0001165527-12-000019.txt : 20120720
0001165527-12-000019.hdr.sgml : 20120720
20120112170956
ACCESSION NUMBER: 0001165527-12-000019
CONFORMED SUBMISSION TYPE: 10-12G/A
PUBLIC DOCUMENT COUNT: 3
FILED AS OF DATE: 20120112
DATE AS OF CHANGE: 20120625
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: GLOBAL EQUITY INTERNATIONAL INC
CENTRAL INDEX KEY: 0001533106
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742]
IRS NUMBER: 273986073
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-12G/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-54557
FILM NUMBER: 12524775
BUSINESS ADDRESS:
STREET 1: 907 SOUTH RIVERSIDE DRIVE
CITY: INDIALANTIC
STATE: FL
ZIP: 32903
BUSINESS PHONE: 3215490628
MAIL ADDRESS:
STREET 1: 907 SOUTH RIVERSIDE DRIVE
CITY: INDIALANTIC
STATE: FL
ZIP: 32903
10-12G/A
1
g5700.txt
AMENDMENT NO. 1 TO FORM 10
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
Form 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934
GLOBAL EQUITY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 27-3986073
(State of Incorporation) (I.R.S. Employer Identification No.)
23 Frond "K" Palm Jumeirah, Dubai, UAE N/A
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: +971 (7) 204 7593
Copies to:
Pino Baldassarre
Corporate Secretary
907 South Riverside Drive
Indiatlantic, Florida 32903
Telephone: (321) 549-0628
Copies to:
David E. Wise, Esq.
Law Offices of David E. Wise, P.C.
9901 IH-10 West, Suite 800, San Antonio, Texas 78230
Telephone: (210) 558-2858/Facsimile: (210) 579-1775
Email: wiselaw@verizon.net
Securities to be registered under Section 12(b) of the Act: None
Name of Exchange on which each class is to be registered: Not applicable
Securities to be registered under Section 12(g) of the Exchange Act:
Common Stock, $.001
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
EXPLANATORY NOTE
We are filing this General Form for Registration of Securities on Form 10
to register our common stock, pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended ("Exchange Act")
Once this registration statement is deemed effective, we will be subject to
the requirements of Regulation 13A under the Exchange Act, which will require us
to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K, and we will be required to comply with all other
obligations of the Exchange Act applicable to issuers filing statements pursuant
to Section 12(g) of the Exchange Act.
FORWARD LOOKING STATEMENTS
There are statements in this Registration Statement that are not historical
facts. These "forward-looking statements" can be identified by use of
terminology such as "believe," "hope," "may," "anticipate," "should," "intend,"
"plan," "will," "expect," "estimate," "project," "positioned," "strategy" and
similar expressions. You should be aware that these forward-looking statements
are subject to risks and uncertainties that are beyond our control. For a
discussion of these risks, you should carefully read this entire Registration
Statement, especially the risks discussed under "Risk Factors." Although
management believes that the assumptions underlying the forward looking
statements included in this Registration Statement are reasonable, they do not
guarantee our future performance, and actual results could differ from
contemplated by these forward looking statements. The assumptions used for
purposes of the forward-looking statements specified in the following
information represent estimates of future events and are subject to uncertainty
as to possible changes in economic, legislative, industry, and other
circumstances. As a result, the identification and interpretation of data and
other information and their use in developing and selecting assumptions from and
among reasonable alternatives require the exercise of judgment. To the extent
that the assumed events do not occur, the outcome may vary substantially from
anticipated or projected results, and, accordingly, no opinion is expressed on
the achievability of those forward-looking statements. In the light of these
risks and uncertainties, there can be no assurance that the results and events
contemplated by the forward-looking statements contained in this Registration
Statement will in fact transpire. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of their dates. We do
not undertake any obligation to update or revise any forward-looking statements.
ii
TABLE OF CONTENTS
Item Number
and Caption Page
----------- ----
ITEM 1. BUSINESS........................................................... 1
ITEM 1A. RISK FACTORS....................................................... 8
ITEM 2. FINANCIAL INFORMATION.............................................. 11
ITEM 3. PROPERTIES......................................................... 16
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..... 16
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS................................... 19
ITEM 6. EXECUTIVE COMPENSATION............................................. 23
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE....................................................... 26
ITEM 8. LEGAL PROCEEDINGS.................................................. 26
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.................................... 26
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES............................ 27
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED............ 31
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.......................... 33
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................ 35
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE........................................... 35
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.................................. 35
iii
ITEM 1. BUSINESS
BACKGROUND
Global Equity International, Inc. ("Company") was incorporated on October
1, 2010, as a Nevada corporation, for the express purpose of acquiring Global
Equity Partners PLC, a corporation formed under the laws of the Republic of
Seychelles ("GEP") on September 2, 2009.
GEP is a Dubai based private equity firm that provides consulting services,
such as corporate restructuring, advice on management buy outs, management
recruitment, website design and development for corporate marketing, investor
and public relations, regulatory compliance and introductions to financiers, to
companies desiring to be listed on stock exchanges in various parts of the
world.
Our authorized capital consists of 70,000,000 shares of common stock, $.001
par value, and 5,000,000 shares of preferred stock, $.001 par value.
On November 15, 2010, we entered into a Plan and Agreement of
Reorganization ("Plan of Reorganization") with GEP and its sole shareholder,
Peter J. Smith, pursuant to which we would acquire 100% of the common stock of
GEP. We consummated the Plan of Reorganization effective December 31, 2010, by
issuing 20,000,000 shares of our common stock to Peter J. Smith, at which time
GEP became our wholly-owned subsidiary and Peter J. Smith was appointed as our
President, Chief Executive Officer and Director.
As a result of our acquisition of GEP, we provide investment services and
advice to companies desiring to have their shares listed on stock exchanges or
quoted on quotation bureaus in various parts of the world. We have offices in
the United States, Dubai, London and Marbella (Spain). We have affiliations with
firms located in some of the world's leading financial centers such as London,
New York, Frankfurt and Dubai. These affiliations are informal and are comprised
of personal relationships with groups of people or people with whom our Company
or our management has done, or attempted to do, business in the past. We do not
have any contractual arrangements, written or otherwise, with our affiliations.
Peter Smith founded Global Equity Partners Plc to assist small to medium
size businesses with management restructuring and corporate restructuring, in
general, and also to obtain, if requested by its clients, access to capital
markets via equity and debt financings.
We also look for promising small to medium size companies ($2,000,000 to
$10,000,000 in assets) and introduce them to private and institutional investors
in our network ("rol-a-dex") of over 179 "financial introducers" around the
world. These financial introducers are simply groups of people or institutions
that are presently introducing new clients to us or who have introduced new
clients to our management in the past. We do not have any contractual
arrangements, written or otherwise, with these financial introducers.
Presently, GEP is our only operating business. Global Equity
International's present operations are limited to insuring compliance with
regional, state and national securities regulatory agencies and organizations.
In addition, GEI is charged with (i) handling our periodic obligations under the
Securities Exchange Act of 1934; (ii) managing our investor relations; and (iii)
raising debt and equity capital necessary to fund our operations and enhance and
grow our business.
1
We currently offer the following services to our clients:
* Corporate restructuring
* Management buy outs
* Management recruitment
* Website design, development and marketing advice
* Investor and public relations
* Regulatory compliance
* Introductions to financiers
CORPORATE RESTRUCTURING SERVICES
We advise and assist our clients in determining the corporate structure
that is most suitable to their business models. We recommend management changes
where necessary. We also offer them corporate governance models customized to
their specific organizations and desired exchange listings. We also review and
analyze their balance sheets and capital structures and make recommendations on
debt consolidations, equity exchanges for debt, proper capital structures and
viability and timing of equity and debt offerings.
MANAGEMENT BUY OUTS
We assist our clients in every aspect of management buy outs from corporate
restructuring to debt financing and also introduce buyers and sellers to
financiers for private equity placements.
MANAGEMENT RECRUITING
We assist our clients with the recruitment of management and board members
through our various contacts around the world. Management recruitment and
retention is also an important part of our Corporate Restructuring Services and
these services often overlap.
WEBSITE DESIGN AND DEVELOPMENT
We recognize that in these times, successful businesses must have
comprehensive and professional internet profiles, interactive websites and
excellent feedback mechanisms. We will assist our clients in this area by
recommending third party consultants and organizations to design, develop and
manage their websites and social networking capabilities.
INVESTOR AND PUBLIC RELATIONS
Since our clients and future clients will likely desire to have their
shares listed or continue to be listed on a stock exchange or quoted on one of
the quotation bureaus, we will advise our clients on the necessary requirements
for communicating with their equity holders and stake holders, their customers
and potential customers. We will assist our clients in this area by recommending
third party financial professionals and investor relations and public relations
organizations to provide them with such services.
2
REGULATORY COMPLIANCE
We are organizing a cadre of third party securities attorneys and
accountants to assist our clients with their compliance with the many reporting
and other requirements of stock exchanges, quotation bureaus and securities
regulatory agencies and organizations in the states and countries where their
shares will be or are listed.
INTRODUCTIONS TO FINANCIERS
After reviewing the business plans, prospects and problems that are unique
to each of clients, we will use our best efforts to introduce our clients to
various third party financial resources around the world who may be able to
assist them with their capital funding requirements.
As used throughout this Form 10 registration statement, references to
"Global Equity International," "GEI," "Company," "we," "our," "ours," and "us"
refer to Global Equity International, Inc. and our subsidiaries, unless the
context otherwise requires. In addition, references to "financial statements"
are to our consolidated financial statements contained herein, except as the
context otherwise requires. References to "fiscal year" are to our fiscal year
which ends on December 31 of each calendar year. Unless otherwise indicated, the
terms "Common Stock," "common stock" and "shares" refer to our shares of $.001
par value, common stock.
HISTORICAL BUSINESS TRANSACTED
2010 TRANSACTIONS
GEP completed two transactions in 2010. The first transaction involved M1
Luxembourg AG a Swiss company, that we helped get listed on the Frankfurt Open
Market, a German stock exchange.
M1 Luxembourg AG, through its subsidiaries, offers financial advisory
services. The firm's subsidiaries include Cannon Regus, Sumner Holdings, ISIS
financial Associates Ltd, Britannia Overseas Property, and M1 Lux (Cyprus) Ltd.
It provides mortgage, private banking, company formation, real estate management
and trust formation advisory services. Additionally, the firm offers property
documentation, education fees planning, retirement planning, healthcare
insurance policies and private wealth management advisory services. M1
Luxembourg AG is headquartered in Hunenberg, Switzerland.
Our contract with M1 Luxembourg AG originally called for us to receive a
cash fee of $200,000. However, we renegotiated our fee to take 2,000,000 shares
of the client's common stock, valued at $1,086,160. Our total fees received from
M1 Luxembourg AG in 2010 represented approximately 52.7% of our gross revenues
for 2010.
The second transaction in 2010 involved consulting with Monkey Rock Group,
Inc. (MKRO.OB), a United States company operated by two British nationals.
Monkey Rock initially focused on organizing motorbike events, such as Sturgis,
South Dakota, which is one of the largest gatherings of bikers in the world with
an average of 400,000 bikers participating. GEP was engaged by Monkey Rock to
assist it in expanding in Europe and to assist with branding and marketing. GEP
introduced Monkey Rock to Brand Union, a division of WPP, one of the largest
advertising firms in the world.
In 2009, GEP received $15,000 in cash compensation from Monkey Rock Group,
Inc. In 2010, GEP received compensation from Monkey Rock in the form of
1,500,000 shares of common stock, valued at $975,000 at the time of issuance.
3
Our total fees received from Monkey Rock Group, Inc. in 2010 represented
approximately 47.3% of our gross revenues for 2010.
Although we received 52.7% of our gross revenues from M1 Luxembourg AG and
47.3% of our gross revenues from Monkey Rock Group, Inc. during 2010, these
companies represent non-recurring revenues and we were not dependent on revenues
from these two companies in 2011 nor will we be dependent on them in any
subsequent period.
During the fiscal year ended December 31, 2011, we received gross revenues
from the following clients who each represented over 10% of our gross revenues:
Arrow Cars SL $ 73,500(1) 25.48%
RFC K.K $ 55,000(1) 19.06%
Black Swan Data Ltd. $ 60,000(1) 20.80%
Voz Mobile Cloud Ltd. $100,000(2) 34.66%
----------
(1) Represents cash fees received by the Company.
(2) Represents 2,000,000 shares of equity securities valued at $.05 per share.
NEW BUSINESS TRANSACTED IN 2011
We currently have contracts with three companies: (1) RFC K.K., a Japan
based company; (2) Black Swan Data Limited, a United Kingdom based company; and
(3) Arrow Cars SL, a company that is currently based in Spain and is a national
rent a car business. In addition, we had another contract in 2011 with Voz
Mobile Cloud Ltd.., a "voice to mail" technology company. We entered into the
contract with Voz Mobile Cloud Ltd. on December 12, 2011, and we concluded our
work on that contract on December 31, 2011. As compensation, we received
2,000,000 shares of Voz Mobile Cloud Inc. common stock valued at an aggregate of
$100,000 in the fourth quarter of 2011.
RFC K.K. has been in business for a little over three years and they are in
the online race simulation business. RFC K.K. has engaged us to assist them in
their expansion into the Middle Eastern and Asian markets. We have arranged
meetings between RFC K.K. and a few high profile, potential Dubai based
partners/investors. As of this time, RFC K.K. has not entered into any
agreements with these potential Dubai partners/investors, but has entered into
preliminary, non-binding verbal agreements with the Shanghai local government
and Ferrari to set up a Race Fight Club in Shanghai, Peoples Republic of China.
RFC K.K. has agreed to pay us a total of $240,000 over the initial 12
months of our contract. We have received $60,000 under this contract so far and
have nine more monthly payments due to us at $20,000 each. During months 13-24
of the contract, RFC K.K. pay us $6,000 per month. In addition, we will receive
a 10% equity stake in RFC K.K. in the event that we assist RFC K.K. is acquiring
a target business.
Black Swan Data Limited is a United Kingdom based company ("Black Swan")
that has developed algorithm based artificial intelligence that audits and
merges internal and external date feeds from various sources, such as sales and
transactional data, web and mobile statistics, consumer services data, social
network analysis and customer relationship management databases. Black Swan
engaged us to (i) assist it with recruiting and structuring its management with
very specific skill sets and job experience; and (ii) prepare a short list of
acquisition targets in the United Kingdom.
4
Black Swan Data Limited has agreed to paid us $180,000, of which $55,,000
has been paid. We will receive the balance of $125,000 over the next six to
eight months. In addition, we will receive a 10% equity stake in Black Swan Data
Limited in the event we assist Black Swan Data Limited in acquiring a target
business.
Arrow Cars SL is currently based in southern Spain and has been in business
since 2008. Arrow Cars SL is a national rent a car business operating only in
Spain. Arrow Cars SL has engaged us to consult with them and to design a three
year strategy to expand their business model into other high density tourist
areas of Spain, Portugal and southern France, with the objective of opening a
similar business in the United States, primarily in Florida.
Arrow Cars SL has agreed to pay us an initial fee of $20,000 and then a
subsequent aggregate fee of $115,000 over the subsequent twelve months. In
addition, we will receive a 10% equity stake in Arrow Cars SL in the event we
assist Arrow Cars SL in acquiring a target business.
We have three distinct divisions (none of which will be treated as a
segment for financial reporting purposes):
1. Introducers Network. We have developed and continue to develop a number
of finance professionals, accountants, attorneys and financial advisers who will
introduce us to their clients. We will review businesses introduced to us be
these introducers and we will compensate them on some "to be determined" basis
in the event that we are engaged by to assist the companies they introduce to
us.
2. Project Review. Our management team and advisors will carefully review
and vet each business plan and opportunity submitted to us. Our management team
and advisors will determine which services we can offer these clients and assess
the potential propositions to best assist our clients in achieving their goals.
3. Placing. Working with our business associates in Frankfurt, London,
Miami, New York and Toronto, we will use our best efforts to assist our clients
with listings on stock exchanges in these cities in order to maximize their
exposure to capital markets and to access funding via debt and equity offerings.
FUTURE PLANS
We currently have three clients under contract, Arrow Cars SL, Black Swan
Data Limited and RFC K.K.
We anticipate signing up an additional three clients by the end of February
2012. We expect the contracts with the three new clients will provide us,
collectively, with an additional $35,000 per month in revenues.
Our monthly burn rate for 2012 will be approximately $31,500. Based on the
following table, we project, but can not assure investors, that we will have
sufficient revenues to fund our operations for the next 12 months.
5
Global Equity International Inc & Global Equity Partners Plc
P&L Projections for 2012
Month 1 2 3 4 5 6 7
-------- -------- -------- -------- -------- -------- --------
INCOME:
Black Swan Data Limited $ -- $ -- $ 45,000 $ -- $ -- $ 40,000 $ --
RFC KK $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000
Arrow Cars SL $ 11,333 $ 11,333 $ 11,333 $ 11,333 $ 11,333 $ 11,333 $ --
-------- -------- -------- -------- -------- -------- --------
$ 31,333 $ 31,333 $ 76,333 $ 31,333 $ 31,333 $ 71,333 $ 20,000
======== ======== ======== ======== ======== ======== ========
Expenses:
General & Administrative $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 10,000 $ 10,000
Directors $ -- $ -- $ -- $ -- $ -- $ -- $ 30,000
Employees $ -- $ -- $ -- $ 3,333 $ 3,333 $ 3,333 $ 3,333
Legal & Accountants $ -- $ -- $ 20,000 $ 10,000 $ -- $ -- $ --
Misc $ -- $ -- $ -- $ 2,500 $ 2,500 $ 2,500 $ 2,500
-------- -------- -------- -------- -------- -------- --------
$ 5,000 $ 5,000 $ 25,000 $ 20,833 $ 10,833 $ 15,833 $ 45,833
======== ======== ======== ======== ======== ======== ========
NET PROFIT / (LOSS) $ 26,333 $ 26,333 $ 51,333 $ 10,500 $ 20,500 $ 55,500 $(25,833)
======== ======== ======== ======== ======== ======== ========
Month 1 2 3 4 5 6 7
-------- -------- -------- -------- -------- -------- --------
CASH FLOW $ 26,333 $ 52,666 $103,999 $114,499 $134,999 $190,499 $164,666
======== ======== ======== ======== ======== ======== ========
Month 8 9 10 11 12 Total
-------- -------- -------- -------- -------- --------
INCOME:
Black Swan Data Limited $ -- $ 40,000 $ -- $ -- $ -- $125,000
RFC KK $ 20,000 $ 20,000 $ 6,000 $ 6,000 $ 6,000 $198,000
Arrow Cars SL $ -- $ -- $ -- $ -- $ -- $ 67,998
-------- -------- -------- -------- -------- --------
$ 20,000 $ 60,000 $ 6,000 $ 6,000 $ 6,000 $390,998
======== ======== ======== ======== ======== ========
Expenses:
General & Administrative $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 95,000
Directors $ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 30,000 $180,000
Employees $ 3,333 $ 3,333 $ 3,333 $ 3,333 $ 3,333 $ 29,997
Legal & Accountants $ 10,000 $ -- $ -- $ 10,000 $ -- $ 50,000
Misc $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 22,500
-------- -------- -------- -------- -------- --------
$ 55,833 $ 45,833 $ 45,833 $ 55,833 $ 45,833 $377,497
======== ======== ======== ======== ======== ========
NET PROFIT / (LOSS) $(35,833) $ 14,167 $(39,833) $(49,833) $(39,833) $ 13,501
======== ======== ======== ======== ======== ========
Month 8 9 10 11 12
-------- -------- -------- -------- --------
CASH FLOW $128,833 $143,000 $103,167 $ 53,334 $ 13,501
======== ======== ======== ======== ========
In the event that we are unable to generate the revenues indicated in the
above table, we will have to lower the salaries of our three employees and
possibly curtail our operations until such time as we can generate sufficient
revenues to cover our overhead.
6
EMPLOYEES; IDENTIFICATION OF A SIGNIFICANT EMPLOYEE
We currently have three employees: Peter J. Smith, Enzo Taddei and Adrian
Scarrott. Peter J. Smith, our President, Enzo Taddei, our Chief Financial
Officer, and Adrian Scarrott, our Business Development Director, each has an
employment agreement with the Company. Pino Baldassarre is our Corporate
Secretary, but he is not an employee of the Company. Peter J. Smith, Enzo Taddei
and Adrian Scarrott are full time employees. See "MANAGEMENT." We intend to hire
additional employees when they are needed.
COMPETITION
We face intense competition in every aspect of our business, and
particularly from other firms which offer management, compliance and other
consulting services to private and public companies. We would prefer to accept a
relatively low cash component as our fee for management consulting and
regulatory compliance services and take a greater portion of our fee in the form
of restricted shares of our private clients' common stock. We also face
competition from a large number of consulting firms, investment banks, venture
capitalists, merchant banks, financial advisors and other management consulting
and regulatory compliance services firms similar to ours. Many of our
competitors have greater financial and management resources and some have
greater market recognition than we do.
