0001477932-16-010797.txt : 20160613 0001477932-16-010797.hdr.sgml : 20160613 20160610200443 ACCESSION NUMBER: 0001477932-16-010797 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 54 CONFORMED PERIOD OF REPORT: 20160331 FILED AS OF DATE: 20160613 DATE AS OF CHANGE: 20160610 FILER: COMPANY DATA: COMPANY CONFORMED NAME: New Global Energy, Inc. CENTRAL INDEX KEY: 0001543083 STANDARD INDUSTRIAL CLASSIFICATION: FISHING, HUNTING & TRAPPING [0900] IRS NUMBER: 454349842 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54609 FILM NUMBER: 161709642 BUSINESS ADDRESS: STREET 1: 109 EAST 17TH STREET, SUITE 4217 CITY: CHEYENNE STATE: WY ZIP: 82001 BUSINESS PHONE: 307-633-9192 MAIL ADDRESS: STREET 1: 109 EAST 17TH STREET, SUITE 4217 CITY: CHEYENNE STATE: WY ZIP: 82001 10-Q 1 ngey_10q.htm FORM 10-Q ngey_10q.htm

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2016

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period From_______ to _______

 

333-179669

Commission file number

 

NEW GLOBAL ENERGY, INC.

(Exact name of small business issuer as specified in its charter)

 

Wyoming

45-4349842

(State of incorporation)

(IRS Employer Identification Number)

 

109 East 17th Street

Suite 4217

Cheyenne, WY 82001

(Address of principal executive office)

 

(307) 633-9192

(Issuer's telephone number)

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to the filing requirement for at least the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes    ¨ No

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if a smaller reporting company) 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $.0001 per share 14,061,582 outstanding shares as of June 8, 2016.

 

 

 

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements-unaudited

3

Condensed Consolidated Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015

3

Condensed Consolidated Statements of Operations for the Three Month Periods Ended March 31, 2016 and March 31, 2015 (unaudited)

4

Condensed Consolidated Statement of Stockholders' Equity for the period ended March 31, 2016 (unaudited)

5

Condensed Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 2016 and March 31, 2015 (unaudited)

6

Notes to Condensed Consolidated Financial Statements (unaudited)

7

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

22

Item 4.

Controls and Procedures

22

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

23

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

23

Item 3.

Defaults Upon Senior Securities

23

Item 4.

Mine Safety Disclosures

23

Item 5.

Other Information

23

Item 6.

Exhibits

24

Signatures

25

 

 
2
 

 

ITEM 1. FINANCIAL STATEMENTS

 

New Global Energy, Inc.
Condensed Consolidated Balance Sheets

  

 

 

As of

March 31,
2016

 

 

As of

December 31, 2015

 

 

 

(unaudited)

 

 

 

 

Assets

Current assets:

 

 

 

 

 

 

Cash

 

$192,933

 

 

$124,746

 

Accounts receivable

 

 

-

 

 

 

2,374

 

Inventory

 

 

12,328

 

 

 

8,937

 

Deferred commissions - related party

 

 

705,536

 

 

 

370,740

 

Total current assets

 

 

910,797

 

 

 

506,797

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

4,521,999

 

 

 

4,646,151

 

 

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

3,680,283

 

 

 

3,680,283

 

Deposits

 

 

21,238

 

 

 

6,981

 

Total other assets

 

 

3,701,521

 

 

 

3,687,264

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$9,134,318

 

 

$8,840,211

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$354,477

 

 

$342,588

 

Accrued expenses

 

 

146,136

 

 

 

118,948

 

Accrued expenses - related party

 

 

625,057

 

 

 

536,331

 

Notes payable - related parties

 

 

394,836

 

 

 

396,036

 

Notes payable - current portion

 

 

668,130

 

 

 

690,475

 

Derivative liability

 

 

6,907

 

 

 

10,935

 

Deferred revenue

 

 

2,190,759

 

 

 

881,218

 

Total current liabilities

 

 

4,386,303

 

 

 

2,976,531

 

 

 

 

 

 

 

 

 

 

Notes payable, net of current portion

 

 

73,616

 

 

 

86,569

 

Total liabilities

 

 

4,459,919

 

 

 

3,063,100

 

 

 

 

 

 

 

 

 

 

Commitments and contingincies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

Preferred stock-25,000,000 shares authorized $0.001 par value 20,000 shares issued and outstanding (liquidation preference of $3,000,000)

 

 

2

 

 

 

2

 

Common stock-100,000,000 shares authorized $0.0001 par value 13,961,582 shares oustanding and 13,861,582 issued, respectively

1,396

1,386

Additional paid-in capital

 

 

43,054,487

 

 

 

43,013,191

 

Common stock subscription receivable

 

 

(353,300)

 

 

(353,200)

Accumulated deficit

 

 

(38,090,341)

 

 

(36,950,311)

Total New Global Stockholders' equity

 

 

4,612,244

 

 

 

5,711,068

 

Non-controlling interest

 

 

62,155

 

 

 

66,043

 

Total stockholders' equity

 

 

4,674,399

 

 

 

5,777,111

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$9,134,318

 

 

$8,840,211

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

 
3
 

 

New Global Energy, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

 

Three months ended March 31,
2016

 

 

Three months ended March 31,
2015

 

 

 

 

 

 

 

 

Revenue

 

$13,088

 

 

$20,247

 

 

 

 

 

 

 

 

 

 

Costs and Expenses:

 

 

 

 

 

 

 

 

Costs of goods sold

 

