Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
NOTE
1 - CONDENSED FINANCIAL STATEMENTS
The
accompanying consolidated financial statements have been prepared by GLOBAL TECH INDUSTRIES GROUP, INC. (“the Company”)
without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations, and cash flows at March 31, 2020, and for all periods presented herein,
have been made.
The
accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules
and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation
S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally
accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these
statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary
for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2019.
The results of operations for the period ended March 31, 2020 are not necessarily indicative of the operating results for the
full year.
The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as disclosed
in Note 2 below. All significant inter-company balances and transactions have been eliminated.
B)
GOING CONCERN
The
Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United
States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the
Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations.
In
order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s
plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient
to meet its operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that
the Company will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described
in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying
consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue
as a going concern.
On
March 11, 2020, the World Health Organization declared the outbreak of a coronavirus (COVID-19) a pandemic. As a result, economic
uncertainties have arisen which have the potential to negatively impact the Company’s ability to raise funding from the
markets. Other financial impact could occur though such potential impact is unknown at this time.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES
A)
PRINCIPLES OF CONSOLIDATION
The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Ludicrous,
Inc., TTI Strategic Acquisitions and Equity Group, Inc, TTII Oil & Gas, Inc., and G T International, Inc. All subsidiaries
of the Company, other than TTI Strategic Acquisitions and Equity Group, Inc., currently have no financial activity. All significant
inter-company balances and transactions have been eliminated.
B)
USE OF MANAGEMENT’S ESTIMATES
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
as of the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.
C)
CASH EQUIVALENTS
The
Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash
and cash equivalents are maintained with major financial institutions in the U S. Deposits held with these banks at times exceed
$250,000 of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that
it is not exposed to any significant credit risk on cash and cash equivalents. At March 31, 2020 and December 31, 2019, no excess
cash balances existed. There were no cash equivalents at March 31, 2020 and December 31, 2019.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
D)
INCOME TAXES
The
Company applies ASC 740 which requires the asset and liability method of accounting for income taxes. The asset and liability
method require that the current or deferred tax consequences of all events recognized in the financial statements are measured
by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years.
Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets
when it is more likely than not that all or some portion of the deferred tax assets will not be recovered.
The
Company adopted ASC 740 at the beginning of fiscal year 2008. This interpretation requires recognition and measurement of uncertain
tax positions using a “more-likely-than-not” approach, requiring the recognition and measurement of uncertain tax
positions. The adoption of ASC 740 had no material impact on the Company’s financial statements. Deferred taxes are provided
on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax
credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are
the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax
assets will to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
E)
REVENUE RECOGNITION
The
Company currently has no source of revenue, however, if and when such revenues can be generated again, we will recognize revenues
in accordance with ASC 606 Revenue from contracts with customers. Revenue is recognized when control of our products are transferred
to our customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products.
The Company does not have any significant financing components as payment is received at or shortly after point of sale. The Company
currently has no sales and no performance obligations. If we subsequently determine that collection from that customer is not
reasonably assured, we record an allowance for doubtful accounts and bad debt expense for all that customer’s unpaid invoices
and cease recognizing revenue for continued services provided until cash is received.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
F)
STOCK-BASED COMPENSATION
The
Company accounts for stock-based compensation in accordance with the provisions of ASC 718. ASC 718 requires all share-based payments
to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant-date
fair value of the award. That cost will be recognized over the period during which an employee is required to provide service
in exchange for the reward- known as the requisite service period. No compensation cost is recognized for equity instruments for
which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments
are estimated using the Black Scholes option-pricing model adjusted for the unique characteristics of those instruments.
