Global Earth Energy (GEEG) 10-Q 2009 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

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

For the quarterly period ended May 31, 2009 

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

GLOBAL EARTH ENERGY, INC.

 (Exact name of registrant as specified in Charter)

NEVADA	000-31343	36-4567500
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employee Identification No.)

534 Delaware Avenue, Suite 412

Buffalo, New York 14202

(Address of Principal Executive Offices)

 _______________

    (910) 616-0077

 (Issuer Telephone number)

_____________

 (Former Name or Former Address if Changed Since Last Report)

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.

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 o                                 No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

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

The number of shares outstanding of the Registrant’s common stock as of   July 20, 2009 was 24,233,403 shares of common stock.

Global Earth Energy, Inc.

FORM 10-Q

May 31, 2009

Table of Contents

PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	Balance Sheets as at May 31, 2009 (unaudited) and August 31, 2008 (restated)	1
	Statements of Operations (unaudited) for the three and nine months ended May 31, 2009 and May 31,  2008 (restated)	2
	Statements of Cash Flows (unaudited) for the nine months ended May 31, 2009 and  May 31, 2008 (restated)	3
	Notes to Financial Statements (unaudited)	4
Item 2.	Management Discussion and Analysis of Financial Condition and Results of Operations.	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	12
Item 4T.	Controls and Procedures.	12
PART II OTHER INFORMATION
Item 1.	Legal Proceedings.	14
Item 1A.	Risk Factors.	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	14
Item 3.	Defaults Upon Senior Securities.	14
Item 4.	Submission of Matters to a Vote of Security Holders.	14
Item 5.	Other Information.	14
Item 6.	Exhibits.	14
Signatures.		15

Part I   Financial Information

Item 1. Financial Statements

GLOBAL EARTH ENERGY, INC.

(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)

(A NEVADA CORPORATION)

Buffalo, New York

FINANCIAL REPORTS

AT

MAY 31, 2009

 

GLOBAL EARTH ENERGY, INC.

(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)

(A NEVADA CORPORATION)

Buffalo, New York

TABLE OF CONTENTS

Consolidated Balance Sheets at May 31, 2009 (Unaudited) and   August 31, 2008 (Restated)	1
Consolidated Statements of Operations for the Three and Nine Months Ended   May 31, 2009 and 2008 (Unaudited) (Restated)	2
Consolidated Statements of Cash Flows for the Nine Months Ended  May 31, 2009 and 2008 (Unaudited) (Restated)	3
Notes to Consolidated Financial Statements	4-8

GLOBAL EARTH ENERGY, INC.
(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)
(A NEVADA CORPORATION)
Buffalo, New York
CONSOLIDATED BALANCE SHEETS
	(Unaudited)			Restated
	May 31,			August 31,
	2009			2008
ASSETS
Current Assets
Cash and Cash Equivalents	$	15,642		$	1,009
Prepaid Expenses		4,000			––
Total Assets	$	19,642		$	1,009
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accrued Expenses	$	368,577		$	183,968
Accrued Compensation - Directors		1,454,186			976,811
Due to Directors		373,437			350,435
Total Liabilities		2,196,200			1,511,214
Stockholders' Deficit
Common Stock :  $.001 Par; 800,000,000 Shares Authorized;
27,233,403  and 26,483,403 Issued, and                            24,233,403 and 23,483,403 Outstanding,                            respectively		24,233			23,483
Common Stock, Class B:  $.001 Par; 50,000,000 Shares
Authorized; -0- Issued and Outstanding		—			—
Preferred Stock, Class A:  $.001 Par; 1,000,000 Shares Authorized;
66,000 and 100,000 Issued and Outstanding, respectively		66			66
Preferred Stock, Class B:  $.001 Par; 5,000,000 Shares Authorized;
1,000,000 Issued and Outstanding		1,000			1,000
Preferred Stock, Class C:  $.001 Par; 15,000,000 Shares
Authorized;  -0- Issued and Outstanding		—			—
Preferred Stock, Class D:  $.001 Par;  13,000,000 Shares
Authorized;  -0- Issued and Outstanding		—			—
Additional Paid-In Capital		4,339,120			4,256,820
Accumulated Deficit		(6,537,977	)		(5,788,574	)
Treasury Stock – 3,000,000 Shares at $.001 Par		(3,000	)		(3,000	)
Total Stockholders' Deficit		(2,176,558	)		(1,510,205	)
Total Liabilities and Stockholders' Deficit	$	19,642		$	1,009