 

358

 

 

 

65,660

 

Depreciation

 

 

111,152

 

 

 

33,328

 

General and administrative - related party

 

 

245,304

 

 

 

-

 

General and administrative

 

 

298,942

 

 

 

180,966

 

Total Operating Costs and Expenses

 

 

655,755

 

 

 

279,954

 

 

 

 

 

 

 

 

 

 

Other (Income) Expense:

 

 

 

 

 

 

 

 

Gain on derivative valuation

 

 

(4,028)

 

 

(145,104)

Interest expense and amortization of debt discount

 

 

19,727

 

 

 

27,880

 

Loss on settlement of debt

 

 

-

 

 

 

1,992,732

 

Loss on disposal of asset

 

 

13,000

 

 

 

-

 

Loss on sale of future fish contracts

 

 

472,552

 

 

 

-

 

Total Other Expense, net

 

 

501,251

 

 

 

1,875,508

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(1,143,918)

 

 

(2,135,215)

Provision for income taxes

 

 

-

 

 

 

-

 

Net loss

 

 

(1,143,918)

 

 

(2,135,215)

Net loss attributable to non-controlling interest

 

 

3,888

 

 

 

40,960

 

Net loss attributable to New Global

 

$(1,140,030)

 

$(2,094,255)

Per share amounts attrubitable to New Global:

 

 

 

 

 

 

 

 

Basic and diluted

 

$(0.08)

 

$(0.16)

Weighted average number of share outstanding

 

 

 

 

 

 

 

 

Basic and diluted

 

 

13,870,471

 

 

 

13,097,365

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

 
4
 

 

New Global Energy, Inc.

Condensed Consolidated Statement of Stockholders' Equity

(unaudited)

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Common Stock
To Be Issued

 

 

 Additional paid-in

 

 

 Accumulated

 

 

 Subscription

 

 

Non-Controlling Interest in Variable Interest 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

 Deficit

 

 

 Receivable

 

 

 Entity

 

 

Equity

 

Balance at December 31, 2015

 

 

20,000

 

 

$2

 

 

 

13,861,582

 

 

$1,386

 

 

 

-

 

 

 

-

 

 

$43,013,191

 

 

$

(36,950,311

)

 

$

(353,200

 

$66,043

 

 

$5,777,111

 

Revaluation of warrants issued for services to non-employees

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

12,010

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

12,010

 

Revluation of common stock issued for services to non-employees

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

29,195

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

29,195

 

Shares issued as a result of warrant conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

100,000

 

 

 

10

 

 

 

90

 

 

 

-

 

 

 

(100)

 

 

-

 

 

 

-

 

Net Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,140,030)

 

 

-

 

 

 

(3,888)

 

 

(1,143,918)

Balance at March 31, 2016

 

 

20,000

 

 

$2

 

 

 

13,861,582

 

 

$1,386

 

 

 

100,000

 

 

$10

 

 

$43,054,487

 

 

$

(38,090,341

)

 

$

(353,300

)

 

$62,155

 

 

$4,674,399

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

 
5
 

 

New Global Energy, Inc.

Condensed Consolidated Statement of Cash Flows

(unaudited)

 

 

 

Three months ended March 31,
2016

 

 

Three months ended March 31,
2015

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net Loss

 

$(1,143,918)

 

$(2,135,215)

Adjustments required to reconcile net loss to cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Gain on derivative valuation

 

 

(4,028)

 

 

(145,104)

Loss realized upon disposal of asset

 

 

13,000

 

 

 

-

 

Loss on settlement of debt

 

 

-

 

 

 

1,992,732

 

Depreciation and amortization

 

 

111,152

 

 

 

33,328

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Decrease in accounts receivable

 

 

2,374

 

 

 

3,661

 

Increase in deferred commissions - related party

 

 

(334,796)

 

 

-

 

Increase in prepaid assets

 

 

(14,257)

 

 

-

 

(Increase) decrease in inventory

 

 

(3,391)

 

 

37,043

 

Increase in accounts payable

 

 

11,685

 

 

 

3,849

 

Increase in accrued expenses

 

 

157,120

 

 

 

10,228

 

Increase in deferred revenue

 

 

1,309,541

 

 

 

-

 

Cash provided by (used in) operating activities:

 

 

104,485

 

 

 

(199,478)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of equipment

 

 

-

 

 

 

(11,875)

Cash used in investing activities

 

 

-

 

 

 

(11,875)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from related party notes payable

 

 

-

 

 

 

55,000

 

Proceeds from notes payable

 

 

-

 

 

 

259,800

 

Payment on debt

 

 

(36,298)

 

 

(114,695)

Cash (used in) provided by financing activities

 

 

(36,298)

 

 

200,105

 

 

 

 

 

 

 

 

 

 

Change in cash

 

 

68,187

 

 

 

(11,248)

Cash-beginning of period

 

 

124,746

 

 

 

25,008

 

Cash-end of period

 

$192,933

 

 

$13,760

 

Supplemental Cash Flow Informationy:

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest

 

$-

 

 

$-

 

Income taxes

 

$-

 

 

$-

 

Schedule of non-cash investing activity

 

 

 

 

 

 

 

 

Fair value of preferred/common stock issued upon settlement of debt

 

$-

 

 

$2,333,530

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

 
6
 

 

NEW GLOBAL ENERGY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 1. Nature of Operations and Summary of Significant Accounting Policies

 

Background

 

