NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
A – ORGANIZATION
Overview
Global
Technologies, Ltd. (hereinafter “Global Technologies”, the “Company”, “Our”, “We”,
or “Us”) is a publicly quoted operating 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 Quarterly Report. We have included our website address in this Quarterly Report solely as an inactive textual
reference.
Current
Operations
Global Technologies, 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.
As of December 31, 2022, Global Technologies had five
wholly-owned subsidiaries: TCBM Holdings, LLC (“TCBM”), HMNRTH, LLC (“HMNRTH”), 911 Help Now, LLC (“911”),
Markets on Main, Inc. (“MOM”) and Tersus Power, Inc. (“Tersus”). As of December 31, 2022, the Company had a minority
investment in one entity, Global Clean Solutions, LLC.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
A – ORGANIZATION (cont’d)
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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
A – ORGANIZATION (cont’d)
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.
About Markets on Main, Inc.
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.
On May 4, 2020,
MOM entered into a Drop Ship Agreement (the “Agreement”) with QVC, Inc. Under the terms of the Agreement, MOM shall provide
products for marketing, promotion, sale and distribution by QVC through certain televised and/or other electronic shopping services developed
or to be developed by QVC and through other means and media.
On January 3,
2022, the Company filed Articles of Conversion with the State of Florida to convert MOM from a limited liability company to a Florida
profit corporation. Simultaneous with the filing of the Articles of Conversion, the Company filed Articles of Incorporation for MOM.
On January 19,
2022, MOM entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) with Amfluent, LLC (“Amfluent”).
Under the terms of the Distribution Agreement, MOM will become an exclusive distributor for the promotion and sale of products carried
by Amfluent. As the exclusive distributor, MOM shall be awarded the exclusive territory of e-commerce, live shopping and digital sales.
The Distribution Agreement has a term of one year from the Effective Date unless both parties agree to renew the Distribution Agreement
for an additional term.
On January 30,
2022, MOM entered into a Marketing Management Agreement (the “Agreement”) with Chin Industries, LLC (“Chin”).
Under the terms of the Agreement, Chin shall provide day to day management of websites where MOM’s products may be sold. The Agreement
has a term of one year. As compensation, Chin shall receive a 50/50 split of net profits.
During the third
quarter of fiscal 2022, MOM launched its first website, www.sculptbaby.com, under the Agreement with Chin. Product sales initiated in
March 2022. During the fourth quarter of fiscal 2022, all Sculpt Baby inventory was sold. The Company has not identified its next product
to launch.
About Tersus Power, Inc. (Delaware)
Tersus Power, Inc. (“Tersus”) (Delaware)
was formed as a wholly owned subsidiary as per the terms of the Share Exchange Agreement entered
into with Tersus Power, Inc., a Nevada corporation, and the Tersus Shareholders with the sole purpose of entering into an Agreement and
Plan of Merger to effect a name change. The Articles of Incorporation were filed with the Secretary of State of the State of Delaware
on March 15, 2022.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
A – ORGANIZATION (cont’d)
Share Exchange Agreement with Tersus Power,
Inc. (Nevada)
On November
17, 2021, the Company entered into a Letter of Intent to acquire Tersus Power, Inc. (“Tersus Power”). On March 9, 2022, the
Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Tersus Power and the Tersus Shareholders. Under
the terms of the Exchange Agreement, at Closing the Company shall deliver to the Tersus Shareholders a to-be-determined pro-rata number
of shares of the Company’s Class A Common Stock for each one (1) share of Tersus common stock held by the Tersus Shareholder (the
“Exchange Ratio”). Such shares of the Company’s Class A Common Stock shall collectively (i) be referred to as the “Exchange
Shares”, and (ii) constitute 75% of the issued and outstanding shares of stock, of all classes, of the Company immediately following
the Closing. Conditions precedent to the Closing shall require the Company to complete the following corporate actions: (i) the Company
will have completed a merger with and into its wholly owned subsidiary sufficient to change its name to “Tersus Power, Inc.”,
a Delaware corporation, with an authorized capital of 500 million shares of common stock (of one class), and 10 million shares of preferred
stock (none of which will be authorized as a particular series), (ii) the Company will have completed, and FINRA will have recognized
and effectuated, a reverse split of its common stock in a range between 1-for-1,000 and 1-for-4,000, at a level that is acceptable to
the Parties, (iii) all of the holders of the Company’s Series K Preferred Stock and Series L Preferred Stock will have converted
their preferred shares into Class A Common Stock of the Company, and (iv) certain nominees by the Tersus Shareholders shall be appointed
to the Company’s Board of Directors.
