UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-K
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2014
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ____________ to ____________
Commission
File Number 000-54557
GLOBAL
EQUITY INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
27-3986073
|
(State
of Incorporation) |
|
(I.R.S.
Employer Identification No.) |
Cluster
X3 Jumeirah Bay, Office 3305, P.O. Box 454332, Jumeirah Lake Towers, Dubai, UAE
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: +971 (0) 42767576
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
Title
of Each Class
Common
Stock, $.001 par value
Indicate
by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes [ ] No
[X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No
[X]
Indicate
by check mark whether the registrant: (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that he registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit or post such files). Yes [X] No [ ]
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S- K is not contained herein, and will not
be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer [ ] |
|
Accelerated
filer [ ] |
|
|
|
Non-accelerated
filer [ ] |
|
Smaller reporting
company [X] |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]
The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of
the Registrant’s most recently completed second fiscal quarter (June 30, 2014) was approximately $7,610,484.
As
of April 8, 2015, there were 79,322,025 shares of our common stock outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE: None
TABLE
OF CONTENTS
CAUTION
REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K (“Annual Report”), in particular the Management’s Discussion and Analysis of Financial
Condition and Results of Operations appearing in Item 7 herein (“MD&A”) contains certain “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Forward-looking statements give expectations or forecasts of future events. The reader can identify these forward-looking
statements by the fact that they do not relate strictly to historical or current facts. They use words such as “believe(s),”
“goal(s),” “target(s),” “estimate(s),” “anticipate(s),” “forecast(s),”
“project(s),” plan(s),” “intend(s),” “expect(s),” “might,” may” and
other words and terms of similar meaning in connection with a discussion of future operating, financial performance or financial
condition. Forward-looking statements, in particular, include statements relating to future actions, prospective services or products,
future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies
such as legal proceedings, trends of operations and financial results.
Any
or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance
on such statements, which speak only as of the date of this Annual Report. These statements are based on current expectations
and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements
are not guarantees of future performance; actual results could differ materially from those expressed or implied in the forward-looking
statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.
Many such factors will be important in determining the Company’s actual results and financial condition. The reader should
consider the following list of general factors that could affect the Company’s future results and financial condition.
Among
the general factors that could cause actual results and financial condition to differ materially from estimated results and financial
condition are:
|
● |
the
success or failure of management’s efforts to implement their business strategy; |
|
|
|
|
● |
the
ability of the Company to raise sufficient capital to meet operating requirements; |
|
|
|
|
● |
the
uncertainty of consumer demand for our products and services; |
|
|
|
|
● |
the
ability of the Company to compete with major established companies; |
|
|
|
|
● |
heightened
competition, including, with respect to pricing, entry of new competitors and the development of new products by new and existing
competitors; |
|
|
|
|
● |
absolute
and relative performance of our products and services; |
|
|
|
|
● |
the
effect of changing economic conditions; |
|
|
|
|
● |
the
ability of the Company to attract and retain quality employees and management; |
|
|
|
|
● |
the
current global recession and financial uncertainty; and |
|
|
|
|
● |
other
risks which may be described in future filings with the U.S. Securities and Exchange Commission (“SEC”). |
No
assurances can be given that the results contemplated in any forward-looking statements will be achieved or will be achieved in
any particular timetable. We assume no obligation to publicly correct or update any forward-looking statements as a result of
events or developments subsequent to the date of this Annual Report. The reader is advised, however, to consult any further disclosures
we make on related subjects in our filings with the SEC.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
CONTENTS
![](image1.jpg)
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Stockholders
Global
Equity International, Inc. and subsidiaries
We
have audited the accompanying consolidated balance sheets of Global Equity International, Inc. and subsidiaries (the “Company”)
as of December 31, 2014 and 2013, and the consolidated statements of operations and comprehensive loss, stockholders’ deficit,
and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. The company is not required to have, nor were we engaged to perform an audit of its internal control
over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the company’s internal control over the financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Global Equity International, Inc. and subsidiaries as of December 31, 2014 and 2013 and the consolidated result of its operations,
comprehensive loss, and cash flows for the years ended December 31, 2014 and 2013, in conformity with U.S. generally accepted
accounting principles.
The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed
in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, which raise substantial
doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described
in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/
De Joya Griffith, LLC |
|
Henderson,
Nevada |
|
April
9, 2015 |
|
De
Joya Griffith, LLC ● 2580 Anthem Village Dr. ● Henderson, NV ● 89052
Telephone
(702) 563-1600 ● Facsimile (702) 920-8049
www.dejoyagriffith.com
Global
Equity International, Inc. and Subsidiary
Consolidated
Balance Sheets
(Audited)
| |
December 31, 2014 | | |
December 31, 2013 | |
Assets | |
| | | |
| | |
| |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 19,026 | | |
$ | 48,856 | |
Accounts receivable | |
| 2,520 | | |
| 2,520 | |
Prepaids | |
| 6,248 | | |
| 33,799 | |
Other current assets | |
| 9,481 | | |
| 452,201 | |
Loans receivable | |
| 10,825 | | |
| 6,000 | |
Total current assets | |
| 48,100 | | |
| 543,376 | |
| |
| | | |
| | |
Investment, cost | |
| 3,000 | | |
| 5,000 | |
| |
| | | |
| | |
Fixed assets, net | |
| 30,224 | | |
| 7,817 | |
| |
| | | |
| | |
Total assets | |
$ | 81,324 | | |
$ | 556,193 | |
| |
| | | |
| | |
| |
| | | |
| | |
Liabilities, Redeemable Preferred Stock and
Stockholders’ Deficit | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 114,191 | | |
$ | 38,989 | |
Accounts payable - related parties | |
| 360,984 | | |
| 192,053 | |
Deferred revenue | |
| 462,015 | | |
| 247,000 | |
Loans payable - related parties | |
| 58,595 | | |
| 57,194 | |
Accrued interest | |
| 657,918 | | |
| 120,918 | |
Loans payable | |
| 440,018 | | |
| - | |
Converitble notes payable - net of unamortized discount of $87,064 and $16,688, respectively | |
| 79,936 | | |
| 996,531 | |
Derivative liability on notes payable | |
| 301,937 | | |
| - | |
Total current liabilities | |
| 2,475,594 | | |
| 1,652,685 | |
| |
| | | |
| | |
Long term liabilities | |
| | | |
| | |
Convertible loan payable - related party - net of unamortized discount of $268,189 and $0, respectively | |
| 33,800 | | |
| 324,475 | |
Derivative liability - related party notes | |
| 393,510 | | |
| - | |
Total long term liabilities | |
| 427,310 | | |
| 324,475 | |
| |
| | | |
| | |
Redeemable Series A, Convertible Preferred Stock: 5,000,000 shares authorized
and 1,983,332 and 5,000,000 shares issued and outstanding, respectively, $0.001 par value (redemption amount $480,000) (liquidation
preference of $0) | |
| 1,020,000 | | |
| 1,020,000 | |
| |
| | | |
| | |
Stockholders’ Deficit | |
| | | |
| | |
| |
| | | |
| | |
Common stock: 70,000,000 shares authorized; $0.001 par value 36,271,148 and 31,044,202 shares
issued and outstanding, respectively. | |
| 36,271 | | |
| 31,045 | |
Additional paid in capital | |
| 3,472,904 | | |
| 2,657,659 | |
Stock payable | |
| 82,850 | | |
| 82,850 | |
Accumulated deficit | |
| (7,434,650 | ) | |
| (5,212,521 | ) |
Other comprehensive gain | |
| 1,045 | | |
| - | |
Total stockholders’ deficit | |
| (3,841,580 | ) | |
| (2,440,967 | ) |
| |
| | | |
| | |
Total liabilities, redeemable preferred stock &
stockholders’ deficit | |
$ | 81,324 | | |
$ | 556,193 | |
The
accompanying notes are an integral part of these consolidated financial statements.
Global
Equity International, Inc. and Subsidiary
Consolidated
Statements of Operations and Comprehensive Loss
(Audited)
| |
For the years ended, | |
| |
December 31, 2014 | | |
December 31, 2013 | |
| |
| | |
| |
Revenue | |
$ | 515,000 | | |
$ | 174,349 | |
| |
| | | |
| | |
General and administrative expenses | |
| 314,095 | | |
| 467,939 | |
Stock compensation | |
| - | | |
| 540,000 | |
Salaries | |
| 816,323 | | |
| 550,284 | |
Professional services | |
| 254,953 | | |
| 646,179 | |
Depreciation | |
| 4,372 | | |
| 1,382 | |
Impairment of investment | |
| 2,000 | | |
| 160,000 | |
Total operating expenses | |
| 1,391,743 | | |
| 2,365,784 | |
| |
| | | |
| | |
Net loss from operations | |
| (876,743 | ) | |
| (2,191,435 | ) |
| |
| | | |
| | |
Other income (expense): | |
| | | |
| | |
Interest expense | |
| (608,973 | ) | |
| (148,210 | ) |
Amortization of debt discount | |
| (299,535 | ) | |
| (23,513 | ) |
Gain on settlement of liabilities | |
| 138,834 | | |
| 18,200 | |
Loss on derivative liability | |
| (227,495 | ) | |
| - | |
Loss on conversion of notes | |
| (369,949 | ) | |
| - | |
Gain on debt extinguishment | |
| 22,486 | | |
| - | |
Exchange rate loss | |
| (754 | ) | |
| - | |
Total income (expenses) | |
| (1,345,386 | ) | |
| (153,523 | ) |
| |
| | | |
| | |
Net loss | |
$ | (2,222,129 | ) | |
$ | (2,344,958 | ) |
| |
| | | |
| | |
Weighted average number of common shares outstanding - basic | |
| 32,487,859 | | |
| 30,474,948 | |
| |
| | | |
| | |
Net loss per common share - basic | |
$ | (0.07 | ) | |
$ | (0.08 | ) |
| |
| | | |
| | |
Comprehensive Loss: | |
| | | |
| | |
Gain on foreign currency translation | |
| 1,045 | | |
| - | |
Net loss | |
| (2,222,129 | ) | |
| (2,344,958 | ) |
Comprehensive Loss | |
$ | (2,221,084 | ) | |
$ | (2,344,958 | ) |
The
accompanying notes are an integral part of these consolidated financial statements.
Global
Equity International, Inc. and Subsidiary
Consolidated
Statement of Stockholders’ Deficit
For
the years ended December 31, 2014 and 2013
(Audited)
| |
| | |
| | |
| | |
| | |
Accumulated
| | |
| |
| |
| | |
Additional | | |
| | |
| | |
Other | | |
Total | |
| |
Common
Stock | | |
Paid-in | | |
Stock | | |
Accumulated | | |
Comprehensive | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Payable | | |
Deficit | | |
Income | | |
Deficit | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Balance
- December 31, 2012 | |
| 29,627,700 | | |
$ | 29,628 | | |
$ | 2,070,554 | | |
$ | - | | |
$ | (2,867,563 | ) | |
$ | - | | |
$ | (767,381 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in lieu of interest payment ($0.12/share) | |
| 20,000 | | |
| 20 | | |
| 2,380 | | |
| - | | |
| - | | |
| - | | |
| 2,400 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.12/share) | |
| 120,000 | | |
| 120 | | |
| 14,280 | | |
| - | | |
| - | | |
| - | | |
| 14,400 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.15/share) | |
| 20,000 | | |
| 20 | | |
| 2,980 | | |
| - | | |
| - | | |
| - | | |
| 3,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in lieu of interest payment ($0.15/share) | |
| 10,000 | | |
| 10 | | |
| 1,490 | | |
| - | | |
| - | | |
| - | | |
| 1,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.16/share) | |
| 10,000 | | |
| 10 | | |
| 1,590 | | |
| - | | |
| - | | |
| - | | |
| 1,600 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.17/share) | |
| 139,835 | | |
| 140 | | |
| 23,632 | | |
| - | | |
| - | | |
| - | | |
| 23,772 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.22/share) | |
| 10,000 | | |
| 10 | | |
| 2,190 | | |
| - | | |
| - | | |
| - | | |
| 2,200 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.27/share) | |
| 20,000 | | |
| 20 | | |
| 5,380 | | |
| - | | |
| - | | |
| - | | |
| 5,400 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.25/share) | |
| 500,000 | | |
| 500 | | |
| 124,500 | | |
| - | | |
| - | | |
| - | | |
| 125,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.29/share) | |
| 150,000 | | |
| 150 | | |
| 43,350 | | |
| - | | |
| - | | |
| - | | |
| 43,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.45/share) | |
| 10,000 | | |
| 10 | | |
| 4,490 | | |
| - | | |
| - | | |
| - | | |
| 4,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.55/share) | |
| 35,000 | | |
| 35 | | |
| 19,215 | | |
| - | | |
| - | | |
| - | | |
| 19,250 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.70/share) | |
| 10,000 | | |
| 10 | | |
| 6,990 | | |
| - | | |
| - | | |
| - | | |
| 7,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.80/share) | |
| 10,000 | | |
| 10 | | |
| 7,990 | | |
| - | | |
| - | | |
| - | | |
| 8,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.95/share) | |
| 150,000 | | |
| 150 | | |
| 142,400 | | |
| - | | |
| - | | |
| - | | |
| 142,550 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services and payables ($0.80/share) | |
| 100,000 | | |
| 100 | | |
| 79,900 | | |
| - | | |
| - | | |
| - | | |
| 80,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($1.10 per share) | |
| 75,000 | | |
| 75 | | |
| 82,375 | | |
| - | | |
| - | | |
| - | | |
| 82,450 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($1.20 per share) | |
| 10,000 | | |
| 10 | | |
| 11,990 | | |
| - | | |
| - | | |
| - | | |
| 12,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
Stock issued for cash ($0.60/share) | |
| 16,667 | | |
| 17 | | |
| 9,983 | | |
| - | | |
| - | | |
| - | | |
| 10,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issuable under commission agreement | |
| - | | |
| - | | |
| - | | |
| 82,850 | | |
| - | | |
| - | | |
| 82,850 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,344,958 | ) | |
| - | | |
| (2,344,958 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
- December 31, 2013 | |
| 31,044,202 | | |
$ | 31,045 | | |
$ | 2,657,659 | | |
$ | 82,850 | | |
$ | (5,212,521 | ) | |
$ | - | | |
$ | (2,440,967 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.044 per share) | |
| 295,567 | | |
| 296 | | |
| 11,704 | | |
| - | | |
| - | | |
| - | | |
| 12,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.041 per share) | |
| 501,149 | | |
| 501 | | |
| 109,318 | | |
| - | | |
| - | | |
| - | | |
| 109,819 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.050/share) | |
| 165,000 | | |
| 165 | | |
| 8,085 | | |
| - | | |
| - | | |
| - | | |
| 8,250 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services ($0.150/share) | |
| 653,500 | | |
| 653 | | |
| 97,372 | | |
| - | | |
| - | | |
| - | | |
| 98,025 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.093 per share) | |
| 86,207 | | |
| 86 | | |
| 16,293 | | |
| - | | |
| - | | |
| - | | |
| 16,379 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.029 per share) | |
| 487,629 | | |
| 488 | | |
| 60,953 | | |
| - | | |
| - | | |
| - | | |
| 61,441 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt and interest ($0.054 per share) | |
| 18,498 | | |
| 18 | | |
| 2,091 | | |
| - | | |
| - | | |
| - | | |
| 2,109 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.023 per share) | |
| 517,241 | | |
| 517 | | |
| 39,311 | | |
| - | | |
| - | | |
| - | | |
| 39,828 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.021 per share) | |
| 902,155 | | |
| 902 | | |
| 314,852 | | |
| - | | |
| - | | |
| - | | |
| 315,754 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.024 per share) | |
| 500,000 | | |
| 500 | | |
| 41,700 | | |
| - | | |
| - | | |
| - | | |
| 42,200 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in settlement of debt ($0.013 per share) | |
| 600,000 | | |
| 600 | | |
| 17,400 | | |
| - | | |
| - | | |
| - | | |
| 18,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued in lieu of salary bonus ($0.16 per share) | |
| 500,000 | | |
| 500 | | |
| 79,500 | | |
| - | | |
| - | | |
| - | | |
| 80,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt
discount on note converted | |
| - | | |
| - | | |
| 16,667 | | |
| - | | |
| - | | |
| - | | |
| 16,667 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,222,129 | ) | |
| - | | |
| (2,222,129 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Other
Comprehensive gain | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,045 | | |
| 1,045 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
- December 31, 2014 | |
| 36,271,148 | | |
$ | 36,271 | | |
$ | 3,472,904 | | |
$ | 82,850 | | |
$ | (7,434,650 | ) | |
$ | 1,045 | | |
$ | (3,841,580 | ) |
The
accompanying notes are an integral part of these consolidated financial statements.
Global
Equity International Inc. And Subsidiary
Consolidated
Statements of Cash Flows
(Audited)
| |
For the years ended, | |
| |
December 31, 2014 | | |
December 31, 2013 | |
| |
| | |
| |
Cash flows from operating activities | |
| | | |
| | |
Net loss | |
$ | (2,222,129 | ) | |
$ | (2,344,958 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities | |
| | | |
| | |
Depreciation | |
| 4,372 | | |
| 1,382 | |
Common stock issued for bonus | |
| 80,000 | | |
| 540,000 | |
Consulting revenue as repayment of loan | |
| (50,000 | ) | |
| - | |
Consulting revenues received in marketable securities | |
| - | | |
| (5,000 | ) |
Common stock issued for services rendered | |
| 106,275 | | |
| 491,311 | |
Loss on conversion of notes | |
| 369,949 | | |
| - | |
Common stock issued for interest | |
| - | | |
| 3,900 | |
Common stock payable for services | |
| - | | |
| 82,850 | |
Gain (loss) on derivate liability - Notes payable | |
| 227,495 | | |
| - | |
Gain on settlement of debt | |
| (138,834 | ) | |
| (18,200 | ) |
Gain on debt extinguishment | |
| (22,486 | ) | |
| - | |
Amortization of debt discount | |
| 299,535 | | |
| 23,407 | |
Impairment loss on available for sale marketable securities | |
| 2,000 | | |
| 160,000 | |
| |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaids | |
| 26,049 | | |
| (23,569 | ) |
Accrued interest | |
| 608,973 | | |
| 120,918 | |
Accounts payable and accrued liabilities | |
| 91,464 | | |
| (68,871 | ) |
Accounts payable - related parties | |
| 168,931 | | |
| 170,028 | |
Deferred revenue | |
| 215,015 | | |
| 247,000 | |
Accounts receivable | |
| - | | |
| 142,500 | |
Other current assets | |
| 442,719 | | |
| (452,200 | ) |
| |
| | | |
| | |
Net cash provide by (used in) operating activities: | |
| 209,328 | | |
| (929,502 | ) |
| |
| | | |
| | |
Cash Flows used in investing activities: | |
| | | |
| | |
Office furniture and equiment, net | |
| (26,779 | ) | |
| (2,737 | ) |
Loans given to non-affiliate | |
| (4,825 | ) | |
| (6,000 | ) |
| |
| | | |
| | |
Net cash used in investing activities | |
| (31,604 | ) | |
| (8,737 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Proceeds from loans - related parties | |
| 1,401 | | |
| 10,319 | |
Repayment of loans - related parties | |
| - | | |
| (1,200 | ) |
Proceeds for notes payable | |
| - | | |
| 1,015,624 | |
Convertible loan payable | |
| 240,500 | | |
| - | |
Repayment of notes payable | |
| (450,500 | ) | |
| (52,500 | ) |
Proceeds from issuance of common stock | |
| - | | |
| 10,000 | |
| |
| | | |
| | |
Net cash provided by (used in) financing activities | |
| (208,599 | ) | |
| 982,243 | |
| |
| | | |
| | |
Net increase (decrease) in cash | |
| (30,875 | ) | |
| 44,004 | |
| |
| | | |
| | |
Effect of Exchange Rates on Cash | |
| 1,045 | | |
| - | |
| |
| | | |
| | |
Cash at Beginning of Period | |
| 48,856 | | |
| 4,852 | |
| |
| | | |
| | |
Cash at End of Period | |
$ | 19,026 | | |
$ | 48,856 | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information: | |
| | | |
| | |
Cash paid for interest | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Cash paid for income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Supplemental disclosure of non-cash investing and financing activities: | |
| | | |
| | |
| |
| | | |
| | |
Notes payable converted into shares | |
$ | 129,534 | | |
$ | - | |
Cancellation of notes payable and subscription receivable
against it | |
$ | 100,000 | | |
$ | - | |
Accounts payable settled in shares | |
$ | - | | |
$ | 75,000 | |
Prepaid expenses paid in stock | |
$ | - | | |
$ | 8,311 | |
Conversion of balance in accounts payable - related
party to loans payable | |
$ | - | | |
$ | 324,475 | |
The
accompanying notes are an integral part of these consolidated financial statements.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
Note
1 - 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. On August 22, 2014, we formed a Dubai subsidiary, of Global Equity Partners Plc., called GE Professionals JLT. Global
Equity Partners Plc. is the parent company of its 100% subsidiary GE Professionals DMCC (Dubai).
Revenue
is generated from business consulting services, introduction fees, and equity participation.
Note
2 - Going Concern
As
reflected in the accompanying financial statements, the Company had a loss of $2,222,129 for the year ended December 31, 2014,
$2,000 of which is due to the permanent impairment of an investment; and net cash used in operations of $209,328 for the year
ended December 31, 2014; and a working capital deficit of $2,427,493 and stockholders´ deficit of $3,841,580 for the year
ended December 31, 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.
Note
3 - Summary of Significant Accounting Policies
Principles
of Consolidation
Global
Equity International Inc. is the parent company of its 100% subsidiary Global Equity Partners Plc and Global Equity Partners Plc.
is the parent company of its 100% subsidiary GE Professionals JLT DMCC (Dubai). All significant inter-company accounts and transactions
have been eliminated in consolidation.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
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 December
31, 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.
Foreign
currency policy
The
Company’s accounting policies related to the consolidation and accounting for foreign operations in future filings will
be as follows: All foreign currency transactions will be translated into United States dollars ($) and/or USD as the reporting
currency. Assets and liabilities will be translated at the exchange rate in effect at the balance sheet date. Revenues and expenses
will be translated at the average rate of exchange prevailing during the reporting period. Equity transactions will be translated
at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period
to period will be included as a component of our stockholders’ equity (deficit) as “Accumulated other comprehensive
income (loss).” Gains and losses resulting from foreign currency transactions will be included in the statement of operations
and comprehensive loss as other income (expense).
For
the years ended December 31, 2014 and 2013 our functional and operational currency was the US Dollar.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
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.
