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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip code) |
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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As of June 9, 2023, the registrant had
GLOBAL ARENA HOLDING, INC.
TABLE OF CONTENTS
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Item 1. Financial Statements
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March 31,
2023 |
December 31,
2022 |
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(unaudited)
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ASSETS
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Current Assets:
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Cash and cash equivalents
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Prepaid Expense |
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Total current assets
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Deposits for proposed acquisitions
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TOTAL ASSETS
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current Liabilities:
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Accounts payable
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Due to related party |
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Accrued expenses
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Convertible promissory notes payable,
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net of debt discount of $
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Promissory notes payable
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Deferred revenue
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Derivative liability
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Total current liabilities
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STOCKHOLDERS' DEFICIT
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Global Arena Holdings, Inc.
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Preferred stock, $
authorized;
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Series B preferred stock;
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Series C preferred stock; |
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Common stock, $
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Additional paid-in capital
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Accumulated deficit
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Total Global Arena Holdings, Inc. stockholders’ deficit
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Noncontrolling interest
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Total stockholders’ deficit
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TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT
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$ |
$ |
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Three Months Ended March 31, |
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2023
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2022
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Revenues:
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Services
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$ | $ | ||||||
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Operating expenses:
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Salaries and benefits
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Marketing and advertising
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Software development
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Professional fees
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General and administrative
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Printing
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Total operating expenses
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Loss from operations
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Other expenses:
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Interest expense and financing costs
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Other income (expense) |
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Change in fair value of derivative liability
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Gain on settlement of debt
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Total other expenses
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Income (loss) before provision for taxes
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Provision for income taxes
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Net loss
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Net loss attributed to noncontrolling interest
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Net loss attributed to Global Arena Holding, Inc.
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$ | ( |
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Weighted average shares outstanding - basic and diluted
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Earnings (loss) per share - basic and diluted
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$ | ( |
) | $ | ( |
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| $ | ( |
) | $ | ( |
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Series B Preferred Stock |
Series C Preferred Stock |
Common Stock |
Additional Paid-in |
Accumulated |
Total Global Stockholders' |
Noncontrolling |
Total Stockholders’ |
|||||||||||||||||||||||||||||||||||||
|
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
Interest |
Deficit |
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Balance, December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock for convertible debt and accrued interest |
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- |
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Conversion of warrants |
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Allocated value of warrants and beneficial conversion |
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Net loss |
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Balance, March 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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GLOBAL ARENA HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (continued)
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Series B Preferred Stock |
Series C Preferred Stock |
Common Stock |
Additional Paid-in |
Accumulated |
Total Global Stockholders' |
Noncontrolling |
Total Stockholders’ |
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Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
Interest |
Deficit |
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Balance, December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
$ |
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$ |
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Issuance of common stock for convertible debt and accrued interest |
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Issuance of common stock for debt settlement |
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Allocated value of warrants and beneficial conversion feature related to issuance of convertible debt |
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Net loss |
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Balance, March 31, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
) |
$ |
( |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
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Three Months Ended March 31, |
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2023
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2022
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OPERATING ACTIVITIES:
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Net loss
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$ | ( |
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Adjustments to reconcile net loss to
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net cash used in operating activities: |
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Amortization of debt discount
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Change in fair value of derivative liability
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Non-cash expense associated with warrant |
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Change in assets and liabilities:
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Deferred revenue
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Prepaid Expense |
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Accounts payable
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Accrued expenses
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Net cash used in operating activities
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INVESTING ACTIVITIES: |
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| Payment of deposit for acquisition | ||||||||
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FINANCING ACTIVITIES:
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Proceeds from convertible promissory notes payable
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| Proceeds from note payable | ||||||||
| Repayment of note payable | ( |
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Repayment of convertible promissory notes payable
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Proceeds from related party |
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Net cash used in financing activities
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
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CASH AND CASH EQUIVALENTS, BEGINNING BALANCE
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CASH AND CASH EQUIVALENTS, ENDING BALANCE
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$ | $ | ||||||
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CASH PAID FOR:
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Interest
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$ | $ | ||||||
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Income taxes
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$ | $ | ||||||
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NON-CASH INVESTING AND FINANCING ACTIVITIES:
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Allocated value of warrants and beneficial conversion features related to debt
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$ | $ | ||||||
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Debt converted to common stock
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$ | $ | ||||||
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Series C Preferred Stock Issuance |
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NOTE 1 - ORGANIZATION
Organization and Business
Global Arena Holding, Inc. (formerly, “Global Arena Holding Subsidiary Corp.”) (“GAHI”), was formed in February 2009, in the state of Delaware. GAHI and its subsidiaries (the “Company”) was previously a financial services firm and currently is focusing on the following businesses through these subsidiaries:
On February 25, 2015, Global Election Services, Inc. (GES) formed on February 25, 2015, provides comprehensive technology-enabled paper absentee/mail ballot and internet election services to organizations such as craft and trade organizations, labor unions, political parties, co-operatives and housing organizations, associations and professional societies, universities, and political organizations.
GES has developed proprietary election software for a data storage and retrieval registration system to determine voter eligibility and prevent duplicate votes with In-Person digital signature capture, as well as proprietary election software for scanning/tabulation utilizing advanced OMR/OCR/Barcode imaging software featuring de-skewing, de-speckling and image correction. This system provides three types of audit capabilities. The hardware includes high speed optical scanners that are hard lined to a computer with all Wi-Fi disabled so the entire tabulation utilizing process occurs offline, eliminating the opportunity for hacking. GES is also working with multiple vendors and has made investments in companies that are developing Blockchain Technology for a data storage and retrieval registration system, tabulation of paper Absentee/Mail Ballots; and internet voting.
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase
On May 20, 2015, the Company incorporated a new wholly owned entity in the State of Delaware called “GAHI Acquisition Corp.” This entity was incorporated at the time to be the merger subsidiary for the acquisition of Blockchain Technologies Corp. (BTC) and other software system development.
On May 20, 2015, the Company entered into an agreement and plan of merger with BTC. Under this agreement, BTC would have merged with GAHI Acquisition, and GAHI Acquisition, would have been the surviving corporation. As consideration for the merger, the Company was to reserve a number of shares equal to 1/3 the total issued and outstanding of the Company to be issued to BTC shareholders at closing. On October 20, 2015, the parties agreed to extend the closing date of the merger to December 15, 2015. This agreement expired on December 15, 2015.
Concurrently, on October 20, 2015, the Company paid $
On March 28, 2017, the United States Patent Office issued patents to BTC covering Election Intellectual Property, US Patent #9,608,829, Issued March 28, 2017. As an equity shareholder in BTC only, GAHC and GES have not used the BTC US Patent. Any use of the patent would require a new negotiation, and new contract with BTC.
9
The Company has determined that the initial investment of Blockchain Technologies Corp. will be written off. The Company’s Board of Directors cancelled all transactions previously proposed but never acted on concerning GAHI Acquisition. GAHI Acquisition will remain a subsidiary for the exclusive use of any future transactions involving Blockchain Technologies Corporation.
The Company, GAHI, and GES do not trade crypto currency, nor participate in Initial Coin Offerings.
On June 15, 2019, GES entered into a Term Sheet to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members. The Company was formed to explore opportunities in the oil, gas, mineral and energy business. Tidewater Energy Group Inc. has
Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses from operations and cash flow deficits from its operations since inception and has had to continually borrow to continue operating. In addition, certain of the Company’s debt is in default as of March 31, 2023. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with their ability to raise additional funds that the Company should be able to continue as a going concern.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.
10
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp and Tidewater Energy Group, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.
Noncontrolling Interest
The Company follows ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.
The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss.
Basic and Diluted Earnings (Loss) Per Share
Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.
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March 31, |
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Options |
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Warrants |
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Convertible notes |
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Total |
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Management 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 certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.
11
Convertible Debt
Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital. The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.
Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.
The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives pursuant to ASC 815, Derivatives and Hedging. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.
The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.
Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.
12
Fair Value Measurements
The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:
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• |
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. |
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Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
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Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Cash, accounts payable and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.
Promissory notes payable and convertible promissory notes payable – Promissory notes payable and convertible promissory notes payable are recorded at amortized cost. The carrying amount approximates their fair value.
The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.
The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2023 and December 31, 2022.
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Fair Value |
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As of |
Fair Value Measurements at |
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Description |
March 31, 2023 |
March 31, 2023 Using Fair Value Hierarchy |
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Level 1 | Level 2 | Level 3 | |||||||||||||
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Beneficial conversion feature |
$ | $ | $ | $ | ||||||||||||
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Total |
$ | $ | $ | $ | ||||||||||||
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Fair Value |
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As of |
Fair Value Measurements at |
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Description |
December 31, 2022 |
December 31, 2022 Using Fair Value Hierarchy |
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Level 1 | Level 2 | Level 3 | |||||||||||||
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Beneficial conversion feature |
$ | $ | $ | $ | ||||||||||||
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Total |
$ | $ | $ | $ | ||||||||||||
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13
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
In June 2018, the FASB issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements as the Company did not have any lease arrangements that were subject to this new pronouncement.
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)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluation the impact this ASU will have on its consolidated financial statements.
