UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2011
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: 333-174859
GLOBAL GREEN, INC.
------------------
(Exact name of registrant as specified in its charter)
Florida 20-1515998
------------------------------- ---------------------
State or other jurisdiction I.R.S. Employer
of incorporation or Identification No.
organization
2820 Remington Circle
Tallahassee, FL 32308
----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(850)597-7906
Securities registered pursuant to Section 12(b) of the Act:
Title of each class registered Name of each
exchange on which
registered
------------------------------- ---------------------
Not Applicable Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
------------
(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. |_|
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 Website, if any, every Interactive Data file required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files)
Yes |_| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 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
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One).
Large accelerated filer [___] Accelerated filer [___]
Non-accelerated filer [___] 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|
The aggregate market value of voting stock held by non-affiliates (81,044,375
shares) of the registrant as of March 27, 2012 was $0. The Company's common
stock was listed for trading on the Over the Counter Market, at this time no
shares of stock have traded and therefor the aggregate market value of the
shares is calculated to be $0.
There were 745,761,432 shares outstanding of the registrant's Common Stock as of
March 27, 2012.
TABLE OF CONTENTS
PART I
ITEM 1 Business 1
ITEM 1 A. Risk Factors 13
ITEM 1 B. Unresolved Staff Comments 23
ITEM 2 Properties 23
ITEM 3 Legal Proceedings 23
ITEM 4 Mine Safety Disclosures 23
PART II
ITEM 5 Market for Registrant's Common Equity, Related Stockholder Matters and 24
ITEM 6 Selected Financial Data 25
ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations 25
ITEM 7A Quantitative and Qualitative Disclosures About Market Risk 29
ITEM 8 Financial Statements and Supplementary Data 29
ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosures 30
ITEM 9A Controls and Procedures 30
ITEM 9B Other Information 30
PART III
ITEM 10 Directors, Executive Officers, and Corporate Governance 30
ITEM 11 Executive Compensation 32
ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters 34
ITEM 13 Certain Relationships and Related Transactions, and Director Independence 35
ITEM 14 Principal Accounting Fees and Services 36
PART IV
ITEM 15 Exhibits, Financial Statement Schedules 37
SIGNATURES 38
FORWARD LOOKING STATEMENTS
This document includes forward-looking statements, including, without
limitation, statements relating to Global Green, Inc. ("Global Green") plans,
strategies, objectives, expectations, intentions and adequacy of resources.
These forward-looking statements involve known and unknown risks, uncertainties,
and other factors that may cause Global Green's actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. These
factors include, among others, the following: ability of Global Green's to
implement its business strategy; ability to obtain additional financing; Global
Green's limited operating history; unknown liabilities associated with future
acquisitions; ability to manage growth; significant competition; ability to
attract and retain talented employees; and future government regulations; and
other factors described in this document or in other of Global Green's filings
with the Securities and Exchange Commission. Global Green is under no
obligation, to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
For further information about these and other risks, uncertainties and factors,
please review the disclosure included in this report under Item 1A "Risk
Factors."
PART I
ITEM 1. BUSINESS
------- --------
History
Global Green, Inc. (formerly Global Tech Assets, Inc.) ("We," "Us," "Our", "the
Company") was initially incorporated on July 12, 2004, in the state of Florida,
as a wholly-owned subsidiary, of Global Assets & Services, Inc., a public
company. The Company was transferred all of the non-operating licenses held by
Global Assets & Services, Inc. At that time, all of the outstanding stock of
Global Tech Assets, Inc., 3,141,597 shares, was distributed to the shareholders
of Global Assets & Services, Inc.
During 2002 and 2003, Global Asset & Services, Inc. was working to develop
technology licensing agreements for such information systems, the use of an
inorganic harding agent and its manufacturing process, a method of recovering of
polystyrene waste materials and a use of an information system for personal
computer memory cards (PCMIA Cards). Global Assets & Services, Inc. did not
pursue the development, marketing or extension of any of these potential license
agreements. Further, none of these potential license agreements have any bearing
on the Company's current business operations.
In September of 2004, due to business reasons, management ceased operational
activities to further develop the licenses. During this time, Global Assets &
Services, Inc. was spun off into a separate legal entity from Global Tech
Assets, Inc. From that time to the present, the business had no viable
operations. The Company's name was changed to Global Green, Inc. on April 14,
2010 to reflect the new business model developed by management.
On November 30, 2010, the Company entered into a Share Exchange Agreement with
Nutritional Health Institute Laboratories, LLC ("NHIL"), a Florida Limited
Liability Company, and its wholly- owned subsidiary Global Green International,
Inc. ("Global Green International"), a Florida corporation. Pursuant to the
Share Exchange Agreement, NHIL transferred 100% of the issued and outstanding
common stock of Global Green International (a total 600,000,000 shares, held
solely by NHIL) to the Company in exchange for 683,097,847 shares of common
stock of Global Green, Inc. After the exchange, NHIL held 92.99% of the issued
and outstanding common stock of the Company, and Global Green International
became a wholly-owned subsidiary of the Company.
1
RELATIONSHIP WITH NHIL
----------------------
NHIL owns 89.13% of the Company's common stock and as such is not only the
Company's parent company, but also its majority and controlling shareholder.
NHIL owns all of the patents and trademarks associated with the Salmogenic
Vaccine.
On November 29, 2010, the Company entered into a License Agreement with NHIL,
our majority shareholder. The License Agreement provides us with exclusive
license to perform the final phase of the USDA study and to manufacture,
distribute, market and sell the Salmonella Vaccine and the Salmonella Antigen,
not only in the United States, but also worldwide. Though, at this time, the
Company has not made any plans regarding operations outside of the United
States. As part of the consideration of the License Agreement, the Company has
agreed to undertake the financial obligations for the acquisition of any patents
and obtaining USDA approval, in addition to the issuance of the 683,097,847
shares to NHIL. The License Agreement has no provisions for termination, unless
the Company defaults on its responsibilities, and is perpetual.
At March 27, 2011, NHIL holds 664,717,057 shares of common stock or 89.13% of
the issued and outstanding common stock of the Company.
COMPANY OVERVIEW
----------------
We have been inactive during the last 5 years. We have no recent operating
history and no representation is made, nor is any intended that we will able to
carry on our activities profitably. Our main emphasis will be to finish the
final phase of the USDA study, find a partner to manufacture the vaccine, and
obtain USDA approval
We are a scientific research and development company of biologics products to
domestic and international markets. Our background and expertise is in the
research, testing, and development of vaccines for applications to animals to
make the growing of these animals for human food sources both healthy for the
animals, economical for the growers and most importantly our vaccine protect
humans from diseases that are transmittable from animal food sources for adult
and child safety.
Our current business plan is focused on the agricultural animal industry, more
specifically, "Salmogenics," a poultry salmonella vaccine. NHIL owns the
exclusive rights to the Salmogenics Vaccine (hereinafter the "Vaccine") and a
Salmonella Antigen (hereinafter the "Antigen") which both provide a method for
controlling intestinal pathogenic organisms in animals. The Company has received
the exclusive rights to finish the final phase of the USDA study and to
manufacture, distribute, market and sell the vaccines by NHIL through a
Licensing Agreement with Global Green International, the wholly-owned subsidiary
of the Company. Under the Licensing Agreement with NHIL, the Company is
responsible for all financial obligations to obtain United States Department of
Agriculture ("USDA") approval. The Company is in the process of having the
Vaccine and Antigen approved by the United States Department of Agriculture/Food
Safety and Inspection Service ("USDA/FSIS").
The Company focuses on the commercialization of the salmonella vaccine for
poultry industry markets. In 2008, NHIL obtained the ownership rights to the
vaccine and took over the funding of a research study that had been in process
since 1996, and initiated the drafting and filings of patent application for the
vaccine. Research was being conducted through an unrelated third party,
AHPharma. AHPharma was informally engaged to conduct not only research and
development, but also to perform the testing of the vaccine product in the
poultry industry. On July 30, 2011, the Company entered into a Cost and
Evaluation Agreement with AHPharma. The Cost and Evaluation Agreement provides
for the responsibilities of AHPharma in connection with the Phase 4 trials and
testing required by the USDA in exchange for payment a total payment of
$300,000. The Cost and Evaluation Agreement terminates upon the final approval
of the USDA.
2
At this time, the USDA has reviewed the results of the research which showed the
vaccine used in the study is safe, non-toxic and causes no harm to the animal,
and reduced the number of salmonella contamination and therefore has allowed the
research to go to the final phase for approval by USDA for the Company to show
efficacy of the vaccine in a commercial setting with large numbers of chickens
and also to find a potential manufacturer for the vaccine. The Company has begun
the final phase and AHPharma has begun collecting salmonella samples from
multiple locations within the United States to start the mock study that was
requested by USDA. The Company at the time of this filing has not entered into
any agreement with a third party to manufacture the vaccine.
OUR PRODUCT
Our product, Salmogenics, is in the form of a vaccine that is injected in the
egg, before it hatches, to give immunity to the Salmonella bacteria to the chick
(Gallus domesticus -genus and species) Salmogenics is a multi-valent vaccine
designed to protect against several strains of Salmonella bacteria and other
opportunistic bacteria that frequently associate with Salmonella bacteria that
further endangers the host's (chick's) survivability.
The advantages of our vaccine when injected in ovo (into the fertilized egg)
are:
o While the animal health industry has developed a variety of treatments
for the prevention of poultry diseases, these treatments are not always
administered to the birds in ways that ensure effective and consistent
results.
o Conventional application has been post- hatch (administered the 1st
week after the chick is born) through feed and drinking water, via a
spray that treats the birds through their mucus membranes or costly
hand vaccinations.
o Such treatments require multiple post-hatch vaccinations and field
boosters, involving costly guesswork and are labor intensive. The
result is inefficient, costly, inconsistent vaccine delivery.
In ovo delivery of the vaccine overcomes problems that have arisen over the
years when using water borne or spray vaccinations with chickens:
o Many poultry caretakers and/or broiler farmers are involved
o A variety of vaccination equipment is used on different farms
o Re-use of containers with viable vaccine residues
o Blocked spray nozzles
o Incorrect spray pressure resulting in defective distribution patterns
o Poor water quality (pH, minerals)
o Use of hot water to reconstitute freeze dried vaccine pellets
o Mixing heat and time sensitive vaccines for a complete day of vaccinations
o Incorrect dosage of vaccine for reconstitution
o Incorrect dosage of diluent for dilution
o Water lines contaminated with bacteria and/or carrying heavy biofilm loads
o Too long or too short time within waterlines
o Blocked needles or tubing
o Defective vaccine reservoirs
o Use of improperly handled diluents
o Incorrect calibrated syringes
o All of the above problems require added human interactions and added labor
costs, as well as stress on the birds increasing mortality rates and
negatively affecting "Food Conversion."
The laboratory concept of `in the egg' vaccination was initially used for a
Marek's disease (MD) vaccine and has been expanded into a commercially applied
technology platform that is capable of placing several antigens and compounds
simultaneously into over 50,000 eggs per hour.
3
Marek's disease is a highly contagious virus that causes the enlargement of
nerves and organs in poultry. The Marek's disease vaccine was one of the first
vaccines to use related viruses as a vaccine to fight a virus. Prior to the
development of the vaccine, Marek's disease was responsible for the devastation
of whole flocks of poultry. The vaccine was one of the first to be successfully
developed for administered by in -ovo vaccination when the eggs are transferred
from the incubator to the hatcher.
In ovo vaccination enables downstream process improvements in efficiencies such
as high speed separation of chick and un-hatched eggs, rapid placement or
reduced time from hatcher to farm, targeted precise therapeutic intervention and
reduction of handling stress on the birds.
In ovo vaccination offers many advantages over other treatments, such as:
o Earlier immunity - an earlier exposure to various vaccines improves the
bird health and disease resistance at the time when they are placed on the
farm.
o Uniform delivery - in ovo vaccination allows an automated and uniform
process for delivering consistent volumes and concentrations of vaccines to
every bird when compared to the previously used subcutaneous method of
vaccination at day of hatch.
o Fast delivery - time is reduced from hatcher to farm with vaccinations
after hatching being eliminated.
o Reduced stress - birds are less stressed when vaccinated in ovo versus
handling and injection after hatch.
o Reduced labor costs - a reduction in the need for the labor associated with
day of hatch subcutaneous vaccination is immediately realized. Compared to
the day of hatch vaccination method there is a reduction in labor required
to vaccinate the embryos.
o Future products - new products and vaccines have recently been marketed and
more are being developed that will effectively control diseases when
applied in ovo.
The manufacturing of our vaccine will be with seasoned pharmaceutical vaccine
manufacturers.
SALMOGENICS VACCINE
-------------------
Salmogenics stimulates an immune response in inoculated poultry to fight several
intestinal pathogenic organism that include seven field strains of E. coli,
Psedomona aeruginosa, Aerobacter aerogenes, and four Salmonella strains. The
chicken egg, when properly vaccinated with Salmogenics, hatches a Salmonella
resistant chick that requires fewer antibiotics. Therefore humans consume higher
quality meat grown with fewer antibiotics.
How Salmogenics Will Positively Effect Lives
Management estimates that 40 billion chickens will benefit from the Salmogenics
vaccine. Approximately, 1.3 billion humans get some form of Salmonella infection
per year, based upon industry statistics. (World Egg Industry - a few facts and
figures. International Egg Commission. (Web site accessed February 2008.)) The
Salmogenics Vaccine improves the immune system of the fowl, thereby improving
the health and welfare of the bird and those that eat chicken, turkey and other
fowl. The birds will be healthier and experience increased weight gain and
reduced mortality, a benefit for the poultry industry worldwide and humans
consuming chickens. This means not only a healthier chicken, but a healthy
source of protein for humans to consume, with much less fear that they will
become infected by Salmonella bacteria and suffer long-term illness or a worst
case scenario, death.
