UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR
THE QUARTERLY PERIOD ENDED
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
COMMISSION
FILE NUMBER
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
A Registered Agent, Inc.
8 The Green, Suite A
Dover, DE 19901
(302) 288-0670
(Name, address, including zip code, and telephone number, including area code, of agent for service)
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 such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted 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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
| OTC Markets “PINK” |
As of May 22, 2023, there were shares of registrant’s Class A common stock outstanding.
GLOBAL TECHNOLOGIES, LTD
FORM 10-Q
FOR THE NINE MONTHS ENDED MARCH 31, 2023
INDEX
| i |
USE OF MARKET AND INDUSTRY DATA
This Quarterly Report on Form 10-Q includes market and industry data that we have obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this Quarterly Report on Form 10-Q are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this Quarterly Report on Form 10-Q or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, internally prepared and third-party market prospective information, in particular, are estimates only and there will usually be differences between the prospective and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Also, references in this Quarterly Report on Form 10-Q to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this Quarterly Report on Form 10-Q.
Solely for convenience, we refer to trademarks in this Quarterly Report on Form 10-Q without the ® or the ™ or symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our own trademarks. Other service marks, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, if any, are the property of their respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks.
OTHER PERTINENT INFORMATION
Unless the context otherwise indicates, when used in this Quarterly Report on Form 10-Q, the terms “Global Technologies” “we,” “us,” “our,” the “Company” and similar terms refer to Global Technologies, Ltd, a Delaware corporation, and all of our subsidiaries and affiliates.
| ii |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the period ended March 31, 2023 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events including, without limitation, the terms, timing and closing of our proposed acquisitions or our future financial performance. We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report on Form 10-Q is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report on Form 10-Q is filed to confirm these statements to actual results, unless required by law.
You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Quarterly Report on Form 10-Q identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:
| ● | Our ability to effectively execute our business plan; | |
| ● | Our ability to manage our expansion, growth and operating expenses; | |
| ● | Our ability to protect our brands and reputation; | |
| ● | Our ability to repay our debts; | |
| ● | Our ability to rely on third-party suppliers outside of the United States; | |
| ● | Our ability to evaluate and measure our business, prospects and performance metrics; | |
| ● | Our ability to compete and succeed in a highly competitive and evolving industry; | |
| ● | Our ability to respond and adapt to changes in technology and customer behavior; | |
| ● | Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives; | |
| ● | Risks related to the anticipated timing of the closing of any potential acquisitions; and | |
| ● | Risks related to the integration with regards to potential or completed acquisitions. | |
| ● | Various risks related to health epidemics, pandemics and similar outbreaks, such as the coronavirus disease 2019 (“COVID-19”) pandemic, which may have material adverse effects on our business, financial position, results of operations and/or cash flows. |
This Quarterly Report on Form 10-Q also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Quarterly Report on Form 10-Q and, accordingly, we cannot guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, the possibility that we may fail to preserve our expertise in consumer product development; that existing and potential distribution partners may opt to work with, or favor the products of, competitors if our competitors offer more favorable products or pricing terms; that we may be unable to maintain or grow sources of revenue; that we may be unable maintain profitability; that we may be unable to attract and retain key personnel; or that we may not be able to effectively manage, or to increase, our relationships with customers; that we may have unexpected increases in costs and expenses. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
| iii |
PART I
INDEX TO FINANCIAL STATEMENTS
| 1 |
GLOBAL TECHNOLOGIES, LTD
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2023 | June 30, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Accrued interest receivable | ||||||||
| Loan receivable, other | ||||||||
| Total current assets | ||||||||
| Property and equipment, less accumulated depreciation of $ | ||||||||
| Notes receivable | ||||||||
| Total other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Accrued director’s compensation | ||||||||
| Notes payable-third parties | ||||||||
| Loan payable, related party | ||||||||
| Loan payable-officer | ||||||||
| Debt discounts | ( | ) | ||||||
| Derivative liability | ||||||||
| Total current liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ DEFICIENCY | ||||||||
| Preferred stock; shares authorized, $ par value: | ||||||||
| Series K; shares authorized, par value $, as of March 31, 2023 and June 30, 2022, there are and shares outstanding, respectively | ||||||||
| Series L; shares authorized, par value $, as of March 31, 2023 and June 30, 2022, there are and shares outstanding, respectively | ||||||||
| Class A Common stock; shares authorized, $ par value, as of March 31, 2023 and June 30, 2022, there are and shares outstanding, respectively | ||||||||
| Additional paid- in capital Class A common stock | ||||||||
| Additional paid- in capital preferred stock | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficiency | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 2 |
GLOBAL TECHNOLOGIES, LTD
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three and nine months ended March 31, 2023 and 2022
For the Three Months Ended March 31, | For the Nine Months Ended March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue earned | ||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Officer and director compensation, including stock-based compensation of $, $, $ and $, respectively | ||||||||||||||||
| Depreciation expense | ||||||||||||||||
| Consulting Services | ||||||||||||||||
| Professional services | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Forgiveness of debt and interest | ||||||||||||||||
| Gain (loss) on derivative liability | ( | ) | ( | ) | ( | ) | ||||||||||
| Gain (loss) on issuance on notes payable | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Amortization of debt discounts | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other income (expenses) | ( | ) | ( | ) | ( | ) | ||||||||||
| Gain (Loss) before provision for income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Provision for income taxes | ||||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Basic and diluted income per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Weighted average common shares outstanding – basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 3 |
GLOBAL TECHNOLOGIES, LTD
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIENCY)
(UNAUDITED)
For the three and nine months ended March 31, 2023 and 2022
For the three months ended March 31, 2023 and 2022:
| Series K | Series L | Common Stock | Additional | |||||||||||||||||||||||||||||||||||||
| Preferred stock | Preferred stock | Common Stock | to be | Paid in | Accumulated | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Issued | Capital | Deficit | Total | |||||||||||||||||||||||||||||||
| Balances at December 31, 2021 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||
| Issuance of common stock for shares purchased through regulation A offering | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of replacement common shares | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock to noteholders in satisfaction of principal and interest | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of Series L preferred shares | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2022 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balances March 31, 2022 (Unaudited) | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
| Balances at December 31, 2022 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2023 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balances at March 31, 2023 (Unaudited) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
For the nine months ended March 31, 2023 and 2022:
| Series K | Series L | Common Stock | Additional | |||||||||||||||||||||||||||||||||||||
| Preferred stock | Preferred stock | Common Stock | to be | Paid in | Accumulated | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Issued | Capital | Deficit | Total | |||||||||||||||||||||||||||||||
| Balances at June 30, 2021 | | $ | $ | | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||||
| Return of common shares as per court order | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Return of common shares | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of replacement common shares | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock for shares purchased through Regulation A offering | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to noteholders in satisfaction of principal and interest | - | - | ||||||||||||||||||||||||||||||||||||||
| Cashless exercise of warrant | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of Series L Preferred shares | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net income for the nine months ended March 31, 2022 | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balances at March 31, 2022 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||
| Balances at June 30, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of common stock to a noteholder in satisfaction of principal and interest | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss for the nine months ended March 31, 2023 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balances at March 31, 2023 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
GLOBAL TECHNOLOGIES, LTD
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the nine months ended March 31, 2023 and 2022
| March 31, 2023 | March 31, 2022 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustment to reconcile net loss to net cash provided by operating activities: | ||||||||
| Gain from forgiveness of debt and interest | ( | ) | ||||||
| Derivative liability loss (gain) | ( | ) | ||||||
| Loss on issuance of notes payable | ||||||||
| Depreciation | ||||||||
| Amortization of debt discounts | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventory | ( | ) | ||||||
| Accounts receivable | ( | ) | ||||||
| Accrued Interest receivable | ( | ) | ( | ) | ||||
| Prepaid director’s compensation | ||||||||
| Prepaid management services | ( | ) | ||||||
| Loans receivable | ||||||||
| Receivable, other | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued interest | ||||||||
| Accrued director’s compensation | ||||||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Notes receivable-long-term | ( | ) | ||||||
| Net cash (used in) investing activities | ( | ) | ||||||
| FINANCING ACTIVITIES: | ||||||||
| Issuance of stock for Regulation A financing | ||||||||
| Repayments under loans payable-related parties | ( | ) | ||||||
| Repayments under notes payable | ( | ) | ||||||
| Borrowings from loans payable-officer | ||||||||
| Borrowings from notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Cancellation of common stock and stock to be issued | $ | $ | ||||||
| Cancellation of common stock as per court order | $ | $ | ||||||
| Issuance of common stock for debt and accrued interest | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE A – ORGANIZATION
Overview
Global Technologies, Ltd. (hereinafter “Global Technologies”, the “Company”, “Our”, “We”, or “Us”) is a publicly quoted operating company that was incorporated under the laws of the State of Delaware on January 20, 1999 under the name of NEW IFT Corporation. On August 13, 1999, the Company filed an Amended and Restated Certificate of Incorporation with the State of Delaware to change the name of the corporation to Global Technologies, Ltd. Our principal executive offices are located at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and our telephone number is (727) 482-1505. Our website address is www.globaltechnologiesltd.info. The information contained on, or that can be accessed through, our website is not a part of this Quarterly Report. We have included our website address in this Quarterly Report solely as an inactive textual reference.