New Global Energy, Inc. ("NGE" or the "Company") was organized on January 24, 2012. NGE's executive offices are located in Brevard County, Florida. The Company is focused on the development of its Global Energy Plantation ("GEP") Platform which combines alternative energy production, sustainable agriculture and aquaculture. It anticipates the use of non-centralized power plants, primarily concentrated solar power, Jatropha based biofuels and aquaculture operations to produce power for its own use and to feed into the power grid serving local power needs while producing farm grown fish and shrimp as food products. Management has begun to execute this plan through the purchase of a controlling interest in Aqua Farming Tech, Inc. ("AFT"). The Company is in the process of raising additional capital to support the completion of its acquisition and development activities. Furthermore, beginning in the 4th quarter 2015, the Company commenced the sale of future contracts for the sale of fish, with the actual fish to be delivered before the end of 2016.These presales have generated cash to support the Company's day-to-day operations. The Company's activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company. 

 

Going Concern

 

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has earned little revenue since inception, and supports its continued operations through debt financing, related party loans, sale of future fish contracts and the sale of equity. As of March 31, 2016, the company had a working capital deficit of $3,475,505 and an accumulated deficit of $38,090,341. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern.

 

While the Company is ramping up its operations and revenue generating activities, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a public or private offering as well as fish presales based on expected fish output in the next year. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern 

 

 
7
 

 

Basis of Presentation

 

The accompanying consolidated balance sheet as of March 31, 2016, which was derived from audited financial statements, and the unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or any future period. These financial statements should be read in conjunction with the audited financial statements and related notes for the fiscal year ended December 31, 2015, included in the Company's Annual Report on Form 10-K covering that period.

 

In the opinion of management, the information furnished in these interim financial statements reflect all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the three-month periods ended March 31, 2016 and 2015. All such adjustments are of a normal recurring nature. The financial statements do not include some information and notes necessary to conform to annual reporting requirements.

 

Principles of Consolidation: The consolidated financial statements include the accounts of New Global Energy, Inc., and its majority-owned subsidiary, AFT, a California corporation. All significant inter-company balances and transactions have been eliminated.

 

Use of EstimatesThe preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to intangible assets, income taxes, inventory valuation, and stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.

 

Cash and Cash EquivalentsFor financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents as of March 31, 2016 and 2015.

 

Inventory: The Company's inventory consists of live fish and is stated at the lower of cost or market.

 

Deferred Revenue: Beginning in the 4th quarter 2015, the Company commenced the sale of future contracts for the sale of fish, with the actual fish to be delivered to customers or their assignees before the end of 2016. The Company records the sale of fish for which delivery of the product has not yet occurred as deferred revenue in the current liabilities section of the condensed consolidated financial statements.

 

 
8
 

 

Property and Equipment: Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.

 

Valuation of Long-Lived Assets: We review the recoverability of our long-lived assets including land, equipment, goodwill and investments, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. No impairment was recognized during the three month ended March 31, 2016 and 2015.

 

GoodwillImpairment of Goodwill and Other Intangible Assets. As of March 31, 2016, goodwill recorded on our condensed consolidated balance sheet aggregated $3.68 million (the entirety of this amount relates to the company's completed acquisition of AFT, a California corporation). The AFT acquisition and its related operations constitute a reporting unit and we must make various assumptions in determining their estimated fair values. We perform an annual impairment review in the fourth quarter of each fiscal year.

 

Revenue Recognition: The Company recognizes revenue during the period in which fish are delivered to the customer. Sale proceeds received in the current period, for which delivery has not occurred, are recorded as deferred revenue until the fish are delivered to the customer.

 

Stock Based Compensation: Stock-based awards are accounted for using the fair value method in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (ASC) 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options and warrants. The company granted no new stock or warrant based compensation during the three months ended March 31, 2016. Non-employee stock and warrant compensation is revalued quarterly and these revaluations are reflected in the Condensed Consolidated Statement of Shareholders' Equity.

 

Fair Value of Financial Instruments: FASB ASC 825, "Financial Instruments," requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At March 31, 2016 and 2015, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

 

 
9
 

 

Fair Value Measurements: The Company measures fair value under a framework that utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs which prioritize the inputs used in measuring fair value are:

 

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

 

Level 2: Inputs to the valuation methodology include:

 

·

Quoted prices for similar assets or liabilities in active markets; 

·

Quoted prices for identical or similar assets or liabilities in inactive markets;

·

Inputs other than quoted prices that are observable for the asset or liability;

·

Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

 

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

 

When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the three months ended March 31, 2016 and 2015, there were no transfers of financial assets or financial liabilities between the hierarchy levels.

 

The following table summarizes assets and liabilities remeasured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015:

 

 

 

March 31, 2016

 

Description of assets:

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

None

 

$-

 

 

$-

 

 

$-

 

 

$-

 

Description of liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

 

$-

 

 

$-

 

 

$6,907

 

 

$6,907

 

 

 

December 31, 2015

Description of assets:

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

None

 

$-

 

 

$-

 

 

$-

 

 

$-

 

Description of liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

 

$-

 

 

$-

 

 

$10,935

 

 

$10,935

 

 

 
10
 

 

Earnings per Common Share: We compute net (loss) per share in accordance with FASB ASC 260, Earning per Share. FASB ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period.

 

For the three months ended March 31, 2016 and 2015, the following potentially dilutive securities have been excluded from the calculation of diluted loss per share because their impact was antidilutive.

