UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2010
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For transition period ___ to ____
Commission file number: 000-31671
GLOBALWISE INVESTMENTS, INC.
(Exact name of registrant as specified in its charter)
Nevada (State or other jurisdiction of incorporation or organization) | 87-0613716 (I.R.S. Employer Identification No.) |
2157 S. Lincoln Street, Salt Lake City, Utah (Address of principal executive offices) | 84106 (Zip Code) |
Registrant’s telephone number: 801-323-2395
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: Common Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) 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.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer [ ] Non-accelerated filer [ ] | Accelerated filed [ ] Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]
The registrant did not have an active trading market for its common stock as of the last business day of its most recently completed second fiscal quarter; therefore, an aggregate market value of shares of voting and non-voting common equity held by non-affiliates cannot be determined.
The number of shares outstanding of the registrant’s common stock as of March 1, 2011 was 1,139,000.
Documents incorporated by reference: None
TABLE OF CONTENTS
PART I
Item 1. Business
3
Item 1A. Risk Factors
8
Item 2. Properties
8
Item 3. Legal Proceedings
9
Item 4. [Reserved]
9
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
9
Item 6. Selected Financial Data
10
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
Item 8. Financial Statements and Supplementary Data
12
Ite 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 21
Item 9A. Controls and Procedures
21
Item 9B. Other Information
21
PART III
Item 10. Directors, Executive Officers and Corporate Governance
22
Item 11. Executive Compensation
23
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
23
Item 13. Certain Relationships and Related Transactions, and Director Independence
24
Item 14. Principal Accounting Fees and Services
24
PART IV
Item 15. Exhibits, Financial Statement Schedules
25
Signatures
26
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In this annual report references to “Globalwise,” “we,” “us,” “our” and “the Company” refer to Globalwise Investments, Inc.
FORWARD LOOKING STATEMENTS
The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
PART I
ITEM 1. BUSINESS
Historical Development
Globalwise Investments, Inc. was incorporated in the state of Utah on October 3, 1997, to engage in the confectionary vending machine business. On July 12, 2000, Globalwise Investments, Inc. was incorporated in the state of Nevada and on July 21, 2000, Globalwise - Utah merged with Globalwise -Nevada for the sole purpose of changing our domicile from the state of Utah to the state of Nevada.
Our Business Plan
Our business plan is to seek, investigate, and, if warranted, acquire an interest in a business opportunity. Our acquisition of a business opportunity may be made by merger, exchange of stock, or otherwise. We have very limited sources of capital, and we probably will only be able to take advantage of one business opportunity. As of the date of this filing we have not identified any business opportunity that we plan to pursue, nor have we reached any preliminary or definitive agreements or understandings with any person concerning an acquisition or merger.
The current economy creates more challenges for the success of our business plan. With the general lack of investor confidence and the uncertainty related to the future global economy, management believes that equity investments and transactions may be less attractive then they have been in the past. However, management believes that it is possible, if not probable, for a company like ours, without many assets or liabilities, to negotiate a merger or acquisition with a viable private company. The opportunity arises principally because of the expensive legal and accounting fees and the length of time associated with the registration process of “going public.” But if the global economy fails to recover, then it is very possible that there would be little or no economic value for another company to enter into a transaction with Globalwise.
Our search for a business opportunity will not be limited to any particular geographical area or industry and includes both U.S. and international companies. Our management has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions and other factors. Our management believes that companies who desire a public market to enhance liquidity for current stockholders, or plan to acquire additional assets through issuance of securities rather than for cash, will be potential merger or acquisition candidates.
The selection of a business opportunity in which to participate is complex and extremely risky and will be made by management in the exercise of their business judgment. Our activities are subject to several significant risks which arise primarily as a result of the fact that we have no operating business and may acquire or participate in a business opportunity based on the decision of management which will, in all probability, act without consent, vote, or
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approval of our stockholders. We cannot assure you that we will be able to identify and merge with or acquire any business opportunity which will ultimately prove to be beneficial to Globalwise and our stockholders. Should a merger or acquisition prove unsuccessful, it is possible management may decide not to pursue further acquisition activities and management may abandon our search and we may become dormant or be dissolved.
It is possible that the range of business opportunities that might be available for consideration by us could be limited by the fact that our common stock is cleared to be listed to trade on the OTC Bulletin Board, however, there is no public trading on any market. We cannot assure you that a market will develop or that a stockholder will be able to liquidate his/her/its investments without considerable delay, if at all. If a market develops, our shares will likely be subject to the rules of the Penny Stock Suitability Reform Act of 1990. The liquidity of penny stock is affected by specific disclosure procedures required by those rules to be followed by all broker-dealers, including but not limited to, determining the suitability of the stock for a particular customer, and obtaining a written agreement from the customer to purchase the stock. This rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell our securities in any market.
Investigation and Selection of Business Opportunities
We anticipate that business opportunities will come to our attention from various sources, including our officers and directors, our stockholders, professional advisors, such as attorneys and accountants, securities broker-dealers, investment banking firms, venture capitalists, members of the financial community and others who may present unsolicited proposals. Management expects that prior personal and business relationships may lead to contacts with these various sources.
We expect that our due diligence will encompass, among other things, meetings with the target business’s incumbent management and inspection of its facilities, as necessary, as well as a review of financial and other information which is made available to our management. This due diligence review may be conducted either by our management or by unaffiliated third parties we may engage. Our limited funds and the lack of full-time management will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a target business before we consummate a business combination. We anticipate that we will rely upon funds provided by advances and/or loans from management and significant stockholders to conduct investigation and analysis of any potential target companies or businesses. We may also rely upon the issuance of our common stock in lieu of cash payments for services or expenses related to any analysis. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which, if we had more funds available to us, would be desirable. We will be particularly dependent in making decisions upon information provided by the promoters, owners, sponsors or other persons associated with the target business seeking our participation.