14
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
NOTE 3 - ACQUISITION DEPOSITS
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase
On June 15, 2019, GES entered into a Term Sheet, and Common Stock Purchase Agreement to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members. The Company was formed to explore opportunities in the oil, gas, mineral, and energy business. Tidewater Energy Group Inc. has
NOTE 4 - ACCRUED EXPENSES
Accrued expenses at March 31, 2023 and December 31, 2022 consisted of the following:
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March 31, |
December 31, |
||||||
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2023 |
2022 |
||||||
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Accrued interest |
$ | $ | ||||||
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Accrued compensation |
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Other accrued expenses |
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$ | $ | ||||||
15
NOTE 5 - PROMISSORY NOTES PAYABLE
In March 2014, the Company issued two promissory notes for a total of $
In April 14, 2022, the Company entered into an revenue share agreement with EBF Holdings, LLC for a total of $
In October 6, 2022, the Company entered into an revenue share agreement with EBF Holdings, LLC for a total of $
In August 22, 2022, the Company entered into an Purchase and Sale of Future Receipts Agreement with Family Business Fund LLC for a total of $
In October 5, 2022, the Company entered into an revenue share agreement with Capytal.com for a total of $
In November 29, 2022, the Company entered into promissory note agreement with Duck Duck Spruce for a total of $
In December 31, 2022, the Company entered into promissory note agreement with a shareholder for a total of $
In January 31, 2023, the Company entered into an Purchase and Sale of Future Receipts Agreement with Family Business Fund LLC for a total of $
NOTE 6 - CONVERTIBLE PROMISSORY NOTES PAYABLE
Convertible promissory notes payable at March 31, 2023 and December 31, 2022 consist of the following:
16
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March 31, |
December 31, |
|||||||
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2023 |
2022 |
|||||||
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Convertible promissory notes with interest rates ranging from |
$ |
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$ | |||||
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Convertible promissory notes with interest rates ranging from |
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Convertible promissory notes with interest at |
||||||||
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Total convertible promissory notes payable |
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Unamortized debt discount |
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) | ( |
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Convertible promissory notes payable, net discount |
( |
) | ||||||
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Less current portion |
( |
) | ( |
) | ||||
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Long-term portion |
$ | $ | ||||||
A rollforward of the convertible promissory notes payable from December 31, 2022 to March 31, 2023 is below:
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Convertible promissory notes payable, December 31, 2022 |
$ | |||
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Issued for cash |
||||
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Issued for original issue discount |
( |
) | ||
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Repayment for cash |
( |
) |
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Conversion of common stock |
( |
) | ||
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Debt discount related to new convertible promissory notes |
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|||
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Amortization of debt discounts |
||||
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Convertible promissory notes payable, March 31, 2023 |
$ |
The per share conversion price into which Principal Amount and interest (including any Default Interest) under the Notes shall be convertible into shares of Common Stock hereunder (the "Conversion Price") shall equal $
NOTE 7 - DERIVATIVE FINANCIAL INSTRUMENTS
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March 31, |
December 31, |
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2023 |
2022 |
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Risk-free interest rate |
% | % | ||||||
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Expected life of the options (Years) |
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Expected volatility |
% | % | ||||||
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Expected dividend yield |
% | % | ||||||
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||||||||
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Fair Value |
$ | $ | ||||||
A roll-forward of the derivative liability from December 31, 2022 to March 31, 2023 is below:
|
Derivative liabilities, December 31, 2022 |
$ | |||
|
Relieved with debt settlement agreement |
||||
|
Change in fair value of derivative liabilities |
||||
|
Derivative liabilities, March 31, 2023 |
$ |
17
NOTE 8 - STOCKHOLDERS’ DEFICIT
Series B Preferred Stock
Pursuant to the Company’s Certificate of Incorporation, the Company has authorized
During the year ended December 31, 2017, the Company sold
Series C Preferred Stock
Pursuant to Board of Director minutes dated July 27, 2022, the Company filed a Certificate of Designation with the State of Delaware authorizing the creation of
A. Designation and Number. A series of the preferred stock, designation the “Series C Preferred Stock,” $
B. Dividend Provisions. None
C. Conversion Rights. None
D. Preemptive Rights. None
E Voting Rights. Each share of Series C Preferred Stock shall entitle the holder thereof to cast
On July 27, 2022, the Company authorized the issuance of
18
The Series C Preferred Shares were issued on July 29, 2022
Common Stock
During the three months ended March 31, 2023, the Company issued
During the three months ended March 31, 2022, the Company issued
Option Activity
A summary of the option activity is presented below:
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Weighted |
Weighted |
Aggregate |
||||||||||||
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Outstanding, December 31, 2022 |
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Outstanding, March 31, 2023 |
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Exercisable, March 31, 2023 |
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The exercise price for options outstanding at March 31, 2023 is as follows:
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Outstanding and Exercisable |
||||
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Number of |
Exercise |
|||
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|
$ | |||
|
|
||||
Warrant Activity
A summary of warrant activity is presented below:
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Number of |
Weighted |
Weighted |
Aggregate |
||||||||||||
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Outstanding, December 31, 2022 |
||||||||||||||||
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Granted |
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Exercised |
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) |
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Forfeited/Canceled |
( |
) |
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Outstanding, March 31, 2023 |
||||||||||||||||
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Exercisable, March 31, 2023 |
|
|||||||||||||||
19
The exercise price for warrants outstanding at March 31, 2023 is as follows:
|
Outstanding and Exercisable |
||||
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Number of |
Exercise |
|||
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Warrants |
Price |
|||
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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|||
During the three months ended March 31, 2023, the Company issued a total of
• Expected life of
• Volatility of
• Dividend yield of
• Risk free interest rate of
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.
On December 26, 2017, the Company entered into a settlement agreement with a prior attorney with regards to outstanding legal fees owed. Pursuant to this settlement agreement, the Company paid $
On October 16, 2020, the Company’s subsidiary, Tidewater Energy Group Corp. was named as a defendant in a lawsuit filed in District Court in and For Tulsa County, State of Oklahoma, CJ-2020-3172. On January 13, 2021, the plaintiffs added the Company to the lawsuit. The plaintiffs are seeking damages, disgorgement and specific performance relief relating to a Purchase and Sale Agreement to purchase all of the membership interests in Foster Energy. The Company has obtained counsel to dispute the charges. On March 18, 2021, the Company filed a motion to dismiss and brief in support. The Company asserted that the plaintiffs’ claims are entirely without merit as the Company was not a party to the Purchase and Sale Agreement or the related non-disclosure agreement. Tidewater concurrently filed a motion to dismiss based on legal remedies available to Tidewater. On December 7, 2022 the case was dismissed with each party bearing their own attorney fees and costs.
20
On March 31, 2022, the Company was named as a defendant in a lawsuit filed in the Supreme Court of the State of New York, Index No. 651531/2002. The plaintiff has alleged breach of contract and unjust enrichment. The plaintiff is seeking damages relating to a plaintiff’s prior employment agreement with the Company. The Company has obtained counsel to dispute the charges.
NOTE 10 - AGREEMENTS
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase
On May 13, 2019, the Company entered into a joint venture agreement with Voting Portals, LLC (VP), a Florida limited liability company. Pursuant to this agreement, the joint venture will be making use of the VP online e-voting web portal solutions and proprietary e-voting software programs to service and fulfill GES’s clients’ online elections and other e-voting events pursuant to the terms of the agreement, as well as any other ventures and relationships agreed to pursuant to the goals of the agreement. The Agreement was amended and as part of this agreement, the Company will be issuing
On January 14, 2022, GES entered into an Independent Consulting Agreement (ICA) with Magdiel Rodriquez. Under the terms of the ICA Magdiel Rodriquez will receive
On June 27, 2019, Blockchain Valley Ventures and GES signed an amended agreement calling for a $
21
GES made payments of $25,000 CHF and received the working paper primarily covering the following matters:
|
|
• |
Development and facilitation of an extended workshop with relevant and best in class third party blockchain technology companies such as Phoenix Systems AG, Securosys AG and others as well as any subject matter expert to be invited by Global Election Services Inc. |
|
|
• |
Development of a high-level technology solution architecture and its requirements for the blockchain based voting registration platform with inputs from third party blockchain technology. |
|
|
• |
Documentation of the results of a) and b) in order to provide the basis of the technical development of the platform. |
|
|
• |
Development of an implementation recommendation with respect to Voting on the Blockchain Platform. |
|
|
• |
Legal facilitation with respect to outside tax and legal advisors in connection with compliance with local and international regulation. |
|
|
• |
Project Management during the engagement. |
The Working Paper discusses a high-level envisaged Blockchain platform, including a foundational flowchart, and implementation recommendation; BVV is a Crypto Valley, Switzerland based venture capital firm who consists of highly successful entrepreneurs, finance experts, blockchain technology experts and ICO experienced analysts and consultants. The documents created will be used by GES, to begin to create a Minimal Viable Product. This Product, along with GES licensing rights on GES existing Registration and Tabulation Software will be owned by GES. The Working Paper was completed in 2022.
GES Investment in TrueVote Inc.
On June 15, 2019, GES entered into a Term Sheet, and Common Stock Purchase Agreement to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $
The TrueVote Voting System will be based on traditional, proven database methodologies and layered with a “checksum” that is posted on the blockchain, proving all data is immutable and unalterable.
True Vote is directed by Brett Morrison recently the Director of Enterprise Information Systems at SpaceX. Brett was as an e-commerce pioneer, getting brands online and creating a new channel for sales at the beginning of the e-commerce boom. Brett co-founded Onestop Internet in 2003 out of his garage and built the original e-commerce and warehouse management software that started the company. Throughout his time as Chief Technology Officer and Chief Innovation Officer at Onestop, he oversaw and managed its growth and architected and helped build the new Onestop 2.0 platform. Prior to Onestop, Brett co-founded one of the first photo sharing companies on the Internet, ememories.com, which was sold to PhotoWorks, one of the largest photo processing companies in the U.S. True Vote is also directed by Ped Hasid who graduated UCLA with Magna Cum Laude Honors in 2007. Ped later went on to cofound Block26, a venture vehicle for the DLT space established in 2014, leading the technology and investment strategy for the firm. Block26 to date has financed and incubated innovative projects that aim to enhance consumer adoption of DLT technology.
On June 15, 2019, GES entered into a Term Sheet to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES will invest $
22
2) Tidewater Energy Group Inc.
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members.
The Company was formed to explore opportunities in the oil, gas, mineral and energy business. Tidewater Energy Group Inc. has
3) GAHI Acquisition Corp.
On June 7, 2019, the Company’s second subsidiary, GAHI Acquisition Corp. (GAHI) was authorized by the Company’s Board of Directors to infuse an initial deposit of $
4) Other Corporate Matters
On February 2, 2022, Global Election Services, Inc. entered into a promissory note with Kim Kaminsky for the amount of $
On February 3, 2022, Global Election Services, Inc. entered into a promissory note with Tom Kivisto for the amount of $
On March 30, 2022, the Company entered into a convertible note with Robert Reyers for the amount of $
On March 30, 2022, the Company entered into a convertible note with Stanley Goldstein for the amount of $
On February 11, 2022, the Company entered into a
23
On February 2, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On February 3, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On March 30, 2022, the Company entered into a convertible note with an investor for the amount of $
On April 7, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On April 7, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On May 27, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On June 3, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On June 15, 2022, the Company entered into a
On August 23, 2022, the Company entered into a
On December 30, 2022, the Company entered into a
On January 31, 2023, the Company and a note holder entered into a settlement, beginning February 5, 2023 and on the fifth day of the next four (4) months thereafter, the Company shall secure a third party (a “Third Party Purchaser”) to purchase from Holder a minimum of Sixty Thousand Dollars ($60,000) of unpaid principal and accrued interest under the Note and on July 1, 2023 the Company shall secure a Third Party Purchaser to purchase from Holder all remaining unpaid principal and accrued interest under the Note with each such purchase to be allocated pro rata between the remaining unpaid principal and accrued interest. The Company has been working with the note holder on an ongoing basis to complete the terms of the settlement.
24
On January 26, 2023, the Company entered into a convertible note with 1800 Diagonal Lending, LLC for the amount of $
On January 31, 2023, the Company entered into a Loan agreement with Family Business Fund, LLC for the amount of $
On February 27, 2023, GES entered into a First Amendment to a Convertible Promissory Note originally dated December 20, 2019. The related Stock Purchase Agreement signed December 19, 2019, wherein GES received
On March 10, 2023, the Company entered into a convertible note with Thomas Kivisto for the amount of $
On March 7, 2023, the Company entered into a warrant purchase agreement with Cathleen Healey, for the purchase of up to
On March 8, 2023, the Company entered into a Media Consulting Agreement with Triple 8 Capital Corp (Media Consultant). The media consultant will provide consulting services in related to their operation and shall receive $
As part of TrueVote revised transaction, new GAHC warrants were issued to the Principals of True Vote Inc., Brett Morrison and Ped Hasid. The warrants were issued on February 27, 2023 and each individual is entitled to exercise the warrants to purchase a maximum of
On March 28, 2023, GES entered into a non- binding letter of intent with Enfield Exploration Corp., a corporation existing under the laws of the Provinces of British Columbia, Albert and Ontario, whereby Enfield will acquire the business of GES. The purchase price shall be the issuance of
NOTE 11 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the financials were issued.