 

 

 

2016

 

 

2015

 

Preferred Stock

 

 

3,049,548

 

 

 

981,504

 

Warrants

 

 

111,716

 

 

 

117,416

 

 

 

 

3,161,264

 

 

 

1,098,920

 

 

Recent Accounting Pronouncements

 

The Company has evaluated new relevant accounting for possible impact on our condensed consolidated financial statements and deemed their impact to be immaterial or non-applicable to the Company.

 

Note 2. Property and Equipment

 

The Company's property and equipment consisted of the following as of March 31, 2016 and December 31, 2015:

 

 

 

Useful Lives

 

March 31,
2016
   

 

 

December 31,
2015

 

Land

 

Indefinite

 

$

2,128,000

 

 

$2,128,000

 

Buildings and Improvements

 

7 years 

 

 

2,269,886

 

 

 

2,269,886

 

Equipment & Solar Panels

 

10 years

 

 

776,477

 

 

 

766,477

 

Vehicles

 

5 years 

 

 

115,500

 

 

 

128,500

 

 

 

 

 

 

5,289,843

 

 

 

5,292,843

 

Accumulated depreciation

 

 

 

 

(767,844)

 

 

(656,692)

Total

 

 

 

$

4,521,999

 

 

$4,646,151

 

 

Depreciation expense totaled $111,152 and $33,328 for the three months ended March 31, 2016, and 2015, respectively.

 

 
11
 

 

Note 3. Notes Payable – related party

 

The balances of related party notes as of March 31, 2016 and December 31, 2015 follows:

 

 

 

Interest Rate

 

 

Maturity

 

March 31,
2016

 

 

December 31,
2015

 

Related Party Note A

 

 

10%

 

In Default

 

$15,000

 

 

$15,000

 

Related Party Note B

 

 

10%

 

In Default

 

 

130,000

 

 

 

130,000

 

Related Party Note C

 

 

10%

 

In Default

 

 

22,210

 

 

 

22,210

 

Related Party Note D

 

 

10%

 

In Default

 

 

74,000

 

 

 

74,000

 

Related Party Note E

 

 

10%

 

In Default

 

 

94,000

 

 

 

95,000

 

Related Party Note F

 

 

10%

 

In Default

 

 

10,000

 

 

 

10,000

 

Related Party Note G

 

 

10%

 

In Default

 

 

7,000

 

 

 

7,000

 

Related Party Note H

 

 

10%

 

In Default

 

 

13,069

 

 

 

13,069

 

Related Party Note I

 

None

 

 

On Demand

 

 

14,458

 

 

 

14,458

 

Related Party Note J

 

None

 

 

On Demand

 

 

15,210

 

 

 

15,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

$394,836

 

 

$396,036

 

 

As of March 31, 2016, the Company had outstanding notes payable to related parties totaling $394,836. Included in this balance is $365,279 of debt which bears interest at 10% per annum and is currently in default. The remaining $29,668 in related party notes are non-interest bearing cash advances from shareholders. These advances are due on demand.

 

The Company has recognized $19,727 and $27,880 in interest expense related to the notes held by related parties for the three months ended March 31, 2016 and 2015, respectively.

 

Note 4. Notes Payable

 

Note 1 - Note payable for vehicle financing with a balance of $6,000 as of March 31, 2016 and December 31 2015, accruing interest of 10% and due on demand. This note matured on September 10, 2010 and is currently in default.

 

Note 2 - Note payable pursuant to a 2010 settlement with a balance of $99,361 and $111,361, as of March 31, 2016 and December 31, 2015, respectively, matured on December 15, 2015, and is non-interest bearing. This note is currently in default.

 

 
12
 

 

Note 3 and Note 3a - Note payable to a bank with a balance of $466,312 on December 31, 2014, with a 6.5% variable interest rate and matured on December 7, 2014 (Note 3), but was renewed by the bank and AFT on March 10, 2015 with a balance of $506,178 (a combination of outstanding principal on the prior note, accrued note interest and late fees) a 6.5% variable interest rate at December 31, 2015 and a maturity date of March 10, 2017 (Note 3a). During 2015, $41,104 was paid towards the principal of the note, while $26,768 of interest related to the renewed note accrued and was converted into note principal per the renewal agreement. The note had a balance of $488,113 as of March 31, 2016 and $498,459 as of December 31, 2015 and is in default under the terms of the loans covenants, and therefore is included in current liabilities as of March 31, 2016.

 

Note 4 - Note payable for solar system array at the Thermal, California property with a balance of $123,272 and $136,225 as of March 31, 2016 and December 31, 2015, respectively, with interest rate at 2.8% due in monthly installments of $4,138 through March of 2018.

 

Note 5 – Note payable for solar installation at the Thermal property, with a balance of $25,000 as of March 31, 2016 and December 31, 2015 and an interest rate at 10%. This note is currently in default

 

The notes payable outstanding as of March 31, 2016 and December 31, 2015 are summarized below:

 

 

 

March 31,
2016

 

 

December 31,
2015

 

Note 1

 

$

6,000

 

 

$6,000

 

Note 2

 

 

99,361

 

 

 

111,361

 

Note 3

 

 

-

 

 

 

-

 

Note 3a

 

 

488,113

 

 

 

498,459

 

Note 4

 

 

123,272

 

 

 

136,224

 

Note 5

 

 

25,000

 

 

 

25,000

 

 

 

 

 

 

 

 

 

 

Total

 

$

741,746

 

 

$777,044

 

 

The Company has recognized $10,622 and $0, in interest expense for the three months ended March 31, 2016 and March 31, 2015, respectively related to notes payable and is included in accrued expenses on the Company's consolidated balance sheet as of March 31, 2016 and December 31, 2015, respectively.