What Is Salmonella?
Salmonella is the scientific name for over 2,500 of types of bacteria. The types
are known to cause disease in humans, animals, and birds (especially poultry)
worldwide. The bacteria are widespread and found mainly in the intestines of
birds, reptiles and mammals. People can acquire the bacteria via a variety of
different foods of animal origin. The illness it causes is called salmonellosis.
4
What Are The Symptoms Of Salmonellosis?
The symptoms of Salmonellosis typically include fever, diarrhea and abdominal
cramps. In persons with poor underlying health or weakened immune systems,
Salmonella can invade the bloodstream and cause life-threatening infections.
Symptoms usually appear 12-72 hours after the ingestion of food contaminated
with Salmonella. and the illness from Salmonella usually last 4-7 days; mild
cases can usually recover, but it may be several months before your bowel habits
are entirely normal.
According to the U. S. Centers for Disease Control and Prevention ("CDC") this
common food-borne illness can do more than just give one diarrhea or a stomach
ache, but can cause the following long-term problems that appear 1-3 weeks
following infection:
o joint pain
o painful urination
o conjunctivitis
o knee pain
What Is Salmogenics Vaccine?
Salmogenics Vaccine is a patented vaccine for Salmonella. Salmogenics stimulates
an immune response in inoculated poultry to several intestinal pathogenic
organisms that include various Salmonella strains and several wild strains of
other frequent pathogenic bacteria.
Salmogenics contains the Sotomayor Antigen, which has been patented by the
Company's majority shareholder, NHIL. An antigen is a substance that, when
introduced into a body triggers the production of an antibody by the immune
system, which will then kill or neutralize the antigen that is recognized as a
foreign and potentially harmful invader. The Sotomayor Antigen pertains to a
particular composition of multiple germs, mainly of the Genus Salmonella, in
order to control intestinal pathogenic organisms in the chicken species.
How Salmogenics Will Positively Effect Lives
Approximately, 40 billion chickens a year will benefit from the Salmogenics
Vaccine. (World Egg Industry - a few facts and figures. International Egg
Commission. (Web site accessed February 2008.)
The Salmogenics Vaccine improves the immune system of the chick, thereby
improving the health and welfare of the bird and those that consume chicken,
turkey and other poultry. The birds are less susceptible to illness and
experience increased weight gain and reduced mortality, a big plus for the
poultry industry worldwide. This means not only a healthier chicken, but a
healthier source of protein for humans to consume with much less fear of
infection by Salmonella bacteria.
How Salmogenics Differs From Other Vaccines On the Market
o Some current vaccines may interfere with efficacy of other vaccines or
medications administered simultaneously with and/or subsequent to
vaccination.
o Salmogenics can be administered alone or with other vaccines. This
makes Salmogenics cost effective for chicken growers who grow for
worldwide consumption.
o Additionally, some antigens may interfere with or affect the accuracy
of traditional test or screening tools used to detect active or prior
infections.
o Salmogenics does not affect the accuracy of diagnostic procedures and
does not reduce the effectiveness of other vaccines. It can be
administered alone or with other vaccines thereby reducing the cost of
administration.
o Other vaccines are administered orally or through nasal passages or by
individual injection which requires man hours to handle.
5
The Salmogenics Vaccine can be administered with other vaccines, directly into
the egg, before the egg is hatched, without additional handling costs and
without human handling of the chick and stress to the live bird. Prior vaccines
generally failed to provide a Salmonella-containing multivalent vaccine
composition which is as effective as Salmogenics in inducing an immune response
to at least one intestinal pathogenic organism.
The USDA has recently ordered the poultry industry to reduce the percentage of
Salmonella infected chicken allowed on the market from 7% to 5%. Salmogenics has
been shown in efficacy studies to help accomplish these strict requirements set
forth by the USDA. (Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 /
Notices; Docket No. FSIS-2009-0034, 27288.)
MARKETING STRATEGY AND SIZE
The Company intends to market to the USA broiler young chicken and parental
industry, initially followed by commercial egg-type laying hen and egg markets.
USDA/FSIS regulatory approval is required for each specie and label claim. USA
young progeny broiler market consists of 8.64 billion processed annually in 2010
produced from approximately 40 million laying hens- both are considered viable
profitable markets for new technology vaccine markets. ("U.S. Poultry and Egg
Association, Economic Data, Poultry Production and Value Summary 2010",
www.poultryegg.org/economic data)
Following initial market entry into the young broiler chicken and parental
markets, the Company is responsible for all financial obligations as NHIL will
proceed to obtaining federal regulatory approval and initiate marketing efforts
into the commercial egg-type laying hen and egg markets. It is well recognized
that the Salmonella organism, once it infects the laying hen, will continue to
contaminate the egg as it tracks down the oviduct. Once the organism is present
in the egg, almost a perfect nutrient environment will assure that those persons
consuming an uncooked egg (a common practice in most parts of the world) will
become infected. Weaker human immune systems (i.e., the very young and very
elderly) have a greater chance of Salmonella infection.
The international animal industry is approximately 4-times the size of the
United States chicken industry. Single-organism Salmonella vaccines have been
used extensively in the United Kingdom plus those markets outside the United
Kingdom. The UK's regulatory agencies have strongly encouraged Salmonella
vaccines of both animal progeny and their parents. (WATTAgNet.com, "Global
Broiler Production to Maintain Growth" April 6, 2009)
PRODUCT CUSTOMER DECISIONS
The immediate customers are the poultry farms, specifically in the chicken
industry and, in particular, Poultry Company Veterinarians. Vaccine product use
decisions are fairly straightforward in the United States due to a limited
number of Poultry Company Veterinarians who will determine technology
need/worth, safety, efficacy and bottom-line profitability of the vaccine. Each
Veterinarian must persuade their top management and cost accountants by
conducting company field studies and demonstrations of cost-effectiveness as to
the reason to use the product.
Our potential end users of our product are the poultry farms, which in the
United States includes the companies listed in the following table.
6
TOP 10 BROILER CHICKEN COMPANIES
--------------------------------
Representing 73 % of the total chickens processed annually include:
------------------------------------------------------------------------------------------------------------------------------------
Annually Annual
Rank Broiler Chicken Company Processed (million)1 R-T-C 2 (lbs.)
------------------------------------------------------------------------------------------------------------------------------------
#1 Tyson Foods, Inc. 1,944 8,372
#2 Pilgrim's Pride Corp. 1,676 6,578
#3 Perdue Farms, Inc. 626 2,787
#4 Sanderson Farms, Inc. 405 2,566
#5 Koch Foods, Inc. 494 1,828
#6 Wayne Farms, LLC 289 1,807
#7 Mountaire Farms, Inc. 263 1,740
#8 House of Raeford Farms, Inc. 198 1,217
#9 Foster Farms, Inc. 296 1,037
#10 Peco Foods, Inc. 176 986
-
------------------------------------------------------------------------------------------------------------------------------------
TOP 10 TOTAL 6,369 million 28,920 million
ANNUAL TOTAL 8.64 billion 38.8 billion
TOP 10 (% of total) 73.7 % 74.5 %
------------------------------------------------------------------------------------------------------------------------------------
1 Number of birds that represents "Market Size" for the Company's product.
2 NOTE: R-T-C equals "Ready-To-Cook" chicken.
(Source: Watt PoultryUSA Feb. 2010, http://www.wattpoultryusa-digital.com and
U.S. Egg and Poultry Association http://www.poultryegg.org/economic_data/ (as of
Feb. 2010))
MARKET PENETRATION TECHNIQUES EMPLOYED
United States markets will be penetrated with a market entry program that will
include:
o Research data publications, including efficacy and safety research.
o Company and product name(s) recognition.
o Strong and reliable regulatory approvals and label claim development.
o Company presents at animal meetings (particularly and initially poultry
meetings and conventions).
o Company and product advertising in prominent animal production (especially
and initially the chicken production industry) and food safety
publications.
o A strong and well-experience technical staff that will work with the
technical experts in the poultry industry, such staff has not been
identified at the time of this filing.
o Strong sales force, with experience in the poultry industry.
7
COMPETITION, AREAS OF INTENDED USAGE, AND SUCCESS RATE
Historically, vaccines have generally failed to provide a multivalent antigen
(an antigen which stimulates production of multiple antibodies) composition
which can be easily and effectively administered in a commercial farm
environment at a reduced cost, while failing to provide a multivalent antigen
composition that can be utilized alone or in combination with vaccine products
for use with other diseases without reducing the efficacy of either vaccine
component and/or the ability to detect or diagnose particular diseases within
inoculated birds. Current vaccines competitive to the Company's include:
o Sporulin(TM), with the active ingredients Bacillus Subtilis
and Bacillus licheniformis, is fed via animal feed additive
with intended use in live performance general bacteria issues.
Typically, this product is used in live broiler young chicken
production operations. The product has been introduced with
very limited success. Sporulin is manufactured and sold by
Pacific Vet Group.
o FloraMax-B11(TM), that is a probiotic for poultry only, is and
administered as a water soluble additive with intended use in
Salmonella and E. coli food safety issues. Typically this
product is used in commercial egg-type and breeder hen
production operations. The product has had some success in
commercial egg-type laying hen operations. FloraMax-B11 is
manufactured and sold by Pacific Vet Group.
o LAYERMUNE(R) SE currently sets the standard in Salmonella
enteritidis protection of commercial egg-type laying hens in
the USA. CEVA, a French pharmaceutical company, received the
first USDA license for a poultry vaccine against S.
enteritidis with multiple strains aids for the reduction of
salmonella colonization of the intestinal tract thereby
reducing the risk of SE shed in the environment and egg shell
contamination. Introduced in 1992, LAYERMUNE(R) SE has been
instrumental in earning CEVA the #1 ranking in salmonella
vaccines in the U.S. The oil-based bacteria product is
administered to chickens via subcutaneous injections.
RECENT DEVELOPMENTS
The Company has successfully completed the requirements of Phase I, Phase II and
Phase III efficacy studies as set forth by the USDA, and the Salmogenics product
has currently entered into the final phase of becoming a USDA approved vaccine
for the in ovo vaccination of chicken eggs.
On January 28, 2011, strains of Salmogenics Vaccine were deposited with the
American Type Culture Collection Repository. The American Type Culture
Collection (ATCC) is a private, not-for-profit biological resource center whose
mission focuses on the acquisition, authentication, production, preservation,
development and distribution of standard reference microorganisms, cell lines
and other materials for research in the life sciences. The deposit was made in
order to have ATCC determine whether the Salmogenics Vaccines meet industry
standards.
8
On February 15, 2011, with USDA approval, AHPharma began the final phase of
Salmogenics Vaccine consisting of in house study ordered and required by USDA
for the chicken industry. The Company completed all prior requirements of the
USDA which included:
1. Phase I which involved independent research with Dr. James McNaughton, PhD
and AHPharma, Inc. which demonstrated that Salmogenics vaccine:
o Reduced fecal bacteria loads significantly for E. coli and Salmonella
bacteria
o Produced an average weight gain of 2% per bird.
o Reduced mortality.
2. Phase II demonstrated:
o In this phase various dosages of Salmogenics were tested to determine
the most efficient and cost effective amount of vaccine to be
administered to produce a chicken born with less or no Salmonella
bacteria.
o Clinical testing also showed that eggs treated with Salmogenics
Vaccine had a reduced mortality as compared to the control groups.
3. Phase III involved proving that Salmogenics Vaccine:
o When tested clinically, Salmogenics Vaccine showed to help reduce the
incidence of Salmonella and reach a point that meets the USDA
regulatory requirements.
o As of August 13, 2010, the USDA issued an edict that the acceptable
incidence of Salmonella for chicken growers had been reduced from 7%
to a 5% tolerance. Additionally, the Salmogenics Vaccine was
concomitantly administered with Marek's Vaccine and found to not alter
the effects of Marek's Vaccine nor the effectiveness of Salmogenics
Vaccine.
4. As of February 16, 2011, the Company was able to announce that the final
phase of USDA approval had begun, which involves:
o Meeting with the USDA for a review of the final steps.
o Selecting a vaccine manufacturer.
o The collection of salmonella strains for the mock study requested by
USDA.
o The approval of AHPharma by the USDA that their facilities will be
approved to perform the final field study for Salmogenics vaccine. The
number of birds to be tested is to be determined. This field study is
done to determine if any variations exist between previous efficacy
studies and studies done in the commercial field.
5. On May 3, 2011, the US Patent Office issued Patent No. 7,935,355
"Composition and Method for Controlling Intestinal Pathogenic Organisms"
for Salmogenics Vaccine.
6. On August 2, 2011, the US Patent Office issued Patent No. 7,988,978
"Composition and Method for Controlling Intestinal Pathogenic Organisms"
for Salmogenics Vaccine.
7. On November 28, 2011, the Salmonella challenge study, as part of the Phase
4 efficacy testing was completed. The results of the study were successful
and the Salmogenics Vaccine held up to the challenge for all Salmonella
strains tested. This placed the Company one step closer towards setting a
model study and protocols for a successful USDA required study after the
filing of our approved vaccine manufacturer.
8. On March 11, 2012, all the results and data have been included in a final
report of the test model for Efficacy Study done with 3,036 chickens. The
purpose of this Efficacy/Challenge study was to determine the effect on
chicken hatched after the in ovo administration of the Salmogenics Vaccine
3 days before hatching.
9
9. The Company's status regarding its Phase 4 efficacy testing is:
o Assure that the requirements from the vaccine manufacturer will meet
the standard batch consistency as defined by the USDA as part of the
efficacy requirements.
o Completion of the USDA approved large bird efficacy study to be done
by AHPharma which meets the following parameters:
o That the vaccine product can be safely and standardly
commercially applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines. This part of the study
has been completed and proven successful.
o Collect and present the data of the efficacy tests to be analyzed and
results sent to the USDA for final approval.