Current Operations
Global Technologies, which through its subsidiaries, has operations engaged in the online sales of CBD and hemp related products, the acquisition of intellectual property in the safety and security space and as a portal for entrepreneurs to provide immediate access to live shopping, e-commerce, product placement in brick and mortar retail outlets and logistics.
As of March 31, 2023, Global Technologies had five wholly-owned subsidiaries: TCBM Holdings, LLC (“TCBM”), HMNRTH, LLC (“HMNRTH”), 911 Help Now, LLC (“911”), Markets on Main, Inc. (“MOM”) and Tersus Power, Inc. (“Tersus”). As of March 31, 2023, the Company had a minority investment in one entity, Global Clean Solutions, LLC.
| 6 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE A – ORGANIZATION (cont’d)
Our wholly owned subsidiaries:
About TCBM Holdings, LLC
TCBM Holdings, LLC (“TCBM”) was formed as a Delaware limited liability company on August 10, 2017. TCBM is a holding corporation, which operated through its two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About HMNRTH, LLC
HMNRTH, LLC (“HMN”) was formed as a Delaware limited liability company on July 30, 2019. HMNRTH operates as an online store selling a variety of hemp and CBD related products. The Company’s business model is to bridge the gap between the lifestyle and knowledge components within the cannabis industry. The Company’s goal is to educate every consumer while cultivating an experience by providing quality products, branded cutting-edge content, and diversified product lines for any purpose. Most importantly, we want our clients to discover their inner HMN, redefine their inner HMN and Empower their inner HMN.
In order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through the Company’s ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have the required capital to initiate any of the options and there is no guarantee that we will be able to raise the required funds.
| 7 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE A – ORGANIZATION (cont’d)
About 911 Help Now, LLC
911 Help Now, LLC (“911”) was formed as a Delaware limited liability company on February 2, 2018. 911 was a holding company of intellectual property in the safety and security space. At present, we own no intellectual property within our 911 subsidiary. In order to generate future revenue within 911, we will need to identify and either acquire or license intellectual property. In the event of an acquisition, we will then need to either develop products utilizing our intellectual property or license out our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition or licensing of any intellectual property.
About Markets on Main, Inc.
Markets on Main, LLC (“MOM”) was formed as a Florida limited liability company on April 2, 2020. MOM is a full service, sales and distribution, third-party logistics provider and portal to multi-channel sales opportunities. MOM’s focus is on bringing small businesses and entrepreneurs to large opportunities and distribution. MOM will provide the following services to its clients: inventory management, brand management, fulfillment and drop-ship capabilities, retail distribution and customer service. MOM’s website can be found at www.marketsonmain.com.
On May 4, 2020, MOM entered into a Drop Ship Agreement (the “Agreement”) with QVC, Inc. Under the terms of the Agreement, MOM shall provide products for marketing, promotion, sale and distribution by QVC through certain televised and/or other electronic shopping services developed or to be developed by QVC and through other means and media.
On January 3, 2022, the Company filed Articles of Conversion with the State of Florida to convert MOM from a limited liability company to a Florida profit corporation. Simultaneous with the filing of the Articles of Conversion, the Company filed Articles of Incorporation for MOM.
On January 19, 2022, MOM entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) with Amfluent, LLC (“Amfluent”). Under the terms of the Distribution Agreement, MOM will become an exclusive distributor for the promotion and sale of products carried by Amfluent. As the exclusive distributor, MOM shall be awarded the exclusive territory of e-commerce, live shopping and digital sales. The Distribution Agreement has a term of one year from the Effective Date unless both parties agree to renew the Distribution Agreement for an additional term.
On January 30, 2022, MOM entered into a Marketing Management Agreement (the “Agreement”) with Chin Industries, LLC (“Chin”). Under the terms of the Agreement, Chin shall provide day to day management of websites where MOM’s products may be sold. The Agreement has a term of one year. As compensation, Chin shall receive a 50/50 split of net profits.
During the third quarter of fiscal 2022, MOM launched its first website, www.sculptbaby.com, under the Agreement with Chin. Product sales initiated in March 2022. During the fourth quarter of fiscal 2022, all Sculpt Baby inventory was sold. The Company has not identified its next product to launch.
About Tersus Power, Inc. (Delaware)
Tersus Power, Inc. (“Tersus”) (Delaware) was formed as a wholly owned subsidiary as per the terms of the Share Exchange Agreement entered into with Tersus Power, Inc., a Nevada corporation, and the Tersus Shareholders with the sole purpose of entering into an Agreement and Plan of Merger to effect a name change. The Articles of Incorporation were filed with the Secretary of State of the State of Delaware on March 15, 2022.
Share Exchange Agreement with Tersus Power, Inc. (Nevada)
During the three months ended March 31, 2023, the Company received notification from FINRA that the proposed corporate action submission, as noted within the Tersus Power Share Exchange Agreement, had passed the allotted time for the corporate action to become effective. The Company is in the process of refiling the same corporate action. The delay on the corporate action becoming effective has required Tersus Power to seek alternate financing and to reevaluate its business plan. As of the date of this filing, it is highly unlikely the Agreement will close due to the delays.
| 8 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE A – ORGANIZATION (cont’d)
Consulting Services
On January 12, 2022, the Company entered into a Fee Agreement (the “Agreement”) for the preparation of a registration statement on Form 1-A and all follow up correspondence with the appropriate regulatory agencies. The Company was fully compensated for its services during the period ended March 31, 2022 and has fulfilled its obligations under the Agreement.
On
February 1, 2022, the Company entered into a Letter Agreement (the “Agreement”) with Donohoe Advisory Services, Inc. (“Donohoe”)
to provide assistance to the Company in support of the Company’s efforts to obtain a listing on a national securities exchange.
Under the terms of the Agreement,
On February 5, 2022, the Company entered into a Fee Agreement (the “Agreement”) for the preparation of a registration statement on Form 1-A and all follow up correspondence with the appropriate regulatory agencies. As of March 31, 2023, the Company has initiated the work to be completed under the Agreement but is awaiting additional information from its client.
| 9 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE B – BASIS OF PRESENTATION
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2023 and the results of operations, changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and nine months ended March 31, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period.
These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 as filed with the Securities and Exchange Commission on October 13, 2022. The Company’s accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended June 30, 2022, and updated, as necessary, in this Quarterly Report on Form 10-Q.
| 10 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of Significant Accounting Policies
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements. The condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended June 30, 2022 filed with the Securities and Exchange Commission on October 13, 2022.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Global Technologies and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.
Cash Equivalents
Investments
having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For the
periods presented, the Company had
| 11 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Accounts Receivable and Allowance for Doubtful Accounts:
Accounts receivable are recorded at invoiced amounts and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management’s judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions. The determination of the collectability of amounts due from customer accounts requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of Global Technologies’ customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. At March 31, 2023 and June 30, 2022, an allowance for doubtful accounts was not considered necessary as all accounts receivable were deemed collectible.
Accounts receivable – related party and allowance for doubtful accounts
Accounts receivable – related party are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection.
