UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2012
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION FROM _________ TO _________.
Commission File Number: 0-54557
GLOBAL EQUITY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 27-3986073
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
23 Frond "K" Palm, Jumeirah, Dubai UAE
(Address of principal executive offices)
+971 (7) 204 7593
(Registrant's telephone number)
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 Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of May 10, 2012, there were
28,920,700 outstanding shares of the Registrant's Common Stock, $.001 par value.
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements................................................. 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................21
Item 3. Quantitative and Qualitative Disclosures about Market Risk...........26
Item 4. Controls and Procedures..............................................26
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................27
Item 1A. Risk Factors.........................................................27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..........27
Item 3. Defaults Upon Senior Securities......................................27
Item 4. Mine Safety Disclosure...............................................27
Item 5. Other Information....................................................27
Item 6. Exhibits.............................................................28
SIGNATURES....................................................................29
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Global Equity International, Inc. and Subsidiary
Consolidated Balance Sheets
March 31, December 31,
2012 2011
------------ ------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 6,675 $ 2,218
Accounts receivable - net of allowance for doubtful
accounts of $35,000 and $0, respectively 27,500 35,000
Prepaids 551 551
------------ ------------
TOTAL CURRENT ASSETS 34,726 37,769
MARKETABLE SECURITIES 1,285,000 1,690,000
------------ ------------
TOTAL ASSETS $ 1,319,726 $ 1,727,769
============ ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 70,010 $ 37,191
Accounts payable - related parties 252,364 145,528
Loans payable - related party 26,844 40,173
Notes payable - net 13,111 --
------------ ------------
TOTAL CURRENT LIABILITIES 362,329 222,892
------------ ------------
REDEEMABLE SERIES A, CONVERTIBLE PREFERRED STOCK:
5,000,000 shares authorized and 5,000,000 and no shares
issued and outstanding, respectively, $0.001 par value
(redemption amount $480,000) (liquidation preference of $0) 480,000 480,000
------------ ------------
STOCKHOLDERS' EQUITY
Common Stock: 70,000,000 shares authorized and 28,920,700 and
28,780,700 shares issued and outstanding, respectively, $0.001 par value 28,921 28,781
Additional Paid In Capital 449,931 393,103
Accumulated deficit (151,455) (12,007)
Accumulated other comprehensive income 150,000 615,000
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 477,397 1,024,877
------------ ------------
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK & STOCKHOLDERS' EQUITY $ 1,319,726 $ 1,727,769
============ ============
See accompanying notes to financial statements.
3
Global Equity International, Inc. and Subsidiary
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
Three Months Ended
March 31, March 31,
2012 2011
------------ ------------
REVENUE $ 107,500 $ 22,581
GENERAL AND ADMINISTRATIVE EXPENSES 246,948 42,514
------------ ------------
NET LOSS $ (139,448) $ (19,933)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 28,814,546 28,668,000
============ ============
Net loss per common share - basic and diluted (0.00) (0.00)
============ ============
COMPREHENSIVE LOSS:
Net loss $ (139,448) $ (19,933)
Unrealized loss on available for sale marketable securities (465,000) --
------------ ------------
COMPREHENSIVE LOSS $ (604,448) $ (19,933)
============ ============
See accompanying notes to financial statements.