OUR STRATEGY
------------
The Company's objective is to be a leader in the commercialization of salmonella
vaccine products. To achieve this objective, we intend to:
o Management's current focus is on the final approval by the USDA of the
Company's sole product, the Salmogenics Vaccine. As the Company, moves
closer to final approval, it will begin to develop and focus efforts
on marketing and sales of the Salmogenics Vaccine.
o Expand our Portfolio of Products. The Company intends to expand its
existing portfolio of product candidates. The Company will take into
account market attractiveness, technical feasibility, the potential to
develop a proprietary position and the productiveness of animal models
in choosing among new product development opportunities. Though, at
the time of this filing, management has not taken any efforts and has
no plans to take any efforts in this direction.
o Broaden our licensee. The Company plans to broaden its portfolio of
licenses of and other technologies to develop new products and attract
corporate and academic collaborators. We intend to accomplish this
through internal and sponsored research, in-licensing and technology
acquisitions. Though, at the time of this filing, the Company has not
identified any such opportunities.
Competition:
Competition among entities attempting to identify and develop new therapies is
intense. The Company faces, and will continue to face, competition from
pharmaceutical and biotechnology companies, academic and research institutions
and government agencies, both in the United States and abroad. Many of the
Company's competitors have substantially greater capital resources, research and
development staffs, facilities, manufacturing and marketing experience,
distribution channels and human resources than the Company. Future competition
will likely come from existing competitors, as well as other companies seeking
to develop new treatments.
At this time, the Company has an exclusive license from NHIL. The Company may be
dependent on NHIL for support of certain of its technologies and intends to rely
on NHIL for development of any future products. Product candidates of the
Company, as it begins to pursue its strategy as discussed above, therefore, may
be subject to competition with a potential product under development by NHIL.
Rapid technological development by the Company or others may result in products
or technologies becoming obsolete before the Company can recover development
expenses. Products developed by the Company could be made obsolete by less
expensive or more effective technologies, even technologies unrelated to
salmonella vaccine. For example, competitors may also develop vaccines that may
compete with or obviate the need for the Company's products. There can be no
assurance that the Company will be able to make the enhancements to its
technology necessary to compete successfully with existing or newly emerging
technologies.
10
Government Regulation:
Prior to marketing, any products developed by the Company must undergo an
extensive regulatory approval process in the United States and other countries.
This regulatory process, which includes efficacy studies, and may include
post-marketing surveillance of each compound to establish its safety and
efficacy (effectiveness), can take many years and require the expenditure of
substantial resources. Efficacy studies are performed to determine the
effectiveness of the product on both a small and large scale. Post-marketing
surveillance requires that the Company continue to monitor the usage and
effectiveness of the product upon sale to users. Data obtained from efficacy
studies are subject to varying interpretations that could delay, limit or
prevent regulatory approval. Delays or rejections may also be encountered based
upon changes in USDA policies for vaccine approval during the period of product
development and USDA regulatory review. Similar delays may also be encountered
in obtaining regulatory approval in foreign countries. Delays in obtaining
regulatory approvals could adversely affect the marketing of any vaccine
developed by the Company or its corporate collaborators, impose costly
procedures upon the Company's or its corporate collaborators' activities,
diminish any competitive advantages that the Company may attain and adversely
affect the Company's receipt of revenues. There can be no assurance that
regulatory approval will be obtained for products developed by the Company.
Furthermore, regulatory approval may entail limitations on the indicated uses of
a proposed product.
As state previously, the Company is in the Phase 4 of the approval process where
efficacy testing has been defined as:
o The vaccine product must be safely commercially manufactured at a USDA
approved vaccine manufacturer;
o That every batch of the vaccine product produced during Phase 4
testing meets not only meets the required standards, but does so
consistently;
o That the vaccine product can be safely applied commercially by the
potential customers.
o That the claims of made regarding the vaccine product are sustainable
and reproducible when applied to larger populations.
The Company's status regarding Phase 4 efficacy testing is:
o In the process of identifying and contracting an USDA approved vaccine
manufacturer.
o Assure that the requirements from the vaccine manufacturer will meet
the standard batch consistency as defined by the USDA efficacy study.
o Completion of the USDA approved large bird efficacy study to be done
by AHPharma which met the following:
o That the vaccine product can be safely and standardly
commercially applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines. This has been proven
at the time of this filing.
o Collect and present the date to be analyzed and results sent to
the USDA for final approval.
The regulation of the Company's products and its ongoing research is subject to
change, and future legislative or administrative acts in the United States or
other countries could have a material adverse effect on the Company's business,
financial condition and results of operations. Regulatory requirements
ultimately imposed could adversely affect the ability of the Company's corporate
collaborators to perform efficacy studies, manufacture or market products, and
could significantly delay or reduce the milestone or royalty payments payable to
the Company.
11
Even if regulatory approval is obtained, a marketed product and its manufacturer
are subject to continuing review. Discovery of previously unknown problems with
a product may result in withdrawal of the product from the market, and could
have a material adverse effect on the Company's business, financial condition
and results of operations. Violations of regulatory requirements at any stage
during the regulatory process, including efficacy studies, the approval process,
post-approval or in GMP, may result in various adverse consequences to the
Company, including the USDA's delay in approval or refusal to approve a product,
withdrawal of an approved product from the market or the imposition of criminal
penalties against the manufacturer and license holder. There can be no assurance
that the Company will be able to conduct efficacy studies or obtain necessary
approvals from the USDA or other regulatory authorities for any products.
Further, the terms of approval of any marketing application, including the
labeling content, may be more restrictive than we desire and could affect the
marketability of the Company's proposed products. Failure to obtain required
governmental approvals will delay or preclude the Company or its corporate
collaborators from marketing products, or limit the commercial use of such
products, and could have a material adverse effect on the Company's business,
financial condition and results of operations.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
BACKLOG OF ORDERS
We currently have no orders for sales at this time.
GOVERNMENT CONTRACTS
We have no government contracts.
NUMBER OF PERSONS EMPLOYED
As of December 31, 2011, we had no full-time employees. Officers and Directors
work on an as needed part-time basis up to 30 hours per week.
DESCRIPTION OF PROPERTIES/ASSETS
Real Estate. None.
Title to properties. None.
Patents and Patent Applications:
--------------------------------
Global Green does not hold any patents or pending patent applications for the
Salmogenics Vaccine, rather the patents, patent applications and trademarks for
the Salmogenics Vaccine are held in the name of NHIL, Global Green's majority
shareholder and parent company. Global Green licenses with NHIL for the usage of
such intellectual property. Pursuant to the License Agreement, Global Green is
required to pay for the USDA approval of the products.
NHIL holds the following patents and/or patent applications with the United
States Patent and Trademark Office:
Patent Issuance Patent Expiration Date
Patent Number Patent Title Date
------------------- ----------------------------------------------- ------------------ ------------------------
7,988,978 Composition and method for controlling August 2, 2011 August 2027
intestinal pathogenic organisms
------------------- ----------------------------------------------- ------------------ ------------------------
7,935,355 Composition and method for controlling May 3, 2011 February 2028
intestinal pathogenic organisms
------------------- ----------------------------------------------- ------------------ ------------------------
12
ITEM 1A. RISK FACTORS
----------------------
Our business is a development stage company and unproven and therefore risky.
-----------------------------------------------------------------------------
We have only very recently adopted the business plan described herein-above.
Potential investors should be made aware of the risk and difficulties
encountered by a new enterprise in the vaccine business, especially in view of
the intense competition from existing businesses in the industry.
We have historically incurred losses and cannot assure investors as to future
--------------------------------------------------------------------------------
profitability.
--------------
We have historically incurred losses from operations while working to obtain
USDA approval of our Salmogenics Vaccine. As of December 31, 2011, we had an
accumulative deficit of ($197,528). During the year ended December 31, 2011, we
recognized a net loss of ($191,800) and used cash of $182,640 to support
operations. We are unable to market or sell our Salmogenics Vaccine until we
have obtained USDA approval. We are currently in the last stages of presenting
the date from phase 44, the final phase of testing of the vaccine. Our ability
to be profitable in the future will depend on obtaining USDA approval and
successfully implementing our marketing and sales activities, all of which are
subject to many risks beyond our control. Even if we become profitable on an
annual basis, we cannot assure you that our profitability will be sustainable or
increase on a periodic basis.
In addition, the independent registered public accounting firm's report on the
Company's financial statements as of December 31, 2011, includes a "going
concern" explanatory paragraph, that describes substantial doubt about the
Company's ability to continue as a going concern. If we be unable to continue as
a going concern, realization of assets and settlement of liabilities in other
than the normal course of business may be at amounts significantly different
from those in the financial statements included in this registration statement.
We have a lack of revenue history and investors cannot view our past performance
--------------------------------------------------------------------------------
since we are a start-up company.
-------------------------------
We were formed on July 12, 2004, for the purpose of engaging in any lawful
business and have adopted a plan to focus on the agriculture industry, more
specifically, "Salmogenics," a poultry salmonella vaccine. We have had no
revenues in the last five years. We have only had operational activities during
the last year. We are not profitable and the business effort is considered to be
in an early development stage. We must be regarded as a new or development
venture, and may be subject to unforeseen costs, expenses and problems, if we
are not able to successfully complete Phase 4 testing and unable to secure USDA
approval or successfully implement a marketing and sales strategy. As a
development venture, we may not be able to adequately forecast and budget our
costs due to the unknown and unpredictable nature of new vaccine development,
testing, and ultimately, if approved, manufacturing. We could experience product
failures, prolonged testing reformulation and unanticipated costs and
availability of manufacturers if ultimately approved. It should be assumed that
any or all of these events could occur, with the result that anyone, if
significant enough could prevent the proposed business from being successful and
potential investors could lose all of their investment.
We may be unable to sustain or increase profitability or raise sufficient
--------------------------------------------------------------------------------
additional capital, which could result in a decline in our stock price.
----------------------------------------------------------------------
Future operating performance is never certain, and if our operating results fall
below the expectations of securities analysts or investors, the trading price of
our common stock will likely decline. We have a history of operating losses. We
have not recognized revenues from the sale of our product, as we are still in
the testing and trial stages. We expect that we will continue to incur financial
losses until we have obtained USDA approval of our product and have begun to
successfully market and sell the vaccine. We may not be able to sustain or
increase profitability on a quarterly or annual basis once we are able to begin
marketing and sale of the vaccine. Moreover, we anticipate that our operating
and capital expenditures will increase significantly in 2011 and in future years
primarily due to:
13
o additional spending to support the marketing and sales of vaccines;
o working capital requirements for sales of vaccines;
o growth in research and development expenses as we progress with the
final phase development of our efficacy studies;
o leasing of facilities and purchases of capital equipment;
o investment in additional marketing capacity for our products and
products in development.
Our ability to generate sufficient cash flow, or to raise sufficient capital, to
fund these operating and capital expenditures depends on our ability to improve
operating performance. This in turn depends, among other things, on finalizing
our study and getting USDA approval and finding a partner to manufacture it and
then successfully completing the product and finding a partner for marketing and
sales first in USA and then worldwide. We may not successfully develop and
commercialize these products.
We will need additional financing for which we have no commitments, and this may
--------------------------------------------------------------------------------
jeopardize execution of our business plan.
-----------------------------------------
Our capital needs consist primarily of expenses related to final field testing
of the vaccine for the USDA approval general and administrative and potential
marketing expenses and could exceed $1,900,000 in the next twelve months. Such
funds are not currently committed, and we have cash as of the date of this
Registration Statement of approximately $160,000.
We have limited funds, and such funds may not be adequate to carryout the
business plan in the animal vaccine industry. Our ultimate success depends upon
our ability to raise additional capital. We will not receive any proceeds from
this Offering. We have not investigated the availability, source, or terms that
might govern the acquisition of additional capital and will not do so until it
determines a need for additional financing. If we need additional capital, we
have no assurance that funds will be available from any source or, if available,
that they can be obtained on terms acceptable to us. If not available, our
operations will be limited to those that can be financed with our modest
capital.
We may in the future issue more shares which could cause a loss of control by
--------------------------------------------------------------------------------
our present management and current stockholders.
------------------------------------------------
We may issue further shares as consideration for the cash or assets or services
out of our authorized but unissued common stock that would, upon issuance,
represent a majority of the voting power and equity of our Company. The result
of such an issuance would be those new stockholders and management would control
our Company, and persons unknown could replace our management at this time. Such
an occurrence would result in a greatly reduced percentage of ownership of our
Company by our current shareholders, which could present a risk to investors, in
that the business focus of the Company could be completely changed with no say
by current management and current shareholders.
We are not diversified and we will be dependent on only one business.
--------------------------------------------------------------------
Because of the limited financial resources that we have, it is unlikely that we
will be able to diversify our operations. Our probable inability to diversify
our activities into more than one area will subject us to economic fluctuations
within the animal vaccine industry. As a result we could incur continuing losses
and not be able to generate revenues or periodic increases in revenue.
Two of our Officers and Directors are the majority shareholders of the Company.
--------------------------------------------------------------------------------
As such there is a possibility of them controlling the Company to the detriment
--------------------------------------------------------------------------------
of outsiders.
------------
Together, Dr. Mehran P. Ghazvini, DC, NMD and Dr. Rene M. Reed, DC, NMD through
direct and indirect ownership, are majority shareholders of Nutritional Health
Institute Laboratories ("NHIL"), the majority shareholder of our Company. As
such, they will be able to control the operations and the direction of the
Company with very little outside influence.
14
Drs. Ghazvini and Reed do not hold direct shares of common stock of the Company.