REGULATORY REQUIREMENTS
We are not required to obtain any special licenses, nor meet any special
regulatory requirements before establishing our business, other than a simple
business license. If new government regulations, laws, or licensing requirements
are passed that would restrict or eliminate delivery of any of our intended
products, then our business may suffer. Presently, to the best of our knowledge,
no such regulations, laws, or licensing requirements exist or are likely to be
implemented in the near future that would reasonably be expected to have a
material impact on or sales, revenues, or income from our business operations.
We are not a broker-dealer, investment advisor or investment company.
VOLUNTARY FILING
We are voluntarily filing this Registration Statement with the U.S.
Securities and Exchange Commission ("SEC") and we are under no obligation to do
so under the Securities Exchange Act of 1934 ("Exchange Act"). However, our
Board of Directors believes that by registering our class of common stock with
the SEC and filing reports under the Exchange Act, some of which include audited
financial statements, our Company's business activities, financial condition and
results of operations will be transparent and accessible by our current and
potential clients, and may help our business in the future.
REPORTS TO SECURITY HOLDERS
1. We will be subject to the informational requirements of the Exchange
Act. Accordingly, we will file annual, quarterly and periodic reports,
proxy statements, information statements and other information with
the SEC.
2. The public may read and copy any materials the Company files with the
SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549. The public may call the SEC at 1-800-SEC-0330
for further information on the Public Reference Room. Our SEC filings
will also be available to the public at the SEC's web site at
http://www.sec.gov.
7
ITEM 1A. RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF THE
FOLLOWING RISKS ACTUALLY MATERIALIZES, OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS WOULD SUFFER AND OUR SHAREHOLDERS COULD LOSE ALL OR PART
OF THEIR INVESTMENT IN OUR SHARES.
RISKS ASSOCIATED WITH OUR COMPANY
WHILE WE HAVE TWO YEARS OF OPERATING HISTORY AND HAVE ACCUMULATED PROFITS,
THERE IS NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE
REVENUES. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE
WILL CEASE OPERATIONS AND YOU WILL LOSE YOUR INVESTMENT.
We were incorporated in Nevada on October 1, 2010, and our wholly-owned
subsidiary, GE Partners Plc, was formed on September 2, 2009. For the nine
months ended September 30, 2011, we incurred a net loss from operations of
$126,150 and an unrealized loss on "available for sale marketable
securities"(due to a decline in the value thereof) for an additional loss of
$1,434,609. If we cannot generate sufficient revenues to operate profitably, we
will cease operations and you will lose your investment in our Company. Our
ability to achieve and maintain profitability and positive cash flow is
dependent, among other things, upon:
* our ability to attract clients who will buy our services from us; and
* our ability to generate revenues through the sale of our services.
WE HAVE NO COMMITMENTS FROM ANY ONE TO PROVIDE US WITH DEBT OR EQUITY
FINANCING. IN THE EVENT OUR REVENUES DO NOT COVER OUR EXPENSES, THEN WE MAY NOT
BE ABLE TO CARRY OUT OUR BUSINESS PLAN.
Our monthly burn rate is estimated to be $31,500 per month during 2011. We
are dependent on our existing contracts with clients to cover this burn rate. If
we are unable to cover our burn rate, then we will have to borrow money or sell
our securities to raise money. We have no commitments from anyone to lend us
money or to invest in our securities. In the event that our revenues do not
cover our expenses and we are unable to borrow money or sell our securities to
fund our operations, then we will have to curtail our operations and our
investors cold lose part or all of their investments in our Company.
AS A RESULT OF OUR INTENSELY COMPETITIVE INDUSTRY, WE MAY NOT GAIN ENOUGH
MARKET SHARE TO BE PROFITABLE.
The corporate consulting business is intensely competitive and due to our
small size and limited resources, we may be at a competitive disadvantage,
especially as a public company. There are several firms offering similar
services. Many of our competitors have proven track records and substantial
human and financial resources, as opposed to our Company who has limited human
resources and little cash. Also, the financial burden of being a public company,
which will cost us approximately $40,000 per year in auditing fees and legal
fees to comply with our reporting obligations under the Securities Exchange Act
of 1934 and compliance with the Sarbanes-Oxley Act of 2002, will strain our
finances and stretch our human resources to the extent that we may have to price
our social networking services and advertising fees higher than our non-publicly
held competitors just to cover the costs of being a public company.
8
WE ARE VULNERABLE TO THE CURRENT ECONOMIC CRISIS WHICH MAY NEGATIVELY
AFFECT OUR PROFITABILITY AND ABILITY TO CARRY OUT OUR BUSINESS PLAN.
We are currently in a severe worldwide economic recession. Runaway deficit
spending by the United States government and other countries further exacerbates
the United States and worldwide economic climate and may delay or possibly
deepen the current recession. Currently, a lot of economic indicators such as
rising gasoline and commodity prices, suggest higher inflation, dwindling
consumer confidence and substantially higher taxes. Demand for the services we
offer tends to decline during recessionary periods when disposable revenue is
lower and may impact sales of our services. In addition, sudden disruptions in
business conditions as a result of a terrorist attack similar to the events of
September 11, 2001, including further attacks, retaliation and the threat of
further attacks or retaliation, war, civil unrest in the Middle East, adverse
weather conditions or other natural disasters, such as Hurricane Katrina,
pandemic situations or large scale power outages can have a short term or,
sometimes, long term impact on spending. The worldwide recession is placing
severe constraints on the ability of all companies, particularly smaller ones,
to raise capital, borrow money, operate effectively and profitably and to plan
for the future.
BECAUSE PETER J. SMITH, OUR PRESIDENT, OWNS 62.54% OF OUR TOTAL OUTSTANDING
COMMON STOCK AND 5,000,000 (100%) SHARES OF OUR TOTAL OUTSTANDING PREFERRED
STOCK, MR. SMITH WILL RETAIN CONTROL OF US AND WILL BE ABLE TO DECIDE WHO WILL
BE DIRECTORS AND YOU MAY NOT BE ABLE TO ELECT ANY DIRECTORS WHICH COULD DECREASE
THE PRICE AND MARKETABILITY OF OUR SHARES.
Peter J. Smith, our President, owns 62.54% of our total outstanding common
stock and 100% of our total outstanding preferred stock. As a result, Peter J.
Smith will own the vast majority of the shares of our Common Stock, all shares
of our preferred stock and super-voting rights attributable to his preferred
stock, which allow him to cast two (2) votes per share of preferred stock and he
will be able to elect all of our directors and control our operations, which
could decrease the price and marketability of our shares.
BECAUSE OUR BUSINESS MODEL ANTICIPATES OUR RECEIVING EQUITY STAKES IN OUR
CLIENTS, MOST OF WHOM WILL BE DEVELOPMENT STAGE COMPANIES, WE MAY NOT BE ABLE TO
RESELL SUCH EQUITY AT SUITABLE PRICES, IF AT ALL, WHICH COULD MATERIALLY IMPACT
OUR EARNINGS AND ABILITY TO REMAIN IN BUSINESS.
Our business model anticipates that we will receive, as partial
compensation for our consulting services, equity stakes in our clients, many of
whom will be development stage companies. We will have to value those equity
stakes at the time we receive them. Investments in development stage companies
are risky because many of such companies' securities are illiquid, thinly traded
(if at all) and the value of such securities will be subject to adjustments
should the value of such securities decline or should such businesses fail,
which could cause us to write-down or write-off the value of such securities and
result in a negative impact to our earnings and possibly cause us to cease or
curtail our operations.
OUR SHAREHOLDERS MAY BE DILUTED SIGNIFICANTLY THROUGH OUR EFFORTS TO OBTAIN
FINANCING, FUND OUR OPERATIONS AND SATISFY OUR OBLIGATIONS THROUGH ISSUANCE OF
ADDITIONAL SHARES OF OUR COMMON STOCK.
9
We have no committed source of financing. We will likely have to issue
additional shares of our Common Stock to fund our operations and to implement
our plan of operation. Wherever possible, our board of directors will attempt to
use non-cash consideration to satisfy obligations. In many instances, we believe
that the non-cash consideration will consist of restricted shares of our common
stock. Our board of directors has authority, without action or vote of the
shareholders, to issue all or part of the 41,219,300 authorized, but unissued,
shares of our common stock. Future issuances of shares of our common stock will
result in dilution of the ownership interests of existing shareholders, may
further dilute common stock book value and that dilution may be material.
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT
BE ABLE TO RESELL YOUR STOCK.
Our Common Stock is not presently quoted on the Over-the-Counter Bulletin
Board or traded in any market. Therefore, you may not be able to resell your
stock.
Because the SEC imposes additional sales practice requirements on brokers
who deal in our shares that are penny stocks, some brokers may be unwilling to
trade them. This means that you may have difficulty reselling your shares and
this may cause the price of our shares to decline.
Our shares would be classified as penny stocks and are covered by Section
15(g) of the Securities Exchange Act of 1934 and the rules promulgated
thereunder, which impose additional sales practice requirements on
brokers/dealers who sell our securities in this offering or in the aftermarket.
For sales of our securities, the broker/dealer must make a special suitability
determination and receive from you a written agreement prior to making a sale
for you. Because of the imposition of the foregoing additional sales practices,
it is possible that brokers will not want to make a market in our shares. This
could prevent you from reselling your shares and may cause the price of our
shares to decline.
FINRA SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY
AND SELL OUR STOCK.
The FINRA has adopted rules that require that in recommending an investment
to a customer, a broker-dealer must have reasonable grounds for believing that
the investment is suitable for that customer. Prior to recommending speculative
low priced securities to their non-institutional customers, broker-dealers must
make reasonable efforts to obtain information about the customer's financial
status, tax status, investment objectives and other information. Under
interpretations of these rules, FINRA believes that there is a high probability
that speculative low priced securities will not be suitable for at least some
customers. FINRA requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may have the effect
of reducing the level of trading activity and liquidity of our common stock.
Further, many brokers charge higher transactional fees for penny stock
transactions. As a result, fewer broker-dealers may be willing to make a market
in our common stock, which may limit your ability to buy and sell our stock.
OUR ARTICLES OF INCORPORATION AUTHORIZE THE ISSUANCE OF PREFERRED STOCK.
Our Articles of Incorporation authorizes the issuance of up to 5,000,000
shares of preferred stock with designations, rights and preferences determined
from time to time by its Board of Directors. Accordingly, our Board of Directors
is empowered, without stockholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting, or other rights which could adversely
10
affect the voting power or other rights of the holders of the common stock. On
November 30, 2011, the Company issued all 5,000,000 shares of our authorized
preferred stock to our Chief Executive Officer, Peter Smith.
THIS REGISTRATION STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS AND
INFORMATION RELATING TO US, OUR INDUSTRY AND TO OTHER BUSINESSES.
These forward-looking statements in this registration statement are based
on the beliefs of our management, as well as assumptions made by and information
currently available to our management. When used in this registration statement,
the words "estimate," "project," "believe," "anticipate," "intend," "expect" and
similar expressions are intended to identify forward-looking statements. These
statements reflect our current views with respect to future events and are
subject to risks and uncertainties that may cause our actual results to differ
materially from those contemplated in our forward-looking statements. We caution
you not to place undue reliance on these forward-looking statements, which speak
only as of the date of this registration statement. We do not undertake any
obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date of this registration statement
or to reflect the occurrence of unanticipated events.
ITEM 2. FINANCIAL INFORMATION
The following discussion is intended to provide an analysis of our
financial condition and should be read in conjunction with our financial
statements and the notes thereto.
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve Common
Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS
(International Financial Reporting Standard)." ASU 2011-04 attempts to improve
the comparability of fair value measurements disclosed in financial statements
prepared in accordance with U.S. GAAP and IFRS. Amendments in ASU 2011-04
clarify the intent of the application of existing fair value measurement and
disclosure requirements, as well as change certain measurement requirements and
disclosures. ASU 2011-04 is effective for the Company beginning January 1, 2012
and will be applied on a prospective basis. We do not believe that the adoption
of ASU 2011-04 will have material effect on our consolidated financial
statements.
BUSINESS DEVELOPMENT
2010 TRANSACTIONS
GEP completed two transactions in 2010. The first transaction involved M1
Luxembourg AG a Swiss company, that we helped get listed on the Frankfurt Open
Market, a German stock exchange.
M1 Luxembourg AG, through its subsidiaries, offers financial advisory
services. The firm's subsidiaries include Cannon Regus, Sumner Holdings, ISIS
financial Associates Ltd, Britannia Overseas Property, and M1 Lux (Cyprus) Ltd.
It provides mortgage, private banking, company formation, real estate management
and trust formation advisory services. Additionally, the firm offers property
documentation, education fees planning, retirement planning, healthcare
insurance policies and private wealth management advisory services. M1
Luxembourg AG is headquartered in Hunenberg, Switzerland.
Our contract with M1 Luxembourg AG originally called for us to receive a
cash fee of $200,000. However, we renegotiated our fee to take 2,000,000 shares
11
of the client's common stock, valued at $1,086,160. Our total fees received from
M1 Luxembourg AG in 2010 represented approximately 52.7% of our gross revenues
for 2010.
The second transaction in 2010 involved consulting with Monkey Rock Group,
Inc. (MKRO.OB), a United States company operated by two British nationals.
Monkey Rock initially focused on organizing motorbike events, such as Sturgis,
South Dakota, which is one of the largest gatherings of bikers in the world with
an average of 400,000 bikers participating. GEP was engaged by Monkey Rock to
assist it in expanding in Europe and to assist with branding and marketing. GEP
introduced Monkey Rock to Brand Union, a division of WPP, one of the largest
advertising firms in the world.
In 2009, GEP received $15,000 in cash compensation from Monkey Rock Group,
Inc. In 2010, GEP received compensation from Monkey Rock in the form of
1,500,000 shares of common stock, valued at $975,000 at the time of issuance.
Our total fees received from Monkey Rock Group, Inc. in 2010 represented
approximately 47.3% of our gross revenues for 2010.
Although we received 52.7% of our gross revenues from M1 Luxembourg AG and
47.3% of our gross revenues from Monkey Rock Group, Inc. during 2010, these
companies represent non-recurring revenues and we were not dependent on revenues
from these two companies in 2011 nor will we be dependent on them in any
subsequent period.
RESULTS FOR THE YEAR ENDED DECEMBER 31 2010:
During 2010, the Company had revenues totaling $2,061,160, comprised
entirely of equity received in two companies: M1 Luxembourg AG and Monkey Rock
Group, Inc.
Our general and administration costs amounted to $40,328, including $15,178
in travel expenses. $34,658 was paid to our Chief Executive Officer as salary.
We paid $88,852 in commissions to persons who introduced us to two of our
clients, Black Swan data Limited and Arrow cars SL.
We also incurred $64,584 in legal, accounting and other professional fees.
We paid an additional $60,050 for business licenses and permits. We recognized
exchange rate losses of $3,441.
Thus, our total operating expenses for 2010 were $291,913.
The net profit was $1,769,247 and the unrealized gain on the available for
sale marketable securities owned by the Company amounted to $166,076, hence the
comprehensive income amounted to $1,935,323.
The Company did not pay any interest as interest was not due within the
2010 fiscal year.
Based on 21,092,405 weighted average shares outstanding for the year ended
December 31 2010, the profit per share was $0.08.
RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30 2011:
We currently have contracts with three companies: (1) RFC K.K., a Japan
based company; (2) Black Swan Data Limited, a United Kingdom based company; and
(3) Arrow Cars SL, a company that is currently based in Spain and is a national
12
rent a car business. In addition, we entered into another contract on December
12, 2011 with Voz Mobile Cloud Inc., a "voice to mail" technology company, and
we concluded our work on that contract on December 31, 2011. As compensation, we
received 2,000,000 shares of Voz Mobile Cloud Inc. common stock valued at an
aggregate of $100,000 in the fourth quarter of 2011.
The Company had cash revenues amounting to $96,491 for the nine months
ended September 2011. We received gross revenues from the following clients who
each represented over 10% of our gross revenues:
Arrow Cars SL $56,531(1) 58.6%
Black Swan Data Ltd. $39,960(1) 41.4%
----------
(1) Represents cash fees received by the Company.
Our general and administration costs amounted to a total of $114,912
during the nine months ended September 30, 2011. We also incurred $69,959 in
officer salaries during this period. Our travel expenses amounted to $27,040
during this period.
We also paid a commission to the person who introduced us to our client,
RFC K.K. during this period.
We incurred $63,542 in legal fees, $5,000 in accounting fees and $5,501 in
other professional fees. We experienced exchange rate losses of $4,198 during
the nine months ended September 30, 2011.
Thus, our total operating expenses amounted to $222,692 for the nine month
period ended September 30, 2011.
We received $690 in interest income and paid $500 in interest expense
during this period.
Our net loss for the nine months ended September 30, 2011 was $(126,150)
and the unrealized loss on the available for sale marketable securities owned by
the Company amounted to $(1,308,459), hence the comprehensive loss amounted to
$(1,434,609).
Based on 28,720,833 weighted average shares outstanding, for the nine
months ended September 30, 2011, the loss per share was $(0.00).
LIQUIDITY AND CAPITAL RESERVES:
Through the nine months ended September 30, 2011 we have relied on advances
of $127,223 from loans from shareholders, third party non-affiliates and also
proceeds from stock issued for cash. As of September 30, 2011, the Company had
cash of $2,700 and a working capital deficit of $89,331.
It is the Company's intention to seek additional debt financing, which we
plan to use for working capital to implement a marketing program to increase
awareness of our business model and also to expand our operations via the
acquisition companies that are in a similar space and industry as ours. We have
no current plans to issue additional equity to raise working capital. Any short
fall in our projected operating revenues will be covered by either a reduction
in the compensation paid to our three officers or from loans from one or more of
our officers. However, at the present time, we do not have verbal or written
commitments from any of our officers or from any other person to lend us money.
13
Depending upon market conditions, the Company may not be successful in
raising sufficient additional capital for it to achieve its business objectives.
In such event, the business, prospects, financial condition, and results of
operations could be materially adversely affected.
The Company's executive offices are based Dubai and our satellite offices
are in London and Marbella (Spain).
Our auditors have not seen the need to include a "Going Concern" note in
our 2010 year end audit report. Instead, a liquidity note was included stating
that the Company's cash balance was minimal and that the Company expects to meet
all of its obligations either by selling its marketable securities or by way of
debt and/or equity financing that could be available to the Company.
We have recently signed contracts with three new clients that are valued at
$767,000 in cash fees between 2011 and 2012. In addition, we could earn a 10%
equity stake in each of these three clients if we are successful in help them
acquire a target company. We cannot determine at this time how much, if
anything, these equity stakes would be worth to us or how or at what value we
could book such assets.
We are also in negotiations with three other companies that would like to
retain our services. We hope to sign these new clients before February 28, 2012.
FUTURE PLANS
We currently have three clients under contract, Arrow Cars SL, Black Swan
Data Limited and RFC K.K.
We anticipate signing up an additional three clients by the end of February
2012. We expect the contracts with the three new clients will provide us,
collectively, with an additional $35,000 per month in revenues.
Our monthly burn rate for 2012 will be approximately $31,500. Based on the
following table, we project, but can not assure investors, that we will have
sufficient revenues to fund our operations for the next 12 months.
14
Global Equity International Inc & Global Equity Partners Plc
P&L Projections for 2012
Month 1 2 3 4 5 6 7
-------- -------- -------- -------- -------- -------- --------
INCOME:
Black Swan Data Limited $ -- $ -- $ 45,000 $ -- $ -- $ 40,000 $ --
RFC KK $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000
Arrow Cars SL $ 11,333 $ 11,333 $ 11,333 $ 11,333 $ 11,333 $ 11,333 $ --
-------- -------- -------- -------- -------- -------- --------
$ 31,333 $ 31,333 $ 76,333 $ 31,333 $ 31,333 $ 71,333 $ 20,000
======== ======== ======== ======== ======== ======== ========
Expenses:
General & Administrative $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 10,000 $ 10,000
Directors $ -- $ -- $ -- $ -- $ -- $ -- $ 30,000
Employees $ -- $ -- $ -- $ 3,333 $ 3,333 $ 3,333 $ 3,333
Legal & Accountants $ -- $ -- $ 20,000 $ 10,000 $ -- $ -- $ --
Misc $ -- $ -- $ -- $ 2,500 $ 2,500 $ 2,500 $ 2,500
-------- -------- -------- -------- -------- -------- --------
$ 5,000 $ 5,000 $ 25,000 $ 20,833 $ 10,833 $ 15,833 $ 45,833
======== ======== ======== ======== ======== ======== ========
NET PROFIT / (LOSS) $ 26,333 $ 26,333 $ 51,333 $ 10,500 $ 20,500 $ 55,500 $(25,833)
======== ======== ======== ======== ======== ======== ========
Month 1 2 3 4 5 6 7
-------- -------- -------- -------- -------- -------- --------
CASH FLOW $ 26,333 $ 52,666 $103,999 $114,499 $134,999 $190,499 $164,666
======== ======== ======== ======== ======== ======== ========
Month 8 9 10 11 12 Total
-------- -------- -------- -------- -------- --------
INCOME:
Black Swan Data Limited $ -- $ 40,000 $ -- $ -- $ -- $125,000
RFC KK $ 20,000 $ 20,000 $ 6,000 $ 6,000 $ 6,000 $198,000
Arrow Cars SL $ -- $ -- $ -- $ -- $ -- $ 67,998
-------- -------- -------- -------- -------- --------
$ 20,000 $ 60,000 $ 6,000 $ 6,000 $ 6,000 $390,998
======== ======== ======== ======== ======== ========
Expenses:
General & Administrative $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 95,000
Directors $ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 30,000 $180,000
Employees $ 3,333 $ 3,333 $ 3,333 $ 3,333 $ 3,333 $ 29,997
Legal & Accountants $ 10,000 $ -- $ -- $ 10,000 $ -- $ 50,000
Misc $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 22,500
-------- -------- -------- -------- -------- --------
$ 55,833 $ 45,833 $ 45,833 $ 55,833 $ 45,833 $377,497
======== ======== ======== ======== ======== ========
NET PROFIT / (LOSS) $(35,833) $ 14,167 $(39,833) $(49,833) $(39,833) $ 13,501
======== ======== ======== ======== ======== ========
Month 8 9 10 11 12
-------- -------- -------- -------- --------
CASH FLOW $128,833 $143,000 $103,167 $ 53,334 $ 13,501
======== ======== ======== ======== ========
In the event that we are unable to generate the revenues indicated in the
above table, we will have to lower the salaries of our three employees and
possibly curtail our operations until such time as we can generate sufficient
revenues to cover our overhead.