All
securities held at December 31, 2014 and December 31, 2013, respectively were designated as available for sale. Any un-realized
gains and losses are reported as a component of other comprehensive income (loss). Realized gains (losses) will be computed on
a specific identification basis and will be reflected in the statement of operations.
Cost
Method Investment
At
March 31, 2013, the Company had investment in securities of two different Companies, having a cost of $163,000 that was 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.
At
December 31, 2014, 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 $2,000 of the investments.
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 recorded as permanent
impairment loss on available for sale marketable securities of $2,000 and $160,000 as of December 31, 2014 and 2013, respectively.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
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 statements.
| |
2014 | | |
2013 | |
Furniture and equipment | |
$ | 36,095 | | |
$ | 9,316 | |
Accumulated depreciation | |
$ | (5,871 | ) | |
$ | (1,499 | ) |
| |
| | | |
| | |
Net fixed assets | |
$ | 30,224 | | |
$ | 7,817 | |
Depreciation
expense for the years ended December 31, 2014 and 2013 was $4,372 and $1,382, respectively.
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 financing costs and 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.
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.
For
the years ended December 31, 2014 and December 31, 2013 the Company received marketable securities and cash as consideration for
services rendered.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
At
December 31, 2014 and December 31, 2013, the Company had the following concentrations of accounts receivables with customers:
Customer | | |
December 31, 2014 | | |
December 31, 2013 | |
| | |
| | | |
| | |
ACI | | |
| 100 | % | |
| 100 | % |
For
the years ended December 31, 2014 and December 31, 2013, the Company had the following concentrations of revenues with customers:
Customer | | |
December 31, 2014 | | |
December 31, 2013 | |
| | |
| | | |
| | |
ATC | | |
| 6 | % | |
| 0 | % |
AUT | | |
| 12 | % | |
| 0 | % |
UNI | | |
| 12 | % | |
| 0 | % |
ACI | | |
| 0 | % | |
| 8 | % |
SAC | | |
| 5 | % | |
| 14 | % |
ANR | | |
| 0 | % | |
| 14 | % |
YMD | | |
| 5 | % | |
| 0 | % |
IOA | | |
| 5 | % | |
| 0 | % |
STV | | |
| 5 | % | |
| 0 | % |
PCI | | |
| 6 | % | |
| 0 | % |
DSI | | |
| 22 | % | |
| 63 | % |
MHB | | |
| 19 | % | |
| 0 | % |
DUO | | |
| 0 | % | |
| 0 | % |
VTH | | |
| 4 | % | |
| 0 | % |
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. | |
| 400,000 | | |
Private Company |
| |
| | | |
|
| |
| 10,100,000 | | |
|
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, 2014 the Company received $730,015 from eleven clients for service to be rendered during the
year 2014 and 2015. At December 31, 2014, the Company recognized $515,000 of this deferred revenue as revenue; leaving the deferred
revenue balance of $462,015 (which includes $247,000 of deferred revenue received during the year ended December 31, 2013.)
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
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.
On
November 15, 2010, the date of the reverse recapitalization, the Company became subject to federal and state income taxes.
The
Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized
income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition
or measurement are reflected in the period in which the change in judgment occurs. The Company will record interest and penalties
related to unrecognized tax benefits in income tax expense. There were no penalties or interest for the years ended December 31,
2014 and 2013.
The
Company may be subject to examination by the Internal Revenue Service (“IRS”) and state taxing authorities for 2014
and 2013 tax years.
The
Company’s subsidiary, GEP, is incorporated under the laws of the Republic of Seychelles (“Seychelles”). A company
is subject to Seychelles income tax if it does business in Seychelles. A company that is incorporated in Seychelles, but that
does not do business in Seychelles, is not subject to income tax there. GEP did not do business in Seychelles for the years ended
December 31, 2014 and December 31, 2013, and GEP does not intend to do business in Seychelles in the future. Accordingly, the
Company is not subject to income tax in Seychelles for the years ended December 31, 2014 and December 31, 2013. All business activities
were performed by GEP in Dubai for the years ended December 31, 2014 and December 31, 2013. Dubai does not have an income tax.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
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
Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance
on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability,
as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that
market participants would use in pricing an asset or liability.
The
authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring
or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical
levels of inputs to measure fair value:
|
● |
Level
1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |
|
|
|
|
● |
Level
2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar
assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities;
or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
|
|
|
|
● |
Level
3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair
value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
The
carrying amounts reported in the balance sheet for prepaid expenses, accounts receivable, accounts payable, accounts payable to
related parties and loans payable to related parties, approximate fair value based on the short-term nature of these instruments.
The
Company has assets and liabilities measured at fair market value on a recurring basis. Consequently, the Company had gains and
losses reported in the statement of comprehensive income (loss).
The
following is the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis at December
31, 2014 and December 31, 2013, using quoted prices in active markets for identical assets (Level 1); significant other observable
inputs (Level 2); and significant unobservable inputs (Level 3):
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
| |
December 31, 2014 | | |
December 31, 2013 | |
| |
| | |
| |
Level 1 – Cash | |
$ | (19,026 | ) | |
$ | (48,856 | ) |
Level 2 – Marketable Securities | |
| - | | |
| - | |
Level 3 – Non-Marketable Securities | |
| 3,000 | | |
| 5,000 | |
Level 3 – Derivative liability | |
| (695,447 | ) | |
| - | |
Total | |
$ | (711,473 | ) | |
$ | 53,856 | |
The
following section describes the valuation methodologies the Company uses to measure financial instruments at fair value:
Marketable
Securities — the Level 2 position consists of the Company’s investment in equity securities of stock held in publically
traded companies. The valuation of these securities is based on significant inputs that are observable or can be derived from
or corroborated by observable market data. These valuations are typically based on quoted prices in active markets. The Company´s
investments in equity securities are in relatively inactive markets.
Non-Marketable
Securities at Fair Value on a Nonrecurring Basis —
certain assets are measured at fair value on a nonrecurring basis. The level 3 position consist of investments accounted for under
the cost method. The Level 3 position consists of investment in an equity security held in a private company.
Management
believes that an “other-than-temporary impairment” would be justified, as according to ASC 320-10 an investment is
considered impaired when the fair value of an investment is less than its amortized cost basis. The impairment is considered either
temporary or other-than-temporary. The accounting literature does not define other-than-temporary. It does, however, state that
other-than-temporary does not mean permanent; although, all permanent impairments are considered other-than-temporary. The literature
does provide some examples of factors which may be indicative of an “other-than-temporary impairment”, such as:
|
● |
the
length of time and extent to which market value has been less than cost; |
|
|
|
|
● |
the
financial condition and near-term prospects of the issuer; and |
|
|
|
|
● |
the
intent and ability of the holder to retain its investment in the issuer for a period of time sufficient to allow for any anticipated
recovery in market value. |
Management
believes that the fair value of its investment has been correctly measured, as the length of time that the stock has been less
than cost is nominal. The financial condition and near-term prospects of the Company’s investment is expected to realize
improved value due to a public reverse merger.
Changes
in Level 3 assets measured at fair value for the years ended December 31, 2014, 2013 and 2012 were as follows:
Balance, December 31, 2012 | |
| 160,000 | |
Realized and unrealized gains (losses) | |
| - | |
Purchases, sales and settlements | |
| 5,000 | |
Impairment loss | |
| (160,000 | ) |
Balance, December 31, 2013 | |
| 5,000 | |
Realized and unrealized gains (losses) | |
| - | |
Purchases, sales and settlements | |
| - | |
Impairment loss | |
| (2,000 | ) |
Balance, December 31, 2014 | |
$ | 3,000 | |
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
Derivative
liability — these instruments consist of certain of our notes which are convertible based on a discount to the market
value of our common stock. These instruments were valued using pricing models which incorporate the Company’s stock price,
volatility, U.S. risk free rate, dividend rate and estimated life.
The
table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (derivative
liabilities) for the year ended December 31, 2014.
Balance, December 31, 2013 | |
$ | - | |
Additions to derivative instruments | |
| (695,447 | ) |
Change in fair value of derivative instruments | |
| - | |
Balance, December 31, 2014 | |
$ | (695,447 | ) |
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 review to discuss a payment plan over the next 6 months.
In
October 2014, the Company granted a loan to another third party. The principal amount lent was $4,825, it was agreed that no interest
would be paid and that 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
4 - Debt
(A)
Accounts payable – related parties
The
following table represents the accounts payable to related parties as of December 31, 2014 and December 31, 2013, respectively:
| |
| 12/31/2014 | | |
| 12/31/2013 | |
Salaries | |
| 353,913 | | |
| 182,080 | |
Expenses | |
| 7,071 | | |
| 9,973 | |
| |
$ | 360,984 | | |
$ | 192,053 | |
As
discussed in note no. 4(C), the Company converted $324,475 of related party accounts payable into a convertible loan during the
year ended December 31, 2013.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
(B)
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 December 31, 2014 and as of December 31, 2013, respectively:
Loans payable – related party – December 31,
2013 | |
$ | 57,194 | |
Proceeds from loans | |
| 1,401 | |
Repayments | |
| - | |
Loans payable – related party – December 31, 2014 | |
$ | 58,595 | |
(C)
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, 2013, $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 these amounts to Convertible Loans Payable.
These amounts have a term of two years and are 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.
On
November 15, 2014, the board of directors agreed to modify the conversion terms of the loan and extend the term until December
31, 2015. The new conversion terms are as follows: 50% of the average 10 day closing price prior to the conversion. This modification
caused the initial notes to be deemed extinguished. The company has accounted for the corresponding debt discount, derivate liability
and gain on extinguishment attached to these notes. At December 31, 2014, the Company had incurred $32,537 of interest expense,
accrued $56,873 of interest, amortized debt discount for a total of $33,800 and recognized a gain on conversion of $22,486.
The
principal balance outstanding of the loan payable account (net of unamortized debt discount of $268,189) as at December 31, 2014
is $33,800.
(D)
Notes payable
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 a five month extension. This stock
compensation was issued to the lender also on December 12, 2013. This loan is currently in default. Total accrued interest as
at December 31, 2014 is $106,196.
Loan granted in 2013 | |
$ | 120,420 | |
Interest accrued in 2013 | |
| 56,196 | |
Balance at December 31, 2013 | |
$ | 176,616 | |
| |
| | |
Interest accrued in 2014 | |
| 50,000 | |
Balance at December 31, 2014 | |
$ | 226,616 | |
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
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. This loan is currently in default. At December 31,
2014, our Company and the note holder are in dispute regarding the interest that is effectively payable. Also, the noteholder
received the 1,600,000 shares (DSI) that were pledged in a private company and is currently trying to sell the shares. The shares
pledged formed part of the assets of our company. Total accrued interest as at December 31, 2014 is $429,799.
Loan granted in 2013 | |
$ | 319,598 | |
Interest accrued in 2013 | |
$ | 39,602 | |
Balance at December 31, 2013 | |
$ | 359,200 | |
| |
| | |
Accrued interest and expenses in 2014 | |
$ | 390,197 | |
Balance at December 31, 2014 | |
$ | 749,397 | |
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 bears 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 December 23, 2014 the loan
had still not been approved due to technical reasons solely related to the lender so the Company made the decision to request
back the $450,000 cash collateral and subsequently paid back the principal to the note holder plus $5,000 of interest. At December
31, 2014 the Company incurred a total interest expense of $42,971, owed the noteholder $37,971 of accrued interest as the principal
had been paid back in full.
(E) Convertible
notes and derivative liability
We
have evaluated the terms and conditions of the notes. Because the economic characteristics and risks of the equity linked conversion
options are not clearly and closely related to a debt-type host, the conversion features require classification and measurement
as derivative financial instruments. The accounting treatment of derivative financial instruments requires that the Company record
the initial fair value of the derivative first by allocating the fair value of the embedded derivative as a reduction to the face
value of the debt recorded as a contra liability or debt discount to be accreted over the term of the note. On each reporting
date, the fair value of the embedded derivative is calculated with changes in value recorded to other expense.
On
May 1, 2014 (the “Closing Date”), the Company issued a $100,000 convertible promissory note (the “LG Note”)
to LG Capital Funding, LLC, a New York limited liability company (the “Lender”). The LG Note provides up to an aggregate
of $100,000 in gross proceeds. The LG Note matures on May 1, 2015, accrues interest of 8% and is convertible into shares of common
stock any time 180 days after May 1, 2014, at a conversion price equal to 60% of lowest daily VWAP of the Common Stock as reported
on the National Quotations Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common
Stock may be traded in the future (“Exchange”), for the twenty prior trading days including the day upon which a Notice
of Conversion is received by the Company. Accrued interest shall be paid in shares of common stock at any time at the discretion
of the Lender pursuant to the conversion terms above. The first LG Note may be prepaid within 180 days with penalty. The note
may not be prepaid after the 180th day.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
The
principal amount of $50,000 under the second note shall be received by the Company no later than January 1, 2015. All principal
under this Note shall be due and payable no later than July 1, 2015. This Full Recourse Note shall bear simple interest at the
rate of 8%. This amount was not received and as on December 19, 2014 the noteholder decided not to lend any further amounts. As
such the second note and corresponding subscription receivable was cancelled and a gain on debt settlement of $46,673 was recognized.
The
fair value of the derivative liability as at December 31, 2014, was determined using the Black Scholes option pricing model with
a quoted market price of $0.0080, a conversion price of $0.00465, expected volatility of 474.25%, no expected dividends, a remaining
term of 4 months and a risk-free interest rate of 0.04% resulting in a fair value per share of $0.0070 multiplied by the 11,327,736
shares that would be issued if the Note was exercised on the Effective Date.
As
of December 31, 2014 a total interest of $2,677 was accrued and a total of $83,423 debt discount was amortized leaving an unamortized
balance of $16,577. The fair value of derivative liability as on December 31, 2014 is recorded at $78,874, thereby recognizing
a net loss on derivative liability as at December 31, 2014 of ($25,547).
On
May 1, 2014 (the “Closing Date”), the Company entered into a Securities Purchase Agreement with Adar Bay, LLC (“Adar
Bay”) providing for the purchase of a Convertible Redeemable Note (the “AB Note”) in the aggregate principal
amount of $100,000. The AB Note provides up to an aggregate principal amount of $100,000.00 (with the first note being in the
amount of $50,000.00 and the second note being in the amount of $50,000.00 (together with any note(s) issued in replacement thereof
or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible
into shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and subject
to the limitations and conditions set forth in such Note. The first of the two notes (the “First Note”) shall be paid
for by the Buyer as set forth herein. The second note (the “Second Note”) shall initially be paid for by the issuance
of an offsetting $50,000 secured note issued to the Company by the Buyer (“Buyer Note”), provided that prior to conversion
of the Second Note, the Buyer must have paid off the Buyer Note in cash such that the Second Note may not be converted until it
has been paid for in cash.
The
first note matures on May 1, 2015, accrues interest of 8% and is convertible into shares of common stock any time 180 days after
May 1, 2014, at a conversion price equal to 60% of lowest daily VWAP of the Common Stock as reported on the National Quotations
Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common Stock may be traded in
the future (“Exchange”), for the twenty prior trading days including the day upon which a Notice of Conversion is
received by the Company. Accrued interest shall be paid in shares of common stock at any time at the discretion of the Lender
pursuant to the conversion terms above. The First Note may be prepaid within 180 days with penalty. The First Note may not be
prepaid after the 180th day.
The
principal amount of $50,000 under the second note shall be received by the Company no later than January 1, 2015. All principal
under this Note shall be due and payable no later than July 1, 2015. This Full Recourse Note shall bear simple interest at the
rate of 8%. This amount was not received and as on December 24, 2014 the noteholder decided not to lend any further amounts. As
such the second note and corresponding subscription receivable was cancelled and a gain on debt settlement of $75,601 was recognized.
The
fair value of the derivative liability as at December 31, 2014, was determined using the Black Scholes option pricing model with
a quoted market price of $0.0080, a conversion price of $0.00465, expected volatility of 474.25%, no expected dividends, over
remaining term of 4 months and a risk-free interest rate of 0.040% resulting in a fair value per share of $0.0070 multiplied by
the 8,403,170 shares that would be issued if the Note was exercised on the Effective Date.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
During
the quarter ended December 31, 2014, after the initial 180 days, the Company repaid $13,000 in principal by the issuance of 518,498
shares of common stock priced between $0.08 to $0.0844 per share. As a result a total of $13,000 of debt discount was amortized
and $27,364 was recognized as loss on conversion.
As
of December 31, 2014 a total interest of $2,518 was accrued and a total of $85,579 debt discount was amortized leaving an unamortized
balance of $14,421. The fair value of derivative liability as on December 31, 2014 is recorded at $58,511, thereby recognizing
a net loss on derivative liability as at December 31, 2014 of ($38,056).
On
June 12, 2014 (the “Closing Date”), the Company issued a $250,000 convertible promissory note (the “JMJ Note”)
to JMJ Financial, a Nevada sole proprietorship (the “Lender”). The JMJ Note provides up to an aggregate of $250,000
in gross proceeds. The JMJ Note matures on June 12, 2016, accrues interest of 12% and is convertible into shares of common stock
any time after the agreement was signed. The Conversion Price is the lesser of $.30 or 60% of the lowest trade price in the 25
trading days previous to the conversion. The Note also contemplated a further 10% discount to market if the shares were not deliverable
by DWAC. Accrued interest shall be paid in shares of common stock at any time at the discretion of the Lender pursuant to the
conversion terms above. This Note may be prepaid interest free within 90 days with the accrued interest at 12% per annum and the
OID proportional to $25,000. The note may not be prepaid after the 91th day. The Company opted to receive only $55,000 of the
possible $250,000.
The
fair value of the derivative liability as at December 31, 2014, was determined using the Black Scholes option pricing model with
a quoted market price of $0.0080, a conversion price of $0.0045, expected volatility of 328.59%, no expected dividends, over remaining
term of 1.45 years and a risk-free interest rate of 0.25% resulting in a fair value per share of $0.0077 multiplied by 14,638,222
shares that would be issued if the Note was exercised on the Effective Date.
During
the quarter ended December 31, 2014, after the initial 90 days, the Company repaid $7,500 in principal by issuance of 600,000
shares of common stock at $0.0300 per share. As a result a total of $7,500 of debt discount was amortized and $6,078 was recognized
as loss on conversion.
As
of December 31, 2014 a total interest of $13,972, other fees of $4,400 was incurred, an accrued interest of $18,372 was recognized
and a total of $20,194 debt discount was amortized leaving an unamortized balance of $34,807. The fair value of derivative liability
as on December 31, 2014 is recorded at $112,941, thereby recognizing a net loss on derivative liability as at December 31, 2014
of ($62,363).
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. Between October and December of 2014, the noteholder
converted the loan by issuing 1,993,232 common shares of value $433,402 and recognizing a loss of $336,507 on conversion.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
As
of December 31, 2014 a total interest of $2,855 was paid and a total of $53,000 debt discount was amortized leaving an unamortized
balance of $0. The fair value of derivative liability as on December 31, 2014 is recorded at $0, thereby recognizing a net gain
on derivative liability as at December 31, 2014 of 9,105
The
Company entered into Securities Purchase Agreement (the “Agreement”), dated as of September 25, 2014, with KMB Worldwide
Inc. On October 2, 2014, the Company received $32,500 from a secured nine month convertible loan signed on September 29, 2014.
The loan carried an 8% interest rate and will be due on June 29, 2015. 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 180 days, 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 March 24, 2015, this note, the 8% per
annum accrued interest and 130% premium was fully paid back to the noteholder.
The
fair value of the derivative liability as at December 31, 2014, was determined using the Black Scholes option pricing model with
a quoted market price of $0.0080, a conversion price of $0.0045, expected volatility of 401.89%, no expected dividends, over remaining
term of 6 months and a risk-free interest rate of 0.12% resulting in a fair value per share of $0.0071 multiplied by the 7,294,445
shares that would be issued if the Note was exercised on the Effective Date.
As
of December 31, 2014 a total interest of $657 was accrued and a total of $11,240 debt discount was amortized leaving an unamortized
balance of $21,259. The fair value of derivative liability as on December 31, 2014 is recorded at $51,611, thereby recognizing
a net loss on derivative liability as at December 31, 2014 of ($19,112).
During
the quarter ended March 31, 2013, the Company converted $209,475 of unpaid salary 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 gave an option to the company´s CEO to convert all or part of the debt that the Company maintains with them into restricted
shares at $1.20 per share.
On
November 15, 2014 the board of directors agreed to modify the conversion terms of the loan and extend the term until December
31, 2015. The new conversion terms are now as follows: 50% of the average 10 day closing price prior to the conversion. This modification
caused the initial note to be deemed extinguished. The company has accounted for the corresponding debt discount, derivate liability
and gain on extinguishment attached to the note.
The
fair value of the derivative liability as at December 31, 2014, was determined using the Black Scholes option pricing model with
a quoted market price of $0.0080, a conversion price of $0.0063 expected volatility of 368.91%, no expected dividends, over remaining
term of 1 year and a risk-free interest rate of 0.25% resulting in a fair value per share of $0.0075 multiplied by the 33,695,784
shares that would be issued if the Note was exercised on the Effective Date.
At
December 31, 2014, the Company incurred interest expense of $21,037, accrued interest of $36,748 and amortized $21,820 of debt
discount for this convertible loan note leaving an unamortized balance of $173,138. The fair value of derivative liability as
on December 31, 2014 is recorded at $254,043, thereby recognizing a net loss on derivative liability as at December 31, 2014 of
($59,085).
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
During
the quarter ended March 31, 2013, the Company converted $115,000 of unpaid salary 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 gave an option to the company´s CFO to convert all or part of the debt that the Company maintains with them into restricted
shares at $1.20 per share.
On
November 15, 2014 the board of directors agreed to modify the conversion terms of the loan and extend the term until December
31, 2015. The new conversion terms are now as follows: 50% of the average 10 day closing price prior to the conversion. This modification
caused the initial note to be deemed extinguished. The company has accounted for the corresponding debt discount, derivate liability
and gain on extinguishment attached to the note.
The
fair value of the derivative liability as at December 31, 2014, was determined using the Black Scholes option pricing model with
a quoted market price of $0.0080, a conversion price of $0.0063 expected volatility of 368.91%, no expected dividends, over remaining
term of 1 year and a risk-free interest rate of 0.25% resulting in a fair value per share of $0.0075 multiplied by the 18,498,700
shares that would be issued if the Note was exercised on the Effective Date.
At
December 31, 2014, the Company incurred $11,500 in interest expense, accrued interest of $20,125 and amortized $11,979 of debt
discount for this convertible loan note leaving an unamortized balance of $95,051. The fair value of derivative liability as on
December 31, 2014 is recorded at $139,467, thereby recognizing a net loss on derivative liability as at December 31, 2014 of ($32,437).