However, they are officers, directors and beneficial shareholders of Nutritional
Health Institute Laboratories and have the ability to vote the shares of NHIL,
our majority shareholder.
o Dr. Mehran P. Ghazvini, DC, NMD owns approximately 50% of NHIL, indirectly
through family trusts and has the power to vote those interests on behalf
of the trusts and disavows any ownership in the equity of NHIL held by
family trusts; and
o Dr. Rene M. Reed, DC, NMD owns approximately 16.66% of NHIL, indirectly
through family trusts and has the power to vote those interests on behalf
of the trusts and disavows any ownership in the equity of NHIL held by
family trusts
As such, they are the beneficial holders of the 664,717,057 shares held by NHIL.
Through their ownership in NHIL, Drs. Ghazvini and Reed as a group, control
approximately 664,717,057 shares of common stock or approximately 89.13% of the
voting stock of the Company.
NHIL's ownership could decrease, NHIL has registered 66,471,705 shares (8.91% of
the issued and outstanding common stock) of the 664,717,057 shares it holds. If
it sells the shares that are registered, it will hold 598,245,352 shares of
common stock (80.21% of the total issued and outstanding common stock.) At the
time of this filing, NHIL has no arrangements to sell these shares.
We will depend upon management but we will have limited participation of
--------------------------------------------------------------------------------
management.
----------
We currently have two individuals who are serving as our officers and directors
for up to 30 hours per week combined, each on a part-time basis. Both directors,
Dr. Ghazvini, DC, NMD and Dr. Reed, DC, NMD are also acting as our officers.
Neither Dr. Ghazvini, DC, NMD nor Dr. Reed, DC, NMD has an employment agreement
with the Company. We will be heavily dependent upon their skills, talents, and
abilities, as well as several consultants to us, to implement our business plan,
and may, from time to time, find that the inability of the officers and
directors to devote their full-time attention to our business results in a delay
in progress toward implementing our business plan. See "Management." Because
investors will not be able to manage our business, they should critically assess
all of the information concerning our officers and directors.
Our officers and directors are not employed full-time by us and may cause
--------------------------------------------------------------------------------
conflicts of interests as to corporate opportunities which we may not be able or
--------------------------------------------------------------------------------
allowed to participate in.
-------------------------
Our directors and officers are owners of our majority shareholder, NHIL. In the
future they may become, in their individual capacities, officers, directors,
controlling shareholder and/or partners of other entities engaged in a variety
of businesses. Thus, our officers and directors may have potential conflicts
including their time and efforts involved in participation with other business
entities. In some circumstances this conflict may arise between their fiduciary
duties to us and their fiduciary duties to NHIL'S business divisions. It is
possible that in this situation their judgment maybe more consistent with their
fiduciary duties to these ventures and may be detrimental to our interests.
Presently there is no requirement contained in our Articles of Incorporation,
Bylaws, or minutes which requires officers and directors of our business to
disclose to us business opportunities which come to their attention. Excluded
from this duty would be opportunities which the person learns about through his
involvement as an officer and director of another company. We have no intention
of merging with or acquiring business opportunity from any affiliate or officer
or director.
We do not know of any reason other than outside business interests that would
prevent them from devoting full-time to our Company, when the business may
demand such full-time participation.
15
We may depend upon outside advisors, who may not be available on reasonable
--------------------------------------------------------------------------------
terms and as needed.
-------------------
To supplement the business experience of our officers and directors, we may be
required to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. Our Board, without any input from stockholders,
will make the selection of any such advisors. Furthermore, we anticipate that
such persons will be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to us. In the event we consider it necessary to
hire outside advisors, we may elect to hire persons who are affiliates, if they
are able to provide the required services.
We have agreed to indemnification of officers and directors as is provided by
--------------------------------------------------------------------------------
Florida Statute.
---------------
Florida Statutes provide for the indemnification of our directors, officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or on activities our behalf. We will also
bear the expenses of such litigation for any of our directors, officers,
employees, or agents, upon such person's promise to repay us therefore if it is
ultimately determined that any such person shall not have been entitled to
indemnification. This indemnification policy could result in substantial
expenditures by us that we will be unable to recoup.
RISK FACTORS RELATING TO OUR BUSINESS
If we are unable sell the vaccine, our revenues from the vaccine will be
--------------------------------------------------------------------------------
limited, which could result in a decline in our stock price.
-----------------------------------------------------------
Because we depend, and expect to continue to depend, on sales of a single
vaccine product for a substantial majority of our revenues, decreased or
lower-than-anticipated demand for the vaccine, or our inability to meet demand,
could materially adversely affect our operating results and harm our business.
Because we have not begun marketing vaccines, long-term effects of the vaccine
are largely unknown. Adverse developments regarding the long-term safety and
efficacy of the vaccines could adversely affect demand for the product, or
restrict our ability to market and sell it for its current or potential
indications. Other factors that would adversely affect sales of the vaccine
include:
o competition from existing products or development of new, superior
products;
o our ability to maintain adequate and uninterrupted sources of supply to
meet demand;
o events adversely affecting the ability of our manufacturing partners to
produce the vaccines;
o contamination of product lots or product recalls; and
o our inability to gain regulatory approval to market the vaccine.
Our dependence on a single contractor for testing poses a risk to our business.
------------------------------------------------------------------------------
We are dependent on one contractor AHPharma, for our testing services for our
proposed vaccine products, which may be a risk to the Company's business
operations, if the services of AHPharma are not available to complete all of the
testing which may be necessary or required for USDA approval to distribute and
sell the proposed vaccine products. While there are other potential contactors
offering similar services, such services may be unavailable due to
confidentiality agreements with other companies, full schedules or lack of
immediate capacity for their services. Such issues could cause a delay in the
completing of Phase 4 testing and final approval of the USDA and, therefore,
delay our future operations.
16
Our final safety field trials of potential products could be unsuccessful, which
--------------------------------------------------------------------------------
could adversely affect our operating results and ability to obtain final USDA
--------------------------------------------------------------------------------
approval.
--------
Before obtaining final USDA approvals for the sale of any of our potential
product, we must subject these products to a regulatory safety field trial to
demonstrate the vaccine's effectiveness when applied on a large scale basis. If
the final phase is unsuccessful, we will be unable to commercialize new products
and, as a result, we may be unable to sustain the Company's growth or potential
profitability. Results of initial efficacy are not necessarily indicative of
results to be obtained from later efficacy studies and, as a result, we may
suffer significant setbacks in advanced efficacy studies. We may not complete
our clinical trials of products and the results of the trials may fail to
demonstrate the safety and effectiveness of new products to the extent necessary
to obtain regulatory approvals.
Our potential products are subject to extensive USDA approval processes and
--------------------------------------------------------------------------------
ongoing USDA supervision, which can be costly and time-consuming and subject us
--------------------------------------------------------------------------------
to unanticipated delays or lost sales.
-------------------------------------
The USDA imposes substantial requirements on our products before it permits us
to manufacture, market and sell them to the public or producer of poultry.
Compliance with these requirements is costly and time-consuming, and could delay
sales of products. To meet USDA requirements, we have spent and will continue to
spend substantial resources on lengthy and detailed laboratory tests and
efficacy studies. It typically takes many years to complete tests and trials for
a product. The actual length of time involved depends on the type, complexity
and novelty of the product. The USDA may not approve on a timely basis, if at
all, some or all of our future products or may not approve some or all of our
applications for additional indications for our previously approved products. We
are currently involved in Phase 4 testing. The requirements of Phase 4 testing
have been developed by the USDA, specifically for our product.
The Phase 4 testing involves proving the following:
1. The vaccine product must be safely commercially manufactured at a USDA
approved vaccine manufacturer:
2. That every batch of the vaccine produced during Phase 4 testing not only
meets the required standards, but does so consistently;
3. That the vaccine product can be safely applied commercially by the
potential customers.
4. That the claims made regarding the vaccine are sustainable and reproducible
when applied to larger populations.
The Company's status regarding Phase 4 testing is:
1. In the process of identifying and contracting an USDA approved vaccine
manufacturer.
2. Assure that the requirements from the vaccine manufacturer will meet the
standard batch consistency as defined by the USDA.
3. The Conclusion of the USDA approved large bird study to be done by AHPharma
which meets the following parameters:
a. That the vaccine product can be safely and standardly
commercially applied by the intended customers.
b. That the claims are sustainable and reproducible when applied to
larger populations of birds.
c. To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines, which has been
successfully proven, at the time of filing.
4. Collect and present the date to be analyzed and results sent to the USDA
for final approval.
17
If we violate the requirements of Phase 4 testing as set by the USDA in this
stage, whether before or after marketing approval is obtained, we may be fined
(to be independently determined by the USDA) or forced to remove a product from
the market or may experience other adverse consequences, including delay or
increased costs, which could materially harm our financial results.
Additionally, we may not be able to obtain approval for the labeling claims
necessary or desirable for promoting our products. Even if approval is obtained,
we may be required to undertake post-marketing trials to be determined by the
USDA.
We may be required to perform additional trials or change the labeling of our
--------------------------------------------------------------------------------
products if we or others identify side effects after our products are on the
--------------------------------------------------------------------------------
market, which could adversely affect sales of the affected products.
-------------------------------------------------------------------
If we or others identify side effects after any of our products are on the
market, or if manufacturing problems occur, regulatory approval may be withdrawn
and reformulation of our products, additional efficacy studies, additional
changes in labeling of our products and changes to or re-approvals of our
manufacturing facilities may be required, any of which could have a material
adverse effect on sales of the affected products and on our business and results
of operations.
There are other products in late-stage development that are targeting
--------------------------------------------------------------------------------
salmonella. Depending on the market acceptance of these products or potential
--------------------------------------------------------------------------------
products, our sales of the vaccine could be adversely affected.
--------------------------------------------------------------
A number of our competitors have substantially more capital, research and
development, regulatory, manufacturing, marketing, human and other resources and
experience than we have. Furthermore, large pharmaceutical companies recently
have been consolidating, which has increased their resources and concentrated
valuable intellectual property assets. As a result, our competitors may:
o develop products that are more effective or less costly than any of our
current or future products or that render our products obsolete;
o produce and market their products more successfully than we do;
o establish superior proprietary positions; or
o obtain USDA approval for labeling claims that are more favorable than those
for our products.
The poultry vaccine business is especially competitive and dominated by a few
large companies with an established global presence. In order for us to expand
our sales of the vaccine, our product must be commercially accepted worldwide
and compete effectively against the vaccines of these other companies. Our
inability to compete successfully in the poultry vaccine sector could materially
adversely affect our revenue growth.
We may be required to defend lawsuits or pay damages for product liability
--------------------------------------------------------------------------------
claims.
------
Product liability is a major risk in testing and marketing biotechnology and
pharmaceutical products. We could face substantial product liability and for
products that we sell after regulatory approval. Product liability claims,
regardless of their merits, could be costly and divert management's attention or
adversely affect our reputation and the demand for our product. We do not
maintain product liability insurance coverage. In the future, insurers may not
offer us product liability insurance, may raise the price of this insurance or
may limit the coverage.
We currently do not carry product liability insurance, though our License
Agreement with NHIL provides that we will maintain product liability. Currently,
NHIL has agreed that we do not have to provide product liability insurance until
we have completed Phase 4 testing and received USDA approval.
18
Our future growth depends on the development and market acceptance of our
current vaccine product.
There is no guarantee that our products will be successfully developed and
marketed. In addition, we have not cleared the regulatory approval process for
our product, and we cannot assure you that final regulatory approval will be
obtained. Any delay in our final development of these products may materially
adversely affect our revenue growth. Because of a number of factors, our product
may not reach the market without lengthy delays, if at all. Some of the factors
that may affect our development and marketing of new products include the
following:
o potential products may require collaborative partners and we may be unable
to identify partners or enter into arrangements on terms acceptable to us;
o we may not be able to produce or contract for the manufacture of new
products at a cost or in quality or quantities necessary to make them
commercially viable;
o domestic and international regulatory approval of these products may not be
obtained or may be obtained only with lengthy delays;
o we may not be able to secure additional financing that may be needed to
bring a potential product to market;
o we may experience unexpected safety, regulatory or efficacy concerns with
respect to marketed products, whether or not scientifically justified,
leading to adverse public reaction, product recalls, withdrawals or
declining sales; and
o we may be unable to accurately predict market requirements and evolving
standards.
If NHIL loses the protection of its patents and proprietary rights, our
--------------------------------------------------------------------------------
financial results could suffer.
------------------------------
Importance and Limitations of Patent and Proprietary Rights Protections
Some of our products and processes used to produce our products involve
proprietary rights, including patents, which are held by our parent NHIL. Our
competitors or potential competitors may have filed for or received United
States and foreign patents and may obtain additional patents and proprietary
rights relating to animal vaccines uses and/or processes which may compete with
our existing products and our products under development. We cannot be sure that
others will not obtain patents of different technology that we would need to
license or circumvent in order to practice our inventions. Even though we strive
to take appropriate action to protect our intellectual property, there is a risk
that competitive systems currently being developed and marketed could gain
acceptance in the United States or elsewhere.
We and NHIL believe that patent protection of materials or processes we develop
and any products that may result from the research and development efforts of
our licensors and us are important to the commercial success of our products.
The loss of the protection of these patents and proprietary rights could
materially adversely affect our business and our competitive position in the
market. The patent position of companies such as ours generally is highly
uncertain and involves complex legal and factual questions. Some of the reasons
for this uncertainty include the following:
o To date, no consistent regulatory policy has emerged regarding the
breadth of claims allowed in biotechnology patents. Consequently,
there can be no assurance that future patent applications relating
to our products or technology will result in patents being issued
or that, if issued, the patents will afford protection against
competitors with similar technology;
o The License Agreement between us and NHIL may be immediately
terminated upon the occurrence of a default by us in performing
our responsibilities under the License Agreement;
o Companies that obtain patents claiming products or processes that
are necessary for, or useful to, the development of our vaccine
could bring legal actions against us, claiming infringement
(though we currently are not the subject of any patent
infringement claim);
19
o Issuance of a valid patent does not prevent other companies from
using alternative, non-infringing technology, so we cannot be sure
that any of our patents (or patents issued to others and licensed
to us) will provide significant commercial protection;
o We may not have the financial resources necessary to obtain patent
protection in some countries or to enforce any patent rights we
may hold;
o The laws of some foreign countries may not protect proprietary
rights to the same extent as the laws of the United States, and
many companies have encountered significant problems in protecting
their proprietary rights in these foreign countries; and
o We may be required to obtain licenses from others to develop,
manufacture or market our products. We may not be able to obtain
these licenses on commercially reasonable terms, and we cannot be
sure that the patents underlying the licenses will be valid and
enforceable.