15
This section of the registration statement includes a number of
forward-looking statements that reflect our current views with respect to future
events and financial performance. Forward-looking statements are often
identified by words like: believe, expect, estimate, anticipate, intend, project
and similar expressions, or words which, by their nature, refer to future
events. You should not place undue certainty on these forward-looking
statements, which apply only as of the date of this registration statement.
These forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results or
our predictions.
ITEM 3. PROPERTIES
The Company does not own any property. Our executive offices are located at
23 Frond "K" Palm Jumeirah, Dubai, UAE where we are utilizing approximately 600
square feet of Peter Smith's personal offices in Dubai and pay no rent for such
privilege. We also have a satellite office located at 1 Berkeley Street, London
W1J 8DJ, United Kingdom, which is a service office for which we pay 350 British
Pounds per month on a renewable one year lease. Our Business Development
Director, Adrian Scarrott, uses our London office on a daily basis and we use
the office when our other management members are in London. We have another
satellite office located at Avenida Marques del Duero 67, Edificio Bahia 2A,
29670 San Pedro de Alcantara, Marbella, Spain where we are utilizing
approximately 1,100 square feet of Enzo Taddei's personal offices in Marbella
and pay no rent for such privilege. We have another satellite office at 907
South Riverside Drive, Indiatlantic, Florida 32903 where we are utilizing
approximately 200 square feet of Pino Baldassarre's personal offices and pay no
rent. Peter J. Smith, our President and Chief Executive Office, is based in
Dubai, Enzo Taddei, our Chief Financial Officer, is based in Marbella, Adrian
Scarrott, our Business Development Director is based in London and Pino
Baldassarre, our Corporate Secretary, is based in Florida.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth the ownership of our common stock and
preferred stock by (a) each person known by us to be the beneficial owner of
more than 5% of our outstanding common stock and preferred stock; and (b) by all
of named officers and our directors and by all of our named executive officers
and directors as a group. To the best of our knowledge, the persons named have
sole voting and investment power with respect to such shares and are beneficial
owners of the shares indicated in the tables, except as otherwise noted by
footnote.
The information presented below regarding beneficial ownership of our
voting securities has been presented in accordance with the rules of the U.S.
Securities and Exchange Commission and is not necessarily indicative of
ownership for any other purpose. Under these rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares the power to vote
or direct the voting of the security or the power to dispose or direct the
disposition of the security. A person is deemed to own beneficially any security
as to which such person has the right to acquire sole or shared voting or
investment power within 60 days through the conversion or exercise of any
convertible security, warrant, option or other right. More than one person may
be deemed to be a beneficial owner of the same securities. The percentage of
beneficial ownership by any person as of a particular date is calculated by
dividing the number of shares beneficially owned by such person, which includes
the number of shares as to which such person has the right to acquire voting or
investment power within 60 days, by the sum of the number of shares outstanding
as of such date plus the number of shares as to which such person has the right
to acquire voting or investment power within 60 days. Consequently, the
denominator used for calculating such percentage may be different for each
16
beneficial owner. Except as otherwise indicated below, we believe that the
beneficial owners of our common stock listed below have sole voting and
investment power with respect to the shares shown.
(a) Security ownership of certain beneficial owners:
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
-------------- ---------------- -------------------- ----------------
Common Stock Peter J. Smith 18,000,000 (1) 62.54%
23 Frond "K" Palm Jumeirah
Dubai, UAE
Common Stock Enzo Taddei 5,000,000 (2) 17.37%
Avenida Marques del Duero 67
Edificio Bahia 2A
29670 San Pedro de Alcantara
Marbella, Spain
----------
(1) Mr. Smith is the direct beneficial owner of, and has sole dispositive and
voting power over, these shares.
(2) Mr. Taddei is the direct beneficial owner of, and has sole dispositive and
voting power over, these shares.
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
-------------- ---------------- -------------------- ----------------
Preferred Stock Peter J. Smith 5,000,000 (1) 100.00%
23 Frond "K" Palm Jumeirah
Dubai, UAE
----------
(1) Mr. Smith is the direct beneficial owner of, and has sole dispositive and
voting power over, these shares.
17
(b) Security ownership of management:
Name of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
-------------- ---------------- -------------------- ----------------
Common Stock Peter J. Smith 18,000,000 (1) 62.54%
Common Stock Enzo Taddei 5,000,000 (2) 17.37%
Common Stock Pino G. Baldassarre 0 0%
Common Stock All officers and directors 23,000,000 79.91%
as a group (3 persons)
----------
(1) Mr. Smith is the direct beneficial owner of, and has sole dispositive and
voting power over, these shares.
(2) Mr. Taddei is the direct beneficial owner of, and has sole dispositive and
voting power over, these shares.
Name of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
-------------- ---------------- -------------------- ----------------
Preferred Stock Peter J. Smith 5,000,000 (1) 100.00%
Preferred Stock Enzo Taddei 0 0%
Preferred Stock Pino G. Baldassarre 0 0%
Preferred Stock All officers and directors
as a group (3 persons) 5,000,000 (1) 100.00%
----------
(1) Mr. Smith is the direct beneficial owner of, and has sole dispositive and
voting power over, these shares.
(c) Changes in control:
We are not aware of any arrangements, including any pledge by any person of
our securities, the operation of which may at a subsequent date result in a
change in control of the Company.
18
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
OFFICERS AND DIRECTORS
Our two directors will serve until their two successors are elected and
qualified. Our officers are elected by the board of directors to a term of one
year and serve until their successor is duly elected and qualified, or until
they are removed from office. Our board of directors has no nominating, auditing
or compensation committees.
The names, addresses, ages and positions of our officers, directors and key
employees are set forth below:
First Year
Name Age as Director Position
---- --- ----------- --------
Peter James Smith 43 2010 President, Chief Executive Officer
and Director
Enzo Taddei 39 2011 Chief Financial Officer and Director
Pino G. Baldassarre 52 -- Corporate Secretary
The persons named above were elected to hold their offices until the next
annual meeting of our stockholders.
PETER JAMES SMITH - PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
Mr. Smith has served as the President, Chief Executive Officer and Director
of Global Equity Partners, PLC, our now wholly-owned subsidiary, since its
formation on September 2, 2009,. Mr. Smith has also servied as the President,
Chief Executive Officer and Director of the Company since December 31, 2010.
Between June 1, 2006, and September 2, 2009, when he formed Global Equity
Partners, PLC, Mr. Smith was not employed and spent his time researching the
market for the consulting business in which Global Equity Partners, PLC would be
engaged. 2006. In 1993, he created an international financial services company
in the Middle East and Asia, named Belgravia Financial Management, and served as
the Chief Executive Officer of that firm until he resigned in May 2006. Between
1993 and May 2006, he built Belgravia Financial Management to 23 global offices,
5 country licenses and in 2005, he floated the company for $40m on the American
market having built the organization to $2.2bn under management with a staff of
approximately 300 people.Mr. Smith first qualified as a stockbroker in London in
1986 with Rensburg and Co. where he became both a registered equity trader and
registered representative of the firm that is a UK registered, full service
stockbroker trading equities, options, warrants, gilts and bonds. He also spent
12 months within that firm covering the back office facilities of a brokerage
house including sales, purchase, rights, dividends and new issues. He then moved
on to the London Traded Options Market where he passed his LTOM open outcry
examinations to become an options trader for a subsidiary of ABN Amro bank
called International Clearing Services (ICS). As an Options trader, his job was
to trade options on behalf of all the firm's clients and to hedge the positions
of the market makers the firm cleared for in the equity market. As the sole dual
qualified broker for ICS, he was constantly trading in either equities or
options, either by open outcry or screen dealing on the London Stock Exchange
Floor on Threadneedle Street.
19
ENZO TADDEI - CHIEF FINANCIAL OFFICER AND DIRECTOR
Mr. Taddei was appointed as our Chief Financial Officer and a member of our
Board of Directors on September 1, 2011. From November 2010 until December 8,
2011, when he resigned from such offices, Mr. Taddei was a member of the Board
of Directors and part-time Chief Financial Officer of Networking Partners, Inc.,
a social networking company. Mr. Taddei resigned from such offices in order to
devote more time and effort to our Company. From May 2009 until the present
date, Mr. Taddei has served as Chief Executive Officer and Chief Financial
Officer of E3B Consulting Network SL (a firm engaged in accounting and property
management). Mr. Taddei spends only a couple of hours a month on E3B Consulting
business. From March 2007 until May 2009, Mr. Taddei served as Chief Financial
Officer of Dolphin Digital Media (a company engaged in social networking). From
August 2006 until March 2007, Mr. Taddei served as Chief Financial Officer of
Plays on the Net PLC (an E Commerce firm). From July 1999 until August 2006, Mr.
Taddei served as Chief Executive Officer and Chief Financial Officer of Adesso
Res Asesores (an accounting firm). In addition to being an accountant and tax
consultant by profession, Mr. Taddei is proficient in three languages: English,
Spanish and Italian. He obtained a Degree in Economics from the University of
Malaga (Spain) in 1998 and also a Bachelor in Business Administration (BBA) from
the University of Wales in 1996. He also holds a Masters Degree in Spanish and
International Taxation granted to him by EADE University in Malaga (Spain) in
2000.
PINO G. BALDASSARRE - CORPORATE SECRETARY
Mr. Baldassarre has been our Corporate Secretary since September 1, 2011.
From November 2, 2010, until November 14, 2011, Mr. Baldassarre served as the
Chief Executive Officer and a member of the Board of Directors of Networking
Partners, Inc., a social networking company. Since June 30, 2011, Mr.
Baldassarre has served as the Chief Executive Officer of Ecodata Systems Plc (a
pharmaceutical recycling company based in the United Kingdom). Mr. Baldassarre
served as Chief Executive Officer of Anne's Diary, Inc. (a website design
company) on a interim basis from March 1, 2010, to July 29, 2010, for the
primary purpose of representing Anne's Diary, Inc. at the United Nations
Interregional Crime and Justice Research Institute ("UNICRI"). He has not held
any position with Anne's Diary, Inc. since July 29, 2010. Prior to his
appointment as interim CEO of Anne's Diary, Inc., Mr. Baldassarre provided
advice and consultation to Anne's Diary, Inc. on issues related to Internet
Safety.
From 2009 until October 2010, Mr. Baldassarre was responsible for the
International Development of the Aico anti-counterfeiting program for the
prevention of counterfeit prescription drugs. From 2007 until 2009, Mr.
Baldassarre was the Managing Director and Chief Executive Officer of Dolphin
Digital Media, Inc., a publicly held company that specialized in the field of
social networks, Internet security and overall e-commerce. From 2005 until 2007,
he acted as Director Business Development of 1231D, a software development firm
specializing in biometric solutions. He was acting President of BPT Technologies
from 2003 until 2005, we he was responsible for the set up and implementation of
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a North America division for a European multinational company. Mr. Baldassarre
was responsible for Business Development of 123ID, a software development
corporation specializing in biometric solutions, and acting President and CEO of
BPT Technologies, responsible for the set up and implementation of a North
American division for a European multinational company. Over the years he has
held many senior positions such as the Managing Director of The Logica Group, a
division of The Mackenzie Group, N.Y., responsible for total corporate
infrastructure development, from Intellikey Corporation Florida, as Vice
President, and Pacific Entrance Systems in Vancouver, as President and CEO.
Pino is a recognized expert in the field Security(s) and Information
Technologies and he is regularly called on to speak at conferences in both
Canada and the United States on issues surrounding National Security and
emerging technologies and is a current member of the UNICRI committee regarding
IT security issues. His career began in 1980 to 1983, when he was an Analyst and
Information Support Specialist in United States - NSA, Level E4 and stationed in
Agnano, Italy.
Pino holds a BA in Mathematics with a minor in economics from York
University, Toronto and an MBA from INSEAD from Fountainbleau, France.
ADRIAN SCARROTT - BUSINESS DEVELOPMENT DIRECTOR
Adrian Scarrott is an experienced new business development and marketing
professional with more than 20-years of experience working with blue chip
companies and global brands. Mr. Scarrott has been the Business Development
Director of the Company since September 1, 2011. In November 2009, Mr. Scarrott
became the Marketing Director of Winkle Media Ltd., a marketing company engaged
in television and print production, online production and web based marketing.
where he worked until joining the Company's as Business Development Director on
September 1, 2011.. From 2006 to October 2009, Mr. Scarrott was responsible for
developing new business and creating opportunities for the new media offerings
for Stageone, a multimedia marketing firm in London and Europe. From 2001 to
2006, Mr. Scarrott served as Sales Director for Seven Soho, another London-based
marketing firm. Mr. Scarrott's blue chip client base at Seven Soho included
Sony, Proctor & Gamble, Apple Mac and United Airlines. Mr. Scarrott began his
career in 1991 at Tapestry, a London-based corporate identity firm, where he
served as Sales Director and was responsible for the full management and
development of a portfolio of accounts covering all areas of advertising and
design, press, outdoor, direct marketing, point of sale marketing, corporate
identity, literature and packaging.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
No officer, director, or persons nominated for such positions, promoter or
significant employee has been involved in the last ten years in any of the
following:
* Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
* Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
* Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; and
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* Being found by a court of competent jurisdiction (in a civil action),
the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
DIRECTOR QUALIFICATIONS
We do not have a formal policy regarding director qualifications. In the
opinion of Peter J. Smith, our President and majority shareholder, both Mr.
Taddei and he have sufficient business experience and integrity to carry out the
Company's plan of operations. Both Mr. Smith and Mr. Taddei recognize that the
Company will have to rely on professional advisors, such as attorneys and
accountants with public company experience to assist with compliance with
Exchange Act reporting and corporate governance matters.
ABSENCE OF INDEPENDENT DIRECTORS
We do not have any independent directors and are unlikely to be able to
recruit and retain any independent directors due to our small size and limited
financial resources.
DIRECTORSHIPS
Enzo Taddei was a director of Networking Partners, Inc., a company with a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934, until his resignation from the Board of Directors of that company
on December 8, 2011.
AUDIT COMMITTEE FINANCIAL EXPERT
We have not established an Audit Committee. The functions of the Audit
Committee are currently being carried out by our Board of Directors.
FAMILY RELATIONSHIPS
There are no family relationships between or among or officers and
directors.
CODE OF ETHICS
We adopted a Code of Business Conduct and Ethics on September 2, 2011.
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AUDIT COMMITTEE
The Board of Directors acts as the Audit Committee and the Board has no
separate committees. The Company has no qualified financial expert at this time
because it has not been able to hire a qualified candidate. Further, the Company
believes that it has inadequate financial resources at this time to hire such an
expert. The Company intends to continue to search for a qualified individual for
hire.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation paid by the
Company and/or its subsidiary, GE Partners PLC, to our executive officers and
directors of the Company for services rendered during the periods indicated
(from inception of Global Equity Partners PLC on September 2, 2009, through
December 31, 2010.
SUMMARY COMPENSATION TABLE
Name and Stock All Other
Principal Position Year (1) Salary ($) Bonus ($) Awards ($) Compensation ($) Total($)
------------------ -------- ---------- --------- ---------- ---------------- --------
Peter J. Smith 2010 $ 34,658 (1) $ 0 $ 0 $ 0 $ 34,658
President, Chief 2009 $100,000 (2) $ 0 $ 0 $ 0 $100,000 (1)
Executive Officer and
Director
Enzo Taddei 2010 $ 0 $ 0 $ 5,000(3) $ 0 $ 5,000
Chief Financial 2009 $ 0 $ 0 $ 0 $ 0 $ 0
Officer and Director
Pino G. Baldassarre 2010 $ 0 $ 0 $ 0 $ 0 $ 0
Secretary 2009 $ 0 $ 0 $ 0 $ 0 $ 0
----------
(1) Represents cash salary.
(2) In 2009, Global Equity Partners PLC issued 20,000,000 shares of common
stock, having a fair value of $100,000 (0.005/share) to Mr. Smith, in
connection with pre-incorporation services rendered.
(3) During 2010, Mr. Taddei provided some accounting services to GE Partners
PLC for which he invoiced Global Equity Partners PLC $5,000 and received
5,000,000 shares of the Company's common stock valued at $.001 per share.
EMPLOYMENT AGREEMENTS SUMMARY
PETER JAMES SMITH:
Mr. Smith's employment agreement with the Company was executed on September
1, 2011, and the basic terms were as follows:
1. DUTIES - ASSIGNMENT: Chief Executive Officer (CEO) and Director on Board
of Directors
2. COMPENSATION: $240,000 per annum, subject to annual review and
adjustment of no less than a 5% percentage increase. The salary will be paid on
a monthly basis.
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3. EMPLOYMENT: The contract commenced on the first day of September, 2011.
(a) Employment will continue for 36 MONTHS.
(b) The Company and employee agreed to accrue the monthly from
September 2011 onwards. Payment of the accrued amounts shall
commence no later than January 2nd 2012 and payment of the
ongoing monthly salary shall commence on the last working day of
January 2012.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than
Disability, Death, Employee shall be entitled to receive, and
Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to SIX MONTHS' SALARY.
(b) If Employer terminates this Agreement by reason of the Disability
of Employee or if this Agreement is automatically terminated upon
the Death of Employee pursuant to Section 3(b), Employee or his
estate shall be entitled to receive, and Employer shall make, the
following severance payments:
(i) continue to pay a sum equivalent to FIVE YEARS ANNUAL SALARY
via the life assurance scheme to be put in place January
2012
ENZO TADDEI:
Mr. Taddei's employment agreement with the Company was executed on
September 1, 2011, and the basic terms were as follows:
1. DUTIES - ASSIGNMENT: Chief Financial Officer (CFO) and Director on Board
of Directors
2. COMPENSATION: $120,000 per annum, subject to annual review and
adjustment of no less than a 5% percentage increase. The salary will be paid on
a monthly basis.
3. EMPLOYMENT: The contract commenced on the first day of September, 2011.
(a) Employment will continue for 36 MONTHS.
(b) The Company and employee agreed to accrue the monthly from
September 2011 onwards. Payment of the accrued amounts shall
commence no later than January 2nd 2012 and payment of the
ongoing monthly salary shall commence on the last working day of
January 2012.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than
Disability, Death, Employee shall be entitled to receive, and
Employer shall make, the following severance payments:
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(i) continue to pay a sum equivalent to SIX MONTHS' SALARY.
(b) If Employer terminates this Agreement by reason of the Disability
of Employee or if this Agreement is automatically terminated upon
the Death of Employee pursuant to Section 3(b), Employee or his
estate shall be entitled to receive, and Employer shall make, the
following severance payments:
(i) continue to pay a sum equivalent to FIVE YEARS ANNUAL SALARY via
the life assurance scheme to be put in place January 2012.
ADRIAN SCARROTT:
Mr. Scarrott's employment agreement with the Company was executed on
September 1, 2011, and the basic terms were as follows:
1. DUTIES - ASSIGNMENT: New business coordinator.
2. COMPENSATION: $40,000 per annum. The salary will be paid on a monthly
basis.
3. EMPLOYMENT: The contract commenced on the first day of September, 2011.
(a) Employment will continue for 12 months.
(b) The Company and employee agreed to accrue the monthly from
September 2011 onwards. Payment of the accrued amounts shall
commence no later than January 2nd 2012 and payment of the
ongoing monthly salary shall commence on the last working day of
January 2012.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than
Disability, Death, Employee shall be entitled to receive, and
Employer shall make, the following severance payments:
i. continue to pay a sum equivalent to two months' salary.