Equity
instruments issued to non-employees are recorded at their fair values as determined in accordance with ASC 718 as amended by ASU
2018-07. As such, the grant date is the measurement date of an award’s fair value.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
G) FAIR VALUE
OF FINANCIAL INSTRUMENTS
On
January 1, 2008, the Company adopted ASC 820, “Fair Value Measurements” ASC 820 defines fair value, establishes a
three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value
measures. The three levels are defined as follows:
|
[ ]
|
Level
1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
|
|
|
|
[ ]
|
Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs
that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
instrument.
|
|
|
|
|
[ ]
|
Level
3 inputs to the valuation methodology are unobservable and significant to the fair measurement.
|
The
carrying amounts reported in the balance sheets for cash and cash equivalents, and current liabilities each qualify as financial
instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments
and their expected realization and their current market rate of interest. The carrying value of notes payable approximates fair
value because negotiated terms and conditions are consistent with current market rates as of March 31, 2020 and December 31, 2019.
Marketable
securities are reported at the quoted and listed market rates of the securities held at the year end.
The
following table presents the Company’s Marketable securities within the fair value hierarchy utilized to measure fair value
on a recurring basis as of March 31, 2020 and December 31, 2019:
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
Marketable Securities
– 2020
|
|
$
|
17,068
|
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
Marketable Securities – 2019
|
|
$
|
44,044
|
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
H)
BASIC AND DILUTED LOSS PER SHARE
The Company calculates
earnings per share in accordance with ASC 260, “Earnings Per Share.” Basic loss per share is computed by dividing
net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss)
per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during
the period; only in periods in which such effect is dilutive. For 2020 and 2019, there were no potentially dilutive
securities to consider in the fully diluted earnings per share calculation.
|
|
For
the Three Months Ended
|
|
|
|
March
31,
|
|
|
|
2020
|
|
|
2019
|
|
Loss (numerator)
|
|
$
|
(284,846
|
)
|
|
$
|
(267,811
|
)
|
Shares (denominator)
|
|
|
205,277,990
|
|
|
|
170,777,990
|
|
Basic and
diluted loss per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
I)
RECENT ACCOUNTING PRONOUNCEMENTS
The
Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact
on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting
pronouncements that have been issued that might have a material impact on its financial position or results of operations.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
J)
Marketable Securities
The
Company purchases marketable securities and engages in trading activities for its own account. Securities that are held principally
for resale in the near term are recorded at fair value with changes in fair value included in earnings. Interest and dividends
are included in net Interest Income.
NOTE
3 - RELATED PARTY TRANSACTIONS
Notes
Payable-Related Party
The
Company is indebted to the officers of the Company for unpaid wages, expenses and cash advances from current and previous years
that were converted into Notes. Various Directors and Shareholders have also advanced funds to the Company to support operations.
The balances at March 31, 2020 and December 31, 2019 for Related Party Notes Payable are $3,540,405 and $3,540,405 respectively.
Accrued interest on the related party notes at March 31, 2020 and December 31, 2019 total $343,056 and $298,796, respectively
Mr.
Reichman, our CEO, has rendered services to the Company and his wages have been accrued in accrued expenses during 2017, 2018
and 2019. At December 30, 2019, Mr. Reichman agreed to consolidate accrued wages, auto allowance and cash advances into a long-term
Note Payable with a term date of July 15, 2021. At December 30, 2019 the Company executed a Note for $2,016,672 which consisted
of cash advances of $400,223, accrued wages of $1,500,000 and auto allowances of $116,449. The total Notes due to Mr. Reichman
at March 31, 2020 and December 31, 2019 is $2,437,717 and $2,437,717, respectively. All Mr. Reichman’s Notes bear interest
at 5%, are unsecured, and have been extended through July 15, 2021. Accrued interest on Mr. Reichman’s Notes are $193,725
and $163,254 at March 31, 2020 and December 31, 2019, respectively.
Mrs.