4
Global Equity International, Inc. and Subsidiary
Consolidated Statement of Stockholders' Equity Three
months ended March 31, 2012 and the Years Ended December 31, 2011 and 2010
(Unaudited)
Accumulated
Retained Other
Common Stock Additional Earnings Comprehensive Total
------------------- Paid-in (Accumulated Income Stockholders'
Shares Amount Capital Deficit) (Loss) Equity
------ ------ ------- -------- ------ ------
Balance - December 31, 2010 28,668,000 $28,668 $336,866 $ 1,676,095 $ 166,076 $2,207,705
Stock issued for cash
($0.50/share) 103,100 103 51,447 -- -- 51,550
Common stock issued for
services ($0.50/share) 9,600 10 4,790 -- -- 4,800
Net loss - 2011 -- -- -- (1,688,102) -- 1,688,102)
Unrealized gain on
available for sale
marketable securities -- -- -- -- 448,924 448,924
---------- ------- -------- ----------- --------- ----------
Balance - December 31, 2011 28,780,700 28,781 393,103 (12,007) 615,000 1,024,877
Issuance of warrants for
interest on notes payable -- -- 6,968 -- -- 6,968
Issuance of common stock as
debt discount on notes
payable ($0.50/share) 140,000 140 49,860 -- -- 50,000
Net loss for the three months
ended March 31, 2012 -- -- -- (139,448) -- (139,448)
Unrealized loss on available
for sale marketable securities -- -- -- -- (465,000) (465,000)
---------- ------- -------- ----------- --------- ----------
BALANCE - MARCH 31, 2012 28,920,700 $28,921 $449,931 $ (151,455) $ 150,000 $ 477,397
========== ======= ======== =========== ========= ==========
See accompanying notes to financial statements.
5
Global Equity International, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31, March 31,
2012 2011
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (139,448) $ (19,933)
Adjustments to Reconcile Net Loss to Net Cash Used
in by Operating Activities:
Amortization of debt discount 13,111 --
Warrants issued for interest on notes payable 6,968 --
Bad debt 35,000 --
Marketable securities received as revenue (60,000) --
Changes in Operating Assets and Operating Liabilities:
Accounts receivable (27,500) --
Accounts payable 32,819 16,680
Accounts payable - related parties 106,836 --
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (32,214) (3,253)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable - related party 5,571 --
Proceeds from loans payable -- 200
Repayments of loans payable - related party (18,900) --
Proceeds from notes payable 50,000 --
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 36,671 200
---------- ----------
NET INCREASE (DECREASE) IN CASH 4,457 (3,053)
CASH - BEGINNING OF THE PERIOD 2,218 3,275
---------- ----------
CASH - END OF THE PERIOD $ 6,675 $ 222
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ -- $ --
========== ==========
Cash paid for income taxes $ -- $ --
========== ==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Debt discount recorded on notes payable $ 50,000 $ --
========== ==========
See accompanying notes to financial statements.
6
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the United States
Securities and Exchange Commission for interim financial information.
Accordingly, they do not include all the information and footnotes necessary for
a comprehensive presentation of financial position, results of operations, or
cash flows. It is management's opinion, however, that all material adjustments
(consisting of normal recurring adjustments) have been made which are necessary
for a fair financial statement presentation.
The unaudited interim consolidated financial statements should be read in
conjunction with the Company's Annual Report on Form 10, which contains the
audited financial statements and notes thereto, together with the Management's
Discussion and Analysis, for the periods ended December 31, 2011 and 2010. The
interim results for the period ended March 31, 2012 are not necessarily
indicative of results for the full fiscal year.
NOTE 2 NATURE OF OPERATIONS
Global Equity Partners, PLC ("GEP"), a private company, was organized under the
laws of the Republic of Seychelles on September 2, 2009. Global Equity
International Inc. (the "Company" or "GEI"), a private company, was organized
under the laws of the state of Nevada on October 1, 2010. On November 15, 2010,
GEP executed a reverse recapitalization with GEI.
Revenue is generated from business consulting services, introduction fees, and
equity participation.
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
All significant inter-company accounts and transactions have been eliminated in
consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenue and expenses during the reporting
period.
7
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
Making estimates requires management to exercise significant judgment. It is at
least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial
statements, which management considered in formulating its estimate could change
in the near term due to one or more future non confirming events. Accordingly,
the actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, competition and potential risk of business
failure. The risk of social and governmental factors is also a concern since the
Company is headquartered in Dubai.
CASH
The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents. At March 31, 2012 and December 31,
2011, respectively, the Company had no cash equivalents.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company recognizes accounts receivable in connection with the services
provided. The Company recognizes an allowance for losses on accounts receivable
in an amount equal to the estimated probable losses net of recoveries. The
allowance is based on an analysis of current receivables aging and expected
future write-offs, as well as an assessment of specific identifiable customer
accounts considered at risk or uncollectible.