(b) If Employer terminates this Agreement by reason of the Disability
of Employee or if this Agreement is automatically terminated upon
the Death of Employee pursuant to Section 3(b), Employee or his
estate shall be entitled to receive, and Employer shall make, the
following severance payments:
i. continue to pay a sum equivalent to three years annual
salary via the life assurance scheme to be put in place
January 2012
STOCK OPTION AND OTHER COMPENSATION PLANS
Aside from the employment agreements with Messrs. Smith, Scarrot and
Taddei, the Company currently does not have a stock option or any other
compensation plan and we do not have any plans to adopt one in the near future.
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COMPENSATION OF DIRECTORS
Our two directors do not receive any compensation for serving as a member
of our board of directors, as they are compensated pursuant to their employment
agreements as officers of the Company.
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
There are no understandings or agreements regarding compensation our
management will receive after a business combination that is required to be
included in this table, or otherwise.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Although we have not adopted formal procedures for the review, approval or
ratification of transactions with related persons, we adhere to a general policy
that such transactions should only be entered into if they are on terms that, on
the whole, are no more favorable, or no less favorable, than those available
from unaffiliated third parties and their approval is in accordance with
applicable law. Such transactions require the approval of our board of
directors.
On November 30, 2011, the Company issued 5,000,000 shares of Series A
Preferred Stock to Peter J. Smith, its President, as consideration for $480,000
as a compensatory bonus.
ABSENCE OF INDEPENDENT DIRECTORS
We do not have any independent directors and are unlikely to be able to
recruit and retain any independent directors due to our small size and limited
financial resources.
Except as otherwise indicated herein, there have been no related party
transactions, or any other transactions or relationships required to be
disclosed pursuant to Item 404 of Regulation S-K.
ITEM 8. LEGAL PROCEEDINGS
Presently, there are not any material pending legal proceedings to which
the Company is a party or as to which any of its property is subject and the
Company does not know nor is it aware of any legal proceedings threatened or
contemplated against it.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information. The Company's Common Stock is not trading on any
stock exchange. The Company is not aware of any market activity in its stock
since its inception and through the date of this filing. There is no assurance
that a trading market will ever develop or, if such a market does develop, that
it will continue.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to us, as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require:
(i) that a broker or dealer approve a person's account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
26
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
(b) Holders. As of the date of this filing, there were 79 record holders of
the 28,780,700 shares of the Company's issued and outstanding Common Stock. The
issued and outstanding shares of the Company's common stock were issued in
accordance with the exemptions from registration afforded by Section 4(2) and/or
Regulation S of the Securities Act of 1933, as amended.
(c) Dividends. The Company has not paid any cash dividends to date and does
not anticipate or contemplate paying dividends in the foreseeable future. It is
the present intention of management to utilize all available funds for the
development of the Company's business.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
The Company originally issued to Javan Kasili (a United States citizen) a
total of 2,000,000 shares of common stock on October 28, 2010 at $.001 per share
(par value) for an aggregate consideration of $2,000.00
The Company issued 20,000,000 shares of common stock to Peter Smith
(non-citizen, non-resident of the United States) pursuant to a Plan and
Agreement of Reorganization dated November 15, 2010, when the Company acquired
100% of the common stock of Global Equity Partners PLC in a private transaction,
resulting in Global Equity Partners PLC becoming a wholly-owned subsidiary of
the Company. Following the closing of this transaction, Peter Smith became our
President and Chief Executive Officer and a member of our board of directors.
Effective November 1, 2010, the Company issued 5,000,000 shares of common
stock to Enzo Taddei, an individual (non-citizen, non-resident of the United
States), for accounting services rendered to the Global Equity Partners PLC
valued at $5,000. Mr. Taddei became the Chief Financial Officer and a Director
of the Company in September 2011.
On November 14, ,2010, the Company issued 1,000,000 shares of common stock
to Miss Pilar Tardon, an individual (non-citizen, non-resident of the United
States), in exchange for services rendered to the Company valued at $50,000.
Effective December 31, 2010, the Company issued 668,000 shares of common
stock to seven debt holders (non-citizens, non-residents of the United States),
at various negotiated conversion rates ranging from $.36 to $.44 per share, in
satisfaction of $263,533.64 in debt owed by the Company, as follows:
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No. of Conversion
Name of Creditor Amount of Debt Shares Issued Price
---------------- -------------- ------------- -----
William & Lorraine Beveridge $ 7,089.00 16,000 $.44 per share
Brain H. Coates $ 14,024.00 40,000 $.35 per share
Daycrest Nominees Ltd. $ 26,952.00 70,000 $.39 per share
Barrie Pearson Craig $ 7,440.00 20,000 $.37 per share
Samueal M. Austin $ 4,435.00 12,000 $.37 per share
David Baker $ 3,593.00 10,000 $.36 per share
Tohibu Ou $200,000.00 500,000 $.40 per share
----------- -------
Totals $263,533,64 668,000
=========== =======
The conversion prices of the above concurrent issuances of common stock
were the product of negotiations by our management with each creditor. As a
result of our negotiations with the above creditors, no interest was included in
the aggregate amounts settled.
Between May 2, 2011, and June 15, 2011, the Company issued a total of
103,100 shares of common stock in a private offering to a total of 27
non-related persons (non-citizens, non-residents of the United States) at $.50
per share for an aggregate consideration of $51,550, as follows:
Name Number of Shares Aggregate Purchase Amount
---- ---------------- -------------------------
Mark Bingham 500 $ 250.00
Margaret Cachart 1,000 $ 500.00
Barry Cotton 500 $ 250.00
Adam Divall 1,000 $ 500.00
Jamie Divall 1,000 $ 500.00
Collin Elliott 500 $ 250.00
Michael Guetjes 500 $ 250.00
Peter Lilley 1,000 $ 500.00
Ian McKenzie 1,000 $ 500.00
Jamie Palacios Vergara 1,000 $ 500.00
Anthony Preece 1,000 $ 500.00
Michael Ricks 500 $ 250.00
Darren Roberts 1,000 $ 500.00
Wayne Roberts 1,000 $ 500.00
Toby Roberts 1,000 $ 500.00
Vicent Samways 2,500 $ 1,250.00
Gary Steel 500 $ 250.00
Jon Stronell 1,000 $ 500.00
Martin Sweeny 500 $ 250.00
Daniel Tovey 2,000 $ 1,000.00
Hayley Wood 1,000 $ 500.00
Caoimhe Lonergan 5,000 $ 2,500.00
Eibhlin Lonergan 5,000 $ 2,500.00
Saoirse Lonergan 5,000 $ 2,500.00
John Lonergan 5,000 $ 2,500.00
Brid Lonergan 20,000 $10,000.00
David Lonergan 43,100 $21,550.00
------- ----------
Totals 103,100 $51,550.00
======= ==========
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On September 23, 2011, the Company issued 9,600 shares of common stock to
Samuel James Cameron, an individual (non-citizen, non-resident of the United
States), in exchange for services rendered to the Company valued at $4,800.
On November 30, 2011, the Company issued 5,000,000 shares of Series A
Preferred Stock (100% of the authorized preferred stock) to our Chief Executive
Officer, Peter Smith, for an aggregate consideration of $480,000 as a bonus
package equal to 24 months of salary.
The 2,000,000 shares issued to Javan Kasili were issued in reliance on the
exemption from registration requirements of the 33 Act provided by Section 4(2)
of the 33 Act, as the issuance of the stock did not involve a public offering of
securities based on the following:
* each investor represented to us that he was acquiring the securities
for his own account for investment and not for the account of any
other person and not with a view to or for distribution, assignment or
resale in connection with any distribution within the meaning of the
33 Act;
* we provided each investor with written disclosure prior to sale or
transfer that the securities have not been registered under the 33 Act
and, therefore, cannot be resold unless they are registered under the
33 Act or unless an exemption from registration is available;
* each investor agreed not to sell or otherwise transfer the purchased
securities unless they are registered under the 33 Act and any
applicable state laws, or an exemption or exemptions from such
registration are available;
* each investor had knowledge and experience in financial and other
business matters such that he was capable of evaluating the merits and
risks of an investment in us;
* such investor was given information and access to all of our
documents, records, books, officers and directors, our executive
offices pertaining to the investment and was provided the opportunity
to ask questions and receive answers regarding the terms and
conditions of the offering and to obtain any additional information
that we possesses or were able to acquire without unreasonable effort
and expense;
* each investor had no need for liquidity in their investment in us and
could afford the complete loss of their investment in us;
* we did not employ any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio;
* we did not conduct, hold or participate in any seminar or meeting
whose attendees had been invited by any general solicitation or
general advertising;
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* we placed a legend on each certificate or other document that
evidences the securities stating that the securities have not been
registered under the 33 Act and setting forth or referring to the
restrictions on transferability and sale of the securities;
* no broker-dealer or underwriter was involved in the sale of the
shares; and
* we added the following legend to the certificates:
"The shares represented by this certificate have been issued to the
registered owner in reliance upon written representations that these shares
have been taken for investment. These shares have not been registered under
the Securities Act of 1933, as amended ("Act"), and may not be sold,
transferred or assigned unless an opinion of counsel satisfactory to the
company has been received by the company to the effect that such sale,
transfer or assignment will not be in violation of the Act and the rules
and regulations promulgated thereunder or applicable state securities
laws."
All of the other shares described above (except for the 2,000,000 shares
issued to Javan Kasili) were issued in reliance on the exemption from
registration requirements of the 33 Act provided by Regulation S of the 33 Act,
as the issuance of the shares did not involved the sale to any person who was a
citizen or resident of the United States and based on the following:
* each investor represented to us that he was acquiring the securities
for his own account for investment and not for the account of any
other person and not with a view to or for distribution, assignment or
resale in connection with any distribution within the meaning of the
33 Act;
* we provided each investor with written disclosure prior to sale or
transfer that the securities have not been registered under the 33 Act
and, therefore, cannot be resold unless they are registered under the
33 Act or unless an exemption from registration is available;
* each investor agreed not to sell or otherwise transfer the purchased
securities unless they are registered under the 33 Act and any
applicable state laws, or an exemption or exemptions from such
registration are available;
* each investor had knowledge and experience in financial and other
business matters such that he was capable of evaluating the merits and
risks of an investment in us;
* such investor was given information and access to all of our
documents, records, books, officers and directors, our executive
offices pertaining to the investment and was provided the opportunity
to ask questions and receive answers regarding the terms and
conditions of the offering and to obtain any additional information
that we possesses or were able to acquire without unreasonable effort
and expense;
* each investor had no need for liquidity in their investment in us and
could afford the complete loss of their investment in us;
* we did not employ any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio;
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* we did not conduct, hold or participate in any seminar or meeting
whose attendees had been invited by any general solicitation or
general advertising;
* we placed a legend on each certificate or other document that
evidences the securities stating that the securities have not been
registered under the 33 Act and setting forth or referring to the
restrictions on transferability and sale of the securities;
* we placed stop transfer instructions in our stock transfer records;
* no underwriter was involved in the offering;
* we made independent determinations that such person was a
sophisticated or accredited investor and that he was capable of
analyzing the merits and risks of their investment in us, that he
understood the speculative nature of their investment in us and that
he could lose their entire investment in us; and
* we added the following legend to the certificates:
"The shares represented by this certificate have not been issued to the
registered owner in reliance upon written representations that these shares
have not been registered under the Securities Act of 1933 ("Act") and are
"restricted securities," as defined under Regulation S, and cannot be sold,
transferred, assigned or traded in the United States for a period of 12
months from the date of issue and require written release from either the
issuing company or their attorney prior to legend removal."
ITEM 11. DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 70,000,000 shares of Common Stock
and 5,000,000 shares of Preferred Stock.
COMMON STOCK
Our authorized capital stock includes 70,000,000 shares of common stock,
par value $0.001 per share. The holders of our Common Stock:
* have equal ratable rights to dividends from funds legally available if
and when declared by our board of directors;
* are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution
or winding up of our affairs;
* do not have preemptive, subscription or conversion rights and there
are no redemption or sinking fund provisions or rights; and
* are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
PREFERRED STOCK
We are authorized to issue 5,000,000 shares of preferred stock.
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Our Board of Directors is authorized to provide for the issuance of shares
of preferred stock in series and, by filing a certificate pursuant to the
applicable law of Nevada, to establish from time to time the number of shares to
be included in each such series, and to fix the designation, powers, preferences
and rights of the shares of each such series and the qualifications, limitations
or restrictions thereof without any further vote or action by the shareholders.
Any shares of preferred stock so issued would have priority over the common
stock with respect to dividend or liquidation rights. Any future issuance of
preferred stock may have the effect of delaying, deferring or preventing a
change in control of our Company without further action by the shareholders and
may adversely affect the voting and other rights of the holders of common stock.
At present, we have no plans to neither issue any preferred stock nor adopt any
series, preferences or other classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might impede
a business combination by including class voting rights that would enable the
holder to block such a transaction, or facilitate a business combination by
including voting rights that would provide a required percentage vote of the
stockholders. In addition, under certain circumstances, the issuance of
preferred stock could adversely affect the voting power of the holders of the
common stock. Although the Board of Directors is required to make any
determination to issue such stock based on its judgment as to the best interests
of our stockholders, the Board of Directors could act in a manner that would
discourage an acquisition attempt or other transaction that some, or a majority,
of the stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then market price
of such stock. The Board of Directors does not at present intend to seek
stockholder approval prior to any issuance of currently authorized stock, unless
otherwise required by law or stock exchange rules. We have no present plans to
issue any preferred stock.
On November 30, 2011, our Board of Directors approved the creation of
Series A Preferred Stock ("Series A Preferred"), and filed an Amended
Certificate of Designation with the Secretary of State of Nevada on November 30,
2011. By virtue of the Certificate of Designation, the Series A Preferred has
the following rights and preferences:
Number of Shares: 5,000,000
Voting Rights: Each share has two (2) votes
Conversion Rights: Each share will be convertible into two (2) shares
of Common Stock beginning December 1, 2013
Dividend Rights: None
Liquidation Rights: None
On November 30, 2011, we issued 5,000,000 shares of Series A Preferred
Stock ("Series A Preferred") to Peter J. Smith, our President, for an aggregate
consideration of $480,000 as a bonus package equal to 24 months of salary.
This description of certain matters relating to the securities of the
Company is a summary and is qualified in its entirety by the provisions of the
Company's Articles of Incorporation, Certificate of Designation and By-Laws, and
any amendments thereto, copies of which have been filed as exhibits to this Form
10.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for use
32
in its business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
WARRANTS AND OPTIONS
We have no outstanding warrants or options to acquire our stock,
TRADING OF SECURITIES IN SECONDARY MARKET
The Company presently has 28,780,700 shares of common stock issued and
outstanding, all of which are "restricted securities," as that term is defined
under Rule 144 promulgated under the Securities Act, in that such shares were
issued in private transactions not involving a public offering.
ANTI-TAKEOVER PROVISIONS
There are no Nevada anti-takeover provisions that our Board of Directors
has adopted which may have the affect of delaying or preventing a change in
control.
STOCK TRANSFER AGENT
Our stock transfer agent is ClearTrust, LLC, 16450 Pointe Village Drive,
Suite 201, Lutz, Florida 33558.
REGISTRATION RIGHTS
We have not granted registration rights to any person.
REPORTS TO SHAREHOLDERS
We intend to furnish our shareholders with annual reports that will
describe the nature and scope of our business and operations for the prior year
and will contain a copy of our audited financial statements for our most recent
fiscal year.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VII, Section 7 of the Company's Bylaws provide that the Company
shall indemnify its officers, directors, employees and agents to the fullest
extent permitted by the laws of Nevada.
The Nevada Revised Statutes allow us to indemnify our officers, directors,
employees, and agents from any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, except
under certain circumstances. Indemnification may only occur if a determination
has been made that the officer, director, employee, or agent acted in good faith
and in a manner, which such person believed to be in the best interests of the
corporation. A determination may be made by the shareholders; by a majority of
the directors who were not parties to the action, suit, or proceeding confirmed
by opinion of independent legal counsel; or by opinion of independent legal
counsel in the event a quorum of directors who were not a party to such action,
suit, or proceeding does not exist.
The expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by us as they are incurred and
in advance of the final disposition of the action, suit or proceeding, if and
33
only if the officer or director undertakes to repay said expenses to us if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by us.
The indemnification and advancement of expenses may not be made to or on
behalf of any officer or director if a final adjudication establishes that the
officer's or director's acts or omission involved intentional misconduct, fraud
or a knowing violation of the law and was material to the cause of action.
The Nevada Revised Statutes allow a company to indemnify our officers,
directors, employees, and agents from any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, except under certain circumstances. Indemnification may only
occur if a determination has been made that the officer, director, employee, or
agent acted in good faith and in a manner, which such person believed to be in
the best interests of the corporation. A determination may be made by the
stockholders; by a majority of the directors who were not parties to the action,
suit, or proceeding confirmed by opinion of independent legal counsel; or by
opinion of independent legal counsel in the event a quorum of directors who were
not a party to such action, suit, or proceeding does not exist.
SECURITIES AND EXCHANGE COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the company, we have been advised by our special securities counsel
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy and is, therefore, unenforceable.
AUTHORIZED BUT UNISSUED CAPITAL STOCK
Nevada law does not require shareholder approval for any issuance of
authorized shares. However, the marketplace rules of the NASDAQ, which would
apply only if our common stock were ever listed on the NASDAQ, which is unlikely
for the foreseeable future, require shareholders approval of certain issuances
of common stock equal to or exceeding 20% of the then outstanding voting power
or then outstanding number of shares of common stock, including in connection
with a change of control of the Company, the acquisition of the stock or assets
of another company or the sale or issuance of common stock below the book or
market value price of such stock. These additional shares may be used for a
variety of corporate purposes, including future public offerings to raise
additional capital or to facilitate corporate acquisitions.
One of the effects of the existence of unissued and unreserved common stock
may be to enable our board of directors to issue shares to persons friendly to
current management, which issuance could render more difficult or discourage an
attempt to obtain control of our board by means of a merger, tender offer, proxy
contest or otherwise, and thereby protect the continuity and entrenchment of our
management and possibly deprive the shareholders of opportunities to sell their
shares of our common stock at prices higher then prevailing market prices.
SHAREHOLDER MATTERS
As an issuer of "penny stock," the protection provided by the federal
securities laws relating to forward-looking statements does not apply to us if
our shares are considered to be penny stocks. Although the federal securities
laws provide a safe harbor for forward-looking statements made by a public
company that files reports under the federal securities laws, this safe harbor
is not available to issuers of penny stocks. As a result, we will not have the
benefit of this safe harbor protection in the event of any claim that the
material provided by us, including this prospectus, contained a material
34
misstatement of fact or was misleading in any material respect because of our
failure to include any statements necessary to make the statements not
misleading.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The audited financial statements of Global Equity International, Inc. for
the years ended December 31, 2010 (consolidated) and 2009 appear beginning at
page F-1, and the unaudited financial statements of Global Equity International,
Inc. for the nine months ended September 30, 2011 (consolidated) and 2010,
appear beginning at F-19.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Registrant
and its accountants on any matter of accounting principles, practices or
financial statement disclosure.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(b) Exhibits
The following Exhibits are filed as part of this Registration Statement:
Exhibit No. Document Description
----------- --------------------
2* Plan and Agreement of Reorganization dated November 15, 2010,
among Global Equity International, Inc., Global Equity Partners
PLC and Stockholders of Global Equity Partners LLC
3.1* Articles of Incorporation
3.2* Bylaws
4.1* Specimen Stock Certificate
4.2* Certificate of Amendment to Certificate of Designation of Series A
Convertible Preferred Stock
10.1* Employment Agreement dated September 1, 2011, with Peter J. Smith
10.2* Employment Agreement dated September 1, 2011, with Enzo Taddei
10.3* Employment Agreement dated September 1, 2011, with Adrian Scarrott
10.4* Consulting Agreement between Global Equity Partners PLC and Black
Swan Data Ltd. dated July 29, 2011
10.5* Consulting Agreement between Global Equity Partners PLC and Arrow
Cars SL dated January 14, 2011
35
10.6* Consulting Agreement between Global Equity Partners PLC and RFC
K.K. dated October 19, 2011
10.7* Consulting Agreement between Global Equity Partners PLC and M1
Luxembourg AG dated December 20, 2010
10.8* Consulting Agreement between Global Equity Partners PLC and Monkey
Rock Group, Inc. dated November 26, 2009
10.9** Consulting Agreement between Global Equity Partners PLC and Voz
Mobile Cloud Ltd. dated December 12, 2011
14* Code of Business Conduct and Ethics adopted on September 2, 2011
21* Subsidiaries
----------
* Previously filed.
** Filed herewith.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 to Form 10 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
Global Equity International, Inc.
Date: January 12, 2012 By: /s/ Peter J. Smith
----------------------------------------
Name: Peter J. Smith
Title: President, Chief Executive Officer
and Director
Global Equity International, Inc.