Common Shares
On April 14, 2023, the Company issued restricted common shares at a per share price of $
|
Amount |
|
Name and position |
|
|
|
Thomas, Kivisto, Managing Director of Fortis Industria LLC. |
|
|
|
Court Consulting controlled by KiKi Vandeweghe – IC for GES consulting on corporate governance and union elections |
|
|
|
Emily Janish – IC on all IT issues for GES and the Company |
|
|
|
Ambassador Francisco – IC on European Union Elections |
|
|
|
Lee Thiam Seng – IC on Asia Elections |
|
|
|
James Moore – IC on Icon GES ballot design |
|
Amount |
Name and position |
25
On May 18, 2023, the Company sold a convertible promissory note in the principal amount of $
On June 1, 2023, GES sold a convertible promissory note in the principal amount of $
On June 6, 2023, GES sold a convertible promissory note in the principal amount of $
On June 6, 2023, GES sold a convertible promissory note in the principal amount of $
Litigation
On May 1, 2023, Brett Pezzuto and Christian Pezzuto filed a complaint in the United States District Court for the Southern District of New York (Civil Action No. 1:23-cv-03591) against the Company and GES for breach of contract for failures to pay monies owned pursuant to promissory notes and for not providing plaintiffs an opportunity to convert their promissory notes to common stock. The plaintiffs are asking to money damages in the aggregate amount of $
On May 22, 2023, Lim Chap Huat filed a Memorandum of Law in Support of Plaintiff’s Motion for Summary Judgment in Lieu of Complaint Pursuant to CPLR 3213 in the Supreme Court of the State of New York (Index No. 652474/2023) against the Company. The Memorandum of Law seeks summary judgment on a promissory note made by the Company in the principal amount of $
26
Forward-looking Statements
Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operation, as well as in certain other parts of this Quarterly Report on Form 10-Q (as well as information included in oral statements or other written statements made or to be made by the Company) that look forward in time, are forward-looking statements made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, expectations, predictions, and assumptions and other statements that are other than statements of historical facts. Although the Company believes such forward-looking statements are reasonable, it can give no assurance that any forward-looking statements will prove to be correct. Such forward-looking statements are subject to, and are qualified by, known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by those statements. These risks, uncertainties and other factors include, but are not limited to the Company’s ability to estimate the impact of competition and of industry consolidation and risks, uncertainties and other factors set forth in the Company’s filings with the Securities and Exchange Commission, including without limitation to our Annual Report on Form 10-K.
The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q.
Current GES Corporate Operations
GES has developed and deployed proprietary Registration software, which was designed specifically to authenticate and register voters. This proprietary software functions as a data storage and retrieval registration system by cross-referencing eligibility status within a control voter database. In a mail ballot election, the voter’s ID barcode, QR code, or signature on the Business Reply Envelope, can be scanned and the status of that voter is identified. If the voter is not eligible to vote or another ballot for that individual has already been registered in the system, that ballot is marked VOID and removed from the count. In an in-person election, the voter provides their name for look-up in the system. If they have not voted, a signature box pops up on the screen, the voter signs an electronic signature pad and the digital signature is captured next to their name. If a voter tries to vote more than once, an alert will pop up indicating that the voter has already registered, and the voter will not receive an additional ballot. Because we account for every single ballot, the system has multiple reporting options, which include the list of valid envelopes and list of voters whose ballot was void, detailing the reason. Once the voter is authenticated, the identifiers are removed to ensure a secret vote and the ballot is scanned for tabulation.
GES developed proprietary Scanning and Tabulation election software. This software features advanced OMR/OCR/Barcode scanning and tabulation system featuring de-skewing, de-speckling and image correction. The computer hardware was designed to run without Internet or Wi-Fi access and is hard wired, ensuring complete security. The system allows for triple-auditing capabilities, which are; electronically generated tabulation results, .jpeg imaging and storage, and the original physical ballot. This advancement gives GES the ability to tabulate elections faster and more efficiently. As experts in paper/mail ballot elections, GES began deploying this system in our elections in the third quarter of 2017 and it has been operating flawlessly.
In 2020 GES developed, built and implemented a propriety online election voting solution that is compliant with Title IV of the United States Department of Labor Office of Labor-Management Standards.
GES built the platform on one of the most secure global infrastructures Amazon Web Services (AWS) which is a comprehensive, evolving platform provided by Amazon that includes a mixture of infrastructure as a service (IaaS) platform as a service and packaged software (PaaS), and software as a service offerings (SaaS).
27
The platform enables GES to protect individual client data, including the ability to encrypt it, move it, and manage retention (if required). All data flowing across the global network interconnects with the GES secured data center and is automatically encrypted at the physical layer before it leaves our secured facilities. Additional encryption layers exist as well.
GES controls where our client data is stored, who can access it, and what resources your organization is utilizing at any given moment. Fine-grain identity and access controls combined with continuous monitoring for near real-time security information ensures that the right resources have the right access at all times, wherever your information is stored.
GES encryption software uses AES 256 with a cryptographic key using a RSA elliptic curve of 4096, which is used to encrypt the communication of the client and the GES server, as well all client data hosted in the server. A six-digit security code, delivered to the voter’s email address provided by the client, must be validated by the prospective voter in order to authenticate the identity of the voter before the voter may access the ballot. After validating the voter, the voter then votes anonymously, so that the identity of the voter and the ballot cast can never be matched.
The GES voting platform verifies that the users does not use the back and forward browser button, a safe mechanism against tampering. Distributed denial of service DDoS protection tools help secure websites and applications and prevent DDoS attacks, which bombard websites with traffic traditionally delivered via “botnets" that are created by networked endpoints connected via malware. The DDoS software protection provides always-on detection and automatic inline mitigations that minimize application downtime and latency.
Management believes there is an opportunity in conducting United States and Foreign Government Elections. GES’ senior Management teams’ primary business for 40 years has been mail/absentee ballot elections. The market for GES conducting paper/mail ballot elections grew exponentially in January of 2017, when first President Barack Obama, and then President Donald Trump designated U.S. Elections “Critical Infrastructure”. The effect of these Executive Orders was to refocus the Department of Homeland Security, and the Elections Assistance Commission to reenergize compliance on U.S. Government elections, and assist by making available resources such as intelligence, funding, training and best practices in election software and hardware, for all 50 States.
On March 23, 2018, President Trump signed the Consolidated Appropriations Act of 2018 into law, which included $380 million in Help America Vote Act (HAVA) grants for states to make election security improvements. Among the authorized uses of the grant funds is the replacement of voting equipment, specifically equipment that does not produce a paper record or that is determined to be at the end of its useful life. Recent published examples are:
| • | On December 20, 2019, President Trump signed the Consolidated Appropriations Act of 2020 into law. The Act includes $425 million in new HAVA funds made available. |
| • | In 2019, Hawaii (SB 166) allocated $789,598 for the purpose of a vote counting system contract. |
| • | In 2019, Georgia issued a $150 million bond package for the replacement of voting equipment statewide. The state also appropriated $12,840,000 from the General Fund for the purpose of financing projects and facilities for the Office of Secretary of State. |
| • | In 2019, Wyoming appropriated $7.5 million into an election readiness account (HB 21). The state's $3 million HAVA allocation will also be placed in this account, the majority of which will go toward replacing outdated voting equipment statewide. |
| • | In 2019, North Dakota enacted SB 2002, which included a one-time appropriation for voting equipment and electronic poll books statewide. The total amount of $11.2 million included $8.2 million in state funds and $3 million in HAVA funds. |
The opportunity for mail/absentee ballots became a page one story in 2020 due to the Coronavirus Pandemic. Subsequent accusations of voter fraud, compounded by President Trump declaring the 2020 U.S. election voting as rigged and fraudulent, has led to almost 40% of the U.S. Electorate believing the 2020 election was fraudulent.
28
On October 23, 2019, the Brennan Center has estimated that the national cost for some of the most critical election security measures to be approximately $ 2.2 Billion dollars over the next five years.
Every state has a vote by mail process right now. Voters may request an Absentee Mail Ballot from their County Board of Elections or a Vote by Mail ballot is sent. In either case, our proprietary registration and tabulation software has an immediate need. In the 2016 U.S. Presidential election, approximately 33 Million ballots were cast by mail making up about 25% of the votes. Most individuals think only of the Presidential election every four years as the Election. In reality, municipal Board of Elections throughout the U.S. are conducting elections annually for such elected positions as; Governor, Mayor, City Council, State Assembly, State Senate, Members of U.S. Congress (House every 2 years, Senate every 6) Civil and Criminal Justices, Sheriffs, School Boards, Village Trustees, etc. In short, most State and local municipal Board of Elections are in the market purchasing software and hardware every year.
In the U.S. there are 3,007 counties, 64 parishes, 19 organized boroughs, 11 census areas, 41 independent cities, and the District of Columbia, all of whom must buy updated Election Machines and Software. Each municipal county individually purchases election voting machines under the guidance of their own State’s Secretary of State.
The United States Government, through the Elections Assistance Commission, certifies election software and hardware for use in U.S. Government Elections. On February 10, 2021 the U.S. Election Assistance Commission (EAC) announced the adoption of the Voluntary Voting System Guidelines (VVSG) 2.0. These guidelines have been formulated to improve cyber security, accessibility and usability requirements in the U.S. voting process.
Election Software Developers and Manufactures may also qualify by meeting individual requirements for individual States in the United States.
GES has begun undertaking the following six step benchmarks to qualify for the updated U.S. certification and is also considering individual State certifications;
Step 1 - Voting System Testing, Testing current developed systems to U.S. Federal 2.0 Standards
Step 2 - Technical Data Package Review; Reviews submitted documents against documentation requirements of outside agencies, published standards, or U.S. specifications
Step 3 - Physical Configuration Audit; Examines the documentation of the system against the actual submitted system
Step 4 - System Integration Testing; Executes tests on all components of a system configured as if the system was deployed
Step 5 - Functional Configuration Audit; Examines submitted test data and conducts additional testing to verify submitted system hardware and software described in the documents submitted to the Elections Assistance Commission and the Department of Homeland Security
Step 6 - Security Testing; Performs vulnerability assessments and penetration analysis to assess system vulnerabilities
Trends and Uncertainties
The Company currently has minimal revenues and operations and is investigating potential businesses and companies for acquisition to create and/or acquire a sustainable business. Our ability to acquire or create a sustainable business may be adversely affected by our current financial conditions, availability of capital and/ or loans, general economic conditions which can be cyclical in nature along with prolonged recessionary periods, and other economic and political situations.
The Company has generated recurring losses and cash flow deficits from its operations since inception and has had to continually borrow to continue operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or generate positive cash flows from operations. As further described in “Liquidity and Capital Resources”, management believes that it will be successful in obtaining additional financing, from which the proceeds will be primarily used to execute its new operating plans. The Company plans to use its available cash and new financing to develop and execute its new business plan and hopefully create and maintain a self-sustaining business. However, the Company can give no assurances that it will be successful in achieving its plans or if financing will be available or, if available, on terms acceptable to the Company, or at all. Should the Company not be successful in obtaining the necessary financing to fund its operations, and ultimately achieve adequate profitability and cash flows from operations, the Company would need to curtail certain or all of its operating activities.
29
There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from our continuing operations except for the fair value change on derivative financial instruments and settlement on arbitration.
The rapid advances in computing and telecommunications technology over the past several decades have brought with them increasingly sophisticated methods of delivering administrating elections. Along with these advances, though, have come risks regarding the integrity and privacy of data, and these risks apply to election companies, falling into the general classification of cybersecurity. While it is not possible for anyone to give an absolute guarantee that data will not be compromised, when applicable, the Company shall utilize third-party service providers to secure the Company’s financial and personal data; the Company believes that third-party service providers provide reasonable assurance that the financial and personal data that they hold are secure.
Liquidity and Capital Resources
As of March 31, 2023, the Company has an accumulated deficit of $31,832,443 and a working capital deficit of $9,622,403. Our ability to continue as a going concern depends upon whether we can ultimately attain profitable operations, generate sufficient cash flow to meet our obligations, and obtain additional financing as needed.
For the three months ended March 31, 2023, the Company recorded net loss of $526,395. We recorded an amortization of debt discount of $91,329, and a change in fair value of derivative liability of $34,867, we had a decrease in accounts payable and Prepaid expenses of $750. We also had an increase in accrued expenses of 226,807. As a result, we had net cash used in operating activities of $149,246 for the three months ended March 31, 2023.
