UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2015
or
[ ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR
THE TRANSITION FROM __________ TO __________.
Commission
File Number: 0-54557
GLOBAL
EQUITY INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
27-3986073 |
(State
or other Jurisdiction
of Incorporation or Organization) |
|
(I.R.S.
Employer
Identification No.) |
|
|
|
X3
Jumeirah Bay, Office 3305,
Jumeirah
Lake Towers, Dubai, UAE |
|
|
(Address
of principal executive offices) |
|
(Zip
code) |
Registrant’s
telephone number: +971 (0) 42767576
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the 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 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 and post such files). Yes [X] No [ ]
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 the 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 Exchange Act). Yes [ ]
No [X]
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate
by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE
ONLY TO CORPORATE ISSUERS
State
the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As
of November 4, 2015, there were 772,523,183 outstanding shares of the Registrant’s Common Stock, $.001 par value.
INDEX
PART
I – FINANCIAL INFORMATION
Item
1. Financial Statements.
Global
Equity International, Inc. and Subsidiary
Consolidated
Financial Statements
September
30, 2015
(Unaudited)
CONTENTS
Global
Equity International, Inc. and Subsidiaries
Consolidated
Balance Sheets
| |
September
30, 2015 | | |
December
31, 2014 | |
| |
(Unaudited) | | |
| |
Assets | |
| | | |
| | |
| |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 1,447 | | |
$ | 19,026 | |
Accounts receivable | |
| - | | |
| 2,520 | |
Prepaids | |
| 15,107 | | |
| 6,248 | |
Other current assets | |
| 7,982 | | |
| 9,481 | |
Loans receivable | |
| 6,000 | | |
| 10,825 | |
Total current assets | |
| 30,536 | | |
| 48,100 | |
| |
| | | |
| | |
Investments, cost | |
| 1,543,950 | | |
| 3,000 | |
| |
| | | |
| | |
Fixed assets,
net | |
| 22,916 | | |
| 30,224 | |
| |
| | | |
| | |
Total assets | |
$ | 1,597,402 | | |
$ | 81,324 | |
| |
| | | |
| | |
Liabilities,
Redeemable Preferred Stock and Stockholders’ Deficit | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 162,282 | | |
$ | 114,191 | |
Accounts payable and accrued liabilities
- related parties | |
| 107,912 | | |
| 360,984 | |
Deferred revenue | |
| 500,000 | | |
| 462,015 | |
Loans payable - related parties | |
| 5,500 | | |
| 58,595 | |
Accrued interest | |
| 324,569 | | |
| 657,918 | |
Loans payable - net of unamortized issue
costs and discount of $29,167 and $0, respectively | |
| 545,851 | | |
| 440,018 | |
Convertible notes payable - net of unamortized
discount of $0 and $87,064, respectively | |
| - | | |
| 79,936 | |
Embedded conversion
option derivative liabilities | |
| - | | |
| 301,937 | |
Total current liabilities | |
| 1,646,114 | | |
| 2,475,594 | |
| |
| | | |
| | |
Long term liabilities | |
| | | |
| | |
Convertible loan payable - related party
- net of unamortized discount of $0 and $268,189, respectively | |
| - | | |
| 33,800 | |
Embedded conversion
option derivative liabilities - related party notes | |
| - | | |
| 393,510 | |
Total liabilities
| |
$ | 1,646,114 | | |
$ | 2,902,904 | |
| |
| | | |
| | |
Redeemable Series
A, Convertible Preferred Stock: 5,000,000 shares authorized; 0 and 1,983,332 issued and outstanding, respectively. | |
| - | | |
| 1,020,000 | |
| |
| | | |
| | |
Commitments and contingencies (Note
8) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders’
Deficit | |
| | | |
| | |
| |
| | | |
| | |
Common stock: 1,000,000,000 shares authorized;
$0.001 par value 771,523,183 and 36,271,148 shares issued and outstanding, respectively. | |
$ | 771,523 | | |
$ | 36,271 | |
Additional paid in capital | |
| 6,804,705 | | |
| 3,472,904 | |
Stock payable | |
| - | | |
| 82,850 | |
Accumulated deficit | |
| (7,624,940 | ) | |
| (7,434,650 | ) |
Other comprehensive
gain | |
| - | | |
| 1,045 | |
Total stockholders’
deficit | |
| (48,712 | ) | |
| (3,841,580 | ) |
| |
| | | |
| | |
Total liabilities,
redeemable preferred stock & stockholders’ deficit | |
$ | 1,597,402 | | |
$ | 81,324 | |
The
accompanying notes are an integral part of these consolidated financial statements.
Global
Equity International, Inc. and Subsidiaries
Consolidated
Statement of Operations
For
the three and nine months ended September 30, 2015 and September 30, 2014 (Unaudited)
| |
For
the three months ended, | | |
For
the nine months ended, | |
| |
September
30, 2015 | | |
September
30, 2014 | | |
September
30, 2015 | | |
September
30, 2014 | |
| |
| | |
| | |
| | |
| |
Revenue - Clients | |
$ | 1,032,465 | | |
$ | 184,000 | | |
$ | 2,187,965 | | |
$ | 345,000 | |
Revenue - Related
party clients | |
| 98,000 | | |
| - | | |
| 98,000 | | |
| - | |
Total revenue | |
| 1,130,465 | | |
| 184,000 | | |
| 2,285,965 | | |
| 345,000 | |
| |
| | | |
| | | |
| | | |
| | |
General and administrative expenses | |
| 61,963 | | |
| 130,263 | | |
| 198,405 | | |
| 237,162 | |
Salaries | |
| 278,123 | | |
| 251,657 | | |
| 770,719 | | |
| 639,374 | |
Professional services | |
| 101,656 | | |
| 111,215 | | |
| 307,114 | | |
| 211,648 | |
Depreciation | |
| 2,835 | | |
| 653 | | |
| 8,416 | | |
| 1,630 | |
Total operating
expenses | |
| 444,577 | | |
| 493,788 | | |
| 1,284,654 | | |
| 1,089,814 | |
| |
| | | |
| | | |
| | | |
| | |
Net income /
(loss) from operations | |
$ | 685,888 | | |
$ | (309,788 | ) | |
$ | 1,001,311 | | |
$ | (744,814 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense): | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| (114,930 | ) | |
| (124,524 | ) | |
| (319,606 | ) | |
| (466,866 | ) |
Finance Charges | |
| (12,396 | ) | |
| - | | |
| (124,175 | ) | |
| - | |
Amortization of debt discount | |
| (139,367 | ) | |
| (76,604 | ) | |
| (355,253 | ) | |
| (141,989 | ) |
Loss on derivative liability | |
| (139,237 | ) | |
| 61,003 | | |
| (459,095 | ) | |
| (165,020 | ) |
Loss on conversion of notes | |
| (793,809 | ) | |
| - | | |
| (732,022 | ) | |
| - | |
Gain on settlement of debt | |
| 660,578 | | |
| - | | |
| 660,578 | | |
| 16,560 | |
Gain on debt extinguishment | |
| 94,043 | | |
| - | | |
| 146,358 | | |
| - | |
Bad debt expense | |
| (7,345 | ) | |
| - | | |
| (7,345 | ) | |
| - | |
Exchange rate loss | |
| (700 | ) | |
| (323 | ) | |
| (1,040 | ) | |
| (476 | ) |
Total other
income (expense) | |
$ | (453,163 | ) | |
$ | (140,448 | ) | |
$ | (1,191,600 | ) | |
$ | (757,791 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | 232,725 | | |
$ | (450,236 | ) | |
$ | (190,289 | ) | |
$ | (1,502,605 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding - basic
& dilutive | |
| 551,531,231 | | |
| 32,474,668 | | |
| 238,222,071 | | |
| 31,526,843 | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss)
per common share - basic & dilutive | |
$ | 0.0004 | | |
$ | (0.01 | ) | |
$ | (0.001 | ) | |
$ | (0.05 | ) |
The
accompanying notes are an integral part of these consolidated financial statements.
