UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended | December 31, 2016 |
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from |
| to |
|
Commission file number 000-15303
HST GLOBAL, INC. |
(Exact name of registrant as specified in its charter) |
Nevada |
| 73-1215433 |
(State or other jurisdiction of incorporation or organization) |
| (I. R. S. Employer Identification No.) |
|
|
150 Research Drive, Hampton, VA | 23666 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code | 757-766-6100 |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Name of each exchange on which registered |
|
|
|
None |
| None |
|
|
|
Securities registered pursuant to Section 12(g) of the Act: |
|
Common Stock |
(Title of Class) |
|
(Title of Class) |
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 Section 15(d) of the Act. | Yes [ ] No [X] | ||
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 [x] No [ ] | ||
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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] | ||
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 [ ] | Accelerated filer [ ] | ||
Non-accelerated filer [ ] (Do not check if a smaller reporting company) | 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 [ ] No [x] | |
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. | $ 946,469 | |
As of March 31, 2017 the number of shares of the registrant’s common stock outstanding was | 36,719,854 Shares | |
Page 2
HST Global, Inc.
TABLE OF CONTENTS
Part I
Forward Looking Statements
4
Item 1.
Business
4
Item 1A.
Risk Factors
4
Item 1B.
Unresolved Staff Comments
4
Item 2.
Properties
4
Item 3.
Legal Proceedings
4
Item 4.
Mine Safety Disclosures
4
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 5
Item 6.
Selected Financial Data
6
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
6
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
7
Item 8.
Financial Statements and Supplementary Data
7
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
18
Item 9A.
Controls and Procedures
18
Item 9B.
Other Information
19
Part III
Item 10.
Directors ,Executive Officers, and Corporate Governance
20
Item 11.
Executive Compensation
21
Item 12.
Security Ownership of Certain Beneficial Owners and Management
25
Item 13.
Certain Relationships and Related Transactions, and Director Independence
25
Item 14.
Principal Accounting Fees and Services
26
Part IV
Item 15.
Exhibits and Financial Statement Schedules
27
Signatures
27
Page 3
ITEM 1. BUSINESS
A. BUSINESS DEVELOPMENT
There have been no changes to our business development since our last annual report on Form 10-K. We are still in the development stage and have not begun to earn any revenue.
B. FINANCIAL INFORMATION ABOUT SEGMENTS
As defined by generally accepted accounting principles ("GAAP"), we do not have any segments separate and apart from our business as a whole. Accordingly, there are no measures of revenue from external customers, profit and loss, or total assets aside from what is reported in the Financial Statements attached to this Form 10-K.
C. BUSINESS OF THE COMPANY
There have been no changes to our business since our last annual report on Form 10-K. We are still in the development stage and have not begun to earn any revenue.
We continue to seek opportunities to implement our business plan as previously reported.
ITEM 1A. RISK FACTORS
Not required by smaller reporting companies.
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 2. PROPERTIES
The Company's executive offices are located at 150 Research Dr., Hampton VA. We currently share these offices with The Health Network, Inc. ("THN"), of which Ron Howell is President. We have no formal sublease or rental agreement with THN; however, we currently pay to THN $0.00 per month as an operating fee, which includes use of the office space among other things. The combined office and warehouse space is 42,600 square feet.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4 MINE SAFETY DISCLOSURES
Not applicable to the Company.
Page 4
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is quoted in United States markets on the Over-The-Counter Bulletin Boards ("OTC BB"), under the symbol "HSTC.OB." There is no assurance that the common stock will continue to be traded on the OTC BB or that any liquidity exists for our shareholders.
Market Price
The following table shows the high and low per share price quotations of the Company's common stock as reported by the OTC BB for the periods presented. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not necessarily represent actual transactions. The OTC BB market is extremely limited and the prices quoted by brokers are not a reliable indication of the value of the common stock. The periods presented represent fiscal quarters, with the fourth quarter of each year ending on December 31.
High
Low
Fiscal 2016
First Quarter
0.007
0.003
Second Quarter
0.0051
0.004
Third Quarter
0.015
0.0015
Fourth Quarter
0.013
0.006
Fiscal 2015
First Quarter
0.012
0.007
Second Quarter
0.008
0.007
Third Quarter
0.008
0.0021
Fourth Quarter
0.0084
0.0019
As of December 31, 2016, the Company had 100,000,000 shares of common stock authorized with 36,719,854, issued and outstanding. The Company had 5,000,000 shares of preferred stock authorized with no shares issued and outstanding.