The accompanying notes are an integral part of these financial statements

-1-

GLOBAL EARTH ENERGY, INC.
(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)
(A NEVADA CORPORATION)
Buffalo, New York
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended						Nine Months Ended
	May 31,						May 31,
										Restated
	2009			2008			2009			2008
Revenues, Net	$	—		$	—		$	—		$	—
Cost of Goods Sold		—			—			—			—
Gross Profit		—			—			—			—
Expenses
Compensation Expense – Stock Options		––			––			2,800			––
Consulting Fees		189,167			147,500			526,167			477,500
General and Administrative		29,211			46,043			76,556			133,855
Interest Expense		41,369			24,706			113,630			66,010
Total Expenses		259,747			218,249			749,403			667,365
Loss from Operations Before
Provision for Taxes		(259,747	)		(218,249	)		(749,403	)		(667,365	)
Provision for Taxes		—			—			—			—
Net Loss for the Period	$	(259,747	)	$	(218,249	)	$	(749,403	)	$	(667,365	)
Weighted Average Number of
Common Shares Outstanding -
Basic		24,230,686			23,462,569			24,066,736			23,152,052
Diluted		27,230,686			26,462,569			27,066,736			26,152,052
Net Loss Per Common Share -
Basic	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.03	)
Diluted	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.03	)

The accompanying notes are an integral part of these financial statements

-2-

GLOBAL EARTH ENERGY, INC.
(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)
(A NEVADA CORPORATION)
Buffalo, New York
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
				Restated
For the Nine Months Ended May 31	2009			2008
Cash Flows from Operating Activities
Net Loss for the Period	$	(749,403	)	$	(667,365	)
Non-Cash Adjustments:
Interest on Directors/Stockholder Loans		113,630			66,010
Common Stock Issued in Exchange for Services Rendered		80,000			––
Compensation Expense – Stock Options		2,800			––
Bad Debt – Proceeds from Stock Purchase		250			––
Changes in Assets and Liabilities:
Prepaid Expenses		(4,000	)		––
Accounts Payable		––			(21,861	)
Accrued Expenses		70,979			54,132
Accrued Compensation - Directors		477,375			280,356
Net Cash Flows from Operating Activities		(8,369	)		(298,728	)
Net Cash Flows from Investing Activities		––			––
Cash Flows from Financing Activities
Cash Proceeds from Issuance of Regulation S Shares		––			153,982
Advances from (Repayment to)Directors - Net		23,002			(52,224	)
Net Cash Flows from Financing Activities		23,002			101,758
Net Change in Cash and Cash Equivalents		14,633			(196,970	)
Cash and Cash Equivalents - Beginning of Period		1,009			197,593
Cash and Cash Equivalents - End of Period	$	15,642		$	623
Supplemental Disclosures
Interest Paid	$	—		$	—
Income Taxes Paid	$	—		$	—

The accompanying notes are an integral part of these financial statements

-3-

GLOBAL EARTH ENERGY, INC.

(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)

(A NEVADA CORPORATION)

Buffalo, New York

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – Basis of Presentation

The condensed consolidated financial statements of Global Earth Energy, Inc. (the “Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the annual audited financial statements and the notes thereto included in the Company’s registration statement on Form 10-KSB, and other reports filed with the SEC.

The accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented.  The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole.  Certain information that is not required for interim financial reporting purposes has been omitted.

The Company has changed its primary business objective from advisory services to the biodiesel production industry.  Consequently, the Company changed their name on February 5, 2008 to Global Earth Energy, Inc.

Principles of Consolidation

The consolidated financial statements include the accounts of Global Earth Energy, Inc., and its wholly owned subsidiary, Knightbridge Corp. (the “Company”).  All significant intercompany balances have been eliminated in consolidation.

NOTE B – Going Concern

The Company’s consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations.  As a result, there is an accumulated deficit of $6,537,977 at May 31, 2009.

The Company’s continued existence is dependent upon its ability to raise capital or acquire a marketable company.  The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

-4-

GLOBAL EARTH ENERGY, INC.

(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)

(A NEVADA CORPORATION)

Buffalo, New York

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 157, "Fair Value Measurements”.  SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  SFAS 157 is effective as of the beginning of the first fiscal year that begins after November 15, 2007.  As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2009.  The Company is currently evaluating the impact of SFAS 157 on its consolidated financial statements.

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115”.  SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates.  This Statement applies to all entities, including not-for-profit organizations.  SFAS 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007.  As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2009.  The Company is currently evaluating the impact of SFAS 159 on its consolidated financial statements.