Griffin, our President, has rendered services to the Company and her wages have been accrued in accrued expenses during 2017,
2018 and 2019. At December 30, 2019, Mrs. Griffin agreed to consolidate accrued wages and expenses into a long-term Note Payable
with a term date of July 15, 2021. At December 30, 2019, the Company executed a Note for $563,000 which consisted of expenses
of $16,000 and accrued wages of $547,000. The total Notes due to Mrs. Griffin at March 31, 2020 and December 31, 2019 is $769,670
and $769,670, respectively. All Mrs. Griffin’s Notes bear interest at 5%, are unsecured, and have been extended through
July 15, 2021. Accrued interest on Mrs. Griffin’s Notes are $76,789 and $56,834 at March 31, 2020 and December 31, 2019,
respectively.
On
December 13, 2012, the Company executed a note payable to an individual and board member in the amount of $19,000, interest accrues
at 8% per annum, unsecured, due after 8 months of execution, but extended to July 15, 2021. Accrued interest at March 31, 2020
and December 31, 2019 is $10,699 and $10,319 respectively.
On
March 6, April 22, April 30, May 24, June 14, June 21, July 3, July 30, November 20, December 2, December 13, 2013, the Company
executed notes payable to an individual and board member in the total amount of $31,000, interest accrues at 6% per annum, unsecured,
due after 8 months of execution, but extended to July 15, 2021. Accrued interest at March 31, 2020 and December 31, 2019 is $12,602
and $12,137, respectively.
On
January 2, January 21, April 24, May 19, July 28, August 26, and December 23, 2014, the Company executed notes payable to an individual
and board member in the total amount of $31,500, interest accrues at 6% per annum, unsecured, due after 8 months of execution,
but extended to July 15, 2021. Accrued interest at March 31, 2020 and December 31, 2019 is $11,090 and $10,617, respectively.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
On
February 11, April 21, May 6, June 8, June 15, July 17, August 19, October 20, 2015, and January 22, 2016 the Company executed
notes payable to an individual and board member in the total amount of $34,800, interest accrues at 6% per annum, unsecured, due
after 8 months of execution, but extended to July 15, 2021. Accrued interest at March 31, 2020 and December 31, 2019 is $9,994
and $9,471, respectively.
On
February 28, 2013, the Company executed a note payable to a Trust and shareholder, whose Trustee is our CEO, in the amount of
$5,000, interest accrues at 6% per annum, unsecured, due after 8 months of execution, and extended to July 15, 2021. Accrued interest
at March 31, 2020 and December 31, 2019 is $2,125 and $2,050, respectively.
On
July 23, July 24, August 5, August 26, and September 13, 2013, the Company executed a note payable to a Trust and shareholder,
whose Trustee is our CEO, in the total amount of $80,000, interest accrues at 6% per annum, unsecured, due after 8 months of execution.$7,924
was paid on December 31, 2019, leaving a balance of $72,076. Unpaid accrued interest at March 31, 2020 and December 31, 2019 is
$1,081 and $0, respectively.
On
March 6, March 16, March 25, June 30, August 12, September 10, September 14, October 8, October 14, November 30, December 3, December
7, 2015, the Company executed a note payable to a Trust and shareholder, whose Trustee is our CEO, in the total amount of $49,200,
which was paid down to $0 at December 31, 2019 interest accrues at 6% per annum, unsecured, due after 12 months of execution (2016).
Accrued interest at March 31, 2020 and December 31, 2019 is $0 and $0, respectively.
On
September 23, and November 10, 2014, the Company executed a note payable to a Trust and shareholder whose Trustee is our CEO,
in the total amount of $2,500, which was paid down to $0 at December 31, 2019 interest accrues at 6% per annum, unsecured, due
after 8 months of execution (2015). Accrued interest at March 31, 2020 and December 31, 2019 is $0 and $0, respectively,
On
May 15, July 12, July 17, and November 22, 2013, the Company executed notes payable to an Trust and shareholder, whose Trustee
is our CEO, in the total amount of $83,877, interest accrues at 6% per annum, unsecured, due after 8 months of execution, and
extended to July 15, 2021. Accrued interest at March 31, 2020 and December 31, 2019 is $9,114 and $8,778, respectively.