Penny Stock Regulations
Our common stock is quoted in United States markets on the OTC BB under the symbol "HSTC.OB." The sale price of our common stock has been reported as low as $0.001 per share. As such, the Company's common stock may be subject to provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock rule."
Section 15(g) sets forth certain requirements for transactions in penny stocks, and Rule 15g-9(d) incorporates the definition of "penny stock" that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines "penny stock" to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. As long as the Company's common stock is deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors.
Dividends
The Company has not issued any dividends on the common stock to date, and does not intend to issue any dividends on the common stock in the near future. We currently intend to use all profits to further the growth and development of the Company.
Page 5
Number of Shares Outstanding
As of December 31, 2016, the Company had 100,000,000 shares of common stock authorized with 36,719,854, issued and outstanding. These shares were held by approximately 590 shareholders of record. The Company had 5,000,000 shares of preferred stock authorized with no shares issued or outstanding.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities
ITEM 6. SELECTED FINANCIAL DATA
Not required by smaller reporting companies.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Forward-Looking Statements
Statements about our future expectations are "forward-looking statements" within the meaning of applicable Federal Securities Laws, and are not guarantees of future performance. When used herein, the words "may," "will," "should," "anticipate," "believe," "appear," "intend," "plan," "expect," "estimate," "approximate," and similar expressions are intended to identify such forward-looking statements. These statements involve risks and uncertainties inherent in our business, including those set forth in Item 1A under the caption "Risk Factors," in this Annual Report on Form 10-K for the year ended December 31, 2016, and other filings with the SEC, and are subject to change at any time. Our actual results could differ materially from these forward-looking statements. We undertake no obligation to update publicly any forward-looking statement.
Overview
HST Global, Inc. is an Integrated Health and Wellness Biotechnology company that is developing and /or acquiring a network of Wellness Centers worldwide that are primarily focused on the homeopathic and alternative treatment of late stage cancer. In addition, the company intends to acquire innovative products for the treatment of individual health challenges. In this regard, the company primarily focuses on homeopathic and alternative product candidates that are undergoing or have already completed significant clinical testing.
The company has identified the growing acceptance of alternative treatments worldwide which has placed us in a perfect position to open our own brand of Treatment Centers. This strategy will enable the company to address the challenges individuals face in the treatment challenging and in some cases life threatening diseases.
Plan of Operation
General and administrative expenses consist primarily of salaries and related personnel costs, professional fees, business insurance, rent, general legal activities, and other corporate expenses.
We have never been profitable and do not anticipate having net income unless and until we develop and/or acquire our wellness centers and/or develop new channels of distribution. With respect to our current activities, this is not likely to occur until we obtain significant additional funding. We cannot provide any assurance that we will be able to achieve profitability on a sustained basis, if at all, obtain the required funding, obtain, or complete additional corporate partnering or acquisition transactions.
Page 6
Accordingly, we will need to raise additional funds or pursue strategic transactions or other strategic alternatives. To date, we have financed our operations primarily through private sales of our equity securities, and we expect to continue obtaining required capital in a similar manner.
Results of Operations
The Company had no revenues and no cost of revenues for the years ended December 31, 2016 and 2015.
The Company incurred operating expenses of $137,274 for the year ended December 31, 2016, compared to $160,047 in 2015. The decrease in expenses in 2016 was primarily a result of an decrease in administrative expenses. We do not believe these costs are indicative of future years, and we cannot at this time predict our costs if and when we begin earning revenues and exit the development stage.
The Company had a net loss of $173,022 in the year ended December 31, 2016 compared to $195,795 in 2015. This is primarily a result of decrease in administrative expenses. We believe the net profits of the Company are the result of being in the development stage, and are not indicative of future earnings once we exit the development stage.
Liquidity and Capital Resources
Our capital requirements are principally related to our efforts to implement our business plan. Our cash balance as of December 31, 2016 was $465.
Cash Flows
| Year Ended | Year Ended |
| December 31, 2016 | December 31, 2015 |
Net cash used in operating activities | $ (21,930) | $ (17,569) |
Net cash used in investing activities | - | - |
Net cash provided by financing activities | 22,200 | 17,600 |
Net increase in cash and cash equivalents | $ 270 | $ 31 |
The Company does not currently have sufficient capital in its accounts, nor sufficient firm commitments for capital to assure its ability to meet its current obligations or to continue its planned operations. The Company is continuing to pursue working capital and additional revenue through the seeking of the capital it needs to carry on its planned operations. There is no assurance that any of the planned activities will be successful.