Global
Equity International Inc. And Subsidiaries
Consolidated
Statement of Cash Flows
For
the nine months period ended September 30, 2015 and September 30, 2014 (Unaudited)
| |
For
the nine months ended, | |
| |
September
30, 2015 | | |
September
30, 2014 | |
| |
| | |
| |
Cash flows from operating activities
| |
| | | |
| | |
Net
loss | |
$ | (190,289 | ) | |
$ | (1,502,605 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities | |
| | | |
| | |
Depreciation | |
| 8,416 | | |
| 1,630 | |
Common stock issued
for services rendered | |
| 42,202 | | |
| 186,275 | |
Common stock issued
for interest | |
| - | | |
| 65,785 | |
Securities received
as payment for services | |
| (1,540,950 | ) | |
| - | |
Loss on conversion
of notes | |
| 732,022 | | |
| - | |
Loss on derivate
liability - Notes payable | |
| 459,095 | | |
| 165,020 | |
Gain on settlement
of debt | |
| (660,578 | ) | |
| (16,560 | ) |
Gain on debt extinguishment | |
| (146,358 | ) | |
| - | |
Amortization of
debt discount | |
| 355,253 | | |
| 141,989 | |
Bad debts | |
| 7,345 | | |
| - | |
Finance Charges | |
| 124,175 | | |
| - | |
| |
| | | |
| | |
Changes in operating assets and liabilities:
| |
| | | |
| | |
Prepaids | |
| (8,859 | ) | |
| 12,502 | |
Accrued interest | |
| 319,683 | | |
| 401,081 | |
Accounts payable
and accrued liabilities | |
| 193,987 | | |
| 49,598 | |
Accounts payable
- related parties | |
| 145,005 | | |
| 117,182 | |
Deferred revenue | |
| 37,985 | | |
| 213,000 | |
Other
current assets | |
| 1,500 | | |
| - | |
| |
| | | |
| | |
Net cash used
in operating activities: | |
$ | (120,366 | ) | |
$ | (165,103 | ) |
| |
| | | |
| | |
Cash Flows used in investing activities:
| |
| | | |
| | |
Office
furniture and equiment, net | |
| (1,108 | ) | |
| (24,712 | ) |
| |
| | | |
| | |
Net cash used
in investing activities | |
$ | (1,108 | ) | |
$ | (24,712 | ) |
| |
| | | |
| | |
Cash flows from financing activities:
| |
| | | |
| | |
Proceeds from loans
- related parties | |
| 48,422 | | |
| 700 | |
Proceeds from notes
payable | |
| 100,000 | | |
| 208,000 | |
Repayment
of notes payable | |
| (43,482 | ) | |
| (50,500 | ) |
| |
| | | |
| | |
Net cash provided
by financing activities | |
$ | 104,940 | | |
$ | 158,200 | |
| |
| | | |
| | |
Net decrease in cash | |
$ | (16,534 | ) | |
$ | (31,615 | ) |
| |
| | | |
| | |
Effect of Exchange
Rates on Cash | |
| (1,045 | ) | |
| (89 | ) |
| |
| | | |
| | |
Cash at Beginning of Period | |
$ | 19,026 | | |
$ | 48,856 | |
| |
| | | |
| | |
Cash at End of Period | |
$ | 1,447 | | |
$ | 17,152 | |
| |
| | | |
| | |
Supplemental disclosure of cash flow
information: | |
| | | |
| | |
Cash
paid for interest | |
$ | 10,981 | | |
$ | - | |
| |
| | | |
| | |
Cash
paid for income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Supplemental disclosure of non-cash
investing and financing activities: | |
| | | |
| | |
| |
| | | |
| | |
Notes
payable and interest converted into shares | |
$ | 637,820 | | |
$ | 121,819 | |
Debt
discount and issuance costs recorded on notes payable | |
$ | 35,000 | | |
$ | 208,000 | |
Accounts
payable and accrued salaries settled in shares | |
$ | 574,359 | | |
$ | 186,275 | |
The
accompanying notes are an integral part of these consolidated financial statements.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
Note
1 - Basis of Presentation
The
accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission
for interim financial information. Accordingly, they do not include all the information and disclosures necessary for a comprehensive
presentation of consolidated financial position, results of operations, or cash flows. It is management’s opinion, however,
that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair consolidated
financial statements presentation.
The
unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form
10-K, which contains the audited consolidated financial statements and notes thereto, together with the Management’s Discussion
and Analysis, for the year ended December 31, 2014. The interim results for the period ended September 30, 2015 are not necessarily
indicative of results for the full fiscal year.
Note
2 - Nature of Operations
Global
Equity Partners, Plc. (“GEP”), a private company, was organized under the laws of the Republic of Seychelles on September
2, 2009. Global Equity International Inc. (the “Company” or “GEI”), a reporting company since June 21,
2012, was organized under the laws of the state of Nevada on October 1, 2010.On November 15, 2010, GEP executed a reverse recapitalization
with GEI. On August 22, 2014, we formed a Dubai subsidiary of Global Equity Partners Plc. called GE Professionals DMCC. 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
3 - Going Concern
As
reflected in the accompanying consolidated financial statements, the Company had a net loss of $190,289 and net cash used in operations
of $120,366 for the nine months ended September 30, 2015; and a working capital deficit of $1,615,578 and stockholders’
deficit of $48,712 as of September 30, 2015. 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 non-convertible 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 expend funds 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 on recognized stock
exchanges around the globe and possibly dual listing some of its clients on foreign stock exchanges. 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 substantial doubt about the Company’s ability to continue as a going concern.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
The
accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not
include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going concern.
Note
4 - Summary of Significant Accounting Policies
Principles
of Consolidation
Global
Equity International Inc. is the parent company of its 100% subsidiary Global Equity Partners Plc and Global Equity Partners Plc.
is the parent company of its 100% subsidiary, GE Professionals DMCC (Dubai). All significant inter-company accounts and transactions
have been eliminated in consolidation.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered
in formulating its estimate could change in the near term due to one or more future non confirming events. Accordingly, the actual
results could differ from those estimates. Significant
estimates in the accompanying financial statements include allowance for doubtful accounts and loans, estimates of fair value
of securities received for services, estimates of fair value of securities held, depreciation of fixed assets, derivative valuations
and valuations for non-cash equity grants.
Risks
and Uncertainties
The
Company’s operations are subject to significant risk and uncertainties including financial, operational, competition and
potential risk of business failure. The risk of social and governmental factors is also a concern since the Company is headquartered
in Dubai.
Cash
The
Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At September
30, 2015 and at December 31, 2014, 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.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
Foreign
currency policy
The
Company’s accounting policies related to the consolidation and accounting for foreign operations are as follows: The accompanying
consolidated financial statements are presented in U.S. dollars. The functional currency of the Company’s Dubai subsidiary
is the Arab Emirates Dirham (AED).All foreign currency balances and transactions are translated into United States dollars “$”
and/or “USD” as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the
balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.
Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use
of different exchange rates from period to period are included as a component of our stockholders’ equity (deficit) as “Accumulated
other comprehensive income (loss).“Since the AED is tagged to the U.S. dollar, translation gains and losses are always de
minimis, therefore a statement of comprehensive income (loss) is not presented. Gains and losses resulting from foreign currency
transactions are included in the statement of operations.
For
the three and nine months ended September 30, 2015 and for the year ended December 31, 2014, our functional and operational currency
was the U.S. Dollar.
Investments
(A)
Classification of Securities
Marketable
Securities
At
the time of the acquisition, a marketable 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.
Any
unrealized gains and losses are reported as a component of other comprehensive income (loss). Realized gains (losses) are computed
on a specific identification basis and are reflected in the statement of operations.
Cost
Method Investments
Securities
that are not classified as marketable securities are accounted for under the cost method. These securities are recorded at their
original cost basis and are subject to impairment testing.
At
June 30, 2013, the Company had investments 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.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
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.
On
April 28, 2015, the Company received 3,460,000 common shares from a private company and client having a fair market value of $865,000
that is treated as a cost method investment. The value of the cost method investment pertains to the receipt of 9.09% of the common
stock in a private company in which the best evidence of value was the last available price at which shares were sold in a private
placement. On April 28, 2015, the Company received 500,000 preferred shares from the same private company and client having a
fair market value of $500 that is treated as a cost method investment. The value of the cost method investment pertains to the
receipt of 10% of the preferred stock in this private company in which the best evidence of value was the services rendered.
On
September 24, 2015, the Company received 4,500,000 common shares from a private company and client having a fair market value
of $675,000 that is treated as a cost method investment. The value of the cost method investment pertains to the receipt of 5%
of the common stock in a private company in which the best evidence of value was based on the net asset value of the private company.
On September 24, 2015, the Company also received 450,000 preferred shares from the same private company and client having a fair
market value of $450 that is treated as a cost method investment. The value of the cost method investment pertains to the receipt
of the preferred stock (10% of 4,500,000 common shares received) in this private company in which the best evidence of value was
the services rendered.