Date: January 12, 2012 By: /s/ Enzo Taddei
----------------------------------------
Name: Enzo Taddei
Title: Chief Financial Officer and Director
36
Global Equity International, Inc. and Subsidiary
Financial Statements
December 31, 2010 and 2009
F-1
CONTENTS
Page(s)
-------
Report of Independent Registered Public Accounting Firm F-3
Balance Sheets -December 31, 2010 (Consolidated) and 2009 F-4
Statements of Operations and Comprehensive Income (Loss)
Periods Ended December 31, 2010 (Consolidated) and 2009 F-5
Statement of Stockholders' Equity
Periods Ended December 31, 2010 (Consolidated) and 2009 F-6
Statements of Cash Flows
Periods Ended December 31, 2010 (Consolidated) and 2009 F-7
Notes to Financial Statements
Periods Ended December 31, 2010 (Consolidated) and 2009 F-8 through F-18
F-2
[LETTERHEAD OF BERMAN & COMPANY, P.A.]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of:
Global Equity International, Inc.
We have audited the accompanying balance sheets of Global Equity International,
Inc. and Subsidiary, as of December 31, 2010 (consolidated) and 2009, and the
related statements of operations and comprehensive income (loss), stockholders'
equity and cash flows for the periods ended December 31, 2010 (consolidated) and
2009. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included considerations of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Global Equity International,
Inc. and Subsidiary as of December 31, 2010 (consolidated) and 2009, and the
results of its operations and comprehensive income (loss), and its cash flows
for the periods then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Berman & Company, P.A.
-----------------------------------
Boca Raton, Florida
October 13, 2011, except for Note 9 as to which the date is November 30, 2011
F-3
Global Equity International, Inc. and Subsidiary
Balance Sheets
December 31, 2010 December 31, 2009
----------------- -----------------
(Consolidated)
ASSETS
CURRENT ASSETS
Cash $ 3,275 $ 3,380
Prepaids 551 7,225
---------- ----------
TOTAL CURRENT ASSETS 3,826 10,605
Marketable securities 2,227,236 --
---------- ----------
TOTAL ASSETS $2,231,062 $ 10,605
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 23,357 $ 3,757
---------- ----------
TOTAL CURRENT LIABILITIES 23,357 3,757
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock: 70,000,000 shares authorized and 28,668,000 and
20,000,000 shares issued and outstanding, $0.001 par value 28,668 20,000
Additional paid in capital 336,866 80,000
Retained earnings (accumulated deficit) 1,676,095 (93,152)
Accumulated other comprehensive income 166,076 --
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 2,207,705 6,848
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $2,231,062 $ 10,605
========== ==========
See accompanying notes to financial statements
F-4
Global Equity International, Inc. and Subsidiary
Statements of Operations and Comprehensive Income (Loss)
Years Ended December 31,
2010 2009
------------ ------------
(Consolidated)
Revenue $ 2,061,160 $ 15,000
General and administrative expenses 291,913 108,152
------------ ------------
NET INCOME (LOSS) $ 1,769,247 $ (93,152)
============ ============
Net income (loss) per share - basic and diluted $ 0.08 $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED 21,092,405 20,000,000
============ ============
COMPREHENSIVE INCOME (LOSS):
Net income (loss) $ 1,769,247 $ (93,152)
Unrealized gain on available for sale marketable securities 166,076 --
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ 1,935,323 $ (93,152)
============ ============
See accompanying notes to financial statements
F-5
Global Equity International, Inc. and Subsidiary
Statement of Stockholders' Equity
Years ended December 31 2010 (Consolidated) and 2009
Retained Accumulated
Common Stock Additional Earnings Other Total
------------------ Paid-in (Accumulated Comprehensive Stockholders'
Shares Amount Capital Deficit) Income Equity
------ ------ ------- -------- ------ ------
Stock issued for services -
related party ($0.005/share) 20,000,000 $20,000 $ 80,000 $ -- $ -- $ 100,000
Net loss - 2009 -- -- -- (93,152) -- (93,152)
---------- ------- -------- ---------- -------- ----------
Balance - December 31, 2009 20,000,000 20,000 80,000 (93,152) -- 6,848
Stock issued in connection with debt
conversion ($0.40/share) 668,000 668 264,866 -- -- 265,534
Recapitalization 8,000,000 8,000 (8,000) -- -- --
Net income - 2010 -- -- -- 1,769,247 -- 1,769,247
Unrealized gain on available for sale
marketable securities -- -- -- -- 166,076 166,076
---------- ------- -------- ---------- -------- ----------
BALANCE - DECEMBER 31, 2010 28,668,000 $28,668 $336,866 $1,676,095 $166,076 $2,207,705
========== ======= ======== ========== ======== ==========
See accompanying notes to financial statements
F-6
Global Equity International, Inc. and Subsidiary
Statements of Cash Flows
Years Ended December 31,
2010 2009
------------ ------------
(Consolidated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Profit (Loss) $ 1,769,247 $ (93,152)
Adjustments to reconcile net income (loss) to
cash used in operating activities:
Stock issued for services - related party -- 100,000
Stock issued for services -- --
Marketable securities received as revenue (2,061,160) --
Changes in operating assets and operating liabilities:
Prepaid expenses 6,674 (7,225)
Accounts Payable 19,600 3,757
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (265,639) 3,380
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible debt 265,534 --
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 265,534 --
------------ ------------
NET INCREASE (DECREASE) IN CASH (105) 3,380
CASH - BEGINNING OF PERIOD 3,380 --
------------ ------------
CASH - END OF PERIOD $ 3,275 $ 3,380
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ -- $ --
============ ============
Income taxes $ -- $ --
============ ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued in connection with debt conversion $ 265,534 $ --
============ ============
See accompanying notes to financial statements
F-7
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
NOTE 1 NATURE OF OPERATIONS
Global Equity Partners, PLC ("GEP"), a private company, was organized under the
laws of the Republic of Seychelles on September 2, 2009. Global Equity
International Inc. (the "Company" or "GEI"), a private company, was organized
under the laws of the state of Nevada on October 1, 2010. On November 15, 2010,
GEP executed a reverse recapitalization with GEI. See Note 3.
Revenue is generated from business consulting services, introduction fees, and
equity participation.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
All significant inter-company accounts and transactions have been eliminated in
consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenue and expenses during the reporting
period.
Making estimates requires management to exercise significant judgment. It is at
least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial
statements, which management considered in formulating its estimate could change
in the near term due to one or more future non confirming events. Accordingly,
the actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, competition and potential risk of business
failure. The risk of social and governmental factors is also a concern since the
Company is headquartered in Dubai.
CASH
The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents. At December 31, 2010 and 2009,
respectively, the Company had no cash equivalents.
F-8
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
MARKETABLE SECURITIES
(A) CLASSIFICATION OF SECURITIES
At the time of acquisition a security is designated as held-to-maturity,
available-for-sale or trading, which depends on ability and intent to hold such
security to maturity. Securities classified as trading and available-for-sale
are reported at fair value, while securities classified as held-to-maturity are
reported at amortized cost.
Any unrealized gains and losses are reported as other comprehensive income
(loss). Realized gains (losses) are computed on a specific identification basis
and are recorded in net capital gains (losses) on investments in the combined
consolidated statements of operations
All securities held at December 31, 2010 are designated as available for sale.
(B) OTHER THAN TEMPORARY IMPAIRMENT
The Company reviews its equity investment portfolio for any unrealized losses
that would be deemed other-than-temporary and require the recognition of an
impairment loss in income. If the cost of an investment exceeds its fair value,
the Company evaluates, among other factors, general market conditions, the
duration and extent to which the fair value is less than cost, and the Company's
intent and ability to hold the investments. Management also considers the type
of security, related-industry and sector performance, as well as published
investment ratings and analyst reports, to evaluate its portfolio. Once a
decline in fair value is determined to be other than temporary, an impairment
charge is recorded and a new cost basis in the investment is established. If
market, industry, and/or investee conditions deteriorate, the Company may incur
future impairments. The Company has not recorded any impairment losses for the
year ended December 31, 2010.
REVENUE RECOGNITION
Revenue is recognized only when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is performed, and collectability
of the related fee is reasonably assured. The Company's services do not include
a provision for cancellation, termination, or refunds.
In 2010, the Company received marketable securities as consideration for
services rendered. In 2009, revenues were generated from consulting services for
cash.
F-9
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
During 2010 and 2009, the Company had the following concentrations of revenues
with customers:
Customer 2010 2009
-------- ---- ----
A 53% --%
B 47% 100%
SHARE-BASED PAYMENTS
Generally, all forms of share-based payments, including stock option grants,
warrants, restricted stock grants and stock appreciation rights are measured at
their fair value on the awards' grant date, based on estimated number of awards
that are ultimately expected to vest. Share-based compensation awards issued to
non-employees for services rendered are recorded at either the fair value of the
services rendered or the fair value of the share-based payment, whichever is
more readily determinable.
INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred
income tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases, and operating
loss carryforwards. Deferred income tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred income tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date. A valuation
allowance is provided to reduce the carrying amount of deferred income tax
assets if it is considered more likely than not that some portion, or all, of
the deferred income tax assets will not be realized.
At December 31, 2009, the Company was not subject to federal and state income
taxes; accordingly, no provision had been made. The financial statements reflect
GEP's transactions without adjustment, if any, required for income tax purposes
for the year ended December 31, 2009 and through November 15, 2010, the date of
the reverse recapitalization.
The Company recognizes the effect of income tax positions only if those
positions are more likely than not of being sustained. Recognized income tax
positions are measured at the largest amount that is greater than 50% likely of
being realized. Changes in recognition or measurement are reflected in the
period in which the change in judgment occurs.
F-10
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
The Company will record interest and penalties related to unrecognized tax
benefits in income tax expense. There were none for the years ended December 31,
2010 and 2009.
The Company may be subject to examination by the Internal Revenue Service
("IRS") and state taxing authorities for all open tax years.
The Company should not be subject to income tax in the Seychelles Islands. A
company is subject to Seychelles income tax if it does business in Seychelles. A
company that is incorporated in Seychelles, but that does not do business in
Seychelles, is not subject to income tax there. The Company did not do business
in Seychelles for the year ended December 31, 2010, and the Company does not
intend to do business in Seychelles in the future. All business activities were
performed in Dubai for the year ended December 31, 2010. Dubai does not have an
income tax.
EARNINGS PER SHARE
Basic earnings (loss) per share is computed by dividing net income (loss) by
weighted average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of shares of common stock, common stock
equivalents and potentially dilutive securities outstanding during the period.
The Company has no common stock equivalents, which, if exercisable, would be
anti-dilutive. A separate computation of diluted earnings (loss) per share is
not presented.
COMPREHENSIVE INCOME (LOSS)
Consists of the change in unrealized gain (loss) on available-for-sale
marketable securities.
F-11
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
FAIR VALUE FOR FINANCIAL ASSETS AND LIABILITIES
The Company measures assets and liabilities at fair value based on an expected
exit price as defined by the authoritative guidance on fair value measurements,
which represents the amount that would be received on the sale of an asset or
paid to transfer a liability, as the case may be, in an orderly transaction
between market participants. As such, fair value may be based on assumptions
that market participants would use in pricing an asset or liability. The
authoritative guidance on fair value measurements establishes a consistent
framework for measuring fair value on either a recurring or nonrecurring basis
whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
* Level 1: Observable inputs that reflect quoted prices (unadjusted) for
identical assets or liabilities in active markets.
* Level 2: Inputs reflect: quoted prices for identical assets or
liabilities in markets that are not active; quoted prices for similar
assets or liabilities in active markets; inputs other than quoted
arices that are observable for the assets or liabilities; or inputs
that are derived principally from or porroborated by observable market
data by correlation or other means.
* Level 3: Unobservable inputs reflecting the Company's assumptions
incorporated in valuation techniques used to determine fair value.
These assumptions are required to be consistent with market
participant assumptions that are reasonably available.
The carrying amounts reported in the balance sheet for cash, marketable
securities and accounts payable approximate fair value based on the short-term
nature of these instruments.
The Company has assets measured at fair market value on a recurring basis.
Consequently, the Company had gains and losses reported in the statement of
comprehensive income (loss), that were attributable to the change in unrealized
gains or losses relating to those assets and liabilities still held at the
reporting date for the year ended December 31, 2010.
F-12
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
The following is the Company's asset measured at fair value on a nonrecurring
basis at December 31, 2010 and 2009, using quoted prices in active markets for
identical assets (Level 1); significant other observable inputs (Level 2); and
significant unobservable inputs (Level 3):
December 31, 2010 December 31, 2009
----------------- -----------------
Level 1 $ -- $ --
Level 2
Marketable Securities 2,227,236 --
Level 3 -- --
---------- ----------
Total $2,227,236 $ --
========== ==========
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220):
Presentation of Comprehensive Income. The guidance in ASU 2011-05 applies to
both annual and interim financial statements and eliminates the option for
reporting entities to present the components of other comprehensive income as
part of the statement of changes in stockholders' equity. This ASU also requires
consecutive presentation of the statement of net income and other comprehensive
income. Finally, this ASU requires an entity to present reclassification
adjustments on the face of the financial statements from other comprehensive
income to net income. The amendments in this ASU should be applied
retrospectively and are effective for fiscal year, and interim periods within
those years, beginning after December 15, 2011. The Company has early adopted
this guidance in these financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic
820): Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs. The guidance in ASU 2011-04 changes the
wording used to describe the requirements in U.S. GAAP for measuring fair value
and for disclosing information about fair value measurements, including
clarification of the FASB's intent about the application of existing fair value
and disclosure requirements and changing a particular principle or requirement
for measuring fair value or for disclosing information about fair value
measurements. The amendments in this ASU should be applied prospectively and are
effective for interim and annual periods beginning after December 15, 2011.
Early adoption by public entities is not permitted. The adoption of this
guidance is not expected to have a material impact on the Company's financial
position or results of operations.
F-13
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
NOTE 3 REVERSE RECAPITALIZATION
On November 15, 2010, the Company merged with GEP, a private corporation, and
GEP became the surviving corporation, in a transaction treated as a reverse
recapitalization. GEI did not have any material operations and majority-voting
control was transferred to GEP.
In the recapitalization, GEI issued 20,000,000 shares of common stock in
exchange for all of GEP's 100,000 issued and outstanding shares of commons
stock. For financial statement reporting purposes, the 100,000 shares have been
recasted to 20,000,000 shares in accordance with an exchange ratio of 200 for 1.
The balance of the common shares issued and outstanding in GEI prior to the
recapitalization were 8,000,000 common shares, and these common shares represent
the common shares issued and outstanding in GEI prior to the recapitalization
that were not contemplated in the share exchange. The transaction resulted in
GEP's shareholders acquiring approximately 72% control.
The transaction also required a recapitalization of GEP. Since GEP acquired a
controlling voting interest, it was deemed the accounting acquirer, while GEI
was deemed the legal acquirer. The historical financial statements of the
Company are those of GEP and of the consolidated entities from the date of
recapitalization and subsequent.
Since the transaction is considered a reverse recapitalization, the presentation
of pro-forma financial information was not required. All share and per share
amounts have been retroactively restated to the earliest periods presented to
reflect the transaction.
NOTE 4 MARKETABLE SECURITIES AND FAIR VALUE
The following table represents the Company's available for sale marketable
securities holdings as of December 31, 2010:
Equity securities - receipt date $ 2,061,160
Unrealized gains - 2010 210,000
Unrealized losses - 2010 (43,924)
-----------
Equity securities at fair value $ 2,227,236
===========
All securities acquired from customer "A" are unrestricted. All securities
acquired from customer "B" became unrestricted in 2011.
F-14
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
NOTE 5 DEBT
During 2010, the Company issued convertible notes for $265,534 to third parties.
In connection with the recapitalization, these notes were converted into 668,000
shares of common stock, representing a conversion price of $0.40/share. There
was no gain or loss on conversion.
NOTE 6 INCOME TAXES
The provision for income taxes results in an effective rate as follows at
December 31, 2010:
Statutory federal income tax 34.0%
Florida income tax 5.5%
----------
Total effective blended rate 37.63%
==========
The Company's provision (benefit) for income taxes was as follows at December
31, 2010:
Current:
Federal $ --
State --
----------
Total --
----------
Deferred:
Federal --
State --
----------
Total --
----------
Continuing operations $ --
==========
The income tax provision differs from the amount of tax determined by applying
the federal statutory rate as follows at December 31, 2010:
Income tax provision at statutory rate $ 582,844
Increase (decrease) in income tax due to:
Non-taxable foreign earnings (601,544)
State taxes (2,000)
Change in valuation allowance 20,700
----------
Total $ --
==========
F-15
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
Net deferred tax assets and liabilities were comprised of the following at
December 31, 2010:
Deferred tax assets (liabilities), non-current:
Net operating loss $ 20,700
Valuation allowance (20,700)
----------
Net deferred tax asset (liability) $ --
==========
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income taxes.
During the year ended December 31, 2010, the Company generated a net operating
loss of $55,000 for federal and Florida income tax purposes. This loss can be
carried forward and used to offset taxable income in future years and expires on
December 31, 2030.
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. As of December 31, 2010,
based upon the levels of historical taxable income and the limited experience of
the Company, the Company believes that it is more likely than not that it will
not be able to realize the benefits of some of these deductible differences.
Accordingly, a valuation allowance of $20,700 has been provided in the
accompanying financial statements as of December 31, 2010.
The Company's net operating loss available to offset Florida income taxes in
future years is $55,000. For state purposes, net operating losses can only be
carried forward. The Company has recorded a full valuation allowance against the
net operating loss since the loss may never be utilized.
From November 15, 2010 to December 31, 2010, GEP incurred a loss of $19,698;
therefore, it had negative earnings and profits and does not have any foreign
earnings and profits to be distributed. Since the GEP does not have any
undistributed earnings, the Company has not recorded a deferred tax liability
associated with the foreign earnings.
GEP is not subject to any foreign income taxes for the year ended December 31,
2010.
F-16
NOTE 7 STOCKHOLDERS' EQUITY
In 2009, the Company issued 20,000,000 shares of common stock, having a fair
value of $100,000 ($0.005/share), to the Company's Chief Executive Officer, in
connection with pre-incorporation services rendered. Fair value was based on the
value of services provided, as this reflected the best evidence of fair value
for an entity that is not publicly traded.
NOTE 8 LIQUIDITY
At December 31, 2010, and through the date of the accompanying report, the
Company's cash balance is minimal, however, the Company expects that it can meet
all of its current obligations if necessary by selling its marketable securities
to generate cash flows. The Company also believes that related party debt and/or
equity financing could be available if needed under favorable terms.
NOTE 9 SUBSEQUENT EVENTS
The Company has evaluated for subsequent events between the balance sheet date
of December 31, 2010 and October 13, 2011, the date the financial statements
were available to be issued, and concluded that events or transactions occurring
during that period requiring recognition or disclosure are as follows:
(A) STOCK ISSUANCES
COMMON STOCK
In May and June 2011, the Company issued 103,100 shares of common stock for
$51,550 ($0.50/share).
On September 23, 2011, the Company issued 9,600 shares of common stock for
services rendered, having a fair value of $4,800 ($0.50/share), based upon
recent third party cash offerings.
PREFERRED STOCK
On November 30 2011, the Company designated Series A Preferred Stock, with the
following rights:
* Voting rights - each share has two votes.
* Conversion - each share is convertible into two shares of common stock
beginning on December 1, 2012
* Number of shares - 5,000,000
The Company issued 5,000,000 Series A convertible preferred shares of stock, as
a bonus to its Chief Executive Officer for services rendered, having a fair
value of $480,000 ($0.096/share), based upon the fair value of the services
rendered, which represents the best evidence of fair value.
(B) DEBT
On July 5, 2011, the Company received an advance of $35,500 from a third party.
The advance was non-interest bearing, unsecured and due on demand. The loan was
repaid in September 2011.
