NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the three months ended September 30, 2021 and 2020
(Unaudited)
NOTE
A – ORGANIZATION
Overview
Global
Technologies, Ltd. (hereinafter the “Company”, “Our”, “We”, or “Us”) is a publicly
quoted company that was incorporated under the laws of the State of Delaware on January 20, 1999 under the name of NEW IFT Corporation.
On August 13, 1999, the Company filed an Amended and Restated Certificate of Incorporation with the State of Delaware to change
the name of the corporation to Global Technologies, Ltd. Our principal executive offices are located at 501 1st Ave
N., Suite 901, St. Petersburg, FL 33701 and our telephone number is (727) 482-1505. Our website address is www.globaltechnologiesltd.info.
The information contained on, or that can be accessed through, our website is not a part of this Registration Statement. We have
included our website address in this Registration Statement solely as an inactive textual reference.
Current
Operations
Global
Technologies, Ltd (“Global”) is a holding corporation, which through its subsidiaries, has operations engaged in the
online sales of CBD and hemp related products, the acquisition of intellectual property in the safety and security space and as
a portal for entrepreneurs to provide immediate access to live shopping, e-commerce, product placement in brick and mortar retail
outlets and logistics.
On
September 3, 2020, the Company entered into a Commitment to be Bound by the Amended Operating Agreement to Effect Transfer of
Membership Interest in order to facilitate the transfer of 25 Membership Units (the “Units”) issued by Global Clean
Solutions, LLC (“Global”) and held in the name of Graphene Holdings, LLC (“Graphene”) to the Company.
In exchange for the transfer of the Units to the Company, the Company issued to Graphene a Convertible Promissory Note (the “Note”)
in the amount of $250,000. Please see NOTE F - NOTES PAYABLE, THIRD PARTIES for further information.
As
of December 31, 2020, Global Technologies had four wholly-owned subsidiaries: TCBM Holdings, LLC (“TCBM”), HMNRTH, LLC (“HMNRTH”),
911 Help Now, LLC (“911”) and Markets on Main, LLC (“MOM”). As of December 31, 2020, the Company had a minority
investment in one entity, Global Clean Solutions, LLC.
Our
wholly owned subsidiaries:
About
TCBM Holdings, LLC
TCBM
Holdings, LLC (“TCBM”) was formed as a Delaware limited liability company on August 10, 2017. TCBM is a holding corporation,
which operated through its two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About
HMNRTH, LLC
HMNRTH,
LLC (“HMN”) was formed as a Delaware limited liability company on July 30, 2019. HMNRTH operates as an online store
selling a variety of hemp and CBD related products. The Company’s business model is to bridge the gap between the lifestyle
and knowledge components within the cannabis industry. The Company’s goal is to educate every consumer while cultivating
an experience by providing quality products, branded cutting-edge content, and diversified product lines for any purpose. Most
importantly, we want our clients to discover their inner HMN, redefine their inner HMN and Empower their inner HMN.
In
September 2019, the Company entered into a Quality Agreement with Nutralife Biosciences for the development and production of its CBD
line of products. The Company’s product line includes hemp derived, full spectrum cannabidiol tinctures and creams in varying sizes.
In
order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through
the Company’s ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar
CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have
the required capital to initiate any of the options and there is no guarantee that we will be able to raise the required funds.
Regulation
of HMNRTH products:
The
manufacture, labeling and distribution of our products is regulated by various federal, state and local agencies. These governmental
authorities may commence regulatory or legal proceedings, which could restrict the permissible scope of our product claims or
the ability to sell our products in the future. The FDA regulates our nutraceutical and wellness products to ensure that the products
are not adulterated or misbranded.
We
are subject to additional regulation as a result of our CBD products. The shifting compliance environment and the need to build
and maintain robust systems to comply with different compliance in multiple jurisdictions increase the possibility that we may
violate one or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmental
regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages,
fines, the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business
and our financial results.
Failure
to comply with FDA requirements may result in, among other things, injunctions, product withdrawals, recalls, product seizures,
fines and criminal prosecutions. Our advertising is subject to regulation by the FTC under the FTCA. Additionally, some states
also permit advertising and labeling laws to be enforced by private attorney generals, who may seek relief for consumers, seek
class action certifications, seek class wide damages and product recalls of products sold by us. Any actions against us by governmental
authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations.
About
911 Help Now, LLC
911
Help Now, LLC (“911”) was formed as a Delaware limited liability company on February 2, 2018. 911 was a holding company
of intellectual property in the safety and security space. At present, we own no intellectual property within our 911 subsidiary.
In order to generate future revenue within 911, we will need to identify and either acquire or license intellectual property.
In the event of an acquisition, we will then need to either develop products utilizing our intellectual property or license out
our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition or licensing
of any intellectual property.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
About
Markets on Main, LLC
Markets
on Main, LLC (“MOM”) was formed as a Florida limited liability company on April 2, 2020. MOM is A full service, sales
and distribution, third-party logistics provider and portal to multi-channel sales opportunities. MOM’s focus is on bringing
small businesses and entrepreneurs to large opportunities and distribution. MOM will provide the following services to its clients:
inventory management, brand management, fulfillment and drop-ship capabilities, retail distribution and customer service. MOM’s
website can be found at www.marketsonmain.com.
Investments:
About
Global Clean Solutions, LLC
Global
Clean Solutions was founded as a special purpose entity in the Personal Protective Equipment Industry during the initial stages
of the pandemic in 2020. Its management set out with a simple mission; deliver customers PPE while removing the panic from the
pandemic. Global Clean Solutions has created a solid and repeatable foundation and is able to satisfy the needs of both government
municipalities and corporations that many companies have tried, and few have succeeded.
|
●
|
Direct
to factory relationships
|
|
●
|
Proprietary
hand sanitizer ready to ship
|
|
●
|
Funding
programs available
|
|
●
|
Government
contract expertise
|
|
●
|
Overseas
production capabilities
|
|
●
|
Distribution
centers in CA and FL
|
The
Company elected to impair its investment in Global Clean during the year ended June 30, 2021 as it does not anticipate generating any
further revenue from this investment.
Services:
Consulting
Services
On May 10, 2021, the Company entered into a
Consulting Agreement (the “Agreement”) with CoroWare, Inc. (“CoroWare”). Under the terms of the Agreement, the
Company is to prepare the following financial reports for CoroWare: (i) Registration Statement and all subsequent amendments, (ii) Quarterly
Reports for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021, and (iii) Annual Report for the period ended December
31, 2021. The Agreement shall have a term of one (1) year or until CoroWare’s Annual Report is filed with OTC Markets or the SEC.
The Company shall be compensated a total of $45,000
in three equal payments of $15,000.
As of September 30, 2021, the Company has received $30,000
compensation.
On June 29, 2021, the Company entered into a Fee
Agreement for the preparation of a registration statement on Form S-1 and all follow up correspondence with the appropriate regulatory
agencies. As of September 30, 2021, the Company has received $5,000 compensation.
NOTE B – BASIS OF PRESENTATION
The
condensed consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) for interim
financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States
Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain
all information and footnotes required by GAAP for annual financial statements. The condensed
consolidated financial statements include the accounts of the Company and its wholly-owned
subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
In the opinion of the Company’s management, the accompanying unaudited condensed consolidated
financial statements contain all the adjustments necessary (consisting only of normal recurring
accruals) to present the financial position of the Company as of September 30, 2021
and the results of operations, changes in stockholders’ equity, and cash flows for
the periods presented. The results of operations for the three months ended September 30,
2021 are not necessarily indicative of the operating results for the full fiscal year
or any future period.
These
condensed consolidated financial statements should be read in conjunction with the consolidated
financial statements and related notes thereto included in the Company’s Annual Report
on Form 10-K for the year ended June 30, 2021 as filed with the Securities and Exchange
Commission on October 13, 2021. The Company’s accounting policies are described
in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the
year ended June 30, 2021, and updated, as necessary, in this Quarterly Report on Form
10-Q.
COVID-19
COVID-19 has caused
and continues to cause significant loss of life and disruption to the global economy, including the curtailment of activities
by businesses and consumers in much of the world as governments and others seek to limit the spread of the disease, and through
business and transportation shutdowns and restrictions on people’s movement and congregation.
As a result of
the pandemic, we have experienced, and continue to experience, weakened demand for our CBD products. Many of our wholesale and
retail customers have been unable to sell our products in their stores due to government-mandated closures and have deferred or
significantly reduced orders for our products. We expect these trends to continue until such closures are significantly curtailed
or lifted. In addition, the pandemic has reduced foot traffic in their stores where our products are sold that remain open, and
the global economic impact of the pandemic has temporarily reduced consumer demand for our products as they focus on purchasing
essential goods.