 

Future maturity of debt is as follows:

 

Year ended March 31,

 

Amount

 

2017

 

$668,130

 

2018

 

 

49,656

 

2019

 

 

23,960

 

2020

 

 

-

 

2021

 

 

-

 

Total

 

$741,746

 

 

 
13
 

 

Note 5. Stockholders' Equity

 

Common Stock

 

We are currently authorized to issue up to 100,000,000 shares of $ 0.0001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis.

 

A consultant exercised 100,000 warrants and has met all contractual obligations to be entitled to such shares. As of March 31, 2016 the shares were not issued, but are included in the shares outstanding and the weighted average shares outstanding because the holder is entitled to all rights and obligations that come with owning the shares.

 

Series A Preferred Stock

 

We are currently authorized to issue up to 25,000,000 shares of Series A Convertible Preferred stock, with a $0.0001 par value. All issued shares of Series A Convertible Preferred stock are entitled to vote on a 1 share/1 vote basis. The currently issued preferred shares carry a liquidation preference of $150 per preferred share.

 

Each share of Series A Convertible Preferred Stock shall be convertible, at the option of the holder, at any time into such number of fully paid and non-assessable shares of Common Stock as is determined by multiplying the number of issued and outstanding shares of the Corporation's Common Stock by .0000110. Provided however, that such number of common shares into which each share of Series A Preferred Stock may be converted shall not exceed 220.

 

Common stock Issued:

 

The following table summarizes common stock warrants issued and outstanding:

 

 

 

Shares

 

 

Weighted
average
exercise
price

 

 

Weighted average remaining contractual term (months)

 

 

Aggregate
intrinsic
value*

 

Warrants outstanding at December 31, 2015

 

 

111,716

 

 

$0.33

 

 

 

6.6

 

 

$212,260

 

Correction to warrants issued in prior period

 

 

100,000

 

 

$0.01

 

 

 

6.7

 

 

$

37,988

 

Total Warrants outstanding at December 31, 2015

 

 

211,716

 

 

$0.35

 

 

 

6.6

 

 

$250,248

 

Warrants exercised during the three months ended March 31, 2016

 

 

(100,000)

 

$0.01

 

 

 

 

 

 

 

 

 

Warrants outstanding at March 31, 2016

 

 

111,716

 

 

$0.33

 

 

 

3.6

 

 

$-

 

Warrants exercisable at March 31, 2016

 

 

111,716

 

 

$0.33

 

 

 

3.6

 

 

$-

 

_____________ 

* Amount by which the fair value of the stock at the balance sheet date exceeds the exercise price

 

 
14
 

 

Range of exercise prices

 

 

Shares

 

 

Weighted average remaining
life in months

 

$ 0.33

 

 

 

111,716

 

 

 

3.6

 

Total Warrants

 

 

 

111,716

 

 

 

 

 

 

On March 23, 2016, a warrant holder exercised 100,000 common stock warrants for proceeds of $100 and received 100,000 shares, which are included in the common share total as of March 31, 2016.

 

Note 6. Derivative and Warrant Liabilities 

 

Warrants

 

The previous convertible debt was issued with an aggregate of 600,000 detachable warrants to purchase the Company's common stock. Each warrant entitles the holder to purchase one share at prices ranging from $1.00 to $3.00 and they expire at various dates in 2016.The exercise price of these warrants and the conversion rate of the debt is to be adjusted in the event that the Company issues or sells any shares of common stock, options, warrants or any convertible instruments (other than exempted issuances) at an effective price per share which is less than the exercise price of these warrants. Accordingly, in accordance with FASB ASC 815, the Company has accounted for these warrants as liabilities.

 

The Company values its warrant derivatives using the Black-Scholes option-pricing model. Assumptions used for 2016 and 2015 include:

 

·

risk-free interest rate- 0.36%

·

warrant life is the remaining contractual life of the warrants, which is .55 of one year

·

expected volatility- 2015: 247.90% 2016: 247.13%

·

Stock Price on Measurement Date: 2015: $0.38 2016: $0.50

·

expected dividends-none

·

exercise prices as set forth in the agreements,

·

common stock price of the underlying share on the valuation date, and

·

number of shares to be issued if the instrument is exercised

 

The aggregate fair value of the warrants was determined to be $6,907 and $10,935 respectively, at March 31, 2016 and December 31, 2015. The following table summarizes the changes in the derivative liabilities for the three months ended March 31, 2016.

 

 

 

Totals

 

 

Warrants

 

Fair value at December 31, 2015

 

$10,935

 

 

$10,935

 

Adjustment to fair value at March 31, 2016

 

 

(4,028)

 

 

4,028

 

Fair value at March 31, 2016

 

$6,907

 

 

$6,907

 

 

 
15
 

 

Note 7. Deferred Revenue and Commissions

 

Deferred revenue represents amounts billed and collected for the future delivery of fish in accordance with contractual terms. These advance payments relate solely to the Company's future fish contract program. Beginning in the 4th quarter 2015, the Company commenced the sale of future contracts for the sale of fish, with the actual fish to be delivered before the end of 2016. The amounts represented below show the results of the presales.