(B)
Other than Temporary Impairment
The
Company reviews its equity investment portfolio for any unrealized losses that would be deemed other than temporary and require
the recognition of an impairment loss in income. If the cost of an investment exceeds its fair value, the Company evaluates, among
other factors, general market conditions, the duration and extent to which the fair value is less than cost, and the Company’s
intent and ability to hold the investments. Management also considers the type of security, related-industry and sector performance,
as well as published investment ratings and analyst reports, to evaluate its portfolio. Once a decline in fair value is determined
to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established. If market,
industry, and/or investee conditions deteriorate, the Company may incur future impairments. The Company did not record any permanent
impairment during the nine months ended September 30, 2015 and 2014.
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.
| |
| 09/30/2015 | | |
| 12/31/2014 | | |
Useful
Life |
Furniture and Equipment | |
$ | 37,203 | | |
$ | 36,095 | | |
3 to 5 years |
Accumulated depreciation | |
$ | (14,287 | ) | |
$ | (5,871 | ) | |
|
Net fixed assets | |
$ | 22,916 | | |
$ | 30,224 | | |
|
Depreciation
expense for the nine months ended September 30, 2015 and September 30, 2014, was $8,416and $1,630, respectively.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
Beneficial
Conversion Feature
For
conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion
feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount.
When
the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective
debt instrument. The discount is 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 debt whether convertible or not. 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 debt issued whether convertible or not, 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.
Valuation
of Derivative Instruments
ASC
815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with
free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting
purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. At September 30,
2015, the Company had no derivative liability balance.
Revenue
Recognition
We
recognize revenue from the services we provide in accordance with ASC Topic 605, Revenue Recognition. ASC Topic 605 sets
forth guidance as to when revenue is realized or realizable and earned, which is generally when all of the following criteria
are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the
seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Generally, the contract
terms for these services are relatively short in duration.
We
receive consideration in the form of cash and/or securities.
We
recognize cash consideration as revenues as the services are performed either on a pro rata basis or on a stage of completion
basis.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
Securities
received as consideration are typically earned at a point in time when the specified event occurs and the securities are issued
to us. Therefore, we measure and recognize these securities received at fair value on the date of receipt.
All
revenues are generated from clients whose operations are based outside of the United States.
At
September 30, 2015 and December 31, 2014, the Company had the following concentrations of accounts receivables with customers:
Customer
| |
September
30, 2015 | | |
December
31, 2014 | |
| |
| | | |
| | |
ACI | |
| 0 | % | |
| 100 | % |
For
the nine months ended September 30, 2015 and 2014, the Company had the following concentrations of revenues with customers:
Customer | |
September
30, 2015 | | |
September
30, 2014 | |
| |
| | |
| |
STV | |
| 0 | % | |
| 7.25 | % |
PCI | |
| 0 | % | |
| 8.70 | % |
YMD | |
| 0 | % | |
| 7.25 | % |
IOA | |
| 0 | % | |
| 7.25 | % |
DSI | |
| 0 | % | |
| 24.35 | % |
SAC | |
| 2.62 | % | |
| 16.23 | % |
MHB | |
| 1.31 | % | |
| 28.99 | % |
TAM | |
| 2.62 | % | |
| 0 | % |
EER | |
| 1.31 | % | |
| 0 | % |
MGP | |
| 2.62 | % | |
| 0 | % |
UNI | |
| 8.84 | % | |
| 0 | % |
DUO | |
| 43.11 | % | |
| 0 | % |
PDI | |
| 33.27 | % | |
| 0 | % |
ALP | |
| 4.29 | % | |
| 0 | % |
| |
| 100 | % | |
| 100 | % |
During
the nine months ended September 30, 2015, the Company received $1,540,950 in equity securities in two private companies in exchange
for services performed. The valuation of one company was based on 3,460,000 common shares valued at $0.25 per share, based on
a contemporaneous private placement of the customer’s shares and 500,000 preferred shares of the same company valued at
$0.001 per share. The valuation of other company was based on 4,500,000 common shares valued at $0.15 per share, based on net
asset value of the company and 450,000 preferred shares of the same company valued at $0.001 per share.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
The
Company currently holds the following common equity securities in private and also reporting companies:
Company | |
No.
of 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 |
Duo World Inc. | |
| 3,460,000 | | |
Private Company |
Primesite Developments
Inc. | |
| 4,500,000 | | |
Private Company |
| |
| 18,060,000 | | |
|
The
Company currently holds the following preferred equity securities:
Company | |
No.
of Shares | | |
Status |
Duo World Inc. | |
| 500,000 | | |
Private Company |
Primesite Developments
Inc. | |
| 450,000 | | |
Private Company |
| |
| 950,000 | | |
|
Deferred
Revenue
Deferred
revenue represents fees that have been received by the Company for requested services that have not been completed. During the
nine months ending on September 30, 2015, the Company further recognized $783,000 as deferred revenue, making total deferred revenue
balance of $1,245,015.As at September 30, 2015, the Company recognized $745,015 of deferred revenue as revenue, leaving the deferred
revenue balance of $500,000 (which includes $250,000 of deferred revenue received during the years ended 2013 and 2014.)
Share-based
payments
The
Company recognizes all forms of share-based payments to employees, 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 as of the measurement date. Amounts received prior to the measurement
date are adjusted to fair value at each reporting period until a measurement date is achieved. 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 is 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 which are based upon our historical volatility. |
|
|
|
|
● |
The
forfeiture rate is based on historical experience. |
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
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.
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 are 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 operations.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
The
following is the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis at September
30, 2015 and December 31, 2014, using quoted prices in active markets for identical assets (Level 1); significant other observable
inputs (Level 2); and significant unobservable inputs (Level 3):
| |
September
30, 2015 | | |
December
31, 2014 | |
| |
| | |
| |
Level 1 – Cash | |
$ | 1,447 | | |
$ | 19,026 | |
Level 3 – Non-Marketable Securities | |
| 1,543,950 | | |
| 3,000 | |
Level 3 – Derivative liabilities | |
| - | | |
| (695,447 | ) |
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 investments
in equity securities held in private companies.
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.
Changes
in Level 3 assets measured at fair value for the nine months ended September 30, 2015 and the year ended December 31, 2014, were
as follows:
Balance, December 31, 2014 | |
$ | 3,000 | |
Realized and unrealized gains (losses) | |
| - | |
Purchases, sales and settlements | |
| 1,540,950 | |
Impairment loss | |
| - | |
Balance, September 30, 2015 | |
$ | 1,543,950 | |
Derivative
liabilities — These instruments result from 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.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
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 nine months ended September 30, 2015.
Balance, December 31, 2014 | |
$ | 695,447 | |
Initial derivatives recorded from 1/1/15
to 9/30/15 | |
| - | |
Changes in fair value from 1/1/15 to 9/30/15 | |
| 459,095 | |
Reduction of derivative from debt conversions
or paybacks | |
| (1,154,542 | ) |
Reclassifications
to/from APIC for the change in status | |
| - | |
Balance, September 30, 2015 | |
$ | - | |
Loans
Receivable
On
March 22, 2013, the Company granted a loan to a third party, Dreamscapes Properties International Inc. The principal amount loaned
was $6,000, the agreed interest rate was 5% per annum and 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 has spoken to Dreamscapes Properties International Inc.
about a payment plan over the next 3 months and has received a positive response.
In
October 2014, the Company granted a loan to another third party. The principal amount loaned 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.
During the nine months ended September 30, 2015, the company wrote off $4,825 as it was deemed uncollectible.
Recent
Accounting Pronouncements
There
are no new accounting pronouncements that have any impact on the Company’s financial statements other than discussed below:
In
April 2015, the Financial Accounting Standards Board issued Accounting Standards Update No. 2015-03,“Simplifying the
Presentation of Debt Issuance Costs,” which changes the presentation of debt issuance costs in financial statements.
Under this guidance such costs would be presented as a direct deduction from the related debt liability rather than as an asset.
This guidance is effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently
evaluating the impact this guidance will have on its Consolidated Balance Sheet.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
Note
5 – Debt & Accounts Payables
(A) Accounts
payable and accrued liabilities
The
following table represents breakdown of accounts payable as of September 30, 2015 and December 31, 2014, respectively:
| |
| 9/30/2015 | | |
| 12/31/2014 | |
Accrued salaries and benefits | |
$ | 40,045 | | |
$ | 13,658 | |
Other payables
& accrued liabilities | |
| 122,237 | | |
| 100,533 | |
| |
$ | 162,282 | | |
$ | 114,191 | |
On
September 9, 2015, one of the employees of the Company decided to convert his accrued salary and bonus balance to the common shares
of the Company at $0.01 per share. As a result of this conversion, the Company issued 5,500,000 common shares having a fair value
of $0.014 per share or $77,000 to the employee for his accrued salary and bonus of $55,000. The $22,000 loss has been recorded
on the income statement as a loss on conversion of notes.