For the three months ended March 31, 2023, we received $93,700 as proceeds from the issuance of convertible promissory notes payable and repaid $47,615 of outstanding convertible note and we received $31,687 as proceeds from the issuance of notes payable and repaid $65,050 of outstanding note payable resulting in net cash provided by financing activities of $19,422 and we received a proceed of 6,700 from related party.
As of March 31, 2022, the Company has an accumulated deficit of $30,018,164 and a working capital deficit of $8,441,806. Our ability to continue as a going concern depends upon whether we can ultimately attain profitable operations, generate sufficient cash flow to meet our obligations, and obtain additional financing as needed.
For the three months ended March 31, 2022, the Company recorded net loss of $423,313. We recorded an amortization of debt discount of $69,419, a change in fair value of derivative liability of $48. had an decrease in accounts payable of $16,434 and increase in accrued expenses of $232,927 and a decrease in deferred revenue of $21,500. As a result, we had net cash used in operating activities of $(158,949) for the three months ended March 31, 2022.
For the three months ended March 31, 2022, we received $171,000 as proceeds from the issuance of convertible promissory notes payable and repaid $13,500 of outstanding convertible note resulting in net cash provided by financing activities of $157,500.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2023.
We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Based on this evaluation, our chief executive officer and chief financial officer have concluded such controls and procedures to be not effective as of September 30, 2022 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Evaluation of Changes in Internal Control over Financial Reporting
Our chief executive officer and chief financial officer have evaluated changes in our internal controls over financial reporting that occurred during the three months ended March 31, 2023. Based on that evaluation, our chief executive officer and chief financial officer, or those persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Important Considerations
The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time.
Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.
31
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.
On December 26, 2017, the Company entered into a settlement agreement with a prior attorney with regards to outstanding legal fees owed. Pursuant to this settlement agreement, the Company paid $25,000 on January 5, 2018, and $25,000 on February 5, 2018, and was required to pay an additional $200,000 during 2018. On December 14, 2020, parties amended the settlement agreement to state that the Company shall pay the prior attorney Two Hundred Nineteen Thousand, Five Hundred and Seventy Six Dollars ($219,576). On January 27, 2021, the Company made a payment of $5,000, on April 12, 2021, the Company made a payment of $15,000, on August 6, 2021, the Company made a payment of $5,000. On October 1, 2021, the Company made a payment of $5,000 and on November 12, 2021, the Company made a payment of $10,000. On January 7, 2022, the Company made a payment of $5,000 and on February 18, 2022, the Company made a payment of $5,000. On May 5,2022 the Company made payments of $5,000 and on June 22, 2022, the Company made payments of $5,000. On January 13, 2023, the Company made a payment of $5,000.
On October 16, 2020, the Company’s subsidiary, Tidewater Energy Group Corp. was named as a defendant in a lawsuit filed in District Court in and For Tulsa County, State of Oklahoma, CJ-2020-3172. On January 13, 2021, the plaintiffs added the Company to the lawsuit. The plaintiffs are seeking damages, disgorgement and specific performance relief relating to a Purchase and Sale Agreement to purchase all of the membership interests in Foster Energy. The Company has obtained counsel to dispute the charges. On March 18, 2021, the Company filed a motion to dismiss and brief in support. The Company asserted that the plaintiffs’ claims are entirely without merit as the Company was not a party to the Purchase and Sale Agreement or the related non-disclosure agreement. Tidewater concurrently filed a motion to dismiss based on legal remedies available to Tidewater. On December 7, 2022, the case was dismissed with each party bearing their own attorney fees and costs.
On March 31, 2022, the Company was named as a defendant in a lawsuit filed in the Supreme Court of the State of New York, Index No. 651531/2002. The plaintiff has alleged breach of contract and unjust enrichment. The plaintiff is seeking damages relating to a plaintiff’s prior employment agreement with the Company. The Company has obtained counsel to dispute the charges.
On May 1, 2023, Brett Pezzuto and Christian Pezzuto filed a complaint in the United States District Court for the Southern District of New York (Civil Action No. 1:23-cv-03591) against the Company and GES for breach of contract for failures to pay monies owned pursuant to promissory notes and for not providing plaintiffs an opportunity to convert their promissory notes to common stock. The plaintiffs are asking to money damages in the aggregate amount of $41,565,610. The Company and GES have obtained legal counsel to dispute the charges.
On May 22, 2023, Lim Chap Huat filed a Memorandum of Law in Support of Plaintiff’s Motion for Summary Judgment in Lieu of Complaint Pursuant to CPLR 3213 in the Supreme Court of the State of New York (Index No. 652474/2023) against the Company. The Memorandum of Law seeks summary judgment on a promissory note made by the Company in the principal amount of $200,000, plus interest at the rate of 12%, as well as attorney’s fees ad costs incurred, to recover unpaid monies owned by the Company. The Company has obtained legal counsel to dispute the charges.
Item 1A. Risk Factors
Not Applicable
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31,2023, the Company issued 67,081,217 shares of common stock for convertible notes of $72,202 and accrued interest of $24,243 and issued 23,603,891 shares of common stock in connection with a warrant agreement.
On July 27, 2022, the Company authorized the issuance of 480,000 shares Series C Preferred Stock at $.001 per share as follows:
120,000 Series C Preferred Shares - John Matthews, CEO/CFO
120,000 Series C Preferred Shares – Martin Doane, Director
120,000 Series C Preferred Shares – Facundo Bacardi, Director
120,000 Series C Preferred Share – Kathryn Weisbeck, Director of Public Relations/Marketing
The above shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.
33
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
The following is a complete list of exhibits filed as part of the Quarterly Report on Form 10-Q, some of which are incorporated herein by reference from the reports, registration statements and other filings of the issuer with the Securities and Exchange Commission, as referenced below:
Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS - XBRL Instance Document
101.SCH - XBRL Taxonomy Extension Schema Document
101.CAL - XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF - XBRL Taxonomy Extension Definition Linkbase Document
101.LAB - XBRL Taxonomy Extension Label Linkbase Document
101.PRE - XBRL Taxonomy Extension Presentation Linkbase Document
*Filed Herewith
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GLOBAL ARENA HOLDING, INC. a Delaware corporation | |
|
| |
Date: June 15, 2023 | By: | /s/ JOHN MATTHEWS |
|
| John Matthews |
|
| Chief Executive Officer Chief Financial Officer |
34
| 1. | I have reviewed this quarterly report on Form 10-Q of Global Arena Holding, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report, our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. |
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Debt discount on convertible promissory notes payable | $ 109,519 | $ 176,378 |
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 4,000,000,000 | 4,000,000,000 |
| Common stock, shares issued | 270,777,969 | 2,044,502,156 |
| Common stock, shares outstanding | 270,777,969 | 2,044,502,156 |
| Series B Preferred Stock | ||
| Preferred stock, shares authorized | 250,000 | 250,000 |
| Preferred stock, shares issued | 49,202 | 49,202 |
| Preferred stock, shares outstanding | 49,202 | 49,202 |
| Series C Preferred Stock | ||
| Preferred stock, shares authorized | 750,000 | 750,000 |
| Preferred stock, shares issued | 480,000 | 0 |
| Preferred stock, shares outstanding | 480,000 | 0 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) |
Series B Preferred Stock
Preferred Stock
|
Series B Preferred Stock |
Series C Preferred Stock
Preferred Stock
|
Series C Preferred Stock |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Global Stockholders' Deficit |
Noncontrolling Interest |
Total |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance preferred stock, shares at Dec. 31, 2021 | 49,202 | 0 | ||||||||
| Balance common stock, shares at Dec. 31, 2021 | 2,044,502,156 | |||||||||
| Balance at Dec. 31, 2021 | $ 49 | $ 0 | $ 2,044,502 | $ 19,951,515 | $ (29,594,851) | $ (7,598,785) | $ (23,042) | $ (7,621,827) | ||
| Issuance of common stock for convertible debt and accrued interest, shares | 46,505,216 | |||||||||
| Issuance of common stock for convertible debt and accrued interest, value | $ 46,505 | 11,627 | 58,132 | 58,132 | ||||||
| Allocated value of warrants and beneficial conversion feature related to issuance of convertible note | 96,352 | 96,352 | ||||||||
| Net loss | (423,313) | (423,313) | (423,313) | |||||||
| Balance preferred stock , shares at Mar. 31, 2022 | 49,202 | 0 | ||||||||
| Balance common stock, shares at Mar. 31, 2022 | 2,091,007,372 | |||||||||
| Balance at Mar. 31, 2022 | $ 49 | $ 0 | $ 2,091,007 | 20,059,494 | (30,018,164) | (7,867,614) | (23,042) | $ (7,890,656) | ||
| Balance preferred stock, shares at Dec. 31, 2022 | 49,202 | 49,202 | 480,000 | 0 | ||||||
| Balance common stock, shares at Dec. 31, 2022 | 270,777,969 | 2,044,502,156 | ||||||||
| Balance at Dec. 31, 2022 | $ 49 | $ 480 | $ 270,778 | 22,411,335 | (31,306,048) | (8,623,406) | (23,042) | $ (8,646,448) | ||
| Issuance of common stock for convertible debt and accrued interest, shares | 67,081,217 | |||||||||
| Issuance of common stock for convertible debt and accrued interest, value | $ 67,081 | 29,363 | 96,444 | 96,444 | ||||||
| Allocated value of warrants and beneficial conversion feature related to issuance of convertible note | 22,396 | 22,396 | 0 | |||||||
| Conversion of warrants (shares) | 23,603,891 | |||||||||
| Conversion of warrants | $ 23,604 | (23,604) | 0 | |||||||
| Net loss | (526,395) | (526,395) | $ (526,395) | |||||||
| Balance preferred stock , shares at Mar. 31, 2023 | 49,202 | 49,202 | 480,000 | 480,000 | ||||||
| Balance common stock, shares at Mar. 31, 2023 | 361,463,077 | 270,777,969 | ||||||||
| Balance at Mar. 31, 2023 | $ 49 | $ 480 | $ 361,463 | $ 22,439,490 | $ (31,832,443) | $ (9,030,961) | $ (23,042) | $ (9,054,003) |
ORGANIZATION |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| ORGANIZATION |
NOTE 1 - ORGANIZATION
Organization and Business
Global Arena Holding, Inc. (formerly, “Global Arena Holding Subsidiary Corp.”) (“GAHI”), was formed in February 2009, in the state of Delaware. GAHI and its subsidiaries (the “Company”) was previously a financial services firm and currently is focusing on the following businesses through these subsidiaries:
On February 25, 2015, Global Election Services, Inc. (GES) formed on February 25, 2015, provides comprehensive technology-enabled paper absentee/mail ballot and internet election services to organizations such as craft and trade organizations, labor unions, political parties, co-operatives and housing organizations, associations and professional societies, universities, and political organizations.
GES has developed proprietary election software for a data storage and retrieval registration system to determine voter eligibility and prevent duplicate votes with In-Person digital signature capture, as well as proprietary election software for scanning/tabulation utilizing advanced OMR/OCR/Barcode imaging software featuring de-skewing, de-speckling and image correction. This system provides three types of audit capabilities. The hardware includes high speed optical scanners that are hard lined to a computer with all Wi-Fi disabled so the entire tabulation utilizing process occurs offline, eliminating the opportunity for hacking. GES is also working with multiple vendors and has made investments in companies that are developing Blockchain Technology for a data storage and retrieval registration system, tabulation of paper Absentee/Mail Ballots; and internet voting.