Convertible
notes repaid:
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 October 18, 2013, the Company exercised its
option to prepay the loan it secured for $42,500. At December 31, 2014, the company had incurred interest and financing expense
of $69,388, accrued $0 of interest and amortized $5,355 of debt discount for this convertible loan note leaving an unamortized
balance of $0.
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 December 31, 2014 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. This loan note was adjusted against
and applied against the amount receivable for services rendered by the Company to the note holder on June 4, 2014. These shares
will be issued within the month of April 2015. At December 31, 2014, the Company incurred a total of $901 in interest expense,
had accrued $0 of interest and amortized $6,945 of debt discount for this convertible loan note leaving an unamortized balance
of $0.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
Note
5 - Income Taxes
The
income tax provision differs from the amount of tax determined by applying the federal statutory rate approximately as follows:
| |
2014 | | |
2013 | |
| |
| | |
| |
Income Tax provision at statutory rate: | |
$ | (551,137 | ) | |
$ | (814,647 | ) |
| |
| | | |
| | |
Increase (decrease) in income tax due to: | |
| | | |
| | |
Non-Taxable foreign earnings | |
| 164,252 | | |
| 317,325 | |
State taxes | |
| - | | |
| - | |
Change in valuation allowance | |
| 386,886 | | |
| 497,322 | |
| |
| | | |
| | |
Total | |
$ | - | | |
$ | - | |
Net
deferred tax assets and liabilities are comprised approximately of the following:
| |
2014 | | |
2013 | |
| |
| | | |
| | |
Deferred tax assets (liabilities), current | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Deferred tax assets (liabilities), non-current | |
| | | |
| | |
Net operating loss | |
$ | 386,886 | | |
$ | 497,322 | |
Change invaluation allowance | |
$ | (386,886 | ) | |
$ | (497,322 | ) |
| |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Net deferred tax assets (liabilities) | |
$ | - | | |
$ | - | |
Non-current assets (liabilities) | |
$ | - | | |
$ | - | |
| |
$ | - | | |
$ | - | |
Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income taxes.
During
the years ended December 31, 2014 and 2013, the Company generated net operating losses of approximately $386,886 and $497,322,
respectively, for federal and Florida income tax purposes. These losses can be carried forward and used to offset taxable income
in future years and will start expiring on December 31, 2033.
In
assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion
or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. Management considers
the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this
assessment. As of December 31, 2014 and 2013, based upon the levels of historical taxable income and the limited experience of
the Company, the Company believes that it is more-likely-than-not that it will not be able to realize the benefits of some or
all of these deductible differences. Accordingly, a valuation allowance of approximately $386,886 and $497,322 has been provided
in the accompanying financial statements as of December 31, 2014 and 2013, respectively.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
For
the years ended December 31, 2014 and December 31, 2013, GEI incurred a loss of approximately $2,222,129 and $2,344,958, respectively.
Therefore,
GEP had negative earnings and profits and does not have any foreign earnings and profits to be distributed. Since GEP does not
have any undistributed earnings, the Company has not recorded a deferred tax liability associated with the foreign earnings as
of December 31, 2014 and 2013.
The
Company is not subject to any foreign income taxes for the years ended December 31, 2014 and 2013. The Company may be subject
to examination by the Internal Revenue Service (“IRS”) and state taxing authorities for 2014 and 2013 tax years.
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; |
|
|
|
|
● |
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.
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.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
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 and the preferred stock holders will redeem these shares within the next 6 months.
(B)
Common Stock
During
the year ended December 31, 2014, the Company issued the following shares:
Date | |
Type | |
Shares | | |
Valuation | |
3/17/2014 | |
Stock issued for payment of debt | |
| 295,567 | | |
$ | 12,000 | |
4/1/2014 | |
Stock issued for payment of debt | |
| 501,149 | | |
$ | 109,819 | |
4/22/2014 | |
Stock issued for services | |
| 165,000 | | |
$ | 8,250 | |
7/22/2014 | |
Stock issued for services | |
| 115,000 | | |
$ | 17,250 | |
7/22/2014 | |
Stock issued for services | |
| 50,000 | | |
$ | 7,500 | |
7/22/2014 | |
Stock issued for services | |
| 12,500 | | |
$ | 1,875 | |
7/22/2014 | |
Stock issued for services | |
| 276,000 | | |
$ | 41,400 | |
8/4/2014 | |
Stock issued for services | |
| 200,000 | | |
$ | 30,000 | |
9/19/2014 | |
Salary Bonus | |
| 500,000 | | |
$ | 80,000 | |
10/2/2014 | |
Stock issued on debt conversion | |
| 86,207 | | |
$ | 16,379 | |
10/17/2014 | |
Stock issued on debt conversion | |
| 162,543 | | |
$ | 23,406 | |
10/27/2014 | |
Stock issued on debt conversion | |
| 162,543 | | |
$ | 19,505 | |
10/29/2014 | |
Stock issued on debt conversion | |
| 162,543 | | |
$ | 18,530 | |
11/6/2014 | |
Stock issued on debt conversion | |
| 18,498 | | |
$ | 2,109 | |
12/1/2014 | |
Stock issued on debt conversion | |
| 517,241 | | |
$ | 39,828 | |
12/1/2014 | |
Stock issued on debt conversion | |
| 902,155 | | |
$ | 315,754 | |
12/2/2014 | |
Stock issued on debt conversion | |
| 500,000 | | |
$ | 42,200 | |
12/16/2014 | |
Stock issued on debt conversion | |
| 600,000 | | |
$ | 18,000 | |
Effective
February 16, 2015, the Company amended its Articles of Incorporation (Article 3) to increase the number of shares of common stock
which the Company has the authority to issue from 70,000,000 to 500,000,000.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
(C)
Notes Receivable Common
On
May 1, 2014, the Company entered into two Securities Purchase Agreement, one with Adar Bay LLC and the other with LG Capital Inc.,
each providing for the purchase of Convertible Redeemable Note. The aggregate principal amount of each note was $100,000. The
first note from each of the funders being in the amount of $50,000 each and the second (the “Second Note”) shall initially
be paid for by the issuance of an offsetting $50,000 secured note issued to the Company by the Buyer (“Buyer Note”),
provided that prior to conversion of the Second Note, the Buyer must have paid off the Buyer Note in cash such hat the Second
Note may not be converted until it has been paid for in cash. The amount due under second note is classified as Contra Equity
account and presented under the statement of stockholders’ deficit. On December 19, 2014 and December 24, 2014 respectively,
the noteholders unilaterally decided not to fund these second notes and hence the Second note along with the buyers note stands
cancelled leaving $0 balance in Contra Equity Account as at December 31, 2014.
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 2013 the Company paid $10,000 in cash, the balance of $20,000 was due within 60 days of
the signing of the agreement; this amount is unpaid as at December 31, 2014. The Company has guaranteed a value of $100,000 for
its shares at the time of legend removal. At December 31, 2014 the legend is still not removed, the Company has accrued for the
shortfall of $77,350 as a stock payable.
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 December 31, 2014 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. This loan note was adjusted against
and applied against the amount receivable for services rendered by the Company to the note holder on June 4, 2014. At December
31, 2014 the Company has accrued for the $5,500 as a stock payable.
Note
8 – Other current assets
The
following is a summary of the Company’s other current assets:
| |
2014 | | |
2013 | |
Cash collateral paid to secure loan | |
$ | - | (1) | |
$ | 450,000 | |
| |
| | | |
| | |
Retainers paid to legal counsel | |
| 2,201 | | |
| 2,201 | |
| |
| | | |
| | |
| |
$ | 2,201 | | |
$ | 452,201 | |
(1)
Please refer to Note 4(D) – Notes payable and Note 9 – Subsequent Events.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
Note
9 – Subsequent events
On
January 21, 2015, our Company was engaged by a Natural Resources company to assist with introducing them to capital in the Middle
East and a possible listing of their stock on a recognized stock exchange.
On
January 22, 2015, our Company was engaged by a company that is the sole proprietor of a “Life Management App”; an
application that helps consumers remove friction from their busy lives and live more and worry less by using digital services
across a range of key life departments such as finances, vehicle, personal security, travel, health, privacy & data security
and home. Our mandate is to assist with introducing the company to capital in the Middle East and a possible listing of their
stock on a recognized stock exchange.
Effective
February 16, 2015, the Company amended its Articles of Incorporation (Article 3) to increase the number of shares of common stock
which the Company has the authority to issue from 70,000,000 to 500,000,000. There was no change in the number of shares of preferred
stock authorized, as that number remained at 5,000,000 shares of preferred stock.
On
January 5, 2015, the Company issued 1,600,000 shares of restricted common stock at $.00275 per share to JMJ Financial upon conversion
of debt.
On
January 12, 2015, the Company issued 639,403 shares of restricted common stock at $.0033 per share to LG Capital upon conversion
of debt and interest.
On
January 21, 2015, the Company issued 1,680,000 shares of restricted common stock at $.00250 per share to JMJ Financial upon conversion
of debt.
On
January 21, 2015, the Company issued 2,287,582 shares of restricted common stock at $.00306 per share to Adar Bay upon conversion
of debt.
On
January 21, 2015, the Company issued 1,056,986 shares of restricted common stock at $.003 per share to LG Capital upon conversion
of debt.
On
February 10, 2015, the Company issued 1,809,000 shares of restricted common stock at $.001 per share to JMJ Financial upon conversion
of debt.
On
February 12, 2015, the Company issued 1,636,958 shares of restricted common stock at $.0012 per share to LG Capital upon conversion
of debt and interest.
On
February 23, 2015, a social networking firm that had previously signed an agreement with our company on December 4, 2014, signed
a new contract with us in order to allow us to assist with the listing of their stock on a recognized exchange. The total value
of the contract is $1,200,000.
On
February 25, 2015, the Company issued 2,318,841 shares of restricted common stock at $.00138 per share to Adar Bay upon conversion
of debt.
On
February 26, 2015, the Company issued 1,800,000 shares of restricted common stock at $.001 per share to JMJ Financial upon conversion
of debt.
On
March 12, 2015, the Company issued 2,391,304 shares of restricted common stock at $.00138 per share to Adar Bay upon conversion
of debt.
On
March 13, 2015, the Company issued 1,808,000 shares of restricted common stock at $.001 per share to JMJ Financial upon conversion
of debt.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
December
31, 2014 and 2013
On
March 16, 2015, the Company issued 2,532,051 shares of restricted common stock at $.00156 per share to Adar Bay upon conversion
of debt.
On
March 17, 2015, the Company issued 1,669,013 shares of restricted common stock at $.00147 per share to LG Capital upon conversion
of debt and interest.
On
March 18, 2015, the Company issued 2,660,256 shares of restricted common stock at $.00156 per share to Adar Bay upon conversion
of debt.
On
March 19, 2015, the Company was engaged by an Oil and Gas Company located in the Texas Panhandle to assist with introducing them
to capital in the Middle East and a possible listing of their stock on a recognized stock exchange.
On
March 23, 2015, the Company issued 1,807,000 shares of restricted common stock at $.001 per share to JMJ Financial upon conversion
of debt.
On
March 23, 2015, the Company issued 3,100,000 shares of restricted common stock at $.0015 per share to Adar Bay upon conversion
of debt.
On
March 24, 2015, the Company paid off a convertible note payable to KBM Worldwide Inc. The note was for $32,500 principal amount
plus interest and carried a 30% premium if paid within 180 days. The Company elected to pay the premium on the loan to avoid conversion
of the note into the Company’s common stock, due to the current stock price.
On
March 25, 2015, the Company issued 2,974,430 shares of restricted common stock at $.00144 per share to LG Capital upon conversion
of debt and interest.
On
March 26, 2015, the Company issued 3,466,667 shares of restricted common stock at $.0015 per share to Adar Bay upon conversion
of debt.
On
March 30, 2015, the Company issued 3,033,333 shares of restricted common stock at $.0015 per share to Adar Bay upon conversion
of debt.
On
March 31, 2015, the Company issued 2,780,053 shares of restricted common stock at $.0015 per share to Adar Bay upon conversion
of debt and the accrued interest.
On
April 10, 2015, filed a form 8k with the Securities and Exchange Commission stating that during the course of its audit of the
financial statements of Global Equity International, Inc. for the fiscal year ended December 31, 2014, the Company’s independent
accountant, De Joya Griffith, advised the Company that action should be taken and disclosure should be made to prevent future
reliance on completed interim reviews related to previously issued financial statements (Form 10-Qs for the fiscal quarters ended
March 31, June 30 and September 30, 2014), for the following reasons: An analysis of convertible notes for assessing derivative
liability, interest expense, prepaid, certain fixed assets and revenue policy was conducted and it was determined that significant
adjustments were required to be made at each quarter ended March 31, June 30 and September 30, 2014. The Company intends to file
amendments to its Form 10-Qs for the first three quarters of 2014.
PART
I
ITEM
1. BUSINESS.
BUSINESS
DEVELOPMENT
BACKGROUND
Global
Equity International Inc. (“Company” or “GEI”)) was incorporated on October 1, 2010, as a Nevada corporation,
for the express purpose of acquiring Global Equity Partners Plc, a corporation formed under the laws of the Republic of Seychelles
(“GEP”) on September 2, 2009.
GEP
is a Dubai based firm that provides consulting services, such as corporate restructuring, advice on management buy outs, management
recruitment, website design and development for corporate marketing, investor and public relations, regulatory compliance and
introductions to financiers, to companies desiring to be listed on stock exchanges in various parts of the world.
Our
authorized capital consists of 500,000,000 shares of common stock, $.001 par value, and 5,000,000 shares of preferred stock, $.001
par value.
On
November 15, 2010, we entered into a Plan and Agreement of Reorganization (“Plan of Reorganization”) with GEP and
its sole shareholder, Peter J. Smith, pursuant to which we would acquire 100% of the common stock of GEP. We consummated the Plan
of Reorganization effective December 31, 2010, by issuing 20,000,000 shares of our common stock to Peter J. Smith, at which time
GEP became our wholly-owned subsidiary and Peter J. Smith was appointed as our President, Chief Executive Officer and Director.
As
a result of our acquisition of GEP, we provide corporate advisory services to companies desiring to have their shares listed on
stock exchanges or quoted on quotation bureaus in various parts of the world. We have offices in Dubai and London. We have affiliations
with firms located in some of the world’s leading financial centers such as London, New York, Frankfurt and Dubai. These
affiliations are informal and are comprised of personal relationships with groups of people or people with whom our Company or
our management has done, or attempted to do, business in the past. We do not have any contractual arrangements, written or otherwise,
with our affiliations.
IMPLICATIONS
OF BEING AN EMERGING GROWTH COMPANY
As
a Company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”
as defined in the Jumpstart Our Business Startups Act of 2012 (also known as the “JOBS Act”). As an emerging growth
company, we are entitled to take advantage of specified reduced disclosure and other requirements that are otherwise applicable
generally to public companies. These provisions include:
|
● |
Only
two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly
reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; |
|
|
|
|
● |
Reduced
disclosure about our executive compensation arrangements; |
|
|
|
|
● |
Not
having to obtain non-binding advisory votes on executive compensation or golden parachute arrangements; and |
|
|
|
|
● |
Exemption
from the auditor attestation requirement in the assessment of our internal control over financial reporting. |
We
may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company.
We would cease to be an emerging growth company if we have more than $1 billion in annual revenues, if we have more than $700
million in market value of our stock held by non-affiliates, or if we issue more than $1 billion of non-convertible debt over
a three-year period. We may choose to take advantage of some but not all of these reduced burdens in the future. We have irrevocably
elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant Section 107(b)
of the JOBS Act.
Peter
Smith founded Global Equity Partners Plc to assist small to medium size businesses with management restructuring and corporate
restructuring, in general, and also to obtain, if requested by its clients, access to capital markets via equity and debt financings.
GEP
looks for promising small to medium size companies ($2,000,000 to $10,000,000 in assets) and introduces these clients to private
and institutional investors in our network (“rol-a-dex”) of over 179 “financial introducers” around the
world. These financial introducers are simply groups of people or institutions that are presently introducing new clients to us
or who have introduced new clients to our management in the past. We do not have any contractual arrangements, written or otherwise,
with these financial introducers.
Presently,
GEP is our only operating business. GEI´s present operations are limited to insuring compliance with regional, state and
national securities regulatory agencies and organizations. In addition, GEI is charged with (i) handling our periodic obligations
under the Securities Exchange Act of 1934; (ii) managing our investor relations; and (iii) raising debt and equity capital necessary
to fund our operations and enhance and grow our business. GEI does not offer or conduct any consulting or advisory services; as
such services are performed solely by our foreign subsidiary, GEP.
We
currently offer the following services to our clients:
|
● |
Corporate
restructuring |
|
|
|
|
● |
Management
buy outs |
|
|
|
|
● |
Management
recruitment |
|
|
|
|
● |
Website
design, development and marketing advice |
|
|
|
|
● |
Investor
and public relations |
|
|
|
|
● |
Regulatory
compliance |
|
|
|
|
● |
Exchange
listings |
|
|
|
|
● |
Introductions
to financiers |
CORPORATE
RESTRUCTURING SERVICES
We
advise and assist our clients in determining the corporate structure that is most suitable to their business models. We recommend
management changes where necessary. We also offer them corporate governance models customized to their specific organizations
and desired exchange listings. We also review and analyze their balance sheets and capital structures and make recommendations
on debt consolidations, equity exchanges for debt, proper capital structures and viability and timing of equity and debt offerings.
We do not presently recommend and we do not intend in the future to recommend that our clients merge or be acquired by shell companies.
MANAGEMENT
BUY OUTS
We
assist our clients in every aspect of management buy outs from corporate restructuring to debt financing and also introduce buyers
and sellers to financiers for private equity placements.
MANAGEMENT
RECRUITING
We
assist our clients with the recruitment of management and board members through our various contacts around the world. Management
recruitment and retention is also an important part of our Corporate Restructuring Services and these services often overlap.
WEBSITE
DESIGN AND DEVELOPMENT
We
recognize that in these times, successful businesses must have comprehensive and professional internet profiles, interactive websites
and excellent feedback mechanisms. We will assist our clients in this area by recommending third party consultants and organizations
to design, develop and manage their websites and social networking capabilities.
INVESTOR
AND PUBLIC RELATIONS
Since
our clients and future clients will likely desire to have their shares listed or continue to be listed on a stock exchange or
quoted on one of the quotation bureaus, we will advise our clients on the necessary requirements for communicating with their
equity holders and stake holders, their customers and potential customers. We will assist our clients in this area by recommending
third party financial professionals and investor relations and public relations organizations to provide them with such services.
REGULATORY
COMPLIANCE
We
are organizing a cadre of third party securities attorneys and accountants to assist our clients with their compliance with the
many reporting and other requirements of stock exchanges, quotation bureaus and securities regulatory agencies and organizations
in the states and countries where their shares will be or are listed.
EXCHANGE
LISTINGS
We
also assist our clients with the selection of stock exchanges that may be suitable to our clients. Various exchanges have listing
requirements and standards that vary from one exchange to another. Typical listing requirements and standards relate to a number
of things, such as pre-tax income, cash flows, revenue, net tangible assets, market value of a company’s listed securities,
minimum trading prices of a company’s securities, minimum shareholders’ equity, operating history, number of shareholders,
number of market makers, and corporate governance. We will try to identify appropriate exchanges for our clients based on the
particular client’s operating history, pre-tax income, cash flow, revenue, net tangible assets, shareholder base and other
factors described above.
We
will assist our clients with retention of attorneys and accountants having experience with publicly held companies and stock exchanges
in various countries. We will also assist our clients in locating market makers, investment bankers and broker-dealers to assist
them with accessing capital markets.
INTRODUCTIONS
TO FINANCIERS
After
reviewing the business plans, prospects and problems that are unique to each of our clients, we will use our best efforts to introduce
our clients to various third party financial resources around the world who may be able to assist them with their capital funding
requirements.
As
used throughout this Annual Report, references to “Global Equity International,” “GEI,” “Company,”
“we,” “our,” “ours,” and “us” refer to Global Equity International, Inc. and our
subsidiaries, unless the context otherwise requires. In addition, references to “financial statements” are to our
consolidated financial statements contained herein, except as the context otherwise requires. References to “fiscal year”
are to our fiscal year which ends on December 31 of each calendar year. Unless otherwise indicated, the terms “Common Stock,”
“common stock” and “shares” refer to our shares of $.001 par value, common stock.
HISTORICAL
BUSINESS TRANSACTED
BUSINESS
TRANSACTED IN 2012
At
the beginning of 2012, we had contracts with five companies: (1) RFC K.K., a Japan based company; (2) Black Swan Data Limited,
a United Kingdom (“U.K.”) based company; (3) Arrow Cars SL, (now called Arrow Cars International Inc.), a company
based in Spain and the U.S.; and (4) Voz Mobile Cloud Ltd., a U.S. corporation and (5) Direct CCTV/Direct Security Integration
Inc., a U.K. and U.S. based company.
During
2012, we gained the following clients:
(1)
REGIS CARDS LIMITED.
On
May 25, 2012, we entered into a contract with Regis Card Limited (“Regis”), a “Pre-Paid” credit card company
based in the U.S. and in the U.K.
We
have contracted to provide Regis the following services:
|
● |
Act
as a corporate finance advisor to Regis; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market Regis, including: (i) where appropriate,
arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating definitive
documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish organic and
inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with having its shares listed on the Dubai NASDAQ. |
Regis
agreed to pay us $250,000 and to date we have been paid a total of $150,000. In addition, we have agreed that we will receive
a 10% equity stake in the company upon listing Regis on the Dubai NASDAQ.
(2)
BTI/SCORPION PERFORMANCE INC.
On
December 5, 2012, we entered into a contract with Scorpion Performance Inc. (Scorpion”), a U.S. corporation based in Ocala,
Florida. Scorpion manufactures precision metal performance engine components and also precision medical instruments.
We
have contracted to provide Scorpion the following services:
|
● |
Act
as a corporate finance advisor to Scorpion; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market Scorpion, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with having its shares listed on the Dubai NASDAQ. |
Scorpion
agreed to pay us $350,000 and to date we have been paid $180,000. In addition, we have agreed that we will receive a 6% equity
stake in Scorpion upon its initial public offering on the Dubai NASDAQ.
(3)
UNIVERSAL ENERGY SOLUTIONS BV
Universal
Energy Solutions BV (“Universal”), a Netherlands green energy company, that desires to list its stock on the Dubai
Nasdaq, but first requires our Company to source a Dubai sponsor that would agree to underwrite and sponsor the proposed public
listing. We agreed to a fee of $10,000 and have been paid in full. We have subsequently sourced an appropriate Dubai sponsor,
however the client decided not to pursue the public listing in the Dubai NASDAQ.