In December 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51”.  SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.  SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008.  As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2010.  The Company is currently evaluating the impact of SFAS 160 on its consolidated financial statements but does not expect it to have a material effect.

- continued -

-5-

GLOBAL EARTH ENERGY, INC.

(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)

(A NEVADA CORPORATION)

Buffalo, New York

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – Recently Issued Accounting Standards – continued

In December 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 141(R), "Business Combinations”.  SFAS 141(R) establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, an any noncontrolling interest in the acquiree, recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.  SFAS 141(R) is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008.  As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2010.  The Company is currently evaluating the impact of SFAS 141(R) on its consolidated financial statements but does not expect it to have a material effect.

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 161, "Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133”.  SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging activities.  SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged.  As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2010.  The Company is currently evaluating the impact of SFAS 161 on its consolidated financial statements but does not expect it to have a material effect.

In May 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 162, "The Hierarchy of Generally Accepted Accounting Principles”.  SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States.  SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162 on its consolidated financial statements but does not expect it to have a material effect.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 163, "Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60" (“SFAS 163”).  SFAS 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement.  SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years.  As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2010.  The Company is currently evaluating the impact of SFAS 163 on its consolidated financial statements but does not expect it to have a material effect.

-6-

GLOBAL EARTH ENERGY, INC.

(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)

(A NEVADA CORPORATION)

Buffalo, New York

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D –

Share Activity Stock Options

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, Share-Based Payment (“SFAS No. 123R”).  SFAS No. 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.  SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  SFAS No. 123R requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements.  That cost will be measured based on the fair value of the equity or liability instruments issued.

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of EITF 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and EITF 00-18, “Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees.”  The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.  Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, which ever is more readily determinable in accordance with SFAS 123(R).

On October 18, 2008 the Company approved the granting of stock options to its CFO of 40,000 Class A Preferred Stock Shares.

The following table provides the range of assumptions used by the Company, at the time stock options were issued.

For the quarter ended November 30, 2008, $2,800 was expensed utilizing the Black-Scholes option pricing model.  The following weighted-average assumptions were used for the grants issued:

Dividend Yield	0.00%
Expected Volatility	235.24%
Discount Rate	3.91%
Option Life	10 Years

- continued -

-7-

GLOBAL EARTH ENERGY, INC.

(FORMERLY KNOWN AS GLOBAL WATAIRE INC.)

(A NEVADA CORPORATION)

Buffalo, New York

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D –	Share Activity - continued
	Common Stock
	On September 25, 2008 a stockholder that is closely related to Betty-Ann and Sydney Harland received 400,000 shares of regulation 144 common stock.  This stock was to reimburse the stockholder for 400,000 shares that he gave to the company on August 27, 2008 to pay the Company’s Consultant.

On August 31, 2008 the Company entered into an agreement with Larry Ricci (Contractor).  Pursuant to the agreement the Contractor agrees to assist the Company in identifying and researching potential acquisitions for the Company’s subsidiary Knightbridge Corp.  The term of the contract is for one year, expiring on August 31, 2009.  In consideration for his services, the Contractor received 100,000 common shares on August 31, 2008.

On March 3, 2009 the Company promised to repay a stockholder that is closely related to Betty-Ann and Sydney Harland 1,000,000 shares of Preferred Stock Class C.   This stock was to reimburse the stockholder for 1,000,000 shares that he gave to the company on March 3, 2009 to pay the Company’s Consultant.

NOTE E –

Restatement of Prior Quarter Financials

As of May 31, 2009 the Company has determined that services rendered by a consultant valued at $100,000 plus interest of $21,896 were previously unreported. As a result, the net loss for the nine months ended May 31, 2008 and the year ended August 31, 2008 after restatement, has increased by $27,664 to $667,365 and $82,768 to $1,489,892, respectively.  Accumulated Deficit for the year ended August 31, 2008 has increased by $113,216 to $5,788,574. May 31, 2008 was restated for the cumulative effect of the above items.

-8-

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

The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Much of the discussion in this Item is "forward looking." Actual operations and results may materially differ from present plans and projections due to changes in economic conditions, new business opportunities, changed business conditions, and other developments. Other factors that could cause results to differ materially are described in our filings with the Securities and Exchange Commission.

The following are factors that could cause actual results or events to differ materially from those anticipated, and include, but are not limited to general economic, financial and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders; and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow.

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-Q to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of its public disclosure practices.