Off-Balance Sheet Arrangements
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Description
Page
Report of Independent Registered Public Accounting Firm
F-8
Consolidated Balance Sheets
F-9
Consolidated Statements of Operations
F-10
Consolidated Statements of Changes in Stockholders' Interest
F-11
Consolidated Statements of Cash Flows
F-12
Notes to Consolidated Financial Statements
F-13
Page 7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
HST Global, Inc.
We have audited the accompanying consolidated balance sheets of HST Global, Inc. (“the Company”) as of December 31, 2016 and 2015, and the related consolidated statements of income, stockholders’ deficit, and cash flows for each of the years in the two year period ended December 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included 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, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of HST Global, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered net losses since inception and has accumulated a significant deficit. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Sadler, Gibb & Associates, LLC
Salt Lake City, UT
F-8
HST Global, Inc.
CONSOLIDATED BALANCE SHEETS
| December 31, 2016 |
| December 31, 2015 |
ASSETS |
|
|
|
|
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents | $ 465 |
| $ 195 |
|
|
|
|
Total Current Assets | 465 |
| 195 |
|
|
|
|
Total Assets | $ 465 |
| $ 195 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
Accounts payable and accrued expenses | 25,219 |
| 29,875 |
Accounts payable and accrued expenses - related parties | 505,959 |
| 505,959 |
Accrued officer compensation | 870,000 |
| 750,000 |
Accrued related party interest | 305,133 |
| 269,385 |
Notes payable - related party | 1,321,669 |
| 1,299,469 |
|
|
|
|
Total Current Liabilities | 3,027,980 |
| 2,854,688 |
|
|
|
|
Total Liabilities | 3,027,980 |
| 2,854,688 |
|
|
|
|
Stockholders' Deficit |
|
|
|
Preferred stock; 5,000,000 shares authorized, at $0.001 par value, -0- shares issued and outstanding, respectively | - |
| - |
Common stock; 100,000,000 shares authorized, at $0.001 par value, 36,719,854 and 36,719,854 shares issued and outstanding, respectively | 36,720 |
| 36,720 |
Additional paid-in capital | 2,384,824 |
| 2,384,824 |
Accumulated deficit | (5,449,059) |
| (5,276,037) |
|
|
|
|
Total Stockholders' Deficit | (3,027,515) |
| (2,854,493) |
|
|
|
|
Total Liabilities and Stockholders' Deficit | $ 465 |
| $ 195 |
|
|
|
|
The notes are an integral part of the consolidated financial statements
F-9
HST Global, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
| Year Ended |
| Year Ended |
| December 31, 2016 |
| December 31, 2015 |
|
|
|
|
Revenues | $ - |
| $ - |
|
|
|
|
Operating Expenses: |
|
|
|
Consulting | 120,000 |
| 120,000 |
General and administrative | 17,274 |
| 40,047 |
|
|
|
|
Total Operating Expenses | $ 137,274 |
| $ 160,047 |
|
|
|
|
Net Loss From Operations | $ (137,274) |
| $ (160,047) |
|
|
|
|
Other Expense |
|
|
|
Interest expense | $ 35,748 |
| $ 35,748 |
|
|
|
|
Total Other Expense | (35,748) |
| (35,748) |
|
|
|
|
Net Loss | $ (173,022) |
| $ (195,795) |
|
|
|
|
Loss Per Share: Basic And Diluted - Common | $ (0.00) |
| $ (0.01) |
|
|
|
|
Weighted Average Shares Outstanding: Basic And Diluted - Common | 36,719,854 |
| 36,719,854 |
The notes are an integral part of the consolidated financial statements
F-10
HST Global, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
| Preferred Stock |
| Common Stock |
| Additional Paid-In |
| Deficit Accumulated |
| Total Stockholders' | |||||
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
|
|
| Deficit | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance, December 31, 2013 | - |
| - |
| 36,719,854 |
| $ 36,720 |
| $ 2,384,824 |
| $ (4,895,540) |
| $ (2,473,996) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net loss for the year ended December 31, 2014 | - |
| - |
| - |
| - |
| - |
| (184,702) |
| (184,702) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance, December 31, 2014 | - |
| - |
| 36,719,854 |
| 36,720 |
| 2,384,824 |
| (5,080,242) |
| (2,658,698) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net loss for the year ended December 31, 2015 | - |
| - |
| - |
| - |
| - |
| (195,795) |
| (195,795) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance, December 31, 2015 | - |
| - |
| 36,719,854 |
| $ 36,720 |
| $ 2,384,824 |
| $ (5,276,037) |
| $ (2,854,493) | |
Net loss for the year ended December 31, 2016 |
|
|
|
| - |
| $ - |
| - |
| (173,022) |
| $ (173,022) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance, December 31, 2016 | - |
| - |
| 36.719,854 |
| $ 36,720 |
| $ 2,384,824 |
| $ (5,449,059) |
| $ (3,027,515) | |
The notes are an integral part of the consolidated financial statements
HST Global, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
| Year Ended |