We and NHIL attempt to protect our proprietary materials and processes by
relying on trade secret laws and non-disclosure and confidentiality agreements
with our future employees and other persons (i.e. future manufacturers) with
access to our proprietary materials or processes or who will have licensing
agreements with us. We plan to continue to use these protections in the future,
but we cannot be sure that these agreements will not be breached or that we
would have adequate remedies for any breach. Even with these protections, others
may independently develop or obtain access to these materials or processes,
which may materially adversely affect our competitive position.
If we are sued for infringing the patent or other proprietary rights of a third
party, we could incur substantial costs and diversion of management and
technical personnel, whether or not the litigation is ultimately determined in
our favor.
We will rely upon Contract Manufacturers to manufacture our product, which could
--------------------------------------------------------------------------------
affect our ability to sell our product and to operate profitably.
----------------------------------------------------------------
We currently do not have facilities for the production of our vaccine products.
Therefore, we will rely principally upon relationships with contract
manufacturers. At this time we have not identified or entered into an agreement
with any to manufacture our product. There can be no assurance that we can
maintain manufacture and supply agreements on terms and at costs acceptable to
us. There are a number of risks that will be associated with our dependence on
contract manufacturers, including:
o reduced control over delivery schedules;
o potential inability to monitor and maintain inventory levels;
o reduced control over quality assurance;
o reduced control over manufacturing yields and costs;
o potential lack of adequate capacity during periods of unanticipated demand;
o limited warranties on products supplied to us;
o increases in prices at a higher rate than our ability to recover our
increased costs through contractual price adjustments with customers;
o reduced control over regulatory efforts;
o potential misappropriation of our intellectual property;
o catastrophic loss of production capacity due to property damage, either man
made or by nature;
o the loss of these contract manufacturers due to financial circumstances in
their respective businesses or their exit from the business lines that
manufacture our devices and products; and
o minimum purchase requirements, which could result in excessive inventories
if the demand for products falls short of such minimum purchase
requirements.
If our contract manufacturers were to fail to provide us with an adequate supply
of vaccine products, our business would be harmed.
20
Poultry health and disease factors affecting our customers may adversely affect
--------------------------------------------------------------------------------
our financial results.
---------------------
Any widespread poultry health problem or disease outbreak, such as avian
influenza in poultry, could have a negative impact on global poultry production.
Our revenues and earnings derived from both the U.S. and international poultry
industry could be materially and adversely affected. In addition, the emergence
of new disease variants, serotypes and strains in the domestic and/or global
markets may reduce the efficacy of our vaccine products and result in reduced
revenues and earnings.
We may be unable to hire and retain independent distributors.
------------------------------------------------------------
Our future success depends on our ability to attract qualified independent
distributors for the vaccine products. We may be unable to attract or retain
these independent distributors. If we fail to attract or retain independent
distributors, or fail to find end users for the vaccine products, we may be
unable to successfully bring the vaccine products to the marketplace and to
generate sufficient revenues to offset operating costs.
In the future we may be in competition with our majority shareholder, NHIL.
--------------------------------------------------------------------------
At this time, the Company has an exclusive license from NHIL, our majority
shareholder. We may be dependent on NHIL for support of certain of our
technologies and we may have to rely on NHIL for development of any future
products. Future product candidates of the Company, as we begin to pursue our
business strategy, we may be subject to competition with potential products
under development by NHIL.
As our officers and directors are officers, directors and shareholders of NHIL
we cannot provide any assurances that any conflicts that may arise out of such
competition would be resolved in a way favorable to the Company.
RISK FACTORS RELATED TO OUR STOCK
Our stock is thinly traded and, as a result, you may be unable to sell at or
--------------------------------------------------------------------------------
near ask prices or at all if you need to liquidate your shares.
--------------------------------------------------------------
The shares of Global Green common stock were just recently approved for trading
on the OTC Bulletin Board, and, as result, they are thinly-traded, meaning that
the number of persons interested in purchasing the Company's common shares at or
near ask prices at any given time may be relatively small or non-existent. This
situation is attributable to a number of factors, including the fact that the
Company is a small company which is relatively unknown to stock analysts, stock
brokers, institutional investors and others in the investment community that
generate or influence sales volume, and that even if it came to the attention of
such persons, they tend to be risk-averse and would be reluctant to follow an
unproven, early stage company such as Global Green or purchase or recommend the
purchase of any of the Company's Securities until such time as the Company
became more seasoned and viable. As a consequence, there may be periods of
several days or more when trading activity in the Company's Securities is
minimal or non-existent, as compared to a seasoned issuer which has a large and
steady volume of trading activity that will generally support continuous sales
without an adverse effect on Securities price. We cannot give you any assurance
that a broader or more active public trading market for the Company's common
Securities will develop or be sustained, or that any trading levels will be
sustained. Due to these conditions, the Company can give investors no assurance
that they will be able to sell their shares at or near ask prices or at all if
they need money or otherwise desire to liquidate their securities of the
Company.
21
The regulation of penny stocks by SEC and FINRA may discourage the tradability
--------------------------------------------------------------------------------
of our securities.
-----------------
We are a "penny stock" company. None of our securities currently trade in any
market and, if ever available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Effectively, this discourages broker-dealers from executing trades in
penny stocks. Consequently, the rule will affect the ability of purchasers in
this offering to sell their securities in any market that might develop
therefore because it imposes additional regulatory burdens on penny stock
transactions.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules will further affect the ability of owners of shares to sell our securities
in any market that might develop for them because it imposes additional
regulatory burdens on penny stock transactions.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
Inventory in penny stocks have limited remedies in the event of violations of
penny stock rules. While the courts are always available to seek remedies for
fraud against the Company, most, if not all, brokerages require their customers
to sign mandatory arbitration agreements in conjunctions with opening trading
accounts. Such arbitration may be through an independent arbiter. Investors may
file a complaint with FINRA against the broker allegedly at fault, and FINRA may
be the arbiter, under FIRNA rules. Arbitration rules generally limit discovery
and provide more expedient adjudication, but also provide limited remedies in
damages usually only the actual economic loss in the account. Investors should
understand that if a fraud case is filed against a company in the courts it may
be vigorously defended and may take years and great legal expenses and costs to
pursue, which may not be economically feasible for small investors.
The fact that we are a penny stock company will cause many brokers to refuse to
handle transactions in the stocks, and may discourage trading activity and
volume, or result in wide disparities between bid and ask prices. These may
cause investors significant illiquidity of the stock at a price at which they
may wish to sell or in the opportunity to complete a sale. Investors will have
no effective legal remedies for these illiquidity issues.
We will pay no foreseeable dividends in the future.
--------------------------------------------------
We have not paid dividends on our common stock and do not ever anticipate paying
such dividends in the foreseeable future. Investors whose investment criteria is
dependent on dividends should not invest in our common stock.
22
ITEM 1B. UNRESOLVED STAFF COMMENTS
----------------------------------
Not Applicable.
ITEM 2. PROPERTIES
-------------------
FACILITIES
The Company operates out of facilities leased by NHIL at 2820 Remington Green
Circle, Tallahassee, Florida 32308.
ITEM 3. LEGAL PROCEEDINGS
--------------------------
We are not a party to any pending legal proceedings, nor are we aware of any
civil proceeding or government authority contemplating any legal proceeding.
ITEM 4. MINE SAFETY DISCLOSURES
--------------------------------
Not applicable.
23
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
------------------------------------------------------------------------------
ISSUER PURCHASES OF EQUITY SECURITIES
-------------------------------------
Market Information
On March 21, 2012, the Company's common stock was accepted for trading by FINRA
on the OTCBB and the Over The Counter Markets OTCQB and was assigned the symbol
is "GOGC".
There is a limited public trading market for the common stock.
Holders
There are approximately 290 holders of record of our common stock as of December
31, 2011.
Dividend Policy
Holders of our common stock are entitled to receive such dividends as may be
declared by our board of directors. We have not declared or paid any dividends
on our common shares and it does not plan on declaring any dividends in the near
future. The Company currently intends to use all available funds to finance the
operation and expansion of its business.
Recent Sales of Unregistered Securities
We have sold securities within the past two years without registering the
securities under the Securities Act of 1933 as shown in the following table:
NAME COMMON SHARES CONSIDERATION DATE OF PURCHASE
============================================== ===================== ============================ ====================
Thomas McCrimmon 10,000,000 Services rendered 5/3/10
Saburo Oto 10,000,000 Services rendered 5/3/10
Nutritional Health Institute Laboratories, LLC 664,717,057 Share Exchange Agreement 11/30/10
Steve Winn & Judy Winn 3,571,348 $0.03 3/10/11
Steve Winn & Susan Beth Winn 3,571,348 $0.03 3/10/11
Raymond G. Behm, Jr. 833,333 $0.03 3/11/11
Sarah D'Angelo 1,333,333 $0.03 3/15/11
Michael A. Piacenza 833,333 $0.03 3/15/11
Roje Investments, LLC 1,700,000 $0.03 3/15/11
Dennis Scott 3,124,286 $0.14 3/15/11
George Springer, Jr. 333,333 $0.03 3/15/11
George A. Stermer, Jr. & Jennifer Foley-Stermer 2,000,000 $0.03 3/15/11
John Welch 1,000,000 $0.03 3/15/11
24
Exemptions From Registration For Unregistered Sales
All of the above sales by the Company of its unregistered securities were made
by the Company in reliance upon Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). All of the individuals and/or entities that purchased
the unregistered securities were known to the Company and its management,
through pre-existing business relationships, as long standing business
associates and employees. All purchasers were provided access to all material
information, which they requested, and all information necessary to verify such
information and were afforded access to management of the Company in connection
with their purchases. All purchasers of the unregistered securities acquired
such securities for investment and not with a view toward distribution,
acknowledging such intent to the Company. All certificates or agreements
representing such securities that were issued contained restrictive legends,
prohibiting further transfer of the certificates or agreements representing such
securities, without such securities either being first registered or otherwise
exempt from registration in any further resale or disposition.
Issuer Purchases of Equity Securities
The Company did not repurchase any shares of its common stock during the year
ended December 31, 2011.
ITEM 6. SELECTED FINANCIAL DATA
--------------------------------
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------
MANAGEMENTS' DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with our audited
consolidated financial statements and notes thereto included herein.
This discussion contains forward-looking statements, such as statements relating
to our financial condition, results of operations, plans, objectives, future
performance and business operations. These statements relate to expectations
concerning matters that are not historical facts. These forward-looking
statements reflect our current views and expectations based largely upon the
information currently available to us and are subject to inherent risks and
uncertainties. Although we believe our expectations are based on reasonable
assumptions, they are not guarantees of future performance and there are a
number of important factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements. By making
these forward-looking statements, we do not undertake to update them in any
manner except as may be required by our disclosure obligations in filings we
make with the Securities and Exchange Commission under the Federal securities
laws. Our actual results may differ materially from our forward-looking
statements.
The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2011 includes a "going concern"
explanatory paragraph that describes substantial doubt about the Company's
ability to continue as a going concern.
PLAN OF OPERATIONS
------------------
We had no operations prior to January 2009 and we did not have any revenues
during the fiscal years ended December 31, 2011 and 2010. We have minimal
capital, minimal cash, and only our intangible assets consist of our patents and
patent applications, business plan, relationships and contacts. We are illiquid
and need cash infusions from investors or shareholders to provide capital, or
loans from any sources.
25
Our plan of operations is as follows:
Milestones
----------------------------- -- -----------------------------------------------
1st Quarter 2012 o Finish with the Final Efficacy Testing
filed with USDA according to Study as
Model test for Regulatory Approval tests
required for USDA approval.
o Continuing Market Development
o Obtain Establishment License required
for manufacturing site, required
before product license will be issued.
----------------------------- -- -----------------------------------------------
----------------------------- -- -----------------------------------------------
2nd Quarter 2012 o First USDA product licensing submission.
o USDA creates product file and assigns
a Product Code.
o Initiate Vaccine Manufacturing Setup for
USDA approved protocol Efficacy Testing.
----------------------------- -- -----------------------------------------------
----------------------------- -- -----------------------------------------------
3rd Quarter 2012 o USDA Product Outline Review
o Submission of Master Seed to NVSL (USDA/
National Veterinary Services Laboratories)
for testing.
o Manufacturing Vaccine batch for Final
Efficacy Testing.
o Perform USDA regulatory Efficacy Study and
Potency Testing according to Model test.
o Final Marek's interference study on the
final product.
----------------------------- -- -----------------------------------------------
----------------------------- -- -----------------------------------------------
4th Quarter 2012 o Second USDA product licensing submission
with Efficacy Study report.
o Third USDA product licensing submission with
Field Safety report and final labeling.
o Vaccine Manufacturer is authorized to submit
samples to NVSL for confirmatory testing.
----------------------------- -- -----------------------------------------------
The Company's status regarding its Phase 4 efficacy testing is:
o In the process of identifying and contracting an USDA approved vaccine
manufacturer.
o Assure that the requirements from the vaccine manufacturer will meet the
standard batch consistency as defined by the USDA as part of the efficacy
requirements.
o The conclusion of the USDA approved large bird efficacy study to be done by
AHPharma which meets the following parameters:
o That the vaccine product can be safely and standardly commercially
applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as a
combined treatment with other vaccines. This part of the study has
been completed and proven successful.
o Collect and present the data of the efficacy tests to be analyzed and results
sent to the USDA for final approval.