Our management will analyze the business opportunities; however, none of our management are professional business analysts. (See Part III, Item 10, below.) Our management has had limited experience with mergers and acquisitions of business opportunities and has not been involved with an initial public offering. Due to management’s limited experience with mergers and acquisitions, they may rely on principal stockholders or associates, or promoters or their affiliates to assist in the investigation and selection of business opportunities.
Certain conflicts of interest exist or may develop between us and our executive officers and directors. Our management has other business interests to which they currently devote attention, which include their primary employment. Members of our management hold management positions with other development stage companies seeking business opportunities. (See Part III, Item 10, below.) Our management may be expected to continue to devote their attention to these other business interests although management time should be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of judgment in a manner which is consistent with their fiduciary duties to us.
A decision to participate in a specific business opportunity may be made upon our management’s analysis of:
•
the quality of the business opportunity’s management and personnel,
•
the anticipated acceptability of its new products or marketing concept,
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•
the merit of its technological changes,
•
the perceived benefit that it will derive from becoming a publicly held entity, and
•
numerous other factors which are difficult, if not impossible, to analyze through the application of any objective criteria.
No one factor described above will be controlling in the selection of a business opportunity. Management will attempt to analyze all factors appropriate to each opportunity and make a determination based upon reasonable investigative measures and available data. Potential business opportunities may occur in many different industries and at various stages of development. Thus, the task of comparative investigation and analysis of such business opportunities will be extremely difficult and complex. Potential investors must recognize that because of our limited capital available for investigation and management’s limited experience in business analysis, we may not discover or adequately evaluate adverse facts about the business opportunity to be acquired.
In many instances, we anticipate that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of the possible need to substantially shift marketing approaches, significantly expand operations, change product emphasis, change or substantially augment management, or make other changes. We will be dependent upon the owners of a business opportunity to identify any such problems which may exist and to implement, or be primarily responsible for, the implementation of required changes.
Form of Acquisition
We cannot predict the manner in which we may participate in a business opportunity. Specific business opportunities will be reviewed as well as our needs and desires and those of the promoters of the opportunity. The legal structure or method deemed by management to be suitable will be selected based upon our review and our relative negotiating strength. Such methods may include, but are not limited to, leases, purchase and sale agreements, licenses, joint ventures and other contractual arrangements. We may act directly or indirectly through an interest in a partnership, corporation or other forms of organization. We may be required to merge, consolidate or reorganize with other corporations or forms of business organizations. In addition, our present management and stockholders most likely will not have control of a majority of our voting shares following a merger or reorganization transaction. As part of such a transaction, our existing directors may resign and new directors may be appointed without any vote by our stockholders.
We likely will acquire our participation in a business opportunity through the issuance of common stock or other securities. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a) (1) of the Internal Revenue Code of 1986, as amended (the "Code") depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in that circumstance retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those persons who were our stockholders prior to such reorganization.
In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving the Company, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.
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The time and costs required to select and evaluate a target business and to structure and complete a business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the indemnification and evaluation of a prospective business combination that is not ultimately completed will result in a loss to the Company. Also, substantial fees are often paid in connection with the completion of all types of acquisitions, reorganizations or mergers, ranging from a small amount to as much as $300,000 or more. These fees are usually divided among promoters or founders, after deduction of legal, accounting and other related expenses, and it is not unusual for a portion of these fees to be paid to members of management or to principal stockholders as consideration for their agreement to retire a portion of the shares of common stock owned by them. Management may actively negotiate or otherwise consent to the purchase of all or any portion of their common stock as a condition to, or in connection with, a proposed reorganization, merger or acquisition. It is not anticipated that any such opportunity will be afforded to other stockholders or that such other stockholders will be afforded the opportunity to approve or consent to any particular stock buy-out transaction. In the event that any such fees are paid, they may become a factor in negotiations regarding any potential acquisition or merger by us, and accordingly, may also present a conflict of interest for such individuals. We have no present arrangements or understandings respecting any of these types of fees or opportunities and we have not adopted any procedures or policies for the review, approval or ratification of related party transactions.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs incurred in the related investigation might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Company of the related costs incurred.
In the event we merge or acquire a business opportunity, the successor company will be subject to our reporting obligations. This is commonly referred to as a “back door registration.” A back door registration occurs when a non-reporting company becomes the successor of a reporting company by merger, consolidation, exchange of securities, acquisition of assets or otherwise. This type of event requires the successor company to file a current report with the SEC which provides the same kind of information about the company to be acquired that would appear in a registration statement, including audited and pro forma financial statements. This regulation may eliminate many of the perceived advantages of these types of transactions. Accordingly, we may incur additional expense to conduct due diligence and present the required information for the business opportunity in any report.
Also, the SEC may elect to conduct a full review of the successor company and may issue substantive comments on the sufficiency of disclosure related to the company to be acquired.
In addition, regulations also deny the use of Form S-8 for the registration of securities of a shell company, and limit the use of Form S-8 to a reorganized shell company until the expiration of 60 days from when any such entity is no longer considered to be a shell company. This prohibition could further restrict opportunities for the Company to acquire companies that may already have stock option plans in place that cover numerous employees. In such an instance, there may be no exemption from registration for the issuance of securities in any business combination to these employees, thereby necessitating the filing of a registration statement with the SEC to complete any such reorganization, and incurring the time and expense costs that are normally avoided by “back door” registrations.