Given these factors,
the Company anticipates that the greatest impact from the COVID-19 pandemic in 2020 occurred in the second and third quarters of 2020
and resulted in a significant decline in the Company’s operational capabilities.
In addition, certain
of our suppliers and the manufacturers of certain of our products were adversely impacted by COVID-19. As a result, we faced delays
or difficulty sourcing products, which negatively affected our business and financial results. Even if we are able to find alternate
sources for such products, they may cost more and cause delays in our supply chain, which could adversely impact our profitability
and financial condition.
We
have taken actions to protect our employees in response to the pandemic, including closing our corporate office and requiring
our office employee to work from home. At the manufacturing facility where our HMNRTH CBD products are produced, certain practices
have been taken into effect to safeguard workers, including a staggered work schedule, and shortening of the work week. If this
were to continue, it may significantly delay our ability to have product produced for delivery.
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary
of Significant Accounting Policies
This summary of significant accounting policies of
the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are
representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies
conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the
financial statements. The condensed consolidated financial statements should be read in conjunction with the annual consolidated financial
statements for the year ended June 30, 2021 filed with the Securities and Exchange Commission on October 13, 2021.
Principles
of Consolidation
The
condensed consolidated financial statements include the accounts of Global Technologies and its wholly-owned subsidiaries. All inter-company
balances and transactions have been eliminated in consolidation.
Cash
Equivalents
Investments
having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For
the periods presented, the Company had no cash equivalents. The Company has cash on deposit at one financial institution which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. In the future, the Company may reduce its credit risk by placing its cash and cash equivalents with major financial institutions. The Company had approximately $66,330 of cash and cash equivalents at September 30, 2021 of which none was held in foreign bank accounts and $0 was not covered by FDIC insurance limits as of September 30, 2021.
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (cont’d)
Accounts
Receivable and Allowance for Doubtful Accounts:
Accounts
receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as
necessary, based on past experience and other factors which, in management’s judgment, deserve current recognition in estimating
bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts
to accounts receivable and current economic conditions. The determination of the collectability of amounts due from customer accounts
requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing
the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection
experience, current aging status of the customer accounts, and the financial condition of Global Technologies’ customers. Based
on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio
as a whole. At September 30, 2021 and June 30, 2021, an allowance for doubtful accounts was not
considered necessary as all accounts receivable were deemed collectible.
Accounts
receivable – related party and allowance for doubtful accounts
Accounts
receivable – related party are presented net of an allowance for doubtful accounts. The Company maintains allowances for
doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and
specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual
receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment
history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection.
Concentrations
of Risks
Concentration
of Accounts Receivable –At September 30, 2021 and June 30, 2021, the Company had $15,000
and $0 in accounts
receivable, respectively. For the three months ended September 30, 2021, one customer accounted for 100% of accounts receivable.
Concentration
of Revenues – For the three months ended September 30, 2021, the Company generated $50,000 in revenue from
two customers. For the three months ended September 30, 2020, the Company generated $0 revenue.
Concentration
of Suppliers – The Company relies on a limited number of suppliers and contract manufacturers.
In particular, a single supplier is currently the sole manufacturer of the Company’s CBD products.
Concentration
of Loans Receivable, Other –At September 30, 2021 and June 30, 2021, the Company had $28,026
and $3,782
in loans receivable, other. At September 30, 2021 and June 30, 2021, one borrower accounted for 100%
of the Company’s total loans receivable, other. The one borrower is controlled by the Company’s sole officer and
director.
Income
Taxes
In
accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the
asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates
in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts
on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they
occur. A valuation allowance is provided when it is not more likely than not that a deferred tax asset will be realized.
We
expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority
would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to
be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax
positions not meeting the threshold, no financial statement benefit is recognized. As of September 30, 2021, we had no uncertain
tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses.
We currently have no federal or state tax examinations nor have we had any federal or state examinations since our inception. To date,
we have not incurred any interest or tax penalties.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Financial
Instruments and Fair Value of Financial Instruments
We
adopted ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a
recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires
the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair
value measurements.
ASC
820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that
maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level
1:
|
Observable
inputs such as quoted market prices in active markets for identical assets or liabilities
|
Level
2:
|
Observable
market-based inputs or unobservable inputs that are corroborated by market data
|
Level
3:
|
Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
|
The
carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial
assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement
is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when
a significant event occurs. Except for the derivative liability, we had no financial assets or liabilities carried and measured
at fair value on a recurring or nonrecurring basis during the periods presented.
Derivative
Liabilities
We
evaluate convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded
components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40,
Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.
The
result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument
and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as
a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion
or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value
is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification
under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.
Please see NOTE I - DERIVATIVE LIABILITY for further information.
Long-lived
Assets
Long-lived
assets such as property and equipment and intangible assets are periodically reviewed for impairment. We test for impairment losses
on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset
may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an
asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment
evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows
could be different from those estimated by management which could have a material effect on our reporting results and financial
positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market
values and third-party independent appraisals, as considered necessary.
Accounting for Investments -
The Company accounts for investments based upon the type and nature of the investment and the availability of current information
to determine its value. Investments in marketable securities in which there is a trading market will be valued at market value
on the nearest trading date relative to the Company’s financial reporting requirements. Investments in which there is no
trading market from which to obtain recent pricing and trading data for valuation purposes will be valued based upon management’s
review of available financial information, disclosures related to the investment and recent valuations related to the investment’s
fundraising efforts.
On September 03, 2020, the Company entered into
a Commitment to be Bound by the Amended Operating Agreement to Effect Transfer of Membership Interest in order to facilitate the transfer
of 25 Membership Units (the “Units”), representing a twenty five percent ownership, issued by Global Clean Solutions, LLC
(“Global Clean”) and held in the name of Graphene Holdings, LLC (“Graphene”) to the Company. The Company
reviews its investments for impairment on a quarterly basis. During the year ended June 30, 2021, the Company elected to impair its
investment in Global Clean as it does not anticipate generating any further revenue from its investment. For the three months ended
September 30, 2021, there were no similar transactions with third-parties.
SCHEDULE
OF INVESTMENT
|
|
September 30, 2021
|
|
|
September
03, 2020
|
|
|
|
|
|
|
|
|
Global Clean Solutions, LLC
|
|
$
|
-
|
|
|
$
|
250,000
|
|
Total investments
|
|
$
|
-
|
|
|
$
|
250,000
|
|
The above investment does not have a readily determinable
fair value, as identified in ASC 321-10-35-2, and each investment is measured at cost less impairment. The Company monitors the investment
for any changes in observable prices from orderly transactions.
On
September 22, 2021, Graphene forgave all unpaid principal and interest on the Convertible Promissory Note issued by the Company on
September 3, 2020 in the acquisition of Graphene’s 25%
ownership interest in Global Clean. The Company retained its 25% ownership in Global Clean.
Deferred
Financing Costs
Deferred
financing costs represent costs incurred in the connection with obtaining debt financing. These costs are amortized ratably and
charged to financing expenses over the term of the related debt.
Revenue
recognition
Generally,
the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process
outlined in the Accounting Standards Codification (“ASC”) 606:
Step
1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved
the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights
regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to
be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of
the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
Step
2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance
obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct
goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract
includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are
capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted
for as a combined performance obligation.
Step
3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize
as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to
determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration,
the Company would determine the amount of variable consideration that should be included in the transaction price based on expected
value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable
that a significant future reversal of cumulative revenue under the contract would not occur.
Step
4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate
the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the
entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction
price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception.
Step
5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods
or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of
the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use
of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from
directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present
obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s).
Performance obligations can be satisfied at a point in time or over time.
Substantially
all of the Company’s revenues continue to be recognized when control of the goods is transferred to the customer, which is upon
shipment of the finished goods to the customer. All sales have fixed pricing and there are currently no material variable components
included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically these credits
for defective merchandise have not been material. Based on the Company’s analysis of the new revenue standards, revenue recognition
from the sale of finished goods to customers, which represents substantially all of the Company’s revenues, was not impacted by
the adoption of the new revenue standards.
Service
revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Stock-Based
Compensation
We
account for share-based awards to employees in accordance with ASC 718 “Stock Compensation”. Under this guidance, stock compensation
expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service
period (generally the vesting period) on the straight-line attribute method. The Company accounts for non-employee stock-based awards
in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Under the new standard,
the Company will value all equity classified awards at their grant-date under ASC718 and no options were required to be revalued at adoption.
Related
Parties
A
party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is
controlled by, or is under common control with us. Related parties also include our principal owners, our management, members
of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or
operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly
influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate
interests, is also a related party.