 

 

 

Total

 

 

Three Months Ended

March 31,
2016

 

 

Year ended December 31,
2015

 

 

 

 

 

 

 

 

 

 

 

Pounds of fish presold

 

 

949,735

 

 

 

429,024

 

 

 

520,711

 

Average sale price per pound (varies between $1.50 and $2.00)

 

$1.80

 

 

$1.95

 

 

$1.79

 

Deferred revenue from future fish contracts

 

$1,718,207

 

 

$836,990

 

 

$881,218

 

Loss recognized on sale of future fish contracts

 

$472,552

 

 

$472,552

 

 

$-

 

Total deferred revenue

 

$2,190,760

 

 

$1,309,542

 

 

$881,218

 

 

In addition, the Company has signed a commission agreement with a related party and beneficial shareholder, for the future fish contracts. Per this agreement, the related party introduces the futures buyers to the Company and receives a 40% flat commission on all sales. The related party has received $705,536 in carried commissions as of March 31, 2016. Commissions carried are reflected as deferred commissions – related party on the accompanying balance sheet until the period in which the related revenue is recognized. Additionally, the Company paid $82,054 of related costs to this related party during the three months ended March 31, 2016.

 

During the three months ended March 31, 2016, management analyzed the estimated loss per pound from all outstanding future fish contracts. After management's review, the Company recognized a $472,552 loss on the sale of future fish contracts.

 

Note 8. Related Party Transactions

 

Due to Related Parties

 

As of March 31, 2016 and December 31, 2015, the Company owed certain related parties $394,836 and $396,036 respectively of which, $365,179 represents note payable due to a related party, bears interest at 10% and is due on demand. The remainder, $29,868, bears no interest and is due on demand.

 

Reimbursement of Expenses of our Chief Executive Officer

 

The Company's chairman and chief executive does not receive a management fee or other compensation in connection with his management of the Company. The Company reimburses its chairman and chief executive for all direct and indirect costs of services provided, including the costs of employee, officer and director compensation and benefits allocable to us, and all other expenses necessary or appropriate to the conduct of our business. Total costs paid by the Company, for legal services provided by our chairman and chief executive related to contractual agreements, fundraising and general day to day business activities, were $77,000 and $62,351 for the three months ended March 31, 2016 and 2015, respectively.

 

 
16
 

 

The Company has entered into the following transactions with a company owned by a beneficial shareholder of the company:

 

 

·

Holder of 20,000 shares of Series A Convertible Preferred stock, and 1,061,630 shares of common stock.

 

·

Note payable in the amount of $74,000 as of March 31, 2016 of which $24,830 in related party interest has been accrued. The CEO of this holder has personally provided $15,210 in cash advances to the Company during 2015 and the entire balance remains outstanding as of March 31, 2016. These advances are non-interest bearing and due on demand.

 

·

Settled $208,000 of the outstanding notes in exchange for issuing 4,160 shares of the Company's Series A Convertible Preferred stock during the year ended December 31, 2015.

 

·

Received 15,840 shares of Series A preferred stock in exchange for $792,000. As of March 31, 2016, the Company has received $438,800 related to the agreement and recorded $353,200 in stock subscription receivable.

 

·

Receives 40% of tilapia futures sales on a commission basis. See Note 7. Deferred Revenue and Commissions for further details on the commission agreement.

 

·

Was paid $82,054 for services and expenses provided to the Company related to tilapia future sales during the three months ended March 31, 2016.

 

·

Entered into a consulting agreement with the Company on October 1, 2015 to provide leads on potential asset and business acquisitions, commercial customers, channel partners, service providers and investors to the Company in exchange for a tiered success fee in the event their efforts secure capital investment or revenue partners for the Company.

 

·

The related party consultant will be paid $10,000 for each month of advisory services provided to the Company. As of March 31, 2016, the Company has accrued $60,000 in consulting fees and paid no amounts under this agreement.

 

The Company entered into the following transactions with a related party:

 

 

·

Holder of 664,217 shares of common stock

 

·

Holds two notes payable from the Company. The first note has a balance of $13,069 as of March 31, 2016, and bears interest at 10%. This note has accrued $5,061 in related party interest as of March 31, 2016. The 2nd note is a cash advance from the debt and equity holder totaling $14,458 as of March 31, 2016. This note bears no interest and is due on demand.

 

·

A cosigner and guarantor on the bank loan for the 221-kW DC solar photovoltaic electric system on the Thermal farm. These panels are owned and the current loan is paid for by AFT. As of March 31, 2016 $488,113 was still owed on the loan.

 

·

Farm Consultant for the Company since September 2013. Per the agreement, the debt and equity holder receives $10,000 per month plus expenses for farm-related consulting services. As of March 31, 2016, the Company has accrued $60,000 in consulting fees and has settled prior outstanding fees in December 2015 through stock issuances totaling 283,783 shares of the Company's common stock.

 

·

Owner of a 174.37 kW-DC Photovoltaic System on the Mecca farm, land owned by AFT and leased to the related party for a period of 10 years at a total cost of $1.00, designed to cover 90% of energy required by the Mecca farm. This system is subject to an agreement between the debt and equity holder and AFT, covered in the off balance sheet arrangement section of this year's 10-K. The Company has accrued $105,706 as of March 31, 2016 for the portion due related to this agreement.

 

The prior owners of AFT are now shareholders in the Company and also were owed $304,500 and $283,000 at March 31, 2016 and December 31, 2015 respectively, in accrued management fees. These shareholders provide farm management and accounting services in exchange for a management fee of $7,000 per month.