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase 100% of the assets of Election Services Solutions, LLC and the Company will pay $650,000, of which $511,150 has already been paid, and issue 40,000,000 common shares to purchase these assets under this second amended APA. This APA replaces the first amended purchase agreement signed on May 10, 2019 wherein the Company was to purchase 100% of the assets of Election Services Solutions, LLC. The Company was to pay $550,000, of which $511,150 has already been paid, and issue 20,000,000 common shares to purchase these assets under this first amended APA. GES derives over 80 % of its current business from Election Services Solutions. Management anticipates the closing of this transaction will occur in the fourth quarter of 2022.
On May 20, 2015, the Company incorporated a new wholly owned entity in the State of Delaware called “GAHI Acquisition Corp.” This entity was incorporated at the time to be the merger subsidiary for the acquisition of Blockchain Technologies Corp. (BTC) and other software system development.
On May 20, 2015, the Company entered into an agreement and plan of merger with BTC. Under this agreement, BTC would have merged with GAHI Acquisition, and GAHI Acquisition, would have been the surviving corporation. As consideration for the merger, the Company was to reserve a number of shares equal to 1/3 the total issued and outstanding of the Company to be issued to BTC shareholders at closing. On October 20, 2015, the parties agreed to extend the closing date of the merger to December 15, 2015. This agreement expired on December 15, 2015.
Concurrently, on October 20, 2015, the Company paid $125,000 in cash to BTC and issued to Nikolaos Spanos 1,377,398 of its common shares and 1,993,911 warrants to purchase its common shares at the exercise price of $.10 per common share with an exercise period of three years. The warrants have expired. The common shares and warrants were issued for the purchase of 1,000,000 common shares of BTC. Said common shares of BTC represented ten percent (10%) of the outstanding equity in BTC on October 20, 2015. The securities issued by the Company were issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933. There has been no further activity in GAHI Acquisition Corp.
On March 28, 2017, the United States Patent Office issued patents to BTC covering Election Intellectual Property, US Patent #9,608,829, Issued March 28, 2017. As an equity shareholder in BTC only, GAHC and GES have not used the BTC US Patent. Any use of the patent would require a new negotiation, and new contract with BTC.
The Company has determined that the initial investment of Blockchain Technologies Corp. will be written off. The Company’s Board of Directors cancelled all transactions previously proposed but never acted on concerning GAHI Acquisition. GAHI Acquisition will remain a subsidiary for the exclusive use of any future transactions involving Blockchain Technologies Corporation.
The Company, GAHI, and GES do not trade crypto currency, nor participate in Initial Coin Offerings.
On June 15, 2019, GES entered into a Term Sheet to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $50,000 into True Vote thru a 24 Month Debenture and issue a three year warrant exercisable at $0.01 for 4,500,000 common shares of the Company. The Company will receive 3 million common shares of TrueVote, representing 30% of TrueVote Inc. On December 16, 2019 this Term Sheet was amended to provide for a December 17, 2019, payment by the Company for $40,000 to True Vote. As of the date of this filing the Company will pay an additional $10,000 and a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of the Company, and the Company will receive 3,000,000 common shares of TrueVote Inc representing Thirty percent (30%) as part of the joint venture between the companies. The closing of this transaction will occur in the third quarter of 2022.
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members. The Company was formed to explore opportunities in the oil, gas, mineral and energy business. Tidewater Energy Group Inc. has 40,000,000 common shares authorized, par value $0.001. There are currently 10,000,000 common shares issued and outstanding of which the Company holds 5,100,000 common shares (51%). The Company invested $50,000 into Tidewater Energy Group Inc. for general capital and administrative expenses in January 2020.
Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses from operations and cash flow deficits from its operations since inception and has had to continually borrow to continue operating. In addition, certain of the Company’s debt is in default as of March 31, 2023. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with their ability to raise additional funds that the Company should be able to continue as a going concern.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp and Tidewater Energy Group, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.
Noncontrolling Interest
The Company follows ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.
The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss.
Basic and Diluted Earnings (Loss) Per Share
Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.
Management 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 certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Convertible Debt
Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital. The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.
Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.
The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives pursuant to ASC 815, Derivatives and Hedging. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.
Share-Based Compensation
The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.
Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.
Fair Value Measurements
The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:
Cash, accounts payable and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.
Promissory notes payable and convertible promissory notes payable – Promissory notes payable and convertible promissory notes payable are recorded at amortized cost. The carrying amount approximates their fair value.
The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.
The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2023 and December 31, 2022.
Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
In June 2018, the FASB issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements as the Company did not have any lease arrangements that were subject to this new pronouncement.
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)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluation the impact this ASU will have on its consolidated financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
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ACQUISITION DEPOSITS |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Business Combinations Abstract | |
| ACQUISITION DEPOSITS |
NOTE 3 - ACQUISITION DEPOSITS
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase 100% of the assets of Election Services Solutions, LLC and the Company will pay $650,000, of which $511,150 has already been paid, and issue 40,000,000 common shares to purchase these assets under this second amended APA. This APA replaces the first amended purchase agreement signed on May 10, 2019 wherein the Company was to purchase 100% of the assets of Election Services Solutions, LLC. The Company was to pay $550,000, of which $511,150 has already been paid, and issue 20,000,000 common shares to purchase these assets under this first amended APA. GES derives over 80 % of its current business from Election Services Solutions. Management anticipates the closing of this transaction will occur in the fourth quarter of 2022.
On June 15, 2019, GES entered into a Term Sheet, and Common Stock Purchase Agreement to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $50,000 into a 24 Month Debenture and issue a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of the Company. The Company will receive 3 million common shares of TrueVote, representing 30% of TrueVote Inc. The Company, on December 17, 2019, paid $ 40,000 to True Vote. Under the terms of the agreement GES is to invest an additional $10,000 and the Company issue a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of the Company. On April 15, 2022, the Company made the final $10,000 cash payment. On June 1st, 2021, TrueVote issued its White Paper “A transparent Electronic Voting System validated by the Bitcoin Blockchain” TrueVote, Inc. is building a comprehensive end-to-end, de-centralized, completely digital voting system. This will be based on traditional, proven database methodologies, and layered with a "checksum" that's posted on the Blockchain, proving all data is immutable and unalterable. This design will ensure that every vote is transparently counted and verifiable. The transaction closed on February 27, 2023.
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members. The Company was formed to explore opportunities in the oil, gas, mineral, and energy business. Tidewater Energy Group Inc. has 40,000,000 common shares authorized: par value $0.001. There are currently 10,000,000 common shares issued and outstanding of which the Company holds 5,100,000 common shares (51%). The Company invested $50,000 into Tidewater Energy Group Inc. for general capital and administrative expenses in January 2020. The Company plans to close in the second quarter of 2023. |
ACCRUED EXPENSES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCRUED EXPENSES |
NOTE 4 - ACCRUED EXPENSES
Accrued expenses at March 31, 2023 and December 31, 2022 consisted of the following:
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PROMISSORY NOTES PAYABLE |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Debt Disclosure [Abstract] | |
| PROMISSORY NOTES PAYABLE |
NOTE 5 - PROMISSORY NOTES PAYABLE
In March 2014, the Company issued two promissory notes for a total of $230,000. The interest rate is the short-term applicable federal rate as determined by the Internal Revenue Service for the calendar month plus 10%. These two promissory notes are due on December 31, 2021, as amended. The outstanding balance was $230,000 and $230,000 as of March 31, 2023 and December 31, 2022, respectively.
In April 14, 2022, the Company entered into an revenue share agreement with EBF Holdings, LLC for a total of $41,100, on the purchase amount of $30,000 and OID of $11,100. There is no interest rate, but the Company will disburse a daily payment of $304,44 to EBF Holdings, LLC. The outstanding balance was $3,045 and $3,045 as of March 31, 2023 and December 31, 2022, respectively
In October 6, 2022, the Company entered into an revenue share agreement with EBF Holdings, LLC for a total of $47,950, on the purchase amount of $35,000 and OID of $12,950. There is no interest rate, but the Company will disburse a daily payment of $343 to EBF Holdings, LLC. The outstanding balance was $4,795 and $27,058 as of March 31, 2023 and December 31, 2022, respectively.
In August 22, 2022, the Company entered into an Purchase and Sale of Future Receipts Agreement with Family Business Fund LLC for a total of $74,500, on the purchase amount of $50,000 and OID of $24,500. There is no interest rate, but the Company will disburse a weekly payment of $3,104 to Family Business Fund LLC. The outstanding balance was $0 and $21,729 as of March 31, 2023 and December 31, 2022, respectively
In October 5, 2022, the Company entered into an revenue share agreement with Capytal.com for a total of $22,350, on the purchase amount of $15,000 and OID of $7,350. There is no interest rate, but the Company will disburse a daily payment of $298 to Capytal.com. The outstanding balance was $0 and $5,364 as of March 31, 2023 and December 31, 2022, respectively.
In November 29, 2022, the Company entered into promissory note agreement with Duck Duck Spruce for a total of $100,000. The outstanding balance was $100,000 and $100,000 as of March 31, 2023 and December 31, 2022, respectively.
In December 31, 2022, the Company entered into promissory note agreement with a shareholder for a total of $5,000. The outstanding balance was $0 and $5,000 as of March 31, 2023 and December 31, 2022, respectively.
In January 31, 2023, the Company entered into an Purchase and Sale of Future Receipts Agreement with Family Business Fund LLC for a total of $58,220, on the purchase amount of $ 41,000and OID of $17,220. There is no interest rate, but the Company will disburse a weekly payment of $2,426 to Family Business Fund LLC. The outstanding balance was $38,813 and $0 as of March 31, 2023 and December 31, 2022, respectively |
CONVERTIBLE PROMISSORY NOTES PAYABLE |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE PROMISSORY NOTES PAYABLE |
NOTE 6 - CONVERTIBLE PROMISSORY NOTES PAYABLE
Convertible promissory notes payable at March 31, 2023 and December 31, 2022 consist of the following:
A rollforward of the convertible promissory notes payable from December 31, 2022 to March 31, 2023 is below:
The per share conversion price into which Principal Amount and interest (including any Default Interest) under the Notes shall be convertible into shares of Common Stock hereunder (the "Conversion Price") shall equal $0.0005. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where "Additional Principal" means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price |
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DERIVATIVE FINANCIAL INSTRUMENTS |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE FINANCIAL INSTRUMENTS |
NOTE 7 - DERIVATIVE FINANCIAL INSTRUMENTS
Certain of the Company’s convertible promissory notes payable are convertible into shares of the Company’s common stock at a percentage of the market price on the date of conversion. The Company has determined that the variable conversion rate is an embedded derivative instrument. The Company uses the Black-Scholes valuation method to value the derivative instruments at inception and on subsequent valuation dates. Weighted average assumptions used to estimate fair values are as follows:
A roll-forward of the derivative liability from December 31, 2022 to March 31, 2023 is below:
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STOCKHOLDERS' DEFICIT |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCKHOLDERS' DEFICIT |
NOTE 8 - STOCKHOLDERS’ DEFICIT
Series B Preferred Stock
Pursuant to the Company’s Certificate of Incorporation, the Company has authorized 2,000,000 shares of $0.001 par value Preferred Stock. The Company has designated 250,000 of the 2,000,000 shares as Series B Preferred Stock. The Series B Preferred Stock dividend is cumulative and accruing at the rate of ten percent (10%) per annum. The dividend shall be paid in common stock of the Company at the current market price. No dividend may be paid on common shares so long as the Series B Preferred Stock dividend is outstanding. Each Series B preferred share, valued at $10 per Series B preferred share, shall be convertible into a number of common shares at the previous average of the 5 Trading Day closing price as reported by OTC Pink, equal to a value of $11.5. The conversion right is only available when the common shares are trading at above $.006. At any time prior to the second anniversary of issuance, the Company may redeem, in whole or in part, the Series B Preferred Stock at an amount equal to 115% of purchase price on not less than thirty (30) days nor more than sixty (60) days’ written notice.