On
January 22, 2014, the Company executed a note agreement with a Trust and shareholder, whose Trustee is our CEO, in the amount
of $14,000, interest accrues at 6% per annum, unsecured, due after 8 months of execution, and has been extended to July 15, 2021.
Accrued interest at December 31, 2019 and 2018 is $5,199 and $4,989, respectively.
On
April 7, 2014, April 17, 2014, June 6, 2014, July 18, 2014 and October 10, 2014, the Company executed note agreements with a Trust
and shareholder whose Trustee is our CEO, in various amounts totaling $24,000, interest accrues at 6% per annum, unsecured, due
after 8 months of execution, and has been extended to July 15, 2021. Accrued interest at March 31, 2020 and December 31, 2019
is $8,808 and $8,448, respectively.
On
October 10, 2014, the Company executed a note payable to a Trust and shareholder, whose Trustee is our CEO, in the amount of $5,000,
interest accrues at 6% per annum, unsecured, due after 8 months of execution, but extended to July 15, 2021. Accrued interest
at March 31,2020 and December 31, 2019 is $1,642 and $1,567, respectively.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
On
December 30, 2019, the Company executed a note payable to a Trust and shareholder, whose Trustee is our CEO, in the amount of
$12,765, interest accrues at 6%, per annum, unsecured, due on July 15, 2021. Accrued interest at March 31, 2020 and December 31,
2019 is $191 and $0, respectively.
(b)
Additional detail to all Notes Payable-Related Party is as follows:
2020
|
|
|
2019
|
|
|
Interest
|
|
|
Interest
Expense
|
|
|
|
|
Principal
|
|
|
Principal
|
|
|
Rate
|
|
|
3/31/2020
|
|
|
3/31/2019
|
|
|
Maturity
|
|
$
|
2,016,672
|
|
|
$
|
2,016,672
|
|
|
|
5.00
|
%
|
|
$
|
25,208
|
|
|
$
|
-
|
|
|
|
7/15/21
|
|
|
563,000
|
|
|
|
563,000
|
|
|
|
5.00
|
%
|
|
|
7,038
|
|
|
|
-
|
|
|
|
7/15/21
|
|
|
409,920
|
|
|
|
409,920
|
|
|
|
5.00
|
%
|
|
|
5,124
|
|
|
|
5,124
|
|
|
|
7/15/21
|
|
|
11,125
|
|
|
|
11,125
|
|
|
|
5.00
|
%
|
|
|
139
|
|
|
|
139
|
|
|
|
7/15/21
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
5.00
|
%
|
|
|
2,500
|
|
|
|
2,500
|
|
|
|
7/15/21
|
|
|
6,670
|
|
|
|
6,670
|
|
|
|
5.00
|
%
|
|
|
83
|
|
|
|
83
|
|
|
|
7/15/21
|
|
|
19,000
|
|
|
|
19,000
|
|
|
|
8.00
|
%
|
|
|
380
|
|
|
|
380
|
|
|
|
7/15/21
|
|
|
31,000
|
|
|
|
31,000
|
|
|
|
6.00
|
%
|
|
|
390
|
|
|
|
390
|
|
|
|
7/15/21
|
|
|
31,500
|
|
|
|
31,500
|
|
|
|
6.00
|
%
|
|
|
473
|
|
|
|
473
|
|
|
|
7/15/21
|
|
|
34,800
|
|
|
|
34,800
|
|
|
|
6.00
|
%
|
|
|
522
|
|
|
|
522
|
|
|
|
7/15/21
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
6.00
|
%
|
|
|
75
|
|
|
|
75
|
|
|
|
7/15/21
|
|
|
72,076
|
|
|
|
80,000
|
|
|
|
6.00
|
%
|
|
|
1,200
|
|
|
|
1,200
|
|
|
|
7/15/21
|
|
|
-
|
|
|
|
-
|
|
|
|
6.00
|
%
|
|
|
-
|
|
|
|
738
|
|
|
|
N/A
|
|
|
-
|
|
|
|
-
|
|
|
|
6.00
|
%
|
|
|
-
|
|
|
|
37
|
|
|
|
N/A
|
|
|
83,877
|
|
|
|
83,877
|
|
|
|
6.00
|
%
|
|
|
335
|
|
|
|
335
|
|
|
|
7/15/21
|
|
|
14,000
|
|
|
|
14,000
|
|
|
|
6.00
|
%
|
|
|
210
|
|
|
|
210
|
|
|
|
7/15/21
|
|
|
24,000
|
|
|
|
24,000
|
|
|
|
6.00
|
%
|
|
|
360
|
|
|
|
360
|
|
|
|
7/15/21
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
6.00
|
%
|
|
|
75
|
|
|
|
75
|
|
|
|
7/15/21
|
|
|
12,765
|
|
|
|
12,765
|
|
|
|
6.00
|
%
|
|
|
191
|
|
|
|
-
|
|
|
|
7/15/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,540,405