| Year Ended |
| December 31, 2016 |
| December 31, 2015 |
Cash Flows From Operating Activities: |
|
|
|
Net loss | $ (173,022) |
| $ (195,795) |
Adjustments to reconcile net loss to net cash used by operating activities: |
|
|
|
Expenses paid on behalf of the Company | - |
| 4,769 |
Changes in operating assets and liabilities: |
|
|
|
Accounts payable and accrued expenses | (4,656) |
| 17,709 |
Accrued officer compensation | 120,000 |
| 120,000 |
Accrued related party interest | 35,748 |
| 35,748 |
Net Cash used in Operating Activities | (21,930) |
| (17,569) |
|
|
|
|
Cash Flows From Investing Activities: |
|
|
|
Net Cash used in Investing Activities | - |
| - |
|
|
|
|
Cash Flows From Financing Activities: |
|
|
|
Proceeds from notes payable - related party | 22,200 |
| 17,600 |
Repayment on notes payable - related party |
|
|
|
Net cash provided by financing activities | 22,200 |
| 17,600 |
|
|
|
|
Net Increase in cash | 270 |
| 31 |
|
|
|
|
Cash at Beginning of Period | 195 |
| 164 |
|
|
|
|
Cash at End of Period | $ 465 |
| $ 195 |
|
|
|
|
Supplemental Disclosures of Cash Flow Information |
|
|
|
|
|
|
|
Cash Paid For: |
|
|
|
Cash paid for interest | $ - |
| $ - |
Cash paid for taxes | $ - |
| $ - |
|
|
|
|
The notes are an integral part of the financial statements
F-11
HST Global, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2016 and 2015
NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES
HST Global, Inc. (“the Company”) was incorporated on April 11, 1984 under the laws of the State of Delaware under the name of NT Holding Corporation. The Company has made several acquisitions and disposals of various business entities and activities. On May 9, 2008, the Company entered into a Merger and share exchange agreement with Health Source Technologies, Inc. This business acquisition has been accounted for as a reverse merger or recapitalization of Health Source Technologies, Inc. At the time of the merger NT Holding Corporation had disposed of its assets and liabilities and had minimal operations and was considered a development stage company. Immediately after the acquisition the Company changed its name to HST Global, Inc. Health Source Technologies, Inc. was incorporated under the laws of the State of Nevada on August 6, 2007. The Company is currently headquartered in Hampton, Virginia.
HST Global, Inc. is an integrated Health and Wellness Biotechnology company that is developing and/or acquiring a network of Wellness Centers worldwide with the primary focus on homeopathic and alternative treatments of late stage cancer and other life threatening diseases. In addition, the Company intends to acquire innovative products for the treatment of life threatening diseases. The Company primarily focuses on homeopathic and alternative product candidates that are undergoing or have already completed significant clinical testing for the treatment of late stage cancer and/or life threatening diseases.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements and related notes include the activity of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-K.
Princliples of Consolidation
The consolidated financial statements include our wholly-owned subsidiary. Intercompany balances and transactions have been eliminated.
Accounting Method
The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year-end.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.
F-12
Income Taxes
The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.
The Company applies the provisions of ASC 740, “Accounting for Uncertainty in Income Taxes”. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits during the years ended December 31, 2016 and 2015, nor were any interest or penalties accrued as of December 31, 2016 and 2015.
Basic and Diluted Loss Per Share
The computations of basic loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements. The Company computes net income (loss) per share in accordance with ASC 260. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is antidilutive. The Company had no common stock equivalents outstanding as of December 31, 2016 and 2015.
Stock-Based Compensation
The Company adopted ASC 718,“Stock Compensation”,upon inception at August 6, 2007. Under ASC 718, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values. As of December 31, 2016, the Company has not issued any employer stock options.
Fair Value of Financial Instruments
The Company adopted ASC 820 which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under this standard certain assets and liabilities must be measured at fair value, and disclosures are required for items measured at fair value.
The Company currently does not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1.
F-13
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
Recently Issued Accounting Pronouncements
Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.