During the year ended December 31, 2017, the Company sold 90,000 shares of Series B Preferred Stock for cash proceeds of $900,000. During the year ended December 31, 2018, 30,000 of these preferred shares were converted into 30,743,885 shares of common stock. During the year ended December 31, 2020, 10,798 of these preferred shares were converted into 36,519,609 shares of common stock.
Series C Preferred Stock
Pursuant to Board of Director minutes dated July 27, 2022, the Company filed a Certificate of Designation with the State of Delaware authorizing the creation of 750,000 Series C Preferred Stock with the following terms and rights:
A. Designation and Number. A series of the preferred stock, designation the “Series C Preferred Stock,” $0.001 par value, is hereby established. The number of shares of the Series C Preferred Stock shall be Seven Hundred Fifty Thousand (750,000). The rights, preferences, privileges, and restrictions granted to and imposed on the Series C Preferred Stock are as set forth below. B. Dividend Provisions. None C. Conversion Rights. None D. Preemptive Rights. None E Voting Rights. Each share of Series C Preferred Stock shall entitle the holder thereof to cast 5,000 votes on all matters submitted to a vote of the stockholders of the Corporation.
On July 27, 2022, the Company authorized the issuance of 480,000 shares Series C Preferred Stock at $.001 per share as follows:
120,000 Series C Preferred Shares - John Matthews, CEO/CFO 120,000 Series C Preferred Shares – Martin Doane, Director 120,000 Series C Preferred Shares – Facundo Bacardi, Director 120,000 Series C Preferred Share – Kathryn Weisbeck, Director of Public Relations/Marketing
The Series C Preferred Shares were issued on July 29, 2022 Common Stock
During the three months ended March 31, 2023, the Company issued 67,081,217 shares of common stock for convertible notes of $72,202 and accrued interest of $24,243. The shares were valued based on the market price on the grant date In addition, the Company issued 23,603,891 for the cashless exercise of 32,187,124 warrants
During the three months ended March 31, 2022, the Company issued 46,505,216 shares of common stock for convertible notes of $50,000 and accrued interest of $8,132.
Option Activity
A summary of the option activity is presented below:
The exercise price for options outstanding at March 31, 2023 is as follows:
Warrant Activity
A summary of warrant activity is presented below:
The exercise price for warrants outstanding at March 31, 2023 is as follows:
During the three months ended March 31, 2023, the Company issued a total of 10,000,000 warrants in connection with a new convertible promissory note payable. The fair values of the warrants were determined using the Black-Scholes option pricing model with the following assumptions: • Expected life of 2.00-5.00 years • Volatility of 217%; • Dividend yield of 0%; • Risk free interest rate of 4.64% - 4.74% |
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES |
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.
On December 26, 2017, the Company entered into a settlement agreement with a prior attorney with regards to outstanding legal fees owed. Pursuant to this settlement agreement, the Company paid $25,000 on January 5, 2018, and $25,000 on February 5, 2018, and was required to pay an additional $200,000 during 2018. On December 14, 2020, parties amended the settlement agreement to state that the Company shall pay the prior attorney Two Hundred Nineteen Thousand, Five Hundred and Seventy-Six Dollars and thirty nine cents ($219,576.39). The amount due shall be paid to the prior attorney in payments of Five Thousand Dollars per month for a period of thirty-four (34) months. On January 27, 2021, the Company made a payment of $5,000, on April 12, 2021, the Company made a payment of $15,000, on August 6, 2021, the Company made a payment of $5,000. On October 1, 2021, the Company made a payment of $5,000 and on November 12, 2021, the Company made a payment of $10,000. On January 7, 2022, the Company made a payment of $ 5,000 and on February 18, 2022, the Company made a payment of $5,000. On May 5, 2022, the Company made payments of $5,000 and, on June 22, 2022, the Company made payments of $5,000.On January 13, 2023, the Company made a payment of $5,000.
On October 16, 2020, the Company’s subsidiary, Tidewater Energy Group Corp. was named as a defendant in a lawsuit filed in District Court in and For Tulsa County, State of Oklahoma, CJ-2020-3172. On January 13, 2021, the plaintiffs added the Company to the lawsuit. The plaintiffs are seeking damages, disgorgement and specific performance relief relating to a Purchase and Sale Agreement to purchase all of the membership interests in Foster Energy. The Company has obtained counsel to dispute the charges. On March 18, 2021, the Company filed a motion to dismiss and brief in support. The Company asserted that the plaintiffs’ claims are entirely without merit as the Company was not a party to the Purchase and Sale Agreement or the related non-disclosure agreement. Tidewater concurrently filed a motion to dismiss based on legal remedies available to Tidewater. On December 7, 2022 the case was dismissed with each party bearing their own attorney fees and costs.
On March 31, 2022, the Company was named as a defendant in a lawsuit filed in the Supreme Court of the State of New York, Index No. 651531/2002. The plaintiff has alleged breach of contract and unjust enrichment. The plaintiff is seeking damages relating to a plaintiff’s prior employment agreement with the Company. The Company has obtained counsel to dispute the charges. |
AGREEMENTS |
3 Months Ended | ||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||
| Agreements Disclosure [Abstract] | |||||||||||||||||||
| AGREEMENTS |
NOTE 10 - AGREEMENTS
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase 100% of the assets of Election Services Solutions, LLC and the Company will pay $650,000, of which $511,150 has already been paid, and issue 40,000,000 common shares to purchase these assets under this second amended APA. This APA replaces the first amended purchase agreement signed on May 10, 2019, wherein the Company was to purchase 100% of the assets of Election Services Solutions, LLC. The Company was to pay $550,000, of which $511,150 has already been paid, and issue 20,000,000 common shares to purchase these assets under this first amended APA. GES derives over 80 % of its current business from Election Services Solutions. Management anticipates the closing of this transaction will occur in the second quarter of 2023.
On May 13, 2019, the Company entered into a joint venture agreement with Voting Portals, LLC (VP), a Florida limited liability company. Pursuant to this agreement, the joint venture will be making use of the VP online e-voting web portal solutions and proprietary e-voting software programs to service and fulfill GES’s clients’ online elections and other e-voting events pursuant to the terms of the agreement, as well as any other ventures and relationships agreed to pursuant to the goals of the agreement. The Agreement was amended and as part of this agreement, the Company will be issuing 10,000,000 common shares to VP for services rendered, and VP will own 100% of the rights to the software, while GES will be responsible for all administrative and other election procedures. This transaction will close in the 2nd Quarter of 2023.
On January 14, 2022, GES entered into an Independent Consulting Agreement (ICA) with Magdiel Rodriquez. Under the terms of the ICA Magdiel Rodriquez will receive 15,000,000 million common shares in return for his software expertise in the development of GES election software. This new ICA replaces an amended MSA signed May 13, 2019 with HCAS and Magdiel Rodriquez wherein the Company was to issue a total of 30,000,000 warrants to purchase the Company’s common shares at a price of $0.005 as consideration for the services of HCAS and Mr. Magdiel Rodriquez. Mr. Rodriguez has over 25 years’ experience in the areas of Information Security, Enterprise Risk Management and Compliance, Information Technology and Operations including 21 years with Visa Inc. where he performed as Senior Business Leader of Information Security. Magdiel has extensive experience in a broad range of areas related to Information Security, Network Engineering, and Enterprise Governance, Risk and Compliance and Payment networks within the financial industry. Management anticipates the closing of this transaction will occur in the first quarter or early 2nd quarter of 2023.
On June 27, 2019, Blockchain Valley Ventures and GES signed an amended agreement calling for a $25,000 CHF payment for the development and facilitation of an extended workshop with relevant and best in class third party blockchain technology companies, wherein BVV was to serve as an advisor in connection with a Voter Registration, Voter Authentication, and Voter Eligibility using a Blockchain Platform and GES would pay BVV $25,000 CHF payment upon completion of the engagement. This agreement replaced a June 19, 2019 engagement letter with Blockchain Valley Ventures (“BVV”) of Zug Switzerland. Under the terms of the original agreement, GES was to pay BVV 50,000 Swiss Francs (CHF).
GES made payments of $25,000 CHF and received the working paper primarily covering the following matters:
The Working Paper discusses a high-level envisaged Blockchain platform, including a foundational flowchart, and implementation recommendation; BVV is a Crypto Valley, Switzerland based venture capital firm who consists of highly successful entrepreneurs, finance experts, blockchain technology experts and ICO experienced analysts and consultants. The documents created will be used by GES, to begin to create a Minimal Viable Product. This Product, along with GES licensing rights on GES existing Registration and Tabulation Software will be owned by GES. The Working Paper was completed in 2022.
GES Investment in TrueVote Inc.
On June 15, 2019, GES entered into a Term Sheet, and Common Stock Purchase Agreement to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $50,000 into a 24 Month Debenture and issue a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of the Company. The Company will receive 3 million common shares of TrueVote, representing 30% of TrueVote Inc. The Company on December 17, 2019 paid $ 40,000 to True Vote. Under the terms of the agreement GES is to invest an additional $10,000 and the Company issue a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of the Company. On June 1st, 2021, TrueVote issued its White Paper “A transparent Electronic Voting System validated by the Bitcoin Blockchain” TrueVote, Inc. is building a comprehensive end-to-end, de-centralized, completely digital voting system. This will be based on traditional, proven database methodologies, and layered with a "checksum" that's posted on the Blockchain, proving all data is immutable and unalterable. This design will ensure that every vote is transparently counted and verifiable. The transaction closed on February 27, 2023.
The TrueVote Voting System will be based on traditional, proven database methodologies and layered with a “checksum” that is posted on the blockchain, proving all data is immutable and unalterable.
True Vote is directed by Brett Morrison recently the Director of Enterprise Information Systems at SpaceX. Brett was as an e-commerce pioneer, getting brands online and creating a new channel for sales at the beginning of the e-commerce boom. Brett co-founded Onestop Internet in 2003 out of his garage and built the original e-commerce and warehouse management software that started the company. Throughout his time as Chief Technology Officer and Chief Innovation Officer at Onestop, he oversaw and managed its growth and architected and helped build the new Onestop 2.0 platform. Prior to Onestop, Brett co-founded one of the first photo sharing companies on the Internet, ememories.com, which was sold to PhotoWorks, one of the largest photo processing companies in the U.S. True Vote is also directed by Ped Hasid who graduated UCLA with Magna Cum Laude Honors in 2007. Ped later went on to cofound Block26, a venture vehicle for the DLT space established in 2014, leading the technology and investment strategy for the firm. Block26 to date has financed and incubated innovative projects that aim to enhance consumer adoption of DLT technology.
On June 15, 2019, GES entered into a Term Sheet to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES will invest $50,000 into a 24 Month Debenture and issue a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of Global Arena Holding Inc., (“GAHC”). GAHC will receive 3 million common shares of TrueVote, representing 30% of TrueVote Inc. TrueVote, Inc. is building a comprehensive end-to-end, de-centralized, completely digital voting system. This will be based on traditional, proven database methodologies, and layered with a "checksum" that's posted on the Blockchain, proving all data is immutable and unalterable. This design will ensure that every vote is transparently counted and verifiable.Upon the closing of the agreement, GES will have invested $50,000 into a 24 Month Debenture and will have issued a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of the Company, and the Company will receive 3,000,000 common shares of TrueVote Inc. as part of the joint venture between the companies. The Company on December 17, 2019 paid $ 40,000 to True Vote. The Company will pay an additional $10,000 and a 3 year warrant exercisable at $0.01 for 4,500,000 common shares of the Company, in the 1st quarter of 2021. The transaction closed on February 27, 2023.