MARKETABLE SECURITIES
(A) CLASSIFICATION OF SECURITIES
At the time of acquisition, a security is designated as held-to-maturity,
available-for-sale or trading, which depends on ability and intent to hold such
security to maturity. Securities classified as trading and available-for-sale
are reported at fair value, while securities classified as held-to-maturity are
reported at amortized cost.
All securities held at March 31, 2012 are designated as available for sale.
Any unrealized gains and losses are reported as other comprehensive income
(loss). Realized gains (losses) will be computed on a specific identification
basis and are recorded in net capital gains (losses) on investments in the
statements of operations.
8
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
COST METHOD INVESTMENT
At March 31, 2012, the Company has one investment, having a fair value of
$160,000 that is treated as a cost method investment. The value of the cost
method investment pertains to the receipt of 9.85% of the common stock in a
private company in which the best evidence of fair value was the services
rendered.
In accordance with ASC NO.325-20, "COST METHOD INVESTMENTS", the Company
recognizes an investment in the stock of an investee as an asset, as a component
of marketable securities.
Under the cost method of accounting for investments in common stock, dividends
will be the basis for recognition by the Company of earnings from the
investment. The net accumulated earnings of an investee subsequent to the date
of investment are recognized by the Company only to the extent distributed by
the investee as dividends. Dividends received in excess of earnings subsequent
to the date of investment are considered a return of investment and are recorded
as reductions of cost of the investment. At March 31, 2012, the Company had not
received any dividends.
Since the Company has less than $100,000,000 in assets, estimating fair value
and related impairment is exempt under ASC No. 325-20-35-26.
(B) OTHER THAN TEMPORARY IMPAIRMENT
The Company reviews its equity investment portfolio for any unrealized losses
that would be deemed other-than-temporary and require the recognition of an
impairment loss in income. If the cost of an investment exceeds its fair value,
the Company evaluates, among other factors, general market conditions, the
duration and extent to which the fair value is less than cost, and the Company's
intent and ability to hold the investments. Management also considers the type
of security, related-industry and sector performance, as well as published
investment ratings and analyst reports, to evaluate its portfolio. Once a
decline in fair value is determined to be other than temporary, an impairment
charge is recorded and a new cost basis in the investment is established. If
market, industry, and/or investee conditions deteriorate, the Company may incur
future impairments.
BENEFICIAL CONVERSION FEATURE
For conventional convertible debt where the rate of conversion is below market
value, the Company records a "beneficial conversion feature" ("BCF") and related
debt discount.
When the Company records a BCF, the relative fair value of the BCF would be
recorded as a debt discount against the face amount of the respective debt
instrument. The discount would be amortized to interest expense over the life of
the debt.
9
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
DERIVATIVE LIABILITIES
Fair value accounting requires bifurcation of embedded derivative instruments
such as conversion features in convertible debt or equity instruments, and
measurement of their fair value for accounting purposes. In determining the
appropriate fair value, the Company uses the Black-Scholes option-pricing model.
In assessing the convertible debt instruments, management determines if the
convertible debt host instrument is conventional convertible debt and further if
there is a beneficial conversion feature requiring measurement. If the
instrument is not considered conventional convertible debt, the Company will
continue its evaluation process of these instruments as derivative financial
instruments.
Once the derivative liabilities are determined, they are adjusted to reflect
fair value at each reporting period end, with any increase or decrease in the
fair value being recorded in results of operations as an adjustment to fair
value of derivatives. In addition, the fair value of freestanding derivative
instruments such as warrants, are also valued using the Black-Scholes pricing
model.
DEBT ISSUE COSTS AND DEBT DISCOUNT
The Company may pay debt issue costs, and record debt discounts in connection
with raising funds through the issuance of convertible debt. These costs are
amortized over the life of the debt to interest expense. If a conversion of the
underlying debt occurs, a proportionate share of the unamortized amounts is
immediately expensed.
ORIGINAL ISSUE DISCOUNT
For certain convertible debt issued, the Company provides the debt holder with
an original issue discount. The original issue discount is recorded to debt
discount, reducing the face amount of the note and is amortized to interest
expense over the life of the debt.