On
September 10, 2015, another employee of the Company decided to convert his accrued salary and bonus balance to the common shares
of the Company at $0.00735 per share. As a result of this conversion, the Company issued 10,749,000 common shares having a fair
value of $0.0127 per share or $136,512 to the employee for his accrued salary and bonus of $79,000. The $57,512 loss has been
recorded on the income statement as a loss on conversion of notes.
(B) Accounts
payable and accrued liabilities – related parties
The
following table represents the accounts payable to related parties as of September 30, 2015 and December 31, 2014, respectively:
| |
| 9/30/2015 | | |
| 12/31/2014 | |
Salaries | |
$ | 91,180 | | |
$ | 353,913 | |
Expenses | |
| 16,732 | | |
| 7,071 | |
| |
$ | 107,912 | | |
$ | 360,984 | |
On
August 27, 2015, all of the officers and directors of the Company decided to convert their accrued salaries balance amounting
to $398,156 to the common shares of the Company at $0.0025 per share which is 50% of the average 20 days closing price prior to
the conversion. As a result of this conversion, the Company issued 69,076,922 common shares at $0.0025 per share having a fair
value of $0.0064 per share or $442,092 to Mr. Enzo Taddei for his accrued salary balance of $173,901, issued 42,127,492 common
shares at $0.0025 per share having a fair value of $0.0064 per share or $269,616 to Mr. Peter Smith for his accrued salary balance
of $106,056, and issued 46,951,071 common shares at $0.0025 per share having a fair value of $0.0064 per share or $300,487 to
Mr. Patrick Dolan for his accrued salary balance of $118,199. The total aggregate loss amounted to $614,039 and is stated on the
income statement under loss on conversion of notes.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
(C)
Related party – short term loans payable
The
Company received loans from two of its officers and directors. The loans are non-interest bearing, unsecured and due on demand.
The following table represents the loans payable activity as of September 30, 2015:
Loans payable –
related party – December 31, 2014 | |
$ | 58,595 | |
Proceeds from loans | |
| 48,422 | |
Repayments | |
| - | |
Converted to
common stock | |
| (101,517 | ) |
Loans payable
– related party – September 30, 2015 | |
$ | 5,500 | |
On
August 27, 2015, both of the officers and directors of the Company decided to convert their short term loans payable balance amounting
to $101,517 to the common shares of the Company at $0.0025 per share which is 50% of the average 20 days closing price prior to
the conversion. As a result of this conversion, the Company issued 11,776,756 common shares at $0.0025 per share having a fair
value of $0.0064 per share or $75,371 to Mr. Enzo Taddei for his loan payable balance of $29,648 and issued 28,547,822 common
shares at $0.0025 per share having a fair value of $0.0064 per share or $182,706 to Mr. Peter Smith for his loan payable balance
of $71,869. The total aggregate loss amounted to $156,560 and is stated on the income statement under loss on conversion of notes.
(D)
Related party – short term convertible notes
The
Company had accrued salary to the officers and directors of the Company based on the terms of the employment agreements entered
into with each officer. As at December 31, 2012, $209,475 was due to the Chief Executive Officer and $115,000 was due to the Chief
Financial Officer. During the quarter ended March 31, 2013, the Company converted these amounts to Convertible Loans Payable.
These amounts had a term of two years from March 31, 2013 and were payable on demand having accrued interest at 10% on the loan
period. The agreements also gave 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.
During
the nine months ended September 30, 2015, the Company converted the full amount of convertible loans outstanding to its officers
and directors into its common stock which makes the outstanding convertible loan payable of $0 as at September 30, 2015.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
During
the nine months ended September 30, 2015, total interest of $17,297 was accrued and a total of $268,190 debt discount was amortized
leaving an unamortized balance of $0. The fair value of derivative liability as on September 30, 2015 is $0, as the debt was fully
converted into shares, thereby recognizing a net loss on derivative liability for the nine months ending on September 30, 2015
of $206,765.
(E)
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 September 30, 2015 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 | |
| |
| | |
Interest accrued
in 2015 | |
| - | |
Balance at September 30, 2015 | |
$ | 226,616 | |
|
● |
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.The note holder received, as a form of guarantee,
1,600,000 shares of Direct Security Integration Inc. and the note holder is currently trying to sell these shares. The shares
used as a form of guarantee formed part of the assets of our Company. |
|
|
|
|
● |
On
September 18, 2015, the Company and the note holder agreed to amend the previous terms of the agreement and both parties agreed
on the new terms whereby the company is now liable to pay $500,000 as full and final payment of the October 17, 2013 loan
principal, accrued interest and all other related penalties. This repayment will not accrue any further interest or penalties.
As a result, the Company has reversed the excess accrued interest and monitoring fee payable amounting to $660,578 recognized
as a gain on settlement; leaving the principal loan balance of $319,598 and accrued interest balance $180,402 of as on September
30, 2015. |
Loan granted in 2013 | |
$ | 319,598 | |
Interest accrued
in 2013 | |
| 39,602 | |
Balance at
December 31, 2013 | |
$ | 359,200 | |
| |
| | |
Interest accrued
in 2014 | |
| 390,197 | |
Balance at
December 31, 2014 | |
$ | 749,397 | |
| |
| | |
Monitoring fee accrual | |
| 124,175 | |
Interest accrued in 2015 | |
| 287,006 | |
Excess interest
and monitoring fee gain | |
| (660,578 | ) |
Balance at
September 30, 2015 | |
$ | 500,000 | |
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
|
● |
On
August 27, 2015, the Company secured a six month non-convertible loan for$135,000 carrying an original issue discount of $30,000.
In addition, the company agreed to pay $5,000 to the note holder to cover their legal costs. The interest will not be accrued
on the outstanding principal balance unless an event of default occurs. During the nine months ended September 30, 2015, $833
of the debt issuance costs and $5,000 of the debt discount balance was amortized to interest expense, leaving an unamortized
issue cost and discount balance of $29,167. |
Principal loan amount | |
$ | 135,000 | |
Original issue discount | |
| (30,000 | ) |
Issuance costs | |
| (5,000 | ) |
Amortization of
OID and issuance costs in 2015 | |
| 5,833 | |
| |
| | |
Balance at September 30, 2015 | |
$ | 105,833 | |
(Net of unamortized discount and issue
costs of $29,167) | |
| | |
A
summary of all non-convertible notes, net of debt discount, including the accrued interest as depicted in Note 5 e) at September
30, 2015.
| |
| Principal | | |
| | | |
| | |
Notes | |
| (net
of debt discount) | | |
| Interest | | |
| Total
payable | |
October 9, 2013 | |
$ | 120,420 | | |
$ | 106,196 | | |
$ | 226,616 | |
October 17, 2013 | |
| 319,598 | | |
| 180,402 | | |
| 500,000 | |
November 26, 2013 | |
| - | | |
| 37,971 | | |
| 37,971 | |
August 27, 2015 | |
| 105,833 | | |
| - | | |
| 105,833 | |
| |
| | | |
| | | |
| | |
| |
$ | 545,851 | | |
$ | 324,569 | | |
$ | 870,420 | |
(F)
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 income (expense).
On
May 1, 2014,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 provided up to an aggregate of $100,000 in gross
proceeds. The LG Note matured on May 1, 2015, having accrued interest of 8% and was 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 which the Company’s shares were traded or any exchange upon which the Common Stock might
be traded in the future, for the twenty prior trading days including the day upon which a Notice of Conversion was received by
the Company. Accrued interest was paid back in shares of common stock 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
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
The
principal amount of $50,000 under the second note was to be received by the Company no later than January 1, 2015. All principal
under this Note was due and payable no later than July 1, 2015. This Full Recourse Note would have accrued simple interest at
the rate of 8%. On December 19, 2014 the note holder decided not to lend any further amounts against the second note, so this
amount was not received by the company. As such, the second note and corresponding subscription receivable was cancelled during
the year ended December 31, 2014.
The
fair value of the derivative liability as at September 30, 2015, was nil as this loan was fully converted into shares during the
nine months ending on September 30, 2015.
During
the nine months ended September 30, 2015, the Company fully repaid $50,000 in principal and $4,024 of accrued interest by the
issuance of 65,283,160 shares of common stock priced between $0.0011 and $0.0067per share. As a result, $6,757 was recognized
as net gain on conversion into stock.