2) Tidewater Energy Group Inc.
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members.
The Company was formed to explore opportunities in the oil, gas, mineral and energy business. Tidewater Energy Group Inc. has 40,000,000 common shares authorized: par value $0.001. There are currently 10,000,000 common shares issued and outstanding of which the Company holds 5,100,000 common shares (51%). The Company invested $50,000 into Tidewater Energy Group Inc. for general capital and administrative expenses in January 2020. The Company plans to close in the second quarter of 2023.
3) GAHI Acquisition Corp.
On June 7, 2019, the Company’s second subsidiary, GAHI Acquisition Corp. (GAHI) was authorized by the Company’s Board of Directors to infuse an initial deposit of $50,000 into the subsidiary for general capital and administrative expenses. GAHI Acquisition will be repurposed in order to explore potential new business ventures in an effort to increase shareholder value. The Company will cause GAHI Acquisition to explore opportunities in the energy and minerals business, which may provide investment opportunities, including the possibility of providing blockchain technology software to energy and mineral companies. The Company added Mr. Jason N. Old to the GAHI Acquisition Board as a Director. On November 28, 2019, the Company’s Board of Directors authorized the termination of the transaction previously authorized to infuse an initial deposit of $50,000 into GAHI Acquisition for general capital and administrative expenses and have GAHI Acquisition repurposed in order to explore opportunities in the energy and minerals business, which may provide investment opportunities, including the possibility of providing blockchain technology software to energy and mineral companies. GAHI Acquisition will remain a 100% subsidiary of the Company and will focus on Blockchain related companies for investments and acquisition.
4) Other Corporate Matters
On February 2, 2022, Global Election Services, Inc. entered into a promissory note with Kim Kaminsky for the amount of $12,000 with original issue discount of $2,000. The note has been repaid in full as of March 31, 2022.
On February 3, 2022, Global Election Services, Inc. entered into a promissory note with Tom Kivisto for the amount of $17,500 with original issue discount of $2,500. The note bears 10% interest and mature in six months.
On March 30, 2022, the Company entered into a convertible note with Robert Reyers for the amount of $10,500. The note bears a 12% interest and mature in twelve months. The Note can be converted into 8,000,000 shares of the Company’s common stock. On March 30, 2022, the Company entered into a convertible note with Stanley Goldstein for the amount of $20,000. The note bears a 12% interest and mature in twelve months. The Note can be converted into 8,000,000 shares of the Company’s common stock.
On February 11, 2022, the Company entered into a 12% annum interest convertible promissory note with an investor for the principal amount of $140,000 with an original issue discount in the amount of $14,000 mature in twelve months. The note can be converted to the Company’s common stock at $0.0005 per share. In connection with the issuance of the convertible promissory note, the Company also issued two common stock purchase warrant, the first common stock purchase warrant for a total of 100,000,000 shares of the Company’s common stock and the second common stock purchase warrant for a total of 260,000,000 shares of the Company’s common stock. The exercise price for both warrants are $0.0005 per share vesting in five years.
On February 2, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $12,000 with original issue discount of $2,000. The note has been repaid in full as of September 30, 2022.
On February 3, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $16,500 with original issue discount of $2,500. The note bears 10% interest and mature in six months. On May 20, 2022, the company entered into a new agreement including the original payment and two additional payments of $10,000 on April 15, 2022 and $26,000 on May 20, 2022. The note bears an interest of 12% and matures in 30 days. On August 16, 2022,entered in to an new agreement including the payments above, an additional payment of $7,000 on August 16, 2022. The note bears an interest of 12% and matures in 30 days.
On March 30, 2022, the Company entered into a convertible note with an investor for the amount of $20,000. The note bears a 12% interest and mature in twelve months. The Note can be converted into Global Election Services Inc. common stock at an $8,000,000 valuation.
On April 7, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $12,500 with original issue discount of $2,500. The note bears 12% interest and matures in 21 days. The note has been repaid in full as of September 30, 2022.
On April 7, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $12,500 with original issue discount of $1,500. The note bears 12% interest and matures in 21 days.
On May 27, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $10,000. The note bears 12% interest and matures in three months. On June 3, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $12,000 with original issue discount of $2,000. The note bears 10% interest and matures in 2 months.
On June 15, 2022, the Company entered into a 12% annum interest convertible promissory note with an investor for the principal amount of $140,000 with an original issue discount in the amount of $14,000 mature in twelve months. The note can be converted to the Company’s common stock at $0.0005 per share. In connection with the issuance of the convertible promissory note, the Company also issued two common stock purchase warrant, the first common stock purchase warrant for a total of 100,000,000 shares of the Company’s common stock and the second common stock purchase warrant for a total of 260,000,000 shares of the Company’s common stock. The exercise price for both warrants are $0.0010 per share vesting in five years.
On August 23, 2022, the Company entered into a 12% annum interest convertible promissory note with an investor for the principal amount of $62,000 with an original issue discount in the amount of $6,200 mature in twelve months. The note can be converted to the Company’s common stock at $0.0005 per share. In connection with the issuance of the convertible promissory note, the Company also issued two common stock purchase warrant, the first common stock purchase warrant for a total of 50,000,000 shares of the Company’s common stock and the second common stock purchase warrant for a total of 180,000,000 shares of the Company’s common stock. The exercise price for both warrants are $0.002 per share vesting in five years.
On December 30, 2022, the Company entered into a 12% annum interest convertible promissory note with an investor for the principal amount of $150,000 with an mature in sixteen months. The note can be converted to the Company’s common stock at $0.0025 per share. In connection with the issuance of the convertible promissory note, the Company also issued one common stock purchase warrant, the common stock purchase warrant for a total of 7,500,000 shares of the Company’s common stock. The exercise price for both warrants are $0.0025 per share vesting in five years.
On January 31, 2023, the Company and a note holder entered into a settlement, beginning February 5, 2023 and on the fifth day of the next four (4) months thereafter, the Company shall secure a third party (a “Third Party Purchaser”) to purchase from Holder a minimum of Sixty Thousand Dollars ($60,000) of unpaid principal and accrued interest under the Note and on July 1, 2023 the Company shall secure a Third Party Purchaser to purchase from Holder all remaining unpaid principal and accrued interest under the Note with each such purchase to be allocated pro rata between the remaining unpaid principal and accrued interest. The Company has been working with the note holder on an ongoing basis to complete the terms of the settlement.
On January 26, 2023, the Company entered into a convertible note with 1800 Diagonal Lending, LLC for the amount of $54,600. The note bears a 12% interest and mature in twelve months.
On January 31, 2023, the Company entered into a Loan agreement with Family Business Fund, LLC for the amount of $41,000. The company will repay the loan in 24 weekly fixed payments of $2,426.
On February 27, 2023, GES entered into a First Amendment to a Convertible Promissory Note originally dated December 20, 2019. The related Stock Purchase Agreement signed December 19, 2019, wherein GES received 3,000 common shares of the 10,000 common stock outstanding of TrueVote remained unchanged.
On March 10, 2023, the Company entered into a convertible note with Thomas Kivisto for the amount of $32,500. The note bears a 12% interest and mature in twelve months.
On March 7, 2023, the Company entered into a warrant purchase agreement with Cathleen Healey, for the purchase of up to ten million shares at a par value of $0.001 and the price of $0.002 per share. The agreement will expire two years after the date of issuance.
On March 8, 2023, the Company entered into a Media Consulting Agreement with Triple 8 Capital Corp (Media Consultant). The media consultant will provide consulting services in related to their operation and shall receive $3,200 per month for 6 months and the parties may negotiate to extend the term of the agreement. As part of TrueVote revised transaction, new GAHC warrants were issued to the Principals of True Vote Inc., Brett Morrison and Ped Hasid. The warrants were issued on February 27, 2023 and each individual is entitled to exercise the warrants to purchase a maximum of 2,250,000 (Two Million, Two Hundred Fifty Thousand) fully-paid and non-assessable shares of the GAHC Common Stock, par value $0.001 per share at an exercise price of $0.0012 per Share, replacing a previous conversion price of $0.01. The warrants are exercisable for a period of two years from the issuance date.
On March 28, 2023, GES entered into a non- binding letter of intent with Enfield Exploration Corp., a corporation existing under the laws of the Provinces of British Columbia, Albert and Ontario, whereby Enfield will acquire the business of GES. The purchase price shall be the issuance of 10,000,000 shares of Enfield at a deemed price of USD$0.50 per share in exchange for all of the issued and outstanding shares of GES. |
SUBSEQUENT EVENTS |
Jun. 01, 2023 |
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| Subsequent Events [Abstract] | |||||||||||||||||||||||||
| SUBSEQUENT EVENTS |
NOTE 11 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the financials were issued.
On May 18, 2023, the Company sold a convertible promissory note in the principal amount of $20,000 with an annual interest rate of 12% to a non-affiliate and the maturity date is May 18, 2024.
On June 1, 2023, GES sold a convertible promissory note in the principal amount of $5,800 with an annual interest of $12% to a non-affiliate and the maturity date of September 1, 2023.
On June 6, 2023, GES sold a convertible promissory note in the principal amount of $6,500 with an annual interest rate of 12% to a non-affiliate and the maturity date of September 1, 2023.
On June 6, 2023, GES sold a convertible promissory note in the principal amount of $10,000 with an annual interest rate of 12% and the maturity date is June 6, 2024.
Litigation
On May 1, 2023, Brett Pezzuto and Christian Pezzuto filed a complaint in the United States District Court for the Southern District of New York (Civil Action No. 1:23-cv-03591) against the Company and GES for breach of contract for failures to pay monies owned pursuant to promissory notes and for not providing plaintiffs an opportunity to convert their promissory notes to common stock. The plaintiffs are asking to money damages in the aggregate amount of $1,565,610. The Company and GES have obtained legal counsel to dispute the charges.
On May 22, 2023, Lim Chap Huat filed a Memorandum of Law in Support of Plaintiff’s Motion for Summary Judgment in Lieu of Complaint Pursuant to CPLR 3213 in the Supreme Court of the State of New York (Index No. 652474/2023) against the Company. The Memorandum of Law seeks summary judgment on a promissory note made by the Company in the principal amount of $200,000, plus interest at the rate of 12%, as well as attorney’s fees and costs incurred, to recover unpaid monies owned by the Company. The Company has obtained legal counsel to dispute the charges. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Principles of Consolidation |
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp and Tidewater Energy Group, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. |
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| Noncontrolling Interest |
Noncontrolling Interest
The Company follows ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.
The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss. |
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| Basic and Diluted Earnings (Loss) Per Share |
Basic and Diluted Earnings (Loss) Per Share
Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.
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| Management Estimates |
Management 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 certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates. |
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| Cash and Cash Equivalents |
Cash and Cash Equivalents
The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
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| Convertible Debt |
Convertible Debt
Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital. The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.
Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.
The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment. |
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| Derivative Financial Instruments |
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives pursuant to ASC 815, Derivatives and Hedging. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. |
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| Revenue Recognition |
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue. |
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| Share-Based Compensation |
Share-Based Compensation
The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. |
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| Fair Value of Financial Instruments |
Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. |
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| Fair Value Measurements |
Fair Value Measurements
The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:
Cash, accounts payable and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.