Advertising
Costs
Advertising
costs are expensed as incurred. For the periods presented, we had no advertising costs.
Loss
per Share
We
compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements
for loss per share for entities with publicly held common stock.
Basic
loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted
net loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such as
stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net
loss per share are excluded from the calculation. For the three months ended September 30, 2021 and 2020, the Company
excluded 1,548,833,791 and 24,631,204,762, respectively, shares relating to convertible notes payable to third parties,
shares issuable upon the exercise of the Armada warrant and share issuable upon conversion of the Company’s Series L Preferred
stock.
Recently
Enacted Accounting Standards
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
In
June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13,
“Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU
2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held
at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the
probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected
credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial
assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured
in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a
write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair
value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance
sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual
right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2022, including
interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial
statements.
In
August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models
for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception
for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU
improves and amends the related EPS guidance. This standard is effective for us on May 1, 2022, including interim periods within those
fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. We are currently
evaluating the impact of the adoption of ASU 2020-06 on our financial statements.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during
the reporting periods. Actual results could differ from those estimates.
Fair
Value of Financial Instruments
The
Company defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current
transaction between willing parties. Financial instruments included in the Company’s financial statements include cash,
accounts payable and accrued expenses, accrued interest payable, loans payable to related parties, notes payable to third parties,
notes payable to related parties and derivative liability. Unless otherwise disclosed in the notes to the financial statements,
the carrying value of financial instruments is considered to approximate fair value due to the short maturity and characteristics
of those instruments. The carrying value of debt approximates fair value as terms approximate those currently available for similar
debt instruments.
Goodwill
After
completing the purchase price allocation, any residual of cost over fair value of the net identifiable assets and liabilities was assigned
to the unidentifiable asset, goodwill. Formerly subject to mandatory amortization, this now is not permitted to be amortized at all,
by any allocation scheme and over any useful life. Impairment testing, using a methodology at variance with that set forth in FAS 144
(which, however, continues in effect for all other types of long-lived assets and intangibles other than goodwill), must be applied periodically,
and any computed impairment will be presented as a separate line item in that period’s income statement, as a component of income
from continuing operations (unless associated with discontinued operations, in which case, the impairment would, net of income tax effects,
be combined with the remaining effects of the discontinued operations. In accordance with Statement No. 142, “Goodwill and Other
Intangible Assets,” the Company does not amortize goodwill, but performs impairment tests of the carrying value at least quarterly.
Intangible
Assets
Intangible
assets are stated at the lesser of cost or fair value less accumulated amortization. Please see NOTE D – ACQUISITION
OF TCBM HOLDINGS, LLC for further information.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
D – ACQUISITION OF TCBM HOLDINGS, LLC
On
November 30, 2019, the Company acquired 100% ownership of TCBM Holdings, LLC (“TCBM”) and TCBM’s two wholly
owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC. The combination has been accounted for in the accompanying consolidated
financial statements as an “acquisition” transaction. Accordingly, the financial position and results of operation
of the Company prior to November 30, 2019 has been excluded from the accompanying consolidated financial statements. The Company
acquired a 100% interest in exchange for a Convertible Promissory Note in the amount of $2,000,000.
Details
regarding the book values and fair values of the net assets acquired are as follows:
SCHEDULE
OF FAIR VALUE OF NET ASSETS ACQUIRED
|
|
Book
Value
|
|
|
Fair
Value
|
|
|
Difference
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Cash
|
|
$
|
546,411
|
|
|
$
|
546,411
|
|
|
$
|
-
|
|
Inventory
|
|
|
70,580
|
|
|
|
70,580
|
|
|
|
-
|
|
Property
and Equipment
|
|
|
36,363
|
|
|
|
36,363
|
|
|
|
-
|
|
Total
|
|
$
|
653,354
|
|
|
$
|
653,354
|
|
|
$
|
-
|
|
Goodwill
and Intangibles
Goodwill
is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other
than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite
lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic
benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or
estimated life. Goodwill and indefinite-lived intangibles assets are not amortized but are tested for impairment in the fourth quarter
using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.
In
performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its carrying value and
an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors
to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, and whether
it is necessary to perform the quantitative goodwill impairment test. The quantitative test is required only if the Company concludes
that it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. For quantitative testing,
the Company compares the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an
impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed
the total amount of goodwill allocated to that reporting unit.
Fair
values are determined using established business valuation techniques and models developed by the Company, estimates of market participant
assumptions of future cash flows, future growth rates and discount rates to value estimated cash flows. Changes in economic and operating
conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment
charge in a future period.
Acquisitions
Upon
acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as
appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants
are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or
liability.
Fair
value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions.
Management values property, plant and equipment using the cost approach supported where available by observable market data, which
includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method or excess
earnings method, forms of the income approach supported by observable market data for peer companies. The significant assumptions
used to estimate the value of the acquired intangible assets include discount rates and certain assumptions that form the basis
of future cash flows (such as revenue growth rates, customer attrition rates, and royalty rates). Acquired inventories are marked
to fair value for valuation of the total purchase price. For certain items, the carrying value is determined to be a reasonable
approximation of fair value based on information available to the Company.
SCHEDULE
OF ASSETS ACQUIRED
Assets
acquired
|
|
As
of
November
30,
2019
|
|
|
|
|
|
Cash
|
|
$
|
546,411
|
|
Inventory (i)
|
|
|
70,580
|
|
Property, plant and equipment (ii)
|
|
|
36,363
|
|
Assets acquired excluding goodwill
|
|
|
653,354
|
|
Goodwill (iii)
|
|
|
1,346,646
|
|
Total purchase price
|
|
$
|
2,000,000
|
|
(i)
|
Inventories
acquired were sold on March 11, 2020
|
(ii)
|
Property,
plant and equipment acquired includes computers, software and other office equipment.
|
(iii)
|
Goodwill
is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired.
|
The
changes in the carrying amount of goodwill for the period from November 30, 2019 through September 30, 2021 were as follows:
SCHEDULE
OF GOODWILL
Balance as of November 30, 2019
|
|
$
|
1,346,646
|
|
Additions and adjustments
|
|
|
(873,323
|
)
|
Balance as of September 30, 2021
|
|
$
|
473,323
|
|
For
the three months ended September 30, 2021 and year ended June 30, 2021, the Company recorded an impairment of goodwill in the amount
of $0 and
$873,323,
respectively. During the fourth quarter of fiscal 2021 (second calendar quarter of 2021), the Company performed an interim goodwill impairment
analysis on the TCBM Holdings, LLC acquisition and its $946,646
goodwill balance based on assessed potential
indicators of impairment, including recent disruptions to the domestic CBD market resulting from the COVID-19 pandemic, the increasing
uncertainty of near-term demand requirements, supply constraints and financing constraints. In the previous 2020 annual goodwill impairment
evaluation, this reporting unit had a fair value of approximately 100% of the carrying value. The impairment assessment and valuation
method require the Company to make estimates and assumptions regarding future operating results, cash flows, changes in working capital
and capital expenditures, selling prices, profitability, and the cost of capital. As a result of the fourth quarter 2021 goodwill impairment
evaluation, the Company determined that the fair value of the TCBM Holdings, LLC acquisition was below carrying value, including goodwill,
by $473,323.
This was primarily due to changes in the timing and amount of expected cash flows resulting from lower projected revenues, profitability
and cash flows due to near-term reductions in the domestic CBD market.