During
the nine months ending on September 30, 2015, total interest of $1,424 was accrued and a total of $16,575 debt discount was amortized
leaving an unamortized balance of $0.The company recognized a net gain on derivative liability during the nine months ending on
September 30, 2015, of $61,641.As of September 30, 2015, this convertible debt has been fully extinguished.
On
May 1, 2014, 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 provided up to an aggregate principal amount of $100,000 (with the first note being in the amount of $50,000 and the second
note being in the amount of $50,000 (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 $50,000secured
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, 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.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
The
principal amount of $50,000 under the second note was to be received by the Company no later than January 1, 2015. All principal
under this Note would be due and payable no later than July 1, 2015. This Full Recourse Note would have accrued simple interest
at the rate of 8%. This amount was not received and as on December 24, 2014 the note holder decided not to lend any further amounts.
As such the second note and corresponding subscription receivable was cancelled during the year ended December 31, 2014.
The
fair value of the derivative liability as at September 30, 2015, was nil as this loan was fully converted into shares at the quarter
ending on March 31, 2015.
During
the nine months ended September 30, 2015, the Company fully repaid $37,000 in principal and $3,171 of accrued interest by the
issuance of 24,570,088 shares of common stock priced between $0.0024 and $0.0057 per share. As a result, $14,641was recognized
as net gain on conversion into stock.
During
the nine months ending on September 30, 2015, total interest of $652 was accrued and a total of $14,421 debt discount was amortized
leaving an unamortized balance of $0. The company recognized a net loss on derivative liability during the nine months ending
on September 30, 2015 of $(157). As of September 30, 2015, this convertible debt has been fully extinguished.
On
June 12, 2014, 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 Deposits/Withdrawals
at Custodian (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. The Company opted to receive only $55,000 of the possible $250,000.
The
fair value of the derivative liability as at September 30, 2015, was nil as this loan was fully converted into shares during the
nine months ending on September 30, 2015.
During
the nine months ended September 30, 2015, the Company fully repaid $47,500 in principal and $18,372 of accrued original issue
discount by the issuance of 103,313,129 shares of common stock priced between $0.0010 and $0.0065 per share. As a result, $57,039
was recognized as net gain on conversion into stock.
During
the nine months ended September 30, 2015, a total debt discount of $34,805 was amortized leaving an unamortized balance of $0.
The company recognized a net gain on derivative liability during the nine months ending on September 30, 2015 of $190,844.As of
September 30, 2015, this convertible debt has been fully extinguished.
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 was due on June 29, 2015. The terms of the conversion included a 42% discount to market
based on an average price calculated on the 10 trading days prior to the conversion date. If the Company opted to pay the loan
back on or before 180 days, hence not converting the debt into equity, borrower should 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 note holder.
Global Equity International, Inc.
and Subsidiary
Notes to the Consolidated Financial
Statements
September 30, 2015
(Unaudited)
During
the nine months ended September 30, 2015, total interest of $10,325 was accrued and a total of $21,259 debt discount was amortized
leaving an unamortized balance of $0. The fair value of the derivative liability as on September 30, 2015, was $0 as this loan
was fully paid back during the quarter ending on March 31, 2015 and the company recognized a gain of $51,613 on extinguishment
of derivative liability balance.
During
the quarter ended March 31, 2013, the Company converted $209,475 of unpaid salary to a 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, derivative liability
and gain on extinguishment attached to the note.
During
the nine months ending on September 30, 2015, the Company converted full amount of convertible loan outstanding to Mr. Peter Smith
into its common stock which makes the outstanding convertible loan payable of $0 as at September 30, 2015.
During
the nine months ending on September 30, 2015, total interest of $11,555 was accrued and a total of $173,138 debt discount was
amortized leaving an unamortized balance of $0. The fair value of derivative liability as on September 30, 2015, is recorded at
$0 as the debt was fully converted into shares, thereby recognizing a net gain on derivative liability during the nine months
ending on September 30, 2015, of $128,481.
During
the quarter ended March 31, 2013, the Company converted $115,000 of unpaid salary to a 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.
During
the nine months ending on September 30, 2015, the Company converted full amount of convertible loan outstanding to Mr. Enzo Taddei
into its common stock which makes the outstanding convertible loan payable of $0 as at September 30, 2015.
During
the nine months ending on September 30, 2015, a total interest of $5,742 was accrued and a total of $95,052 debt discount was
amortized leaving an unamortized balance of $0. The fair value of derivative liability as on September 30, 2015 is recorded at
$0 as the debt was fully converted into shares, thereby recognizing a net loss on derivative liability during the nine months
ending on September 30, 2015 of $78,284.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
Note
6 - Equity and Stockholders’ Equity (Deficit)
(A) Redeemable
Preferred Stock
On
November 30, 2011, the Company authorized and designated 5,000,000 Series “A” convertible preferred shares. 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 |
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 was redeemable on December 1, 2014 and it was presented on the balance sheets
as “Redeemable Preferred Stock” in a manner consistent with temporary equity as at December 31, 2014. There were no
other features associated with this class of redeemable preferred stock, which require disclosure. As at December 31, 2014, there
were 1,983,332 series “A” preferred shares issued and outstanding. The carrying amount and redemption amount was $1,020,000
as at December 31, 2014.
On
May 19, 2015, the board of directors agreed to the non-redemption and returned the 1,983,332 series “A” preferred
shares of the Company to Treasury. Since the preferred shares were vested upon issuance in prior years, the cancellation of these
shares was considered a contribution back to the company at zero cost with no gain or loss recognized.
(B) Common
Stock
During
the nine months ended September 30, 2015, the Company issued 735,252,035 common shares valued at their fair value of $3,047,052
in exchange for conversion of promissory notes, accrued interest, accrued salaries and commission of $1,212,102 and related derivative
liabilities of $1,102,928, thereby recognizing a net loss on conversion of $732,022.
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.
Effective
August 3, 2015, the Company again amended its Articles of Incorporation (Article 3) to increase the number of shares of common
stock available to issue from 500,000,000 to 1,000,000,000.
Global
Equity International, Inc. and Subsidiary
Notes
to the Consolidated Financial Statements
September
30, 2015
(Unaudited)
(C) Notes
Receivable Common
On
May 1, 2014, the Company entered into two Securities Purchase Agreements, one with Adar Bay LLC and the other with LG Capital
Inc., each providing for the purchase of a Convertible Redeemable Note. The aggregate principal amount of each note was $100,000.
The first note from each of the funders (“Buyers”) 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 that 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 note holders unilaterally decided not to fund these second notes and hence the Second Note,
along with the Buyers Note stands cancelled leaving $0 balance in notes payable and in the Contra Equity Account as at December
31, 2014.
Note
7 – Related Party Transactions.
On
July 1, 2015, the Company entered into a consultancy agreement valued at $148,000 with a Nevada Corporation that is majority owned
by Mr Peter Smith and Mr. Enzo Taddei. At September 30, 2015 we had received a total of $98,000 and this income was recognized
as revenue.
Note
8 – Commitments and contingencies
On
October 9, 2013, the Company secured a two month loan for GBP 75,000 (equivalent to $120,420) and issued 10,000 restricted shares
of common stock to the lender. On December 7, 2013, the company agreed to pay an extra 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 restricted shares of common stock in consideration for a for a five month extension on the loan. This stock
compensation was issued to the lender also on December 12, 2013. The Company is currently in litigation, in the courts of Dubai,
regarding the Able Foundation loan. The plaintiff, Able Foundation, is requesting a settlement of $300,000 which is the $226,616
currently owed plus an additional $73,384 of damages (see Note 5(e)). On, June 1, 2015, the Company (the defendant) retained the
legal services of a Dubai based law firm called Alsafar & Partners. These legal proceeding are currently ongoing. The Company
intends to vigorously defend the litigation. At this time, the Company cannot predict the outcome of the litigation.
On
October 28, 2013, the Company entered into a lease agreement for its head office at Dubai for a period of two years amounting
to a rental of $31,850 per annum. On October 7, 2015, the Company renewed its lease agreement for its head office at Dubai for
a further period of two years amounting to a rental of $31,850 per annum for the first year (from November 2015 until October
2016) and $35,035 for the second year (from November 2016 until October 2017). This agreement is renewable for a further period
of one year at 5% higher than the current rent.
Note
9 – Subsequent events
On
October 7, 2015, the Company renewed its lease agreement for its head office at Dubai for a further period of two years amounting
to a rental of $31,850 per annum for the first year and $35,035 for the second year. This agreement will expire on October 30,
2017 and will be renewable for a further period of one year at 5% higher than the current rent.