Promissory notes payable and convertible promissory notes payable – Promissory notes payable and convertible promissory notes payable are recorded at amortized cost. The carrying amount approximates their fair value.
The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.
The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2023 and December 31, 2022.
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| Income Taxes |
Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements. |
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| Recently Issued Accounting Pronouncements |
Recently Issued Accounting Pronouncements
In June 2018, the FASB issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements as the Company did not have any lease arrangements that were subject to this new pronouncement.
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)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluation the impact this ASU will have on its consolidated financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share |
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| Schedule of Fair Value Hierarchy of Assets and Liabilities |
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ACCRUED EXPENSES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accrued Liabilities |
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CONVERTIBLE PROMISSORY NOTES PAYABLE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of convertible promissory notes payable |
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| Schedule of rollfoward of convertible promissory notes payable |
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of valuation techniques used in determining fair value of derivative liability |
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| Schedule of changes in fair value of financial derivatives |
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STOCKHOLDERS' DEFICIT (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock option activity |
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| Schedule of exercise price for option outstanding |
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| Schedule of warrant activity |
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| Schedule of exercise price for warrants outstanding |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule Of Antidilutive Securities Excluded From Earnings) (Details) - shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 2,997,606,346 | 2,482,063,551 |
| Options | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 0 | 15,000,000 |
| Warrants | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 1,193,260,301 | 873,793,230 |
| Convertible notes | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 1,804,346,045 | 1,562,603,654 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule Of Fair Value Of Assets And Liabilities) (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Beneficial conversion feature | $ 151,017 | $ 116,150 |
| Total | 151,017 | 116,150 |
| Fair Value Measurements At Using Fair Value Hierarchy (Level 1) | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Beneficial conversion feature | 0 | 0 |
| Total | 0 | 0 |
| Fair Value Measurements At Using Fair Value Hierarchy (Level 2) | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Beneficial conversion feature | 151,017 | 116,150 |
| Total | 151,017 | 116,150 |
| Fair Value Measurements At Using Fair Value Hierarchy (Level 3) | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Beneficial conversion feature | 0 | 0 |
| Total | $ 0 | $ 0 |
ACCRUED EXPENSES (Schedule of Accrued Liabilities) (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accrued interest | $ 2,890,656 | $ 2,767,267 |
| Accrued compensation | 1,387,832 | 1,307,656 |
| Other accrued expenses | 36,438 | 36,438 |
| Total accrued expenses | $ 4,314,926 | $ 4,111,361 |
CONVERTIBLE PROMISSORY NOTES PAYABLE (Schedule Of Rollfoward Of Convertible Promissory Notes Payable) (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Debt Instrument [Line Items] | ||
| Convertible promissory notes payable, beginning balance | $ 4,418,233 | |
| Repayment for cash | (47,615) | $ (13,500) |
| Amortization of debt discount | 91,329 | $ 69,419 |
| Convertible promissory notes payable, ending balance | 4,465,625 | |
| Convertible Promissory Notes Payable | ||
| Debt Instrument [Line Items] | ||
| Convertible promissory notes payable, beginning balance | 4,418,233 | |
| Issued for cash | 80,700 | |
| Issued for original issue discount | (6,650) | |
| Repayment for cash | (47,615) | |
| Conversion of common stock | (70,452) | |
| Debt discount related to new convertible promissory notes | 0 | |
| Amortization of debt discount | 91,409 | |
| Convertible promissory notes payable, ending balance | $ 4,465,625 | |
CONVERTIBLE PROMISSORY NOTES PAYABLE (Narratives) (Details) |
Mar. 31, 2023
$ / shares
|
|---|---|
| Debt Disclosure [Abstract] | |
| Exercise price of warrants issued | $ 0.0005 |
DERIVATIVE FINANCIAL INSTRUMENTS (Schedule Of Changes In Fair Value Of Financial Derivatives) (Details) - Derivative liabilities |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
| Derivative liabilities, December 31, 2021 | $ 116,150 |
| Relieved with debt settlement agreement | 0 |
| Change in fair value of derivative liabilities | 34,867 |
| Derivative liabilities, September 30, 2022 | $ 151,017 |
STOCKHOLDERS' DEFICIT (Schedule Of Stock Option Activity) (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Number of Options | ||
| Outstanding, beginning of year | 15,000,000 | |
| Granted | 0 | |
| Exercised | (15,000,000) | |
| Forfeited/Canceled | 0 | |
| Outstanding, end of year | 0 | 15,000,000 |
| Exercisable, end of year | 0 | |
| Weighted Average Exercise Price | ||
| Outstanding, beginning of year | $ 0.02 | |
| Outstanding, end of year | 0 | $ 0.02 |
| Exercisable, end of year | $ 0 | |
| Weighted Average Remaining Contractual Life (in years) | ||
| Outstanding | 2 months 8 days | |
| Exercisable | ||
| Aggregate Intrinsic Value ($) | ||
| Outstanding, end of year | $ 0 | |
| Exercisable, end of year | $ 0 | $ 0 |
STOCKHOLDERS' DEFICIT (Schedule Of Exercise Price For Options Outstanding) (Details) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Number of options outstanding and exercisable | 0 | 15,000,000 |
| Exercise price | $ 0 | $ 0.02 |
| Exercise Price $0.02 | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Number of options outstanding and exercisable | 0 | |
| Exercise price | $ 0 |
STOCKHOLDERS' DEFICIT (Schedule Of Warrant Activity) (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Weighted Average Remaining Contractual Life (in years) | ||
| Exercisable | ||
| Warrants | ||
| Number of Warrants | ||
| Outstanding, December 31, 2022 | 1,380,755,235 | |
| Granted | 14,500,000 | |
| Exercised | (32,187,124) | |
| Forfeited/Canceled | (169,807,810) | |
| Outstanding, March 31, 2023 | 1,193,260,301 | 1,380,755,235 |
| Exercisable, March 31, 2023 | 1,193,260,301 | |
| Weighted Average Exercise Price | ||
| Outstanding, December 31, 2023 | $ 0.003 | |
| Granted | 0.0044 | |
| Exercised | 0.001 | |
| Forfeited/Canceled | 0.013 | |
| Outstanding, March 31, 2023 | 0.001 | $ 0.003 |
| Exercisable, March 31, 2023 | $ 1 | |
| Weighted Average Remaining Contractual Life (in years) | ||
| Outstanding | 1 year 4 months 24 days | |
| Exercisable | 1 year 10 months 6 days | |
| Aggregate Intrinsic Value | ||
| Outstanding, December 31, 2022 | $ 0 | |
| Outstanding, March 31, 2023 | $ 0 | |
| Exercisable, March 31, 2023 | $ 190,363 |
STOCKHOLDERS' DEFICIT (Series B Preferred Stock) (Narratives) (Details) |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
|
Jul. 27, 2022
$ / shares
shares
|
Mar. 31, 2023
$ / shares
shares
|
Dec. 31, 2017
USD ($)
shares
|
Dec. 31, 2022
$ / shares
shares
|
Dec. 31, 2020
shares
|
Dec. 31, 2018
shares
|
|
| Preferred stock, shares authorized | 2,000,000 | 2,000,000 | ||||
| Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | ||||
| Common Stock | ||||||
| Proceeds from sale of stock | $ | $ 900,000 | |||||
| Common stock issued for conversion of Series B preferred stock | 36,519,609 | 30,743,885 | ||||
| Series B Preferred Stock | ||||||
| Preferred stock, shares authorized | 250,000 | 250,000 | ||||
| Preferred stock dividend payment terms | The Series B Preferred Stock dividend is cumulative and accruing at the rate of ten percent (10%) per annum. The dividend shall be paid in common stock of the Company at the current market price. No dividend may be paid on common shares so long as the Series B Preferred Stock dividend is outstanding. | |||||
| Preferred stock conversion terms | Each Series B preferred share, valued at $10 per Series B preferred share, shall be convertible into a number of common shares at the previous average of the 5 Trading Day closing price as reported by OTC Pink, equal to a value of $11.5. The conversion right is only available when the common shares are trading at above $.006. At any time prior to the second anniversary of issuance, the Company may redeem, in whole or in part, the Series B Preferred Stock at an amount equal to 115% of purchase price on not less than thirty (30) days nor more than sixty (60) days’ written notice. | |||||
| Common stock issued for conversion of Series B preferred stock | 90,000 | 10,798 | 30,000 | |||
| Preferred stock shares issued | 49,202 | 49,202 | ||||
| Series C Preferred Stock | ||||||
| Preferred stock, shares authorized | 750,000 | 750,000 | 750,000 | |||
| Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | |||||
| Preferred stock, voting rights, number of votes | 5,000 | |||||
| Preferred stock shares issued | 480,000 | 480,000 | 0 | |||
| Series C Preferred Stock | John Matthews | ||||||
| Preferred stock shares issued | 120,000 | |||||
| Series C Preferred Stock | Martin Doane | ||||||
| Preferred stock shares issued | 120,000 | |||||
| Series C Preferred Stock | Facundo Bacardi | ||||||
| Preferred stock shares issued | 120,000 | |||||
| Series C Preferred Stock | Kathryn Weisbeck | ||||||
| Preferred stock shares issued | 120,000 |
STOCKHOLDERS' DEFICIT (Common Stock) (Narratives) (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
| Common stock, shares authorized | 4,000,000,000 | 4,000,000,000 | |
| Common Stock | |||
| Number of common stock issued for conversion of debt | 67,081,217 | 46,505,216 | |
| Debt conversion, original debt, amount | $ 72,202 | $ 50,000 | |
| Number of addition shares issuance for cashless exercise warrants | 32,187,124 | ||
| Number of addition shares issuance for cashless exercise | 23,603,891 | ||
| Accrued interest portion of debt converted into common stock | $ 24,243 | $ 8,132 | |
STOCKHOLDERS' DEFICIT (Warrant Activity) (Narratives) (Details) - Warrants |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
shares
| |
| Fair value assumptions - Warrant: | |
| Warrants issued | 10,000,000 |
| Fair value assumption model used | Black-Scholes option pricing model |
| Volatility rate | 217.00% |
| Dividend yield | 0.00% |
| Minimum | |
| Fair value assumptions - Warrant: | |
| Expected life | 2 years |
| Risk free interest rate | 4.64% |
| Maximum | |
| Fair value assumptions - Warrant: | |
| Expected life | 5 years |
| Risk free interest rate | 4.74% |
COMMITMENTS AND CONTINGENCIES (Narratives) (Details) - Settlement agreement - USD ($) |
1 Months Ended | 12 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 13, 2023 |
May 05, 2022 |
Jan. 07, 2022 |
Nov. 12, 2021 |
Oct. 01, 2021 |
Aug. 06, 2021 |
Apr. 12, 2021 |
Feb. 05, 2018 |
Jan. 05, 2018 |
Jun. 22, 2022 |
Feb. 18, 2022 |
Jan. 27, 2021 |
Dec. 31, 2018 |
Dec. 14, 2020 |
|
| Loss Contingencies [Line Items] | ||||||||||||||
| Damages paid | $ 25,000 | $ 25,000 | $ 200,000 | |||||||||||
| Owed legal fees | $ 5,000 | $ 5,000 | $ 5,000 | $ 10,000 | $ 5,000 | $ 5,000 | $ 15,000 | $ 5,000 | $ 5,000 | $ 5,000 | ||||
| Accounts Payable | ||||||||||||||
| Loss Contingencies [Line Items] | ||||||||||||||
| Amount settlement in default and carried in accounts payable | $ (219,576.39) | |||||||||||||