NOTE 3 – GOING CONCERN
The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
Management’s plan to support the Company in its operations and to maintain its business strategy is to raise funds through public offerings and to rely on officers and directors to perform essential functions with minimal compensation. If the Company does not raise all of the money it needs from public offerings, it will have to find alternative sources, such as a second public offering, a private placement of securities, or loans from its officers, directors or others. If the Company requires additional cash and is unable to raise it, it will either have to suspend operations until the cash is raised, or cease business entirely.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – ACCOUNTS PAYABLE AND ACCURED EXPENSES – RELATED PARTIES
Accounts payable and accrued expenses consist of the following at December 31, 2016 and 2015:
| December 31, 2016 |
| December 31, 2015 |
The Health Network, Inc. | $ 365,462 |
| $ 365,462 |
Ronald Howell | 43,770 |
| 43,770 |
Eric Clemons | 96,727 |
| 96,727 |
Total | $ 505,959 |
| $ 505,959 |
Please see Note 6 for further explanation of these liabilities.
NOTE 5 – NOTES PAYABLE – RELATED PARTIES
During the year ended December 31, 2016, the Company received $22,200 in additional cash loans from various related parties.
During the year ended December 31, 2015, the Company received $17,600 in additional cash loans from various related parties and $4,769 in expenses paid on behalf of the Company.
F-14
Total related party notes payable as of December 31, 2016 were $1,321,669. Of this total, $595,800 of related party notes payable is unsecured, bears interest at 6 percent per annum, and is due on demand. Also of this total, $200,000 is unsecured, bears a flat owed interest amount of $46,000, and is due on demand. The remaining $467,500 of related party notes payable is unsecured, bears no interest, and is due on demand.
Included in the related party notes payable balance is a $50,000 penalty fee associated with one of its related party notes due to nonpayment.
NOTE 6 - RELATED PARTY TRANSACTIONS
Executive Offices
The Company's executive offices are located at 150 Research Dr., Hampton VA. These offices are leased by The Health Network, Inc. ("THN"), of which Ron Howell is President. THN allows the Company to use the office space without a formal sublease or rental agreement.
The Company currently accrues $0.00 per month as a general operating fee, which covers use of the office space, use of certain equipment, and various other services. At December 31, 2016 and 2015, the Company owes THN an amount of $365,462 and $365,462 respectively, for amounts due under this agreement.
Consulting Agreements
The Company has entered into a consulting agreement with Mr. Howell, President of the Company, whereby the Company agreed to pay Mr. Howell $10,000 per month for consulting services through December 31, 2010. Mr. Howell received 714,286 shares of common stock valued at $120,000 as a partial payment for amounts owed under this agreement. The consulting agreement may be terminated at will by the Company. The Company intends to continue to engage Mr. Howell as a consultant until his consulting services are no longer required. Mr. Howell received 1,000,000 shares of common stock valued at $40,000 in February of 2011 as partial payment for amounts due under this agreement. As of December 31, 2016 and 2015, the Company owes Mr. Howell $800,000 and $680,000, respectively under the agreement.
The Company has entered into a consulting agreement with Eric Clemons, a shareholder of the Company, whereby the Company agreed to pay Mr. Clemons $10,000 per month for consulting services through December 2009. This employment agreement carried the provision that it could be extended beyond this date upon mutual agreement by both parties and that the agreement could be canceled by the Company at any time after that date. Mr. Clemons received 1,471,419 shares of common stock valued at $103,000 as a partial payment for amounts owed under this agreement in January of 2010. The Company continued to accrue amounts owed under this agreement through July of 2010. The balance owed to Mr. Clemons at December 31, 2016 and December 31, 2015 is $70,000 and $70,000, respectively under this agreement. The Company disputes this amount and is currently assessing legal issues surrounding this obligation.
NOTE 7 – INCOME TAXES
The Company follows ASC 740, under which deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.
F-15
The cumulative tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows:
| December 31, 2016 |
| December 31, 2015 |
Income tax benefit attributable to: |
|
|
|
Net operating loss | $ (58,827) |
| $ (66,570) |
Common stock issued for services | - |
| - |
Change in valuation allowance | 58,827 |
| 66,570 |
Net refundable amount | $ - |
| $ - |
The cumulative tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows:
| December 31, 2016 |
| December 31, 2015 |
Deferred tax asset attributable to: |
|
|
|
Net operating loss carry forwards | $ (1,887,314) |
| $ (1,828,487) |
Common stock issued for services | 184,072 |
| 184,072 |
Valuation allowance | 1,703,242 |
| 1,644,415 |
Net deferred tax asset | $ - |
| $ - |
The Company’s zero percent effective tax rate for each year, as compared to the 34 percent statutory rate, results from non-deductible stock based compensation and the change in valuation allowance.