(4)
INNOVEAS AG
Innoveas
AG. is a German company and a technology incubator that wishes to also list its shares on the Dubai Nasdaq, but also requires
our Company to source a Dubai sponsor that would be in agreement to underwrite and sponsor the proposed public listing. We agreed
to a fee of $10,000 and have been paid in full. We subsequently sourced an appropriate Dubai sponsor, but the client decided not
to pursue the public listing in the Dubai NASDAQ.
(5)
ARABIAN NUBIAN RESOURCES LIMITED
Arabian
Nubian Resources Limited (“Arabian”), a United Kingdom based company with mining contacts in North East Africa that
wanted to list its shares on the Dubai Nasdaq but required our Company to source a Dubai sponsor that would be in agreement to
underwrite and sponsor the proposed public listing. We agreed to a fee of $10,000 and have been paid in full. We were unable to
source a sponsor in Dubai for Arabian; hence, Arabian decided not to pursue the public listing in the Dubai NASDAQ.
BUSINESS
TRANSACTED IN 2013
At
the beginning of 2013, we already had contracts with four companies: (1) Arrow Cars International Inc., a company based in Spain
and the US; and (2) Voz Mobile Cloud Ltd., a U.S. corporation, (3) Direct CCTV / Direct Security Integration Inc., a U.K. and
U.S. based company, and (4) BTI / Scorpion Performance Inc. a company based in the U.S.
During
2013, we gained the following clients:
(1)
SCANDINAVIAN AGRITEX CO. LIMITED
Scandinavian
Agritex Co. Limited (“SAC”) is a U.K. and Sri Lankan based company that is a green “Agriculture Technology and
Textile” company whose business is situated in Sri-Lanka, Norway and the U.K. whose main purpose is to develop and rapidly
expand the organic cotton industry in the country. SAC was founded by textile professionals, fashion brand owners, and finance
people with significant international management experience. SAC has an extensive management team comprised of highly skilled
and competent agronomists, farmers and textile professionals. SAC´s long term objective is to operate in the entire textile
value chain, including cultivation of cotton, ginning, spinning, weaving, garment manufacture, fashion and retail, with the objective
of retaining control and generating significant margins on each step of the chain. Furthermore, SAC intends to produce organic
cotton fabrics to be used in the sustainable clothing lines of well-known fashion brands and retailers.
We
have contracted to provide SAC with the following services:
|
● |
Act
as a corporate finance advisor to SAC; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market SAC, including: (i) where appropriate,
arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating definitive
documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish organic and
inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with having its shares listed on the Dubai NASDAQ. |
SAC
agreed to pay us $400,000 and to date we have been paid $210,000. In addition, we have agreed that we will receive a 6% equity
stake in SAC upon its initial public offering on the Dubai NASDAQ.
BUSINESS
TRANSACTED IN 2014
At
the beginning of 2014, we already had contracts with five companies: (1) Arrow Cars International Inc., a company based in Spain
and the U.S., (2) Regis Card Group Limited., a U.K. and U.S. corporation, (3) Direct CCTV / Direct Security Integration Inc.,
a U.K. and U.S. based company, (4) BTI / Scorpion Performance Inc. a company based in the U.S. and (5) Scandinavian Agritex Co.
Limited a UK and Sri Lankan based company.
During
2014, we gained the following eight clients:
(1)
ATC Enterprises DMCC
ATC
Enterprises DMCC (“ATC”) is a Dubai based company that has an innovative way to buy and sell diamonds. ATC DMCC is
working with the Dubai Diamond Exchange to establish regular sales and tenders of rough cut diamonds in Dubai. The first of these
was in January 2005. ATC has an extensive list of buyers from the UAE, Bombay, Surat, Ahmedabad, New York, Antwerp and the
Far East, giving suppliers access to reliable and legitimate buyers throughout the world as well as the chance to trade in the
unique and innovative environment in Dubai.
We
have contracted to provide ATC with the following services:
|
● |
Act
as a corporate finance advisor to ATC; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
ATC
agreed to pay us $30,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
(2)
Authenta Trade Inc.
Authenta
Trade Inc. (“Authenta”) is a Canadian company based in Calgary, Canada with offices in Singapore and Cyprus. Authenta
is in the business of developing a high security digital currency exchange. Authenta was formed specifically to address security
concerns in the market place, is currently developing software that will tighten security to new levels and will also bring technology
to the marketplace in order to make transacting in digital currencies such as Bitcoin, much simpler.
We
have contracted to provide Authenta with the following services:
|
● |
Act
as a corporate finance advisor to Authenta; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Authenta
agreed to pay us $60,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
3.Duo
World Inc.
Duo
World Inc. (“Duo”) a Nevada corporation, is a software company with subsidiaries in Sri Lanka, India and Singapore.
Duo is an information technology and software solutions company, focused on bringing value to its clients through every customer
interaction. Duo´s business model allows it to deliver consistent, quality service, at a scale and in the geographies that
meet its clients’ business needs. They leverage their breadth and depth of capabilities to help companies create quality
customer experiences across multiple channels, while increasing revenue and reducing their cost to serve their customers.
We
have contracted to provide Duo with the following services:
|
● |
Act
as a corporate finance advisor to Duo; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with having its shares listed on the OTCQB. |
Duo
agreed to pay us $250,000 and to date we have been paid $170,000. In addition, we have agreed that we will receive a 10% equity
stake in Duo upon its initial public offering.
(4)
Medinas Holdings BV
Medinas
Holdings BV (“Medinas”) is a Netherlands company with subsidiaries in the Netherlands and also in the U.S. that is
the sole proprietor and holder of an FDA approved cure for peritoneal cancer.
We
have contracted to provide Medinas with the following services:
|
● |
Act
as a corporate finance advisor to Medinas; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with having its shares listed on the Dubai NASDAQ. |
Medinas
agreed to pay us $465,000 and to date we have been paid $230,000. In addition, we have agreed that we will receive a 5% to 7%
(depending on certain agreed upon milestones) equity stake in Medinas upon its initial public offering.
(5).
Precious Cells International Limited
Precious
Cells International Limited (“Precious”) a U.K. company, is based in London.
Precious is a medical technology company founded in 2009, with a key focus on the development of clinical technologies in the
innovation of adult stem cells, cord blood stem cells and regenerative medicine. Regenerative medicine consists of innovative
medical therapies that will enable the body to repair, replace, restore and regenerate damaged or diseased cells, tissues and
organs. These therapies are targeting the repair of damaged heart muscle following heart attacks, replacement of skin for burns
victims, restoration of movement after spinal cord injury, regeneration of pancreatic tissue for insulin production in diabetics
and provide new treatments for Parkinson’s and Alzheimer’s disease.
We
have contracted to provide Precious with the following services:
|
● |
Act
as a corporate finance advisor to Precious; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Precious
agreed to pay us $30,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
(6)
Unii Limited
Unii
Limited (“Unii”) is a U.K. based company and sole proprietor of the social media application “Fling –
Message the World” that can be found in the Google Play Store and in Apple´s App Store and has grown virally to more
than 3 million users at the date of this filing.
We
have contracted to provide Unii with the following services:
|
● |
Act
as a corporate finance advisor to Unii; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Unii
agreed to pay us $60,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
(7)
VT Hydrocarbon Holdings (Pte.) Ltd.
VT
Hydrocarbon Holdings (Pte.) Ltd (“VTH”) is a Singapore based company whose ground operations are based in the
Aqaba Special Economic Zone in Aqaba, Jordan. VTH is looking to acquire, operate, manage and build hydrocarbon storage farms in
Aqaba and expand to repeat the formula in other parts of the world. VTH´s main business focus will be to provide Liquid
Petroleum Gas storage as well as other wet fuel facilities.
We
have contracted to provide VTH with the following services:
|
● |
Act
as a corporate finance advisor to VTH; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to potential sources of funding and once funding is sourced, assist with a potential IPO on the Dubai NASDAQ. |
VTH
agreed to pay us $20,000 for the initial ground work and a success fee for any funds that the company raises as a result of our
introductions, of 1% (cash fee) and 1.5% (equity fee). A possible listing on a recognized stock exchange and a possible larger
equity fee will be subject to a separate agreement.
(8)
Your MD AS
Your
MD AS (“Your MD”) is a Norwegian based company and sole proprietor of the medical diagnostic application “Your
MD” that can be found in the Google Play Store and in Apple´s App Store. This service brings healthcare advice to
those in areas where primary healthcare is needed most; whether that’s due to large expense, poor access, and poor quality
primary health or for those who are unable to travel. Your MD is primarily focused on emerging markets.
We
have contracted to provide Your MD with the following services:
|
● |
Act
as a corporate finance advisor to Your MD; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Your
MD agreed to pay us $25,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to
a separate agreement.
During
2014, our client Direct Security Integration Inc., decided not to pursue a listing of its stock on a recognized Stock Exchange.
OUR
BUSINESS IN 2015
We
have three distinct divisions (none of which will be treated as a segment for financial reporting purposes):
1.
Introducers Network. We have developed and continue to develop a number of finance professionals, accountants, attorneys and financial
advisers who will introduce us to their clients. We will review businesses introduced to us through these introducers and we will
compensate them on sum “to be determined” based on the event that we are engaged to assist the companies they introduce
to us.
2.
Project Review. Our management team and advisors will carefully review and vet each business plan and opportunity submitted to
us. Our management team and advisors will determine which services we can offer these clients and assess the potential propositions
to best assist our clients in achieving their goals.
3.
Placing. Working with our business associates in Dubai, Europe and the United States, we will use our best efforts to assist our
clients with listings on stock exchanges in these cities in order to maximize their exposure to capital markets and to access
funding via debt and equity offerings.
FUTURE
PLANS
MILESTONES
FOR 2015:
Our
specific plan of operations and milestones through April 2016 are as follows:
| 1) | DEVELOP
THE INTRODUCER NETWORK FURTHER AND IN HOPES OF ATTRACTING NEW INTEREST FOR OUR SERVICES. |
We
currently are relying on introductions to potential clients by the following firms in Asia and Europe:
|
(1) |
Certain
registered investment houses in London (United Kingdom). |
|
|
|
|
(2) |
An
Austrian management consultancy firm based in Vienna (Austria). |
|
|
|
|
(3) |
Various
investment banks based in Dubai (UAE) |
|
|
|
|
(4) |
Certain
Private Banks based in Amsterdam (Holland), Luxembourg (Luxembourg) and Zurich in Switzerland. |
|
|
|
|
(5) |
The
Colombo Stock Exchange in Sri Lanka. |
|
|
|
|
(6) |
Various
family offices in Dubai (UAE). |
We
do not have any verbal or written agreements with the firms identified above, as our relationship with each of them has been developed
over the past year or so.
We
intend to develop relationships with a further six “introducers” to potential new business for the Company before
the end of December 2015.
We
will continue to establish a firm presence in Dubai, UAE where we are attracting clients, relationships and awareness. Our Dubai
operation is currently a branch office of the company allowing us a license to trade in the area. This branch office will continue
to recruit new members of staff that will allow us to grow and become more efficient in Dubai.
| 3) | CREATE
A MORE EFFICIENT SYSTEM FOR REVIEWING PROSPECTIVE BUSINESSES. |
We
will concentrate our efforts on the quality of the company that is introduced to us. We will start off by sending the client a
standard due diligence list and request that they complete the list and send us the support for review. We will then follow-up
the due diligence with a “site visit” in order to properly understand our client’s business model and more importantly
meet the principals in person.
We
will create a deeper due diligence program allowing us to dig deep on any prospective client prior to engagement thus protecting
the company from any future problems by employing one new staff member that will be responsible for the due diligence analysis
and creating a report for our file on their findings.
| 4) | EXPAND
OUR CONSULTANCY TO INCLUDE MORE MERGER AND ACQUISITION ACTIVITY. |
We
intend to form relationships with merger and acquisition specialists during 2015 which will hopefully enable us to:
|
(1) |
Find
potential merger and acquisition candidates. |
|
|
|
|
(2) |
Introduce
our clients to brokers and investment bankers. |
|
|
|
|
(3) |
Introduce
our clients to the appropriate professionals (attorneys and accountants) to assist them in a public offering or exchange listing. |
The
only additional cost for this activity will be a very small administrative burden for telephone calls and communications to be
funded out of operational income, mainly income receivable from clients currently under contract.
| 5) | DEVELOP
IN HOUSE IT DEPARTMENT |
Commencing
initially with one member we will start to develop a proprietary program allowing us to easily monitor a client’s development
status and work in progress. We will also use this tool to manage our pipeline of clients and therefore it will become vital in
our cash flow forecasting.
During
2015, when this option becomes feasible, we intend to try to become one of the first foreign companies to dual list on Dubai NASDAQ;
our plan is to carry out a public relations campaign alongside the dual listing process with the public relations firm we have
selected with a view to prepare a campaign that will have a maximum effect.
| 7) | EXPAND
OUR NETWORK OF CONTACTS WITHIN THE INVESTMENT COMMUNITY IN DUBAI |
Our
network of investment companies in Dubai is currently small; however, we intend to substantially expand our Dubai network in order
to enable us to make introductions on a more institutional level. We intend to develop our network to at least twelve Investment
Institutions who may have interests in minority shareholding in companies from outside of the Middle East Region.
At
present we are being received with open arms by the Dubai and Middle Eastern financial community; hence we have plans to host
various hospitality events for our current clients, our key contacts and upper management of the company.
| 8) | EXPAND
OUR RANGE OF BUSINESS AND CONTACTS |
We
intend to take our consultancy service outside of the Middle East and Europe into Asia and Sri Lanka. We will expand on a “Commission
Only” basis for the individuals or companies who take on our service to offer to their clients. Accountants, lawyers and
finance professionals are the target market for overlaying our service into their existing client banks in return for a percentage
of fees received. We also intend to add two to five new members to our administration team during 2015.
We
will continue the “Road Shows”, in Dubai with the support of the Dubai NASDAQ for companies already listed in Sri
Lanka and other parts of Asia who could be seeking a dual listing in Dubai to provide liquidity and more capital raising options.
We have commenced initial conversations with a brokerage house in Sri Lanka to look at their clients they have that would be suitable
for the Dubai market. We will initially invite management of selected companies to Dubai for a two day event in conjunction with
Nasdaq Dubai and a number of leading Investment Institutions, the anticipated cost of this is to be met by the prospective clients
themselves and sponsorship from the institutions and Nasdaq Dubai.
| 10) | FURTHER
EXPAND OUR RANGE OF BUSINESS AND CONTACTS |
In
2015, we intend to cement in the relationships created. The target markets for attracting clients are: Thailand, Sri Lanka, China,
Hong Kong and Singapore. The foundation for this development commenced in 2013 and 2014. To service the clients generated from
these markets we will spend time creating a network of service companies who we can utilize to assist us on a local basis. We
will explore the possibilities of dual listings for our clients in Singapore to allow us a local market for any Asian clients
we will attract and giving the company a firm foothold in the Asian territory.
| 11) | EMPLOYEES;
IDENTIFICATION OF A SIGNIFICANT EMPLOYEE |
We
currently have five employees: Peter J. Smith, our President, and Enzo Taddei, our Chief Financial Officer, Patrick V. Dolan,
our New Business Managing Director, Shoaib Rasool, our In-House Accountant and Analyst and Zara V. Clark, our Dubai office manager,
each have an employment agreement with the Company. All are full time employees of the Company. We intend to hire at least five
additional employees in 2015, two administrative and three people to assist our New Business Managing Director, Patrick Dolan,
in London.
COMPETITION
We
face intense competition in every aspect of our business, and particularly from other firms which offer management, compliance
and other consulting services to private and public companies. We would prefer to accept a relatively low cash component as our
fee for management consulting and regulatory compliance services and take a greater portion of our fee in the form of restricted
shares of our private clients’ common stock. We also face competition from a large number of consulting firms, investment
banks, venture capitalists, merchant banks, financial advisors and other management consulting and regulatory compliance services
firms similar to ours. Many of our competitors have greater financial and management resources and some have greater market recognition
than we do.
REGULATORY
REQUIREMENTS
We
are not required to obtain any special licenses, nor meet any special regulatory requirements before establishing our business,
other than a simple business license. If new government regulations, laws, or licensing requirements are passed that would restrict
or eliminate delivery of any of our intended products, then our business may suffer. Presently, to the best of our knowledge,
no such regulations, laws, or licensing requirements exist or are likely to be implemented in the near future that would reasonably
be expected to have a material impact on or sales, revenues, or income from our business operations.
We
are not a broker-dealer. We do not believe we are an investment adviser or an investment company. We are not a hedge fund or a
mutual fund or any similar type of fund. We are primarily an operating business that offers and performs corporate consultancy
services.
EFFECT
OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS
The
Company’s common stock is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“1934 Act”).
As a result of such registration, the Company is subject to Regulation 14A of the “1934 Act,” which regulates proxy
solicitations. Section 14(a) requires all companies with securities registered pursuant to Section 12(g) thereof to comply with
the rules and regulations of the Commission regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to
stockholders of the Company at a special or annual meeting thereof or pursuant to a written consent will require the Company to
provide its stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information
must be submitted to the Commission at least 10 days prior to the date that definitive copies of this information are forwarded
to stockholders.
The
Company is also required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Commission on a regular
basis, and will be required to disclose certain events in a timely manner, (e.g., changes in corporate control; acquisitions or
dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report
on Form 8-K.
WE
ARE SUBJECT TO THE REQUIREMENTS OF SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002. IF WE ARE UNABLE TO TIMELY COMPLY WITH SECTION
404 OR IF THE COSTS RELATED TO COMPLIANCE ARE SIGNIFICANT, OUR PROFITABILITY, STOCK PRICE AND RESULTS OF OPERATIONS AND FINANCIAL
CONDITION COULD BE MATERIALLY ADVERSELY AFFECTED.
The
Company is required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which requires that we document
and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures
for the 2015 fiscal year. We are currently evaluating our existing controls against the standards adopted by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). During the course of our ongoing evaluation and integration of the
internal controls of our business, we may identify areas requiring improvement, and we may have to design enhanced processes and
controls to address issues identified through this review (see Item 9A, below for a discussion of our internal controls and procedures).
We
believe that the out-of-pocket costs, the diversion of management’s attention from running the day-to-day operations and
operational changes caused by the need to comply with the requirement of Section 404 of the Sarbanes-Oxley Act could be significant.
If the time and costs associated with such compliance exceed our current expectations, our results of operations and the future
filings of our Company could be materially adversely affected.
DEPENDENCE
ON KEY EMPLOYEES
The
Company is heavily dependent on the ability of our President, Peter Smith, our Chief Financial Officer, Enzo Taddei and our New
Business Managing Director, Patrick V. Dolan. The loss of the services of Mr. Smith, Mr. Taddei or Mr. Dolan would seriously undermine
our ability to carry out our business plan.
In
the event of future growth in administration, marketing, manufacturing and customer support functions, the Company may have to
increase the depth and experience of its management team by adding new members. The Company’s success will depend to a large
degree upon the active participation of its key officers and employees, as well as the continued service of its key management
personnel and its ability to identify, hire, and retain additional qualified personnel. There can be no assurance that the Company
will be able to recruit such qualified personnel to enable it to conduct its proposed business successfully.
REPORTS
TO SECURITY HOLDERS
The
public may view and obtain copies of the Company’s reports, as filed with the Securities and Exchange Commission, at the
SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Information on the Public Reference
Room is available by calling the SEC at 1-800-SEC-0330 1-800-SEC-0330 FREE. Additionally, copies of the Company’s
reports are available and can be accessed and downloaded via the internet on the SEC’s internet site at http://www.sec.gov.
ITEM
1A. RISK FACTORS.
An
investment in our Common Stock involves a high degree of risk. Prospective investors should carefully consider the following risk
factors and the other information in this Annual Report and in our other filings with the SEC before investing in our Common Stock.
Our business and results of operations could be seriously harmed by any of the following risks. You should carefully consider
the risks described below, the other information in this Annual Report and the documents incorporated by reference herein when
evaluating our Company and our business. If any of the following risks actually occurs, our business could be harmed. In such
case, the trading price of our Common Stock could decline and investors could lose all or a part of the money paid for our Common
Stock.
INVESTING
IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF THE FOLLOWING RISKS ACTUALLY MATERIALIZES, OUR BUSINESS, FINANCIAL
CONDITION AND RESULTS OF OPERATIONS WOULD SUFFER AND OUR SHAREHOLDERS COULD LOSE ALL OR PART OF THEIR INVESTMENT IN OUR SHARES.
RISKS
ASSOCIATED WITH OUR COMPANY
WHILE
WE HAVE A LITTLE OVER FOUR YEARS OF OPERATING HISTORY. THERE IS NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE
REVENUES. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE WILL CEASE OPERATIONS AND YOU WILL LOSE YOUR INVESTMENT.
We
were incorporated in Nevada on October 1, 2010, and our wholly-owned subsidiary, GE Partners Plc., was formed on September 2,
2009. For the fiscal year ended December 31, 2014, we incurred a net loss from operations of $876,744 which included stock compensation
to the New Business Managing Director, CEO and CFO valued at $540,000.
If
we cannot generate sufficient revenues to operate profitably, we will cease operations and you will lose your investment in our
Company. Our ability to achieve and maintain profitability and positive cash flow is dependent, among other things, upon:
|
● |
our
ability to attract clients who will buy our services from us; and |
|
|
|
|
● |
our
ability to generate revenues through the sale of our services. |
BECAUSE
OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THERE IS SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH CASE
INVESTORS COULD LOSE THEIR INVESTMENTS IN OUR COMMON STOCK.
Our
auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business
for the next twelve months. The financial statements do not include any adjustments that might result from the uncertainty about
our ability to continue in business. As such, we may have to cease operations and you could lose your investment.
WE
ARE AN “EMERGING GROWTH COMPANY” AND WE CANNOT BE CERTAIN IF WE WILL BE ABLE TO MAINTAIN SUCH STATUS OR IF THE REDUCED
DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES WILL MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS.
We
are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 or “JOBS Act,”
and we may adopt certain exemptions from various reporting requirements that are applicable to other public companies that are
not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive
and stockholder approval of any golden parachute payments not previously approved. We may remain an “emerging growth company”
for up to five full fiscal years following our initial public offering. We would cease to be an emerging growth company, and,
therefore, ineligible to rely on the above exemptions, if we have more than $1 billion in annual revenue in a fiscal year, if
we issue more than $1 billion of non-convertible debt over a three-year period, or if we have more than $700 million in market
value of our common stock held by non-affiliates as of June 30 in the fiscal year before the end of the five full fiscal years.