On
October 7, 2015, the Company employed and appointed Mr. Charles Taylor as Chairman of the Board of Directors under a renewable
employment agreement (initially) for a period of six months. On October 16, 2015, the Company issued 1,000,000 shares of restricted
common stock valued at a fair value of $0.0419 per share based on the quoted trade price on the day of issuance or $41,900 to
Mr. Charles Taylor upon conversion of agreed salary compensation of $40,000 into equity.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary
Forward - Looking Statement
The
following discussion and analysis of the results of operations and financial condition of Global Equity International, Inc. should
be read in conjunction with the unaudited financial statements, and the related notes. References to “we,” “our,”
or “us” in this section refers to the Company and its subsidiaries. Our discussion includes forward-looking statements
based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions..
We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,”
“should,” “could,” and similar expressions to identify forward-looking statements.
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.
For
the three months ended September 30, 2015 and September 30, 2014:
The
Company had revenues amounting to $1,130,465 and $184,000, for the three months ended September 30, 2015 and 2014, respectively.
| |
September
30, 2015 | | |
September
30, 2014 | |
| |
| | |
| |
Revenue | |
$ | 1,130,465 | | |
$ | 184,000 | |
| |
$ | 1,130,465 | | |
$ | 184,000 | |
Following
is the breakdown of total revenue for the three months ended September 30, 2015 amounted to $1,130,465:
|
a) |
$675,450
was received in equity securities in a private company in exchange for services performed. The valuation was based on 4,500,000
common shares at $0.15 per share and 450,000 preferred shares at $0.001 per share. |
|
|
|
|
b) |
$272,015
was recognized as revenue from deferred revenue as we performed related services to the clients against payments received
in prior quarters. |
|
|
|
|
c) |
$183,000
was received in cash for services performed to two new clients during the three months ending on September 30, 2015. |
For
the three months ended September 30, 2015 and 2014, the Company had the following concentrations of revenues with customers:
Customer | |
September
30, 2015 | | |
September
30, 2014 | |
| |
| | |
| |
DSI | |
| 0 | % | |
| 45.65 | % |
MHB | |
| 2.65 | % | |
| 54.35 | % |
SAC | |
| 3.98 | % | |
| 0 | % |
UNI | |
| 14.33 | % | |
| 0 | % |
DUO | |
| 3.10 | % | |
| 0 | % |
PDI | |
| 67.27 | % | |
| 0 | % |
ALP | |
| 8.67 | % | |
| 0 | % |
| |
| 100 | % | |
| 100 | % |
The
total operating expenses amounted to $444,577 and $493,788, for the three months ending on September 30, 2015 and 2014, respectively.
The following table sets forth the Company’s operating expenditure analysis for both periods:
| |
September
30, 2015 | | |
September
30, 2014 | | |
Change | |
| |
| | |
| | |
| |
General and administrative expenses | |
$ | 61,693 | | |
$ | 130,363 | | |
$ | (68,300 | ) |
Salaries | |
| 278,123 | | |
| 251,657 | | |
| 26,466 | |
Professional services | |
| 101,656 | | |
| 111,215 | | |
| (9,559 | ) |
Depreciation | |
| 2,835 | | |
| 653 | | |
| 2,182 | |
Total operating
expenses | |
$ | 444,577 | | |
$ | 493,788 | | |
$ | (49,211 | ) |
During
the three months ended September 30, 2015, total operating expenses were decreased by $49,211 from the previous three months ending
on September 30, 2014. The reason for the decrease in expenses and also increase in salaries are mainly due to the reduction in
general & administrative expenses and professional fees and the fact that employed more staff. The net income (loss) from
operations for the three months ended September 30, 2015 and 2014, were $685,888 and $(309,788), respectively.
The
Company´s other income and (expenses) for the three months ended September 30, 2015 and 2014, were $(453,163) and $(140,448),
respectively. The following table sets forth the Company’s other income and (expenses) analysis for both periods:
| |
September
30, 2015 | | |
September
30, 2014 | | |
Changes | |
Interest expense | |
$ | (114,930 | ) | |
$ | (124,524 | ) | |
$ | 9,594 | |
Finance Charges | |
| (12,396 | ) | |
| - | | |
| (12,396 | ) |
Amortization of debt discount | |
| (139,367 | ) | |
| (76,604 | ) | |
| (62,763 | ) |
Gain on settlement of liabilities | |
| 660,578 | | |
| - | | |
| 660,578 | |
Gain (loss) on derivative liability | |
| (139,237 | ) | |
| 61,003 | | |
| (200,240 | ) |
Gain (loss) on conversion of notes | |
| (793,809 | ) | |
| - | | |
| (793,809 | ) |
Gain on debt extinguishment | |
| 94,043 | | |
| - | | |
| 94,043 | |
Bad debt expense | |
| (7,345 | ) | |
| - | | |
| (7,345 | ) |
Exchange rate loss | |
| (700 | ) | |
| (323 | ) | |
| (377 | ) |
Total other
income (expense) | |
$ | (453,163 | ) | |
$ | (140,448 | ) | |
$ | (312,715 | ) |
Our
total other expense has increased mainly due to the increase in loss on derivative liability, amortization of debt discount and
loss on conversion of convertible notes. There was also a gain on debt extinguishment and gain on settlement of liabilities. Gain
on debt extinguishment includes extinguishment of stock payable balance amounting to $82,850 and $11,193 relates to balances written
back that company owed to different static parties from a long time. Gain on settlement of liabilities includes write back of
excess amount of accrued interest and monitoring fee payable relating to Eden loan as per the new arrangement between the lender
(Eden) and the Company. Balances written off consist of static receivable balances from two parties which are deemed uncollectible,
hence written off during the three months ending on September 30, 2015.
The
net income (loss) for the three months ended September 30, 2015 and 2014 were $232,725 and $(450,236), respectively.
The
Company had 771,523,183 and 33,159,418 common shares issued and outstanding at September 30, 2015 and September 30, 2014, respectively.
The weighted average number of shares for the three months ended September 30, 2015 and September 30, 2014, was 551,531,231 and
32,474,668, respectively. The income / (loss) per share for both periods was $0.0004 and $(0.01) respectively.
For
the nine months ended September 30, 2015 and September 30, 2014:
The
Company had revenues amounting to $2,285,965 and $345,000, for the nine months ended September 30, 2015 and 2014, respectively.
| |
September
30, 2015 | | |
September
30, 2014 | |
| |
| | |
| |
Revenue
| |
$ | 2,285,965 | | |
$ | 345,000 | |
| |
$ | 2,285,965 | | |
$ | 345,000 | |
Following
is the breakdown of total revenue for the nine months ended September 30, 2015 amounted to $2,285,965:
|
a) |
$865,500
in equity securities in a private company in exchange for services performed. The valuation was based on 3,460,000 common
shares at $0.25 per share and 500,000 preferred shares at $0.001 per share. |
|
|
|
|
b) |
$675,450
was received in equity securities in another private company in exchange for services performed. The valuation was based on
4,500,000 common shares at $0.15 per share and 450,000 preferred shares at $0.001 per share. |
|
|
|
|
c) |
$212,015
was recognized as revenue from deferred revenue as we performed related services to the clients against payments received
in prior years. |
|
|
|
|
d) |
$533,000
was received in cash for services performed to our new clients during the nine months ending on September 30, 2015. |
For
the nine months ended September 30, 2015 and 2014, the Company had the following concentrations of revenues with customers:
Customer | |
September
30, 2015 | | |
September
30, 2014 | |
| |
| | |
| |
STV | |
| 0 | % | |
| 7.25 | % |
PCI | |
| 0 | % | |
| 8.70 | % |
YMD | |
| 0 | % | |
| 7.25 | % |
IOA | |
| 0 | % | |
| 7.25 | % |
DSI | |
| 0 | % | |
| 24.35 | % |
SAC | |
| 2.62 | % | |
| 16.23 | % |
MHB | |
| 1.31 | % | |
| 28.99 | % |
TAM | |
| 2.62 | % | |
| 0 | % |
EER | |
| 1.31 | % | |
| 0 | % |
MGP | |
| 2.62 | % | |
| 0 | % |
UNI | |
| 8.84 | % | |
| 0 | % |
DUO | |
| 43.11 | % | |
| 0 | % |
PDI | |
| 33.27 | % | |
| 0 | % |
ALP | |
| 4.29 | % | |
| 0 | % |
| |
| 100 | % | |
| 100 | % |
The
total operating expenditures amounted to $1,284,654 and $1,089,814, for the nine months ending on September 30, 2015 and 2014,
respectively. The following table sets forth the Company’s operating expenditure analysis for both periods:
| |
September
30, 2015 | | |
September
30, 2014 | | |
Change
| |
General and administrative expenses | |
$ | 198,405 | | |
$ | 237,162 | | |
$ | (38,757 | ) |
Salaries | |
| 770,719 | | |
| 639,374 | | |
| 131,345 | |
Professional services | |
| 307,114 | | |
| 211,648 | | |
| 95,466 | |
Depreciation | |
| 8,416 | | |
| 1,630 | | |
| 6,786 | |
Total operating expenses | |
$ | 1,284,654 | | |
$ | 1,089,814 | | |
$ | 194,840 | |
Total
operating expenses increased by $194,840 as we had more legal and professional fees to pay on behalf of new clients during the
nine months ended September 30, 2015. We also had three more employees, which was the reason for an increase in salaries expense.