The Exchange Agreement
provides for mutual indemnification for breaches of representations and covenants.
Unless the Exchange Agreement shall have been terminated
and the transactions therein contemplated shall have been abandoned, the closing of the Exchange (the “Closing”) will
take place at 5:00 p.m. Pacific Time on the second business day following the satisfaction or waiver of the conditions (the “Closing
Date”). Either party may terminate the Exchange Agreement if a Closing has not occurred on or before June 30, 2022. As
of December 31, 2022, the Company is awaiting the passing of its corporate action filed with FINRA so that the Closing may occur. Please
see NOTE M - SUBSEQUENT EVENTS
for further information.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
A – ORGANIZATION (cont’d)
Consulting Services
On June 29, 2021, the Company entered into a Fee Agreement
(the “Agreement”) for the preparation of a registration statement on Form S-1 and all follow up correspondence with the appropriate
regulatory agencies. As of December 31, 2022, the Company has initiated the work to be completed under the Agreement but is awaiting
additional information from its client.
On January 12, 2022, the Company entered into a Fee
Agreement (the “Agreement”) for the preparation of a registration statement on Form 1-A and all follow up correspondence with
the appropriate regulatory agencies. The Company was fully compensated for its services during the period ended March 31, 2022 and has
fulfilled its obligations under the Agreement.
On February 1, 2022, the Company entered into a Letter
Agreement (the “Agreement”) with Donohoe Advisory Services, Inc. (“Donohoe”) to provide assistance to the Company
in support of the Company’s efforts to obtain a listing on a national securities exchange. Under the terms of the Agreement, the
Company shall pay Donohoe an initial retainer in the amount of $17,500 and if successful a “success fee” in the amount
of $10,000 in cash or registered shares of common stock. During the three months ended September 30, 2022, the Company requested
and received the balance of the retainer as it does not anticipate requiring any additional assistance from Donohoe.
On February 5, 2022, the Company entered into a Fee
Agreement (the “Agreement”) for the preparation of a registration statement on Form 1-A and all follow up correspondence
with the appropriate regulatory agencies. As of December 31, 2022, the Company has initiated the work to be completed under the Agreement
but is awaiting additional information from its client.
During the three months ended December 31, 2022, the Company provided consulting
services to another publicly traded entity by preparing its quarterly and annual reports. The Company has been paid in full for these
services.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
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 December 31, 2022 and the results of operations,
changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and six months
ended December 31, 2022 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, 2022 as filed with the Securities and
Exchange Commission on October 13, 2022. 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, 2022, and updated, as necessary, in this Quarterly Report on
Form 10-Q.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
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, 2022 filed with the Securities and Exchange Commission
on October 13, 2022.
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 $69 of
cash and cash equivalents at December 31, 2022 of which none was held in foreign bank accounts and $0 was not covered by FDIC insurance
limits as of December 31, 2022.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Accounts
Receivable and Allowance for Doubtful Accounts:
Accounts
receivable are recorded at invoiced amounts 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 December 31, 2022 and June 30, 2022, 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 December 31, 2022 and June 30, 2022, the Company had $5,000 and $5,000 in accounts receivable,
respectively. For the six months ended December 31, 2022, one customer accounted for 100% of accounts receivable.
Concentration
of Revenues – For the six months ended December 31, 2022, the Company generated $14,000 in revenue from one customer. For
the six months ended December 31, 2021, the Company generated $95,000 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 December 31, 2022 and June 30, 2022, the Company had $17,533 and $18,380 in loans receivable,
other. At December 31, 2022 and June 30, 2022, 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.