For the three months ended May 31, 2009 and May 31, 2008 the company had no sales. Net loss for the three months ended May 31, 2009 was $(259,747)compared to the net loss of $(218,249) for the three months ended May 31, 2008.

For the nine months ended May 31, 2009 and May 31, 2008 the company had no sales.  Net loss for the nine months ended May 31, 2009 was $(749,403) compared to the net loss of $(667,365) for the nine months ended May 31, 2008.

Expenses have increased by $41,498 for the three months of our current fiscal year from $218,249 for the three months ended May 31, 2008 to $259,747 for the three months ended May 31, 2009.  The increase can be attributed to, an increase in consulting fees of $41,667 from $147,500 to $189,167 and a decrease in general and administrative expenses of $16,832 from $46,043 to $29,211.  An increase in interest expense of $16,663 from $24,706 to $41,369 is due to the company having no revenues.

Expenses have increased by $82,038 for the nine months of our current fiscal year from $667,365 for the nine months ended May 31, 2008 to $749,403 for the nine months ended May 31, 2009.  The increase can be attributed to an increase in consulting fees of $88,667 from $467,500 to $556,167, a decrease in general and administrative expenses of $57,049 from $133,855 to $76,806 and compensation expenses of $2,800.   An increase in interest expense of $47,620 from $66,010 to $113,630 is due to the company having no revenues.

Going Concern

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations.  As a result, there is an accumulated deficit of $ 6,537,977at May 31, 2009. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company’s continued existence is dependent upon its ability to raise capital or acquire a marketable company.  The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

-9-

Liquidity and Capital Resources

Our operations used approximately $15,642 in cash for the nine months ended May 31, 2009. Cash required during the nine months ended May 31, 2009 came principally from advances from directors in the amount of $23,002.

In pursuing our marketing and sale of our products under our new business plan, we estimate our operational expenses during the next 12 months will be approximately $3,500,000.

As discussed by our accountants in the audited financial statements included in this report, our revenues are currently insufficient to cover our costs and expenses and our lack of sources of revenue raise substantial doubts about our ability to continue as a going concern.

Pursuant to this report, we are attempting to raise additional capital. In addition, certain of our directors and stockholders may continue to provide the Company with the funds needed to continue our development and operations. To the extent our revenue shortfall exceeds our capital raising efforts and the willingness and ability of our directors and stockholders to continue providing the Company with the funds needed, we anticipate raising any necessary capital from other outside investors coupled with bank or mezzanine lenders. As of the date of this report, we have not entered into any negotiations with any third parties to provide such capital.

We anticipate that our current financing strategy of equity offerings and private debt will meet our anticipated objectives and business operations for the next 12 months. Subject to our ability to obtain adequate financing at the applicable time, we may enter into definitive agreements on one or more of those opportunities.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Critical accounting policies include revenue recognition and impairment of long-lived assets.

We recognize revenue in accordance with Staff Accounting Bulletin No.101, “Revenue Recognition in Financial Statements.” Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances and other adjustments are provided for in the same period the related sales are recorded.

We evaluate our long-lived assets for financial impairment on a regular basis in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” which evaluates the recoverability of long-lived assets not held for sale by measuring the carrying amount of the assets against the estimated discounted future cash flows associated with them. At the time such evaluations indicate that the future discounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”)  No. 157, "Fair Value Measurements”.  SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  SFAS 157 is effective as of the beginning of the first fiscal year that begins after November 15, 2007.  As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2009. The adoption of SFAS 157 did not have a material effect on the consolidated financial statements.

-10-

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115”. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. This Statement applies to all entities, including not-for-profit organizations. SFAS 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2009.  The adoption of SFAS 159 did not have a material effect on the consolidated financial statements.

In December 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 141(R), "Business Combinations”. SFAS 141(R) establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, an any noncontrolling interest in the acquiree, recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended August, 2010. The Company is currently evaluating the impact of SFAS 141(R) on its consolidated financial statements but does not expect it to have a material effect.

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51 ”. This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement did not have a material effect on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. The adoption of this statement did not have a material effect on the Company's financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS 162 is effective 60 days following the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have a material impact on the Company’s financial position.

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In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FASB 163 is not expected to have a material impact on the Company’s financial position.

In May 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 165, "Subsequent Events" (“SFAS 165”).  SFAS 165 establishes principles and requirements for subsequent events.  SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009.  As such, the Company is required to adopt this standard in the current period.  Adoption of SFAS 165 did not have a significant effect on the Company’s consolidated financial statements.