Concentrations of Risks
Concentration
of Accounts Receivable –At March 31, 2023 and June 30, 2022, the Company had
$
Concentration
of Revenues – For the nine months ended March 31, 2023, the Company generated
$
Concentration of Suppliers – The Company relies on a limited number of suppliers and contract manufacturers.
Concentration
of Loans Receivable, Other –At March 31, 2023 and June 30, 2022, the Company
had $
Concentration
of Notes Receivable – The Company had notes receivable of $
Income Taxes
In accordance with Accounting Standards Codification (ASC) 740 – Income Taxes, the provision for income taxes is computed using the asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is not more likely than not that a deferred tax asset will be realized.
We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of March 31, 2023, we had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have no federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have not incurred any interest or tax penalties.
| 12 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Financial Instruments and Fair Value of Financial Instruments
We adopted ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
| Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities |
| Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data |
| Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. Except for the derivative liability, we had no financial assets or liabilities carried and measured at fair value on a recurring or nonrecurring basis during the periods presented.
Derivative Liabilities
We evaluate convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.
The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. Please see NOTE I - DERIVATIVE LIABILITY for further information.
Long-lived Assets
Long-lived assets such as property and equipment and intangible assets are periodically reviewed for impairment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
| 13 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Deferred Financing Costs
Deferred financing costs represent costs incurred in the connection with obtaining debt financing. These costs are amortized ratably and charged to financing expenses over the term of the related debt.
Revenue recognition
Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606:
Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
| 14 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation.
Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur.
Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception.
Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or overtime.
Substantially all of the Company’s revenues continue to be recognized when control of the goods is transferred to the customer, which is upon shipment of the finished goods to the customer. All sales have fixed pricing and there are currently no material variable components included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically these credits for defective merchandise have not been material. Based on the Company’s analysis of the new revenue standards, revenue recognition from the sale of finished goods to customers, which represents substantially all of the Company’s revenues, was not impacted by the adoption of the new revenue standards.
Service revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer.
| 15 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Stock-Based Compensation
We account for share-based awards to employees in accordance with ASC 718 “Stock Compensation”. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. The Company accounts for non-employee stock-based awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Under the new standard, the Company will value all equity classified awards at their grant-date under ASC 718 and no options were required to be revalued at adoption.
Related Parties
A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.
Advertising Costs
Advertising costs are expensed as incurred. For the periods presented, we had no advertising costs.
We compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.
Basic loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net loss per share are excluded from the calculation. For the nine months ended March 31, 2023 and 2022 the Company excluded and , respectively, shares relating to convertible notes payable to third parties and shares issuable upon conversion of the Company’s Series L Preferred stock.
| 16 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Recently Enacted Accounting Standards
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial statements.
In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on May 1, 2022, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. We are currently evaluating the impact of the adoption of ASU 2020-06 on our financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. Financial instruments included in the Company’s financial statements include cash, accounts payable and accrued expenses, accrued interest payable, loans payable to related parties, notes payable to third parties, notes payable to related parties and derivative liability. Unless otherwise disclosed in the notes to the financial statements, the carrying value of financial instruments is considered to approximate fair value due to the short maturity and characteristics of those instruments. The carrying value of debt approximates fair value as terms approximate those currently available for similar debt instruments.
| 17 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Goodwill
After completing the purchase price allocation, any residual of cost over fair value of the net identifiable assets and liabilities was assigned to the unidentifiable asset, goodwill. Formerly subject to mandatory amortization, this now is not permitted to be amortized at all, by any allocation scheme and over any useful life. Impairment testing, using a methodology at variance with that set forth in FAS 144 (which, however, continues in effect for all other types of long-lived assets and intangibles other than goodwill), must be applied periodically, and any computed impairment will be presented as a separate line item in that period’s income statement, as a component of income from continuing operations (unless associated with discontinued operations, in which case, the impairment would, net of income tax effects, be combined with the remaining effects of the discontinued operations. In accordance with Statement No. 142, “Goodwill and Other Intangible Assets,” the Company does not amortize goodwill, but performs impairment tests of the carrying value at least quarterly.
Intangible Assets
Intangible assets are stated at the lesser of cost or fair value less accumulated amortization. Please see NOTE D – ACQUISITION OF TCBM HOLDINGS, LLC for further information.
NOTE D – ACQUISITION OF TCBM HOLDINGS, LLC
On
November 30, 2019, the Company acquired
Details regarding the book values and fair values of the net assets acquired are as follows:
| Book Value | Fair Value | Difference | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Cash | $ | $ | $ | |||||||||
| Inventory | ||||||||||||
| Property and Equipment | ||||||||||||
| Total | $ | $ | $ | |||||||||
Goodwill and Intangibles
Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or estimated life. Goodwill and indefinite-lived intangibles assets are not amortized but are tested for impairment in the fourth quarter using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.
| 18 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE D – ACQUISITION OF TCBM HOLDINGS, LLC (cont’d)
In performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, and whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is required only if the Company concludes that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. For quantitative testing, the Company compares the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value estimated cash flows. Changes in economic and operating conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment charge in a future period.
Acquisitions
Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability.
Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method or excess earnings method, forms of the income approach supported by observable market data for peer companies. The significant assumptions used to estimate the value of the acquired intangible assets include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates, customer attrition rates, and royalty rates). Acquired inventories are marked to fair value for valuation of the total purchase price. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company.
| Assets acquired | As of November 30, 2019 | |||
| Cash | $ | |||
| Inventory (i) | ||||
| Property, plant and equipment (ii) | ||||
| Goodwill (iii) | ||||
| Total purchase price | $ | |||
| (i) | |
| (ii) | |
| (iii) |
The changes in the carrying amount of goodwill for the period from November 30, 2019 through March 31, 2023 were as follows:
| Balance as of November 30, 2019 | $ | |||
| Additions and adjustments | ( | ) | ||
| Balance as of March 31, 2023 | $ |
| 19 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE D – ACQUISITION OF TCBM HOLDINGS, LLC (cont’d)
For
the nine months ended March 31, 2023 and year ended June 30, 2022, the Company recorded an impairment of goodwill in the amount of
$
NOTE E - PROPERTY AND EQUIPMENT
| March 31, 2023 | June 30, 2022 | |||||||
| Property and Equipment | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
| (i) | ||
| (ii) |
NOTE F – NOTE RECEIVABLE
| March 31, 2023 | June 30, 2022 | |||||||
| Note receivable- Tersus Power, Inc. | $ | $ | ||||||
| Total | $ | $ | ||||||
| (i) | ||
| (ii) |
| 20 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE G – ACCRUED OFFICER AND DIRECTOR COMPENSATION
Accrued officer and director compensation is due to Wayne Anderson, the sole officer and director of the Company, and consists of:
| March 31, 2023 | June 30, 2022 | |||||||
| Pursuant to January 26, 2018 Board of Directors Service Agreement | $ | $ | ||||||
| Total | $ | $ | ||||||
For the nine months ended March 31, 2023 and year ended June 30, 2022, the balance of accrued officer and director compensation changed as follows:
| Pursuant to Employment Agreements | Pursuant to Board of Directors Services Agreements | Total | ||||||||||
| Balances at June 30, 2022 | ||||||||||||
| Officer’s/director’s compensation for the nine months ended March 31, 2023 (i) | ||||||||||||
| Cash compensation | ( | ) | ( | ) | ||||||||
| Balances at March 31, 2023 | $ | $ | $ | |||||||||
| (i) |
| 21 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE H – NOTES PAYABLE, THIRD PARTIES
Notes payable to third parties consist of:
March 31, 2023 | June 30, 2022 | |||||||
| Convertible Promissory Note dated January 20, 2021 payable to Tri-Bridge Ventures, LLC
(“Tri-Bridge”), interest at | ||||||||
| Convertible Promissory Note dated February 22, 2021 payable to Tri-Bridge
Ventures, LLC (“Tri-Bridge”), interest at | ||||||||
| Convertible Promissory Note dated January 13, 2022 payable to Sixth Street Lending, LLC (“Sixth
Street”), interest at | ||||||||
| Convertible Promissory Note dated February 4, 2022 payable to Sixth Street
Lending, LLC (“Sixth Street”), interest at | ||||||||
| Totals | $ | $ | ||||||
| (i) |
| (ii) |
| 22 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE H – NOTES PAYABLE, THIRD PARTIES (cont’d)
| (iii) | |
| (iv) |
Income from forgiveness of principal and interest on convertible notes payable consists of:
| March
31, 2023 |
June
30, 2022 |
|||||||
| Forgiveness of Graphene Holdings, LLC principal and interest | ||||||||
| Total | $ | $ | ||||||
| 23 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE I - DERIVATIVE LIABILITY
The derivative liability at March 31, 2023 and June 30, 2022 consisted of:
March 31, 2023 | June 30, 2022 | |||||||
| Convertible Promissory Notes payable to Tri-Bridge Ventures, LLC. Please see NOTE H – NOTES PAYABLE, THIRD PARTIES for further information | $ | $ | ||||||
| Convertible Promissory Note payable to Sixth Street Lending, LLC. Please see NOTE H – NOTES PAYABLE, RELATED PARTIES for further information | ||||||||
| Total derivative liability | $ | $ | ||||||
The Convertible Promissory Notes (the “Notes”) contain a variable conversion feature based on the future trading price of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the Notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at the respective issuance dates of the notes and charged the applicable amounts to debt discounts (limited to the face value of the respective notes) and the remainder to other expenses. The increase (decrease) in the fair value of the derivative liability from the respective issue dates of the notes to the measurement dates is charged (credited) to other expense (income).