Concentration
of Notes Receivable – The Company had notes receivable of $350,000 and $350,000 at December 31, 2022 and
June 30, 2022, respectively. At December 31, 2022, one borrower accounted for 100% of the Company’s total notes
receivable.
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 December 31, 2022, 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 six months ended December 31, 2022 and 2021
(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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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 overtime.
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 six months ended December 31, 2022 and 2021
(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 ASC 718 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 six months ended December 31, 2022 and 2021, the Company excluded 33,600,000,000 and
1,500,660,030, respectively, shares relating to convertible notes payable to third parties and shares issuable upon conversion of the Company’s Series L Preferred stock.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Recently
Enacted Accounting Standards
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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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.
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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
D – ACQUISITION OF TCBM HOLDINGS, LLC (cont’d)
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 December 31, 2022 were as follows:
SCHEDULE
OF GOODWILL
| |
| | |
Balance as of November 30, 2019 | |
$ | 1,346,646 | |
Additions and adjustments | |
| (1,346,646 | ) |
Balance as of December 31, 2022 | |
$ | - | |
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
D – ACQUISITION OF TCBM HOLDINGS, LLC (cont’d)
For the six months ended December 31, 2022 and year
ended June 30, 2022, the Company recorded an impairment of goodwill in the amount of $0 and $473,323, 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
| |
December 31, 2022 | | |
June 30, 2022 | |
| |
| | |
| |
Property and Equipment | |
$ | 36,363 | | |
$ | 36,363 | |
Less: accumulated depreciation | |
| (16,015 | ) | |
| (13,419 | ) |
Total | |
$ | 20,348 | | |
$ | 22,944 | |
|
(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 six months ended December 31, 2022 and 2021 was $2,596 and $2,598, respectively. |
NOTE
F – NOTE RECEIVABLE
SCHEDULE
OF NOTE RECEIVABLE
| |
December 31, 2022 | | |
June 30, 2022 | |
| |
| | |
| |
Note receivable- Tersus Power, Inc. | |
$ | 350,000 | | |
$ | - | |
Total | |
$ | 350,000 | | |
$ | - | |
|
(i) |
On
December 14, 2021, the Company, was issued a Senior Secured Promissory Note (the “Note”) in the principal amount of $500,000
by Tersus Power, Inc. (the “Borrower”). The Note shall bear interest at 5% annually, be amortized over 25 years and the
Borrower shall pay the full amount of principal and interest in one balloon payment on December 14, 2026 (the “Maturity Date”).
The Note is secured, through a Security Agreement, by all current and future assets of the Borrower. The Lender shall advance the
Borrower funds, up to $500,000, prior to the closing of the proposed merger between the Lender and the Borrower. The first tranche,
in the amount of $37,500, was advanced by the Lender on December 14, 2021. As of December 31, 2022, the Company has advanced the
Borrower $350,000. |
|
(ii) |
The
convertible note receivable is considered available for sale debt securities with a private company that is not traded in active
markets. Since observable price quotations were not available at acquisition, fair value was estimated based on cost less an appropriate
discount upon acquisition. The discount of each instrument is accreted into interest income over the respective term as shown within
the Company’s Condensed Consolidated Statements of Operations. |
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
G – 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
| |
| December 31, 2022 | | |
| June 30, 2022 | |
| |
| | | |
| | |
Pursuant to January 26, 2018 Board of Directors Service Agreement | |
$ | 18,074 | | |
$ | - | |
Total | |
$ | 18,074 | | |
$ | - | |
For the six months ended December 31, 2022 and year ended June 30, 2022, 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, 2022 | |
| - | | |
| - | | |
| - | |
Officer’s/director’s compensation for the six months ended December 31, 2022 (i) | |
| - | | |
| 40,000 | | |