Competition
We expect to encounter substantial competition in our effort to locate attractive business opportunities. Business development companies, venture capital partnerships and corporations, venture capital affiliates of large industrial and financial companies, small investment companies, and wealthy individuals will be our primary competition. Many of these entities will have significantly greater experience, resources and managerial capabilities than we do and will be in a better position than we are to obtain access to attractive business opportunities. We also will experience competition from other reporting development stage companies, many of which may have more funds available for such transactions.
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Effect of Existing or Probable Governmental Regulations on Business
The SEC is currently formulating rules and regulations required by the Dodd-Frank Wall Street Reform and Consumer Protection Act that became effective July 21, 2010. This Act has changed legal requirements for the purchase and sale of securities and has authorized the SEC to propose new regulations to satisfy the requirements of this Act. As of the date of this report, the SEC is moving forward with new rule proposals and as a reporting company we will be subject to any new regulations promulgated under the Securities Act or Exchange Act.
We are subject to the Sarbanes-Oxley Act of 2002. This Act creates a strong and independent accounting oversight board to oversee the conduct of auditors, of public companies and to strengthen auditor independence. It also requires steps to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; creates guidelines for audit committee members’ appointment, and compensation and oversight of the work of public companies’ auditors; prohibits certain insider trading during pension fund blackout periods; and establishes a federal crime of securities fraud, among other provisions.
We are subject to the Exchange Act of 1934 and are required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC on a regular basis, and will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K. We are also subject to Section 14(a) of the Exchange Act which requires the Company to comply with the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to our stockholders at a special or annual meeting of stockholders or pursuant to a written consent will require us to provide our stockholders with the information outlined in Schedules 14A or 14C of Regulation 14A; preliminary copies of this information must be submitted to the SEC at least 10 days prior to the date that definitive copies of this information are forwarded to our stockholders.
If we are acquired by a “non-reporting issuer” under the Exchange Act, we will be subject to the “back-door registration” requirements of the SEC that will require us to file a Current Report on Form 8-K that will include all information about such “non-reporting issuer” as would have been required to be filed by that entity had it filed a Form 10 Registration Statement with the SEC.
Our securities are subject to open market trading restrictions because we are a shell company. Under subparagraph (i) of Rule 144, no sales of “restricted securities” issued by the Company while we are a shell company can be publicly sold for at least one year from the date when we file the Form 10 information about any acquisition, reorganization or merger that results in the Company no longer being considered a shell company. We will also be prohibited from utilizing Form S-8 for the registration of our securities until we have not been a shell company for at least 60 days.
Research and Development and Environmental Compliance
During the year ended December 31, 2010, we have not spent any funds on research and development. Nor have we recognized any costs related to compliance with environmental laws.
Employees
We currently have no employees. Our management expects to confer with consultants, attorneys and accountants as necessary. We do not anticipate a need to engage any full-time employees so long as we are seeking and evaluating business opportunities. We will determine the need for employees based upon a specific business opportunity, if any.
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ITEM 1A. RISK FACTORS
We have minimal assets and no source of revenue.
We have minimal assets and have had no revenues since inception. We will not receive revenues until we select an industry in which to commence business or complete an acquisition, reorganization or merger. We can provide no assurance that any selected or acquired business will produce any material revenues for the Company or our stockholders, or that any such business will operate on a profitable basis.
We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a merger or other business combination with a private company. This may result in our incurring a net operating loss that will increase unless we consummate a business combination with a profitable business. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination, or that any such business will be profitable at the time of its acquisition by the Company or ever.
There can be no assurance that we will successfully consummate a business combination.
We can give no assurances that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management has not identified any particular industry or specific business within an industry for evaluation. We cannot guarantee that we will be able to negotiate a business combination on favorable terms. At the date of this filing, we have no arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with, or acquisition of, a private or public entity. No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination.
There is currently no trading market for our common stock, and liquidity of shares of our common stock is limited.
Our shares of common stock are not registered under the securities laws of any state or other jurisdiction. Our common stock is cleared for listing on the OTC Bulletin Board, but is not trading as of the date of this report. Accordingly, there is no public trading market for our common stock. Further, no public trading market is expected to develop in the foreseeable future unless and until we complete a business combination with an operating business or the Company files and obtains effectiveness of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”). Therefore, outstanding shares of common stock cannot be offered, sold, pledged or otherwise transferred unless subsequently registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. Stockholders may rely on the exemption from registration provided by Rule 144 of the Securities Act (“Rule 144”), subject to certain restrictions; namely, common stock may not be sold in open market transactions until one year after:
(i) the completion of a business combination with a private company in a reverse merger or reverse takeover transaction after which the Company would cease to be a “shell company” (as defined in Rule 12b-2 under the Exchange Act) and
(ii) the disclosure of certain information on a Current Report on Form 8-K within four business days thereafter, and only if the Company has been current in all of its periodic SEC filings for the 12 months preceding the contemplated sale of stock.
Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex, especially in respect of those exemptions affording flexibility and the elimination of trading restrictions in respect of securities received in exempt transactions and subsequently disposed of without registration under the Securities Act or state securities laws.
ITEM 2. PROPERTIES
We do not currently own or lease any property. Until we pursue a viable business opportunity and recognize income we will not seek office space.
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ITEM 3. LEGAL PROCEEDINGS
We are not a party to any legal proceedings as of the date of this filing.
ITEM 4. [Reserved]
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is listed for trading on the OTC Bulletin Board under the symbol “GWIV.” We have had no trading activity in our common stock during the past two years.