26
Our Budget for operations in next year is as follows:
The Vaccine- Final Testing for USDA Approval
Final Testing for USDA approval $415,000
Manufacturing Cost of the Vaccine $750,000
Compensation for in-house doctors/scientist $150,000
Administration
Marketing/Fundraising $350,000
Management $150,000
Legal and accounting $35,000
Office Overhead/Salaries $45,000
--------------------------------------
TOTAL $1,895,000
We will need substantial additional capital to support our proposed future
operations. We have no revenues. We have no committed source for any funds as of
date hereof. No representation is made that any funds will be available when
needed. In the event funds cannot be raised when needed, we may not be able to
carry out our business plan, may never achieve sales, and could fail in business
as a result of these uncertainties.
RESULTS OF OPERATIONS
The Year Ended December 31, 2011 Compared to The Year Ended December 31, 2010
-----------------------------------------------------------------------------
During the year ended December 31, 2011 and 2010, the Company did not recognize
any revenues from its operations. Management does not anticipate recognizing any
revenues from the sale of the Salmogenic vaccine, until the final approval of
the USDA has been granted and that time the Company will be able to begin sales
and marketing efforts.
During the year ended December 31, 2011, the Company incurred total operating
expenses of $191,800 compared to $5,728 for the year ended December 31, 2010.
The increase of $186,072 was primarily a result of the increase of $137,800 in
the testing expenses connected the Phase 4 trials being performed as part of the
USDA approval and the $40,484 increase in professional fees as a result of our
efforts in filing of our registration statement on Form S-1. We saw additional
increases of $6,735 in general and administrative expenses, $921 in transfer
agent fees and $308 in amortization expense. We expect that we will continue to
see an increase in expenses, as we complete Phase 4 testing and gain final
approval of the USDA and begin to develop our sales and marketing efforts.
During the year ended December 31, 2011, we recognized a net loss of $191,800
compared to $5,728 during the year ended December 31, 2010. The increase of
$186,072 was a result of the increases in expenses as discussed above.
LIQUIDITY
---------
The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2011, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
At December 31, 2011, the Company had total current assets of $106,548,
consisting of $103,360 in cash and prepaid expenses of $3,188 and total current
liabilities of $17,512, consisting of $17,012 in accrued expenses and $500 due
to shareholders. At December 31, 2011, the Company had working capital of
$89,036.
During the year ended December 31, 2011, the Company used $182,976 in funds in
it operational activities. During the year ended December 31, 2011, the Company
recognized a net loss of ($191,800) which was adjusted for $336 in amortization
expense. During the year ended December 31, 2010, the Company did not use or
received funds from its operational activities.
27
During the year ended December 31, 2011, the Company received funds of $286,000
from its financing activities. During the year ended December 31, 2010, the
Company did not use or receive funds from its financing activities.
During the year ended December 31, 2011, the Company sold 11,247,618 shares of
common stock as part of a private placement at approximately $0.025 per share
and received funds of $286,000.
Short- Term
On a short-term basis, the Company has not generated any revenue or revenues
sufficient to cover operations. For short- term needs the Company will be
dependent on receipt, if any, of offering proceeds.
Capital Resources
The Company has only common stock as its capital resource.
The Company has no material commitments for capital expenditures within the next
year, however if operations are commenced, substantial capital will be needed to
pay for participation, investigation, exploration, acquisition and working
capital.
Need for Additional Financing
The Company does not have capital sufficient to meet its cash needs. The Company
will have to seek loans or equity placements to cover such cash needs. Once
manufacturing and sales efforts commence, its needs for additional financing is
likely to increase substantially.
No commitments to provide additional funds have been made by the Company's
management or other stockholders. Accordingly, there can be no assurance that
any additional funds will be available to the Company to allow it to cover the
Company's expenses as they may be incurred.
The Company will need substantial additional capital to support its proposed
operations. The Company has no revenues. The Company has no committed source for
any funds as of the date hereof. No representation is made that any funds will
be available when needed. In the event funds cannot be raised when needed, the
Company may not be able to carry out its business plan, may never achieve sales,
and could fail in business as a result of these uncertainties.
Limited Financing
There is no assurance that the Company will achieve additional monies or
financing will be available in the future or, if available, will be at favorable
terms. In the event that the Company is unable to raise funds through the sale
of its shares, the Company will have substantially less funds available to
engage in sales of its Salmogenic vaccine business.
The Company may borrow money to finance its future operations, although it does
not currently contemplate doing so. Any such borrowing will increase the risk of
loss to the investor in the event it is unsuccessful in repaying such loans.
Critical Accounting Policies
Cash and Cash Equivalents
-------------------------
The Company considers all investments with a maturity date of three months or
less when purchased to be cash equivalents. There were no cash equivalents at
December 31, 2011 or 2010.
28
Revenue Recognition
-------------------
The Company recognizes revenue on arrangements in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 13, "Revenue Recognition" and
Financial Accounting Standards Board's ("FASB") Accounting Standards
Codification ("ASC") 605-15-25, "Revenue Recognition". In all cases, revenue is
recognized only when the price is fixed or determinable, persuasive evidence of
an arrangement exists, the service is performed and collectability is reasonably
assured. For the years ended December 31, 2011 and 2010, and the period from
inception to December 31, 2011, the Company did not report any revenues.
Income Taxes
------------
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Additionally, the recognition of future tax benefits, such as net
operating loss carryforwards, is required to the extent that realization of such
benefits is more likely than not. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which the assets and liabilities are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income tax expense in the period that includes the
enactment date.
In the event the future tax consequences of differences between the financial
reporting bases and the tax bases of the Company's assets and liabilities result
in deferred tax assets, an evaluation of the probability of being able to
realize the future benefits indicated by such asset is required. A valuation
allowance is provided for the portion of the deferred tax asset when it is more
likely than not that some or all of the deferred tax asset will not be realized.
In assessing the realizability of the deferred tax assets, management considers
the scheduled reversals of deferred tax liabilities, projected future taxable
income, and tax planning strategies.
The Company files income tax returns in the United States and Florida, which are
subject to examination by the tax authorities in these jurisdictions. Generally,
the statute of limitations related to the Company's federal and state income tax
return is three years. The state impact of any federal changes for prior years
remains subject to examination for a period up to five years after formal
notification to the states.
Management has evaluated tax positions in accordance with FASB ASC 740, Income
Taxes and has not identified any significant tax positions, other than those
disclosed.
Intangible Assets
-----------------
The Company accounts for intangible assets in accordance FASB ASC 350
Intangibles--Goodwill and Other. Intangible assets consist of the Licensing
Agreement and is carried at an allocated cost, less accumulated amortization.
The Licensing Agreement is amortized over an estimated useful life of 20 years.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------
Our operations do not employ financial instruments or derivatives which are
market sensitive. Short term funds are held in non-interest bearing accounts and
funds held for longer periods are placed in interest bearing accounts. Large
amounts of funds, if available, will be distributed among multiple financial
institutions to reduce risk of loss. Our cash holdings do not generate any
significant interest income.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
The audited financial statements of Global Green, Inc. for the two-years ended
December 31, 2011 and 2010 and for the period from Inception through December
31, 2011 starting on page F-1.
29
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
--------------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
--------------------------------
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures (as defined in Rule 13(a) - 15(e)) are
controls and procedures that are designed to ensure that information required to
be disclosed by a public company in the reports that if 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. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by a public company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the company's management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.
ITEM 9A(T). CONTROLS AND PROCEDURES
-----------------------------------
This annual report does not include a report of management's assessment
regarding internal control over financial reporting or an attestation report of
the Company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly- public
companies.
ITEM 9B. OTHER INFORMATION
---------------------------
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
----------------------------------------------------------------
Name Age Position Term
-------------------------------------- ---------- ---------------------------------------- -----------------
Dr. Mehran P. Ghazvini, DC,NMD 48 President, CEO, CFO, Treasurer and Annual
Chairman
Dr. Rene' M. Reed, DC, NMD 65 Vice President/Secretary and Director Annual
Dr. Mehran P. Ghazvini, DC, NMD President, CEO, CFO, Treasurer and Chairman of
the Board:
Dr. Ghazvini has been President, CEO, CFO, Treasurer and Chairman of the Board
of Global Green, Inc. since December 2010. He has been a doctor of Chiropractic
in his own practice, Premier Health Clinic & Rehab of Tallahassee, since 1997.
Dr. Ghazvini's education background includes:
o Bachelor of Science, University of New York 1994
o Doctor of Chiropractic - Life University 1995
o Doctor of Naturopathic Medicine - Florida College of Integrated
Medicine 2003
30
He serves as CEO for Nutritional Health Institute Laboratories, since 2006.
He is qualified to hold the positions of President, Chief Executive Officer,
Chief Financial Officer, Treasurer and Chairman of the Board of the Company
based on his involvement in the business since 1982. In the last 29 years he
served as officer in business in a range of industries, such as real estate and
construction, but has also owned his own chiropractic clinic. Dr. Ghazvini has
served as the Chief Executive Officer of the Company's majority shareholder,
Nutritional Health Institute Laboratories. As the majority shareholder, NHIL has
appointed Dr. Ghazvini as an officer and director for his experience in running
and managing well-established and start-up businesses, combined with his
knowledge and experience with the development and USDA approval of the Sotomayor
vaccine gained from his years with NHIL.
Dr. Rene' M. Reed, DC, NMD, Vice President, Secretary and Director:
Dr. Reed has been Vice President, Secretary and Director of the Company since
December 2010. Dr. Reed has been in private practice since 1979 as Dr. Rene' M.
Reed, DC, DABCO, NMD. Dr. Reed attended the University of Central Florida
(formerly Florida Technological University), where he earned his BS in Business
Administration - 1972. Dr. Reed's professional qualifications and postgraduate
studies include:
o National College of Chiropractic, Lombard, IL, 5 year program, Doctor
of Chiropractic, graduated April 1979
o Internship in Orthopedic Surgery, Cook County Hospital, Chicago, IL,
1979
o Orthopedic Program, Los Angeles College of Chiropractic, 4-year
program, 1981-1985
o Awarded Fellowship as Board Eligible Chiropractic Orthopedist
o Passed Diplomate Chiropractic Orthopedic Boards - Part I, 1988
o Passed Diplomate Chiropractic Orthopedic Boards - Part II, 1989;
earned Postgraduate Degree Status of D.A.B.C.O., Diplomate American
Board of Chiropractic Orthopedists course.
o Florida College of Integrative Medicine, Orlando, FL, Doctor of
Naturopathic Medicine (NMD) Nov 2003 (5336 didactic hours; 730
clinical hours in Integrative Family Medicine)
Dr. Reed has been Vice President of NHIL (Nutritional Health Institute
Laboratories) since 2006.
Dr. Reed has served as the Vice President of Company's majority shareholder,
Nutritional Health Institute Laboratories. As the majority shareholder, NHIL has
appointed Dr. Reed as an officer and director for his experience in running and
managing well-established and start-up businesses, combined with his knowledge
and experience with the development and USDA approval of the Sotomayor vaccine
gained from his years with NHIL.
Our officers are spending up to 30 hours per week on our business at this time.
At such time as the Company is financially capable of paying salaries, it is
anticipated that management will assume full- time roles in the Company's
operations and be paid accordingly.
Conflicts of Interest - General.
-------------------------------
Our directors and officers are, or may become, in their individual capacities,
officers, directors, controlling shareholder and/or partners of other entities
engaged in a variety of businesses. Thus, there exist potential conflicts of
interest including, among other things, time, efforts and corporation
opportunity, involved in participation with such other business entities. While
each officer and director of our business is engaged in business activities
outside of our business, the amount of time they devote to our business will be
up to approximately 30 hours per week.
Conflicts of Interest - Corporate Opportunities
-----------------------------------------------
Presently, no requirement contained in our Articles of Incorporation, Bylaws, or
minutes which requires officers and directors of our business to disclose to us
business opportunities which come to their attention. We have no intention of
merging with or acquiring an affiliate, associate person or business opportunity
from any affiliate or any client of any such person.
31
Committees of the Board of Directors
The Company is managed under the direction of its board of directors.
The board of directors has no nominating, auditing committee or a compensation
committee. Therefore, the selection of person or election to the board of
directors was neither independently made nor negotiated at arm's length.
Executive Committee
The members of the Board of Directors serve as its executive committee.
Audit Committee
The members of the Board of Directors serve as its audit committee.
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
The following table sets forth the fact that officers received a cash salary
during the last three fiscal years. The following table sets forth this
information by the Company including salary, bonus and certain other
compensation to the Company's Chief Executive Officer and named executive
officers for the years ended December 31, 2011, 2010 and 2009.
SUMMARY EXECUTIVES COMPENSATION TABLE
Non-equity Non-qualified
incentive deferred
Stock Option plan compensation All other
Salary Bonus awards awards compensation earnings compensation Total
Name & Position Year ($) ($) ($) ($) ($) ($) ($) ($)
------------------- -------- ---------- ------- -------- -------- --------------- -------------- -------------- ------------
Dr. Mehran P.
Ghazvini, DC, NMD
President, CEO,
CFO, 2011 0 0 0 0 0 0 0 0
Treasurer
2010 0 0 0 0 0 0 0 0
2009 0 0 0 0 0 0 0 0
Dr. Rene' M. 2011 0 0 0 0 0 0 0 0
Reed, DC, NMD, 2010 0 0 0 0 0 0 0 0
Vice President 2009 0 0 0 0 0 0 0 0
and Secretary
Drs. Ghazvini and Reed do not have employment agreements with the Company nor do
they receive compensation for their services from the Company or from the
Company's majority shareholder, NHIL.