|
|
|
$
|
3,540,405
|
|
|
|
|
|
|
$
|
44,303
|
|
|
$
|
12,641
|
|
|
|
|
|
Due
to Officers and Directors
Due
to officers consists of cash advances and expenses paid by Mr. Reichman in order to satisfy the expense needs of the Company.
The balance of advances made by Mr. Reichman at December 30, 2019 in the amount of $400,223, were consolidated with other
amounts due Mr. Reichman, and a Note Payable was issued in its stead. The payables and cash advances are unsecured, due on
demand and do not bear interest. During the three months ended March 31, 2020 and 2019, Mr. Reichman advanced $28,901
and $21,531, respectively, to the Company and was repaid $0 and $30, 257, respectively. At March 31, 2020 and December 31, 2019, the amounts
Due to Officers and Directors for cash advances and expenses are $28,901 and $0, respectively.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
NOTE
4 - NOTES PAYABLE
(a)
NOTES PAYABLE IN DEFAULT:
Notes
payable in default consist of various notes bearing interest at rates from 5% to 9%, which are unsecured with original due dates
between August 2000 and December 2016. All the notes are unpaid to date and are in default and are thus classified as current
liabilities. At March 31, 2020 and December 31, 2019, notes payable in default amounted to $871,082 and $871,082, respectively.
Accrued interest on the notes in default at March 31, 2020 and December 31, 2019 are $319,146 and $310,307, respectively. Below
is a discussion of the details to the notes payable in default and a table summarizing the notes in default with additional information.
During
2002, the Company settled a trade payable in litigation by executing a note payable to a Company in the amount of $18,000, interest
accrues at 6% per annum, unsecured, due September 1, 2002, and in default. Accrued interest at March 31, 2020 and December 31,
2019 is $20,070 and $19,800, respectively.
Also
during 2002, in settlement of another trade payable, the Company executed a note payable to a Company in the amount of $30,000,
interest accrues at 6% per annum, unsecured, due September 12, 2002, in default. Accrued interest at March 31, 2020 and December
31, 2019 is $30,949 and $30,499, respectively.
During
2000, the Company executed a note payable to an individual in the amount of $25,000, interest accrues at 5% per annum, unsecured,
due August 31, 2000, in default. Accrued interest at March 31, 2020 and December 31, 2019 is $26.152 and $25,839, respectively.
In
2002, the Company settled an obligation with a consultant by executing a note payable for $40,000, interest accrues at 7% per
annum, unsecured, due July 10, 2002, in default. Accrued interest at March 31, 2020 and December 31, 2019 is $50,187 and $49,487,
respectively.
On
December 27, 2009, the Company executed a note payable to an individual for various advances to the Company in the amount of $292,860.
On June 26, 2013, this note was renegotiated to include the accrued interest. The new note balance is $388,376 and interest accrues
at 5% per annum, unsecured, and is extended to October 5, 2018, with monthly installments beginning in 2014 of $5,553, which did
not occur. This note is in default. Accrued interest at March 31, 2020 and December 31, 2019 is $131,344 and $126,489, respectively.