Additionally, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
If some investors find our common stock less attractive as a result of our reduced disclosures, there may be less active trading
in our common stock (assuming a market ever develops) and our stock price may be more volatile.
AS
A RESULT OF OUR INTENSELY COMPETITIVE INDUSTRY, WE MAY NOT GAIN ENOUGH MARKET SHARE TO BE PROFITABLE.
The
corporate consulting business is intensely competitive and due to our small size and limited resources, we may be at a competitive
disadvantage, especially as a public company. There are several firms offering similar services. Many of our competitors have
proven track records and substantial human and financial resources, as opposed to our Company who has limited human resources
and little cash. Also, the financial burden of being a public company, which will cost us approximately $50,000 per year in auditing
fees and legal fees to comply with our reporting obligations under the Securities Exchange Act of 1934 and compliance with the
Sarbanes-Oxley Act of 2002, will strain our finances and stretch our human resources to the extent that we may have to price our
Consultancy service fees higher than our non-publicly held competitors just to cover the costs of being a public company.
WE
ARE VULNERABLE TO THE CURRENT ECONOMIC CRISIS WHICH MAY NEGATIVELY AFFECT OUR PROFITABILITY AND ABILITY TO CARRY OUT OUR BUSINESS
PLAN.
We
are currently in a severe worldwide economic recession. Runaway deficit spending by the United States government and other countries
further exacerbates the United States and worldwide economic climate and may delay or possibly deepen the current recession. Currently,
a lot of economic indicators such as rising gasoline and commodity prices suggest higher inflation, dwindling consumer confidence
and substantially higher taxes. Demand for the services we offer tends to decline during recessionary periods when disposable
revenue is lower and may impact sales of our services. In addition, sudden disruptions in business conditions as a result of a
terrorist attack similar to the events of September 11, 2001, including further attacks, retaliation and the threat of further
attacks or retaliation, war, civil unrest in the Middle East, adverse weather conditions or other natural disasters, such as Hurricane
Katrina, pandemic situations or large scale power outages can have a short term or, sometimes, long term impact on spending. The
worldwide recession is placing severe constraints on the ability of all companies, particularly smaller ones, to raise capital,
borrow money, and operate effectively and profitably and to plan for the future.
BECAUSE
PETER J. SMITH, OUR PRESIDENT, OWNS 21.34% OF OUR TOTAL OUTSTANDING COMMON STOCK AND 1,200,000 (60.50%) SHARES OF OUR TOTAL OUTSTANDING
PREFERRED STOCK, MR. SMITH WILL RETAIN CONTROL OF US AND WILL BE ABLE TO DECIDE WHO WILL BE DIRECTORS AND YOU MAY NOT BE ABLE
TO ELECT ANY DIRECTORS WHICH COULD DECREASE THE PRICE AND MARKETABILITY OF OUR SHARES.
Peter
J. Smith, our President, owns 21.34% of our total outstanding common stock and 60.50% of our total outstanding preferred stock.
As a result, Peter J. Smith will own the vast majority of the shares of our Common Stock, a majority of the shares of our preferred
stock and super-voting rights attributable to his preferred stock, which allow him to cast ten (10) votes per share of preferred
stock and he will be able to elect all of our directors and control our operations, which could decrease the price and marketability
of our shares.
BECAUSE
OUR BUSINESS MODEL ANTICIPATES OUR RECEIVING EQUITY STAKES IN OUR CLIENTS, MOST OF WHOM WILL BE DEVELOPMENT STAGE COMPANIES, WE
MAY NOT BE ABLE TO RESELL SUCH EQUITY AT SUITABLE PRICES, IF AT ALL, WHICH COULD MATERIALLY IMPACT OUR EARNINGS AND ABILITY TO
REMAIN IN BUSINESS.
Our
business model anticipates that we will receive, as partial compensation for our consulting services, equity stakes in our clients,
many of whom will be development stage companies. We will have to value those equity stakes at the time we receive them. Investments
in development stage companies are risky because many of such companies’ securities are illiquid, thinly traded (if at all)
and the value of such securities will be subject to adjustments should the value of such securities decline, should such securities
be delisted from an exchange or cease being quoted on a stock quotation medium or should such businesses fail, which could cause
us to write-down or write-off the value of such securities and result in a negative impact to our earnings and possibly cause
us to cease or curtail our operations.
WE
MAY BE SUBJECT TO FURTHER GOVERNMENTAL REGULATION, INCLUDING THE INVESTMENT COMPANY ACT OF 1940, WHICH COULD ADVERSELY AFFECT
OUR OPERATIONS.
As
part of our business model, GEP accepts equity securities in our clients as partial compensation for our services. Prior to 2012,
40% or more of our income was derived from the receipt of equity securities and more than 40% of our assets were comprised of
equity securities that we received in exchange for some of our services. In 2012, only 9.85% of our income was derived from the
receipt of equity securities. As of December 31, 2013, 1.00% of our assets were comprised of equity securities. As of December
31, 2014, 3.69% of our assets were comprised of equity securities.
Although
we do not believe we are engaged in the business of investing, reinvesting or trading in securities, and we do not currently hold
ourselves out to the public as being engaged in those activities, it is possible that we may be deemed to be an “inadvertent
investment company” under section 3(a)(1)(C) of the Investment Company Act of 1940, as amended (“ICA”), if more
than 40% of our future income and/or more than 40% of our assets are derived from “investment securities” (as defined
in the ICA), and if we are deemed to be, or perceived to be, primarily engaged in the business of investing, reinvesting or trading
in securities.
If
we were deemed or found to be an investment company by the Securities and Exchange Commission or a court of law, then we would
face dire consequences and a maze of additional regulatory obligations. For example, registered investment companies are subject
to extensive, restrictive and potentially adverse regulation relating to, among other things, operating methods, management, capital
structure, dividends and transactions with affiliates. If it were established that we are an unregistered investment company,
there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive
relief, or both, in an action by the SEC, that we would be unable to enforce contracts with third parties or that third parties
with whom we have contracts could seek to obtain rescission of transactions with us undertaken during the period it was established
that we were an unregistered investment company.
WE
COULD BE SUBJECT TO THE INVESTMENT ADVISERS ACT OF 1940, WHICH WOULD BE DETRIMENTAL TO OUR BUSINESS.
Although
we do not believe we are engaged in the investment advisory business and we do not hold ourselves out to be investment advisers,
it is possible that the SEC could deem or find us to be an unregistered investment adviser due to the types of consulting services
offered by us. If we were deemed or found to be an investment adviser by the Securities and Exchange Commission or a court of
law, then we would face dire consequences and a maze of additional regulatory obligations. For example, registered investment
advisers are subject to extensive, restrictive and potentially adverse regulation relating to, among other things, operating methods,
fees, management, capital structure, dividends and transactions with affiliates. If it were established that we are an unregistered
investment adviser, there would be a risk, among other material adverse consequences, that we could be become subject to monetary
penalties or injunctive relief, or both, in an action by the SEC, that we would be unable to enforce contracts with third parties
or that third parties with whom we have contracts could seek to obtain rescission of transactions with us undertaken during the
period it was established that we were an unregistered investment adviser.
OUR
SHAREHOLDERS MAY BE DILUTED SIGNIFICANTLY THROUGH OUR EFFORTS TO OBTAIN FINANCING, FUND OUR OPERATIONS AND SATISFY OUR OBLIGATIONS
THROUGH ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK.
We
will likely have to issue additional shares of our Common Stock to fund our operations and to implement our plan of operation.
Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances,
we believe that the non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority,
without action or vote of the shareholders, to issue all or part of the 420,677,975 authorized, but unissued, shares of our common
stock. Future issuances of shares of our common stock will result in dilution of the ownership interests of existing shareholders,
may further dilute common stock book value and that dilution may be material.
FINRA
SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER’S ABILITY TO BUY AND SELL OUR STOCK.
The
FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds
for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial
status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there
is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements
make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of
reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees
for penny stock transactions. As a result, fewer broker-dealers may be willing to make a market in our common stock, which may
limit your ability to buy and sell our stock.
OUR
ARTICLES OF INCORPORATION AUTHORIZE THE ISSUANCE OF PREFERRED STOCK.
Our
Articles of Incorporation authorize the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences
determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder
approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect
the voting power or other rights of the holders of the common stock. On November 30, 2011, the Company issued all 5,000,000 shares
of our authorized preferred stock to our Chief Executive Officer, Peter Smith.
On
November 20, 2012, the Board of Directors and Mr. Smith subsequently agreed that Mr. Smith would retire to treasury 3,466,668
of these Series “A” preferred shares and retain, the balance, 1,533,332 shares. Mr. Smith subsequently gifted 400,000
of these Series “A” preferred shares to Mr. Taddei (CFO of the Company) and a further 133,332 preferred shares to
two other employees of the Company, 66,666 Series “A” preferred shares each.
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.
THIS
ANNUAL REPORT CONTAINS FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO US, OUR INDUSTRY AND TO OTHER BUSINESSES.
These
forward-looking statements in this Annual Report are based on the beliefs of our management, as well as assumptions made by and
information currently available to our management. When used in this Annual Report, the words “estimate,” “project,”
“believe,” “anticipate,” “intend,” “expect” and similar expressions are intended
to identify forward-looking statements. These statements reflect our current views with respect to future events and are subject
to risks and uncertainties that may cause our actual results to differ materially from those contemplated in our forward-looking
statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of
this Annual Report. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to
reflect events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events.
ITEM
1B. UNRESOLVED STAFF COMMENTS.
Not
applicable.
ITEM
2. PROPERTIES.
The
Company does not own any property. Our executive offices are located at X3 Jumeirah Bay, Office 3305, Jumeirah Lake Towers, Dubai,
U.A.E.; this office consists of 1,400 square feet of office space for which we pay a monthly rent of $2,675. We also have a satellite
serviced office located in London based in another office in Level 17 Dashwood House, 69 Old Broad Street, London EC2M 1QS, United
Kingdom. Peter J. Smith, our President and Chief Executive Office, is based in Dubai and Enzo Taddei, our Chief Financial Officer,
is based between Europe and Dubai.
ITEM
3. LEGAL PROCEEDINGS.
We
are not subject to any legal proceedings and are not aware of any threatened legal proceedings.
ITEM
4. MINE SAFETY DISCLOSURES.
Not
applicable.
PART
II
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
As
of December 31, 2014, the Company’s Common Stock was quoted on the Over-the-Counter Bulletin Board under the symbol “GEQU.OB.”
The market for the Company’s Common Stock is limited, volatile and sporadic and the price of the Company’s Common
Stock could be subject to wide fluctuations in response to quarterly variations in operating results, news announcements, trading
volume, sales of Common Stock by officers, directors and principal shareholders of the Company, general market trends, changes
in the supply and demand for the Company’s shares, and other factors. The following table sets forth the high and low sales
prices for each quarter relating to the Company’s Common Stock for the last two fiscal years. These quotations reflect inter-dealer
prices without retail mark-up, markdown, or commissions, and may not reflect actual transactions.
Fiscal
2014 | |
High | | |
Low | |
First Quarter (1) | |
$ | 0.37 | | |
$ | 0.08 | |
Second Quarter (1) | |
$ | 0.28 | | |
$ | 0.05 | |
Third Quarter (1) | |
$ | 0.22 | | |
$ | 0.14 | |
Fourth Quarter (1) | |
$ | 0.35 | | |
$ | 0.01 | |
| |
| | | |
| | |
Fiscal
2013 | |
| High | | |
| Low | |
First Quarter (1) | |
$ | 1.20 | | |
$ | 0.70 | |
Second Quarter (1) | |
$ | 0.97 | | |
$ | 0.10 | |
Third Quarter (1) | |
$ | 0.27 | | |
$ | 0.15 | |
Fourth Quarter (1) | |
$ | 0.45 | | |
$ | 0.10 | |
|
(1) |
This
represents the closing bid information for the stock on the OTC Bulletin Board. The bid and ask quotations represent prices
between dealers and do not include retail markup, markdown or commission. They do not represent actual transactions and have
not been adjusted for stock dividends or splits. |
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for
purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price
of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules
require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks and (ii) the broker or
dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny
stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must
(i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination
that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,
prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market,
which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that
the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about commissions payable
to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing
recent price information for the penny stock held in the account and information on the limited market in penny stocks.
Shareholders
should be aware that, according to SEC Release No. 34-29093 dated April 17, 1991, the market for penny stocks has suffered
in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one
or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged
matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure
sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential
and markups by selling broker dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent
investor losses. The occurrence of these patterns or practices could increase the volatility of our share price.
Our
management is aware of the abuses that have occurred historically in the penny stock market.
HOLDERS.
As of the date of this filing, there were 79 record holders of the 76,541,972 shares of the Company’s issued and outstanding
Common Stock.
DIVIDENDS.
The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable
future. It is the present intention of management to utilize all available funds for the development of the Company’s business.
RECENT
ISSUANCES OF UNREGISTERED SECURITIES
SECURITIES
ISSUED IN 2013
On
February 15, 2013, the Company issued 100,000 common restricted shares at $.80 to Tricon Holdings Limited in exchange of $80,000
of marketing services rendered to the Company.
On
March 12, 2013, the Company issued 75,000 common restricted shares at $1.10 to Tempest Holdings Limited in exchange of $82,500
of services rendered in the form of introductions of various new clients to the Company.
On
April 5, 2013, the Company issued 150,000 common restricted shares at $.95 to Tricon Holdings Limited in exchange of $142,500
of marketing services rendered to the Company.
On
April 5, 2013, the Company issued 500,000 common restricted shares at $.25 to Caro Capital Inc. in exchange of $125,000 of invest
relations services rendered to the Company.
On
April 15, 2013, the Company issued 25,000 common restricted shares at $.55 to Philip Brooks in exchange of $13,750 of services
rendered to the Company.
On
April 24, 2013, the Company issued 150,000 common restricted shares at $.29 to Robert Sullivan in exchange of $43,500 of marketing
and radio advertisement services rendered to the Company.
On
May 3, 2013, an investor, Piquerel Investment Limited, subscribed for 10,000 common restricted shares at $.60.
On
May 17, 2013, the Company issued 40,000 common restricted shares at $.17 to Scott Suckling in exchange of $6,800 of services rendered
in the form of introduction of a new client to the Company.
On
May 17, 2013, the Company issued 99,385 common restricted shares at $.17 to ME Biz Limited in exchange of $16,972 of services
rendered in the form of introduction of a new client to the Company.
In
October through December 2013, the Company issued 30,000 common restricted shares to the beneficiary of The Able Foundation (Mr.
Robert Luke Hague) as an interest payment for a loan $120,420 signed on October 9, 2013. The stock issued was valued for a total
cost of $3,900 at an average of $0.13.
From
January, 2013 through December, 2013, the Company issued 120,000 common restricted shares to Tempest Holdings Limited in exchange
of a twelve month consultancy agreement that began on January 1, 2013. The stock issue was valued at $50,400 at an average of
$0.42 over the twelve month life of the contract.
On
December 12, 2013 the Company issued 10,000 common restricted shares at $.12 to Zara V. Clark in exchange of $1,200 of services
rendered to the Company.
On
December 12, 2013 the Company issued 100,000 common restricted shares at $.12 to Michael Paul Duff in exchange of $12,000 of marketing
services rendered to the Company in the United Kingdom.
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.
SECURITIES
ISSUED IN 2014
On
March 17, 2014, the Company issued 295,567 shares of restricted common stock at $.04 per share to Asher Enterprises, Inc. upon
conversion of debt in the amount of $12,000. The conversion was at a discount to market value of the common stock.
On
April 1, 2014, the Company issued 501,149 shares of restricted common stock at $.22 per share to Asher Enterprises, Inc. upon
conversion of debt in the amount of $109,819. The conversion was at a discount to market value of the common stock.
On
April 22, 2014, the Company issued 165,000 shares of restricted common stock at $.05 per share to Robert Hasnain in exchange for
$8,250 of services rendered to the Company. Common stock issued at market price on April 22, 2014.
On
July 22, 2014, the Company issued 115,000 shares of restricted common stock at $.15 per share to Robert Hasnain in exchange for
$17,250 of services rendered to the Company. Common stock issued at market price on July 22, 2014.
On
July 22, 2014, the Company issued 50,000 shares of restricted common stock at $.15 per share to Susan Smith in exchange for $7,500
of services rendered to the Company. Common stock issued at market price on July 22, 2014.
On
July 22, 2014, the Company issued 12,500 shares of restricted common stock at $.15 per share to Julian Ainsby in exchange for
$1,875 of services rendered to the Company. Common stock issued at market price on July 22, 2014.
On
July 22, 2014, the Company issued 276,000 shares of restricted common stock at $.15 per share to Colin Copeland in exchange for
$41,400 of services rendered to the Company. Common stock issued at market price on July 22, 2014.
On
August 4, 2014, the Company issued 200,000 shares of restricted common stock at $.15 per share to Martin E. Janis and Company,
Inc. in exchange for $30,000 of services rendered to the Company. Common stock issued at market price on August 4, 2014.
On
September 19, 2014, the Company issued 500,000 shares of restricted common stock at $.16 per share to Patrick Dolan, the Company’s
New Business Director, as a salary bonus.
On
October 2, 2014, the Company issued 86,207 shares of restricted common stock at $.093 per share to Asher Enterprises, Inc. upon
conversion of debt valued at $16,379. The conversion was at a discount to market value of the common stock.
On
October 17, 2014, the Company issued 162,543 shares of restricted common stock at $.029 per share to Asher Enterprises, Inc. upon
conversion of debt valued at $23,406. The conversion was at a discount to market value of the common stock.
On
October 21, 2014, the Company issued 162,543 shares of restricted common stock at $.029 per share to Asher Enterprises, Inc. upon
conversion of debt valued at $19,505. The conversion was at a discount to market value of the common stock.
October
27, 2014, the Company issued 162,543 shares of restricted common stock at $.029 per share to Asher Enterprises, Inc. upon conversion
of debt valued at $18,530. The conversion was at a discount to market value of the common stock.
On
November 6, 2014, the Company issued 18,498 shares of restricted common stock at $.054 per share to Adar Bay, LLC upon conversion
of debt valued at $2,109. The conversion was at a discount to market value of the common stock.
On
December 1, 2014, the Company issued 517,241 shares of restricted common stock at $.023 per share to Asher Enterprises, Inc. upon
conversion of debt valued at $39,828. The conversion was at a discount to market value of the common stock.
On
December 1, 2014, the Company issued 902,155 shares of restricted common stock at $.021 per share to Asher Enterprises, Inc. upon
conversion of debt valued at $315,754. The conversion was at a discount to market value of the common stock.
On
December 2, 2014, the Company issued 500,000 shares of restricted common stock at $.024 per share to Adar Bay, LLC upon conversion
of debt valued at $42,200. The conversion was at a discount to market value of the common stock.
On
December 16, 2014, the Company issued 600,000 shares of restricted common stock at $.013 per share to JMJ Financial upon conversion
of debt valued at $18,000.
All
of the foregoing stock was issued in reliance on the exemption from registration requirements of the 33 Act provided by Section
4.(a)(2) of the 33 Act and/or Regulation S of the 33 Act.
ISSUER
REPURCHASES OF EQUITY SECURITIES
None.
ITEM 6.
SELECTED FINANCIAL DATA.
Not
applicable.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
For
the years ended December 31, 2014 and 2013:
The
Company had revenues amounting to $515,000 and $174,349, respectively, for the years ended December 31, 2014 and 2013.
| |
December
31, 2014 | | |
December
31, 2013 | | |
Changes | |
| |
| | |
| | |
| |
Revenue | |
$ | 515,000 | (1) | |
$ | 174,349 | | |
$ | 340,651 | |
| |
$ | 515,000 | | |
$ | 174,349 | | |
$ | 340,651 | |
For
the years ended December 31, 2014 and December 31, 2013, the Company had the following concentrations of revenues with customers:
Customer | |
December
31, 2014 | | |
December
31, 2013 | |
| |
| | |
| |
ATC | |
| 6 | % | |
| 0 | % |
AUT | |
| 12 | % | |
| 0 | % |
UNI | |
| 12 | % | |
| 0 | % |
ACI | |
| 0 | % | |
| 8 | % |
SAC | |
| 5 | % | |
| 14 | % |
ANR | |
| 0 | % | |
| 14 | % |
YMD | |
| 5 | % | |
| 0 | % |
IOA | |
| 5 | % | |
| 0 | % |
STV | |
| 5 | % | |
| 0 | % |
PCI | |
| 6 | % | |
| 0 | % |
DSI | |
| 22 | % | |
| 63 | % |
MHB | |
| 19 | % | |
| 0 | % |
DUO | |
| 0 | % | |
| 0 | % |
VTH | |
| 4 | % | |
| 0 | % |
(1) | The
Company’s 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, 2014 the Company received $730,015 from eleven clients for service to be
rendered during the year 2014 and 2015. At December 31, 2014, the Company recognized
$515,000 of this deferred revenue as revenue; leaving accumulated deferred revenue balance
of $462,015 (which includes $247,000 of deferred revenue received during the year ended
December 31, 2013.) |
The
total operating expenditures amounted to $1,391,743 and $2,365,784, respectively, for the years ended December 31, 2014
and 2013. The following table sets forth the Company’s operating expenditure analysis for both years:
| |
December
31, 2014 | | |
December
31, 2013 | | |
Change | |
| |
| | |
| | |
| |
General and administrative expenses | |
$ | 314,095 | | |
$ | 467,939 | | |
$ | (153,844 | ) |
Stock compensation | |
| - | | |
| 540,000 | | |
| (540,000 | ) |
Salaries | |
| 816,323 | | |
| 550,284 | | |
| 266,039 | |
Professional services | |
| 254,953 | | |
| 646,179 | | |
| (391,226 | ) |
Depreciation | |
| 4,372 | | |
| 1,382 | | |
| 2,990 | |
Impairment of Financial Assets | |
| 2,000 | | |
| 160,000 | | |
| (158,000 | ) |
Total
operating expenses | |
$ | 1,391,743 | | |
$ | 2,365,784 | | |
$ | (974,040 | ) |
The
net loss from operations for the years ended December 31, 2014 and 2013 was $876,743 and $2,191,435, respectively.