The
fair value of the derivative liability was measured at the respective issuance dates and at March
31, 2023, and June 30, 2022 using the Black Scholes option pricing model. Assumptions used for the calculation of the derivative
liability of the Notes at March 31, 2023 were (1) stock price of $ per share, (2)
conversion price of $ per share, (3) term of 6 months, (4) expected volatility of
The following table provides a reconciliation of the beginning and ending balances for the convertible note embedded derivative liability measured at fair value using significant unobservable inputs (Level 3):
| Level 3 | ||||
| Balance at June 30, 2022 | $ | |||
| Additions | ||||
| (Gain)Loss | ||||
| Change resulting from conversions and payoffs | ( | ) | ||
| Balance at March 31, 2023 | $ | |||
| 24 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK
Preferred Stock
Filed with the State of Delaware:
On September 30, 1999, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series A 8% Convertible Preferred Stock, par value $. The designation of the new Series A 8% Convertible Preferred Stock was approved by the Board of Directors on August 16, 1999. The Company is authorized to issue shares of the Series A 8% Convertible Preferred Stock. At March 31, 2023 and June 30, 2022, the Company had and shares issued and outstanding, respectively.
On September 30, 1999, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series B 8% Convertible Preferred Stock, par value $. The designation of the new Series B 8% Convertible Preferred Stock was approved by the Board of Directors on August 16, 1999. The Company is authorized to issue shares of the Series B 8% Convertible Preferred Stock. At March 31, 2023 and June 30, 2022, the Company had and shares issued and outstanding, respectively.
On February 15, 2000, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series C 5% Convertible Preferred Stock, par value $. The designation of the new Series C 5% Convertible Preferred Stock was approved by the Board of Directors on February 14, 2000. The Company is authorized to issue shares of the Series C 5% Convertible Preferred Stock. At March 31, 2023 and June 30, 2022, the Company had and shares issued and outstanding, respectively.
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GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
On April 26, 2001, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series D Convertible Preferred Stock, par value $. The designation of the new Series D Convertible Preferred Stock was approved by the Board of Directors on April 26, 2001. The Company is authorized to issue shares of the Series D Convertible Preferred Stock. At March 31, 2023 and June 30, 2022, the Company had and shares issued and outstanding, respectively.
On June 28, 2001, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series E 8% Convertible Preferred Stock, par value $. The designation of the new Series E 8% Convertible Preferred Stock was approved by the Board of Directors on March 30, 2001. The Company is authorized to issue shares of the Series E Convertible Preferred Stock. At March 31, 2023 and June 30, 2022, the Company had and shares issued and outstanding, respectively.
Series K Super Voting Preferred Stock
On July 31, 2019, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series K Super Voting Preferred Stock, par value $. The designation of the new Series K Super Voting Preferred Stock was approved by the Board of Directors on July 16, 2019. The Company is authorized to issue three () shares of the Series K Super Voting Preferred Stock. At March 31, 2023 and June 30, 2022, the Company had and shares issued and outstanding, respectively.
Dividends. Initially, there will be no dividends due or payable on the Series K Super Voting Preferred Stock. Any future terms with respect to dividends shall be determined by the Board consistent with the Corporation’s Certificate of Incorporation. Any and all such future terms concerning dividends shall be reflected in an amendment to this Certificate, which the Board shall promptly file or cause to be filed.
Liquidation and Redemption Rights. Upon the occurrence of a Liquidation Event (as defined below), the holders of Series K Super Voting Preferred Stock are entitled to receive net assets on a pro-rata basis. Each holder of Series K Super Voting Preferred Stock is entitled to receive ratably any dividends declared by the Board, if any, out of funds legally available for the payment of dividends. As used herein, “Liquidation Event” means (i) the liquidation, dissolution or winding-up, whether voluntary or involuntary, of the Corporation, (ii) the purchase or redemption by the Corporation of shares of any class of stock or the merger or consolidation of the Corporation with or into any other corporation or corporations, unless (a) the holders of the Series K Super Voting Preferred Stock receive securities of the surviving Corporation having substantially similar rights as the Series K Super Voting Preferred Stock and the stockholders of the Corporation immediately prior to such transaction are holders of at least a majority of the voting securities of the successor Corporation immediately thereafter (the “Permitted Merger”), unless the holders of the shares of Series K Super Voting Preferred Stock elect otherwise or (b) the sale, license or lease of all or substantially all, or any material part of, the Corporation’s assets, unless the holders of Series K Super Voting Preferred Stock elect otherwise.
Conversion. No conversion of the Series K Super Voting Preferred Stock is permitted.
Rank. All shares of the Series K Super Voting Preferred Stock shall rank (i) senior to the Corporation’s (A) Common Stock, par value $ per share (“Common Stock”), and any other class or series of capital stock of the Corporation hereafter created, except as otherwise provided in clauses (ii) and (iii) of this Section 4, (ii) pari passu with any class or series of capital stock of the Corporation hereafter created and specifically ranking, by its terms, on par with the Series K Super Voting Preferred-Stock and (iii) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking, by its terms, senior to the Series K Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.
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GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
Voting Rights.
A. If at least one share of Series K Super Voting Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series K Super Voting Preferred Stock at any given time, regardless of their number, shall have voting rights equal to 20 times the sum of: i) the total number of shares of Common stock which are issued and outstanding at the time of voting, plus ii) the total number of shares of any and all Preferred stocks which are issued and outstanding at the time of voting.
B. Each individual share of Series K Super Voting Preferred Stock shall have the voting rights equal to:
[twenty times the sum of: {all shares of Common stock issued and outstanding at the time of voting + all shares of any other Preferred stocks issued and outstanding at the time of voting}]
Divided by:
[the number of shares of Series K Super Voting Preferred Stock issued and outstanding at the time of voting]
With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series K Super Voting Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Certificate of Incorporation or By-laws.
Series L Preferred Stock
On July 31, 2019, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series L Preferred Stock, par value $. The designation of the new Series L Preferred Stock was approved by the Board of Directors on July 16, 2019. The Company is authorized to issue five hundred thousand () shares of the Series L Preferred Stock. At March 31, 2023 and June 30, 2022, the Company had and shares issued and outstanding, respectively.
Dividends. The holders of Series L Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion.