On February 15, 2008 we effected a 2-for-1 forward split of our outstanding common stock and our outstanding pre-split common shares of 569,500 outstanding on February 15, 2008 were forward split to 1,139,000 shares of common stock.
Our shares of common stock are subject to Section 15(g) and Rule 15g-9 of the Securities and Exchange Act, commonly referred to as the “penny stock” rule. The rule defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. These rules may restrict the ability of broker-dealers to trade or maintain a market in our common stock and may affect the ability of shareholders to sell their shares. Broker-dealers who sell penny stocks to persons other than established customers and accredited investors must make a special suitability determination for the purchase of the security. Accredited investors, in general, include individuals with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse, and certain institutional investors. The rules require the broker-dealer to receive the purchaser’s written consent to the transaction prior to the purchase and require the broker-dealer to deliver a risk disclosure document relating to the penny stock prior to the first transaction. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the security. Finally, monthly statements must be sent to customers disclosing recent price information for the penny stocks.
Holders
As of March 1, 2011 we had 33 stockholders of record.
Dividends
The 2-for-1 forward split effected in February 2008 was completed as a dividend and new certificates for the additional shares were mailed to stockholders on or about February 15, 2008. However, we do not anticipate paying dividends on our common stock in the foreseeable future.
Recent Sales of Unregistered Securities
None.
Issuer Purchase of Securities
None.
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ITEM 6. SELECTED FINANCIAL DATA
Not applicable to smaller reporting companies.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Executive Overview
We are a development stage company that has not recorded revenues for the past two fiscal years. At December 31, 2010, we had $1,318 cash and had total liabilities of $67,270. We are dependent upon financing to continue basic operations. Management intends to rely upon advances or loans from management, significant stockholders or third parties to meet our cash requirements, but we have not entered into written agreements guaranteeing funds and, therefore, no one is obligated to provide funds to us in the future. These factors raise doubt as to our ability to continue as a going concern. Our plan is to combine with an operating company to generate revenue.
Our management has not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
We anticipate that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of securities. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
Management anticipates that the struggling global economy will restrict the number of business opportunities available to us and will restrict the cash available for such transactions. There can be no assurance in the current economy that we will be able to acquire an interest in an operating company.
If we obtain a business opportunity, then it may be necessary to raise additional capital. We likely will sell our common stock to raise this additional capital. We anticipate that we would issue such stock pursuant to exemptions to the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions to the registration requirements of the Securities Act of 1933. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock, then our stockholders may experience dilution in the value per share of their common stock.
Liquidity and Capital Resources
We have not recorded revenues from operations since inception. We have not established an ongoing source of revenue sufficient to cover our operating costs. We intend to obtain capital from management, significant stockholders and third parties to cover minimal operations; however, there is no assurance that additional funding
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will be available. Our ability to continue as a going concern during the long term is dependent upon our ability to find a suitable business opportunity and acquire or enter into a merger with such company. The type of business opportunity with which we acquire or merge will affect our profitability for the long term.
During the next 12 months we anticipate incurring additional costs related to the filing of Exchange Act reports. We believe we will be able to meet these costs through advances and loans provided by management, significant stockholders or third parties. We may also rely on the issuance of our common stock in lieu of cash to convert debt or pay for expenses.
Results of Operations
At December 31, 2010, our cash increased to $1,318 from $305 at December 31, 2009. Our total liabilities also increased from $59,995 for 2009 to $67,270 for 2010. The total liabilities represent primarily advances from and accounts payable to third parties. We did not record revenues in either year. General and administrative expense increased from $4,823 for 2009 to $6,262 for 2010 and reflects increased reporting costs. Accordingly, our net loss increased from 2009 to 2010.
Commitments
The Company has recorded $66,995 in current liabilities for services received, as well as cash advances received from unrelated parties. Management intended to issue common stock to convert the amount owed to these third parties; however, it was subsequently determined that it was not in the best interests of all parties to issue stock for the advances and, therefore, the parties have agreed that these liabilities will be treated as loans effective January 1, 2011. The loans are non-collateralized, carry interest at 8% and are due on demand.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
GLOBALWISE INVESTMENTS, INC.
(A Development Stage Company)
Financial Statements
December 31, 2010 and 2009
INDEX
Report of Independent Registered Public Accounting Firm
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Balance Sheets
14
Statements of Operations
15
Statements of Stockholders’ Equity
16
Statements of Cash Flows
17
Notes to the Financial Statements
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12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Globalwise Investments, Inc.
I have audited the accompanying balance sheets of Globalwise Investments, Inc. as of December 31, 2010 and 2009, and the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2010. Globalwise Investments, Inc.’s management is responsible for these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. The financial statements of Globalwise Investments, Inc. for the period from inception on October 3, 1997 through December 31, 2008 were audited by other auditors whose report, dated March 24, 2009, on those statements included an explanatory paragraph that described conditions which raised substantial doubt about the ability of the company to continue as a going concern.
I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, I express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Globalwise Investments, Inc. as of December 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 2 to the financial statements, the company has current liabilities in excess of current assets, has incurred losses since inception, has negative cash flows from operations, and has no revenue-generating activities, which raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Michael J. Larsen
Michael J. Larsen
Salt Lake City, Utah
March 11, 2011
13
Globalwise Investments, Inc.