In
January 27, 2010, the Company executed a note payable to a corporation in the amount of $192,000, bears no interest and is due
on demand after 6 months of execution and is unsecured. No demand has been made at the date of these financial statements, but
the note is in default. Interest expense in the amount of $3,360 has been imputed for this note for the three months ended March
31, 2020 and 2019, respectively, with an offsetting entry to Paid in Capital.
On
August 28, 2012, and September 17, 2012, the Company executed a note payable to a corporation in the amount of $12,000 and $20,000,
respectively. On June 26, 2013, this note was renegotiated to include the accrued interest. The new note balance is $32,960 and
interest accrues at 5% per annum, unsecured, and is extended to October 5, 2018, with monthly installments beginning in 2014 of
$473, which did not occur, and is unsecured and in default. Accrued interest at March 31, 2020 and December 31, 2019 is $11,147
and $10,735, respectively.
On
April 12, 2012, the Company executed a note payable to a corporation in the amount of $100,000, however on June 26, 2013, this
note was renegotiated to bear interest at 5% per annum, unsecured, extended to October 5, 2018, with monthly installments beginning
in 2014 of $1,430, which did not occur and this note is in default. Accrued interest at March 31, 2020 and December 31, 2019 is
$33,818 and $32,568, respectively.
On
December 31, 2012, the Company executed a note payable to a corporation in the amount of $32,000, however on June 26, 2013, this
note was renegotiated to include accrued interest. The new note balance is $32,746, bears interest at 5% per annum, unsecured,
extended to October 5, 2018, with monthly installments beginning in 2014 of $468, which did not occur and this note is in default.
Accrued interest at March 31, 2020 and December 31, 2019 is $11,073 and $10,664, respectively.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
On
March 11, 2014, the Company executed a note agreement with an LLC in the amount of $5,000, interest accrues at 6% per annum, unsecured,
due after 8 months of execution, extended to October 5, 2018 and is in default. Accrued interest at March 31, 2020 and December
31, 2019 is $1,817 and $1,742, respectively.
On
January 31, 2014, the Company executed a note agreement with a Corporation in the amount of $7,000, interest accrues at 6% per
annum, unsecured, due after 8 months of execution, but extended to October 5, 2018 and is in default. Accrued interest at March
31, 2020 and December 31, 2019 is $2,589 and $2,484, respectively.
None
of the above notes are convertible or have any covenants.
(b)
Additional detail to all Notes Payable in Default is as follows:
2020
|
|
|
2019
|
|
|
Interest
|
|
|
Interest
Expense
|
|
|
|
|
Principal
|
|
|
Principal
|
|
|
Rate
|
|
|
3/31/2020
|
|
|
3/31/2019
|
|
|
Maturity
|
|
$
|
32,960
|
|
|
|
32,960
|
|
|
|
5.00
|
%
|
|
|
412
|
|
|
|
412
|
|
|
|
10/5/18
|
|
|
32,746
|
|
|
|
32,746
|
|
|
|
5.00
|
%
|
|
|
409
|
|
|
|
409
|
|
|
|
10/5/18
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
6.00
|
%
|
|
|
75
|
|
|
|
75
|
|
|
|
10/5/18
|
|
|
100,000
|
|
|
|
100,000
|
|
|
|
5.00
|
%
|
|
|
1,250
|
|
|
|
1,250
|
|
|
|
10/5/18
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
6.00
|
%
|
|
|
105
|
|
|
|
105
|
|
|
|
10/5/18
|
|
|
388,376
|
|
|
|
388,376
|
|
|
|
5.00
|
%
|
|
|
4,855
|
|
|
|
4,855
|
|
|
|
10/5/18
|
|
|
192,000
|
|
|
|
192,000
|
|
|
|
0
|
%
|
|
|
3,360
|
|
|
|
3,360
|
|
|
|
10/5/18
|
|
|
18,000
|
|
|
|
18,000
|
|
|
|
6.00
|
%
|
|
|
270
|
|
|
|
270
|
|
|
|
9/1/2002
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
6.00
|
%
|
|
|
450
|
|
|
|
450
|
|
|
|
9/12/2002
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
5.00
|
%
|
|
|
313
|
|
|
|
313
|
|
|
|
8/31/2000
|
|
|
40,000
|
|
|
|
40,000
|
|
|
|
7.00
|
%
|
|
|
700
|
|
|
|
700
|
|
|
|
7/10/2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
871,082
|
|
|
$
|
871,082
|
|
|
|
|
|
|
$
|
12,199
|
|
|
$
|
12,199
|
|
|
|
|
|
At
March 31, 2020 and December 31, 2019, accrued interest on the outstanding notes payable were $319,146 and $310,307, respectively
and related party notes was $343,056 and $298,796, respectively. Interest expense on the outstanding notes amounted to $56,502
and $24,840 for the three months ended March 31, 2020 and 2019, including the imputed interest discussed above.