| 40,000 | |
Cash compensation | |
| | | |
| (21,926 | ) | |
| (21,926 | ) |
Balances at December 31, 2022 | |
$ | - | | |
$ | 18,074 | | |
$ | 18,074 | |
|
(i) |
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). |
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
H – NOTES PAYABLE, THIRD PARTIES
Notes
payable to third parties consist of:
SCHEDULE
OF NOTES PAYABLE TO THIRD PARTIES
| |
December 31,
2022 | | |
June 30, 2022 | |
| |
| | |
| |
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 $0
and $0
at, December 31, 2022 and June 30, 2022, respectively (i) | (i) |
| 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 $0
and $0
at December 31, 2022 and June 30, 2022, respectively (ii) | (ii) |
| 200,000 | | |
| 200,000 | |
Convertible Promissory Note dated January 13, 2022 payable to Sixth Street Lending, LLC (“Sixth
Street”), interest at 8%,
due January
13, 2023 with unamortized debt discount of $0
and $23,613
at, December 31, 2022 and June 30, 2022, respectively (iii) | (iii) |
| - | | |
| 43,750 | |
Convertible Promissory Note dated February 4, 2022 payable to Sixth Street
Lending, LLC (“Sixth Street”), interest at 8%,
due February
4, 2023 with unamortized debt discount of $0
and $26,250
at, December 31, 2022 and June 30, 2022, respectively (iv) | (iv) |
| - | | |
| 43,750 | |
Totals | |
$ | 300,000 | | |
$ | 387,500 | |
(i) |
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 December 31, 2022, $100,000 principal plus $10,000 interest were
due. |
(ii) |
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 December 31, 2022, $200,000 principal plus $20,000
interest were due. |
|
|
(iii) |
On
January 13, 2022, the Company issued to Sixth Street Lending, LLC (the “Investor”) a Convertible Promissory Note (the
“Convertible Note”) in the principal amount of $43,750. The Convertible Note has a term of one (1) year (Maturity Date
of January 13, 2023) 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 January 14, 2022. On
July 14, 2022, the Company issued 111,111,111 shares of common stock with
a fair market value of $33,333 to the noteholder in satisfaction of $20,000 principal
against the Convertible Note. On July 15, 2022, the Company issued 212,500,000 shares
of common stock with a fair market value of $63,750 to the Investor in satisfaction
of $23,750 principal and $1,750 interest
against the Convertible Note. As of December 31, 2022, the Convertible Note was paid in full. |
|
|
(iv) |
On
February 4, 2022, the Company issued to Sixth Street Lending, LLC (the “Investor”) a Convertible Promissory Note (the
“Convertible Note”) in the principal amount of $43,750. The Convertible Note has a term of one (1) year (Maturity Date
of February 4, 2023) 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 February 7, 2022. On
August 8, 2022, the Company issued 379,166,667 shares of common stock with
a fair market value of $113,750 to the Investor in satisfaction of $43,750 principal
and $1,750 interest against the Convertible Note. As of December 31, 2022, the Convertible Note was paid in full. |
Income
from forgiveness of principal and interest on convertible notes payable consists of:
SCHEDULE OF INTEREST FROM FORGIVENESS OF NOTES
| |
December 31, 2022 | | |
June 30, 2022 | |
| |
| | |
| |
Forgiveness of Graphene Holdings, LLC principal and interest | |
| - | | |
| 449,293 | |
| |
| | | |
| | |
Total | |
$ | - | | |
$ | 449,293 | |
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
I - DERIVATIVE LIABILITY
The derivative liability at December 31, 2022 and
June 30, 2022 consisted of:
SCHEDULE OF DERIVATIVE LIABILITY
| |
December 31, 2022 | | |
June 30, 2022 | |
| |
| | |
| |
Convertible Promissory Notes payable to Tri-Bridge Ventures, LLC. Please see NOTE H – NOTES PAYABLE, THIRD PARTIES for further information | |
$ | 568,684 | | |
$ | 1,023,744 | |
Convertible Promissory Note payable to Sixth Street Lending, LLC. Please see NOTE H – NOTES PAYABLE, RELATED PARTIES for further information | |
| - | | |
| 249,055 | |
Total derivative liability | |
$ | 568,684 | | |
$ | 1,272,799 | |
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 December 31, 2022, and June 30, 2022 using the Black Scholes option pricing model. Assumptions
used for the calculation of the derivative liability of the Notes at December 31, 2022 were (1) stock price of $0.0001 per share, (2)
conversion price of $0.00005 per share, (3) term of 6 months, (4) expected volatility of 502.26%, and (5) risk free interest rate of 4.76%.