NOTE
E - PROPERTY AND EQUIPMENT
SCHEDULE
OF PROPERTY AND EQUIPMENT
|
|
September
30, 2021
|
|
|
June 30, 2021
|
|
|
|
|
|
|
|
|
Property and Equipment
|
|
$
|
36,363
|
|
|
$
|
36,363
|
|
Less: accumulated depreciation
|
|
|
(9,525
|
)
|
|
|
(8,226
|
)
|
Total
|
|
$
|
26,838
|
|
|
$
|
28,137
|
|
|
(i)
|
Property and equipment
are stated at cost and depreciated principally on methods and at rates designed to amortize their costs over their useful
lives.
|
|
(ii)
|
Depreciation expense for
the three months ended September 30, 2021 and 2020 was $1,299
and $758,
respectively.
|
NOTE
F – ACCRUED OFFICER AND DIRECTOR COMPENSATION
Accrued
officer and director compensation is due to Wayne Anderson, the sole officer and director of the Company, and consists of:
SCHEDULE
OF ACCRUED OFFICER AND DIRECTOR COMPENSATION
|
|
September
30, 2021
|
|
|
June
30, 2021
|
|
|
|
|
|
|
|
|
Pursuant
to January 26, 2018 Board of Directors Service Agreement
|
|
$
|
-
|
|
|
$
|
-
|
|
Total
|
|
$
|
-
|
|
|
$
|
-
|
|
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
F – ACCRUED OFFICER AND DIRECTOR COMPENSATION (cont’d)
For
the three months ended September 30, 2021 and year ended June 30, 2021, the balance of accrued officer and director compensation
changed as follows:
SCHEDULE
OF CHANGES IN ACCRUED OFFICER AND DIRECTOR COMPENSATION
|
|
Pursuant
to
Employment
Agreements
|
|
|
Pursuant
to
Board of
Directors
Services
Agreements
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Balances
at June 30, 2020
|
|
|
-
|
|
|
|
79,803
|
|
|
|
79,803
|
|
Officer’s/director’s
compensation for the year ended June 30, 2021 (not including stock-based compensation of $40,000 accrued as Stock to be Issued)
|
|
|
-
|
|
|
|
40,000
|
|
|
|
40,000
|
|
Cash
compensation
|
|
|
|
|
|
|
(119,803
|
)
|
|
|
(119,803
|
)
|
Balances
at June 30, 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Officer’s/director’s
compensation for the three months ended September 30, 2021
|
|
|
-
|
|
|
|
20,000
|
|
|
|
20,000
|
|
Cash
bonus as per new agreement (ii)
|
|
|
|
|
|
|
50,000
|
|
|
|
50,000
|
|
Cash
compensation
|
|
|
|
|
|
|
(70,000
|
)
|
|
|
(70,000
|
)
|
Balances
at September 30, 2021
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
(i)
|
As
of September 30, 2021 and June 30, 2021, total shares of common stock accrued
as “Stock to be Issued” to Mr. Anderson as per the terms of the Board of Director’s
Services Agreement is 84,803
and
84,803,
respectively.
|
|
(ii)
|
On
July 1, 2021, the Company executed a new Board of Directors Service Agreement with Jimmy
Wayne Anderson. Under the terms of the Agreement, Mr. Anderson shall receive a one-time bonus
payment of Fifty Thousand and no/100 dollars ($) upon execution of the Agreement,
and Twenty Thousand and no/100 dollars ($) paid to Mr. Anderson on the last calendar
day of each quarter as long as Mr. Anderson continues to fulfill his duties and provide the
services set forth above. The compensation of $ per quarter shall commence with the
third calendar quarter of 2021 (first fiscal quarter of 2022).
|
NOTE
G – NOTES PAYABLE, THIRD PARTIES
Notes
payable to third parties consist of:
SCHEDULE
OF NOTES PAYABLE TO THIRD PARTIES
|
|
September
30, 2021
|
|
|
June
30, 2021
|
|
Totals
|
|
$
|
497,250
|
|
|
$
|
649,750
|
|
|
|
|
|
|
|
|
Convertible
Promissory Note dated December 17, 2019 payable to Armada Investment Fund, LLC (“Armada”), interest at 8%, due December
17, 2020, in technical default-with unamortized debt discount of $0
and $0
at, September 30, 2021 and June 30,
2021, respectively (i)
|
|
|
11,000
|
|
|
|
11,000
|
|
Convertible
Promissory Note dated September 3, 2020 payable to Graphene Holdings, LLC (“Graphene”), interest at 3%, due March 3,
2021, in technical default, with unamortized debt discount of $0
and $0
at, September 30,
2021 and June 30, 2021, respectively (ii)
|
|
|
-
|
|
|
|
250,000
|
|
Convertible
Promissory Note dated September 9, 2020 payable to Graphene Holdings, LLC (“Graphene”), interest at 3%, due March 9,
2021, in technical default, with unamortized debt discount of $0
and $0
at, September 30,
2021 and June 30, 2021, respectively (iii)
|
|
|
20,000
|
|
|
|
20,000
|
|
Convertible
Promissory Note dated January 20, 2021 payable to Tri-Bridge Ventures, LLC (“Tri-Bridge”), interest at 10%, due January
20, 2022, with unamortized debt discount of $30,411
and $55,616
at, September 30,
2021 and June 30, 2021, respectively (iv)
|
|
|
100,000
|
|
|
|
100,000
|
|
Convertible
Promissory Note dated February 22, 2021 payable to Tri-Bridge Ventures, LLC (“Tri-Bridge”), interest at 10%, due February
22, 2022, with unamortized debt discount of $78,904
and $129,316
at September 30,
2021 and June 30, 2021, respectively (v)
|
|
|
200,000
|
|
|
|
200,000
|
|
Convertible
Promissory Note dated June 17, 2021 payable to Power Up Lending Group Ltd. (“Power Up”), interest at 8%, due June 17,
2022-with unamortized debt discount of $48,785
and $66,303
at, September 30,
2021 and June 30, 2021, respectively (vi)
|
|
|
68,750
|
|
|
|
68,750
|
|
Convertible
Promissory Note dated July 12, 2021 payable to Power Up Lending Group Ltd. (“Power Up”), interest at 8%, due July 12,
2022-with unamortized debt discount of $37,931
and $0
at, September 30,
2021 and June 30, 2021, respectively (vii)
|
|
|
48,750
|
|
|
|
-
|
|
Convertible
Promissory Note dated September 9, 2021 payable to Power Up Lending Group Ltd. (“Power Up”), interest at 8%, due September
9, 2022-with unamortized debt discount of $45,811
and $0
at, September 30,
2021 and June 30, 2021, respectively (viii)
|
|
|
48,750
|
|
|
|
-
|
|
Totals
|
|
$
|
497,250
|
|
|
$
|
649,750
|
|
(i)
|
On December 17, 2019, the Company entered
into a Securities Purchase Agreement (the “Agreement”) with Armada Capital Partners, LLC (“Armada”) wherein
the Company issued Armada a Convertible Promissory Note (the “Convertible Note”) in the amount of $11,000
($1,000
OID). The Convertible Note has a term of one (1)
year (due on December
17, 2020) and bears interest at 8%
annually. The
Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (March 20, 2021) at the
option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder
shall be 60%
multiplied by the Market Price (as defined herein)(representing a discount rate of 40%), subject to adjustment as described herein
(“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common
Stock during the twenty (20)
Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means,
for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading
market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the
Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities
exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not
available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the
OTC Markets. As part and parcel of the foregoing transaction, Armada was issued a warrant granting the holder the right to purchase
up to 560,800
shares of the Company’s common stock at an exercise price of $0.024
for a term of 5-years.
The transaction closed on December 17, 2019. In addition, 10,000,000
shares of the Company’s common stock have been reserved at Pacific Stock Transfer Corporation for possible issuance upon the
conversion of the Note into shares of our common stock. As of September 30, 2021, $11,000
principal, $5,500 default principal, $1,572
interest and $1,868 default interest were due.
|
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the three months ended September 30, 2021 and 2020
NOTE
G – NOTES PAYABLE, THIRD PARTIES (cont’d)
(ii)
|
On
September 3, 2020, the Company executed a Convertible Note (the “Convertible Note”) payable to Graphene Holdings, LLC
(the “Holder”) in the principal amount of $250,000. The Convertible Note is convertible, in whole or in part, at any
time and from time to time before maturity (March 3, 2021) at the option of the holder. The conversion price for the principal and
interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing
a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the
lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last
complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest
traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported
by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB
is not the principal trading market for such security, on the principal securities exchange or trading market where such security
is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the
lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term
of one (1) year and bears interest at 3% annually. On September 22, 2021, the Holder forgave all unpaid principal and interest on
the Convertible Note. As of September 30, 2021, no principal or interest were due.
|
|
|
(iii)
|
On
September 9, 2020, the Company executed a Convertible Note (the “Convertible Note”) payable to Graphene Holdings, LLC
(the “Holder”) in the principal amount of $20,000. The Convertible Note is convertible, in whole or in part, at any time
and from time to time before maturity (March 9, 2021) at the option of the holder. The conversion price for the principal and interest
in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing
a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the
lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last
complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest
traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported
by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB
is not the principal trading market for such security, on the principal securities exchange or trading market where such security
is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the
lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term
of one (1) year and bears interest at 3% annually. As of September 30, 2021, $20,000 principal, $10,000 default principal, $622
interest and $4,246 default interest were due.
|
|
|
(iv)
|
On
January 20, 2021, the Company executed a Convertible Note (the “Convertible Note”) payable to Tri-Bridge Ventures, LLC
(the “Holder”) in the principal amount of up to $150,000. The Convertible Note shall accrue interest at 10% per annum.