NOTE
5 - STOCKHOLDERS’ DEFICIT
ISSUANCES
OF COMMON STOCK
During
the three months ended March 31, 2020 and 2019, the Company did not issue any stock, stock options or warrants.
ISSUANCES
OF PREFERRED STOCK
Pursuant
to the Articles of Incorporation of the Company, there was initially authorized 50,000 shares of Series A Preferred Stock. On
April 7, 2016, the Company’s Board of Directors created and issued out of the Series A Preferred Stock, 1,000 Series
A Preferred shares with the following features:
|
a)
|
Super
voting power, wherein the 1,000 shares have the right to vote in the amount equal to fifty-one percent (51%) of the total
vote with respect to any proposal relating to (i) increasing the authorized share capital of the Company, and (ii) effecting
any forward stock split of the Company’s authorized, issued or outstanding shares of capital stock, and (iii) any other
matter subject to a shareholder vote.
|
|
|
|
|
b)
|
No
entitlement to dividends.
|
|
|
|
|
c)
|
No
liquidation preferences.
|
|
|
|
|
d)
|
No
conversion rights.
|
|
|
|
|
e)
|
Automatic
Redemption Rights upon certain triggers, to be redeemed at par value.
|
OTHER
During
the three months ended March 31, 2020 and 2019, the Company recorded imputed interest on a non-interest-bearing note in the amount
of $3,360 and $3,360, respectively, as an increase in paid in capital.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2020
NOTE
6 - LEGAL ACTIONS
On
February 3, 2017, the Company filed suit in Eastern District Federal Court New York against American Resource Technologies, Inc.,
(ARUR) and several directors and officers relating to the Chautauqua County Court Kansas decision nullifying the acquisition Agreement
of ARUR. The Company has made several attempts to recover the shares of GTII stock paid to ARUR for the asset acquisition and
the various costs and expenses expended by GTII in fulfillment of its obligations under the contract with ARUR. The failure of
non-litigation attempts to resolve the matter resulted in filing an action for declaratory judgment in the US District Court for
the Eastern District of New York, Docket No. 17-CV-0698. The case was subsequently withdrawn due to the close of ARUR operations.
The Company is continuing its efforts to legally cancel the shares issued to the ARUR shareholders.
On
December 30, 2016, the Company executed a stock purchase agreement (the “Agreement”), which was signed and closed
in Hong Kong, with GoFun Group, Ltd. through its wholly owned subsidiary Go F & B Holdings, Ltd. GoFun Group, Ltd. is a privately
held company running a casual dining restaurant business, based in Hong Kong. Subsequent to the agreement being signed, GoFun
Group failed to substantially perform under the agreement, including, but not limited to providing audited financials of its assets,
making the ongoing payments called for in the agreement, along with other matters that led Global Tech to initiate litigation
in the United States. Currently, Global Tech and GoFun are litigating the matter in the U.S District Court for the southern district
of New York. The original acquisition agreement and rescission was recorded on the Company’s books in 2016, however the
physical share certificates were not returned to the Company. During the last quarter of 2019, the Company was able to
secure, via preliminary settlement, the return of 43,649,491 shares of the Company’s stock, which was issued in good
faith to GoFun in anticipation of a final stock exchange. The stock has since been returned to the Company’s treasury and
cancelled. The Company also reclassified a deposit received from GoFun shareholders in the amount of $128,634 for future share
issuances pursuant to the Acquisition Agreement, to a Gain on Settlements and Debt Relief as part of the legal settlement of this
case. As of this writing, motions are pending that may require remaining negotiations to continue in arbitration.