REVENUE RECOGNITION
Revenue is recognized when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is performed, and collectability
of the related fee is reasonably assured.
The Company's services do not include a provision for cancellation, termination,
or refunds.
For the three months ended March 31, 2012 and 2011, the Company received
marketable securities and cash as consideration for services rendered.
10
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
At March 31, 2012 and December 31, 2011, the Company had the following
concentrations of accounts receivables with customers:
Customer March 31, 2012 December 31, 2011
-------- -------------- -----------------
C 44% --%
D 24% 43%
E 32% 57%
For the three months ended March 31, 2012 and 2011, the Company had the
following concentrations of revenues with customers:
Customer March 31, 2012 March 31, 2011
-------- -------------- --------------
C 26 % 100%
E 19 % --%
F* 56 % --%
No securities were acquired from customers "C" or "E" as all of this revenue was
received in cash.
----------
* Non-marketable securities, accounted for under the cost method.
SHARE-BASED PAYMENTS
The Company recognizes all forms of share-based payments, including stock option
grants, warrants, restricted stock grants and stock appreciation rights, at
their fair value on the grant date, which are based on the estimated number of
awards that are ultimately expected to vest.
Share based payments, excluding restricted stock, are valued using a
Black-Scholes pricing model. Share based payment awards issued to non-employees
for services rendered are recorded at either the fair value of the services
rendered or the fair value of the share-based payment, whichever is more readily
determinable. The grants are amortized on a straight-line basis over the
requisite service periods, which is generally the vesting period. If an award is
granted, but vesting does not occur, any previously recognized compensation cost
is reversed in the period related to the termination of service.
11
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
When computing fair value, the Company considered the following variables:
* The risk-free interest rate assumption is based on the U.S. Treasury
yield for a period consistent with the expected term of the share
based payment in effect at the time of the grant.
* The expected term was developed by management estimate.
* The Company has not paid any dividends on common stock since inception
and does not anticipate paying dividends on its common stock in the
near future.
* The expected volatility is based on management estimates regarding
private company stock, where future trading of stock in a public
market is expected to be highly volatile.
* The forfeiture rate is based on historical experience.
EARNINGS PER SHARE
Basic earnings (loss) per share are computed by dividing net income (loss) by
weighted average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of shares of common stock, common stock
equivalents and potentially dilutive securities outstanding during the period.
The Company has no common stock equivalents, which, if exercisable, would be
anti-dilutive. A separate computation of diluted earnings (loss) per share is
not presented.
COMPREHENSIVE INCOME (LOSS)
The comprehensive income or loss consists of the change in unrealized gain
(loss) on available-for-sale marketable securities.
12
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
FAIR VALUE FOR FINANCIAL ASSETS AND LIABILITIES
The Company measures assets and liabilities at fair value based on an expected
exit price as defined by the authoritative guidance on fair value measurements,
which represents the amount that would be received on the sale of an asset or
paid to transfer a liability, as the case may be, in an orderly transaction
between market participants. As such, fair value may be based on assumptions
that market participants would use in pricing an asset or liability. The
authoritative guidance on fair value measurements establishes a consistent
framework for measuring fair value on either a recurring or nonrecurring basis
whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
* Level 1: Observable inputs that reflect quoted prices (unadjusted) for
identical assets or liabilities in active markets.
* Level 2: Inputs reflect: quoted prices for identical assets or
liabilities in markets that are not active; quoted prices for similar
assets or liabilities in active markets; inputs other than quoted
prices that are observable for the assets or liabilities; or inputs
that are derived principally from or corroborated by observable market
data by correlation or other means.
* Level 3: Unobservable inputs reflecting the Company's assumptions
incorporated in valuation techniques used to determine fair value.
These assumptions are required to be consistent with market
participant assumptions that are reasonably available.
The carrying amounts reported in the balance sheet for cash, prepaid, accounts
receivable, accounts payable, accrued liabilities - related parties and loans
payable - related party, approximate fair value based on the short-term nature
of these instruments.
The Company has assets measured at fair market value on a recurring basis.
Consequently, the Company had gains and losses reported in the statement of
comprehensive income (loss), that were attributable to the change in unrealized
gains or losses relating to those assets and liabilities still held at March 31,
2012.