The
net income (loss) from operations for the nine months ended September 30, 2015 and 2014, were $1,001,311 and $(744,814), respectively.
The
Company´s other income and (expenses) for the nine months ended September 30, 2015 and 2014, were $(1,191,600) and $(757,791),
respectively. The following table sets forth the Company’s other income and (expenses) analysis for both periods:
| |
September
30, 2015 | | |
September
30, 2014 | | |
Change
| |
Interest expense | |
$ | (319,606 | ) | |
$ | (466,866 | ) | |
$ | 147,260 | |
Finance charges | |
| (124,175 | ) | |
| - | | |
| (124,175 | ) |
Amortization of debt discount | |
| (355,253 | ) | |
| (141,989 | ) | |
| (213,264 | ) |
Gain (loss) on settlement of liabilities | |
| 660,578 | | |
| 16,560 | | |
| 644,018 | |
Gain (loss) on derivative liability | |
| (459,095 | ) | |
| (165,020 | ) | |
| (294,075 | ) |
Gain (loss) on conversion of notes | |
| (732,022 | ) | |
| - | | |
| (732,022 | ) |
Gain on debt extinguishment | |
| 146,358 | | |
| - | | |
| 146,358 | |
Balance written off | |
| (7,345 | ) | |
| - | | |
| (7,345 | ) |
Exchange rate loss | |
| (1,040 | ) | |
| (476 | ) | |
| (564 | ) |
Total other
income (expense) | |
$ | (1,191,600 | ) | |
$ | (757,791 | ) | |
$ | (433,809 | ) |
Our
total other income (expense) increased mainly due to the fact that a larger portion of our convertible notes was converted into
our common stock during the nine months ended September 30, 2015. There were no such conversions executed during the nine months
ended on September 30, 2014. These note conversions caused an increase in amortization of debt discount and loss on conversion
of notes. Loss on derivative liabilities also increased due to the change in fair values of the derivative liabilities at each
conversion and reporting date. There was also a gain on debt extinguishment and gain on settlement of liabilities. Gain on debt
extinguishment includes extinguishment of derivative liability balance amounting to $51,613 relating to early cash settlement
of KMB convertible note. It also includes extinguishment of stock payable balance amounting to $82,850 and $11,193 which relates
to balances written back that company owed to different static creditors from a long time. Gain on settlement of liabilities includes
write back of excess amount of accrued interest and monitoring fee payable relating to Eden loan as per the new arrangement between
the lender (Eden) and the Company. The interest expense decreased due to the fact that we paid back loans in cash and all of the
convertible notes were converted into common stock of the Company during the nine months ended September 30, 2015. Balances written
off consist of static receivable balances from two parties which are deemed uncollectible, hence written off during the nine months
ending on September 30, 2015.
The
net loss for the nine months ended September 30, 2015 and 2014 were $190,289 and $1,502,605, respectively.
The
Company had 771,523,183 and 33,159,418 common shares issued and outstanding at September 30, 2015, and September 30, 2014, respectively.
The weighted average number of shares for the nine months ended September 30, 2015, and September 30, 2014, was 238,222,071 and
31,526,843, respectively. The loss per share for both periods was $(0.001) and $(0.05), respectively.
LIQUIDITY
AND CAPITAL RESERVES
Our
financial statements contained herein have been prepared assuming that the Company will continue as a going concern. The Company
had net income from operations of $685,888 and $1,001,311 for the three and nine months ended September 30, 2015, respectively;
a total “Other Income (Expenses)” amounting to $(453,163) and $( 1,191,600) for the three and nine months ended
September 30, 2015, respectively; and net income (loss) of $232,725 and $(190,289) for the three and nine months ended September
30, 2015, respectively.
The
Company had $1,447 in cash; net cash used in operations of $(120,366) for the nine months ended September 30, 2015; working capital
deficit of $1,615,578 and stockholders´ deficit of $48,712 as of September 30, 2015.
While
the Company receives cash revenues periodically from its current clients, the ability of the Company to continue its operations
is dependent on Management’s plans, which may include raising capital through non-convertible 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.
During
the nine months ending on September 30, 2015, the Company had paid off 100% of its discounted convertible loan notes, as follows:
|
1) |
LG
Capital LLC: Converted into equity. |
|
|
|
|
2) |
Adar
Bays LLC: Converted into equity. |
|
|
|
|
3) |
KMB
Worldwide Inc.: Paid in cash. |
|
|
|
|
4) |
JMJ
Financial: Converted into equity. |
|
|
|
|
5) |
Peter
Smith: Converted into equity. |
|
|
|
|
6) |
Enzo
Taddei: Converted into equity. |
|
|
|
|
7) |
Patrick
V. Dolan: Converted into equity. |
The
Company does not intend to obtain any further funding through convertible notes and the fact that we now have no more discounted
convertible loan notes, should allow our common stock to trade in a more orderly manner. Currently, our common stock price is
on a rising trend which is as a result of our organic growth, which should improve our options to source funding through the equity
markets, if required.
Depending
on achievement of certain milestones and contractual agreements, the Company will be due further cash fees from current clients
amounting to $1,747,985.
Also,
of the cash fees paid to date, the Company has deferred a total $500,000 from cash fees received from four clients. These deferred
cash fees will be reflected on the Company´s income statement once certain milestones and contractual agreements have been
completed.
Customer | |
Fees
due over the life of the executed contracts | | |
Cash
fees deferred
to date | |
SCI | |
$ | 170,000 | | |
$ | - | |
DUO | |
| 80,000 | | |
| 50,000 | |
MHB | |
| 235,000 | | |
| 100,000 | |
SAC | |
| 190,000 | | |
| 100,000 | |
UNI | |
| 752,985 | | |
| 185,000 | |
PDI | |
| 150,000 | | |
| 65,000 | |
MAR | |
| 60,000 | | |
| - | |
SPP | |
| 60,000 | | |
| - | |
ALP | |
| 50,000 | | |
| - | |
| |
| | | |
| | |
Total | |
$ | 1,747,985 | | |
$ | 500,000 | |
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 a substantial 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 non-convertible debt financing when necessary, 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 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
non-convertible loans from third party investors. |
FUTURE
PLANS
To
date we have 14 clients under contract that we deem to be active and are either seeking a listing on a recognized stock exchange
or seeking funding for acquisition and growth:
|
Client: |
|
Sector: |
1 |
Regis
Card Group Limited |
|
Prepaid
cards and payment services. |
2 |
Arrow
Cars International Inc. |
|
Long
term car rental. |
3 |
Medinas
Holdings BV |
|
Theraputical
stomach cancer treatment. |
4 |
Your
MD |
|
Mobile
application for health diagnostic. |
5 |
Duo
World Inc |
|
Software
development and integration. |
6 |
VT
Hydrocarbon Holdings (Pte.) |
|
LNG
Gas storage. |
7 |
Authenta
Trade |
|
Bitcoin. |
8 |
ATC
Enterprises DMCC |
|
Diamonds. |
9 |
Unii
Limited |
|
Mobile
Applications such as “Fling”. |
10 |
Energy
Equity Resources (Norway) Limited |
|
Natural
resources. |
11 |
Scandinavian
AgriTex Co. Limited |
|
Cotton
and clothing industry. |
12 |
Tam
Mining Limited |
|
Natural
resources. |
13 |
Primesite
Developments Limited |
|
Residential
and commercial Development. |
14 |
International
FIM SRL |
|
Manufacturing
of automotive car parts. |
MILESTONES
FOR 2015 /2016:
Our
specific plan of operations and milestones through December 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 the Middle East, South East Asia, Europe
and the US:
|
● |
Certain
registered investment houses and funds 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. |
|
|
|
|
● |
Various
family offices in Dubai (UAE). |
|
|
|
|
● |
Various
introducers to Capital based on the East and West coast of the US. |
|
|
|
|
● |
Yemon
(Pvt.) Limited – An introducer of new business based in Sri Lanka. |
|
|
|
|
● |
MEPEX
– A Bahrain Oil and Gas exhibit with over 280 members. |
We
intend to develop relationships with a further six “introducers” to potential new business for the Company before
the end of December 2016.