Voting.
a. If at least one share of Series L Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series L Preferred Stock at any given time, regardless of their number, shall have voting rights equal to four times the sum of: i) the total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of shares of all series of Preferred Stock which are issued and outstanding at the time of voting.
| 27 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
b. Each individual share of Series L Preferred Stock shall have the voting rights equal to:
[four times the sum of: {all shares of Common Stock issued and outstanding at time of voting + the total number of shares of all series of Preferred Stock issued and outstanding at time of voting}]
divided by:
[the number of shares of Series L Preferred Stock issued and outstanding at the time of voting]
Conversion Rights.
a) Outstanding. If at least one share of Series L Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series L Preferred Stock at any given time, regardless of their number, shall be convertible into the number of shares of Common Stock defined by the formula set forth is section 4.b.
b) Method of Conversion.
i. Procedure- Before any holder of Series L Preferred Stock shall be entitled to convert the same into shares of common stock, such holder shall surrender the certificate or certificates therefore, duly endorsed, at the office of the Company or of any transfer agent for the Series L Preferred Stock, and shall give written notice 5 business days prior to date of conversion to the Company at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of common stock are to be issued. The Company shall, within five business days, issue and deliver at such office to such holder of Series L Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of common stock to which such holder shall be entitled as aforesaid. Conversion shall be deemed to have been effected on the date when delivery of notice of an election to convert and certificates for shares is made, and such date is referred to herein as the “Conversion Date.”
ii. Issuance- Shares of Series L Preferred Stock may only be issued in exchange for the partial or full retirement of debt held by Management, Employees, Consultants or as directed by a majority vote of the Board of Directors. The number of Shares of Series L Preferred Stock to be issued to each qualified person (member of Management, Employee or Consultant) holding a Note shall be determined by the following formula:
For
retirement of debt:
iii. Calculation for conversion into Common Stock- Each individual share of Series L Preferred Stock shall be convertible into the number of shares of Common Stock equal to:
[5000]
divided by:
[.50 times the lowest closing price of the Company’s common stock for the immediate five-day period prior to the receipt of the Notice of Conversion remitted to the Company by the Series L Preferred stockholder]
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GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
Common Stock
Class A and Class B:
Identical Rights. Except as otherwise expressly provided in ARTICLE FIVE of the Company’s Amended and Restated Certificate of Incorporation dated August 13, 1999, all Common Shares shall be identical and shall entitle the holders thereof to the same rights and privileges.
Stock Splits. The Corporation shall not in any manner subdivide (by any stock split, reclassification, stock dividend, recapitalization, or otherwise) or combine the outstanding shares of one class of Common Shares unless the outstanding shares of all classes of Common Shares shall be proportionately subdivided or combined.
Liquidation Rights. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation, after payment shall have been made to holders of outstanding Preferred Shares, if any, of the full amount to which they are entitled pursuant to the Certificate of Incorporation, the holders of Common Shares shall be entitled, to the exclusion of the holders of the Preferred Shares, if any, to share ratably, in accordance with the number of Common Shares held by each such holder, in all remaining assets of the Corporation available for distribution among the holders of Common Shares, whether such assets are capital, surplus, or earnings. For the purposes of this paragraph, neither the consolidation or merger of the Corporation with or into any other corporation or corporations in which the stockholders of the Corporation receive capital stock and/or securities (including debt securities) of the acquiring corporation (or of the direct or indirect parent corporation of the acquiring corporation) nor the sale, lease or transfer of the Corporation, shall be deemed to be a voluntary or involuntary liquidation, dissolution, or winding up of the Corporation as those terms are used in this paragraph.
Voting Rights.
(a)
(b) The holders of Class A Shares and Class B Shares are not entitled to cumulative votes in the election of any directors.
Preemptive or Subscription Rights. No holder of Common Shares shall be entitled to preemptive or subscription rights.
| 29 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
Conversion Rights.
(a) Automatic Conversion. Each Class B Share shall (subject to receipt of any and all necessary approvals) convert automatically into one fully paid and non-assessable Class A Share (i) upon its sale, gift, or other transfer to a party other than a Principal Stockholder (as defined below) or an Affiliate of a Principal Stockholder (as defined below), (ii) upon the death of the Class B Stockholder holding such Class B Share, unless the Class B Shares are transferred by operation of law to a Principal Stockholder or an Affiliate of a Principal Stockholder, or (iii) in the event of a sale, gift, or other transfer of a Class B Share to an Affiliate of a Principal Stockholder, upon the death of the transferor. Each of the foregoing automatic conversion events shall be referred to hereinafter as an “Event of Automatic Conversion.” For purposes of this ARTICLE FIVE, “Principal Stockholder” includes any of Donald H. Goldman, Steven M. Fieldman, Lance Fieldman, Yuri Itkis, Michall Itkis and Boris Itkis and an “Affiliate of a Principal Stockholder” is a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. For purposes of this definition, “control,” when used with respect to any specified person, means the power to direct or cause the direction of the management, and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Without limitation, an Affiliate also includes the estate of such individual.
(b) Voluntary Conversion. Each Class B Share shall be convertible at the option of the holder, for no additional consideration, into one fully paid and non-assessable Class A Share at any time.
(c) Conversion Procedure. Promptly upon the occurrence of an Event of Automatic Conversion such that Class B shares are converted automatically into Class A Shares, or upon the voluntary conversion by the holder, the holder of such shares shall surrender the certificate or certificates therefor, duly endorsed in blank or accompanied by proper instruments of transfer, at the office of the Corporation or of any transfer agent for the Class A Shares, and shall give written notice to the Corporation at such office (i) stating that the shares are being converted pursuant to an Event of Automatic Conversion into Class A Shares as provided in subparagraph 5.6(a) hereof or a voluntary conversion as provided in subparagraph 5.6(b) hereof, (ii) specifying the Event of Automatic Conversion (and, if the occurrence of such event is within the control of the transferor, stating the transferor’s intent to effect an Event of Automatic Conversion) or whether such conversion is voluntary, (iii) identifying the number of Class B Shares being converted, and (iv) setting out the name or names (with addresses) and denominations in which the certificate or certificates for Class A Shares shall be issued and including instructions for delivery thereof. Delivery of such notice together with the certificates representing the Class B Shares shall obligate the Corporation to issue such Class A Shares and the Corporation shall be justified in relying upon the information and the certification contained in such notice and shall not be liable for the result of any inaccuracy with respect thereto. Thereupon, the Corporation or its transfer agent shall promptly issue and deliver at such stated address to such holder or to the transferee of Class B Shares a certificate or certificates for the number of Class A Shares to which such holder or transferee is entitled, registered in the name of such holder, the designee of such holder or transferee, as specified in such notice. To the extent permitted by law, conversion pursuant to (i) an Event of Automatic Conversion shall be deemed to have been effected as of the date on which the Event of Automatic Conversion occurred or (ii) a voluntary conversion shall be deemed to have been effected as of the date the Corporation receives the written notice pursuant to this subparagraph (c) (each date being the “Conversion Date”). The person entitled to receive the Class A Shares issuable upon such conversion shall be treated for all purposes as the record holder of such Class A Shares at and as of the Conversion Date, and the right of such person as the holder of Class B Shares shall cease and terminate at and as of the Conversion Date, in each case without regard to any failure by the holder to deliver the certificates or the notice by this subparagraph (c).
(d) Unconverted Shares. In the event of the conversion of fewer than all of the Class B Shares evidenced by a certificate surrendered to the Corporation in accordance with the procedures of this Paragraph 5.6, the Corporation shall execute and deliver to or upon the written order of the holder of such certificate, without charge to such holder, a new certificate evidencing the number of Class B Shares not converted.
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GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
(e) Reissue of Shares. Class B Shares that are converted into Class A Shares as provided herein shall be retired and canceled and shall not be reissued.
(f) Reservation. The Corporation hereby reserves and shall at all times reserve and keep available, out of its authorized and unissued Class A Shares, for the purpose of effecting conversions, such number of duly authorized Class A Shares as shall from time to time be sufficient to effect the conversion of all outstanding Class B Shares. The Corporation covenants that all the Class A Shares so issuable shall, when so issued, be duly and validly issued, fully paid and non-assessable, and free from liens and charges with respect to the issue. The Corporation will take all such action as may be necessary to assure that all such Class A Shares may be so issued without violation of any applicable law or regulation, or any of the requirements of any national securities exchange upon which the Class A Shares may be listed. The Corporation will not take any action that results in any adjustment of the conversion ratio if the total number of Class A Shares issued and issuable after such action upon conversion of the Class B Shares would exceed the total number of Class A Shares then authorized by the Amended and Restated Certificate of Incorporation, as amended.