13
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
The following is the Company's assets measured at fair value on a recurring and
nonrecurring basis at March 31, 2012 and December 31, 2011, using quoted prices
in active markets for identical assets (Level 1); significant other observable
inputs (Level 2); and significant unobservable inputs (Level 3):
March 31, 2012 December 31, 2011
-------------- -----------------
Level 1 - None $ -- $ --
Level 2 - Marketable Securities 1,125,000 1,590,000
Level 3 - Non-Marketable Securities 160,000 100,000
---------- ----------
TOTAL $1,285,000 $1,690,000
========== ==========
The following section describes the valuation methodologies the Company uses to
measure financial instruments at fair value:
Marketable Securities -- The Level 2 position consists of the Company's
investments in equity securities of stock held in publicly traded companies. The
valuation of these securities is based on significant inputs that are observable
or can be derived from or corroborated by observable market data. These
valuations are typically based on quoted prices in active markets.
Non-Marketable Securities at Fair Value on a Nonrecurring Basis -- certain
assets are measured at fair value on a nonrecurring basis. These assets consist
of investments accounted for under the cost method. The Level 3 position
consists of investment in an equity security held in a private company.
Changes in Level 3 assets measured at fair value for the three months ended
March 31, 2012 and the year ended December 31, 2011 were as follows:
Beginning balance, December 31, 2010 $ --
Realized and unrealized gains (losses) --
Purchases, sales and settlements 100,000
Impairment loss --
--------
Balance, December 31, 2011 100,000
Realized and unrealized gains (losses) --
Purchases, sales and settlements 60,000
Impairment loss --
--------
Ending balance, March 31, 2012 $160,000
========
14
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220):
Presentation of Comprehensive Income. The guidance in ASU 2011-05 applies to
both annual and interim financial statements and eliminates the option for
reporting entities to present the components of other comprehensive income as
part of the statement of changes in stockholders' equity. This ASU also requires
consecutive presentation of the statement of net income and other comprehensive
income. Finally, this ASU requires an entity to present reclassification
adjustments on the face of the financial statements from other comprehensive
income to net income. The amendments in this ASU should be applied
retrospectively and are effective for fiscal year, and interim periods within
those years, beginning after December 15, 2011. The Company has adopted this
guidance in these financial statements.
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic
820): Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs. The guidance in ASU 2011-04 changes the
wording used to describe the requirements in U.S. GAAP for measuring fair value
and for disclosing information about fair value measurements, including
clarification of the FASB's intent about the application of existing fair value
and disclosure requirements and changing a particular principle or requirement
for measuring fair value or for disclosing information about fair value
measurements. The amendments in this ASU should be applied prospectively and are
effective for interim and annual periods beginning after December 15, 2011.
Early adoption by public entities is not permitted. The Company has adopted this
guidance in these financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
There are no other new accounting pronouncements that have any impact on the
Company's financial statements.
NOTE 4 MARKETABLE SECURITIES AND FAIR VALUE
The following table represents the Company's available for sale marketable
securities holdings as of March 31, 2012:
Equity securities at fair value - December 31, 2011 $ 1,690,000
Equity securities acquired during the three months
ended March 31, 2012 60,000
Unrealized losses during the three months ended
March 31, 2012 (465,000)
-----------
EQUITY SECURITIES AT FAIR VALUE - MARCH 31, 2012 $ 1,285,000
===========
15
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
NOTE 5 DEBT
(A) RELATED PARTY
The Company received loans from related parties. The loans are non-interest
bearing, unsecured and due on demand. The following table represents the loans
payable activity as of March 31, 2012:
Loans payable - related party - December 31, 2011 $ 40,173
Additional loans during the three months ended March 31, 2012 5,571
Repayments during the three months ended March 31, 2012 (18,900)
--------
LOANS PAYABLE - RELATED PARTY - MARCH 31, 2012 $ 26,884
========
(B) NOTES PAYABLE
In February and March 2012, the Company entered into two 90 day bridge loan
agreements to raise a total of $70,000. The loans will have interest ranging
from 0% - 3%. The loans are unsecured. As of March 31, 2012, the Company had
received $50,000. On April 10, 2012, the remaining $20,000 was received under
the same terms. The Company recorded an additional debt discount of $20,000.