 

 
17
 

 

Note 9. Subsequent Events:

 

On May 2, 2016, the Company issued 100,000 common shares in for warrants exercised on March 23, 2016. The warrant holder has met all contractual obligations to be entitled to such shares as of March 31, 2016 and therefore the shares were included in the shares outstanding and the weighted average shares outstanding. In addition, on the same date, the company issued 100,000 shares of common stock for investor relation services provided over the previous six month period.

 

On May 2, 2016, the Company granted a total of 2,828,530 options to three separate related parties and our CEO at an exercise price of $0.30 per share. The 800,000 options granted to our CEO and an additional 1,600,000 options granted to two related parties are exercisable at tiered intervals beginning June 1, 2016. The remaining 428,530 options granted to the Company's partner in a joint venture are also exercisable at tiered intervals beginning May 1, 2016.

 

For the period between April 1, 2016 and the date of this report, June 8, 2016, the Company has sold $307,100 in tilapia future contracts and has paid $122,840 in related party commissions and $15,400 in related party expenses resulting from these sales.

 

 
18
 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

 

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial statements and the notes presented herein. In addition to historical information, the following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed in this Form 10-Q.

 

Overview and Financial Condition 

 

New Global Energy, Inc. ("NGE" or the "Company") is a sustainable agriculture and aquaculture company organized as a Wyoming corporation on January 24, 2012 with executive offices located in Brevard County, Florida. The Company focuses on the use of advanced technology and farming techniques with the goal of increasing production and decreasing costs. The Company is focused on internal growth and growth through the acquisition of high-growth firms, assets and properties in the Green market space; industry segments of interest to the Company include sustainable agriculture, aquaculture and solar. Management is targeting growth stage assets, operations and companies that possess proprietary market edge and demonstrate solid opportunity to scale their business. We expect to pursue special opportunities that are anticipated to accelerate shareholder value by consolidating certain tiers of the $5 Trillion per year fragmented Green and Renewable Energy industry.

 

The first portion of the Company's development plan includes the development of its Global Energy Plantation ("GEP") using its Global Cell concept which combines alternative energy (source of usable energy intended to replace fuel sources without the undesired consequences of the replaced fuels) production, sustainable agriculture (practice of farming using principles of ecology, the study of relationships between organisms and their environment) and aquaculture (the processes of farming of aquatic organisms such as fish, crustaceans, mollusks and aquatic plants). In summation, our development plan will utilize non centralized solar panels to produce power for its own use and to feed into the power grid serving local power needs while producing farm grown fish, a process currently in operation, and, in future operations after the current year, shrimp.

 

Aqua Farming Tech, Inc. ("AFT") continued during the reported period to replace its existing brood stock used in its Tilapia production. It addition, in furtherance of the development of its feed development program, AFT planted Moringa on available acreage on the Company's "Thermal" property to be used and has been using it as a component of the feed used in its own aquaculture operations. 

 

Important Note about Forward Looking Statements

 

Forward-looking statements such as this are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by a forward-looking statement. These risks and uncertainties include, without limitation: (1) the potential acquisitions or mergers may not be consummated in a timely manner, if at all; (2) any merger agreement may be terminated in circumstances that require the Company to pay a termination fee or reimburse certain expenses; (3) the diversion of management's attention from the Company's ongoing business operations; (4) the ability of the Company to retain and hire key personnel; (5) the effect of the announcement of any acquisition or Merger on the Company's business relationships, operating results and business generally; (6) competitive responses to any proposed Merger; and (7) the failure to obtain any requisite approvals to any Merger, such as stockholder approval. The Company expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

 
19
 

 

Results of Operations for the Three Months ended March 31, 2016 compared to March 31, 2015

 

The Company had revenues for the three month period ended March 31, 2016 of $13,088, down from revenues of $20,247 for the same period the prior year. The 2016 revenues result mainly from the sale of live fish including Tilapia and Silver Carp, and to a lesser extent, Moringa leaves cultivated from plants grown on AFT property. Selling, general and administrative expenses for the same three months ended March 31, 2016 were $655,755, up from $279,954 for the same period the prior year. The increases were significantly associated with the consolidation of the Company's financial statements with Aqua Farming Tech, Inc., increased depreciation due to a larger fixed asset base in 2016, selling expenses related to the tilapia future contract program and enlarged operations compared to the prior three month period leading to increased general and administrative costs.

 

We charge the initial valuation of the conversion feature and warrants by offsetting the carrying value of the note up to the principal. Initial derivative values in excess of note principal are immediately charged to interest expense. Derivative valuation charged to interest expense was $4,028 for the three months ended March 31, 2016 decreasing the fair value of warrants to $6,907. This is down significantly from the derivative charge of $145,104 for the same period in the prior year with the decrease substantially due to the conversion and payment of notes prior to the reported period. The decrease in valuation charge is offset by the loss on future fish contracts of $472,522, recognized for the first time in the three months ended March 31, 2016. The significant decline in derivative valuation charge, as well as the loss on the settlement of debt in 2015 of $1,992,732 during the three months ended March 31, 2015 that did not reoccur in 2016, resulted in a decline in Net Loss attributable to New Global for the reported period to $1,140,030 from $2,094,255 for the same period the prior year. 

 

Emerging Growth Company:

 

We qualify as an "emerging growth company" under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.

 

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

 

 

Cash Flows Three Months Ended

 

 

 

March 31,
2016

 

 

March 31,
2015

 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Operating Activities 

 

$104,486

 

 

$(199,478)

Net Cash Used by Investing Activities 

 

$-

 

 

$(11,875)

Net Cash (Used in) Provided by Financing Activities

 

$(36,298)

 

$200,105

 

Cash Ending Balance 

 

$192,933

 

 

$13,760

 

 

 
20
 

 

Although consolidated financials with Aqua Farming Tech, Inc. show revenues, the Company's cash position is not significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues. 