At March 31, 2023 and June 30, 2022, the Company is authorized to issue and shares of Class A Common Stock, respectively. At March 31, 2023 and June 30, 2022, the Company has and shares issued and outstanding, respectively. At March 31, 2023 and June 30, 2022, the Company is authorized to issue and shares of Class B Common Stock, respectively. At March 31, 2023 and June 30, 2022, the Company has and shares issued and outstanding, respectively.
Common Stock, Preferred Stock and Warrant Issuances
For the nine months ended March 31, 2023 and year ended June 30, 2022, the Company issued and/or sold the following unregistered securities:
Common Stock:
Common stock issued during the nine months ended March 31, 2023
On
July 14, 2022, the Company issued shares
of common stock with a fair market value of $
On
July 15, 2022, the Company issued shares
of common stock with a fair market value of $
On
August 8, 2022, the Company issued shares
of common stock with a fair market value of $
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GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
Common stock issued during the year ended June 30, 2022
On
November 17, 2021, the Company issued shares of common stock with a fair market value of $
On
November 17, 2021, the Company issued shares of common stock with a fair market value of $
On
December 13, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 14, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 15, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 16, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 17, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 21, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 22, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 22, 2021, the Company issued shares of common stock with a fair market value of $
On
December 28, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
December 29, 2021, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
January 3, 2022, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
January 3, 2022, the Company issued shares of common stock to an accredited investor with a fair market value of $
On
January 18, 2022, the Company issued shares of common stock with a fair market value of $
On
March 3, 2022, the Company issued shares of common stock with a fair market value of $
On
March 3, 2022, the Company issued shares of common stock with a fair market value of $
On
March 15, 2022, the Company issued shares of common stock with a fair market value of $
On
April 29, 2022, the Company issued shares of common stock with a fair market value
of $
| 32 |
GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE J - CAPITAL STOCK (cont’d)
Preferred Stock:
Preferred stock issued during the nine months ended March 31, 2023
None
Preferred stock issued during the year ended June 30, 2022
On February 15, 2022, the Company issued shares of the Company’s Series L Preferred Stock to the Company’s sole officer and director as reimbursement for returning shares of common stock to the Company.
Warrants and Options:
None.
As of March 31, 2023, the Company had no outstanding warrants or options.
NOTE K - COMMITMENTS AND CONTINGENCIES
Occupancy
As of March 31, 2023, the Company maintains office space at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and is not required to reimburse Sylios Corp for monthly rent. The Company anticipates that this relationship will change with the hiring of additional employees, and it will be required to enter into a lease for a separate office space.
Director Agreements
NOTE L - GOING CONCERN UNCERTAINTY
Under ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date that the financial statements are issued. As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our plans that have not been fully implemented as of the date the financial statements are issued.
In
performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability to
meet our financial obligations as they become due. We have a history of net losses: As of March 31, 2023, we had an accumulated deficit
of $
In performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that the financial statements are issued. Our future plans include securing additional funding sources that may include establishing corporate partnerships, establishing licensing revenue agreements, issuing additional convertible debentures and issuing public or private equity securities, including selling common stock through an at-the-market facility (ATM).
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GLOBAL TECHNOLOGIES, LTD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended March 31, 2023 and 2022
(Unaudited)
NOTE L - GOING CONCERN UNCERTAINTY (cont’d)
There is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or they will not have a significant dilutive effect on the Company’s existing shareholders. We have therefore concluded there is substantial doubt about our ability to continue as a going concern.
The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our failure to continue as a going concern.
NOTE M - SUBSEQUENT EVENTS
On May 17, 2023, the Company appointed Frederick Kalei Cutcher to its Board of Directors.
On May 17, 2023, the Company’s Board of Directors elected to increase the Company’s number of authorized shares of its Class A Common Stock from to . The Company will file an Amendment to its Articles of Incorporation during the quarter ended June 30, 2023.
On May 17, 2023, Jimmy Wayne Anderson resigned in his role as an officer and director of the Company. Mr. Cutcher was retained as the Company’s new Chief Executive Officer and Principal Financial Officer.
On
May 17, 2023, the Company entered into an Employment Agreement (the “Agreement”) with Mr. Cutcher for his role as the Company’s
Chief Executive Officer. Under the terms of the Agreement, Mr. Cutcher is to receive a base salary of $
On
May 17, 2023, the Company executed a Convertible Note (the “Convertible Note”) payable to Hillcrest Ridgewood Partners, LLC
in the principal amount of $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Management’s Discussion and Analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this quarterly report.
Forward-Looking Statements
This Quarterly Report contains forward-looking statements and information relating to us that 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 report, the words “believe,” “anticipate,” “expect,” “will,” “estimate,” “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved. Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, and in our subsequent filings with the SEC, and include, among others, the following: marijuana is illegal under federal law, the marijuana industry is subject to strong competition, our business is dependent on laws pertaining to the marijuana industry, the marijuana industry is subject to government regulation, our business model depends on the availability of private funding, we will be subject to general real estate risks, if debt payments to note holder are not made we could lose our investment in our real estate properties, terms and deployment of capital. The terms “Global Technologies, Ltd “Global Technologies,” “Global,” “we,” “us,” “our,” and the “Company” refer to Global Technologies, Ltd., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis.
Company Overview
Global Technologies, Ltd. (hereinafter the “Company”, “Our”, “We”, or “Us”) is a publicly quoted company that was incorporated under the laws of the State of Delaware on January 20, 1999 under the name of NEW IFT Corporation. On August 13, 1999, the Company filed an Amended and Restated Certificate of Incorporation with the State of Delaware to change the name of the corporation to Global Technologies, Ltd. Our principal executive offices are located at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and our telephone number is (727) 482-1505. Our website address is www.globaltechnologiesltd.info. The information contained on, or that can be accessed through, our website is not a part of this Quarterly Report. We have included our website address in this Quarterly Report solely as an inactive textual reference.
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Current Operations
Global Technologies, Ltd (“Global Technologies”) is a publicly traded operating corporation, which through its subsidiaries, has operations engaged in the online sales of CBD and hemp related products, the acquisition of intellectual property in the safety and security space and as a portal for entrepreneurs to provide immediate access to live shopping, e-commerce, product placement in brick and mortar retail outlets and logistics.
As of March 31, 2023, Global Technologies had five wholly-owned subsidiaries: TCBM Holdings, LLC (“TCBM”), HMNRTH, LLC (“HMNRTH”), 911 Help Now, LLC (“911”), Markets on Main, Inc. (“MOM”) and Tersus Power, Inc. (“Tersus”). As of March 31, 2023, the Company had a minority investment in one entity, Global Clean Solutions, LLC.
Our wholly owned subsidiaries:
About TCBM Holdings, LLC
TCBM Holdings, LLC (“TCBM”) was formed as a Delaware limited liability company on August 10, 2017. TCBM is a holding corporation, which operated through its two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About HMNRTH, LLC
HMNRTH, LLC (“HMN”) was formed as a Delaware limited liability company on July 30, 2019. HMNRTH operates as an online store selling a variety of hemp and CBD related products. The Company’s business model is to bridge the gap between the lifestyle and knowledge components within the cannabis industry. The Company’s goal is to educate every consumer while cultivating an experience by providing quality products, branded cutting-edge content, and diversified product lines for any purpose. Most importantly, we want our clients to discover their inner HMN, redefine their inner HMN and Empower their inner HMN.
In order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through the Company’s ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have the required capital to initiate any of the options and there is no guarantee that we will be able to raise the required funds.
About 911 Help Now, LLC
911 Help Now, LLC (“911”) was formed as a Delaware limited liability company on February 2, 2018. 911 was a holding company of intellectual property in the safety and security space. At present, we own no intellectual property within our 911 subsidiary. In order to generate future revenue within 911, we will need to identify and either acquire or license intellectual property. In the event of an acquisition, we will then need to either develop products utilizing our intellectual property or license out our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition or licensing of any intellectual property.
| 36 |
About Markets on Main, Inc.
Markets on Main, LLC (“MOM”) was formed as a Florida limited liability company on April 2, 2020. MOM is A full service, sales and distribution, third-party logistics provider and portal to multi-channel sales opportunities. MOM’s focus is on bringing small businesses and entrepreneurs to large opportunities and distribution. MOM will provide the following services to its clients: inventory management, brand management, fulfillment and drop-ship capabilities, retail distribution and customer service. MOM’s website can be found at www.marketsonmain.com.