In connection with these loans, the Company issued 140,000 shares of common
stock, having a fair value of $70,000 ($0.50/share), based upon recent third
party services rendered, and 20,000 warrants to one lender having an exercise
price of $1, expiring September 2013. The fair value of the warrants was
approximately $7,000.
The amounts paid to acquire the debt financing have been treated as a debt
discount. At March 31, 2012, the Company recorded debt discounts of $50,000. The
remaining valuation of the warrants for $7,000 was recorded as interest expense.
The Company credited additional paid in capital for $57,000.
16
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
The Company applied fair value accounting for all share based payment awards.
The fair value of each warrant granted is estimated on the date of grant using
the Black-Scholes pricing model. The Black-Scholes assumptions used are as
follows:
Exercise price $1
Expected dividends 0%
Expected volatility 200%
Risk fee interest rate 0.35%
Expected life of option 1.5 years
Expected forfeitures 0%
(C) DEBT DISCOUNT
During the three months ended March 31, 2012, the Company amortized $13,111 as
follows.
March 31, 2012
--------------
Total notes payable (See 5(B) above) $ 50,000
Debt discount (50,000)
Amortization of debt discount 13,111
--------
Debt - net $ 13,111
========
NOTE 6 STOCKHOLDERS' EQUITY
PREFERRED STOCK
On November 30, 2011, the Company designated Series "A" Preferred Stock, with
the following rights:
* Voting rights - each share has two votes.
* Conversion - each share is automatically convertible into 10,000,000
shares of common stock on December 1, 2013. (See Redeemable Preferred
Stock below).
* No dividend rights.
* No liquidation rights.
17
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
The Company issued 5,000,000, Series A, convertible preferred shares of stock,
as a bonus to its Chief Executive Officer for services rendered, having a fair
value of $480,000 ($0.096/share), based upon the fair value of the services
rendered, which represents the best evidence of fair value.
The Company has determined that no beneficial conversion feature or derivative
financial instruments exist in connection with the Series "A", convertible
preferred stock, as the conversion rate was fixed at an amount equal to the
market price of our common stock. Additionally, there are a stated number of
fixed shares.
REDEEMABLE PREFERRED STOCK
Under Regulation S-X, Rule 5-02-28, preferred stock must be classified outside
shareholders' equity when the stock is:
* Redeemable at a fixed or determinable price on a fixed or determinable
date,
* Redeemable at the option of the holder, or
* Redeemable based on conditions outside the control of the issuer.
Since the Series A, convertible preferred stock is redeemable on December 1,
2013 it is presented on the balance sheets as "Redeemable Preferred Stock" in a
manner consistent with temporary equity.
There are no other features associated with this class of redeemable preferred
stock, which require disclosure. The carrying amount and redemption amount are
$480,000. There are no redemption requirements.
18
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
STOCK WARRANTS
The following is a summary of the Company's stock warrant activity:
Number of Weighted Average
Warrants Exercise Price
-------- --------------
Balance at December 31, 2011 -- $ --
Granted 20,000 $1.00
Exercised -- $ --
Forfeited -- $ --
------ -----
Balance at March 31, 2012 20,000 $1.00
====== =====
The weighted average remaining life for all outstanding warrants at March 31,
2012 is 1.45 years. The intrinsic value at March 31, 2012 and December 31, 2011
is $0 and $0, respectively.
NOTE 7 COMMITMENTS
Effective September 1, 2011, the Company executed an employment agreement with
its Chief Executive Officer and Chief Financial Officer, under the following
terms:
* Salary - $240,000 - 120,000 per year,
* Stock options - amount yet to be determined; and
* Term - 3 years
NOTE 8 GOING CONCERN
As reflected in the accompanying financial statements, the Company had a net
loss of $139,448 and net cash used in operations of $32,214 for the three months
ended March 31, 2012; and a working capital deficit of $327,603 for the period
ended March 31, 2012. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
19
Global Equity International Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2012
(Unaudited)
The ability of the Company to continue its operations is dependent on
Management's plans, which include the raising of capital through debt and/or
equity markets, until such time that funds provided by operations are sufficient
to fund working capital requirements. The Company may need to incur liabilities
with certain related parties to sustain the Company's existence.