The
Company´s other income and expenses for the years ended December 31, 2014 and 2013 was $1,345,384 and $153,523, respectively.
| |
December
31, 2014 | | |
December
31, 2013 | | |
Change | |
| |
| | |
| | |
| |
Interest expense | |
$ | (608,973 | ) | |
$ | (148,210 | ) | |
$ | (460,763 | ) |
Amortization of debt discount | |
| (299,535 | ) | |
| (23,513 | ) | |
| (276,022 | ) |
Gain on settlement of debt | |
| 138,834 | | |
| 18,200 | | |
| 120,634 | |
Loss on derivative liability | |
| (227,495 | ) | |
| - | | |
| (227,495 | ) |
Loss on conversion of notes | |
| (369,949 | ) | |
| - | | |
| (369,949 | ) |
Gain on debt extinguishment | |
| 22,486 | | |
| - | | |
| 22,486 | |
Exchange rate loss | |
| (753 | ) | |
| - | | |
| (753 | ) |
Total
income (expense) | |
$ | (1,345,384 | ) | |
$ | (153,523 | ) | |
$ | (1,191,862 | ) |
The
net loss for the years ended December 31, 2014 and 2013 amounted to $2,222,129 and $2,344,958, respectively.
The
Company´s Comprehensive Loss for the years ended December 31, 2014 and 2013 amounted to $2,221,084 and $2,344,958, respectively.
| |
12/31/2014 |
| |
12/31/2013 |
|
Comprehensive
Loss: | |
|
|
| |
|
|
|
Gain on foreign currency translation | |
|
1,045 |
| |
|
- |
|
Net loss | |
|
(2,222,129 |
) | |
|
(2,344,958 |
) |
Comprehensive
Loss | |
$ |
(2,221,084 |
) | |
$ |
(2,344,958 |
) |
At
December 31, 2014 and December 31, 2013, the Company had 36,271,148 and 31,044,202 shares issued and outstanding, respectively,
the weighted average was 32,487,859 and 30,474,948 shares, respectively, hence, the loss per share at December 31, 2014 and 2013
was $(0.07) and (0.08), respectively.
CAUTIONARY
FORWARD - LOOKING STATEMENT
The
following discussion should be read in conjunction with our financial statements and related notes.
Certain
matters discussed herein may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties
include, but are not limited to, the following:
|
● |
the volatile and
competitive nature of our industry, |
|
|
|
|
● |
the uncertainties
surrounding the rapidly evolving markets in which we compete, |
|
|
|
|
● |
the uncertainties
surrounding technological change of the industry, |
|
|
|
|
● |
our dependence
on its intellectual property rights, |
|
|
|
|
● |
the success of
marketing efforts by third parties, |
|
|
|
|
● |
the changing demands
of customers, and |
|
|
|
|
● |
the arrangements
with present and future customers and third parties. |
Should
one or more of these risks or uncertainties materialize or should any of the underlying assumptions prove incorrect, actual results
of current and future operations may vary materially from those anticipated.
BUSINESS
DEVELOPMENT
RESULTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2014
At
the beginning of 2014, we already had contracts with five companies: (1) Arrow Cars International Inc., a company based in Spain
and the US; (2) Regis Card Group Limited., a UK and U.S. corporation, (3) Direct CCTV / Direct Security Integration Inc., a U.K.
and U.S. based company, (4) BTI / Scorpion Performance Inc. a company based in the U.S. and (5) Scandinavian Agritex Co. Limited
a UK and Sri Lankan based company.
During
2014, we gained the following eight clients:
1)
ATC Enterprises DMCC
ATC
Enterprises DMCC (“ATC”) is a Dubai based company that has an innovative way to buy and sell diamonds. ATC DMCC is
working with the Dubai Diamond Exchange to establish regular sales and tenders of rough cut diamonds in Dubai. The first of these
was in January 2005. ATC have an extensive list of buyers from the UAE, Bombay, Surat, Ahmedabad, New York, Antwerp and the
Far East, giving suppliers access to reliable and legitimate buyers throughout the world as well as the chance to trade in the
unique and innovative environment in Dubai.
We
have contracted to provide ATC with the following services:
|
● |
Act
as a corporate finance advisor to ATC; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
ATC
agreed to pay us $30,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
2)
Authenta Trade Inc.
Authenta
Trade Inc. (“Authenta”) is a Canadian company based in Calgary, Canada with offices in Singapore and Cyprus. Authenta
is in the business of developing a high security digital currency exchange. Authenta was formed specifically to address security
concerns in the market place, is currently developing software that will tighten security to new levels and will also bring technology
to the marketplace in order to make transacting in digital currencies such as Bitcoin, much simpler.
We
have contracted to provide Authenta with the following services:
|
● |
Act
as a corporate finance advisor to Authenta; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Authenta
agreed to pay us $60,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
3)
Duo World Inc.
Duo
World Inc. (“Duo”) a Nevada corporation, is a software company with subsidiaries in Sri Lanka, India and Singapore.
Duo is an information technology and software solutions company, focused on bringing value to its clients through every customer
interaction. Duo´s business model allows it to deliver consistent, quality service, at a scale and in the geographies that
meet its clients’ business needs. They leverage their breadth and depth of capabilities to help companies create quality
customer experiences across multiple channels, while increasing revenue and reducing their cost to serve their customers.
We
have contracted to provide Duo with the following services:
|
● |
Act
as a corporate finance advisor to Company; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market Duo, including: (i) where appropriate,
arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating definitive
documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish organic and
inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with having its shares listed on the OTCQB. |
DUO
agreed to pay us $250,000 and to date we have been paid $170,000. In addition, we have agreed that we will receive a 10% equity
stake in DUO upon its initial public offering.
4)
Medinas Holdings BV
Medinas
Holdings BV (“Medinas”) is a Netherlands company with subsidiaries in the Netherlands and also in the U.S. that is
the sole proprietor and holder of an FDA approved cure for peritoneal cancer.
We
have contracted to provide Medinas with the following services:
|
● |
Act
as a corporate finance advisor to Medinas; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with having its shares listed on the Dubai NASDAQ. |
Medinas
agreed to pay us $465,000 and to date we have been paid $230,000. In addition, we have agreed that we will receive a 5% to 7%
(depending on certain agreed upon milestones) equity stake in Medinas upon its initial public offering.
5)
Precious Cells International Limited
Precious
Cells International Limited (“Precious”) a U.K. company, is based in London.
Precious is a medical technology company founded in 2009, with a key focus on the development of clinical technologies in the
innovation of adult stem cells, cord blood stem cells and regenerative medicine (RM). Regenerative medicine consists of innovative
medical therapies that will enable the body to repair, replace, restore and regenerate damaged or diseased cells, tissues and
organs. These therapies are targeting the repair of damaged heart muscle following heart attacks, replacement of skin for burns
victims, restoration of movement after spinal cord injury, regeneration of pancreatic tissue for insulin production in diabetics
and provide new treatments for Parkinson’s and Alzheimer’s disease.
We
have contracted to provide Precious with the following services:
|
● |
Act
as a corporate finance advisor to Precious; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market Precious, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Precious
agreed to pay us $30,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
6)
Unii Limited
Unii
Limited (“Unii”) is a U.K. based company and sole proprietor of the social media application “Fling –
Message the World” that can be found in the Google Play Store and in Apple´s App Store and has grown virally to more
than 3 million users at the date of this filing.
We
have contracted to provide Unii with the following services:
|
● |
Act
as a corporate finance advisor to Unii; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Unii
agreed to pay us $60,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to a
separate agreement.
7)
VT Hydrocarbon Holdings (Pte.) Ltd.
VT
Hydrocarbon Holdings (Pte.) Ltd (“VTH”) is a Singapore based company whose ground operations are based in the
Aqaba Special Economic Zone in Aqaba, Jordan. VTH is looking to acquire, operate, manage and build hydrocarbon storage farms in
Aqaba and expand to repeat the formula in other parts of the world. VTH´s main business focus will be to provide Liquid
Petroleum Gas storage as well as other wet fuel facilities.
We
have contracted to provide VTH with the following services:
|
● |
Act
as a corporate finance advisor to VTH; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to potential sources of funding and once funding is sourced, assist with a potential IPO on the Dubai NASDAQ. |
VTH
agreed to pay us $20,000 for the initial ground work and a success fee for any funds that the company raises as a result of our
introductions, of 1% (cash fee) and 1.5% (equity fee). A possible listing on a recognized stock exchange and a possible larger
equity fee will be subject to a separate agreement.
8)
Your MD AS
Your
MD AS (“Your MD”) is a Norwegian based company and sole proprietor of the medical diagnostic application “Your
MD” that can be found in the Google Play Store and in Apple´s App Store. This service brings healthcare advice to
those in areas where primary healthcare is needed most; whether that’s due to large expense, poor access, and poor quality
primary health or for those who are unable to travel. Your MD is primarily focused on emerging markets.
We
have contracted to provide Your MD with the following services:
|
● |
Act
as a corporate finance advisor to Your MD; |
|
|
|
|
● |
Advise
the client on possible corporate restructuring and assist the client in the preparation and authorization of documentation; |
|
|
|
|
● |
Use
reasonable efforts through our marketing and public relations contacts to support and market the company, including: (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the client, its management and advisors in negotiating
definitive documentation; and (iii) otherwise assist the client with such other actions as may be necessary to accomplish
organic and inorganic growth; and |
|
|
|
|
● |
Introduce
the client to professional advisors, such as accountants, auditors, lawyers and stock registrars who would assist the client
with potential IPO on the Dubai NASDAQ. |
Your
MD agreed to pay us $25,000 for this initial ground work. A possible listing on a recognized stock exchange will be subject to
a separate agreement.
In
2014, our client Direct Security Integration Inc., decided not to pursue a listing of its stock on a recognized Stock Exchange.
During
2014, the Company had revenues totaling $515,000 that was comprised entirely of cash received from our current clients.
In
2014, our total operating expenses amounted to $1,391,743.
| |
December
31, 2014 | | |
December
31, 2013 | |
General and administrative expenses. | |
$ | 314,095 | | |
$ | 467,939 | |
Salaries. | |
| 816,323 | | |
| 550,283 | |
Professional services. | |
| 254,953 | | |
| 646,179 | |
Depreciation. | |
| 4,372 | | |
| 1,382 | |
Impairment of financial assets. | |
| 2,000 | | |
| 160,000 | |
Stock based compensation. | |
| - | | |
| 540,000 | |
Total
operating expenses | |
$ | 1,391,743 | | |
$ | 2,365,784 | |
LIQUIDITY
AND CAPITAL RESERVES
Our
audited financial statements contained herein have been prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 to the financial statements, the Company had a loss of $2,222,129 for the year ended December 31, 2014, $2,000
of which is due to the permanent impairment of investments and a further $1,345,384 was due to other income and expenses as per
the following table:
Other (income) &
expense | |
| | |
| |
Interest expense | |
$ | 608,973 | | |
$ | 148,210 | |
Amortization of debt discount | |
| 299,535 | | |
| 23,513 | |
(Gain) on settlement of debt | |
| (138,834 | ) | |
| (18,200 | ) |
Loss on derivate liability | |
| 227,495 | | |
| - | |
Loss on conversion of notes | |
| 369.949 | | |
| - | |
(Gain) on debt extinguishment | |
| (22.486 | ) | |
| - | |
Exchange rate loss | |
| 753 | | |
| - | |
Total
(income) & expense | |
$ | 1,345,384 | | |
$ | 153,523 | |
The
Company had $19,026 in cash; net cash used in operations of $209,328 for the year ended December 31, 2014; and a working capital
deficit of $2,427,492 and stockholders´ deficit of $3,841,579 as of December 31, 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.
It
is the Company’s intention to seek additional debt financing, which we plan to use as additional working capital to implement
our marketing program to increase awareness of our business model and also to expand our operations via the acquisition of companies
that are in a similar space and industry as ours, although we have not identified any companies that we would consider acquiring.
However, we do not have any verbal or written agreements with anyone to provide us with debt financing. Any short fall in our
projected operating revenues will be covered by:
|
● |
The
cash fees that we expect to receive during the next 12 months from the clients we currently have under contract. |
|
|
|
|
● |
Receiving
loans from one or more of our officers even though at the present time, we do not have verbal or written commitments from
any of our officers to lend us money. |
|
|
|
|
● |
Receiving
loans from third party lenders and/ or investors. |
FUTURE
PLANS
We
currently have 12 live clients under contract, two of which were signed in January 2015, that either are seeking a listing on
a recognized Stock Exchange or are seeking funding for acquisition and growth:
(1) |
Arrow
Cars International Inc. |
(2) |
ATC
Enterprises DMCC. |
(3) |
Duo
World Inc. |
(4) |
Energy
Equity Resources (Norway) Limited. |
(5) |
Magpie
Investment Holdings Limited. |
(6) |
Medinas
Holding Limited. |
(7) |
Regis
Card Limited. |
(8) |
Scandinavian
AgriTex Co. Limited. |
(9) |
Scorpion
Performance Inc. (renamed Biological Therapies Inc.). |
(10) |
Unii
Limited. |
(11) |
VT
Hydrocarbons Holdings Limited. |
(12) |
Your
MD AS. |
MILESTONES
FOR 2015/2016:
Our
specific plan of operations and milestones through April 2016 are as follows:
|
1) |
DEVELOP
THE INTRODUCER NETWORK FURTHER AND IN HOPES OF ATTRACTING NEW INTEREST FOR OUR SERVICES. |
We
currently are relying on introductions to potential clients by the following firms in Asia and Europe:
|
● |
Certain
registered investment houses in London (United Kingdom). |
|
|
|
|
● |
An
Austrian management consultancy firm based in Vienna (Austria). |
|
|
|
|
● |
Various
investment banks based in Dubai (UAE) |
|
|
|
|
● |
Certain
Private Banks based in Amsterdam (Holland), Luxembourg (Luxembourg) and Zurich in Switzerland. |
|
|
|
|
● |
The
Colombo Stock Exchange in Sri Lanka. |
|
|
|
|
● |
Various
family offices in Dubai (UAE). |
We
do not have any verbal or written agreements with the firms identified above, as our relationship with each of them has been developed
over the past year or so.
We
intend to develop relationships with a further six “introducers” to potential new business for the Company before
the end of December 2015.
We
will continue to establish a firm presence in Dubai, UAE where we are attracting clients, relationships and awareness. Our Dubai
operation is currently a branch office of the company allowing us a license to trade in the area. This branch office will continue
to recruit new members of staff that will allow us to grow and become more efficient in Dubai.
| 2) | CREATE
A MORE EFFICIENT SYSTEM FOR REVIEWING PROSPECTIVE BUSINESSES. |
We
will concentrate our efforts on the quality of the company that is introduced to us. We will start off by sending the client a
standard due diligence list and request that they complete the list and send us the support for review. We will then follow-up
the due diligence with a “site visit” in order to properly understand our client’s business model and more importantly
meet the principals in person.
We
will create a deeper due diligence program allowing us to dig deep on any prospective client prior to engagement thus protecting
the company from any future problems by employing one new staff member that will be responsible for the due diligence analysis
and creating a report for our file on their findings.
| 3) | EXPAND
OUR CONSULTANCY TO INCLUDE MORE MERGER AND ACQUISITION ACTIVITY. |
We
intend to form relationships with merger and acquisition specialists during 2015 which will hopefully enable us to:
|
● |
Find
potential merger and acquisition candidates. |
|
|
|
|
● |
Introduce
our clients to brokers and investment bankers. |
|
|
|
|
● |
Introduce
our clients to the appropriate professionals (attorneys and accountants) to assist them in a public offering or exchange listing. |
The
only additional cost for this activity will be a very small administrative burden for telephone calls and communications to be
funded out of operational income, mainly income receivable from clients currently under contract.
| 4) | DEVELOP
IN HOUSE IT DEPARTMENT. |
Commencing
initially with one member we will start to develop a proprietary program allowing us to easily monitor a client’s development
status and work in progress. We will also use this tool to manage our pipeline of clients and therefore it will become vital in
our cash flow forecasting.
During
2015, when this option becomes feasible, we intend to try to become one of the first foreign companies to dual list on Dubai NASDAQ;
our plan is to carry out a public relations campaign alongside the dual listing process with the public relations firm we have
selected with a view to prepare a campaign that will have a maximum effect.
| 6) | EXPAND
OUR NETWORK OF CONTACTS WITHIN THE INVESTMENT COMMUNITY IN DUBAI. |
Our
network of investment companies in Dubai is currently small; however, we intend to substantially expand our Dubai network in order
to enable us to make introductions on a more institutional level. We intend to develop our network to at least twelve Investment
Institutions who may have interests in minority shareholding in companies from outside of the Middle East Region.
At
present we are being received with open arms by the Dubai and Middle Eastern financial community; hence we have plans to host
various hospitality events for our current clients, our key contacts and upper management of the company.
| 7) | EXPAND
OUR RANGE OF BUSINESS AND CONTACTS. |
We
intend to take our consultancy service outside of the Middle East and Europe into Asia and Sri Lanka. We will expand on a ‘Commission
Only’ basis for the individuals or companies who take on our service to offer to their clients. Accountants, lawyers and
finance professionals are the target market for overlaying our service into their existing client banks in return for a percentage
of fees received. We also intend to add at least two new members to our administration team during 2015.
We
will continue the “Road shows”, in Dubai with the support of the Dubai NASDAQ for companies already listed in Sri
Lanka and other parts of Asia who could be seeking a dual listing in Dubai to provide liquidity and more capital raising options.
We have commenced initial conversations with a brokerage house in Sri Lanka to look at their clients they have that would be suitable
for the Dubai market. We will initially invite management of selected companies to Dubai for a two day event in conjunction with
Nasdaq Dubai and a number of leading Investment Institutions, the anticipated cost of this is to be met by the prospective clients
themselves and sponsorship from the institutions and Nasdaq Dubai.
| 9) | FURTHER
EXPAND OUR RANGE OF BUSINESS AND CONTACTS. |
In
2015, we intend to cement in the relationships created. The target markets for attracting clients are: Thailand, Sri Lanka, China,
Hong Kong and Singapore. The foundation for this development commenced in 2013 and 2014.
To
service the clients generated from these markets we will spend time creating a network of service companies who we can utilize
to assist us on a local basis. We will explore the possibilities of dual listings for our clients in Singapore to allow us a local
market for any Asian clients we will attract and giving the company a firm foothold in the Asian territory.
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Not
applicable.
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our
financial statements and supplementary data may be found beginning at page F-1.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not
applicable.
ITEM
9A. CONTROLS AND PROCEDURES.
EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES
As
of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation
of our Principal Executive Officer and Principal Financial Officer of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that
our disclosure controls and procedures (as defined in Rules 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of
1934) were ineffective.
MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies
and procedures that:
|
(1) |
pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of
our assets; |
|
|
|
|
(2) |
provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management
and directors; and |
|
|
|
|
(3) |
provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets
that could have a material effect on the financial statements. |
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management
assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment,
management used the framework set forth in the report entitled Internal Control--Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s
internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information
and communication, and (v) monitoring. This annual report does not include an attestation report of our registered public accounting
firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits us to provide only management’s
report in this Annual Report.
IDENTIFIED
MATERIAL WEAKNESSES AND SIGNIFICANT DEFICIENCIES
A
material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood
that a material misstatement of the financial statements will not be prevented or detected. Management identified the following
internal control deficiency which we had assessed as a material weakness as of December 31, 2014, during our assessment of our
internal control over financial reporting as follows:
|
1. |
We
did not have adequate segregation of duties over certain areas of our financial reporting process. |
The
internal control deficiency identified above will only be completely corrected if the company expands and has the capacity to
adequately segregate the duties to mitigate risk in financial reporting. Expansion will depend mostly on the ability of management
to generate enough income to warrant growth in personnel.
We
did not have effective comprehensive entity-level internal controls specific to the structure of our board of directors and organization
of critical committees. Due to our expected expansion, without correcting this significant deficiency and ensuring that our board
of directors has the proper oversight and committees are properly established, the control environment in subsequent years may
not be effective.
MANAGEMENT’S
REMEDIATION INITIATIVES
We
are in the further process of evaluating our material and significant deficiencies. We have already begun to remediate many of
the deficiencies. However, others will require additional people, including adding to our board of directors, which will take
longer to remediate.
In
an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated,
or plan to initiate, the following series of measures:
|
1. |
Identify
and retain one or two new directors for our board of directors including a member who is appropriately credentialed as a financial
expert with a goal of having sufficient independent board of directors oversight; |
|
|
|
|
2. |
Ensure
all entity level controls are applied at all levels of the organization and are scalable for acquisition or merger targets; |
|
|
|
|
3. |
Establish
comprehensive formal general accounting policies and procedures and require directors or employees to sign off such policies
and procedures as documentation of their understanding of and compliance with company policies; |
|
|
|
|
4. |
Make
all directors or employees subject to our Code of Ethics (including those employees in acquisition targets) and require all
employees and directors to sign our Code of Ethics on an annual basis and retain the related documentation; and, |
|
|
|
|
5. |
Implement
better segregation of duties given the size of our company. |
We
plan to test our updated controls and remediate our deficiencies by June 30, 2015.
CONCLUSION
Our
management concluded that our internal control over financial reporting was ineffective. The above identified material weaknesses
and deficiency did in fact result in certain material audit adjustments to our 2014 financial statements. However, it is reasonably
possible that, if not remediated, one or more of the identified material weaknesses noted above could result in a material misstatement
in our reported financial statements that might result in a material misstatement in a future annual or interim period.
CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
We
did not change our internal control over financial reporting during our last fiscal quarter that materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting.
ITEM
9B. OTHER INFORMATION.
Not
applicable.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
OFFICERS
AND DIRECTORS
Our
two directors will serve until their two successors are elected and qualified. Our officers are elected by the board of directors
to a term of one year and serve until their successor is duly elected and qualified, or until they are removed from office. Our
board of directors has no nominating, auditing or compensation committees.
The
names, addresses, ages and positions of our officers, directors and key employees are set forth below:
|
|
|
|
First
Year |
|
|
Name |
|
Age |
|
as
Director |
|
Position |
|
|
|
|
|
|
|
Peter James Smith |
|
46 |
|
2010 |
|
President, Chief
Executive Officer and Director |
|
|
|
|
|
|
|
Enzo Taddei |
|
42 |
|
2011 |
|
Chief Financial
Officer, Secretary and Director |
The
persons named above were elected to hold their offices until the next annual meeting of our stockholders.
PETER
JAMES SMITH - PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
Mr.