F-17
Global Equity International Inc. and Subsidiary
Notes to Financial Statements
December 31, 2010 (Consolidated) and 2009
(C) EMPLOYMENT AGREEMENTS
Effective September 1, 2011, the Company executed an employment agreement with
its Chief Executive Officer and Chief Financial Officer, under the following
terms:
* Salary - $120,000 - 240,000 per year,
* Stock options - amount yet to be determined; and
* Term - 3 years
F-18
Global Equity International, Inc. and Subsidiary
Financial Statements
September 30, 2011
(Unaudited)
F-19
CONTENTS
Page(s)
-------
Consolidated Balance Sheets - September 30, 2011 (unaudited)
and December 31, 2010 (Consolidated) F-21
Statements of Operations and Comprehensive Income (Loss) F-22
Nine Months Ended September 30, 2011 (consolidated)
and September 30, 2010 (unaudited)
Statement of Stockholders' Equity F-23
Nine Months Ended September 30, 2011 (consolidated) (unaudited)
Statements of Cash Flows F-24
Nine Months Ended September 30, 2011 (consolidated)
and September 30, 2010 (Unaudited)
Notes to Financial Statements (unaudited) F-25 through F-32
F-20
Global Equity International, Inc. and Subsidiary
Consolidated Balance Sheets
September 30, 2011 December 31, 2010
------------------ -----------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 2,700 $ 3,275
Prepaids 551 551
----------- -----------
TOTAL CURRENT ASSETS 3,251 3,826
MARKETABLE SECURITIES 752,701 2,227,236
----------- -----------
TOTAL ASSETS $ 755,952 $ 2,231,062
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 52,409 $ 23,357
Loans payable - shareholders 40,173 --
----------- -----------
TOTAL CURRENT LIABILITIES 92,582 23,357
----------- -----------
STOCKHOLDERS' EQUITY:
Common Stock: 70,000,000 shares authorized and 28,780,700
and 28,668,000 shares issued and outstanding 28,781 28,668
Additional Paid In Capital 393,103 336,866
Retained Earnings 1,549,945 1,676,095
Accumulated Other Comprehensive Income (Loss) (1,308,459) 166,076
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 663,370 2,207,705
----------- -----------
Total Liabilities & Stockholders' Equity $ 755,952 $ 2,231,062
=========== ===========
See accompanying notes to financial statements
F-21
Global Equity International, Inc. and Subsidiary
Statements of Operations and Comprehensive Income (Loss)
Nine Months Ended September 30,
2011 2010
------------ ------------
(Consolidated)
(Unaudited) (Unaudited)
Revenue $ 96,542 $ 2,061,160
General and administrative expenses 222,692 81,818
------------ ------------
NET INCOME (LOSS) $ (126,150) $ 1,979,342
============ ============
NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED $ (0.00) $ 0.10
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING -
BASIC AND DILUTED 28,720,833 20,000,000
============ ============
COMPREHENSIVE INCOME (LOSS):
Net income (loss) $ (126,150) $ 1,979,342
Unrealized loss on available for sale
marketable securities (1,308,459) (1,277,600)
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ (1,434,609) $ 701,742
============ ============
See accompanying notes to financial statements
F-22
Global Equity International, Inc. and Subsidiary
Consolidated Statement of Stockholders' Equity
For the period ended September 30, 2011
(Unaudited)
Retained Accumulated
Common Stock Additional Earnings Other Total
------------------ Paid-in (Accumulated Comprehensive Stockholders'
Shares Amount Capital Deficit) Income Equity
------ ------ ------- -------- ------ ------
Balance - December 31, 2009 20,000,000 $20,000 $ 80,000 $ (93,152) $ -- $ 6,848
Stock issued in connection with debt
conversion ($0.40/share) 668,000 668 264,866 -- -- 265,534
Recapitalization 8,000,000 8,000 (8,000) -- -- --
Net income - 2010 -- -- -- 1,769,247 -- 1,769,247
Unrealized gain on available for sale
marketable securities -- -- -- -- 166,076 166,076
---------- ------- -------- ---------- ----------- -----------
BALANCE - DECEMBER 31, 2010 28,668,000 28,668 336,866 1,676,095 166,076 2,207,705
Stock issued for services
($0.50/share) 103,100 103 51,447 -- -- 51,550
Stock issued for services
($0.50/share) 9,600 10 4,790 -- -- 4,800
Net loss - 2011 -- -- -- (126,150) -- (126,150)
Unrealized loss on available for sale
marketable securities -- -- -- -- (1,474,535) (1,474,535)
---------- ------- -------- ---------- ----------- -----------
BALANCE - SEPTEMBER 30, 2011 28,780,700 $28,781 $393,103 $1,549,945 $(1,308,459) $ 663,370
========== ======= ======== ========== =========== ===========
See accompanying notes to financial statements
F-23
Global Equity International, Inc. and Subsidiary
Statements of Cash Flows
Nine Months Ended September 30,
2011 2010
------------ ------------
(Consolidated)
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (126,150) $ 1,979,342
Adjustments to reconcile net loss to net
cash used in by operating activities:
Stock issued for services 4,800 --
Marketable securities received as revenue -- (2,061,160)
Changes in operating assets and operating liabilities:
Prepaid expenses -- 6,674
Accounts payable 29,052 22,445
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (92,298) (52,699)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable - shareholders 40,173 3,757
Proceeds from loans payable 35,500 --
Repayments from loans payable (35,500) --
Proceeds from convertible debt -- 236,581
Proceeds from stock issued for cash 51,550 --
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 91,723 240,338
------------ ------------
NET INCREASE (DECREASE) IN CASH $ (575) $ 187,639
============ ============
CASH - BEGINNING OF PERIOD 3,275 3,380
------------ ------------
CASH - END OF PERIOD $ 2,700 $ 191,019
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ -- $ --
============ ============
Income taxes $ -- $ --
============ ============
See accompanying notes to financial statements
F-24
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the United States
Securities and Exchange Commission for interim financial information.
Accordingly, they do not include all the information and footnotes necessary for
a comprehensive presentation of financial position, results of operations, or
cash flows. It is management's opinion, however, that all material adjustments
(consisting of normal recurring adjustments) have been made which are necessary
for a fair financial statement presentation.
The unaudited interim consolidated financial statements should be read in
conjunction with the Company's Annual Report on Form S-1, which contains the
audited financial statements and notes thereto, together with the Management's
Discussion and Analysis, for the periods ended December 31, 2010 and 2009. The
interim results for the period ended September 30, 2011 are not necessarily
indicative of results for the full fiscal year.
NOTE 2 NATURE OF OPERATIONS
Global Equity Partners, PLC ("GEP"), a private company, was organized under the
laws of the Republic of Seychelles on September 2, 2009. Global Equity
International Inc. (the "Company" or "GEI"), a private company, was organized
under the laws of the state of Nevada on October 1, 2010. On November 15, 2010,
GEP executed a reverse recapitalization with GEI. See Note 3.
Revenue is generated from business consulting services, introduction fees, and
equity participation.
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
All significant inter-company accounts and transactions have been eliminated in
consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenue and expenses during the reporting
period.
F-25
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
Making estimates requires management to exercise significant judgment. It is at
least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial
statements, which management considered in formulating its estimate could change
in the near term due to one or more future non confirming events. Accordingly,
the actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, competition and potential risk of business
failure. The risk of social and governmental factors is also a concern since the
Company is headquartered in Dubai.
MARKETABLE SECURITIES
(A) CLASSIFICATION OF SECURITIES
At the time of acquisition, a security is designated as held-to-maturity,
available-for-sale or trading, which depends on ability and intent to hold such
security to maturity. Securities classified as trading and available-for-sale
are reported at fair value, while securities classified as held-to-maturity are
reported at amortized cost.
Any unrealized gains and losses are reported as other comprehensive income
(loss). Realized gains (losses) are computed on a specific identification basis
and are recorded in net capital gains (losses) on investments in the combined
consolidated statements of operations
All securities held at September 30, 2011 are designated as available for sale.
(B) OTHER THAN TEMPORARY IMPAIRMENT
The Company reviews its equity investment portfolio for any unrealized losses
that would be deemed other-than-temporary and require the recognition of an
impairment loss in income. If the cost of an investment exceeds its fair value,
the Company evaluates, among other factors, general market conditions, the
duration and extent to which the fair value is less than cost, and the Company's
intent and ability to hold the investments. Management also considers the type
of security, related-industry and sector performance, as well as published
investment ratings and analyst reports, to evaluate its portfolio. Once a
decline in fair value is determined to be other than temporary, an impairment
charge is recorded and a new cost basis in the investment is established. If
market, industry, and/or investee conditions deteriorate, the Company may incur
future impairments. The Company has not recorded any impairment losses for the
periods ended September 30, 2011 and 2010.
F-26
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
REVENUE RECOGNITION
Revenue is recognized only when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is performed, and collectability
of the related fee is reasonably assured. The Company's services do not include
a provision for cancellation, termination, or refunds.
In 2010, the Company received marketable securities as consideration for
services rendered. In 2011, revenues were generated from consulting services for
cash.
During the nine months ended September 30, 2011 and 2010, the Company had the
following concentrations of revenues with customers:
Customer 2011 2010
-------- ---- ----
A --% 53%
B --% 47%
C 59% --%
D 41% --%
SHARE-BASED PAYMENTS
Generally, all forms of share-based payments, including stock option grants,
warrants, restricted stock grants and stock appreciation rights are measured at
their fair value on the awards' grant date, based on estimated number of awards
that are ultimately expected to vest. Share-based compensation awards issued to
non-employees for services rendered are recorded at either the fair value of the
services rendered or the fair value of the share-based payment, whichever is
more readily determinable.
EARNINGS PER SHARE
Basic earnings (loss) per share is computed by dividing net income (loss) by
weighted average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of shares of common stock, common stock
equivalents and potentially dilutive securities outstanding during the period.
The Company has no common stock equivalents, which, if exercisable, would be
anti-dilutive. A separate computation of diluted earnings (loss) per share is
not presented.
COMPREHENSIVE INCOME (LOSS)
The comprehensive income or loss consists of the change in unrealized gain
(loss) on available-for-sale marketable securities.
F-27
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
FAIR VALUE FOR FINANCIAL ASSETS AND LIABILITIES
The Company measures assets and liabilities at fair value based on an expected
exit price as defined by the authoritative guidance on fair value measurements,
which represents the amount that would be received on the sale of an asset or
paid to transfer a liability, as the case may be, in an orderly transaction
between market participants. As such, fair value may be based on assumptions
that market participants would use in pricing an asset or liability. The
authoritative guidance on fair value measurements establishes a consistent
framework for measuring fair value on either a recurring or nonrecurring basis
whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
* Level 1: Observable inputs that reflect quoted prices (unadjusted) for
identical assets or liabilities in active markets.
* Level 2: Inputs reflect: quoted prices for identical assets or
liabilities in markets that are not active; quoted prices for similar
assets or liabilities in active markets; inputs other than quoted
arices that are observable for the assets or liabilities; or inputs
that are derived principally from or porroborated by observable market
data by correlation or other means.
* Level 3: Unobservable inputs reflecting the Company's assumptions
incorporated in valuation techniques used to determine fair value.
These assumptions are required to be consistent with market
participant assumptions that are reasonably available.
The carrying amounts reported in the balance sheet for cash, prepaids,
marketable securities, accounts payable and loans payable - shareholders,
approximate fair value based on the short-term nature of these instruments.
The Company has assets measured at fair market value on a recurring basis.
Consequently, the Company had gains and losses reported in the statement of
comprehensive income (loss), that were attributable to the change in unrealized
gains or losses relating to those assets and liabilities still held at the
reporting date for the periods ended September 30, 2011 and December 31, 2010.
F-28
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
The following is the Company's asset measured at fair value on a nonrecurring
basis at September 30, 2011 and December 31, 2010, using quoted prices in active
markets for identical assets (Level 1); significant other observable inputs
(Level 2); and significant unobservable inputs (Level 3):
September 30, 2011 December 31, 2010
------------------ -----------------
Level 1 $ -- $ --
Level 2
Marketable Securities 752,701 2,227,236
Level 3 -- --
---------- ----------
Total $ 752,701 $2,227,236
========== ==========
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220):
Presentation of Comprehensive Income. The guidance in ASU 2011-05 applies to
both annual and interim financial statements and eliminates the option for
reporting entities to present the components of other comprehensive income as
part of the statement of changes in stockholders' equity. This ASU also requires
consecutive presentation of the statement of net income and other comprehensive
income. Finally, this ASU requires an entity to present reclassification
adjustments on the face of the financial statements from other comprehensive
income to net income. The amendments in this ASU should be applied
retrospectively and are effective for fiscal year, and interim periods within
those years, beginning after December 15, 2011. The Company has early adopted
this guidance in these financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic
820): Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs. The guidance in ASU 2011-04 changes the
wording used to describe the requirements in U.S. GAAP for measuring fair value
and for disclosing information about fair value measurements, including
clarification of the FASB's intent about the application of existing fair value
and disclosure requirements and changing a particular principle or requirement
for measuring fair value or for disclosing information about fair value
measurements. The amendments in this ASU should be applied prospectively and are
effective for interim and annual periods beginning after December 15, 2011.
Early adoption by public entities is not permitted. The adoption of this
guidance is not expected to have a material impact on the Company's financial
position or results of operations.
F-29
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
NOTE 4 REVERSE RECAPITALIZATION
On November 15, 2010, the Company merged with GEP, a private corporation, and
GEP became the surviving corporation, in a transaction treated as a reverse
recapitalization. GEI did not have any material operations and majority-voting
control was transferred to GEP.
In the recapitalization, GEI issued 20,000,000 shares of common stock in
exchange for all of GEP's 100,000 issued and outstanding shares of commons
stock. For financial statement reporting purposes, the 100,000 shares have been
recasted to 20,000,000 shares in accordance with an exchange ratio of 200 for 1.
The balance of the common shares issued and outstanding in GEI prior to the
recapitalization were 8,000,000 common shares, and these common shares represent
the common shares issued and outstanding in GEI prior to the recapitalization
that were not contemplated in the share exchange. The transaction resulted in
GEP acquiring approximately 72% control.
The transaction also required a recapitalization of GEP. Since GEP acquired a
controlling voting interest, it was deemed the accounting acquirer, while GEI
was deemed the legal acquirer. The historical financial statements of the
Company are those of GEP and of the consolidated entities from the date of
recapitalization and subsequent.
Since the transaction is considered a reverse recapitalization, the presentation
of pro-forma financial information was not required. All share and per share
amounts have been retroactively restated to the earliest periods presented to
reflect the transaction.
NOTE 5 MARKETABLE SECURITIES AND FAIR VALUE
The following table represents the Company's available for sale marketable
securities holdings as of September 30, 2011:
Balance - December 31, 2010 $ 2,227,236
Unrealized losses - 2011 (1,308,459)
-----------
Equity securities at fair value - September 30, 2011 $ 752,701
===========
F-30
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
NOTE 6 DEBT
(A) RELATED PARTY
The Company received advances of $40,173 from related parties. The advances are
non-interest bearing, unsecured and due on demand.
(B) OTHER
On July 5, 2011, the Company received an advance of $35,500 from a third party.
The advance was non-interest bearing, unsecured and due on demand. The loan was
repaid in September 2011.
NOTE 7 STOCKHOLDERS' EQUITY
In May and June 2011, the Company issued 103,100 shares of common stock for
$51,550 ($0.50/share).
On September 23, 2011, the Company issued 9,600 shares of common stock for
services rendered, having a fair value of $4,800 ($0.50/share), based upon
recent third party cash offerings.
NOTE 8 COMMITMENTS
Effective September 1, 2011, the Company executed an employment agreement with
its Chief Executive Officer and Chief Financial Officer, under the following
terms:
* Salary - $120,000 - 240,000 per year,
* Stock options - amount yet to be determined; and
* Term - 3 years
NOTE 9 LIQUIDITY
At September 30, 2011, and through the date these financial statements were
available to be issued, the Company's cash balance is minimal. The Company
expects that it can meet all of its current obligations if necessary by selling
its marketable securities to generate cash flows. The Company also believes that
related party debt and/or equity financing is available if needed under
favorable terms.
F-31
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2011
(Unaudited)
NOTE 10 SUBSEQUENT EVENTS
The Company has evaluated for subsequent events between the balance sheet date
of September 30, 2011 and November 30, 2011, the date the financial statements
were available to be issued, and concluded that the following events or
transactions occurred during that period requiring recognition or disclosure.
On November 30 2011, the Company designated Series A Preferred Stock, with the
following rights:
* Voting rights - each share has two votes.
* Conversion - each share is convertible into two shares of common stock
beginning on December 1, 2012
* Number of shares - 5,000,000
The Company issued 5,000,000 Series A convertible preferred shares of stock, as
a bonus to its Chief Executive Officer for services rendered, having a fair
value of $480,000 ($0.096/share), based upon the fair value of the services
rendered, which represents the best evidence of fair value.
F-32
EX-10
3
ex10-9.txt
CONSULTING AGREEMENT
Exhibit 10.9
[LETTERHEAD OF GE PARTNERS PLC]
1 PARTIES TO THE AGREEMENT
1.1 GE Partners Plc ("GEP") domiciled in 306 Victoria House, Victoria, Mahe,
Republic of Seychelles and 1 Berkeley Street, London W1J 8DJ, United
Kingdom.
1.2 Voz Mobile Cloud Ltd ("VMC") a VOTP Biometric Security company domiciled in
Singapore (Asia).
2 APPOINTMENT
2.1 GEP is hereby engaged by the Company as its corporate finance adviser in
relation to the Acquisition and the Company accordingly agrees itself not
to appoint and not to instruct any other person on its behalf to appoint
any other person as arranger/ advisor for such purpose at any time during
the Engagement Period (as defined in paragraph 5) without GEP's specific
consent, such consent not to be unreasonably withheld. Further, during the
Engagement Period the Company itself shall ensure that no other person on
its behalf instructs any other agents, intermediaries or advisors in
relation to the Acquisition without GEP's prior written approval.
2.2 The Company shall promptly inform GEP of all information, inquiries and
proposals it has received before or receives at any time during the
Engagement Period with respect to the Acquisition.
2.3 GEP shall inform the Company on a regular basis of any information that may
come to its attention regarding the Acquisition during the Engagement
Period.
3 SERVICES TO BE PROVIDED BY GEP
3.1 GEP will act as corporate finance adviser to the Company in connection with
the transaction. As such, GEP will use all reasonable endeavours to provide
the following advice, assistance and services:
3.2 GEP shall advise the Company on structuring and arranging the Acquisition.
Additionally, as arranger, GEP shall assist in the preparation and
authorisation of documentation, as required.
1
3.3 GEP shall use reasonable efforts through its marketing and public relations
contacts to support and market the Acquisition including; (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the
Company, the Directors and their advisors in negotiating definitive
documentation and (iii) take such other actions as are reasonably necessary
to give effect to the foregoing.
3.4 The Company will give GEP reasonable and prompt co-operation and assistance
to support GEP in the provision of its services hereunder and keep GEP
informed of all developments relevant to the Acquisition ("the Services").
3.5 The Company acknowledges that this engagement letter does not constitute
any understanding or commitment whatsoever by GEP, or any of its respective
affiliates, to participate financially in any way in the Acquisition.
3.6 At the Company's option, GEP agrees to introduce to the Company
professional advisers to include but not be limited to reporting
accountants, auditors, lawyers and registrars, it being understood that all
fees in connection with such professional advice will be borne by the
Company.
3.7 At the Company's option, GEP agrees to provide assistance in the marketing
of the Company's product, any such assistance to be governed by a separate
agreement.
3.7 GEP shall on a best efforts basis seek to provide or make relevant
introductions to provide:
* Any finance required for the listing and additional finance as agreed
with the company for
* Ongoing development pre listing. Post listing finance is by separate
negotiation.
4 FEES AND EXPENSES
4.1 In consideration of GEP providing the Services, the Company will pay GEP
the following fees, together with any applicable VAT thereon:
2
(a) $ 100,000 or at GEP's election, 10% of the Target Company's issued
share capital which would represent no less than 2,000,000 shares.
In addition VMC will pay the relevant fees due as they become due to the
accountants and auditors.
In addition, the Company shall reimburse GEP on demand for all
out-of-pocket expenses incurred by GEP in providing the Services, including
but not limited to travel, accommodation and professional advisors fees,
subject to the presentation of invoices to the Company, together with any
taxes thereon. All such expenses in excess of (euro)1,000 (One Thousand
Euros) will be subject to the prior written consent of the Company, such
consent not to be unreasonably withheld. A representative will travel to
the USA no more than twice during the course of the contract on behalf of
VMC. Each trip is expected to cost $5000. That cost is to be reimbursed by
the company.
4.2 In the event that GEP provides the Services hereunder and such Acquisition
thereafter does not proceed owing to a material or adverse change in the
structure of the Company or to any failure on the part of the Company to
close on such Acquisition, the Company shall be required to pay to GEP a
cancellation fee of $50,000 (Fifty Thousand Dollars).
4.3 All fees as referred to in this paragraph 4 shall be paid in USD$ or an
alternative currency using the days prevailing interbank exchange rate. All
out of pocket expenses to be reimbursed to GEP shall be reimbursed in the
currency in which they were incurred.
5 ENGAGEMENT PERIOD AND TERMINATION
5.1 GEP's engagement hereunder shall become effective on the date the Company
executes and delivers this engagement letter to GEP and shall remain in
effect until termination in accordance with the following provisions of
this paragraph 5 ("the Engagement Period").
3
(a) Termination of this agreement shall occur on the following
events/circumstances:
on the date 90 (ninety) days following execution by the parties of the
present agreement, provided at least 30 (thirty) days prior to such
date, at least one of the parties has served notice in writing on the
other that it wishes the engagement to terminate on such date. Where
no such notice is served by either party as aforesaid, the engagement
shall remain in effect for another 90 days from such date, under the
same terms and conditions as set out in this engagement letter;
GEP shall be entitled to terminate:
i) In the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) Otherwise, subject to the minimum term established in clause 5.1
(a), above, at any time as GEP so wishes on giving 30 (thirty)
days written notice to the Company.
The Company shall be entitled to terminate:
iii) in the event there has been a material breach of the terms of the
engagement letter by the Company;
iv) otherwise, subject to the minimum term established in clause 5.1
(a), above, and to giving 30 (thirty) days written notice to GEP,
in the event that the Company in its discretion no longer wishes
to proceed with the Acquisition, in which event the cancellation
fee specified in clause 4.3 hereof will become immediately
payable.
(b) At any time but without prejudice to the foregoing as specifically
agreed between the parties in writing.
5.2 Upon termination of this engagement letter, neither party shall have any
continuing liability or obligation to the other.