(A Development Stage Company)
Balance Sheets
|
|
|
|
|
|
|
|
|
| DEC 31, 2010 |
| DEC 31, 2009 |
|
|
|
|
|
|
| |
| ASSETS |
|
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
|
| Cash | $ | 1,318 | $ | 305 |
|
| Total current assets |
| 1,318 |
| 305 |
|
|
|
|
|
|
|
|
| TOTAL ASSETS | $ | 1,318 | $ | 305 |
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
| CURRENT LIABILITIES |
|
|
|
|
|
| Accounts payable | $ | 31,270 | $ | 30,995 |
|
| Advances |
| 36,000 |
| 29,000 |
|
| Total current liabilities |
| 67,270 |
| 59,995 |
|
| Total liabilities |
| 67,270 |
| 59,995 |
|
| STOCKHOLDERS' EQUITY |
|
|
|
|
|
| Common stock, $.001 par value; 50,000,000 shares authorized; 1,139,000 shares issued and outstanding |
| 1,139 |
| 1,139 |
|
| Additional paid in capital |
| 35,205 |
| 35,205 |
|
| Deficit accumulated during the development stage |
| (102,296) |
| (96,034) |
|
| Total stockholders' equity |
| (65,952) |
| (59,690) |
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,318 | $ | 305 |
|
The accompanying notes are an integral part of these financial statements
14
Globalwise Investments, Inc.
(A Development Stage Company)
Statements of Operations
|
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|
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|
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| FOR THE YEAR ENDED DEC 31, 2010 |
| FOR THE YEAR ENDED DEC 31, 2009 |
| FROM INCEPTION ON OCT 3, 1997 TO DEC 31, 2010 |
|
|
|
|
|
|
|
|
| |
| Revenues | $ | 0 | $ | 0 | $ | 0 |
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
| General and administrative |
| 6,262 |
| 4,823 |
| 102,296 |
|
| Total expenses |
| 6,262 |
| 4,823 |
| 102,296 |
|
|
|
|
|
|
|
|
|
|
| Loss from operations before income taxes |
| (6,262) |
| (4,823) |
| (102,296) |
|
|
|
|
|
|
|
|
|
|
| Income taxes |
| 0 |
| 0 |
| 0 |
|
|
|
|
|
|
|
|
|
|
| Net loss | $ | (6,262) | $ | (4,823) | $ | (102,296) |
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net loss per share | $ | (0.01) | $ | (0.00) |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding |
| 1,139,000 |
| 1,139,000 |
|
|
|
The accompanying notes are an integral part of these financial statements
15
Globalwise Investments, Inc. | ||||||||||
(A Development Stage Company) | ||||||||||
Statements of Stockholders' Equity | ||||||||||
From Inception on October 3, 1997 through December 31, 2010 | ||||||||||
|
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|
| Deficit |
|
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|
|
|
|
|
|
| Accumulated |
|
|
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|
|
| Additional |
| During the |
|
|
|
| Common Stock |
| Paid-in |
| Development | ||
|
|
|
| Shares |
| Amount |
| Capital |
| Stage |
Balance, October 3, 1997 |
|
| - | $ | - | $ | - | $ | - | |
Shares issued for equipment at $0.032 per share | 600,000 |
| 600 |
| 18,500 |
| - | |||
Net (loss) for the year ended December 31, 1997 | - |
| - |
| - |
| - | |||
Balance - December 31, 1997 |
|
| 600,000 |
| 600 |
| 18,500 |
| - | |
Capital Contributions |
|
| - |
| - |
| 550 |
| - | |
Net (loss) for the year ended December 31, 1998 | - |
| - |
| - |
| (550) | |||
Balance - December 31, 1998 |
|
| 600,000 |
| 600 |
| 19,050 |
| (550) | |
Shares issued for cash at $0.0498 per share | 1,304,000 |
| 1,304 |
| 63,696 |
| - | |||
Capital Contributions |
|
| - |
| - |
| 6,000 |
| - | |
Net (loss) for the year ended December 31, 1999 | - |
| - |
| - |
| (27,794) | |||
Balance - December 31, 1999 |
|
| 1,904,000 |
| 1,904 |
| 88,746 |
| (28,344) | |
Cancellation of shares in connection with spin-off |
|
|
|
|
|
|
| |||
of Assets and Liabilities of the Company |
| (300,000) |
| (300) |
| (62,006) |
| - | ||
Shares issued for services at $.125 per share | 40,000 |
| 40 |
| 4,960 |
| - | |||
Shares issued for services at $.268 per share | 56,000 |
| 56 |
| 14,944 |
| - | |||
Net (loss) for the year ended December 31, 2000 | - |
| - |
| - |
| (21,345) | |||
Balance - December 31, 2000 |
|
| 1,700,000 |
| 1,700 |
| 46,644 |
| (49,689) | |
Cancellation of shares issued for services in 2000 | (96,000) |
| (96) |
| (19,904) |
| - | |||
Net (loss) for the year ended December 31, 2001 | - |
| - |
| - |
| - | |||
Balance - December 31, 2001 |
|
| 1,604,000 |
| 1,604 |
| 26,740 |
| (49,689) | |
Net (loss) for the year ended December 31, 2002 | - |
| - |
| - |
| (5,000) | |||
Balance - December 31, 2002 |
|
| 1,604,000 |
| 1,604 |
| 26,740 |
| (54,689) | |
Net (loss) for the year ended December 31, 2003 | - |
| - |
| - |
| - | |||
Balance - December 31, 2003 |
|
| 1,604,000 |
| 1,604 |
| 26,740 |
| (54,689) | |
Net (loss) for the year ended December 31, 2004 | - |
| - |
| - |
| (2,104) | |||
Balance - December 31, 2004 |
|
| 1,604,000 |
| 1,604 |
| 26,740 |
| (56,793) | |
Net (loss) for the year ended December 31, 2005 | - |
| - |
| - |
| (9,345) | |||
Balance - December 31, 2005 |
|
| 1,604,000 |
| 1,604 |
| 26,740 |
| (66,138) | |
Net (loss) for the year ended December 31, 2006 | - |
| - |
| - |
| (9,044) | |||
Balance - December 31, 2006 |
|
| 1,604,000 |
| 1,604 |
| 26,740 |
| (75,182) | |
Shares canceled and returned to treasury |
| (565,000) |
| (565) |
| 565 |
| - | ||
Issuance of shares in settlement of debt |
| 100,000 |
| 100 |
| 7,900 |
| - | ||
Net (loss) for the year ended December 31, 2007 | - |
| - |
| - |
| (10,124) | |||
Balance - December 31, 2007 |
|
| 1,139,000 |
| 1,139 |
| 35,205 |
| (85,306) | |
Net (loss) for the year ended December 31, 2008 | - |
| - |
| - |
| (5,905) | |||
Balance - December 31, 2008 |
|
| 1,139,000 |
| 1,139 |
| 35,205 |
| (91,211) | |
Net (loss for the year ended December 31, 2009 |
| - |
| - |
| - |
| (4,823) | ||
Balance - December 31, 2009 |
| 1,139,000 |
| 1,139 |
| 35,205 |
| (96,034) | ||
Net (loss for the year ended December 31, 2010 |
| - |
| - |
| - |
| (6,262) | ||
Balance – December 31, 2010 |
|
| 1,139,000 | $ | 1,139 | $ | 35,205 | $ | (102,296) | |
The accompanying notes are an integral part of these financial statements. | ||||||||||
16
Globalwise Investments, Inc.