At December 31, 2016, the Company had an unused net operating loss carry-forward of approximately $1,887,314 that is available to offset future taxable income; the loss carry-forward will begin to expire in 2027.
NOTE 8 – SUBSEQUENT EVENTS
In accordance with ASC 855, Company management reviewed all material events through the date of this report and determined that there are no material subsequent events to report.
F-16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures
Our management, including our Principal Executive and Principal Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2016. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized, and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2016.
(b) Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-a5(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision of our Chief Executive Officer and Chief Financial Officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2016 and there are material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The material weaknesses relate to the limited number of persons responsible for the recording and reporting of financial information, the lack of separation of financial reporting duties, and the limited size of our management team in general. We are in the process evaluating methods of improving our internal control over financial reporting, including the possible addition of financial reporting staff and the increased separation of financial reporting responsibility, and intend to implement such steps as are necessary and possible to correct these material weaknesses.
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(c) Change in Internal Controls
There were no changes in our internal control over financial reporting during the year ended December 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Director And Executive Officer Summary
The following table sets forth the names, ages, and principal offices and positions of our current directors, executive officers, and persons we consider to be significant employees. The Board of Directors elects our executive officers annually. Our directors serve one-year terms or until their successors are elected, qualified and accept their positions. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. There are no family relationships or understandings between any of the directors and executive officers. In addition, there was no arrangement or understanding between any executive officer and any other person pursuant to which any person was selected as an executive officer.
Name of Director or Officer | Age | Position |
Ronald R. Howell | 69 | Chief Executive Officer, Chairman of the Board of Directors and Interim Chief Financial Officer |
Executive Officer and Director Bios
Ronald R. Howell, Chief Executive Officer, Chairman and Interim Chief Financial Officer: Mr. Howell has over 30 years of diversified leadership experience. He has distinguished himself in various businesses and held executive positions in various industries including real estate, distribution, national and international sales, wholesale and retail marketing, financial service. Mr. Howell serves as the CEO and President of The Health Network, Inc. and has served in that capacity for over 5 years. The Health Network, Inc. is a direct sales and marketing company in the nutraceutical industry.
Holding a Bachelor's Degree in Management from the University of Maryland and an MBA from the Sellinger School of Business and Management at Loyola College, Mr. Howell has also taught as an Adjunct Professor at Loyola College in Baltimore, Maryland. Ron also served his country as a United States Marine.
Legal and Disciplinary History
No officer, director or control person of the Company has been the subject of:
1. A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);
2. The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person's involvement in any type of business, securities, commodities, or banking activities;
3. A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or
4. The entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended or otherwise limited such person's involvement in any type of business or securities activities.
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Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires our directors and officers, and persons who own more than ten percent of the Common Stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC") and the American Stock Exchange. SEC regulations require reporting persons to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of the Forms 3, 4 and 5 and amendments thereto furnished to us by the persons required to make such filings during fiscal 2015 and our own records, we believe that no director or officer failed to file timely any beneficial ownership report.
Corporate Governance.
We have not adopted a code of ethics do date. We are in the process of evaluating the standards of conduct necessary for the deterrence of malfeasance and the promotion of ethical conduct and accountability, and will determine whether a code of ethics is necessary based on our evaluation.
The Company does not have a standing Nominating Committee. There have been no changes to the procedures whereby security holders may recommend nominees to the registrant's board of directors.
The Company is not a "listed issuer" as defined by Rule 10A-3, and does not have a standing Audit Committee. We do not have a financial expert serving on our board of directors.
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Discussion and Analysis
We do not have a standing compensation committee. Our board of directors as a whole makes the decisions as to employee benefit programs and officer and employee compensation. The primary objectives of our executive compensation programs are to:
-
attract, retain and motivate skilled and knowledgeable individuals;
-
ensure that compensation is aligned with our corporate strategies and business objectives;
-
promote the achievement of key strategic and financial performance measures by linking short-term and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals; and
-
align executives' incentives with the creation of stockholder value.
To achieve these objectives, our board of directors evaluates our executive compensation program with the objective of setting compensation at levels they believe will allow us to attract and retain qualified executives. In addition, a portion of each executive's overall compensation is tied to key strategic, financial and operational goals set by our board of directors. We also generally provide a portion of our executive compensation in the form of options that vest over time, which we believe helps us retain our executives and align their interests with those of our stockholders by allowing the executives to participate in our longer term success as reflected in asset growth and stock price appreciation.