In June 2009, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”.  SFAS 168 replaces SFAS 162 and establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  The Company is currently evaluating the impact of SFAS 162 on its consolidated financial statements but does not expect it to have a material effect.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs). 

Item 3.    Quantitative and Qualitative Disclosures about Market Risks

We conduct our business in United States dollars. Our market risk is limited to the United States domestic, economic and regulatory factors.

Item 4T. Controls and Procedures

 Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CAO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Controls over Financial Reporting

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.  There has been no change in the Company’s internal control over financial reporting during the quarter ended May 31, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company’s management, including the Company’s CEO and CAO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of May 31, 2009.

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Company-level controls. We did not maintain effective company-level controls as defined in the Internal Control—Integrated Framework published by COSO. These deficiencies related to each of the five components of internal control as defined by COSO (control environment, risk assessment, control activities, information and communication, and monitoring). These deficiencies resulted in more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected. Specifically,

·   We had inadequate monitoring controls, including inadequate staffing and procedures to ensure periodic evaluations of internal controls to ensure that appropriate personnel regularly obtain evidence that controls are functioning effectively and that identified control deficiencies are remediated timely;

Financial statement preparation and review procedures. We had inadequate policies, procedures and personnel to ensure that accurate, reliable interim and annual consolidated financial statements were prepared and reviewed on a timely basis. Specifically, we had insufficient: a) levels of supporting documentation; b) review and supervision within the accounting and finance departments; c) preparation and review of footnote disclosures accompanying our financial statements; and d) technical accounting resources. These deficiencies resulted in errors in the financial statements and more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected.

Inadequate reviews of adjusting journal entries, inter-corporate accounts, and consolidating entries. We had inadequate review procedures over consolidation work papers and adjusting journal entries as well as inter-corporate account transactions. Specifically, deficiencies were noted in the following areas: a) management review of supporting documentation, calculations and assumptions used to prepare the financial statements, including consolidation spreadsheets and inter-corporate account analyses; b) management review of adjusting journal entries recorded during the financial statement preparation process and carry forward of such adjustments. These deficiencies resulted in the omission of a material inter-corporate entry, incorrect classification of certain accounts, the omission of a prior period adjusting entry and certain other clerical errors. These deficiencies resulted in a more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected.

Because of the weaknesses described above, management has concluded that our internal control over financial reporting was not effective as of the interim period ended May 31, 2009.

We are addressing the outstanding material weaknesses described above, as well as our control environment. We are seeking a qualified CFO. We also expect to undertake the following remediation efforts:

·   Hire additional qualified personnel and other resources to strengthen the accounting, finance, and information technology components of our organization, including a Compliance officer, Information technology officer, and SEC reporting manager and an internal audit manager.

·   Adopt administration, supervision, and review controls over inter-corporate entries and fiscal year end adjusting entries;

·   Implement controls to ensure the periodic review of and changes to our end-user computing spreadsheets used in the period-end financial statement preparation and reporting process; and

·   Implement a new system of internal controls at both the Company and subsidiary levels to include improved management information systems, risk assessment policies and financial statement closing processes.

These specific actions are part of an overall program that we are currently developing in an effort to remediate the material weaknesses described above. We may not have sufficient time to implement our remediation plan before testing our internal control over financial reporting for the fiscal year ended 2009. This Quarterly Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Quarterly Report."

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PART II - OTHER INFORMATION

Item 1.      Legal Proceedings.

A default judgment was entered against the Company in a Texas Court in a legal dispute initiated by the Company’s former attorney over the amount of his legal charges, the amount and entitlement to which the Company is currently disputing.

Item 1A.   Risk Factors.

Not Applicable for smaller reporting company.

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

None.

Item 3.      Defaults Upon Senior Securities.

None

Item 4.      Submission of Matters to a Vote of Security Holders.

None.

Item 5.      Other Information.

None

Item 6.      Exhibits and Reports of Form 8-K.

(a)      Exhibits

           31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002 of Chief Executive Officer

           31.2 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002 of Chief Financial Officer

           32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002 of Chief Executive Officer

           32.2 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002 of Chief Financial Officer

(b)      Reports of Form 8-K  

           None.

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SIGNATURES

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

	Global Earth Energy, Inc.
Date: July 20,  2009	By:	/s/ Sydney A. Harland
		Sydney A. Harland
		Chief Executive Officer
Date: July 20, 2009	By:	/s/ Edmund J. Gorman
		Edmund J. Gorman Chief Financial Officer

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