(A Development Stage Company)
Statements of Cash Flows
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| FOR THE YEAR ENDED DEC 31, 2010 |
| FOR THE YEAR ENDED DEC 31, 2009 |
| FROM INCEPTION ON OCT 3, 1997 TO DEC 31, 2010 |
|
|
|
|
|
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| |
| Cash Flows from Operating Activities |
|
|
|
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|
|
| Net loss | $ | (6,262) | $ | (4,823) | $ | (102,296) |
|
| Adjustments to reconcile net loss to cash provided (used) by operating activities: |
|
|
|
|
|
|
|
| Capital contributions - expenses |
| 0 |
| 0 |
| 6,550 |
|
| Changes in assets and liabilities: |
|
|
|
|
|
|
|
| Increase in inventory |
| 0 |
| 0 |
| (21,744) |
|
| Increase in accounts payable |
| 275 |
| 0 |
| 39,869 |
|
| Net cash provided (used) by operating activities |
| (5,987) |
| (4,823) |
| (77,621) |
|
|
|
|
|
|
|
|
|
|
| Cash Flows from Investing Activities |
|
|
|
|
|
|
|
| Purchase of equipment |
| 0 |
| 0 |
| (20,530) |
|
| Loss of cash in spin-off |
| 0 |
| 0 |
| (1,531) |
|
| Net cash used by investing activities |
| 0 |
| 0 |
| (22,061) |
|
|
|
|
|
|
|
|
|
|
| Cash Flows from Financing Activities |
|
|
|
|
|
|
|
| Proceeds from stock issuance |
| 0 |
| 0 |
| 65,000 |
|
| Cash advances received |
| 7,000 |
| 5,000 |
| 36,000 |
|
| Net cash provided by financing activities |
| 7,000 |
| 5,000 |
| 101,000 |
|
|
|
|
|
|
|
|
|
|
| Increase (decrease) in cash |
| 1,013 |
| 177 |
| 1,318 |
|
|
|
|
|
|
|
|
|
|
| Cash and Cash Equivalents, Beginning of Period |
| 305 |
| 128 |
| 0 |
|
|
|
|
|
|
|
|
|
|
| Cash and Cash Equivalents, End of Period | $ | 1,318 | $ | 305 | $ | 1,318 |
|
|
|
|
|
|
|
|
|
|
| Supplemental Cash Flow Information: |
|
|
|
|
|
|
|
| Cash paid for interest | $ | 0 | $ | 0 | $ | 0 |
|
| Cash paid for income taxes | $ | 0 | $ | 0 | $ | 0 |
|
|
|
|
|
|
|
|
|
|
| Non-Cash Investing and Financing Activities |
|
|
|
|
|
|
|
| Issuance of stock in settlement of debt | $ | 0 | $ | 0 | $ | 8,000 |
|
The accompanying notes are an integral part of these financial statements
17
Globalwise Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2010 and 2009
NOTE 1 - Summary of Significant Accounting Policies
a.
Organization & Summary of Significant Accounting Policies
Globalwise Investments, Inc. (the Company) was incorporated October 3, 1997 as a Utah corporation. On July 12, 2000, the Company changed its domicile to Nevada.
b.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.
c.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
d.
Fair Value of Financial Instruments
It is not practicable to estimate the fair value of advances (accounts payable) because there is no established market for these loans and it is inappropriate to estimate future cash flows, which are largely dependent on the Company establishing or acquiring operations at some future point. No financial instruments are held for trading purposes.
e.
Reclassification
Certain amounts in prior-year financial statements have been reclassified for comparative purposes to conform to the presentation in the current year financial statements.
NOTE 2 -
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has current liabilities in excess of current assets, has incurred losses since inception, has negative cash flows from operations, and has no revenue-generating activities. Its activities have been limited for the past several years and it is dependent upon financing to continue operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plan to acquire or merge with other operating companies.
18
Globalwise Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2010 and 2009
NOTE 3 -
Income Taxes
No provision for income taxes has been recorded due to net operating loss carryforwards totaling $ (10,810) at December 31, 2010 that will be offset against future taxable income. These NOL carryforwards begin to expire in the year 2029. No tax benefit has been reported in the financial statements because the Company believes there is a 50% or greater chance the carryforward will expire unused.