Assumptions used for the calculation of the derivative liability of the Notes at June 30, 2022 were (1) stock price of $0.0004 per share,
(2) conversion prices ranging from $0.0001 to $0.000122 per share, (3) term of 6 months to 8 months, (4) expected volatility of 305.48%,
and (5) risk free interest rate of 0.05% to 0.34%.
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 EMBEDDED DERIVATIVE LIABILITY
MEASURED AT FAIR VALUE USING SIGNIFICANT UNOBSERVABLE INPUTS
| |
Level 3 | |
| |
| |
Balance at June 30, 2022 | |
$ | 1,272,799 | |
Additions | |
| - | |
(Gain)Loss | |
| (544,017 | ) |
Change resulting from conversions and payoffs | |
| (160,098 | ) |
Balance at December 31, 2022 | |
$ | 568,684 | |
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - 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 December 31, 2022 and June 30, 2022, 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 December 31, 2022 and June 30, 2022, the Company had 0 and 0 shares issued and outstanding, respectively.
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 December 31, 2022 and June 30, 2022, the Company had 0 and 0 shares issued and outstanding, respectively.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
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 December
31, 2022 and June 30, 2022, 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 December
31, 2022 and June 30, 2022, 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 December
31, 2022 and June 30, 2022, 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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
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.
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 December 31, 2022 and June
30, 2022, the Company had 276 and 276 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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
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.”
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]
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
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.
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 six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - 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.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
(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.
At
December 31, 2022 and June 30, 2022, the Company is authorized to issue 14,991,000,000 and 14,991,000,000 shares of Class A Common Stock,
respectively. At December 31, 2022 and June 30, 2022, the Company has 14,488,440,097 and 13,785,662,319 shares issued and outstanding,
respectively. At December 31, 2022 and June 30, 2022, the Company is authorized to issue 4,000,000 and 4,000,000 shares of Class B Common
Stock, respectively. At December 31, 2022 and June 30, 2022, the Company has 0 and 0 shares issued and outstanding, respectively.
Common
Stock, Preferred Stock and Warrant Issuances
For
the six months ended December 31, 2022 and year ended June 30, 2022, the Company issued and/or sold the following unregistered securities:
Common
Stock:
Common
stock issued during the six months ended December 31, 2022
On
July 14, 2022, the Company issued 111,111,111 shares of common stock with a fair market
value of $33,333 to a noteholder in satisfaction of $20,000
principal against the note dated January 13, 2022.
On July
15, 2022, the Company issued 212,500,000 shares of common stock with a fair market
value of $63,750 to a noteholder in satisfaction of $23,750 principal
and $1,750 interest against the note dated January 13, 2022.
On
August 8, 2022, the Company issued 379,166,667 shares of common stock with a fair
market value of $113,750 to a noteholder in satisfaction of $43,750
principal and $1,750 interest against the note dated February 4, 2022.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
Common
stock issued during the year ended June 30, 2022
On
November 17, 2021, the Company issued 40,070,137 shares of common stock with a fair market value of $144,252 to a noteholder in satisfaction
of $16,500 principal and $3,535 interest against the note dated December 17, 2019.
On
November 17, 2021, the Company issued 126,674,824 shares of common stock with a fair market value of $456,029 for a cashless exercise
of a warrant.