Page 20
Named Executive Officers
The following table identifies our principal executive officer, our principal financial officer and our most highly paid executive officers, who, for purposes of this Compensation Disclosure and Analysis only, are referred to herein as the "named executive officers."
Name |
| Corporate Office |
Ron Howell |
| Chief Executive Officer and Interim Chief Financial Officer |
Components of our Executive Compensation Program
The primary elements of our executive compensation program will be base salaries and option grant incentive awards, although the board of directors has the authority to award cash bonuses, benefits and other forms of compensation as it sees fit.
The Company has entered into a consulting agreement with Mr. Howell whereby the Company agreed to pay Mr. Howell $10,000 per month. The consulting agreement may be terminated at will by the Company. The Company intends to continue to engage Mr. Howell as a consultant until his consulting services are no longer required.
We do not have any formal or informal policy or target for allocating compensation between short-term and long-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, we have determined subjectively on a case-by-case basis the appropriate level and mix of the various compensation components. Similarly, we do not rely on benchmarking against our competitors in making compensation related decisions.
Base salaries – Base salaries will be used to recognize the experience, skills, knowledge and responsibilities required of our named executive officers. Base salary, and other components of compensation, may be evaluated by our board of directors for adjustment based on an assessment of the individual's performance and compensation trends in our industry.
Equity Awards –Our stock option award program will be the primary vehicle for offering long-term incentives to our executives. To date, we have not issued any equity awards. We intend our equity awards to executives to generally be made in the form of warrants. We believe that equity grants in the form of warrants provide our executives with a direct link to our long-term performance, create an ownership culture, and align the interests of our executives and our stockholders.
Cash bonuses –Our board of directors has the discretion to award cash bonuses based on our financial performance and individual objectives. The corporate financial performance measures (revenues and profits) will be given the greatest weight in this bonus analysis. We have not yet granted any cash bonuses to any named executive officer nor have we yet developed any specific individual objectives while we wait to attain revenue and profitability levels sufficient to undertake any such bonuses.
Benefits and other compensation –Our named executive officers are permitted to participate in such health care, disability insurance, bonus and other employee benefits plans as may be in effect with the Company from time to time to the extent the executive is eligible under the terms of those plans. As of the date of this Registration Statement, with exception to health care, we have not implemented any such employee benefit plans.
Page 21
Description of Compensation Agreements and Arrangements
As discussed below, we have not agreed to pay the Named Executive Officers an annual salary. We will negotiate base salary in the near future. Base salary may be increased from time to time with the approval of the board of directors. The following table summarizes the agreed annual salary of each of the named executive officers:
Summary Annual Salary
Name |
| Annual Salary |
Ron Howell |
| 01 |
(1)
Mr. Howell has agreed to defer receiving an annual salary. He has received $10,000 per month thru December 31, 2016 from the Company pursuant to a consulting agreement. See "Relationships and Related Transactions," below.
Ron Howell, Chief Executive Officer –Mr. Howell currently does not receive compensation for his services as Chief Executive Officer. He has agreed to defer compensation until the Company obtains sufficient financing. The Board of Directors will determine what level of compensation is appropriate to offer Mr. Howell in the near future.
Grants of Plan-Based Awards Table for Fiscal Year 2016
The Company currently does not participate in any equity award plan. During fiscal 2016, we did not grant any equity awards under any equity award plan.
Option Exercises for Fiscal 2016
During fiscal 2016, none of the named executive officers exercised options.
Nonqualified Deferred Compensation
To date, we currently offer no defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified to any of our employees, including the named executive officers.
Compensation of Directors
We intend to use a combination of cash and equity-based compensation to attract and retain candidates to serve on our board of directors. We intend to compensate directors who are also our employees for their service on our board of directors. Therefore, Mr. Howell will receive compensation for his service on our board of directors, which compensation has not yet been determined.
Compensation Committee Interlocks and Insider Participation
We do not currently have a standing Compensation Committee. Our entire board of directors participated in deliberations concerning executive officer compensation.
Compensation Committee Report
The board of directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the board of directors has recommended that this Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.
Page 22
Summary Compensation Table
The following table sets forth the total compensation paid to, or accrued by, the Named Executive Officers and other employees earning over $100,000 per year during the fiscal years ended December 31, 2015 and 2016. No restricted stock awards, long-term incentive plan payout or other types of compensation, other than the compensation identified in the chart below and its accompanying notes, were paid to these executive officers during those fiscal years.