On May 4, 2020, MOM entered into a Drop Ship Agreement (the “Agreement”) with QVC, Inc. Under the terms of the Agreement, MOM shall provide products for marketing, promotion, sale and distribution by QVC through certain televised and/or other electronic shopping services developed or to be developed by QVC and through other means and media.
On January 3, 2022, the Company filed Articles of Conversion with the State of Florida to convert MOM from a limited liability company to a Florida profit corporation. Simultaneous with the filing of the Articles of Conversion, the Company filed Articles of Incorporation for MOM.
On January 19, 2022, MOM entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) with Amfluent, LLC (“Amfluent”). Under the terms of the Distribution Agreement, MOM will become an exclusive distributor for the promotion and sale of products carried by Amfluent. As the exclusive distributor, MOM shall be awarded the exclusive territory of e-commerce, live shopping and digital sales. The Distribution Agreement has a term of one year from the Effective Date unless both parties agree to renew the Distribution Agreement for an additional term.
On January 30, 2022, MOM entered into a Marketing Management Agreement (the “Agreement”) with Chin Industries, LLC (“Chin”). Under the terms of the Agreement, Chin shall provide day to day management of websites where MOM’s products may be sold. The Agreement has a term of one year. As compensation, Chin shall receive a 50/50 split of net profits.
During the third quarter of fiscal 2022, MOM launched its first website, www.sculptbaby.com, under the Agreement with Chin. Product sales initiated in March 2022. During the fourth quarter of fiscal 2022, all Sculpt Baby inventory was sold. The Company has not identified its next product to launch.
About Tersus Power, Inc. (Delaware)
Tersus Power, Inc. (“Tersus”) (Delaware) was formed as a wholly owned subsidiary as per the terms of the Share Exchange Agreement entered into with Tersus Power, Inc., a Nevada corporation, and the Tersus Shareholders with the sole purpose of entering into an Agreement and Plan of Merger to effect a name change. The Articles of Incorporation were filed with the Secretary of State of the State of Delaware on March 15, 2022.
Share Exchange Agreement with Tersus Power, Inc. (Nevada)
During the three months ended March 31, 2023, the Company received notification from FINRA that the proposed corporate action submission, as noted within the Tersus Power Share Exchange Agreement, had passed the allotted time for the corporate action to become effective. The Company is in the process of refiling the same corporate action. The delay on the corporate action becoming effective has required Tersus Power to seek alternate financing and to reevaluate its business plan. As of the date of this filing, it is highly unlikely the Agreement will close due to the delays.
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Consulting Services
On January 12, 2022, the Company entered into a Fee Agreement (the “Agreement”) for the preparation of a registration statement on Form 1-A and all follow up correspondence with the appropriate regulatory agencies. The Company was fully compensated for its services during the period ended March 31, 2022 and has fulfilled its obligations under the Agreement.
On February 1, 2022, the Company entered into a Letter Agreement (the “Agreement”) with Donohoe Advisory Services, Inc. (“Donohoe”) to provide assistance to the Company in support of the Company’s efforts to obtain a listing on a national securities exchange. Under the terms of the Agreement, the Company shall pay Donohoe an initial retainer in the amount of $17,500 and if successful a “success fee” in the amount of $10,000 in cash or registered shares of common stock. During the three months ended September 30, 2022, the Company requested and received the balance of the retainer as it does not anticipate requiring any additional assistance from Donohoe.
On February 5, 2022, the Company entered into a Fee Agreement (the “Agreement”) for the preparation of a registration statement on Form 1-A and all follow up correspondence with the appropriate regulatory agencies. As of March 31, 2023, the Company has initiated the work to be completed under the Agreement but is awaiting additional information from its client.
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Critical Accounting Policies, Judgments and Estimates
There were no material changes to our critical accounting policies and estimates during the interim period ended March 31, 2023.
Please see our Annual Report on Form 10-K for the year ended June 30, 2022 filed on October 13, 2022, for a discussion of our critical accounting policies and estimates and their effect, if any, on the Company’s financial results.
Components of our Results of Operations
Revenues
We generate revenue by selling consumer products either wholesale or direct to consumers, providing logistics services through our wholly owned subsidiary, Market on Main, and through our consulting services we offer to other publicly traded companies.
Cost of Revenues
Our cost of revenues includes inventory costs, materials and supplies costs, internal labor costs and related benefits, subcontractor costs, depreciation, overhead and shipping and handling costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, finance and professional expenses.
Interest Expense, Net
Interest expense includes the cost of our borrowings under our debt arrangements.
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Results of Operations
Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022
The following table sets forth information comparing the components of net (loss) income for the three months ended March 31, 2023 and 2022:
Three Months Ended March 31, | Period over Period Change | |||||||||||||||
| 2023 | 2022 | $ | % | |||||||||||||
| Revenues, net | $ | - | $ | 11,927 | $ | (11,927 | ) | -100.00 | % | |||||||
| Cost of revenues | - | 598 | (598 | ) | -100.00 | % | ||||||||||
| Gross profit | - | 11,329 | (11,329 | ) | -100.00 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 4,497 | 36,584 | (32,087 | ) | -87.71 | % | ||||||||||
| Stock-based compensation | 20,000 | 20,000 | - | 0.00 | % | |||||||||||
| Other operating expenses | 21,798 | 67,286 | (45,488 | ) | -67.61 | % | ||||||||||
| Total operating expenses | 46,295 | 123,870 | (77,575 | ) | -62.63 | % | ||||||||||
| Operating loss | (46,295 | ) | (112,541 | ) | 66,246 | -58.86 | % | |||||||||
| Other income (expenses): | ||||||||||||||||
| Interest income | 4,315 | 6,000 | (1,685 | ) | -28.08 | % | ||||||||||
| Gain (loss) on derivative liability | (619,005 | ) | (84,948 | ) | (534,057 | ) | 628.67 | % | ||||||||
| Gain (loss) on issuance of notes payable | - | (63,038 | ) | 63,038 | -100.00 | % | ||||||||||
| Amortization of debt discounts | - | (119,331 | ) | 119,331 | -100.00 | % | ||||||||||
| Interest expense | (7,397 | ) | (9,428 | ) | 2,031 | -21.54 | % | |||||||||
| Total other income(expenses) | (622,087 | ) | (270,745 | ) | (351,342 | ) | 129.77 | % | ||||||||
| Gain(loss) before income taxes | (668,382 | ) | (383,286 | ) | (285,096 | ) | 74.38 | % | ||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Net (loss) | $ | (668,382 | ) | $ | (383,286 | ) | $ | (285,096 | ) | 74.38 | % | |||||
Revenue
For the three months ended March 31, 2023 and 2022, we generated revenue of $- and $11,927, respectively. The decrease in revenue for the three months ended March 31, 2023 is largely attributable to the Company’s decrease in consulting revenue.
Cost of Revenues
For the three months ended March 31, 2023 and 2022, cost of revenues was $- and $598, respectively.
Gross Profit
For the three months ended March 31, 2023 and 2022, gross profit was $- and $11,329, respectively.
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Operating Expenses
Operating expenses were $46,295 and $123,870 for the three months ended March 31, 2023 and 2022, respectively, representing a decrease of $77,575, or 62.63%. The Company’s decrease in selling, general and administrative expenses, as well as fees for consulting services, were largely attributable to a reduction in corporate operating expenses.
Other Income (Expenses)
Other income (expense) was ($622,087) and ($270,745) for the three months ended March 31, 2023 and 2022, respectively, representing an increase of ($351,342), or 129.77%. The other income (expense) for the three months ended March 31, 2023 included interest expense of ($7,397), loss on derivative liability of ($619,005) offset by interest income in the amount of $4,315. The increase in other income (expense) for the three months ended March 31, 2023 was largely attributable to an increased loss on derivative liability as compared to the three months ended March 31, 2022.
Income Tax Expense
There was no income tax expense for the three months ended March 31, 2023 or for the three months ended March 31, 2022.
Net (Loss)
For the three months ended March 31, 2023, our net loss increased to ($668,382), as compared to ($383,286) for three months ended March 31, 2022, an increase of ($285,096). The increase in net loss for the three months ended March 31, 2023 was largely attributable to a loss on derivative liability as compared to the three months ended March 31, 2022.