32
DIRECTOR COMPENSATION
The following table sets forth certain information concerning compensation paid
to our directors for services as directors, but not including compensation for
services as officers reported in the "Summary Executive Compensation Table"
during the year ended December 31, 2011:
Fees Non-qualified
earned or deferred
Name paid in Non-equity compensation
cash Stock Option incentive plan earnings All other Total
($) awards ($) awards ($) compensation ($) ($) compensation ($) ($)
------------------ ----------- ----------- ----------- ----------------- ----------------- ----------------- ---------
Dr. Mehran P. 0 0 0 0 0 0 0
Ghazvini, DC, NMD
Dr. Rene' M. 0 0 0 0 0 0 0
Reed, DC, NMD
All of our officers and/or directors will continue to be active in other
companies. All officers and directors have retained the right to conduct their
own independent business interests.
It is possible that situations may arise in the future where the personal
interests of the officers and directors may conflict with our interests. Such
conflicts could include determining what portion of their working time will be
spent on our business and what portion on other business interest. Any
transactions between us and entities affiliated with our officers and directors
will be on terms which are fair and equitable to us. Our Board of Directors
intends to continually review all corporate opportunities to further attempt to
safeguard against conflicts of interest between their business interests and our
interests.
We have no intention of merging with or acquiring an affiliate, associated
person or business opportunity from any affiliate or any client of any such
person.
Directors receive no compensation for serving.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
Global Green does not have a stock option plan as of the date of this filing.
There was no grant of stock options to the Chief Executive Officer and other
named executive officers during the fiscal years ended December 31, 2010 and
2011.
LIMITATION ON LIABILITY AND INDEMNIFICATION
Global Green, Inc. officers and directors are indemnified as provided by the
Florida Revised Statutes and the bylaws.
Under the Florida Revised Statutes, director immunity from liability to a
company or its shareholders for monetary liabilities applies automatically
unless it is specifically limited by a company's Articles of Incorporation. Our
Articles of Incorporation do not specifically limit the directors' immunity.
Excepted from that immunity are: (a) a willful failure to deal fairly with us or
our shareholders in connection with a matter in which the director has a
material conflict of interest; (b) a violation of criminal law, unless the
director had reasonable cause to believe that his or her conduct was lawful or
no reasonable cause to believe that his or her conduct was unlawful; (c) a
transaction from which the director derived an improper personal profit; and (d)
willful misconduct.
33
Our bylaws provide that it will indemnify the directors to the fullest extent
not prohibited by Florida law; provided, however, that we may modify the extent
of such indemnification by individual contracts with the directors and officers;
and, provided, further, that we shall not be required to indemnify any director
or officer in connection with any proceeding, or part thereof, initiated by such
person unless such indemnification: (a) is expressly required to be made by law,
(b) the proceeding was authorized by the board of directors, (c) is provided by
us, in sole discretion, pursuant to the powers vested under Florida law or (d)
is required to be made pursuant to the bylaws.
Our bylaws provide that it will advance to any person who was, or is a party, or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of us, or is or was
serving at the request of us as a director or executive officer of another
company, partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request therefore, all
expenses incurred by any director or officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under the bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer except by
reason of the fact that such officer is, or was, our director in which event
this paragraph shall not apply, in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, if a determination is
reasonably and promptly made: (a) by the board of directors by a majority vote
of a quorum consisting of directors who were not parties to the proceeding, or
(b) if such quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, that the facts known to the decision-making party at the time such
determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of us.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
--------------------------------------------------------------------------------
RELATED STOCKHOLDER MATTERS.
---------------------------
The following table sets forth information with respect to the beneficial
ownership of Global Greens' outstanding common stock by:
o each person who is known by to the Company be the beneficial owner of
five percent (5%) or more of the Company's common stock;
o Global Green's Chief Executive Officer, its other executive officers,
and each director as identified in the "Management -- Executive
Compensation" section; and
o all of the Company's directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock and options, warrants
and convertible securities that are currently exercisable or convertible within
60 days of the date of this document into shares of Global Green's common stock
are deemed to be outstanding and to be beneficially owned by the person holding
the options, warrants or convertible securities for the purpose of computing the
percentage ownership of the person, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.
There are currently 3,000,000,000 common shares authorized of which 745,761,432
are outstanding at December 31, 2011.
The following sets forth information with respect to our common stock
beneficially owned by each Officer and Director, and by all Directors and
Officers as a group as of December 31, 2011.
34
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner (1) Beneficial Owner
------------------------------- ------------------------------ ------------------------ ----------------------------
Common shares Dr. Mehran P. Ghazvini, 664,717,057 89.13%
President, DC, NMD
CEO, CFO, Treasurer and
Director (2)
Common shares Dr. Rene' M. Reed, DC, Vice 664,717,057 89.13%
President, Secretary and Director(2)
Common shares Nutritional Health Institute 664,717,057 89.13%
Laboratories(2)
------------------------ ----------------------------
All Directors and Executive 664,717,057 (2) 89.13%
Officers as a Group (2
persons)
-------------------------------
(1) Address is c/o Global Green, Inc., 2820 Remington Green Circle,
Tallahassee, Florida 32308.
(2) Dr. Mehran P. Ghazvini, DC, NMD and Dr. Rene' M. Reed, DC, NMD are
either officers, directors and/or beneficial shareholders of
Nutritional Health Institute Laboratories and they disavow any
beneficial ownership in the equity in NHIL held by family trusts.
Nutritional Health Institute Laboratories holds 664,717,057 shares of
common stock directly.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------
Other than the transactions discussed below, we have not entered into any
transaction nor are there any proposed transactions in which any of our
founders, directors, executive officers, shareholders or any members of the
immediate family of any of the foregoing had or is to have a direct or indirect
material interest.
NHIL, our majority shareholder, owns the exclusive rights to the Salmogenics
Vaccine and a Salmonella Antigen. The Company has received the exclusive rights
to finish the final phase of study, manufacture, distribute, market and sell the
vaccines by NHIL through a Licensing Agreement with Global Green International,
the wholly-owned subsidiary of the Company. Under the Licensing Agreement with
NHIL, the Company is responsible for all financial obligations to obtain United
States Department of Agriculture ("USDA") approval.
During the year ended December 31, 2010, NHIL, the majority shareholder of the
Company paid expenses totaling $5,500 for attorney and stock transfer fees on
behalf of the Company. At December 31, 2011 and 2010, the amounts due to related
parties were $500 and $5,500, respectively.
Dr. Mehran P. Ghazvini, DC, NMD and Dr. Rene' M. Reed, DC, NMD, officers and
directors of the Company, through direct and indirect ownership, are majority
shareholders of NHIL), the majority shareholder of our Company. As such, they
will be able to control the operations and the direction of the Company with
very little outside influence.
35
Drs. Ghazvini and Reed do not hold direct shares of common stock of the Company.
However, they are officers, directors and beneficial shareholders of Nutritional
Health Institute Laboratories and have the ability to vote the shares of NHIL,
our majority shareholder.
o Dr. Mehran P. Ghazvini, DC, NMD owns approximately 50% of NHIL,
indirectly through family trusts and has the power to vote those
interests on behalf of the trusts; and
o Dr. Rene' M. Reed, DC, NMD owns approximately 16.66% of NHIL,
indirectly through family trusts and has the power to vote those
interests on behalf of the trusts.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
-----------------------------------------------
GENERAL. Accell Audit & Compliance, P.A. ("Accell") is the Company's principal
auditing accountant firm. The Company's Board of Directors has considered
whether the provisions of audit services are compatible with maintaining
Accell's independence. The engagement of our independent registered public
accounting firm was approved by our audit committee prior to the start of the
audit of our consolidated financial statements for the year ended December 31,
2011 and 2010.
The following table represents aggregate fees billed to the Company for the
years ended December 31, 2011 and December 31, 2010 by Accell.
Year Ended December 31,
2011 2010
----------------------------- ----------------------------
Audit Fees $3,000 $0
Audit-related Fees $4,750 $0
Tax Fees $0 $0
All Other Fees $0 $0
----------------------------- ----------------------------
Total Fees $7,750 $0
All audit work was performed by the auditors' full time employees.
36
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
-------------------------------------------------
The following is a complete list of exhibits filed as part of this Form 10K.
Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of
Regulation S-K.
------------------ ---------------------------------------------------------------- ----------------------------
Exhibit Number Description
------------------ ---------------------------------------------------------------- ----------------------------
3.1 Articles of Incorporation *
3.2 Amended Articles of Incorporation - Name Change *
3.3 Amended Articles of Incorporation - Share Increase *
3.4 Bylaws *
10.1 Share Exchange Agreement *
10.2 License Agreement *
10.3 Cost and Evaluation Agreement **
31.1 Certification of Principal Executive and Accounting Officer
pursuant to Section 302 of the Sarbanes-Oxley Act Filed Herewith
32.1 Certification of Principal Executive and Accounting Officer
pursuant to Section 906 of the Sarvanes-Oxley Act Filed Herewith
99.1 AHPharma, Inc. Executive Summary and Addendum *
101.INS XBRL Instance Document Filed Herewith (1)
101.SCH XBRL Taxonomy Extension Schema Document Filed Herewith (1)
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document Filed Herewith (1)
101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed Herewith (1)
101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed Herewith (1)
101.PRE XBRL Taxonomy Extension presentation Linkbase Document Filed Herewith (1)
------------------ ---------------------------------------------------------------- ----------------------------
*Filed as Exhibits with the Company's S-1 Registration Statement filed with the
Securities and Exchange Commission (www.sec.gov), dated June 9, 2011. ** Filed
as an Exhibit with the Company's Amended S-1 Registration Statement filed with
the Securities and Exchange Commission (www.sec.gov), dated August 24, 2011.
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not
filed for purposes of Section 18 of the Securities Exchange Act of 1934,
and otherwise is not subject to liability under these sections.
37
GLOBAL GREEN, INC.
(A development stage company)
(Formerly, The Global Tech Assets, Inc.)
CONSOLIDATED FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS' REPORT
December 31, 2011 and 2010
ACCELL
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors and Shareholders
Global Green, Inc.
We have audited the accompanying consolidated balance sheets of Global Green,
Inc. (a development stage company) and its wholly owned subsidiary (together,
the "Company") as of December 31, 2011 and 2010, and the related consolidated
statements of operations, shareholders' equity and cash flows for the years then
ended and the cumulative period from July 12, 2004 (inception) to December 31,
2011. These financial statements are the responsibility of the Global Green,
Inc.'s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluation of 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 consolidated financial position of Global
Green, Inc., as of December 31, 2011 and 2010, and the consolidated results of
its operations and its cash flows for the years then ended and the cumulative
period from July 12, 2004 (inception) to December 31, 2011, in conformity with
generally accepted accounting principles in effect in the United States.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2, the
Company has incurred net losses and negative cash flow from operations since
inception. These factors, and the need for additional financing in order for the
Company to meet its business plans, raise substantial doubt about the Company's
ability to continue as a going concern.
/S/ Accell Audit & Compliance, P.A.
----------------------------------
Accell Audit & Compliance, P.A.
Tampa, Florida
March 23, 2012
F-1
Global Green, Inc.
(A Development Stage Company)
Consolidated Balance Sheet
December 31, 2011 and 2010
December 31, 2011 December 31, 2010
-------------------- --------------------
ASSETS
Current assets
Cash and cash equivalents $ 103,360 $ -
Prepaid expenses 3,188 -
-------------------- --------------------
Total current assets 106,548 -
Intangible asset, net 6,467 6,803
-------------------- --------------------
Total assets $ 113,015 $ 6,803
-------------------- --------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ 17,012 $ -
Due to shareholders 500 5,500
-------------------- --------------------
Total liabilities 17,512 5,500
-------------------- --------------------
Shareholders' equity:
Preferred stock; no par value; 100,000,000 - -
shares authorized; no shares outstanding at
December 31, 2011 or 2010
Common stock; $.00001 par value; 3,000,000,000 7,458 7,345
shares authorized; 745,761,432 and 734,513,814
shares issued and outstanding at December 31, 2011
and 2010, respectively
Additional paid in capital 285,573 (314)
Deficit accumulated during the development stage (197,528) (5,728)
-------------------- --------------------
Total shareholders' equity 95,503 1,303
-------------------- --------------------
Total liabilities and shareholders' equity $ 113,015 $ 6,803
-------------------- --------------------
See accompanying Notes to Financial Statements
F-2
Global Green, Inc.
(A Development Stage Company)
Consolidated Statement of Operations
For the Years Ended December 31, 2011 and 2010
and the Period from Inception (July 12, 2004) to December 31, 2011
Year Ended Year Ended Inception to December 31, 2011
December 31, 2011 December 31, 2010
------------------ ------------------ ------------------
REVENUES $ - $ - $ -
------------------ ------------------ ------------------
OPERATING EXPENSES
Testing for U.S. Department of 137,800 - 137,800
Agriculture's approval
Professional fees 45,484 5,000 50,484
General and administrative 6,735 - 6,735
Stock transfer agent fees 1,421 500 1,921
Amortization 336 28 364
Consulting fees - 200 200
Bank fees 24 - 24
------------------ ------------------ ------------------
Total operating expenses 191,800 5,728 197,528
------------------ ------------------ ------------------
NET LOSS $ (191,800) $ (5,728) $ (197,528)
------------------ ------------------ ------------------
Net loss per share applicable to common $ (0.00) $ (0.00)
stockholders-- basic and diluted
------------------ ------------------
Weighted average number of shares 743,293,205 101,674,121
outstanding - basic and diluted
------------------ ------------------
See accompanying Notes to Financial Statements
F-3
Global Green, Inc.