The Convertible Note was partially funded on January 27, 2021 in the amount of $100,000. The Convertible Note is convertible, in
whole or in part, at any time and from time to time before maturity (January 20, 2022) at the option of the holder. The Conversion
Price shall be equal to Fifty Percent (50%) of the lowest Trading Price (defined below) during the Valuation Period (defined below),
and the Conversion Amount shall be the amount of principal or interest electively converted in the Conversion Notice. The total number
of shares due under any conversion notice (“Notice Shares”) will be equal to the Conversion Amount divided by the Conversion
Price. On the date that a Conversion Notice is delivered to Holder, the Company shall deliver an estimated number of shares (“Estimated
Shares”) to Holder’s brokerage account equal to the Conversion Amount divided by 50% of the Market Price. “Market
Price” shall mean the lowest of the daily Trading Price for the Common Stock during the twenty (20) Trading Day period ending
on the latest complete Trading Day prior to the Conversion Date. The “Valuation Period” shall mean twenty (20) Trading
Days, commencing on the first Trading Day following delivery and clearing of the Notice Shares in Holder’s brokerage account,
as reported by Holder (“Valuation Start Date”). As of September 30, 2021, $100,000 principal plus $6,740 interest were
due.
|
|
|
(v)
|
On
February 22, 2021, the Company executed a Convertible Note (the “Convertible Note”) payable to Tri-Bridge Ventures, LLC
(the “Holder”) in the principal amount of up to $200,000. The Convertible Note shall accrue interest at 10% per annum. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (February
22, 2022) at the option of the holder. The conversion price shall be equal to the lesser of (i) the price of any public offering
of the Maker’s Common Stock or (ii) Fifty Percent (50%) of the lowest Trading Price (defined below) during the Twenty Trading
Day period prior to the day the Holder delivers the Conversion Notice (“Conversion Price”). “Trading Price”
means, for any security as of any date, any trading price on the OTC Bulletin Board, or other applicable trading market (the “OTCBB”)
as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg)
or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange
or trading market where such security is listed or traded. “Trading Day” shall mean any day on which the Common Stock
is tradable for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock
is then being traded. The Convertible Note was funded on March 2, 2021. As of September 30, 2021, $200,000 principal plus $11,616
interest were due.
|
|
|
(vi)
|
On
June 17, 2021, the Company issued to Power Up Lending Group Ltd. (the “Investor”)
a Convertible Promissory Note (the “Convertible Note”) in the principal amount
of $68,750. The Convertible Note has a term of one (1) year (Maturity Date of June 17, 2022)
and bears interest at 8% annually. The Convertible Note is convertible, in whole or in part,
and at any time during the period beginning on the date which is one hundred eighty (180)
days following the date of this Convertible Note and ending on the later of: (i) the Maturity
Date and (ii) the date of payment of the Default Amount at the option of the holder. The
“Variable Conversion Price” shall mean 61% multiplied by the Market Price (as
defined herein) (representing a discount rate of 39%). “Market Price” means the
lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading
Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the closing bid price on the OTCQB,
OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”)
as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such
security, the closing bid price of such security on the principal securities exchange or
trading market where such security is listed or traded or, if no closing bid price of such
security is available in any of the foregoing manners, the average of the closing bid prices
of any market makers for such security that are listed in the “pink sheets”.
The transaction closed on June 21, 2021. As of September 30, 2021, $68,750 principal plus
$1,582 interest were due.
|
|
|
(vii)
|
On
July 12, 2021, the Company issued to Power Up Lending Group Ltd. (the “Investor”)
a Convertible Promissory Note (the “Convertible Note”) in the principal amount
of $48,750. The Convertible Note has a term of one (1) year (Maturity Date of July 12, 2022)
and bears interest at 8% annually. The Convertible Note is convertible, in whole or in part,
and at any time during the period beginning on the date which is one hundred eighty (180)
days following the date of this Convertible Note and ending on the later of: (i) the Maturity
Date and (ii) the date of payment of the Default Amount at the option of the holder. The
“Variable Conversion Price” shall mean 61% multiplied by the Market Price (as
defined herein) (representing a discount rate of 39%). “Market Price” means the
lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading
Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the closing bid price on the OTCQB,
OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”)
as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such
security, the closing bid price of such security on the principal securities exchange or
trading market where such security is listed or traded or, if no closing bid price of such
security is available in any of the foregoing manners, the average of the closing bid prices
of any market makers for such security that are listed in the “pink sheets”.
The transaction closed on July 15, 2021. As of September 30, 2021, $48,750 principal plus
$855 interest were due.
|
|
|
(viii)
|
On
September 9, 2021, the Company issued to Power Up Lending Group Ltd. (the “Investor”)
a Convertible Promissory Note (the “Convertible Note”) in the principal amount
of $48,750. The Convertible Note has a term of one (1) year (Maturity Date of September 9,
2022) and bears interest at 8% annually. The Convertible Note is convertible, in whole or
in part, and at any time during the period beginning on the date which is one hundred eighty
(180) days following the date of this Convertible Note and ending on the later of: (i) the
Maturity Date and (ii) the date of payment of the Default Amount at the option of the holder.
The “Variable Conversion Price” shall mean 61% multiplied by the Market Price
(as defined herein) (representing a discount rate of 39%). “Market Price” means
the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading
Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the closing bid price on the OTCQB,
OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”)
as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such
security, the closing bid price of such security on the principal securities exchange or
trading market where such security is listed or traded or, if no closing bid price of such
security is available in any of the foregoing manners, the average of the closing bid prices
of any market makers for such security that are listed in the “pink sheets”.
The transaction closed on September 13, 2021. As of September 30, 2021, $48,750 principal
plus $224 interest were due.
|
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
NOTE G – NOTES PAYABLE, THIRD PARTIES (cont’d)
Income
from forgiveness of principal and interest on convertible notes payable consists of:
SCHEDULE
OF INTEREST FROM FORGIVENESS OF NOTES PAYABLE
|
|
September 30, 2021
|
|
|
June 30, 2021
|
|
|
|
|
|
|
|
|
Forgiveness of principal and interest Tribridge Ventures, LLC
|
|
$
|
-
|
|
|
$
|
29,277
|
|
Forgiveness of interest Around the Clock Partners, LP
|
|
|
-
|
|
|
|
3,532
|
|
Forgiveness of interest Valvasone Trust
|
|
|
-
|
|
|
|
2,453
|
|
Forgiveness of interest Jody A. DellaDonna
|
|
|
-
|
|
|
|
1,327
|
|
Forgiveness of Jetco Holdings, LLC principal, default principal, interest and
default interest
|
|
|
-
|
|
|
|
300,197
|
|
Forgiveness of Graphene Holdings, LLC principal and interest
|
|
|
443,849
|
|
|
|
-
|
|
Total
|
|
$
|
443,849
|
|
|
$
|
336,786
|
|
Default
principal, notes payable-third parties:
|
|
September 30, 2021
|
|
|
June 30, 2021
|
|
|
|
|
|
|
|
|
Armada Investment Fund, LLC
|
|
$
|
5,500
|
|
|
$
|
2,200
|
|
Graphene Holdings, LLC
|
|
|
10,000
|
|
|
|
135,000
|
|
Total
|
|
$
|
15,500
|
|
|
$
|
137,200
|
|
Accrued
default interest, notes payable-third parties:
|
|
September 30, 2021
|
|
|
June 30, 2021
|
|
|
|
|
|
|
|
|
Armada Investment Fund, LLC
|
|
$
|
1,868
|
|
|
$
|
1,269
|
|
Graphene Holdings, LLC
|
|
|
4,246
|
|
|
|
38,947
|
|
Total
|
|
$
|
6,114
|
|
|
$
|
40,216
|
|
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
H - DERIVATIVE LIABILITY
The derivative liability at September 30, 2021 and
June 30, 2021 consisted of:
SCHEDULE OF DERIVATIVE LIABILITY
|
|
September 30, 2021
|
|
|
June
30, 2021
|
|
|
|
|
|
|
|
|
Convertible Promissory
Notes payable to Tri-Bridge Ventures, LLC. Please see NOTE F – NOTES PAYABLE, THIRD PARTIES for further information
|
|
$
|
757,717
|
|
|
$
|
548,392
|
|
Convertible Promissory Note
payable to Armada Investment Fund, LLC. Please see NOTE G – NOTES PAYABLE, RELATED PARTIES for further information
|
|
|
27,783
|
|
|
|
18,865
|
|
Convertible Promissory Notes
payable to Graphene Holdings, LLC. Please see NOTE G – NOTES PAYABLE, THIRD PARTIES for further information
|
|
|
32,102
|
|
|
|
332,519
|
|
Convertible
Promissory Note payable to Power Up Lending Group Ltd. Please see NOTE G – NOTES PAYABLE, RELATED PARTIES for further
information
|
|
|
407,438
|
|
|
|
107,801
|
|
Total derivative liability
|
|
$
|
1,225,040
|
|
|
$
|
1,007,577
|
|
The
Convertible Promissory Notes (the “Notes”) contain a variable conversion feature based on the future trading price of the
Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the Notes is indeterminate.
Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at the respective issuance
dates of the notes and charged the applicable amounts to debt discounts (limited to the face value of the respective notes) and the remainder
to other expenses. The increase (decrease) in the fair value of the derivative liability from the respective issue dates of the notes
to the measurement dates is charged (credited) to other expense (income).
The
fair value of the derivative liability was measured at the respective issuance dates and at September 30, 2021, and June 30, 2021
using the Black Scholes option pricing model. Assumptions used for the calculation of the derivative liability of the Notes at
September 30, 2021 were (1) stock price of $0.0036
per share, (2) conversion prices ranging from $0.00105
to $0.00147
per share, (3) term of 6
months to 1
year, (4) expected volatility of 144.91-365.65%,
and (5) risk free interest rate of 0.05%
to 0.09%.
Assumptions used for the calculation of the derivative liability of the Notes at June 30, 2021 were (1) stock price of $0.0032
per share, (2) conversion prices ranging from $0.0015
to $0.0021
per share, (3) term of 6
months to 1
year, (4) expected volatility of 257.53%
to 392.02%,
and (5) risk free interest rate of 0.09%.
The
following table provides a reconciliation of the beginning and ending balances for the convertible note embedded derivative liability
measured at fair value using significant unobservable inputs (Level 3):
SCHEDULE
OF EBEDDED DERIVATIVE LIABILITY MEASURED AT FAIR VALUE USING SIGNIFICANT UNOBSERVABLE INPUTS
|
|
Level
3
|
|
Balance at June 30, 2021
|
|
$
|
1,007,577
|
|
Additions
|
|
|
219,546
|
|
Gain
|
|
|
(2,083
|
)
|
Balance at September 30, 2021
|
|
$
|
1,225,040
|
|
NOTE
I - CAPITAL STOCK
Preferred
Stock
Filed
with the State of Delaware:
On
September 30, 1999, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series
A 8% Convertible Preferred Stock, par value $0.01. The designation of the new Series A 8% Convertible Preferred Stock was approved by
the Board of Directors on August 16, 1999. The Company is authorized to issue 3,000 shares of the Series A 8% Convertible Preferred Stock.
At September 30, 2021 and June 30, 2021, the Company had 0 and 0 shares issued and outstanding, respectively.
On
September 30, 1999, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series
B 8% Convertible Preferred Stock, par value $0.01. The designation of the new Series B 8% Convertible Preferred Stock was approved by
the Board of Directors on August 16, 1999. The Company is authorized to issue 3,000 shares of the Series B 8% Convertible Preferred Stock.
At September 30, 2020 and June 30, 2021, the Company had 0 and 0 shares issued and outstanding, respectively.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
On
February 15, 2000, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series
C 5% Convertible Preferred Stock, par value $0.01. The designation of the new Series C 5% Convertible Preferred Stock was approved by
the Board of Directors on February 14, 2000. The Company is authorized to issue 1,000 shares of the Series C 5% Convertible Preferred
Stock. At September 30, 2021 and June 30, 2021, the Company had 0 and 0 shares issued and outstanding, respectively.
On
April 26, 2001, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series D
Convertible Preferred Stock, par value $0.01. The designation of the new Series D Convertible Preferred Stock was approved by the Board
of Directors on April 26, 2001. The Company is authorized to issue 800 shares of the Series D Convertible Preferred Stock. At September
30, 2021 and June 30, 2021, the Company had 0 and 0 shares issued and outstanding, respectively.
On
June 28, 2001, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series E 8%
Convertible Preferred Stock, par value $0.01. The designation of the new Series E 8% Convertible Preferred Stock was approved by the
Board of Directors on March 30, 2001. The Company is authorized to issue 250 shares of the Series E Convertible Preferred Stock. At September
30, 2021 and June 30, 2021, the Company had 0 and 0 shares issued and outstanding, respectively.
Series
K Super Voting Preferred Stock
On
July 31, 2019, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series K Super
Voting Preferred Stock, par value $0.01. The designation of the new Series K Super Voting Preferred Stock was approved by the Board of
Directors on July 16, 2019. The Company is authorized to issue three (3) shares of the Series K Super Voting Preferred Stock. At September
30, 2021 and June 30, 2021, the Company had 3 and 3 shares issued and outstanding, respectively.
Dividends.
Initially, there will be no dividends due or payable on the Series K Super Voting Preferred Stock. Any future terms with respect
to dividends shall be determined by the Board consistent with the Corporation’s Certificate of Incorporation. Any and all
such future terms concerning dividends shall be reflected in an amendment to this Certificate, which the Board shall promptly
file or cause to be filed.
Liquidation
and Redemption Rights. Upon the occurrence of a Liquidation Event (as defined below), the holders of Series K Super Voting
Preferred Stock are entitled to receive net assets on a pro-rata basis. Each holder of Series K Super Voting Preferred Stock is
entitled to receive ratably any dividends declared by the Board, if any, out of funds legally available for the payment of dividends.
As used herein, “Liquidation Event” means (i) the liquidation, dissolution or winding-up, whether voluntary or involuntary,
of the Corporation, (ii) the purchase or redemption by the Corporation of shares of any class of stock or the merger or consolidation
of the Corporation with or into any other corporation or corporations, unless (a) the holders of the Series K Super Voting Preferred
Stock receive securities of the surviving Corporation having substantially similar rights as the Series K Super Voting Preferred
Stock and the stockholders of the Corporation immediately prior to such transaction are holders of at least a majority of the
voting securities of the successor Corporation immediately thereafter (the “Permitted Merger”), unless the holders
of the shares of Series K Super Voting Preferred Stock elect otherwise or (b) the sale, license or lease of all or substantially
all, or any material part of, the Corporation’s assets, unless the holders of Series K Super Voting Preferred Stock elect
otherwise.
Conversion.
No conversion of the Series K Super Voting Preferred Stock is permitted.
Rank.
All
shares of the Series K Super Voting Preferred Stock shall rank (i) senior to the Corporation’s (A) Common Stock, par value $0.0001
per share (“Common Stock”), and any other class or series of capital stock of the Corporation hereafter created, except as
otherwise provided in clauses (ii) and (iii) of this Section 4, (ii) pari passu with any class or series of capital stock of the
Corporation hereafter created and specifically ranking, by its terms, on par with the Series K Super Voting Preferred-Stock and (iii)
junior to any class or series of capital stock of the Corporation hereafter created specifically ranking, by its terms, senior to the
Series K Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary.
Voting
Rights.
A.
If at least one share of Series K Super Voting Preferred Stock is issued and outstanding, then the total aggregate issued shares
of Series K Super Voting Preferred Stock at any given time, regardless of their number, shall have voting rights equal to 20 times
the sum of: i) the total number of shares of Common stock which are issued and outstanding at the time of voting, plus ii) the
total number of shares of any and all Preferred stocks which are issued and outstanding at the time of voting.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
B.
Each individual share of Series K Super Voting Preferred Stock shall have the voting rights equal to:
[twenty
times the sum of: {all shares of Common stock issued and outstanding at the time of voting + all shares of any other Preferred
stocks issued and outstanding at the time of voting}]
Divided
by:
[the
number of shares of Series K Super Voting Preferred Stock issued and outstanding at the time of voting]
With
respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the
holders of the outstanding shares of Series K Super Voting Preferred Stock shall vote together with the holders of Common Stock
without regard to class, except as to those matters on which separate class voting is required by applicable law or the Certificate
of Incorporation or By-laws.
Series
L Preferred Stock
On
July 31, 2019, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series L Preferred
Stock, par value $0.01. The designation of the new Series L Preferred Stock was approved by the Board of Directors on July 16, 2019.
The Company is authorized to issue five hundred thousand (500,000) shares of the Series L Preferred Stock. At September 30, 2021
and June 30, 2021, the Company had 255 and 255 shares issued and outstanding, respectively.
Dividends.
The holders of Series L Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors,
in its sole discretion.
Voting.
a.
If at least one share of Series L Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series
L Preferred Stock at any given time, regardless of their number, shall have voting rights equal to four times the sum of: i) the
total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of shares
of all series of Preferred Stock which are issued and outstanding at the time of voting.
b.