Smith has served as the President, Chief Executive Officer and Director of Global Equity Partners, PLC, our now wholly-owned subsidiary,
since its formation on September 2, 2009. Mr. Smith has also served as the President, Chief Executive Officer and Director of
the Company since December 31, 2010. Between June 1, 2006, and September 2, 2009, when he formed Global Equity Partners, PLC,
Mr. Smith was not employed and spent his time researching the market for the consulting business in which Global Equity Partners,
PLC would be engaged. In 1993, he created an international financial services company in the Middle East and Asia, named Belgravia
Financial Management, and served as the Chief Executive Officer of that firm until he resigned in May 2006. Between 1993 and May
2005, he built Belgravia Financial Management to 23 global offices, 5 country licenses, a Company with $2.2 billion under financial
management. Belgravia Financial Management merged with Intervest SL and became Belgravia Intervest Group Limited. Belgravia Intervest
Group Limited subsequently merged with Tally Ho Ventures, Inc. (TLYH.OB) on May 12, 2005. In 2006, Mr. Smith resigned from his
position as Chief Executive Officer of Tally Ho Ventures, Inc. Tally Ho Ventures, Inc. subsequently changed its name to Premier
Wealth Management, Inc. on September 26, 2007. Mr. Smith first qualified as a stockbroker in London in 1986 with Rensburg and
Co. where he became both a registered equity trader and registered representative of the firm that is a UK registered, full service
stockbroker trading equities, options, warrants, gilts and bonds. He also spent 12 months within that firm covering the back office
facilities of a brokerage house including sales, purchase, rights, dividends and new issues. He then moved on to the London Traded
Options Market where he passed his LTOM open outcry examinations to become an options trader for a subsidiary of ABN Amro bank
called International Clearing Services (ICS). As an Options trader, his job was to trade options on behalf of all the firm’s
clients and to hedge the positions of the market makers the firm cleared for in the equity market. As the sole dual qualified
broker for ICS, he was constantly trading in either equities or options, either by open outcry or screen dealing on the London
Stock Exchange Floor on Threadneedle Street.
ENZO
TADDEI - CHIEF FINANCIAL OFFICER, SECRETARY AND DIRECTOR
Mr.
Taddei was appointed as our Chief Financial Officer and a member of our Board of Directors on September 1, 2011. From November
2010 until December 8, 2011, when he resigned from such offices, Mr. Taddei was a member of the Board of Directors and part-time
Chief Financial Officer of Networking Partners, Inc., a social networking company, now known as Sonant Systems Inc. Mr. Taddei
resigned from such offices in order to devote more time and effort to our Company. However, Mr. Taddei is currently the Chief
Executive Officer a sole Director of Sonant Systems, Inc. From March 2007 until May 2009, Mr. Taddei served as Chief Financial
Officer of Dolphin Digital Media (a company engaged in social networking). From August 2006 until March 2007, Mr. Taddei served
as Chief Financial Officer of Plays on the Net Plc. (an E Commerce firm). From July 1999 until August 2006, Mr. Taddei served
as director and partner of Adesso Res Asesores (an accounting firm). In addition to being an accountant and tax consultant by
profession, Mr. Taddei is proficient in three languages: English, Spanish and Italian. He obtained a Degree in Economics from
EADE University in Malaga (Spain) in 1998 and also a Bachelor in Business Administration (BBA) from the University of Wales in
1996. He also holds a “Masters Degree” in Spanish and International Taxation granted to him by EADE University in
Malaga (Spain) in 2000.
INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS
Except
as described below, during the past ten years, no present director, executive officer or person nominated to become a director
or an executive officer of the Company:
|
(1) |
had
a petition under the federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent
or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any corporation or business association of which
he was an executive officer at or within two years before the time of such filing; |
|
|
|
|
(2) |
was
convicted in a criminal proceeding or subject to a pending criminal proceeding (excluding traffic violations and other minor
offenses); |
|
|
|
|
(3) |
was
subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting his involvement in any of the following activities: |
|
(i) |
acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any
of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity; |
|
|
|
|
(ii) |
engaging
in any type of business practice; or |
|
|
|
|
(iii) |
engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws; or |
|
(4) |
was
the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of an federal or state authority
barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described
in paragraph (3) (i), above, or to be associated with persons engaged in any such activity; |
|
|
|
|
(5) |
was
found by a court of competent jurisdiction in a civil action, the Securities and Exchange Commission to have violated a federal
or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not
been subsequently reversed, suspended or vacated; |
|
|
|
|
(6) |
was
found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission
has not been subsequently reversed, suspended or vacated; |
|
|
|
|
(7) |
was
the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to any alleged violation of: |
|
i. |
Any
Federal or State securities or commodities law or regulation; or |
|
|
|
|
ii. |
Any
law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent
injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or
removal or prohibition order; or |
|
|
|
|
iii. |
Any
law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
|
(8) |
was
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), and registered entity (as defined
in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C.1(a)(29)), or any equivalent exchange, association, entity or organization
that has disciplinary authority over its members or persons associated with a member. |
ABSENCE
OF INDEPENDENT DIRECTORS
We
do not have any independent directors and are unlikely to be able to recruit and retain any independent directors due to our small
size and limited financial resources.
DIRECTOR
QUALIFICATIONS
We
do not have a formal policy regarding director qualifications. In the opinion of Peter J. Smith, our President and majority shareholder,
both Mr. Taddei and he have sufficient business experience and integrity to carry out the Company’s plan of operations.
Both Mr. Smith and Mr. Taddei recognize that the Company will have to rely on professional advisors, such as attorneys and accountants
with public company experience to assist with compliance with Exchange Act reporting and corporate governance matters.
DIRECTORSHIPS
Enzo
Taddei is a director of Sonant Systems, Inc., a company with a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934.
AUDIT
COMMITTEE FINANCIAL EXPERT
Although
we have not established an Audit Committee, the functions of the Audit Committee are currently carried out by our Board of Directors.
FAMILY
RELATIONSHIPS
There
are no family relationships between or among or officers and directors.
CODE
OF BUSINESS CONDUCT AND ETHICS
On
September 2, 2011, we adopted a Code of Business Conduct and Ethics applicable to our officers, including our principal executive
officer, principal financial officer, principal accounting officer or controller and any other persons performing similar functions.
Our Code of Business Conduct and Ethics was designed to deter wrongdoing and promote honest and ethical conduct, full, fair and
accurate disclosure, compliance with laws, prompt internal reporting and accountability to adherence to our Code of Business Conduct
and Ethics. Our Code of Business Conduct and Ethics is posted on our website at http://www.globalequityincusa.com/ in the “Governance”
section. We also intend to disclose any future amendments to, and any waivers from (though none are anticipated), the Code of
Business Conduct and Ethics in the “Governance” section of our website.
ITEM 11.
EXECUTIVE COMPENSATION.
The
following table sets forth the aggregate compensation paid by the Company and/or its subsidiary, Global Equity Partners Plc.,
to our executive officers and directors of the Company for services rendered during the periods indicated.
SUMMARY
COMPENSATION TABLE
Name
and
Principal Position |
|
Year |
|
Salary
($) |
|
Note |
|
Bonus
($) |
|
Note |
|
Stock
Awards ($) |
|
Note |
|
All
other stock
compensation (s) |
|
Note |
|
Total
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter
J. Smith |
|
2014 |
|
$ |
304,500 |
|
(1) |
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
304,500 |
President,
Chief |
|
2013 |
|
$ |
240,000 |
|
|
|
$ |
0 |
|
|
|
$ |
240,000 |
|
(5) |
|
$ |
0 |
|
|
|
$ |
480,000 |
Executive
Officer & Director |
|
2012 |
|
$ |
240,000 |
|
|
|
$ |
480,000 |
|
(3) |
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
720,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enzo
Taddei |
|
2014 |
|
$ |
229,500 |
|
(2) |
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
229,500 |
Chief
Financial |
|
2013 |
|
$ |
180,000 |
|
|
|
$ |
0 |
|
|
|
$ |
240,000 |
|
(6) |
|
$ |
0 |
|
|
|
$ |
420,000 |
Officer,
Secretary & Director |
|
2012 |
|
$ |
120,000 |
|
|
|
$ |
0 |
|
|
|
$ |
1,000,000 |
|
(4) |
|
$ |
0 |
|
|
|
$ |
1,120,000 |
|
(1) |
Represents
$209,894 paid in cash and $116,364 in accrued, but unpaid salary. |
|
|
|
|
(2) |
Represents
$86,557 paid in cash and $ 142,943 in accrued, but unpaid salary. |
|
|
|
|
(3) |
Represents
the value of 1,000,000 shares of Series “A” Preferred Stock (of the 5,000,000 authorized Series “A”
Preferred Stock) issued to Peter Smith as a bonus package. Our Board of Directors recognized the hard and fruitful work of
Mr. Smith for the past three years and decided to compensate him with a bonus equivalent to two years of gross salary. Since
the Company did not have the cash resources to pay such bonus, it decided to issue him preferred stock, which the Board of
Directors (after consulting with our accountants) determined to be worth $480,000. The preferred stock is redeemable on December
1, 2013. |
|
|
|
|
(4) |
Represents
400,000 Series “A” preferred shares convertible into 4,000,000 common shares on December 1, 2014 and valued at
$0.25 per share. |
|
|
|
|
(5) |
Represents
200,000 Series “A” preferred shares convertible into 2,000,000 common shares on December 1, 2014 and valued at
$0.12 per share. |
|
|
|
|
(6) |
Represents
200,000 Series “A” preferred shares convertible into 2,000,000 common shares on December 1, 2014 and valued at
$0.12 per share. |
EMPLOYMENT
AGREEMENTS SUMMARY
PETER
JAMES SMITH:
Mr.
Smith’s employment agreement with the Company was renewed on January 1, 2013, and the basic terms were as follows:
|
1. |
DUTIES
- ASSIGNMENT: Chief Executive Officer (CEO) and Director on Board of Directors. |
|
|
|
|
2. |
COMPENSATION: |
|
|
$180,000
per annum, subject to annual review and adjustment of no less than a 5% percentage increase. The salary will be paid on a
monthly basis. |
|
|
|
|
3. |
EMPLOYMENT:
|
|
(a) |
Employment
will continue for 36 months. |
|
(a) |
If
Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and
Employer shall make, the following severance payments: |
|
(i) |
continue to pay
a sum equivalent to twelve months salary. |
|
(b) |
If
Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated
upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall
make, the following severance payments: |
|
(i) |
continue
to pay a sum equivalent to five years annual salary via the life assurance scheme. |
|
(a) |
The
company will pay the CEO´s rent in Dubai up to a maximum of $30,000 per quarter. |
ENZO
TADDEI:
Mr.
Taddei’s employment agreement with the Company was renewed on January 1, 2013 and the basic terms were as follows:
|
1. |
DUTIES
- ASSIGNMENT: Chief Financial Officer (CFO) and Director on Board of Directors |
|
|
|
|
2. |
COMPENSATION: |
|
|
|
|
|
$180,000
per annum, subject to annual review and adjustment of no less than a 5% percentage increase. The salary will be paid on a
monthly basis. It was also agreed that in June of each fiscal year the company would pay a bonus to no more than 25% of the
annual salary in order to help Mr. Taddei pay his personal tax bill in his country of residence. |
|
(a) |
Employment
will continue for 36 months. |
|
(a) |
If
Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and
Employer shall make, the following severance payments: |
|
(i) |
continue
to pay a sum equivalent to twelve months. |
|
(b) |
If
Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated
upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall
make, the following severance payments: |
|
(i) |
continue to pay
a sum equivalent to five years annual salary via the life assurance scheme. |
STOCK
OPTION AND OTHER COMPENSATION PLANS
Aside
from the employment agreements with Messrs. Smith and Taddei, the Company currently does not have a stock option or any other
compensation plan and we do not have any plans to adopt one in the near future.
COMPENSATION
OF DIRECTORS
Our
two directors do not receive any compensation for serving as a member of our board of directors, as they are compensated pursuant
to their employment agreements as officers of the Company.
No
retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company
for the benefit of its employees.
There
are no understandings or agreements regarding compensation our management will receive after a business combination that is required
to be included in this table, or otherwise.
INDEMNIFICATION
Article
VII, Section 7 of the Company’s Bylaws provide that the Company shall indemnify its officers, directors, employees and agents
to the fullest extent permitted by the laws of Nevada.
The
Nevada Revised Statutes allow us to indemnify our officers, directors, employees, and agents from any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, except under certain circumstances.
Indemnification may only occur if a determination has been made that the officer, director, employee, or agent acted in good faith
and in a manner, which such person believed to be in the best interests of the corporation. A determination may be made by the
shareholders; by a majority of the directors who were not parties to the action, suit, or proceeding confirmed by opinion of independent
legal counsel; or by opinion of independent legal counsel in the event a quorum of directors who were not a party to such action,
suit, or proceeding does not exist.
The
expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by us as
they are incurred and in advance of the final disposition of the action, suit or proceeding, if and only if the officer or director
undertakes to repay said expenses to us if it is ultimately determined by a court of competent jurisdiction that he is not entitled
to be indemnified by us.
The
indemnification and advancement of expenses may not be made to or on behalf of any officer or director if a final adjudication
establishes that the officer’s or director’s acts or omission involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
The
Nevada Revised Statutes allow a company to indemnify our officers, directors, employees, and agents from any threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, except under certain circumstances.
Indemnification may only occur if a determination has been made that the officer, director, employee, or agent acted in good faith
and in a manner, which such person believed to be in the best interests of the corporation. A determination may be made by the
stockholders; by a majority of the directors who were not parties to the action, suit, or proceeding confirmed by opinion of independent
legal counsel; or by opinion of independent legal counsel in the event a quorum of directors who were not a party to such action,
suit, or proceeding does not exist.
SECURITIES
AND EXCHANGE COMMISSION POSITION ON INDEMNIFICATION
Insofar
as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers
and controlling persons of the company, we have been advised by our special securities counsel that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy and is, therefore, unenforceable.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The
following tables set forth, as of the date of this Annual Report, the ownership of our common stock and preferred stock by (a)
each person known by us to be the beneficial owner of more than 5% of our outstanding common stock and preferred stock; and (b)
by all of named officers and our directors and by all of our named executive officers and directors as a group. To the best of
our knowledge, the persons named have sole voting and investment power with respect to such shares and are beneficial owners of
the shares indicated in the tables, except as otherwise noted by footnote.
The
information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the
rules of the U.S. Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under
these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to
vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed
to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within
60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may
be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular
date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as
to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding
as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60
days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as
otherwise indicated below, we believe that the beneficial owners of our common stock listed below have sole voting and investment
power with respect to the shares shown.
(a)
Security ownership of certain beneficial owners:
| |
Name and Address
of | |
Amount
and Nature of | | |
| | |
Percent
of | |
Title
of Class | |
Beneficial
Owner | |
Beneficial
Ownership | | |
Notes | | |
Class | |
| |
| |
| | |
| | |
| |
Common Stock | |
Peter J. Smith, | |
| 16,333,334 | | |
| 1 | | |
| 21.34 | % |
| |
38 Frond “F” Palm Jumeirah, | |
| | | |
| | | |
| | |
| |
Dubai, UAE. | |
| | | |
| | | |
| | |
| |
| |
| | | |
| | | |
| | |
Common Stock | |
Enzo Taddei, | |
| 5,000,000 | | |
| 2 | | |
| 6.53 | % |
| |
Avenida Marques del Duero 67, | |
| | | |
| | | |
| | |
| |
Edificio Bahia 2A, | |
| | | |
| | | |
| | |
| |
29670 San Pedro de Alcantara, | |
| | | |
| | | |
| | |
| |
Malaga, Spain. | |
| | | |
| | | |
| | |
| (1) | Mr.
Smith is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
| (2) | Mr.
Taddei is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
Title
of Class | |
Name
and Address of
Beneficial Owner | |
Amount
and Nature of Beneficial Ownership | |
|
Percent
of Class | |
| |
| |
| |
|
| |
Preferred Stock | |
Peter J. Smith, | |
| 1,200,000 | (1) |
|
| 60.50 | % |
| |
38 Frond “F” Palm, Jumeirah, Dubai, U.A.E. | |
| | |
|
| | |
| |
| |
| | |
|
| | |
Preferred Stock | |
Enzo Taddei, | |
| 600,000 | (2) |
|
| 30.25 | % |
| |
Avenida Marques del Duero 67, Edificio Bahia 2A, 29670 San Pedro de Alcantara,
Malaga, Spain. | |
| | |
|
| | |
| (1) | Mr.
Smith is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
| (2) | Mr.
Taddei is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
(b)
Security ownership of management:
Title
of Class | |
Name
of
Beneficial
Owner | |
Amount
and Nature
Beneficial Ownership | |
|
Percent
of Class | |
| |
| |
| |
|
| |
Common Stock | |
Peter J. Smith | |
| 16,333,334 | (1) |
|
| 21.34 | % |
| |
| |
| | |
|
| | |
Common Stock | |
Enzo Taddei | |
| 5,000,000 | (2) |
|
| 6.53 | % |
| |
| |
| | |
|
| | |
Common Stock | |
All officers and directors | |
| 21,333,334 | |
|
| 27.87 | % |
| |
as a group (2 persons) | |
| | |
|
| | |
| (1) | Mr.
Smith is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
| (2) | Mr.
Taddei is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
Title
of Class | |
Name
of Beneficial Owner | |
Amount
and Nature of Beneficial Ownership | |
|
Percent
of Class | |
| |
| |
| |
|
| |
Preferred Stock | |
Peter J. Smith | |
| 1,200,000 | (1) |
|
| 60.50 | % |
| |
| |
| | |
|
| | |
Preferred Stock | |
Enzo Taddei | |
| 600,000 | (2) |
|
| 30.25 | % |
| |
| |
| | |
|
| | |
Preferred Stock | |
All officers and directors | |
| | |
|
| | |
| |
as a group (2 persons) | |
| 1,400,000 | |
|
| 90.75 | % |
| (1) | Mr.
Smith is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
| (2) | Mr.
Taddei is the direct beneficial owner of, and has sole dispositive and voting power over,
these shares. |
(c)
Changes in control:
We
are not aware of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent
date result in a change in control of the Company.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
Although
we have not adopted formal procedures for the review, approval or ratification of transactions with related persons, we adhere
to a general policy that such transactions should only be entered into if they are on terms that, on the whole, are no more favorable,
or no less favorable, than those available from unaffiliated third parties and their approval is in accordance with applicable
law. Such transactions require the approval of our board of directors.
On
November 30, 2011, the Company issued 5,000,000 shares of Series “A” Preferred Stock to Peter J. Smith, its President,
as consideration for $480,000 as a compensatory bonus. On November 20, 2012, the Board of Directors and Mr. Smith subsequently
agreed that Mr. Smith would retire to treasury 3,466,668 of these Series “A” preferred shares and retain, the balance,
1,533,332 shares. Mr. Smith subsequently gifted 400,000 of these Series “A” preferred shares to Mr. Taddei (CFO of
the Company) and a further 133,332 preferred shares to two other employees of the Company, 66,666 Series “A” preferred
shares each.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
INDEPENDENT
PUBLIC ACCOUNTANTS
(1)
Audit Fees. We paid an aggregate of $24,500 for the audit of our annual financial statements for the year ended December 31, 2014
and quarterly reviews for three quarters, to be paid to our auditors De Joya Griffith, LLC. During the fiscal year ended December
31, 2013, the aggregate fees billed by the Company’s auditors for services rendered for the review of the financial statements
included in our quarterly reports on Form 10-Q and for services provided in connection with the statutory and regulatory filings
or engagements for 2013, was $20,055.
(2)
Audit-Related Fees. During fiscal years ended December 31, 2014 and 2013, our auditors did not receive any fees for any audit-related
services other than as set forth in paragraph (1) above.
(3)
Tax Fees. Our auditor’s tax department provided tax compliance, tax advice, or tax planning advice during the fiscal years
ended December 31, 2014 and 2013. During 2013 and 2014, we did not pay our auditor for any of these services.
(4)
All Other Fees. None.
(5)
Audit Committee’s Pre-Approval Policies and Procedures.
Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require that before Principal Accountants are engaged by
us to render any auditing or permitted non-audit related service, the engagement be:
|
● |
approved
by our audit committee (which consists of our entire board of directors); or |
|
|
|
|
● |
entered
into pursuant to pre-approval policies and procedures established by the board of directors, provided the policies and procedures
are detailed as to the particular service, the board of directors is informed of each service, and such policies and procedures
do not include delegation of the board of directors’ responsibilities to management. |
Our
Board of Directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed
and approved by our Board of Directors either before or after the respective services were rendered.
Our
Board of Directors has considered the nature and amount of fees billed by our principal accountants and believes that the provision
of services for activities unrelated to the audit is compatible with maintaining our principal accountants’ independence.
During
the 2014 and 2013 fiscal years, the Company used the following pre-approval procedures related to the selection of our independent
auditors and the services they provide: unanimous consent of all directors via a board resolution.
PART
IV
ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a)
(1) Financial Statements
Financial
statements for Global Equity International, Inc. listed in the Index to Financial Statements on page F-1 are filed as part of
this Annual Report.
(a)
(2) Financial Statement Schedule
Financial
Statement Schedule for Global Equity International, Inc. listed in the Index to Financial Statements on page F-1 are filed as
part of this Annual Report.
(a)
(3) See the “Index to Exhibits” set forth below.
(b)
See Exhibit Index below for exhibits required by Item 601 of Regulation S-K.