4
6 INFORMATION AND CO-OPERATION
6.1 In connection with GEP's engagement hereunder, the Company shall provide
GEP with such information and documents as GEP may consider necessary or
desirable in order to enable it to provide the Services and to carry out
its duties and responsibilities hereunder. In particular, and without
prejudice to the generality of the foregoing, the Company will promptly
furnish GEP with such information as GEP may request in order to permit GEP
to assist the Company in preparing any material required for the
Acquisition (collectively, the "Acquisition Documents").
6.2 The Company will be solely responsible for the contents of any Acquisition
Documents and the Company represents and warrants to GEP that the
Acquisition Documents will, as of the date of any marketing, distribution
of the Acquisition Documents or completion, or preparation of the
Acquisition, be true and accurate in all material respects, not omit any
material fact and not be misleading in any respect and, with respect to any
financial projections, the Company represents that they have been, or will
be, prepared in good faith on the basis of reasonable assumptions. The
Company agrees to advise GEP promptly of the occurrence of any event or any
other change known to the Company which results in any of the Acquisition
Documents containing any untrue statement of a material fact or omitting to
state a material fact the omission of which would render any statements
contained therein, in light of the circumstances under which they were
made, misleading and in such event the Company shall provide corrective
information to GEP suitable for inclusion in a supplemental information
statement. For purposes of this paragraph notification by the Company must
be made directly to GEP and GEP shall not be deemed notified solely as a
result of action, notice or the constructive knowledge of any of its
Related Parties.
6.3 The Company acknowledges that GEP (i) will use and rely upon the
information provided by the Company or on its behalf which will comprise
the Acquisition Documents absolutely and without GEP itself independently
verifying any of the same, (ii) does not itself assume any responsibility
for the accuracy of completeness of the Acquisition Documents.
6.4 The Company hereby authorises GEP to provide the Acquisition Documents on
its behalf to those concerned with the Acquisition. GEP shall each have the
right to review and be required to approve all Acquisition Documents and
every form of letter, circular, notice, memorandum or other written
communication from the Company or any person acting on its behalf in
connection with the Acquisition and the persons to whom any of the
foregoing are to be directed, such approval not to be unreasonably
withheld.
5
6.5 The Company shall at all times use its efforts to assist GEP in providing
the Services and in carrying out its duties, functions and responsibilities
hereunder and shall co-operate and use all reasonable efforts to assist GEP
in complying with the applicable laws of any jurisdiction in which GEP
operating.
7 CONFIDENTIALITY
7.1 GEP acknowledges that, in performing its duties from time to time
hereunder, it shall receive from the Company certain information relating
to the Company, the Acquisition and otherwise to the transactions
contemplated by this engagement letter. For purposes of this paragraph, all
such information, except for information which (i) is comprised in
Acquisition Documents as approved by the Company (ii) GEP is otherwise
authorised by the Company to disclose to third parties otherwise than on a
confidential basis, (iii) is or becomes generally available to the public
other than as a result of a disclosure by GEP where such disclosure is not
permitted, or (iv) is or becomes available to GEP on a non-confidential
basis from a person or entity other than the Company, is hereinafter
referred to as "Confidential Information".
7.2 GEP shall keep the Confidential Information confidential and not without
the Company's prior consent, except as required by law, legal process, or
regulatory authority, (i) disclose or reveal any Confidential Information
to any person, firm or entity other than those employees, agents or
advisors of GEP who are actively and directly participating in the
transactions contemplated by this engagement letter or who otherwise need
to know the Confidential Information for the purpose of evaluating,
structuring or reviewing any portion of the Acquisition or GEP's role with
respect thereto, or (ii) use Confidential Information for any purpose other
than in connection with the transactions contemplated by this engagement
letter.
7.3 If GEP's engagement is terminated at any time, GEP shall continue to
maintain the Confidential Information in confidence in accordance with the
terms of this engagement letter and, upon the written request of the
Company, such Confidential Information and all copies thereof as are held
by GEP, will be returned to the Company, or destroyed by GEP, provided,
however, that GEP may retain one copy of the Confidential Information in
the files of its general counsel for compliance purposes or for the purpose
of defending or maintaining any litigation relating to this engagement
letter.
6
7.4 If GEP should decide that any such Confidential Information should be
included in the Acquisition Documents, and the Company withholds its
consent to such disclosure or refrains from co-operating fully in such
disclosure, GEP may immediately terminate the Services and the Company
shall immediately reimburse all GEP's fees and expenses due under clause 4
herein., as provided in paragraph 4.3 together with all fees, if any, due
under paragraph 4.2.
7.5 The Company agrees that this engagement letter (including the fact of its
existence and its terms and conditions), and the services it describes,
together with any related information or documents, constitute confidential
and propriety information of GEP. The Company further agrees that its
written and verbal reports to the Company and all writings prepared by or
on behalf of GEP and furnished to the Company in connection with GEP's
engagement hereunder (collectively the "GEP Information") shall be kept
confidential and the Company shall not without GEP's prior written consent,
except as required by law, legal process or a regulatory authority, (i)
disclose or reveal any GEP Information to any person, firm or entity other
than those employees, agents or advisors of the Company who are actively
and directly participating in the transactions contemplated by this
engagement letter or otherwise needed to know the GEP Information for the
purpose of evaluating, structuring or reviewing any portion of the
Acquisition or the Company's participation with respect thereto, or (ii)
use the GEP Information for any purpose other than in connection with the
transactions contemplated by this engagement letter.
8 RELATED PARTIES
GEP acknowledges that it will take all reasonable steps to ensure that,
pursuant to paragraph 7 above, any Confidential Information obtained from
the Company shall not be disclosed to the Related Parties, except as
permitted under paragraph 7.
9 INDEMNIFICATION
9.1 The Company agrees to indemnify and hold harmless GEP, each of its Related
Parties and each of its or their directors, officers, employees, agents and
affiliates (each an "Indemnitee") in respect of any and all actions, claims
losses, liabilities, damages, costs, charges and expenses whatsoever which
any Indemnitee may suffer or incur or which may be made against any
Indemnitee relating to or arising from GEP's engagement, the provision of
the Services, the Acquisition or otherwise from the arrangements
contemplated by this engagement letter or any acts or omissions of any
7
Indemnitee otherwise requested by the Company or any of the Company's
affiliates pursuant to or in connection therewith, provided that the
Company shall not be liable under this indemnity to the extent any such
action, claims, losses, liabilities, damages, costs, charges, or expenses
are attributable to the gross negligence or wilful misconduct of such
Indemnitee. The indemnity in this paragraph 9 is given to GEP in its own
right and as trustee for each other Indemnitee.
10 DUE DILIGENCE AND INFORMATION
The Company shall not be responsible for any due diligence in relation to
the transaction and the Company acknowledges that any advice given by GEP
on the structuring of the Acquisition shall be based on information
provided by the Company.
11 CONFLICTS
The Company acknowledges that, in addition to GEP acting as arranger under
this engagement letter, other members of the GEP group of companies may
have other roles in relation to the Acquisition or provide other services
to the Company or its affiliates or to other persons who may have a role or
participation in the Acquisition or otherwise, and the Company hereby on
its own behalf and on behalf of its affiliates waives any claim against GEP
in undertaking any such other roles.
12 LIMITED GEP ROLE
It is expressly agreed and understood that GEP is not providing nor is the
Company relying on GEP for legal, accounting, tax or other advice and that
the Company will rely on the advice of its own professionals and advisors
as it considers appropriate for such matters and will make an independent
analysis and decision regarding the Acquisition in relation to such matters
based on such advice. The determination whether to accept any proposals,
presentation or recommendations arising out of GEP's services under this
engagement letter shall be made by the Company in its sole discretion, and
the Company shall have the option, at its sole discretion, to accept,
reject or modify any such proposals, presentations or recommendations
rendered to it by GEP. Nothing in this engagement letter shall give rise to
any liability or responsibility on the part of GEP for the success or
otherwise of the Acquisition.
8
13 GEP AFFILIATES
The Company hereby acknowledges and agrees that GEP may perform the
services, contemplated to be rendered by it, under this engagement letter
through selected affiliates within the host country of listing. In
connection therewith but at all times subject to the confidentiality
obligations set out herein, GEP may share any information on matters
relating to the Company with such affiliates.
14 MODIFICATION OF AGREEMENT
This engagement letter may be modified, amended or superseded only in
writing signed by both the parties hereto and expressly referring to this
engagement letter.
15 BROKERS
The Company represents and warrants that there have been no other brokers
or agents engaged by it or by any other person on its behalf in connection
with the transactions contemplated by this engagement letter, other than
those specifically advised. The Company shall indemnify and hold GEP for
itself and on trust for each of its Related Parties (each an "Indemnitee")
harmless against the claim of any broker or agent claiming to have acted on
behalf of the Company or any of its affiliates in connection with the
Acquisition, and against the claim of any other party (other than a party
expressly engaged by GEP) claiming to be entitled to any fees or expenses
in connection with the Acquisition and against all costs, charges and
expenses incurred by each Indemnitee in relation thereto.
16 AUTHORITY
The Company represents and warrants to GEP that its entry into and delivery
of this engagement letter has been duly authorized. GEP represents and
warrants to the Company that GEP's entry into and delivery of this
engagement letter has been duly authorized.
17 NO AGENCY
Notwithstanding the identification of GEP as arranger for the Acquisition,
GEP will act under this engagement letter solely as an independent
contractor. The execution of this engagement letter shall not authorize any
party to act as or hold themselves to act as an agent or fiduciary, and GEP
shall not be or be deemed to be an agent or fiduciary of the Company.
18 TAXES: PAYMENTS FREE AND CLEAR
All payments by the Company under this engagement letter shall not be
subject to any counter-claim or set-off for, or be otherwise affected by,
any claim or dispute relating to any matter and will be made free and clear
of and without deduction for any and all present or future taxes, levies,
9
imposts, deductions, charges over holdings, and all liabilities with
respect thereto (together "Taxes"). If the Company shall be required by law
to deduct any Taxes from or in respect of any sum payable to GEP hereunder,
the sum payable shall be increased as may be necessary so that after making
all required deductions, GEP receives an amount equal to the sum it would
have received had no such deductions been made. In addition, the Company
agrees to pay any present or future stamp or sales taxes or any other
excise taxes, charges or similar levies that arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise
with respect to this engagement letter at the same time as payment or
reimbursement of any fees, costs and expenses payable hereunder. The
Company shall pay for any VAT or other form of duty or sales tax which is
required to be levied thereon.
19 DISPUTES
Any disputes or complaints (with all relevant details) must be in writing
and should be referred in the first instance to the Compliance Officer of
GEP. Should the Company be dissatisfied with the handling of the dispute,
the Company has the right to refer the matter to the Directors of GEP. As
the Company is classified as either an Intermediate Customer or Private
Expert Client and thereby an Intermediate Customer the Company waives the
right to the services of any Financial Ombudsman Service (FOS) and
compensation under the any regulatory regime.
20 ASSIGNMENT
This engagement letter shall be binding upon and inure to the benefit of
the parties hereto and may not be assigned by either party, without the
prior written consent of the other party.
21 ENTIRE AGREEMENT
This agreement supersedes any and all discussions, written or oral, between
the parties hereto and sets out the entire agreement of the parties
relating to the subject matter of this engagement letter.
22 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be
deemed an original and all of which counterparts shall constitute one and
the same document.
23 APPLICABLE LAW
The laws of the United Kingdom apply to this agreement
10
Please indicate the Company's acceptance of the provisions of this engagement
letter by signing as indicated and in accordance with the provisions set out
below:
This engagement letter is hereby executed and delivered by the parties as a Deed
on the date and year of acceptance of the terms of this letter by the Company as
indicated by the date of its signature below:
EXECUTED AND DELIVERED AS A DEED By Voz Mobile Cloud Ltd.
/s/ John Francis Baxter
---------------------------------
........................................................................ Director
JOHN FRANCIS BAXTER
December 12 2011
EXECUTED AND DELIVERED AS A DEED
by Global Equity Partners
/s/ Peter Smith
---------------------------------
...................................................................CEO / Director
PETER SMITH
December 12 2011
11
CORRESP
4
filename4.txt
Global Equity International, Inc.
23 Frond "K" Palm Jumeirah
Dubai, UAE
January 12, 2012
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, D.C. 20549
Attention: Jennifer Gowetski, Senior Counsel
Sandra B. Hunter, Staff Attorney
Kevin Woody, Accounting Branch Chief
Mark Rakip, Staff Accountant
Re: Global Equity International, Inc.
Registration Statement on Form 10-12G
Filed December 1, 2011
File No. 000-54557
Dear Madam or Sir,
This letter is in response to your letter to me of December 29, 2011,
regarding the above referenced matter ("Comment Letter"). Our revised filing is
attached.
Our responses to the Comment Letter follow:
GENERAL
1. PLEASE NOTE THAT THE FORM 10 GOES EFFECTIVE BY LAPSE OF TIME 60 DAYS AFTER
THE DATE FILED PURSUANT TO SECTION 12(G)(1) OF THE SECURITIES EXCHANGE ACT OF
1934. AT THAT TIME, YOU WILL BE SUBJECT TO THE REPORTING REQUIREMENTS UNDER
SECTION 13(A) OF THE SECURITIES EXCHANGE ACT OF 1934. IN ADDITION, WE WILL
CONTINUE TO REVIEW YOUR FILING UNTIL ALL OF OUR COMMENTS HAVE BEEN ADDRESSED. IF
THE REVIEW PROCESS HAS NOT BEEN COMPLETED BEFORE THAT DATE YOU SHOULD CONSIDER
WITHDRAWING THE REGISTRATION STATEMENT TO PREVENT IT FROM BECOMING EFFECTIVE AND
FILE IT AGAIN AT SUCH TIME AS YOU ARE ABLE TO RESPOND TO ANY REMAINING ISSUES OR
COMMENTS.
Response:
Acknowledged.
2. WE NOTE YOU INDICATE ON PAGE 5 THAT YOU ARE VOLUNTARILY FILING THIS
REGISTRATION STATEMENT. PLEASE TELL US THE PURPOSE OF THE REGISTRATION OF THIS
CLASS OF SECURITIES.
Response:
In response to this comment, we have amended our filing on page 7 to state:
"VOLUNTARY FILING
"We are voluntarily filing this Registration Statement with the U.S. Securities
and Exchange Commission ("SEC") and we are under no obligation to do so under
the Securities Exchange Act of 1934 ("Exchange Act"). However, our Board of
Directors believes that by registering our class of common stock with the SEC
and filing reports under the Exchange Act, some of which include audited
financial statements, our Company's business activities, financial condition and
results of operations will be transparent and accessible by our current and
potential clients, and may help our business in the future."
3. WE NOTE THAT MARKETABLE SECURITIES APPEAR TO COMPRISE THE SUBSTANTIAL
MAJORITY OF YOUR TOTAL ASSETS. PLEASE PROVIDE US WITH A DETAILED ANALYSIS OF
WHETHER YOU ARE SUBJECT TO THE INVESTMENT COMPANY ACT OF 1940. IN THIS REGARD,
WE NOTE YOU OWN INVESTMENT SECURITIES THAT APPEAR HAVE A VALUE EXCEEDING 40% OF
YOUR TOTAL ASSETS. PLEASE NOTE THAT WE MAY REFER YOUR RESPONSE TO THE DIVISION
OF INVESTMENT MANAGEMENT FOR FURTHER REVIEW.
Response:
In response to this comment, we are not an investment company. We are,
instead, a company that just happens to accept equity stakes in our clients as
part of our compensation. Although we currently hold investment securities
having a value exceeding 40% of the value of our total assets (see Section
3.a.1.iii. of Investment Company Act or "ICA")), we are exempt from the
provisions of the ICA by virtue of Section 3.b.a of the ICA due to the fact that
we are "... primarily engaged, directly or through our wholly-owned subsidiary
(Global Equity Partners PLC) in a business (of providing consulting services,
such as corporate restructuring, advice on management buy outs, management
recruitment, website design and development for corporate marketing, investor
and public relations, regulatory compliance and introductions to financiers, to
companies desiring to be listed on stock exchanges in various parts of the
world) ... other than that of investing, reinvesting, owning, holding, or
trading in securities."
ITEM 1. BUSINESS, PAGE 1
4. WE NOTE YOU INDICATE THAT YOU HAVE AFFILIATIONS WITH FIRMS AROUND THE WORLD
AND THAT YOU HAVE A "ROL-A-DEX" OF OVER 179 FINANCIAL INTRODUCERS AROUND THE
WORLD. PLEASE REVISE YOUR DISCLOSURE TO EXPLAIN WHAT YOU MEAN BY "AFFILIATIONS"
AND "FINANCIAL INTRODUCERS." IN ADDITION, PLEASE DISCLOSE WHETHER YOU HAVE ANY
CONTRACTUAL ARRANGEMENTS WITH FIRMS IN THIS REGARD.
Response:
In response to this comment, we have revised our disclosures on page 1 of
our amended filing by explaining what we mean by "affiliations" and "financial
introducers."
NEW BUSINESS TRANSACTED IN 2011, PAGE 3
5. WE NOTE YOU INDICATE THAT YOU HAVE ARRANGED MEETINGS BETWEEN RFC K.K. AND "A
FEW HIGH PROFILE, POTENTIAL DUBAI BASED PARTNERS/INVESTORS" AND THAT RFC K.K.
HAS ENTERED INTO PRELIMINARY VERBAL AGREEMENTS WITH THE SHANGHAI LOCAL
GOVERNMENT AND FERRARI. PLEASE REVISE TO CLARIFY WHETHER RFC K.K. HAS ANY
BINDING AGREEMENTS AND WHETHER YOUR COMPENSATION FROM RFC K.K. DEPENDS ON
BINDING AGREEMENTS WITH INVESTORS OR OTHERS.
2
Response:
In response to this comment, we have revised our disclosures on page 4 of
our amended filing to indicate that RFC K.K. has not entered into any binding
agreements and that the equity portion of our compensation is contingent upon
our clients acquiring target businesses.
6. WE NOTE YOU INDICATE THAT RFC K.K., BLACK SWAN DATA LIMITED AND ARROW CARS SL
HAVE GIVEN YOU A 10% EQUITY STAKE. PLEASE TELL US WHETHER YOU ARE ABLE TO
PROVIDE THE VALUE OF EACH OF THESE EQUITY HOLDINGS AND HOW YOU DETERMINED SUCH
VALUE. AS APPLICABLE, PLEASE REVISE YOUR DISCLOSURE TO DESCRIBE THE RISKS
ASSOCIATED WITH AN EQUITY STAKE OF A DEVELOPMENT STAGE COMPANY, SUCH AS RFC
K.K., BLACK SWAN DATA LIMITED AND ARROW CARS SL, AND THAT THE VALUE OF YOUR
EQUITY STAKE MAY DECREASE AND ULTIMATELY BE WORTH NOTHING.
Response:
In response to this comment, we have revised our disclosures on page 4 and
5 of our amended filing to indicate that "we will receive a 10% equity stake" in
our clients in the event they acquire a target company. We have not received any
equity stake in RFC K.K., Black Swan Data Limited or Arrow Cars SL thus far.
We have also added on page 9 of our amended filing a new risk factor as
follows:
"BECAUSE OUR BUSINESS MODEL ANTICIPATES OUR RECEIVING EQUITY STAKES IN OUR
CLIENTS, MOST OF WHOM WILL BE DEVELOPMENT STAGE COMPANIES, WE MAY NOT BE ABLE TO
RESELL SUCH EQUITY AT SUITABLE PRICES, IF AT ALL, WHICH COULD MATERIALLY IMPACT
OUR EARNINGS AND ABILITY TO REMAIN IN BUSINESS.
Our business model anticipates that we will receive, as partial
compensation for our consulting services, equity stakes in our clients, many of
whom will be development stage companies. We will have to value those equity
stakes at the time we receive them. Investments in development stage companies
are risky because many of such companies' securities are illiquid, thinly traded
(if at all) and the value of such securities will be subject to adjustments
should the value of such securities decline or should such businesses fail,
which could cause us to write-down or write-off the value of such securities and
result in a negative impact to our earnings and possibly cause us to cease or
curtail our operations."
FUTURE PLANS, PAGE 5
7. YOU DISCLOSE ELSEWHERE IN YOUR PROSPECTUS THAT THROUGH THE NINE MONTHS ENDED
SEPTEMBER 30, 2011 YOU HAVE RELIED ON ADVANCES OF $127,223 IN LOANS FROM
SHAREHOLDERS. BASED ON THIS AND YOUR CURRENT WORKING CAPITAL DEFICIT FOR THE
SAME TIME PERIOD, PLEASE DISCLOSE ADDITIONAL INFORMATION SUPPORTING YOUR
STATEMENT THAT YOU BELIEVE YOU HAVE SUFFICIENT FUNDS TO OPERATE FOR THE NEXT 24
MONTHS.
Response:
In response to this comment, we have expanded our disclosure on pages 5 and
6 of our amended filing.