Nine Months Ended March 31, 2023 Compared to Nine Months Ended March 31, 2022
The following table sets forth information comparing the components of net (loss) income for the nine months ended March 31, 2023 and 2022:
Nine Months Ended March 31, | Period
over Period Change | |||||||||||||||
| 2023 | 2022 | $ | % | |||||||||||||
| Revenues, net | $ | 14,000 | $ | 106,927 | $ | (92,927 | ) | -86.91 | % | |||||||
| Cost of revenues | - | 598 | (598 | ) | -100.00 | % | ||||||||||
| Gross profit | 14,000 | 106,329 | (92,329 | ) | -86.83 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 17,166 | 95,836 | (78,670 | ) | -82.09 | % | ||||||||||
| Stock-based compensation | 354,467 | 110,087 | 244,380 | 221.99 | % | |||||||||||
| Other operating expenses | 52,194 | 115,864 | (63,670 | ) | -54.95 | % | ||||||||||
| Total operating expenses | 423,827 | 321,787 | 102,040 | 31.71 | % | |||||||||||
| Operating loss | (409,827 | ) | (215,458 | ) | (194,369 | ) | 90.21 | % | ||||||||
| Other (expense) income: | ||||||||||||||||
| Interest income | 13,137 | 6,277 | 6,860 | 109.29 | % | |||||||||||
| Forgiveness of debt and accrued interest | - | 449,294 | (449,244 | ) | -100.00 | % | ||||||||||
| Gain (Loss) on derivative liability | (74,988 | ) | 478,047 | (553,035 | ) | -115.69 | % | |||||||||
| Gain (Loss) on issuance of notes payable | - | (217,393 | ) | 217,393 | -100.00 | % | ||||||||||
| Amortization of debt discounts | (49,863 | ) | (381,013 | ) | 331,150 | -86.91 | % | |||||||||
| Interest expense | (22,573 | ) | (51,084 | ) | 28,511 | -55.81 | % | |||||||||
| Total other income (expenses) | (134,287 | ) | 284,128 | (418,415 | ) | -147.26 | % | |||||||||
| Income (loss) before income taxes | (544,114 | ) | 68,670 | (612,784 | ) | -892.36 | % | |||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Net income (loss) | $ | (544,114 | ) | $ | 68,670 | $ | (612,784 | ) | -892.36 | % | ||||||
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Revenue
For the nine months ended March 31, 2023 and 2022, the Company generated $14,000 and $106,927 revenue, respectively. Revenue for the nine months ended March 31, 2023 was entirely comprised of revenue generated from consulting services. The decrease in revenue for the nine months ended March 31, 2023 is largely attributable to the Company’s decrease in consulting revenue.
Cost of Revenues
For the nine months ended March 31, 2023 and 2022, cost of revenues was $- and $598, respectively.
Gross Profit
For the nine months ended March 31, 2023 and 2022, gross profit was $14,000 and $106,329, respectively.
Operating Expenses
Operating expenses were $423,827 and $321,787 for the nine months ended March 31, 2023 and 2022, respectively, representing an increase of $102,040, or 31.71%. The increase in operating expenses is largely attributable to the increase in stock-based compensation for the nine months ended March 31, 2023.
Other Income (Expenses)
Other income (expense) was ($134,287) and $284,128 for the nine months ended March 31, 2023 and 2022, respectively, representing a decrease of ($418,415), or 147.26%. The other income (expenses) for the nine months ended March 31, 2023 included amortization of debt discounts of ($49,863), interest expense of ($22,573), loss on derivative liability of ($74,988) offset by interest income of $13,137. The decrease in other income for the nine months ended March 31, 2023 was largely attributable to forgiveness of debt and interest in the amount of $449,294 and gain on derivative liability of $478,047 for the nine months ended March 31, 2022 as compared to the nine months ended March 31, 2023.
Income tax expense
There was no income tax expense for the nine months ended March 31, 2023 and 2022.
Net Income (Loss)
For the nine months ended March 31, 2023, our net loss increased to ($544,114), as compared to net income of $68,670 for nine months ended March 31, 2022, a decrease of ($612,784). The increase in net loss for the nine months ended March 31, 2023 was largely attributable to forgiveness of debt and interest in the amount of $449,294 for the nine months ended March 31, 2022 versus $0 for the nine months ended March 31, 2023.
Liquidity and Capital Resources
The following table summarizes the cash flows for the nine months ended March 31, 2023 and 2022:
| March 31, 2023 | March 31, 2022 | |||||||
| Cash Flows: | ||||||||
| Net cash (used in) operating activities | (329,881 | ) | (280,876 | ) | ||||
| Net cash (used in) investing activities | - | (250,000 | ) | |||||
| Net cash provided by financing activities | 5,387 | 1,103,426 | ||||||
| Net (decrease) increase in cash | (324,494 | ) | 572,500 | |||||
| Cash at beginning of period | 324,494 | 56,300 | ||||||
| Cash at end of period | $ | - | $ | 628,850 | ||||
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As of March 31, 2023 and 2022, the Company had cash of $- and $628,850, respectively.
We had cash used in operating activities of $329,881 for the nine months ended March 31, 2023, compared to $280,876 for the nine months ended March 31, 2022.
We had cash used in investing activities of $- and $250,000 for the nine months ended March 31, 2023 and 2022, respectively.
We had cash provided by financing activities of $5,387 and $1,103,426 for the nine months ended March 31, 2023 and 2022, respectively.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Seasonality
We do not consider our business to be seasonal.
Commitments and Contingencies
We are subject to the legal proceedings described in “Part II, Item 1. Legal Proceedings” of this report. There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.
Inflation and Changing Prices
Neither inflation nor changing prices for the nine months ended March 31, 2023 had a material impact on our operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Form 10-Q, management performed, with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on the evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2023, our disclosure controls and procedures were not effective.
Due to resource constraints, material weaknesses are evident to management regarding our inability to generate all the necessary disclosure for inclusion in our filings with the Securities and Exchanges Commission, which is due to the lack of resources and segregation of duties. We lack sufficient personnel with the appropriate level of knowledge, experience and training in GAAP to meet the demands for a public company, including the accounting skills and understanding necessary to fulfill the requirements of GAAP-based reporting. This weakness causes us to not fully identify and resolve accounting and disclosure issues that could lead to a failure to perform timely internal control and reviews. In addition, the Company has not established an audit committee, does not have any independent outside directors on the Company’s Board of Directors, and lacks documentation of its internal control processes.
Changes in Internal Control over Financial Reporting
There was no change to our internal controls or in other factors that could affect these controls during the period ended March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, our Board is currently seeking to improve our controls and procedures to remediate the deficiency described above.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. I addition to the estimated loss, the liability includes probable and estimable legal cost associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company business. There is no pending litigation involving the Company at this time.
Item 1A. Risk Factors
Not required for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In connection with the foregoing, the Company relied upon the exemptions from registration provided by Rule 701 and Section 4(a)(2) under the Securities Exchange Act of 1933, as amended:
Issuance of common stock – Nine months ended March 31, 2023
On July 14, 2022, the Company issued 111,111,111 shares of common stock with a fair market value of $33,333 to a noteholder in satisfaction of $20,000 principal against the note dated January 13, 2022.
On July 15, 2022, the Company issued 212,500,000 shares of common stock with a fair market value of $63,750 to a noteholder in satisfaction of $23,750 principal and $1,750 interest against the note dated January 13, 2022.
On August 8, 2022, the Company issued 379,166,667 shares of common stock with a fair market value of $113,750 to a noteholder in satisfaction of $43,750 principal and $1,750 interest against the note dated February 4, 2022.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None
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Item 6. Exhibits
The documents set forth below are filed, incorporated by reference or furnished herewith as indicated.
Index to Exhibits
| + | Management contract or compensatory plan or arrangement. |
| * | Filed herewith |
| ** | Furnished herewith (not filed). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GLOBAL TECHNOLOGIES, LTD | ||
| By: | /s/ Frederick Kalei Cutcher | |
| Frederick Kalei Cutcher | ||
| President | ||
| Date: | May 23, 2023 | |
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