Each individual share of Series L Preferred Stock shall have the voting rights equal to:
[four
times the sum of: {all shares of Common Stock issued and outstanding at time of voting + the total number of shares of all series
of Preferred Stock issued and outstanding at time of voting}]
divided
by:
[the
number of shares of Series L Preferred Stock issued and outstanding at the time of voting]
Conversion
Rights.
a)
Outstanding. If at least one share of Series L Preferred Stock is issued and outstanding, then the total aggregate issued
shares of Series L Preferred Stock at any given time, regardless of their number, shall be convertible into the number of shares
of Common Stock defined by the formula set forth is section 4.b.
b)
Method of Conversion.
i.
Procedure- Before any holder of Series L Preferred Stock shall be entitled to convert the same into shares of common stock, such
holder shall surrender the certificate or certificates therefore, duly endorsed, at the office of the Company or of any transfer
agent for the Series L Preferred Stock, and shall give written notice 5 business days prior to date of conversion to the Company
at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of common stock are to be issued. The Company shall, within five business days, issue and
deliver at such office to such holder of Series L Preferred Stock, or to the nominee or nominees of such holder, a certificate
or certificates for the number of shares of common stock to which such holder shall be entitled as aforesaid. Conversion shall
be deemed to have been effected on the date when delivery of notice of an election to convert and certificates for shares is made,
and such date is referred to herein as the “Conversion Date.”
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
ii.
Issuance- Shares of Series L Preferred Stock may only be issued in exchange for the partial or full retirement of debt held by
Management, Employees, Consultants or as directed by a majority vote of the Board of Directors. The number of Shares of Series
L Preferred Stock to be issued to each qualified person (member of Management, Employee or Consultant) holding a Note shall be
determined by the following formula:
For
retirement of debt: One (1) share of Series L Preferred stock shall be issued for each Five Thousand Dollar ($5,000) tranche of
outstanding liability. As an example: If an officer has accrued wages due to him or her in the amount of $25,000, the officer
can elect to accept 5 shares of Series L Preferred stock to satisfy the outstanding obligation of the Company.
iii.
Calculation for conversion into Common Stock- Each individual share of Series L Preferred Stock shall be convertible into the
number of shares of Common Stock equal to:
[5000]
divided
by:
[.50
times the lowest closing price of the Company’s common stock for the immediate five-day period prior to the receipt of the
Notice of Conversion remitted to the Company by the Series L Preferred stockholder]
Common
Stock
Class
A and Class B:
Identical
Rights. Except as otherwise expressly provided in ARTICLE FIVE of the Company’s Amended and Restated Certificate of
Incorporation dated August 13, 1999, all Common Shares shall be identical and shall entitle the holders thereof to the same rights
and privileges.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
Stock
Splits. The Corporation shall not in any manner subdivide (by any stock split, reclassification, stock dividend, recapitalization,
or otherwise) or combine the outstanding shares of one class of Common Shares unless the outstanding shares of all classes of
Common Shares shall be proportionately subdivided or combined.
Liquidation
Rights. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation, after
payment shall have been made to holders of outstanding Preferred Shares, if any, of the full amount to which they are entitled
pursuant to the Certificate of Incorporation, the holders of Common Shares shall be entitled, to the exclusion of the holders
of the Preferred Shares, if any, to share ratably, in accordance with the number of Common Shares held by each such holder, in
all remaining assets of the Corporation available for distribution among the holders of Common Shares, whether such assets are
capital, surplus, or earnings. For the purposes of this paragraph, neither the consolidation or merger of the Corporation with
or into any other corporation or corporations in which the stockholders of the Corporation receive capital stock and/or securities
(including debt securities) of the acquiring corporation (or of the direct or indirect parent corporation of the acquiring corporation)
nor the sale, lease or transfer of the Corporation, shall be deemed to be a voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation as those terms are used in this paragraph.
Voting
Rights.
(a)
The holders of the Class A Shares and the Class B Shares shall vote as a single class on all matters submitted to a vote of the
stockholders, with each Class A Share being entitled to one (1) vote and each Class B Share being entitled to six (6) votes, except
as otherwise provided by law.
(b)
The holders of Class A Shares and Class B Shares are not entitled to cumulative votes in the election of any directors.
Preemptive
or Subscription Rights. No holder of Common Shares shall be entitled to preemptive or subscription rights.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
Conversion
Rights.
(a)
Automatic Conversion. Each Class B Share shall (subject to receipt of any and all necessary approvals) convert automatically into
one fully paid and non-assessable Class A Share (i) upon its sale, gift, or other transfer to a party other than a Principal Stockholder
(as defined below) or an Affiliate of a Principal Stockholder (as defined below), (ii) upon the death of the Class B Stockholder
holding such Class B Share, unless the Class B Shares are transferred by operation of law to a Principal Stockholder or an Affiliate
of a Principal Stockholder, or (iii) in the event of a sale, gift, or other transfer of a Class B Share to an Affiliate of a Principal
Stockholder, upon the death of the transferor. Each of the foregoing automatic conversion events shall be referred to hereinafter
as an “Event of Automatic Conversion.” For purposes of this ARTICLE FIVE, “Principal Stockholder” includes
any of Donald H. Goldman, Steven M. Fieldman, Lance Fieldman, Yuri Itkis, Michall Itkis and Boris Itkis and an “Affiliate
of a Principal Stockholder” is a person that directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified. For purposes of this definition, “control,”
when used with respect to any specified person, means the power to direct or cause the direction of the management, and policies
of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Without
limitation, an Affiliate also includes the estate of such individual.
(b)
Voluntary Conversion. Each Class B Share shall be convertible at the option of the holder, for no additional consideration, into
one fully paid and non-assessable Class A Share at any time.
(c)
Conversion Procedure. Promptly upon the occurrence of an Event of Automatic Conversion such that Class B shares are converted
automatically into Class A Shares, or upon the voluntary conversion by the holder, the holder of such shares shall surrender the
certificate or certificates therefor, duly endorsed in blank or accompanied by proper instruments of transfer, at the office of
the Corporation or of any transfer agent for the Class A Shares, and shall give written notice to the Corporation at such office
(i) stating that the shares are being converted pursuant to an Event of Automatic Conversion into Class A Shares as provided in
subparagraph 5.6(a) hereof or a voluntary conversion as provided in subparagraph 5.6(b) hereof, (ii) specifying the Event of Automatic
Conversion (and, if the occurrence of such event is within the control of the transferor, stating the transferor’s intent
to effect an Event of Automatic Conversion) or whether such conversion is voluntary, (iii) identifying the number of Class B Shares
being converted, and (iv) setting out the name or names (with addresses) and denominations in which the certificate or certificates
for Class A Shares shall be issued and including instructions for delivery thereof. Delivery of such notice together with the
certificates representing the Class B Shares shall obligate the Corporation to issue such Class A Shares and the Corporation shall
be justified in relying upon the information and the certification contained in such notice and shall not be liable for the result
of any inaccuracy with respect thereto. Thereupon, the Corporation or its transfer agent shall promptly issue and deliver at such
stated address to such holder or to the transferee of Class B Shares a certificate or certificates for the number of Class A Shares
to which such holder or transferee is entitled, registered in the name of such holder, the designee of such holder or transferee,
as specified in such notice. To the extent permitted by law, conversion pursuant to (i) an Event of Automatic Conversion shall
be deemed to have been effected as of the date on which the Event of Automatic Conversion occurred or (ii) a voluntary conversion
shall be deemed to have been effected as of the date the Corporation receives the written notice pursuant to this subparagraph
(c) (each date being the “Conversion Date”). The person entitled to receive the Class A Shares issuable upon such
conversion shall be treated for all purposes as the record holder of such Class A Shares at and as of the Conversion Date, and
the right of such person as the holder of Class B Shares shall cease and terminate at and as of the Conversion Date, in each case
without regard to any failure by the holder to deliver the certificates or the notice by this subparagraph (c).
(d)
Unconverted Shares. In the event of the conversion of fewer than all of the Class B Shares evidenced by a certificate surrendered
to the Corporation in accordance with the procedures of this Paragraph 5.6, the Corporation shall execute and deliver to or upon
the written order of the holder of such certificate, without charge to such holder, a new certificate evidencing the number of
Class B Shares not converted.
(e)
Reissue of Shares. Class B Shares that are converted into Class A Shares as provided herein shall be retired and canceled and
shall not be reissued.