EMPLOYEES; IDENTIFICATION OF A SIGNIFICANT EMPLOYEE, PAGE 5
8. PLEASE REVISE YOUR DISCLOSURE IN THIS SECTION TO PROVIDE THE TOTAL NUMBER OF
EMPLOYEES AND THE TOTAL NUMBER OF FULL-TIME EMPLOYEES. IN ADDITION, WE NOTE YOU
INDICATE ON PAGE 7 THAT SOME OF YOUR OFFICERS WILL ONLY BE DEVOTING LIMITED TIME
TO YOUR OPERATIONS. PLEASE REVISE TO INDICATE THE AMOUNT OF TIME THESE EMPLOYEES
WILL BE DEVOTING TO THE COMPANY. PLEASE REFER TO ITEM 101(H)(4)(XII) OF
REGULATION S-K
3
Response:
In response to this comment, we have revised our disclosure on page 7 of
our amended filing to indicate that we have only three employees: Peter Smith,
Enzo Taddei and Adrian Scarrott, each of whom is full time.
ITEM 1A. RISK FACTORS, PAGE 6
WHILE WE HAVE TWO YEARS OF OPERATING HISTORY..., PAGE 6
9. PLEASE REVISE THIS RISK FACTOR TO REMOVE THE MITIGATING LANGUAGE RELATED TO
YOUR ACCUMULATED PROFITS AND PROFITABILITY IN THE PAST. IN ADDITION, PLEASE
DESCRIBE AND QUANTIFY YOUR LOSSES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011.
Response:
In response to this comment, we have revised this risk factor on page 8 of
our amended filing by deleting the mitigating language and specifying our losses
for the nine months ended September 30, 2011, as follows:
"WHILE WE HAVE TWO YEARS OF OPERATING HISTORY AND HAVE ACCUMULATED PROFITS,
THERE IS NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE
REVENUES. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE
WILL CEASE OPERATIONS AND YOU WILL LOSE YOUR INVESTMENT.
We were incorporated in Nevada on October 1, 2010, and our wholly-owned
subsidiary, GE Partners Plc, was formed on September 2, 2009. For the nine
months ended September 30, 2011, we incurred a net loss from operations of
$126,150 and an unrealized loss on "available for sale marketable
securities"(due to a decline in the value thereof) for an additional loss of
$1,434,609. If we cannot generate sufficient revenues to operate profitably, we
will cease operations and you will lose your investment in our Company. Our
ability to achieve and maintain profitability and positive cash flow is
dependent, among other things, upon:
* our ability to attract clients who will buy our services from us; and
* our ability to generate revenues through the sale of our services. "
OUR ARTICLES OF INCORPORATION AUTHORIZES THE ISSUANCES OF PREFERRED STOCK, PAGE
8
10. WE NOTE YOU INDICATE ON PAGE 7 THAT MR. SMITH OWNS 5,000,000 SHARES (100%)
OF YOUR TOTAL OUTSTANDING PREFERRED STOCK. PLEASE REVISE YOUR DISCLOSURE IN THIS
RISK FACTOR AND THROUGHOUT YOUR PROSPECTUS, INCLUDING WITHOUT LIMITATION ON
PAGES 11 AND 22, TO CLARIFY THAT THESE SHARES OF PREFERRED STOCK HAVE BEEN
ISSUED TO MR. SMITH.
Response:
In response to this comment, we have revised our disclosures on pages
10-11, 17, 18, and 32 of our amended filing to clarify that the 5,000,000 shares
of preferred stock have been issued to Mr. Smith.
4
ITEM 2. FINANCIAL INFORMATION, PAGE 8
BUSINESS DEVELOPMENT, PAGE 9
11. PLEASE REVISE TO PROVIDE A MORE DETAILED DESCRIPTION OF HOW YOU DERIVE YOUR
REVENUES AND HOW YOU ARE COMPENSATED BY YOUR CLIENTS. PLEASE IDENTIFY ANY CLIENT
FROM WHICH YOU DERIVE 10% OR MORE OF YOUR REVENUE. IN ADDITION, PLEASE DESCRIBE
AND QUANTIFY YOUR GENERAL AND ADMINISTRATIVE EXPENSES.
Response:
In response to this comment, we have revised our disclosure on pages 11 to
13 of our amended filing.
12. PLEASE PROVIDE A MORE ROBUST DESCRIPTION OF YOUR RESULTS BOTH FOR THE YEAR
ENDED DECEMBER 31, 2010 AS WELL AS THE NINE MONTHS ENDED SEPTEMBER 30, 2011.
REFER TO ITEM 303(A)(3) OF REGULATION S-K.
Response:
In response to this comment, we have revised our disclosure on pages 11 to
13 of our amended filing.
13. PLEASE EXPAND THE COMPANY'S PLAN OF OPERATIONS FOR THE NEXT 12 MONTHS.
PROVIDE DETAILS OF YOUR SPECIFIC PLAN OF OPERATIONS, INCLUDING DETAILED
MILESTONES, THE ANTICIPATED TIME FRAME FOR BEGINNING AND COMPLETING EACH
MILESTONE, THE ESTIMATED EXPENSES ASSOCIATED WITH EACH MILESTONE AND THE
EXPECTED SOURCES OF SUCH FUNDING. PLEASE EXPLAIN HOW THE COMPANY INTENDS TO MEET
EACH OF THE MILESTONES IF IT CANNOT RECEIVE FUNDING.
Response:
We have revised our disclosure on pages 14-16 of our amended filing.
LIQUIDITY AND CAPITAL RESERVES, PAGE 9
14. PLEASE ALSO REVISE YOUR DISCLOSURE IN THIS SECTION TO BE MORE SPECIFIC
CONCERNING THE SOURCES OF YOUR LIQUIDITY FOR THE NEXT 12 MONTHS. FOR EXAMPLE, IF
YOU PLAN TO ISSUE ADDITIONAL EQUITY, YOU SHOULD DISCLOSE YOUR PLANS TO DO SO. IF
YOU PLAN TO INCUR DEBT OBLIGATIONS, YOU SHOULD DISCLOSE WHETHER YOU HAVE
IDENTIFIED ANY POTENTIAL LENDERS. PLEASE ALSO REVISE YOUR DISCLOSURE TO INCLUDE
A RELATED RISK FACTOR.
Response:
In response to this comment, we have revised our disclosure on pages 13 and
14 of our amended filing and we have added a new risk factor on page 8 of our
amended filing, as follows:
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"WE HAVE NO COMMITMENTS FROM ANY ONE TO PROVIDE US WITH DEBT OR EQUITY
FINANCING. IN THE EVENT OUR REVENUES DO NOT COVER OUR EXPENSES, THEN WE MAY NOT
BE ABLE TO CARRY OUT OUR BUSINESS PLAN.
Our monthly burn rate is estimated to be $31,500 per month during 2011. We
are dependent on our existing contracts with clients to cover this burn rate. If
we are unable to cover our burn rate, then we will have to borrow money or sell
our securities to raise money. We have no commitments from anyone to lend us
money or to invest in our securities. In the event that our revenues do not
cover our expenses and we are unable to borrow money or sell our securities to
fund our operations, then we will have to curtail our operations and our
investors cold lose part or all of their investments in our Company."
15. PLEASE TELL US WHY YOU WERE UNABLE TO VALUE THE 10% EQUITY INTEREST RECEIVED
FOR SERVICES RENDERED RELATED TO ONE OF YOUR RECENTLY SIGNED CLIENT CONTRACTS
AND HOW THIS TRANSACTION I RECORDED WITHIN YOUR FINANCIAL STATEMENTS.
Response:
In response to this comment, we have revised our disclosure on page 14 of
our amended filing by removing the statement that "...we were unable to value
the 10% equity interest received...."
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, PAGE 11
16. PLEASE REVISE THIS SECTION TO INCLUDE A SEPARATE SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS TABLE IN ADDITION TO THE SECURITY OWNERSHIP OF
MANAGEMENT TABLE. PLEASE PROVIDE THE TABLES IN THE FORMAT PRESENTED IN ITEMS
403(A) AND (B) OF REGULATION S-K.
Response:
In response to this comment, we have revised the tables on pages 16-18 of
our amended filing.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PAGE 12
17. WE NOTE YOU INDICATE THAT MR. SMITH HAS AN "EXCELLENT PEDIGREE AND TRACK
RECORD." PLEASE REVISE TO CLARIFY OR REMOVE.
Response:
We removed the above language from page 19 of our amended filing.
18. WE NOTE THAT MR. SMITH "CREATE[D] AN INTERNATIONAL FINANCIAL SERVICES
COMPANY" IN 1993. PLEASE REVISE YOUR DISCLOSURE TO IDENTIFY THE COMPANY AND
PROVIDE MR. SMITH'S POSITION(S). IN ADDITION, PLEASE REVISE TO DESCRIBE MR.
SMITH'S BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND INDICATE THE PERIOD
DURING WHICH MR. SMITH SERVED AS YOUR PRESIDENT AND CHIEF EXECUTIVE OFFICER.
PLEASE REFER TO ITEM 401 OF REGULATION S-K.
Response:
In response to this comment, we have revised our disclosure on page 19 of
our amended filing to name the company created by Mr. Smith in 1993 and to
describe his business experience during the past five years.
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19. WE NOTE YOU INDICATE THAT MR. TADDEI IS A MEMBER OF THE BOARD OF DIRECTORS
AND PART- TIME CHIEF FINANCIAL OFFICER OF NETWORKING PARTNERS, INC. PLEASE
REVISE YOUR DISCLOSURE TO DESCRIBE THE PRINCIPAL BUSINESS OF NETWORKING
PARTNERS, INC. PLEASE ALSO REVISE YOUR DISCLOSURE TO PROVIDE THE DATES WHEN MR.
TADDEI SERVED AS CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF E3B
CONSULTING NETWORK SL. PLEASE REFER TO ITEM 401(D) OF REGULATION S-K.
Response:
We have revised Mr. Taddei's biographical information on page 20 of our
amended filing.
20. WE NOTE YOU INDICATE THAT MR. BALDASSARRE HAS HELD SENIOR MANAGEMENT AND
DIRECTOR POSITIONS OF NEW BUSINESS START-UPS AND ESTABLISHED MULTINATIONAL
ORGANIZATIONS. PLEASE REVISE YOUR DISCLOSURE TO PROVIDE THE NAME AND PRINCIPAL
BUSINESS OF ANY ORGANIZATION WHERE EMPLOYMENT WAS CARRIED ON, AS WELL AS THE
DATES OF EMPLOYMENT AND THE POSITION(S) HELD. PLEASE REFER TO ITEM 401(D) OF
REGULATION S-K.
Response:
We have revised the biographical information about Mr. Baldassarre on pages
20 and 21 of our amended filing.
21. WE NOTE YOU INDICATE THAT ADRIAN SCARROTT "RAN A VERY SUCCESSFUL
MARKETING/COMMUNICATIONS CONSULTANCY FOR TWO YEARS." PLEASE REVISE YOUR
DISCLOSURE TO IDENTIFY THE FIRM AND PROVIDE GREATER DETAILS.
Response:
We have revised this disclosure by naming the firm on page 21 of our
amended filing.
ITEM 6. EXECUTIVE COMPENSATION, PAGE 15
22. WE NOTE THAT THE SUMMARY COMPENSATION TABLE ON PAGE 16 INDICATES THAT MR.
SMITH RECEIVED A SALARY OF $34,658 IN 2010. PLEASE REVISE TO INCLUDE A
DISCUSSION OF THIS AMOUNT IN NARRATIVE DISCLOSURE TO THE TABLE. PLEASE REFER TO
ITEM 402(O) OF REGULATION S-K.
Response:
We have added a footnote to the Table on page 23 of our amended filing
showing that the salary was paid in cash.
23. WE NOTE YOU INDICATE ON PAGE 20 THAT THE COMPANY ISSUED 5,000,000 SHARES OF
COMMON STOCK TO ENZO TADDEI ON NOVEMBER 1, 2010 FOR SERVICES RENDERED TO THE
COMPANY VALUED AT $5,000. PLEASE REVISE TO INCLUDE THIS IN THE SUMMARY
COMPENSATION TABLE AS WELL AS IN THE NARRATIVE DISCLOSURE TO THE TABLE OR
ADVISE.
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Response:
We have revised the Table to include the $5,000 paid to Mr. Taddei during
2010 and added a footnote describing that the fee was paid in stock and in
exchange for accounting fees. See page 23 of our amended filing.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES, PAGE 20
24. WE NOTE YOU INDICATE THAT YOU ISSUED 668,000 COMMON SHARES TO SEVEN DEBT
HOLDERS IN SATISFACTION OF $263,533.64. PLEASE REVISE YOUR DISCLOSURE TO
IDENTIFY THESE INDIVIDUALS AND TO PROVIDE THE NUMBER OF SHARES RECEIVED BY EACH
INDIVIDUAL AS WELL AS THE AMOUNT OF CONSIDERATION RECEIVED BY THE REGISTRANT IN
EACH TRANSACTION. PLEASE REFER TO ITEM 701 OF REGULATION S-K.
Response:
We have revised Item 10 by identifying the seven debt holders, the number
of shares each individual received and the amount of consideration received by
the Company. See pages 30 and 31 of our amended filing.
25. WE NOTE YOU INDICATE THAT YOU ISSUED SHARES OF STOCK TO INDIVIDUALS FOR
SERVICES RENDERED. PLEASE REVISE YOUR DISCLOSURE IN THIS SECTION TO IDENTIFY
THESE INDIVIDUALS. PLEASE REFER TO ITEM 701(B) OF REGULATION S-K.
Response:
We have substantially revised Item 10. See pages 27 to 31 of our amended
filing.
26. PLEASE REVISE YOUR DISCLOSURE IN THIS SECTION TO PROVIDE THE SPECIFIC
EXEMPTION FROM REGISTRATION CLAIMED FOR EACH RECENT SALE OF UNREGISTERED
SECURITIES. IN ADDITION, PLEASE REVISE TO STATE BRIEFLY THE FACTS RELIED UPON TO
MAKE EACH EXEMPTION AVAILABLE. PLEASE REFER TO ITEM 701(D) OF REGULATION S-K.
Response:
We have revised Item 10 to show specific exemptions for each recent sale of
unregistered shares. See page 29 to 31 of our amended filing.
SIGNATURES PAGE 27
27. WE NOTE THAT ENZO TADDEI SIGNED THE REGISTRATION STATEMENT AS CHIEF
EXECUTIVE OFFICER AND DIRECTOR. WE FURTHER NOTE YOU INDICATE ON PAGE 12 THAT MR.
TADDEI IS CHIEF FINANCIAL OFFICER. PLEASE REVISE OR ADVISE.
Response:
We have adjusted the signature of Mr. Taddei to indicate that he is our
Chief Financial Officer.
GLOBAL EQUITY INTERNATIONAL, INC. AND SUBSIDIARY FINANCIAL STATEMENTS, PAGE F-1
BALANCE SHEETS, PAGE F-4
28. PLEASE TELL US WHY IT IS APPROPRIATE TO PRESENT PREFERRED STOCK ON YOUR
BALANCE SHEET GIVEN THAT THE SHARES WERE NOT AUTHORIZED BY THE BOARD OF
DIRECTORS UNTIL NOVEMBER 2011.
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Response:
We have deleted preferred stock from our balance sheet. See pages F-4 and
F-21 of our amended filing.
29. WE NOTE THAT THE ISSUANCE OF COMMON STOCK NOTED HEREIN DOES NOT RECONCILE TO
THE DATES AND AMOUNTS AS INDICATED WITHIN ITEM 10. RECENT SALES OF UNREGISTERED
SECURITIES. PLEASE PROVIDE AN ITEMIZED CHRONOLOGICAL SCHEDULE COVERING ALL
EQUITY INSTRUMENTS ISSUED SINCE INCEPTION THROUGH THE DATE OF YOUR RESPONSE.
PLEASE PROVIDE THE FOLLOWING INFORMATION SEPARATELY FOR EACH EQUITY ISSUANCE:
* THE DATE OF THE TRANSACTION AND NUMBER OF SHARES ISSUED;
* MANAGEMENT'S FAIR MARKET VALUE PER SHARE ESTIMATE AND HOW THE ESTIMATE
WAS DERIVED (E.G., THIRD-PARTY SPECIALIST RETAINED TO ASSIST IN
VALUATION);
* THE IDENTITY OF THE RECIPIENT, INDICATING IF THE RECIPIENT WAS A
RELATED PARTY;
* NATURE AND TERMS OF CONCURRENT TRANSACTIONS (E.G., SHARE ISSUANCES
EFFECTIVE DECEMBER 31, 2010 TO TWO SEPARATE PARTIES WITH DIFFERENT PER
SHARE VALUES);
* THE AMOUNT OF ANY COMPENSATION OR INTEREST EXPENSE ELEMENT; AND
* NARRATIVE DESCRIPTION OF THE FACTORS CONTRIBUTING TO SIGNIFICANT
CHANGES IN THE FAIR VALUE OF THE UNDERLYING STOCK.
Response:
In response to this comment, we have substantially revised our disclosures
on pages 27-31 of our amended filing.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, PAGE F-8
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES, PAGE F-12
30. PLEASE DISCLOSE HOW YOU HAVE VALUED THE SECURITIES RECEIVED AND RECORDED AS
REVENUE AND YOUR BASIS FOR DOING SO. FOR SUBSEQUENT PERIODS, PLEASE TELL US HOW
YOU VALUED THE SECURITIES AND GIVEN THAT YOU CLASSIFY THESE ASSETS AS
AVAILABLE-FOR-SALE SECURITIES, TELL US HOW YOU HAVE DETERMINED THAT THESE ASSETS
SHOULD BE FAIR VALUED ON A NON-RECURRING BASIS.
Response:
The securities received were quoted on the OTCBB and the Frankfurt Open
Exchange. As a result, the existence of orderly transactions between market
participants is capable of being observed and the fair value of these securities
are based upon "expected exit price" as it is defined in accounting guidance
pertaining to fair value measurements. Note #2 to our financial statements more
fully describes this. Valuation of these securities was based upon the quoted
closing trading price on the date at which these securities were deemed to have
been earned. All securities received are for services rendered, and there is no
component related to future services to be rendered. The date of revenue
recognition and the accounting for revenue recognition is described in the next
paragraph.
9
As a result of the application of the methodology for valuing the
securities, revenues were recorded based upon the accounting guidance for
revenue recognition in ASC No. 605 and SEC Staff Accounting Bulletin No. 104.
Note #2 to our financial statements more fully describes this.
During subsequent periods, the securities are remeasured on a recurring
basis, with adjustments made to other comprehensive income (loss) in order to
reflect the fair value of these securities at the measurement date. Both Notes 2
and 4 to the financial statements further discuss the accounting and reporting
of these securities.
The methodology that we have used to value the equity received for services
rendered was as follows:
The stock that we received was publically traded; we took the number of
shares and multiplied it by the price at the close of the market on the
date that the share certificate was issued.
The valuation of the equity received at the date when services had been
rendered was not adjusted to reflect future values.
On a quarterly basis the publically traded equity is valued using the last
quoted traded price on the last day of each quarter and the comprehensive loss
or gain that results from this calculation is duly reflected in the Company's
books and records.
LASTLY, PLEASE TELL US WHETHER SUCH ASSETS ARE COMPRISED OF THE THREE 10% EQUITY
INTERESTS IN RFC K.K., BLACK SWAN DATA LIMITED AND ARROW CARS SL, AND IF NOT,
WHY.
As mentioned in our response to comment number 6, this is not applicable as
we have not received any equity from RFC K.K., Black Swan Data Limited and Arrow
Cars SL to date.
NOTE 3 REVERSE RECAPITALIZATION PAGE F-14
31. PLEASE CLARIFY YOUR DISCLOSURE TO NOTE THAT YOUR HISTORICAL FINANCIAL
STATEMENTS ARE THOSE OF GLOBAL EQUITY PARTNERS, PLC ("GEP") FROM ITS INCEPTION,
AS SUCH FINANCIAL INFORMATION IS PROVIDED FOR PERIODS PRIOR TO NOVEMBER 15,
2010.
Response:
As originally noted in the filing, we believe this disclosure was correct:
The transaction also required a recapitalization of GEP. Since GEP acquired
a controlling voting interest, it was deemed the accounting acquirer, while GEI
was deemed the legal acquirer. The historical financial statements of the
Company are those of GEP and of the consolidated entities from the date of
recapitalization and subsequent.
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General Amendments to Our Filing
In addition to the amendments and revisions described above, we have made
various minor updating revisions to the dates of information in some of the
tables and other sections in the filing, updated consents of our auditors and we
have corrected a few typographical errors.
Acknowledgement
We acknowledge that:
* the Company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action with respect to
the filing;
* the Company may not assert staff comments as a defense in any
proceeding initiated by the Commission from taking any action with
respect to the filings; and
* the Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
Please address any further comments to our attorney, David E. Wise, Esq.
Mr. Wise's contact information is set forth below:
Law Offices of David E. Wise, P.C.
Attorney at Law
The Colonnade
9901 IH-10 West, Suite 800
San Antonio, Texas 78230
Telephone: (813) 645-3025
Facsimile: (210) 579-1775
Email: wiselaw@verizon.net
Sincerely,
By: /s/ Enzo Taddei
-------------------------------
Enzo Taddei
Chief Financial Officer
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