EXHIBIT
INDEX
List
of Exhibits attached or incorporated by reference pursuant to Item 601 of Regulation S-B
Exhibit
No. |
|
Document
Description |
|
|
|
2* |
|
Plan
and Agreement of Reorganization dated November 15, 2010, among Global Equity International, Inc., Global Equity Partners PLC
and Stockholders of Global Equity Partners LLC |
|
|
|
3.1* |
|
Articles
of Incorporation |
|
|
|
3.(i).2** |
|
Certificate
of Amendment to Articles of Incorporation, effective February 16, 2015. |
|
|
|
3.2* |
|
Bylaws |
|
|
|
4.1*** |
|
Convertible
Note, dated November 22, 2013, in the principal amount of $450,000, made by Global Equity International, Inc. and payable
to Mr. Jason St. Pierre. |
|
|
|
4.2* |
|
Certificate
of Amendment to Certificate of Designation of Series A Convertible Preferred Stock |
|
|
|
10.1***** |
|
Employment
Agreement dated January 1, 2013, with Peter J. Smith |
|
|
|
10.2***** |
|
Employment
Agreement dated January 1, 2013, with Enzo Taddei |
|
|
|
10.3* |
|
Consulting
Agreement between Global Equity Partners Plc. and Black Swan Data Ltd. dated July 29, 2011. |
|
|
|
10.4* |
|
Consulting
Agreement between Global Equity Partners Plc. and Arrow Cars SL dated January 14, 2011. |
|
|
|
10.5* |
|
Consulting
Agreement between Global Equity Partners Plc. and RFC K.K. dated October 19, 2011 |
|
|
|
10.6* |
|
Consulting
Agreement between Global Equity Partners Plc. and M1 Luxembourg AG dated December 20, 2010. |
|
|
|
10.7* |
|
Consulting
Agreement between Global Equity Partners Plc. and Monkey Rock Group, Inc. dated November 26, 2009. |
|
|
|
10.8* |
|
Consulting
Agreement between Global Equity Partners Plc. and Voz Mobile Cloud Ltd. dated
December
12, 2011. |
|
|
|
10.9* |
|
Consulting
Agreement between Global Equity Partners Plc. and CDP Security Group Limited
(Direct
CCTV) dated March 31, 2012. |
|
|
|
10.10* |
|
Bridge
Loan and Option Agreement made as of February 28, 2012, between Mr. David Lonergan,
Global
Equity Partners Plc. and Global Equity International Inc. |
|
|
|
10.11* |
|
Bridge
Loan and Option Agreement made as of March 13, 2012, between Mr. Robert Hasnain and
Global
Equity International, Inc. |
|
|
|
10.12**** |
|
Consulting
Agreement, dated May 25, 2012, between the Company and Regis Card Limited |
|
|
|
10.13**** |
|
Consulting
Agreement, dated December 12, 2012, between the Company and Energy Solutions BV |
|
|
|
10.14**** |
|
Consulting
Agreement, dated November 20, 2012, between the Company and Innoveas AG |
|
|
|
10.15**** |
|
Consulting
Agreement, dated December 5, 2012, between the Company and Scorpion Performance, Inc. |
|
|
|
14* |
|
Code
of Business Conduct and Ethics adopted on September 2, 2011 |
|
|
|
21***** |
|
Subsidiaries |
|
|
|
31.1***** |
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 |
|
|
|
31.2***** |
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 |
|
|
|
32.1***** |
|
906
Certification of Principal Executive Officer |
|
|
|
32.2***** |
|
906
Certification of Principal Financial Officer |
|
|
|
* |
|
Incorporated
by reference to the Company’s Form 10 Registration Statement filed with the Commission
on December 1, 2011, and as subsequently amended. |
|
|
|
** |
|
Incorporated
by reference to the Company’s Form 8-K filed with the Commission on February 17, 2015. |
|
|
|
*** |
|
Incorporated
by reference to the Company’s Form 8-K filed with the Commission on November 29, 2013. |
|
|
|
**** |
|
Incorporated
by reference to the Company’s Form 10-K Annual Report filed with the Commission
on April 16, 2013. |
|
|
|
***** |
|
Filed
herewith. |
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report
to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Global Equity International, Inc. |
|
|
|
Dated:
April 14, 2015 |
|
/s/
Peter J. Smith |
|
By: |
Peter J. Smith |
|
Its: |
President and
Chief Executive Officer |
In
accordance with the Securities Exchange Act of 1934, this amended report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
Dated:
April 14, 2015 |
|
/s/
Peter J. Smith |
|
By: |
Peter J. Smith |
|
Its: |
President and
Chief Executive Officer and |
|
|
Director (Principal
Executive Officer) |
|
|
|
Dated: April 14,
2015 |
|
/s/
Enzo Taddei |
|
By: |
Enzo Taddei |
|
Its: |
Chief Financial
Officer, Secretary and |
|
|
Director (Principal
Financial Officer and Principal Accounting Officer) |
Exhibit
10.1
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT is executed on the dates set forth below the signatures hereon but effective as of January 1, 2013,
and is by and between GLOBAL EQUITY PARTNERS PLC., domiciled in the United Arab Emirates, Level 28 – Al Habtoor
Business Tower, P.O. Box 29805, Dubai Marina, Dubai (“Employer”), and Mr. Peter Smith a resident of Dubai,
UAE (“Employee”).
1.
Duties; Assignment
During
the term of employment hereunder, Employee shall initially perform the duties of Chief Executive Officer (CEO) of Employer,
or such other duties as assigned by and at the location determined by the Board of Directors of Employer. Employee shall oversee
the running and development of the company to the best of his ability.
2.
Compensation
In
consideration of the services rendered by Employee to Employer hereunder, Employer shall pay to Employee an annual salary of no
less than $180,000, subject to annual review and adjustment of no less than a 5% percentage increase, if any, in
the U.S. Consumer Price Index during such year (“Base Salary”). This Salary shall be paid on a monthly basis to the
employee or a Company owned by the Employee at the option of the Employee.
3.
Employment
Employer
hereby employs Employee and Employee hereby accepts employment on the terms set forth herein commencing on the first day of
January 1, 2013.
|
(a) |
Employment
will continue for 36 months and until terminated as hereafter set forth. |
|
|
|
|
(b) |
Employer
shall have the right to terminate this Agreement and all of Employee’s rights shall thereupon terminate upon the disability
(for 180 or more days, whether or not consecutive, in any 360 day period) of Employee (“Disability”) and the Employer
giving written notice thereof, and this Agreement shall automatically terminate upon the death of Employee (“Death”). |
|
|
|
|
(c) |
Employer
shall have the right to terminate Employee’s employment (1) for any reason or no reason with either (i) 60 days prior
written notice of termination or (ii) immediate notice of termination with an undertaking to continue payment of Employee’s
compensation under this Agreement for 90 days, (2) at any time during the thirty six month period following the execution
of this agreement and with 30 days prior written notice or (3) for Cause (as defined below), upon Employee’s receipt
of notice thereof. . As used herein, “Cause” means (i) willful or serious misconduct or dishonesty in the performance
of, Employee’s duties hereunder or (ii) the indictment or conviction of Employee for a felony under state or federal
criminal laws. Upon the effective date of termination specified in such notice, this Agreement shall terminate except for
the provisions, which expressly survive termination, and Employee shall vacate the offices of Employer. |
|
(d) |
Employee
shall have the right to terminate employment hereunder by providing 30 days written notice. Thereafter, this Agreement shall
terminate except for the provisions, which expressly survive termination. |
4.
Severance Payments
|
(a) |
If
Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and
Employer shall make, the following severance payments: |
(i)
continue to pay a sum equivalent to twelve months’ salary.
|
(b) |
If
Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated
upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall
make, the following severance payments: |
(i)
continue to pay a sum equivalent to five years annual salary via the life assurance scheme to be put in place before the
end of 2013.
5.
Expenses
Employer
shall reimburse Employee’s expenses reasonably incurred in carrying out his duties hereunder within 30 days of submittal
of an itemized account of such expenses together with such receipts and forms as are required by Employer’s normal policies
and practices. In the event of cash advances such reimbursements will be credited against the advanced account.
6.
Benefits
Employer
shall provide and Employee shall be entitled to participate in an all benefit plans and programs generally available to employees
of Employer on the same terms as other employees except as follows:
|
(a) |
Vacation:
Employee shall be entitled to four weeks paid vacation per year scheduled at times mutually convenient to Employee and Employer.
Employee shall be entitled to carry over unused vacation days into the next year in accordance with Employer’s policy,
as modified from time to time. Employee shall be entitled to all holidays as allowed to other employees of the Employer with
similar responsibilities. |
|
(b) |
Life
Insurance: The employee shall be entitled a life insurance coverage equivalent five years of gross salary. |
|
(c) |
Medical:
The employee and his family shall be entitled to full health insurance coverage by a reputable insurance company of the employee’s
choice. |
|
|
|
|
(d) |
Stock
Options: The employee shall be entitled to stock options to be agreed before June 30, 2013. |
|
|
|
|
(e) |
Rent
Allowance: The employee shall be entitled to a monthly rent allowance in Dubai of $10,000. This rent allowance shall commence
on July 1st 2013. |
7.
Confidentiality; Non-Disclosure
|
(a) |
For
the purpose of this Agreement, “Confidential Information” is defined to include any information, designs, software,
processes, practices, plans, proposals, markets, pricing, personnel or financial or business information relating to Employer,
its affiliates (including the Subsidiary), and their respective businesses, customers, suppliers, products or services, whether
in written, oral or other form. Confidential Information shall not include information, which at the time of disclosure is
in the public domain by publication or otherwise through no fault of Employee, or information furnished by a third party which
was not received directly from Employer or otherwise under an obligation of secrecy. |
|
|
|
|
(b) |
At
all times after the date hereof, including after termination of this Agreement, Employee shall not, except with the expressed
prior written consent of Employer, directly or indirectly communicate, disclose or divulge any of the Confidential Information
or use any of the Confidential Information for any purpose other than performance of his duties hereunder. |
8.
Agreement Not to Compete
For
so long as Employee is entitled to receive severance payments under Sections 4(a), 4(b) or 4(c), or (ii) for a period of one year
from the effective date of termination if Employee voluntarily terminates his employment hereunder or if Employee is terminated
by Employer for Cause, Employee agrees that he will not, directly or indirectly, (1) be employed by, serve as a consultant or
advisor to, or have a material ownership interest in any corporation or other entity whose business is competitive (as reasonably
determined by the Board of Directors of Employer) with the business of Employer, the Subsidiary or any of their affiliates; provided,
however that this clause (1) shall not prohibit any such employment or other relationship with an entity which itself is not,
but has a separate corporate affiliate which is, engaged in such competitive business so long as Employee does not provide services
to, assist or advise such competitive affiliate in any way, or (2) induce or solicit any other person who was employed by Employer,
Subsidiary or any of their affiliates at any time during Employee’s employment by Employer to engage in any line of business
competitive with that of Employer, Subsidiary or their affiliates.
9.
No Conflicting Agreements
Employee
represents and warrants that he is not a party to or bound by any agreement or subject to any restriction arising out of any current
or prior employment or relationship which would be violated by his entering into and performing his obligations under this Agreement,
including, without limitation, restrictions relating to non-competition or the protection of confidential information.
10.
Notices
All
notices and other communication which are required or permitted hereunder shall be given in writing and either delivered by hand
or overnight courier service or mailed by certified mail, return receipt requested, postage prepaid, to the following addresses:
Global
Equity Partners Plc.
Level
28 – Al Habtoor Business Tower,
PO Box
29805,
Dubai,
U.A.E.
Peter
Smith
Frond
“F”, Villa 38,
Palm
Jumeirah,
Dubai
UAE
11.
Miscellaneous
|
(a) |
This
Agreement shall be binding upon, inure to the benefit of, and enforceable by the successors and assigns of the Employer and
the heirs, estate, personal representatives and beneficiaries of Employee. The rights, obligations and duties of the Employee
hereunder shall be personal and are not assignable or delegable in any manner whatsoever; provided, however, that this Agreement
shall be assigned to and assumed by the Subsidiary if and when required by Section 1. |
|
(b) |
The
obligations of the parties in Sections 4, 7, 8 and 11 shall survive any termination of this Agreement. |
|
(c) |
This
Agreement constitutes the entire understanding of the parties with respect to subject matter hereof, and shall not be modified,
terminated or any provisions waived orally, including this clause. Any such modification, termination or waiver must be in
writing and signed by each of the parties hereto. |
|
|
|
|
(d) |
No
failure to exercise or delay in exercising any right, power or remedy hereunder shall preclude any other or further exercise
of the same or any other right, power or remedy. |
|
|
|
|
(e) |
This
Agreement shall be construed and enforced in accordance with the laws of England. |
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date indicated below intending to be legally bound hereby.
Global
Equity Partners Plc. |
|
Employee |
|
|
|
/s/ Enzo Taddei |
|
/s/
Peter Smith |
Enzo Taddei |
|
Peter Smith |
CFO |
|
|
|
|
|
Dated: January
1, 2013 |
|
Dated: January
1, 2013 |
Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT
is executed on the dates set forth below the signatures hereon but effective as of January 1, 2013, and is by and between
GLOBAL EQUITY PARTNERS PLC domiciled in the United Arab Emirates, Level 28 – Al Habtoor Business Tower, P.O. Box
29805, Dubai Marina, Dubai (“Employer”), and Mr. ENZO TADDEI a resident of Malaga, Spain (“Employee”).
1. Duties;
Assignment
During the term of employment hereunder, Employee
shall initially perform the duties of Chief Financial Officer (CFO) of Employer, or such other duties as assigned by and
at the location determined by the Board of Directors of Employer. Employee shall oversee the financial affairs of the Employer
to the best of his ability.
2. Compensation
In consideration of the services rendered by
Employee to Employer hereunder, Employer shall pay to Employee an annual salary of no less than $180,000, subject to annual
review and adjustment of no less than a 5% percentage increase, if any, in the U.S. Consumer Price Index during such year
(“Base Salary”). This Salary shall be paid on a monthly basis to the employee or a Company owned by the Employee at
the option of the Employee.
3. Employment
Employer hereby employs Employee and Employee
hereby accepts employment on the terms set forth herein commencing on January 1, 2013:
|
(a) |
Employment will continue for 36 months and until terminated as hereafter set forth. |
|
|
|
|
(b) |
Employer shall have the right to terminate this Agreement and all of Employee’s rights shall thereupon terminate upon the disability (for 180 or more days, whether or not consecutive, in any 360 day period) of Employee (“Disability”) and the Employer giving written notice thereof, and this Agreement shall automatically terminate upon the death of Employee (“Death”). |
|
(c) |
Employer shall have the right to terminate Employee’s employment (1) for any reason or no reason with either (i) 60 days prior written notice of termination or (ii) immediate notice of termination with an undertaking to continue payment of Employee’s compensation under this Agreement for 90 days, (2) at any time during the thirty six month period following the execution of this agreement and with 30 days prior written notice or (3) for Cause (as defined below), upon Employee’s receipt of notice thereof. . As used herein, “Cause” means (i) willful or serious misconduct or dishonesty in the performance of, Employee’s duties hereunder or (ii) the indictment or conviction of Employee for a felony under state or federal criminal laws. Upon the effective date of termination specified in such notice, this Agreement shall terminate except for the provisions, which expressly survive termination, and Employee shall vacate the offices of Employer. |
|
|
|
|
(d) |
Employee shall have the right to terminate employment hereunder by providing 30 days written notice. Thereafter, this Agreement shall terminate except for the provisions, which expressly survive termination. |
4. Severance
Payments
|
(a) |
If employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and Employer shall make, the following severance payments: |
(i) Continue
to pay a sum equivalent to Twelve months’ salary.
|
(b) |
If Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall make, the following severance payments: |
(i) continue to pay a sum equivalent
to five years annual salary via the life assurance scheme to be put in within the year 2013.
5. Expenses
Employer shall reimburse Employee’s expenses
reasonably incurred in carrying out his duties hereunder within 30 days of submittal of an itemized account of such expenses together
with such receipts and forms as are required by Employer’s normal policies and practices. In the event of cash advances such
reimbursements will be credited against the advanced account.
6. Benefits
Employer shall provide and Employee shall be
entitled to participate in an all benefit plans and programs generally available to employees of Employer on the same terms as
other employees except as follows:
|
(a) |
Vacation: Employee shall be entitled to four weeks paid vacation per year scheduled at times mutually convenient to Employee and Employer. Employee shall be entitled to carry over unused vacation days into the next year in accordance with Employer’s policy, as modified from time to time. Employee shall be entitled to all holidays as allowed to other employees of the Employer with similar responsibilities. |
|
|
|
|
(b) |
Life Insurance: The employee shall be entitled a life insurance coverage equivalent five years of gross salary. |
|
|
|
|
(c) |
Medical: The employee and his family shall be entitled to full health insurance coverage by a reputable insurance company of the employee’s choice. |
|
|
|
|
(d) |
Stock Options: The employee shall be entitled to stock options to be agreed before June 30, 2013. |
|
|
|
|
(e) |
Taxes: The employee shall have the right to a yearly cash bonus, June of each year, equivalent to the income tax that is levied on his salary in the country that he is tax resident. In no event shall the bonus amount to more than 25% of the stipulated annual gross salary. |
7. Confidentiality;
Non-Disclosure
|
(a) |
For the purpose of this Agreement, “Confidential Information” is defined to include any information, designs, software, processes, practices, plans, proposals, markets, pricing, personnel or financial or business information relating to Employer, its affiliates (including the Subsidiary), and their respective businesses, customers, suppliers, products or services, whether in written, oral or other form. Confidential Information shall not include information, which at the time of disclosure is in the public domain by publication or otherwise through no fault of Employee, or information furnished by a third party which was not received directly from Employer or otherwise under an obligation of secrecy. |
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|
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|
(b) |
At all times after the date hereof, including after termination of this Agreement, Employee shall not, except with the expressed prior written consent of Employer, directly or indirectly communicate, disclose or divulge any of the Confidential Information or use any of the Confidential Information for any purpose other than performance of his duties hereunder. |
8. Agreement
Not to Compete
For so long as Employee
is entitled to receive severance payments under Sections 4(a), 4(b) or 4(c), or (ii) for a period of one year from the effective
date of termination if Employee voluntarily terminates his employment hereunder or if Employee is terminated by Employer for Cause,
Employee agrees that he will not, directly or indirectly, (1) be employed by, serve as a consultant or advisor to, or have a material
ownership interest in any corporation or other entity whose business is competitive (as reasonably determined by the Board of Directors
of Employer) with the business of Employer, the Subsidiary or any of their affiliates; provided, however that this clause (1) shall
not prohibit any such employment or other relationship with an entity which itself is not, but has a separate corporate affiliate
which is, engaged in such competitive business so long as Employee does not provide services to, assist or advise such competitive
affiliate in any way, or (2) induce or solicit any other person who was employed by Employer, Subsidiary or any of their affiliates
at any time during Employee’s employment by Employer to engage in any line of business competitive with that of Employer,
Subsidiary or their affiliates.
9. No
Conflicting Agreements
Employee represents
and warrants that he is not a party to or bound by any agreement or subject to any restriction arising out of any current or prior
employment or relationship which would be violated by his entering into and performing his obligations under this Agreement, including,
without limitation, restrictions relating to non-competition or the protection of confidential information.
10. Notices
All notices and other communication
which are required or permitted hereunder shall be given in writing and either delivered by hand or overnight courier service or
mailed by certified mail, return receipt requested, postage prepaid, to the following addresses:
Global Equity Partners Plc.
Level 28 – Al Habtoor Business
Tower,
PO Box 29805,
Dubai, U.A.E.
Enzo Taddei
Avenida Marqués del Duero 67,
Edificio Bahía 2-A,
29670 San Pedro de Alcantara,
Malaga (Spain).
11. Miscellaneous
|
(a) |
This Agreement shall be binding upon, inure to the benefit of, and enforceable by the successors and assigns of the Employer and the heirs, estate, personal representatives and beneficiaries of Employee. The rights, obligations and duties of the Employee hereunder shall be personal and are not assignable or delegable in any manner whatsoever; provided, however, that this Agreement shall be assigned to and assumed by the Subsidiary if and when required by Section 1. |
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|
(b) |
The obligations of the parties in Sections 4, 7, 8 and 11 shall survive any termination of this Agreement. |
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|
(c) |
This Agreement constitutes the entire understanding of the parties with respect to subject matter hereof, and shall not be modified, terminated or any provisions waived orally, including this clause. Any such modification, termination or waiver must be in writing and signed by each of the parties hereto. |
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(d) |
No failure to exercise or delay in exercising any right, power or remedy hereunder shall preclude any other or further exercise of the same or any other right, power or remedy. |
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(e) |
This Agreement shall be construed and enforced in accordance with the laws of the England. |
IN WITNESS WHEREOF,
the parties have executed this Agreement on the date indicated below intending to be legally bound hereby.
Global Equity Partners Plc. |
|
Employee |
|
|
|
/s/ Peter Smith |
|
/s/ Enzo Taddei |
Peter Smith |
|
Enzo Taddei |
CEO |
|
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|
Dated: January 1, 2013 |
|
Dated: January 1, 2013 |
EXHIBIT
21
Subsidiaries
Global
Equity Partners Plc., a corporation organized under the laws of the Republic of Seychelles, is a wholly-owned subsidiary of Global
Equity International, Inc.
GE
Professionals DMCC, a corporation organized under the laws of the United Arab Emirates, is a wholly-owned subsidiary of Global
Equity Partners Plc.
EXHIBIT
31.1
GLOBAL
EQUITY INTERNATIONAL, INC.
A
Nevada Corporation
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
Section
302 Certification
I,
Peter J. Smith, certify that:
1. |
I
have reviewed this annual report on Form 10-K of Global Equity International, Inc., a Nevada Corporation (the “registrant”); |
|
|
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report; |
|
|
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report; |
|
|
4. |
The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
b) |
Designed such internal
control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
c) |
Evaluated the effectiveness
of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
d) |
Disclosed in this
report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and |
5. |
The registrant’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing
the equivalent functions): |
|
a) |
All significant
deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and |
|
|
|
|
b) |
Any fraud, whether
or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting. |
Dated:
April 14, 2015
|
/s/
Peter J. Smith |
|
By: |
Peter
J. Smith |
|
Its: |
Chief
Executive Officer (Principal Executive Officer) |
|
EXHIBIT
31.2
GLOBAL
EQUITY INTERNATIONAL, INC.
A
Nevada Corporation
CERTIFICATION
OF PRINCIPAL FINANCIAL OFFICER
Section
302 Certification
I,
Enzo Taddei, certify that:
1. |
I
have reviewed this annual report on Form 10-K of Global Equity International, Inc., a Nevada Corporation (the “registrant”); |
|
|
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report; |
|
|
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report; |
|
|
4. |
The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
b) |
Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
c) |
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based
on such evaluation; and |
|
|
|
|
d) |
Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and |
|
5. |
The registrant’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing
the equivalent functions): |
|
a) |
All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and |
|
|
|
|
b) |
Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
Dated:
April 14, 2015
|
/s/
Enzo Taddei |
|
By: |
Enzo Taddei |
|
Its: |
Chief Financial Officer (Principal Financial Officer) |
|
EXHIBIT
32.1
GLOBAL
EQUITY INTERNATIONAL, INC.
A
Nevada Corporation
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Annual Report of Global Equity International, Inc. (“Company”) on Form 10-K for the year ended
December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter
J. Smith, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
|
(1) |
The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
|
|
(2) |
The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company. |
Dated:
April 14, 2015
|
/s/
Peter J. Smith |
|
By: |
Peter J. Smith |
|
Its: |
Chief Executive Officer (Principal Executive Officer) |
|
EXHIBIT
32.2
GLOBAL
EQUITY INTERNATIONAL, INC.
A
Nevada Corporation
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Annual Report of Global Equity International, Inc. (“Company”) on Form 10-K for the year ended
December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Enzo
Taddei, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
|
(1) |
The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
|
|
(2) |
The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company. |
Dated:
April 14, 2015
|
/s/
Enzo Taddei |
|
By: |
Enzo Taddei |
|
Its: |
Chief Financial Officer (Principal Financial Officer) |
|
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