(f)
Reservation. The Corporation hereby reserves and shall at all times reserve and keep available, out of its authorized and unissued
Class A Shares, for the purpose of effecting conversions, such number of duly authorized Class A Shares as shall from time to
time be sufficient to effect the conversion of all outstanding Class B Shares. The Corporation covenants that all the Class A
Shares so issuable shall, when so issued, be duly and validly issued, fully paid and non-assessable, and free from liens and charges
with respect to the issue. The Corporation will take all such action as may be necessary to assure that all such Class A Shares
may be so issued without violation of any applicable law or regulation, or any of the requirements of any national securities
exchange upon which the Class A Shares may be listed. The Corporation will not take any action that results in any adjustment
of the conversion ratio if the total number of Class A Shares issued and issuable after such action upon conversion of the Class
B Shares would exceed the total number of Class A Shares then authorized by the Amended and Restated Certificate of Incorporation,
as amended.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
At
September 30, 2021 and June 30, 2021, the Company is authorized to issue 14,991,000,000 and 14,991,000,000 shares of Class
A Common Stock, respectively. At September 30, 2021 and June 30, 2021, the Company has 14,290,293,609 and 14,680,293,609
shares issued and outstanding, respectively. At September 30, 2021 and June 30, 2021, the Company is authorized to
issue 4,000,000 and 4,000,000 shares of Class B Common Stock, respectively. At September 30, 2021 and June 30, 2021, the
Company has 0 and 0 shares issued and outstanding, respectively.
Common
Stock, Preferred Stock and Warrant Issuances
For
the three months ended September 30, 2021 and year ended June 30, 2021, the Company issued and/or sold the following unregistered
securities:
Common
Stock:
Three
months ended September 30, 2021
A total of 390,000,000 shares
of common stock were returned to the Company to be retired.
Year
ended June 30, 2021
On
September 22, 2020, the Company issued 596,785,387 shares of restricted common stock with a fair market value of $59,679 to
a noteholder in satisfaction of $29,839 in penalties against the note dated January 24, 2018.
On
November 25, 2020, the Company issued 637,526,342 shares of restricted common stock with a fair market value of $63,753 to
a noteholder in satisfaction of $31,876 in penalties against the note dated January 24, 2018.
On
December 13, 2020, the Company issued 669,338,906 shares of restricted common stock with a fair market value of $200,802 to
a noteholder in satisfaction of $33,467 in penalties against the note dated January 24, 2018.
On
December 22, 2020, the Company issued 702,738,918 shares of restricted common stock with a fair market value of $281,096 to
a noteholder in satisfaction of $35,137 in penalties against the note dated January 24, 2018.
On
January 14, 2021, the Company issued 500,000,000 shares of restricted common stock with a fair market value of $900,000 to
a noteholder in satisfaction of $20,000 principal against the note dated June 3, 2019.
On
January 19, 2021, the Company issued 300,000,000 shares of restricted common stock with a fair market value of $1,200,000 to
a noteholder in satisfaction of $42,000 principal against the note dated November 30, 2019.
On
January 21, 2021, the Company issued 194,610,447 shares of restricted common stock with a fair market value of $1,264,968 to
a noteholder in satisfaction of $1,946 principal against the note dated January 24, 2018.
On
February 22, 2021, the Company issued 150,000,000 shares
of restricted common stock with a fair market value of $1,710,000 to
a noteholder in satisfaction of $1,500 in
penalties against the note dated January 24, 2018.
A
total of 1,260,000,000 shares of common stock were returned to the Company during the year ended June 30, 2021 to be retired.
Preferred
Stock:
Three months ended September 30, 2021
None
Year
ended June 30, 2021
On
February 15, 2021, the Company issued 100 shares of the Company’s Series L Preferred Stock to two Consultants in
satisfaction of $500,000 cash compensation due for past consulting services. Each Consultant received 50 Shares.
On
March 1, 2021, the Company issued 40 shares of the Company’s Series L Preferred Stock, to an affiliate of the Company’s
sole officer and director, in satisfaction of $200,000 principal and interest outstanding on a Convertible Promissory Note dated
July 27, 2018.
On
March 15, 2021, the Company issued 50 shares of the Company’s Series L Preferred Stock in satisfaction of $250,000 principal
outstanding on a Convertible Promissory Note dated November 30, 2019.
On
March 31, 2021, the Company issued 26 shares of the Company’s Series L Preferred Stock in satisfaction of $130,000 principal
and interest outstanding on a Convertible Promissory Note dated June 3, 2018.
On
March 31, 2021, the Company issued 8 shares of the Company’s Series L Preferred Stock in satisfaction of $40,000 principal
and interest outstanding on a Convertible Promissory Note dated June 29, 2018.
On
March 31, 2021, the Company issued 18 shares of the Company’s Series L Preferred Stock to the Company’s sole officer
and director as reimbursement for returning 890,000,000 shares of common stock to the Company.
On
March 31, 2021, the Company issued 3 shares of the Company’s Series L Preferred Stock to a non-affiliate as reimbursement
for returning 150,000,000 shares of common stock to the Company.
Warrants
and Options:
On
December 17, 2019, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Armada Capital
Partners, LLC (“Armada”) wherein the Company issued Armada a Convertible Promissory Note (the “Note”)
in the amount of $11,000 ($1,000 OID). The Note has a term of one (1) year (due on December 17, 2020) and bears interest at 8%
annually. As part and parcel of the foregoing transaction, Armada was issued a warrant granting the holder the right to purchase
up to 560,800 shares of the Company’s common stock at an exercise price of $0.024 for a term of 5-years. The transaction
closed on December 17, 2019. Please see NOTE G - NOTES PAYABLE, THIRD PARTIES for further information.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
J - COMMITMENTS AND CONTINGENCIES
Occupancy
Currently,
the Company shares office space with Sylios Corp at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and is not required
to reimburse Sylios Corp for monthly rent. The Company anticipates that this relationship will change with the hiring of
additional employees and it will be required to enter into a lease for a separate office space.
Director Agreements
On
July 1, 2021, the Company executed a new Board of Directors Service Agreement with Jimmy Wayne Anderson. Under the terms of the Agreement,
Mr. Anderson shall receive a one-time bonus payment of Fifty Thousand and no/100 dollars ($50,000.00) upon execution of the Agreement,
and Twenty Thousand and no/100 dollars ($20,000.00) paid to Mr. Anderson on the last calendar day of each quarter as long as Mr. Anderson
continues to fulfill his duties and provide the services set forth above. The compensation of $20,000 per quarter shall commence with
the third calendar quarter of 2021 (first fiscal quarter of 2022).
NOTE
K - GOING CONCERN UNCERTAINTY
Under
ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability
to meet our future financial obligations as they become due within one year after the date that the financial statements are issued.
As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our
plans that have not been fully implemented as of the date the financial statements are issued.
In
performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability to
meet our financial obligations as they become due. We have a history of net losses: As of September 30, 2021, we had an accumulated
deficit of $165,046,378.
For the three months ended September 30, 2021, we had
cash used from operating activities of $80,873.
We expect to continue to incur negative cash flows until such time as our operating segments generate sufficient cash inflows to finance
our operations and debt service requirements.
In
performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above
alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that
the financial statements are issued. Our future plans include securing additional funding sources that may include establishing
corporate partnerships, establishing licensing revenue agreements, issuing additional convertible debentures and issuing public
or private equity securities, including selling common stock through an at-the-market facility (ATM).
There
is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will
be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations
or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore,
have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available
on attractive terms or they will not have a significant dilutive effect on the Company’s existing shareholders. We have therefore
concluded there is substantial doubt about our ability to continue as a going concern.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2021
and 2020
(Unaudited)
NOTE
K - GOING CONCERN UNCERTAINTY (cont’d)
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. The accompanying consolidated financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the
amounts and classification of liabilities that may result from our failure to continue as a going concern.
NOTE
L - SUBSEQUENT EVENTS
On
October 18, 2021, a Default Final Judgment was entered in favor of the Company in the Complaint for Declaratory Judgment filed with the
Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida against Fortis Holdings, Ltd, Wayfarer Management,
Ltd, Flash Funding, Inc. and OTC Capital Partners, LLC. A total of 2,991,000,000 shares of the Company’s issued and outstanding
common stock were voided.
On
October 27, 2021, the Company issued to Sixth Street Lending, LLC. (the “Investor”) a Convertible Promissory Note (the “Convertible
Note”) in the principal amount of $38,750. The Convertible Note has a term of one (1) year (Maturity Date of October 27, 2022)
and bears interest at 8% annually. The Convertible Note is convertible, in whole or in part, and at any time during the period beginning
on the date which is one hundred eighty (180) days following the date of this Convertible Note and ending on the later of: (i) the Maturity
Date and (ii) the date of payment of the Default Amount at the option of the holder. The “Variable Conversion Price” shall
mean 61% multiplied by the Market Price (as defined herein) (representing a discount rate of 39%). “Market Price” means the
lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading
Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB,
OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting
service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market
for such security, the closing bid price of such security on the principal securities exchange or trading market where such security
is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing
bid prices of any market makers for such security that are listed in the “pink sheets”. The transaction closed on October
29, 2021.