Deferred tax asset and the valuation account are as follows at December 31, 2010 and 2009:
| For the Years Ended December 31, | |
| 2010 | 2009 |
|
|
|
Net operating loss carryforward | $ 1,622 | $ 723 |
Valuation allowance | (1,622) | (723) |
Deferred tax asset | $ 0 | $ 0 |
The change in the valuation allowance was $899 during the year ended December 31, 2010.
NOTE 4 - Accounts Payable and Advances
The Company had recorded liabilities of $66,995 for services received, as well as cash advances received from unrelated parties, as accounts payable as it was the intent of management and the counter parties to issue common stock of the Company at some future date for the amounts received. However, it was subsequently determined that it was not in the best interests of the parties to issue stock for the advances and, therefore, the parties have agreed that these liabilities will be treated as loans effective January 1, 2011, bearing interest at 8% and due on demand.
NOTE 5 - Capitalization
In 1997 the Company issued 600,000 shares of common stock for equipment valued at $19,100.
In 1998 the Company received a cash contribution in the amount of $550. No shares were issued for this contribution.
In 1999 the Company issued 1,304,000 shares of common stock for cash of $65,000 ($.0498 per share). It also received contributions in the amount of $6,000 for which no shares were issued.
In March, 2000, the Company exchanged all of its assets and liabilities for 300,000 shares of its previously issued common stock. The shares were subsequently canceled.
19
Globalwise Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2010 and 2009
NOTE 5 – Capitalization (Continued)
In July 2000, the Company issued 96,000 shares of common stock for costs and services valued at $20,000. In 2001 the Company and stockholders elected to cancel the stock and the liability was re-established in the Accounts Payable - related parties section of the balance sheet.
In May 2007, five stockholders returned 565,000 shares of common stock to the treasury, which were subsequently canceled. The shares were originally issued for cash and the shareholders returned the shares to the Company for no consideration.
In December, 2007, the Company issued 100,000 shares of common stock in settlement of debt of $8,000 ($.08 per share).
NOTE 6 – Changes Resulting From Stock Split
In January 2008 the Board of Directors approved a 2-for-1 forward stock split which was effective February 15, 2008. Customary notification of the forward split was provided to the OTC Bulletin Board and it effected the split on February 19, 2008. The financial statements for all periods presented have been restated to reflect this stock split.
NOTE 7 - Development Stage Company
The Company has no significant operations and is considered a development stage company. It is concentrating substantially all of its efforts in raising capital and searching for a business operation with which to merge, or assets to acquire, in order to generate significant operations.
NOTE 8 – Subsequent Event
Effective January 1, 2011, the Company is treating $66,995 in advances and accounts payable as non-collateralized loans, bearing interest at 8% and due on demand.
20
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
As reported in our Current Report on Form 8-K, on October 8, 2010 we dismissed our former auditing firm Chisholm, Bierwolf, Nilson & Morrill, LLC. On October 12, 2010 we engaged Michael J. Larsen, Certified Public Accountant, as our independent public registered accounting firm.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow timely decisions regarding required disclosure. During the period we did not have additional personnel to allow segregation of duties to ensure the completeness or accuracy of our information. Accordingly, our President has concluded that the lack of an adequate control environment constituted a deficiency in our disclosure controls and procedures.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible to establish and maintain adequate internal control over financial reporting. Our principal executive officer is responsible to design or supervise a process that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The policies and procedures include:
•
maintenance of records in reasonable detail to accurately and fairly reflect the transactions and dispositions of assets,
•
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and
•
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
For the year ended December 31, 2010, management has relied on the Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Internal Control - Integrated Framework,” to evaluate the effectiveness of our internal control over financial reporting. Based upon that framework, management has determined that our internal control over financial reporting is ineffective due to the lack of additional personnel to allow segregation of duties to ensure the completeness or accuracy of our information.
Our management determined that there were no changes made in our internal controls over financial reporting during the fourth quarter of 2010 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
21
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
Our directors and executive officers and their respective ages, positions, and biographical information are set forth below. Our bylaws require two directors who serve until our next annual meeting or until each is replaced by a qualified director. Our executive officers are chosen by our board of directors and serve at its discretion. There are no existing family relationships between or among any of our executive officers or directors.
Name | Age | Position Held | Term of Director |
Donald R. Mayer | 71 | Director and President | Nov. 2005 until next annual meeting |
Linda L. Perry | 66 | Director and Secretary/Treasurer | Nov. 2005 until next annual meeting |
Donald R. Mayer -- Mr. Mayer is the President and Chairman of Universal Business Insurance, an insurance company that he co-founded. He has worked in the insurance industry for over twenty five years, specializing in business and motel/hotel industry. He graduated from the University of Utah, located in Salt Lake City, Utah, with a bachelor’s degree in accounting.
He currently serves as a director of WorldNet, Inc. of Nevada, a company that has a class of securities registered with the SEC pursuant to Section 12. He has not been involved in any legal proceedings during the past ten years that are material to an evaluation of his ability or integrity.
Linda L. Perry -- Mrs. Perry serves as President of Business Builders, Inc., a privately held Utah corporation which she co-founded in 1997 and that provides business consulting for small businesses. Her business experience includes operating a small business and experience as a director and officer of other reporting public companies.
Mrs. Perry serves as a director of LZG International, Inc., a company that has a class of securities registered with the SEC pursuant to Section 12. She has not been involved in any legal proceedings during the past ten years that are material to an evaluation of her ability or integrity.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own more than five percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and our other equity securities. Officers, directors and greater than ten-percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. We believe no reports were required to be filed for the year ended December 31, 2010.