 

Financing Activities

 

During the three month period ended March 31, 2016, the Company paid $36,298 against outstanding current debt principal.

 

For the three months ended March 31, 2015, net cash provided from financing activities was $200,105. During the quarter ending March 31, 2015, the Company borrowed an additional $314,800 from related parties, and repaid $114,695 against outstanding debt principal.

 

The Company has historically met its cash needs through a combination of cash flows from operating activities along with long and short term borrowings and through the sale of its stock and the sale of future fish contracts.

 

Contractual Obligations

 

The company has acquired Net Revenue interests and crop leases (see Overview of Financial Condition above). In addition, the Company has been reviewing various real property to utilize in its business plan and has been exploring the use of project finance structures to fund such acquisition and development of business activities. The Company expects to enter into such transaction or transactions during the next 12 months. There are currently no transactions under contract and there is no assurance that the company will be able to complete such transactions. 

 

In August 2015, the Company entered into a sales commission agreement with a related party for the sale of tilapia futures. Per the agreement the related party is entitled to 40% of all futures sales when the buyer is referred by the related party. As of March 31, 2016, the Company has paid $705,536 to the related party, which is recorded as deferred commission as a result of $1,712,591 in future fish sales. The payments received will be held as deferred revenue and the commissions paid as a deferred commission on the Company's balance sheet until the fish are delivered in 2016.

 

Commitments and Capital Expenditures

 

The Company had no material commitments for capital expenditures as of March 31, 2016.

 

Off-Balance Sheet Arrangements

 

Mecca Solar Panels

 

On December 11, 201l, the company's subsidiary, Aqua Farming Technologies, Inc. "AFT", entered into a land lease and solar panel easement agreement with a related party. Per the agreement, AFT leased land under its ownership, called Mecca, to the related party for a 10 year period beginning at the date of solar panel installation in 2014 and at a total cost of $1.00 for the entire lease period. In exchange for the lease agreement, the related party purchased, at a cost of $540,987, a solar panel array installed at the Mecca property. As a fee for the energy provided to AFT's farm and equipment by the installed solar panels, AFT is committed to pay $3,130 per month for 72 months, beginning at installation date, to the builder of the solar array, Sun Valley Solar, Inc. or its assignee. In addition, on October 1, 2016, AFT will begin paying the related party $2,500 a month for the rest of the useful life of the solar array. 

 

 
21
 

 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 

 

Not required for smaller reporting companies. 

 

ITEM 4. Controls and Procedures

 

We maintain "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were not effective as of the end of the period covered by this report. Our disclosure controls and procedures are not effective as a result of the following material weaknesses:

 

a)

The Company lacks the financial infrastructure to account for complex transactions which may result in a greater than normal risk that material errors may occur in the financial statements and not be detected timely.

b)

The Company does not have a full time CFO, and currently relies upon independent financial reporting consultants for review of critical accounting areas and disclosures of material non-standard transactions.

c)

The Company lack sufficient personal to allow for proper segregation of duties.

 

Changes in Internal Controls

 

We have also evaluated our internal control for financial reporting and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.

 

 
22
 

 

PART II - OTHER INFORMATION

 

ITEM 1. Legal Proceedings

 

There are no pending legal proceedings. The Company may subject to other legal proceedings that arise in the ordinary course of its business and from prior management activities. Other than as previously disclosed, in the opinion of present management, the aggregate liability, if any, with respect to these other actions will not materially adversely affect our financial position, results of operations or cash flows. 

 

ITEM 1A. Risk Factors 

 

Not required for smaller reporting companies. 

 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

The Company issued no shares of its common stock during the reported period. 

 

ITEM 3. Defaults Upon Senior Securities

 

None 

 

ITEM 4. Other Information

 

None 

 

 
23
 

 

ITEM 5. Exhibits

 

a) Exhibits

 

31.1

Section 302 Certification By Chief Executive Officer and Principal Financial Officer

32.1

Section 906 Certification of Principal Executive Officer and Principal Financial Officer

 

 
24
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

 

NEW GLOBAL ENERGY, INC.

Dated: June 10, 2016

By:

/s/ Perry D. West

Perry D. West

CEO and Director

 

 

25


EX-31.1 2 ngey_ex311.htm CERTIFICATION doc1.htm

EXHIBIT 31.1

 

NEW GLOBAL ENERGY, INC.

OFFICER'S CERTIFICATE PURSUANT TO SECTION 302 

 

I, Perry West, the Chief Executive Officer and Chief Financial Officer of New Global Energy, Inc. certify that: 

 

1.

I have reviewed this Form 10-Q of New Global Energy, Inc.

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

 

5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

 

 

Dated: June 10, 2016 

By:

/s/ Perry West

Perry West

Chief Executive Officer and Chief Financial Officer

 

EX-32.1 3 ngey_ex321.htm CERTIFICATION ngey_ex321.htm

 

EXHIBIT 32.1

 

NEW GLOBAL ENERGY, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of New Global Energy, Inc. (the Company) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Perry West, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

A signed original of this written statement required by Section 906 has been provided to New Global Energy, Inc. and will be retained by New Global Energy, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

Dated: June 10, 2016

By:

/s/ Perry West

Perry West

Chief Executive Officer and Chief Financial Officer

 

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