On
December 13, 2021, the Company issued 50,000,000 shares of common stock to an accredited investor with a fair market value of $135,000
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 14, 2021, the Company issued 60,000,000 shares of common stock to an accredited investor with a fair market value of $150,000
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 15, 2021, the Company issued 50,000,000 shares of common stock to an accredited investor with a fair market value of $125,000
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 16, 2021, the Company issued 66,700,000 shares of common stock to an accredited investor with a fair market value of $173,420
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 17, 2021, the Company issued 50,000,000 shares of common stock to an accredited investor with a fair market value of $124,000
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 21, 2021, the Company issued 33,333,333 shares of common stock to an accredited investor with a fair market value of $73,333
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 22, 2021, the Company issued 66,700,000 shares of common stock to an accredited investor with a fair market value of $133,400
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 22, 2021, the Company issued 55,000,000 shares of common stock with a fair market value of $110,000 to a noteholder in satisfaction
of $68,750 principal and $2,750 interest against the note dated June 17, 2021.
On
December 28, 2021, the Company issued 50,000,000 shares of common stock to an accredited investor with a fair market value of $90,000
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
December 29, 2021, the Company issued 66,700,000 shares of common stock to an accredited investor with a fair market value of $113,390
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
January 3, 2022, the Company issued 66,700,000 shares of common stock to an accredited investor with a fair market value of $120,060
as per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
January 3, 2022, the Company issued 50,000,000 shares of common stock to an accredited investor with a fair market value of $90,000 as
per terms of the Securities Purchase Agreement under the Company’s Regulation A offering.
On
January 18, 2022, the Company issued 55,108,596 shares of common stock with a fair market value of $93,685 to a noteholder in satisfaction
of $48,750 principal and $1,950 interest against the note dated July 12, 2021.
On
March 3, 2022, the Company issued 500,000,000 shares of common stock with a fair market value of $650,000 to an Accredited Investor (the
“Investor”) to replace shares of common stock the Investor had returned to the Company in prior periods.
On
March 3, 2022, the Company issued 600,000,000 shares of common stock with a fair market value of $780,000 to an Accredited Investor (the
“Investor”) to replace shares of common stock the Investor had returned to the Company in prior periods.
On
March 15, 2022, the Company issued 163,548,387 shares of common stock with a fair market value of $81,774 to a noteholder in satisfaction
of $48,750 principal and $1,950 interest against the note dated September 9, 2021.
On
April 29, 2022, the Company issued 335,833,333 shares of common stock with a fair market value
of $67,167 to a noteholder in satisfaction of $38,750 principal
and $1,550 interest against the note dated October 27, 2021.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
Preferred
Stock:
Preferred
stock issued during the six months ended December 31, 2022
None
Preferred
stock issued during the year ended June 30, 2022
On
February 15, 2022, the Company issued 21 shares of the Company’s Series L Preferred Stock to the Company’s sole
officer and director as reimbursement for returning 1,028,030,000 shares of common stock to the Company.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
J - CAPITAL STOCK (cont’d)
Warrants
and Options:
None.
As
of December 31, 2022, the Company had no outstanding warrants or options.
NOTE
K - COMMITMENTS AND CONTINGENCIES
Occupancy
As of December 31, 2022,
the Company maintains office space 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 commenced with the
third calendar quarter of 2021 (first fiscal quarter of 2022).
NOTE
L - 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 December 31, 2022, we had an accumulated deficit
of $166,320,069. For the six months ended December 31, 2022, we had cash used in operating activities of $324,425. 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).
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For
the six months ended December 31, 2022 and 2021
(Unaudited)
NOTE
L - GOING CONCERN UNCERTAINTY (cont’d)
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.
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
M - SUBSEQUENT EVENTS
During the first quarter of calendar 2023, the Company received notification
from FINRA that the proposed corporate action submission, as noted within the Tersus Power Share Exchange Agreement, had passed the allotted
time for the corporate action to become effective. The Company is in the process of refiling the same corporate action. The delay on the
corporate action becoming effective has required Tersus Power to seek alternate financing and to reevaluate its business plan. There is
no guarantee that the corporate action will become effective, and as such, there is no guarantee that the transaction with Tersus Power
will be closed.