Code of Ethics
Since we have minimal operations and only two persons serving as our executive officers, we have not adopted a code of ethics for our principal executive and financial officers. Our board of directors will revisit this issue in the future to determine if adoption of a code of ethics is appropriate. In the meantime, our management intends to promote honest and ethical conduct, full and fair disclosure in our reports to the SEC, and comply with applicable governmental laws and regulations.
Committees
We are a smaller reporting company with a small number of directors and officers who have active roles in our operations. As a result, we do not have a standing nominating committee for directors, nor do we have an audit
22
committee with an audit committee financial expert serving on that committee. Our entire board of directors acts as our nominating and audit committee.
ITEM 11. EXECUTIVE COMPENSATION
Executive Officer Compensation
Our principal executive officer, Donald R. Mayer, did not receive compensation during the past year ended December 31, 2010. None of our named executive officers received any cash or non-cash compensation during the past two fiscal years or had outstanding equity awards at year end. We have not entered into employment contracts with our executive officers and their compensation, if any, will be determined at the discretion of our Board of Directors.
We do not offer retirement benefit plans to our executive officers, nor have we entered into any contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to a named executive officer at, or in connection with, the resignation, retirement or other termination of a named executive officer, or a change in control of the company, or a change in the named executive officer’s responsibilities following a change in control.
Compensation of Directors
We do not have any standard arrangement for compensation of our directors for any services provided as director, including services for committee participation or for special assignments.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Securities Under Equity Compensation Plans
We do not have any securities authorized for issuance under any equity compensation plans.
Beneficial Ownership
The following tables set forth the beneficial ownership of our outstanding common stock by our management and each person or group known by us to own beneficially more than 5% of our outstanding common stock. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as indicated by footnote, the persons named in the table below have sole voting power and investment power with respect to all shares of common stock shown as beneficially owned by them. The percentage of beneficial ownership is based on 1,139,000 post-split shares of common stock outstanding as of March 1, 2011.
CERTAIN BENEFICIAL OWNERS | ||
Name and address of beneficial owner | Amount and nature of beneficial ownership | Percent of class |
ALPCO 440 East 400 South Salt Lake City, UT 84111 | 60,000 | 5.27 |
John S. Clayton 525 South 300 East Salt Lake City, UT 84111 | 75,000 | 6.6 |
23
MANAGEMENT | ||
Name of beneficial owner | Amount and nature of beneficial ownership | Percent of class |
Donald R. Mayer | 15,000 | 1.3 |
Directors and officers as a group | 15,000 | 1.3 |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Parties
During the past two fiscal years we have not engaged in, or propose to engage in, any transactions involving our executive officers, directors, 5% or more stockholders or immediate family members of such persons.
Director Independence
None of our directors are independent directors as defined by NASDAQ Stock Market Rule 5605(a)(2). This rule defines persons as “independent” who are neither officers nor employees of the company and have no relationships that, in the opinion of the board, would interfere with the exercise of independent judgment in carrying out their responsibilities as directors.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Auditor Fees
The following table presents the aggregate fees billed for each of the last two fiscal years by our accounting firm, Michael J. Larsen, Certified Public Accountant, in connection with the audit of our financial statements and other professional services.
| 2009 |
| 2010 |
Audit fees | $ 500 |
| $ 2,000 |
Audit-related fees | 0 |
| 0 |
Tax fees | 0 |
| 0 |
All other fees | $ 0 |
| $ 0 |
Audit fees represent the professional services rendered for the audit of our annual financial statements and the accounting firm review of our financial statements included in quarterly reports, along with services normally provided by the accounting firm in connection with statutory and regulatory filings or engagements. Audit-related fees represent professional services rendered for assurance and related services by the accounting firm that are reasonably related to the performance of the audit or review of our financial statements that are not reported under audit fees.
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Tax fees represent professional services rendered by the accounting firm for tax compliance, tax advice, and tax planning. All other fees represent fees billed for products and services provided by the accounting firm, other than the services reported for the other categories.
Pre-approval Policies
We do not have an audit committee currently serving and as a result our board of directors performs the duties of an audit committee. Our board of directors will evaluate and approve in advance the scope and cost of the engagement of an auditor. We do not rely on pre-approval policies and procedures.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1)
Financial Statements
The audited financial statements of Globalwise Investments, Inc. are included in this report under Item 8 on pages 12 through 20.
(a)(2) Financial Statement Schedules
All financial statement schedules are included in the footnotes to the financial statements or are inapplicable or not required.
(a)(3)
Exhibits
The following documents have been filed as part of this report.
No.
Description
3.1
Articles of Incorporation, as amended (Incorporated by reference to exhibit 3.1 of Form 10-QSB, filed October 11, 2001)
3.2
Certificate of Correction, effective May 22, 2007 (Incorporated by reference to exhibit 3.1 of Form 8-K, filed June 17, 2007)
3.3
Bylaws of Globalwise (Incorporated by reference to exhibit 3.3 of Form 10-SB, filed October 2, 2000.)
31.1
Principal Executive Officer Certification
31.2
Principal Financial Officer Certification
32.1
Section 1350 Certification
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SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized
GLOBALWISE INVESTMENTS, INC.
By: /s/ Donald R. Mayer
Donald R. Mayer, President
Date: March 16, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Donald R. Mayer
Donald R. Mayer
Principal Executive Officer,
Principal Financial Officer,
Director and President
Date: March 16, 2011
By: /s/ Linda L. Perry
Linda L. Perry
Director and Secretary/Treasurer
Date: March 16, 2011
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