(A Development Stage Company)
Consolidated Statement of Equity
For the Period from Inception (July 12, 2004) to December 31, 2011
Deficit
Accumulated
During the Total
Common Common Additional Development Shareholders'
Shares Stock Paid in Capital Stage Equity
-------------- ------------ -------------- ------------- --------------
INCEPTION, July 12, 2004 - $ - $ - $ - $ -
Share issuance, September 2004 3,141,597 314 (314) - -
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2004 3,141,597 314 (314) - -
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2005 3,141,597 314 (314) - -
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2006 3,141,597 314 (314) - -
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2007 3,141,597 314 (314) - -
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2008 3,141,597 314 (314) - -
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2009 3,141,597 314 (314) - -
Recapitalization due to 10 to
1 stock split 28,274,370 - - - -
Stock based compensation 20,000,000 200 - - 200
Share issuance 683,097,847 6,831 - - 6,831
Net loss - - - (5,728) (5,728)
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2010 734,513,814 7,345 (314) (5,728) 1,303
Share issuance, March 2011 11,247,618 113 285,887 - 286,000
Net loss - - - (191,800) (191,800)
-------------- ------------ -------------- ------------- --------------
BALANCE, December 31, 2011 745,761,432 $ 7,458 $ 285,573 $ (197,528) $ 95,503
-------------- ------------ -------------- ------------- --------------
See accompanying Notes to Financial Statements
F-4
Global Green, Inc.
(A Development Stage Company)
Consolidated Statement of Cash Flows
For the Years Ended December 31, 2011 and 2010
and the Period from Inception (July 12, 2004) to December 31, 2011
December 31, 2011 December 31, 2010 Inception to
December 31, 2011
------------------ ----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (191,800) $ (5,728) $ (197,528)
Adjustments to reconcile net loss to net cash
from operating activities:
Amortization 336 28 364
Stock based compensation - 200 200
Change in assets and liabilities:
Prepaid expenses (3,188) - (3,188)
Accrued expenses 17,012 17,012
Due to shareholders (5,000) 5,500 500
------------------ ----------------- -----------------
Net cash from operating activities (182,640) - (182,640)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from share issuance 286,000 - 286,000
------------------ ----------------- -----------------
NET CHANGE IN CASH 103,360 - 103,360
CASH, beginning of period - - -
------------------ ---------------- -----------------
CASH, end of period $ 103,360 $ - $ 103,360
================== ================ =================
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Common stock issued for acquisition of
Global Green International, Inc. $ - $ 6,831 $ 6,831
================== ================ ==================
F-5
See accompanying Notes to the Financial Statements
GLOBAL GREEN, INC.
(a Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
NOTE 1 NATURE OF ORGANIZATION
Global Green, Inc. (the "Company") is a Florida Corporation
incorporated on July 12, 2004 as a wholly owned subsidiary of
Global Assets & Services, Inc. In September 2004, the Company was
spun out into a separate legal entity. The Company changed its
name from The Global Tech Assets, Inc. to Global Green, Inc. in
April 2010 and its fiscal period end is December 31.
The Company is in the development stage. The principal activities
during the development stage include organizing the corporate
structure, implementing the Company's business plan and raising
capital. Although the Company was formed in 2004, it did not have
any operating activities until 2010.
Under the Share Exchange Agreement executed on November 29, 2011,
between the Company and Nutritional Health Institute, LLC
("NHIL"), the Company acquired 100% of the issued and outstanding
stock of Global Green International, Inc. ("GGII"), a wholly
owned subsidiary of NHIL. At the same time, the Company issued
approximately 683 million shares of its common stock,
representing 93% of the ownership of the Company, to NHIL. After
the above mentioned acquisition as per the Share Exchange
Agreement, the Company has become a majority-owned subsidiary of
NHIL. As the effective control over GGII did not change, in
accordance with Financial Accounting Standards Board's ("FASB")
Accounting Standards Codification ("ASC") 805 Business
Combinations, GGII is consolidated at its book value (See Note
4). Prior to November 2010, CGII had no assets or operations, so
there is no impact to the historical financial statements.
GGII, a wholly-owned subsidiary of the Company, has been granted
the exclusive worldwide rights (the "Licensing Agreement") to
manufacture, distribute, market and sell a Salmonella and Antigen
vaccine (the "Vaccine"). The Licensing Agreement was executed
between NHIL and GGII before the Company acquired the 100%
ownership of GGII and is the only asset of CGII.
In February 2011, the Vaccine has been entered into the final
phase of becoming a United States Department of Agriculture
("USDA") approved vaccine for the in ovo vaccination of chicken
eggs to provide immunity against Salmonella bacteria. In May
2011, the United States Patent and Trademark Office granted a
patent for the method and composition in the Vaccine. In August
2011, an additional patent was granted related to the vaccine.
NOTE 2 GOING CONCERN
These consolidated financial statements have been prepared on a
going concern basis which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business for the foreseeable future. As of December 31, 2011 the
Company has incurred net losses of $197,528 since inception (July
12, 2004).
Management's plans include raising capital through the equity
markets to fund operations and eventually, the generating of
revenue through its business; however, there can be no assurance
that the Company will be successful in such activities. These
consolidated financial statements do not include any adjustments
relating to the recovery of the recorded assets or the
classifications of the liabilities that might be necessary should
the Company be unable to continue as a going concern.
F-6
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
---------------------
The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America ("GAAP") on the accrual basis of
accounting and in compliance with FASB ASC 915, Development Stage
Entities. All significant intercompany accounts and transactions
have been eliminated in consolidation. The interim financial
statements reflect all adjustments, which are, in the opinion of
management, necessary in order to make the financial statements
not misleading.
Use of Estimates
----------------
The preparation of financial statements in conformity with GAAP
requires management to adopt accounting policies and make
estimates and assumptions that affect amounts reported in the
financial statements. The significant accounting policies,
estimates and related judgments underlying the Company's
financial statements are summarized below. In applying these
policies, management makes subjective judgments that frequently
require estimates about matters that are inherently uncertain.
Cash and Cash Equivalents
-------------------------
The Company considers all investments with a maturity date of
three months or less when purchased to be cash equivalents. There
were no cash equivalents at December 31, 2011 or 2010.
Revenue Recognition
-------------------
The Company recognizes revenue on arrangements in accordance with
Securities and Exchange Commission Staff Accounting Bulletin
Topic 13, Revenue Recognition and FASB ASC 605-15-25, Revenue
Recognition. In all cases, revenue is recognized only when the
price is fixed or determinable, persuasive evidence of an
arrangement exists, the service is performed and collectability
is reasonably assured. The Company did not report any revenues
from inception to December 31, 2011.
Earnings Per Share
------------------
The Company has adopted ASC 260-10-50, Earnings Per Share, which
provides for calculation of "basic" and "diluted" earnings per
share. Basic earnings per share includes no dilution and is
computed by dividing net income or loss available to common
shareholders by the weighted average common shares outstanding
for the period. Diluted earnings per share reflect the potential
dilution of securities that could share in the earnings of an
entity. Basic and diluted losses per share were the same at the
reporting dates as there were no common stock equivalents
outstanding at December 31, 2011 or 2010.
Concentrations
--------------
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash.
Occasionally, cash balances may exceed amounts insured by the
Federal Deposit Insurance Corporation ("FDIC"). Accordingly, the
Company places its cash and cash equivalents with financial
institutions considered by management to be of high credit
quality. At December 31, 2011, the cash balances were not in
excess of amounts insured by the FDIC.
F-7
Income Taxes
------------
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Additionally, the
recognition of future tax benefits, such as net operating loss
carryforwards, is required to the extent that realization of such
benefits is more likely than not. Deferred tax assets and
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which the assets and
liabilities are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates
is recognized in income tax expense in the period that includes
the enactment date.
In the event the future tax consequences of differences between
the financial reporting bases and the tax bases of the Company's
assets and liabilities result in deferred tax assets, an
evaluation of the probability of being able to realize the future
benefits indicated by such asset is required. A valuation
allowance is provided for the portion of the deferred tax asset
when it is more likely than not that some or all of the deferred
tax asset will not be realized. In assessing the realizability of
the deferred tax assets, management considers the scheduled
reversals of deferred tax liabilities, projected future taxable
income, and tax planning strategies.
The Company files income tax returns in the United States and
Florida, which are subject to examination by the tax authorities
in these jurisdictions. Generally, the statute of limitations
related to the Company's federal and state income tax return is
three years. The state impact of any federal changes for prior
years remains subject to examination for a period up to five
years after formal notification to the states.
Management has evaluated tax positions in accordance with FASB
ASC 740, Income Taxes, and has not identified any significant tax
positions, other than those disclosed.
Recently Issued Accounting Pronouncements
-----------------------------------------
There are no recently issued accounting pronouncements that are
expected to have a significant impact to the Company or its
financial statements.
Subsequent Events
-----------------
In accordance with FASB ASC 855, Subsequent Events, the Company
evaluated subsequent events through March 23, 2011, the date the
financial statements were available for issue.
NOTE 4 INTANGIBLE ASSET
The Company accounts for its intangible asset in accordance FASB
ASC 350 Intangibles--Goodwill and Other. The intangible assets
consist of the Licensing Agreement and is carried at an allocated
cost, less accumulated amortization. The Licensing Agreement was
executed on November 29, 2010 between NHIL and GGII, before the
Company acquired the 100% ownership of GGII as described in Note
1. The provisions in the License Agreement include the Company's
responsibilities to protect the Vaccine information and to assume
financial responsibilities for the acquisition of USDA approval
of the Vaccine. The License Agreement has no expiration date, but
is being amortized over the 20 year legal life of the related
patent. As the effective control over GGII did not change after
acquisition by the Company, in accordance with FASB ASC 805,
Business Combinations, the License Agreement is consolidated at
the book value.
F-8
Company, in accordance with FASB ASC 805, Business Combination, the License
Agreement is consolidated at the book value.
Components of intangible assets at the periods ended are as follows:
December 31, December 31,
2011 2010
------------------------------------------
License agreement $ 6,831 $ 6,831
Accumulated amortization (364) (28)
------------------- -------------------
$ 6,467 $ 6,803
------------------- -------------------
NOTE 5 TAXES
The components of income tax expense for the periods ended are as follows:
For the Year For the Year Inception to
Ended Ended December 31,
December 31, December 31, 2011
2011 2010 (unaudited)
-----------------------------------------------
Current tax expense (benefit) $ (72,117) $ (2,153) $ (74,271)
Deferred tax expense (benefit) - - -
Change in valuation allowance 72,117 2,153 74,271
Use of operating loss carryforward - - -
----------- ----------- -----------
$ - $ - $ -
----------- ----------- -----------
The difference between income tax expense computed by applying the statutory
federal income tax rate to earnings before taxes for the period ended are as
follows:
For the Year For the Year Inception to
Ended Ended December 31,
December 31, December 31, 2011
2011 2010 (unaudited)
------------------------------------------------
Pretax loss at federal
statutory rate $(65,212) $ (1,948) $ (67,161)
State income benefit,
net of federal (6,905) (205) (7,111)
Change in valuation
allowance 72,117 2,153 74,272
----------- ----------- -----------
$ - $ - $ -
----------- ----------- -----------
F-9
The components of deferred taxes are as follows:
For the Year For the Year
Ended Ended
December 31, December 31,
2011 2010
-------------------------------
Deferred income tax assets:
Operating loss carryforwards $ 72,117 $ 2,153
Less: Valuation allowance (72,117) (2,153)
----------- -----------
Net deferred tax asset $ - $ -
----------- -----------
NOTE 6 EQUITY
In April 2010, the Company authorized the issuance of up to
100,000,000 shares of Preferred Stock at no par value. As of
December 31, 2011 and 2010, no shares are issued or outstanding.
In May 2010, the Company had a 10-to-1 stock forward split,
changing its par value from $.0001 per share to $.00001 per
share. Right after the said stock split, the Company issued
20,000,000 shares of its common stock to certain shareholders for
services rendered valued at $200. This is recorded as a non-cash
expense in the accompanying statement of operations.
On March 21, 2011, the Company completed a private placement of
common stock to accredited investors and raised $286,000 of
working capital.
NOTE 7 RELATED PARTY TRANSACTIONS AND COMMITMENTS
During the period ending December 31, 2010, shareholders of the
Company paid expenses totaling $5,500 for attorney and stock
transfer fees which are included in Due to Shareholders on the
accompanying balance sheet. At December 30, 2011 and 2010, the
amounts due to related parties were $500 and $5,500 respectively.
Through its wholly-owned subsidiary, GGII, the Company has
exclusive rights to the Licensing Agreement with NHIL, the
Company's majority shareholder. In accordance with this
agreement, GGII assumes the financial responsibility for the
acquisition and maintenance of all patents, as well as USDA's
approval of the Vaccine.
NOTE 8 CONTINGENCIES
During the normal course of business, the Company may be exposed
to litigation. When the Company becomes aware of potential
litigation, it evaluates the merits of the case in accordance
with FASB ASC 450-20-50, Contingencies. The Company evaluates its
exposure to the matter, possible legal or settlement strategies
and the likelihood of an unfavorable outcome. If the Company
determines than an unfavorable outcome is probable and can be
reasonably estimated, it establishes the necessary accruals. As
of December 31, 2011 and 2010, the Company is not aware of any
contingent liabilities that should be reflected in the
accompanying financial statements.
F-10
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.
GLOBAL GREEN, INC.
/s/Dr. Mehran P. Ghazvini, DC, NMD March 29, 2012
------------------------------------------------------------
Dr. Mehran P. Ghazvini, DC, NMD
(Chief Executive Officer/Principal Executive Officer
& Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/Dr. Mehran P. Ghazvini, DC, NMD March 29, 2012
------------------------------------------------------------
Dr. Mehran P. Ghazvini, DC, NMD, Chairman of the Board of
Directors
/s/Dr. Rene' M. Reed, DC, NMD March 29, 2012
------------------------------------------------------------
Dr. Rene' M. Reed, DC, NMD Director
38