During
2015 and the 2016, we believe that we have the capacity to sign at least another 15 new clients a lot of which will be in the
oil and gas sector due to our newly formed alliance with MEPEX.
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) | SOUTH
EAST ASIAN EXPANSION |
We
will continue to establish a firm presence in South East Asia where we are attracting clients, relationships and awareness.
| 4) | OPEN
AN OFFICE IN THE US. |
During
2016, we intend to open an office on the east coast of the USA in order to substantially expand our network of introducers to
new business and also professionals and consultants.
| 5) | EXPAND
OUR CONSULTANCY TO INCLUDE MORE MERGER AND ACQUISITION ACTIVITY. |
We
intend to form relationships with merger and acquisition specialists during 2015 and 2016 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. |
| 6) | 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.
| 7) | EXPAND
ITS NEWLY FORMED HUMAN RESOURCES DEPARTMENT IN DUBAI. |
The
Company has already created an in-house human resources department called “Kingsman James” (http://kingsmanjames.com/)
with a view to be able to provide its existing clients and other new clients with the possibility of restructuring their companies
management with seasoned professionals, if required. We intend to continue expanding this human resources department throughout
2015 and 2016.
| 8) | DUAL
LISTING DUBAI AND UP-LIST IN THE U.S. |
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 preparing a campaign that will have a maximum effect. The Company intends to apply for an up-listing to a bigger
board such as the NYSE Mkt. in the US as soon as the criteria’s set out by the chosen market have been met.
| 9) | EXPAND
OUR NETWORK OF CONTACTS WITHIN THE INVESTMENT COMMUNITY |
During
2015 and 2016, we intend to substantially expand our Middle Eastern, South East Asian and also our US networks in order to enable
us to make introductions on a more institutional level.
At
present, we are being received with open arms by all of the financial communities with whom we have contact; hence, we have plans
to host various hospitality events for our current clients, our key contacts and upper management of the Company.
| 10) | EXPAND
OUR RANGE OF BUSINESS AND CONTACTS |
We
intend to take our consultancy service outside of the Middle East and Europe and 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 the next 12
months.
We
will continue working on different “Road shows” in Dubai, Europe and the US during 2015 and 2016.
| 12) | FURTHER
EXPAND OUR RANGE OF BUSINESS AND CONTACTS |
During
this year 2015 and 2016, we intend to cement the relationships created. The target markets for attracting clients are: Thailand,
Sri Lanka, China, Hong Kong and Singapore.
To
service the clients generated from these markets, we will spend time creating a network of service companies who we can utilize
to assist us on a local basis. We will explore the possibilities of dual listings for our clients in Singapore to allow us a local
market for any Asian clients we will attract and giving the Company a firm foothold in the Asian territory.
Item
3. Quantitative and Qualitative Disclosure about Market Risk.
Not
applicable.
Item
4. 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 effective.
Changes
in internal control over financial reporting.
There
were no changes in 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.
PART
II – OTHER INFORMATION
Item
1. Legal Proceedings.
On
October 9, 2013, the Company secured a two month loan for GBP 75,000 (equivalent to $120,420) and issued 10,000 restricted shares
of common stock to the lender, The Able Foundation, 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 restricted shares of common stock in consideration for a for a five month extension on the loan. This stock
compensation was issued to the lender also on December 12, 2013. The Company is currently in litigation, in the courts of Dubai,
regarding the Able Foundation loan. The plaintiff, Able Foundation, is requesting a settlement of $300,000 which is the $226,616
currently owed plus an additional $73,384 of damages. On, June 1, 2015, the Company (the defendant) retained the legal services
of a Dubai based law firm called Alsafar & Partners. These legal proceeding are currently ongoing. The Company intends to
vigorously defend the litigation. At this time, the Company cannot predict the finally outcome of the litigation but so far the
preliminary proceedings in Dubai have been favorable to the Company.
Item
1A. Risk Factors.
Not
applicable.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
On
October 16, 2015, the Company issued 1,000,000 restricted common stock valued at a fair value of $0.0419 per share or $41,900
to Mr. Charles Taylor upon conversion of agreed salary compensation of $40,000 into equity.
The
above securities were issued by the Company in reliance on the exemption from registration provided by Section 4(a (2) of the
Securities Act of 1933, as amended.
Item
3. Defaults upon Senior Securities.
None.
Item
4. Mine Safety Disclosures.
Not
applicable.
Item
5. Other Information.
None.
Item
6. Exhibits.
See
Exhibit Index below for exhibits required by Item 601 of regulation S-K.
EXHIBIT
INDEX
Exhibit |
|
Description |
31.1
* |
|
Certification
under Section 302 of Sarbanes-Oxley Act of 2002 |
31.2
* |
|
Certification
under Section 302 of Sarbanes-Oxley Act of 2002 |
32.1
* |
|
Certification
under Section 906 of Sarbanes-Oxley Act of 2002 |
32.2
* |
|
Certification
under Section 906 of Sarbanes-Oxley Act of 2002 |
*
Filed herewith.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
|
GLOBAL
EQUITY INTERNATIONAL, INC. |
|
|
Date:
November 5, 2015 |
/s/
Peter J. Smith |
|
Peter
J. Smith |
|
President
and Chief Executive Officer |
|
(Principal
Executive Officer) |
Date:
November 5, 2015 |
/s/
Enzo Taddei |
|
Enzo
Taddei |
|
Chief
Financial Officer |
|
(Principal
Accounting and Financial Officer) |
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 quarterly report on Form 10-Q of Global Equity International, Inc. for the three months ended September
30, 2015. |
|
|
2. |
Based
on my knowledge, this quarterly 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 interim 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. |
I
am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal controls 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 my supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
me by others within those entities, particularly during the period in which this annual report is being prepared; |
|
|
|
|
b) |
Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
my 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 my 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; |
|
|
|
|
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 that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and |
5. |
I
have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
|
a) |
All
significant deficiencies in the design of operation of internal controls which would adversely affect the registrant’s
ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any
material weakness in internal controls; and |
|
|
|
|
b) |
Any
fraud, whether or not material, that involves management or other employees who have a significant role in the small business
issuer’s internal control over financial reporting. |
Date:
November 5, 2015 |
/s/
Peter J. Smith |
|
Peter
J. Smith |
|
President
and 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 quarterly report on Form 10-Q of Global Equity International, Inc. for the three months ended September
30, 2015. |
|
|
2. |
Based
on my knowledge, this quarterly 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 interim 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. |
I
am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal controls 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 my supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
me by others within those entities, particularly during the period in which this annual report is being prepared; |
|
|
|
|
b. |
Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
my 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 my 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; |
|
|
|
|
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 that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and |
5. |
I
have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
|
a. |
All
significant deficiencies in the design of operation of internal controls which would adversely affect the registrant’s
ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any
material weakness in internal controls; and |
|
|
|
|
b. |
Any
fraud, whether or not material, that involves management or other employees who have a significant role in the small business
issuer’s internal control over financial reporting. |
Date:
November 5, 2015 |
/s/
Enzo Taddei |
|
Enzo
Taddei |
|
Chief
Financial Officer |
|
(Principal
Accounting and 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 Quarterly Report of Global Equity International, Inc. (“Company”) on Form 10-Q for the quarter
ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”),
I, Peter J. Smith, President and Chief Executive Officer, certify, pursuant to 18 U.S.C. §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.
A
signed original of this written statement required by Section 906, or other document authentication, acknowledging, or otherwise
adopting the signature that appears in typed from within the electronic version of this written statement required by Section
906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
Date:
November 5, 2015 |
/s/
Peter J. Smith |
|
Peter
J. Smith |
|
President
and 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 Quarterly Report of Global Equity International, Inc. (“Company”) on Form 10-Q for the quarter
ended September 30, 2015, 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. §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.
A
signed original of this written statement required by Section 906, or other document authentication, acknowledging, or otherwise
adopting the signature that appears in typed from within the electronic version of this written statement required by Section
906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
Date:
November 5, 2015 |
/s/
Enzo Taddei |
|
Enzo
Taddei |
|
Chief
Financial Officer |
|
(Principal
Accounting and Financial Officer) |
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