On
December 30, 2019, a dispute between the Company and its counsel regarding the GoFun matter, above, resulted in a filing, and
subsequent settlement, of an action in the Supreme Court of the State of New York for the County of New York (Index No. 656396/2019).
Pursuant to the settlement, prior counsel for the Company accepted previously-issued shares in 2016, as full payment for all legal
work, expenses, costs, and other fees.
NOTE
7 – SUBSEQUENT EVENTS
On
May 8, 2020, the Company issued 3,040,000 shares of common stock at $0.02 per share, for services rendered valued
at $60,800.
The
Company has evaluated events subsequent to the balance sheet through the date the financial statements were issued and noted no
additional events requiring disclosure.
NOTE
8 – RESTATEMENT OF PRIOR ISSUED FINANCIAL STATEMENTS
The financial statements for the three months ended March 31, 2019
have been restated due to an error in reporting the adoption of ASC 321, effective January 1, 2018, which requires unrealized gains
and losses from marketable securities to be recorded in earnings, however, the Company erroneously recorded unrealized losses on
marketable securities in the March 31, 2019 10-Q in other accumulated comprehensive income, an equity account. For comparability
purposes, some reclassifications have also been made. The impact of the Restatement is as follows at March 31, 2019:
|
|
Three Months Ended March 31, 2019
|
|
|
|
As Previously
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
247,318
|
|
|
|
(170,000
|
)
|
|
|
77,318
|
|
Compensation and professional fees
|
|
|
29,909
|
|
|
|
170,000
|
|
|
|
199,909
|
|
Gain on marketable securities
|
|
|
-
|
|
|
|
35,615
|
|
|
|
35,615
|
|
Total Other Income (expense)
|
|
|
(26,199
|
)
|
|
|
35,615
|
|
|
|
9,416
|
|
Loss Before Income Taxes
|
|
|
(303,426
|
)
|
|
|
35,615
|
|
|
|
(267,811
|
)
|
Net Loss
|
|
|
(303,426
|
)
|
|
|
35,615
|
|
|
|
(267,811
|
)
|
Other Comprehensive Income (loss)
|
|
|
35,615
|
|
|
|
(35,615
|
)
|
|
|
-
|
|
|
|
Period Ended March 31, 2019
|
|
|
|
As Previously
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
166,735
|
|
|
|
51,832
|
|
|
|
218,567
|
|
Total Current Assets
|
|
|
170,555
|
|
|
|
51,832
|
|
|
|
222,387
|
|
Investments
|
|
|
51,832
|
|
|
|
(51,832
|
)
|
|
|
-
|
|
Unearned ESOP shares
|
|
|
(3,413,600
|
)
|
|
|
3,413,600
|
|
|
|
-
|
|
Accumulated other comprehensive income
|
|
|
139,599
|
|
|
|
(139,599
|
)
|
|
|
-
|
|
Accumulated (Deficit)
|
|
|
(163,189,680
|
)
|
|
|
(3,274,001
|
)
|
|
|
(166,463,681
|
)
|
|
|
Three Months Ended March 31, 2019
|
|
|
|
As Previously
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(303,426
|
)
|
|
|
35,615
|
|
|
|
(267,811
|
)
|
Gain loss on marketable securities
|
|
|
-
|
|
|
|
(35,615
|
)
|
|
|
(35,615
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|