1. Mr. Howell receives $10,000 per month from the Company pursuant to a consulting agreement.
Outstanding Equity Awards At Fiscal Year End Table
The following table sets forth information regarding the outstanding warrants held by our named officers as of December 31, 2016.
| Option Awards | ||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price ($) | Option Expiration Date |
|
|
|
|
|
|
Ron Howell | - | - | - | - | - |
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership of our common stock as of December 31, 2016. The table shows the amount of shares owned by:
Identity of Person or Group |
| Shares Beneficially Owned |
| Percent of Shares Beneficially Owned1 |
| Class |
Ronald R. Howell |
| 27,041,982(2) |
| 73.6% |
| Common |
|
|
|
|
|
|
|
All Directors and Officers as a Group |
| 27,041,982 |
| 73.6% |
| Common |
(1)
The percentage of shares owned is based on 36,719,854 shares of common stock outstanding as of December 31, 2015. Where the beneficially owned shares of any individual or group in the following table includes any options, warrants, or other rights to purchase shares, the percentage of shares owned includes such shares as if the right to purchase had been duly exercised.
(2)
Includes 12,371,982 held personally, and 14,670,000 held by The Health Network, Inc., of which he is President.
Beneficial Ownership of Securities: Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, involving the determination of beneficial owners of securities, a beneficial owner of securities is person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has, or shares, voting power and/or investment power with respect to the securities, and any person who has the right to acquire beneficial ownership of the security within sixty days through means including the exercise of any option, warrant or conversion of a security.
ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Executive Offices
The Company's executive offices are located at 150 Research Dr., Hampton VA. These offices are leased by The Health Network, Inc. ("THN"), of which Ron Howell is President. THN allows the Company to use the office space without a formal sublease or rental agreement.
The Company currently pays The Health Network, Inc. $0.00 per month as a general operating fee, which covers use of the office space, use of certain equipment, and various other services.
Consulting Agreements
The Company has entered into a consulting agreement with Mr. Howell whereby the Company agreed to pay Mr. Howell $10,000 per month. The consulting agreement may be terminated at will by the Company. The Company intends to continue to engage Mr. Howell as a consultant until his consulting services are no longer required.
Director Independence
The Company is not listed on any national exchange, or quoted on any inter-dealer quotation service, that imposes independence requirements on any committee of the Company's directors, such as an audit, nominating or compensation committee. The company's Board of Directors consists of Ron Howell, who is not independent.
Page 24
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following is a summary of the fees paid to Sadler, Gibb & Associates LLC, the Company's independent public accounting firm, during the fiscal years ended December 31, 2015 and 2016.
| 2016 |
| 2015 |
Audit fees | $ 13,500 |
| $ 13,500 |
Audit-related fees | - |
| - |
Tax fees | - |
| - |
All other fees | - |
| - |
Total | $ 13,500 |
| $ 13,500 |
Audit Committee Pre-Approval of Services of Principal Accountants
We do not currently have an audit committee appointed by the Board of Directors and the full Board of Directors did not vote on whether any non-audit services impacted our auditor's independence. We currently do not have any policy for approval of audit and permitted non-audit services by our independent auditor. We plan to appoint an audit committee by our Board of Directors and adopt procedures for approval of audit and non-audit services.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Financial Statements and Schedules.
The following consolidated financial statements of HST Global, Inc. are included herein beginning on page F-9:
·
Report of Independent Registered Public Accounting Firm
·
Consolidated Balance Sheets as of December 31, 2016 and 2015
·
Consolidated Statements of Operations for the years ended December 31, 2016, and 2015
·
Consolidated Statements of Changes in Stockholders' Interest for the years ended December 31, 2016 and 2015
·
Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015
·
Notes to Consolidated Financial Statements
Exhibits
The following Exhibits are included herein:
Exhibit No. |
| Description |
31.1 |
| Certification by the Chief Executive Officer of Competitive Technologies, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). |
31.2 |
| Certification by the Chief Financial Officer of Competitive Technologies, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). |
32.1 |
| Certification by the Chief Executive Officer of Competitive Technologies, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). |
32.2 |
| Certification by the Chief Financial Officer of Competitive Technologies, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). |
101 |
| Interactive Data Files |
SIGNATURES
Pursuant to the requirements of 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, thereunto duly authorized.
HST GLOBAL, INC.
(the registrant)
By:\s\ Ron Howell
Ron Howell
Chief Executive Officer
Date: March 31, 2017
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