The Company expects to use its working capital to implement a marketing program
to increase awareness of its business model, which includes, but is not limited
to, acquisition of private companies, with the intention of taking those
companies public in the United States and possibly dual listing those entities
abroad. In the event that operating cash flows are slowed or nonexistent, the
Company plans to reduce its overhead wherever possible.
Depending upon market conditions, the Company may not be successful in raising
sufficient additional capital for it to achieve its business objectives. In such
event, the business, prospects, financial condition, and results of operations
could be materially adversely affected hence there is certain doubt about the
Company's ability to continue as a going concern.
The accompanying 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. These financial statements do not
include any adjustments relating to the recovery of the recorded assets or the
classification of the liabilities that might be necessary should the Company be
unable to continue as a going concern.
20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FOR THE THREE MONTHS ENDED MARCH 31, 2012:
The Company had revenues amounting to $107,500 for the three months ended March
31, 2012. The general and administrative costs were $16,151; and the
professional fees amounted to $43,719 although more than $35,000 related to our
year end audit fee and legal fees for our on going Form 10 filing. For the
period ended March 31, 2012, we accrued $109,999 of salaries and we account for
a further $77,079 of expenses that are either non-recurring or do not form part
of our normal company expenditure.
OUR PROFIT & LOSS ANALYSIS FOR THE PERIOD ENDED MARCH 31 2012 IS AS FOLLOWS:
GENERAL & ADMINISTRATIVE
Web design and Maintenance $ 1,120
Rent 1,226
Communications 1,003
Travel 4,264
Client Entertainment 3,210
Bank Charges 624
Other Services 4,378
Misc 326
--------
$ 16,151
--------
PROFESSIONAL FEES
Accountants $ 20,000
Edgar Service 1,670
Legal 21,240
Registered Agent 99
Transfer Agent 710
--------
$ 43,719
--------
ACCRUED SALARIES
Directors Salaries $ 90,000
Other Salaries 19,999
--------
$109,999
--------
OTHER
Dubai - Business License Fee $ 22,000
Allowance for possible Bad Debt 35,000
Amortization of Debt Discount 13,111
Interest Expense - Bridge Loans 6,968
--------
$ 77,079
--------
TOTAL $246,948
========
21
The net loss for the period was $(139,448) and the comprehensive loss, due to
$465,000 of unrealized losses on available for sale marketable securities,
amounted to $(604,448).
At March 31, 2012, the Company had 28,920,700 shares issued and outstanding, the
weighted average was 28,814,546 shares hence the loss per share was $(0.005).
FOR THE THREE MONTHS ENDED MARCH 31, 2011:
The Company had revenues amounting to $22,581 for the three months ended March
31, 2011. The total expenditure for the period was $42,514, of which $18,268
were General and Administrative costs and $24,246 were professional, legal and
accounting fees.
The net loss for the period ended March 31, 2011 was $(19,933).
At March 31, 2011, the Company had 28,668,000 shares issued and outstanding, the
weighted average was 28,668,000 shares hence the loss per share was $(0.001).
LIQUIDITY AND CAPITAL RESERVES
As of March 31, 2012, the Company had $6,675 in cash and net cash used in
operations of $32,214. For the quarter ended March 31, 2012, the Company had a
net loss of $(139,448) and a working capital deficit of $(327,603). The Company
had a positive balance of $477,397 of Shareholders' Equity for the period ended
March 31, 2012.
On February 28, 2012, Global Equity Partners Plc. entered into a "Bridge Loan
Agreement" with Mr. David Lonergan, a resident of Ireland, pursuant to which Mr.
Lonergan loaned Global Equity Partners Plc. $20,000. The loan is unsecured and
is due on June 11, 2012, which is 90 days after the funds were received.
Interest on the loan is 3% or $600 for the 90 day loan term plus 40,000 shares
of the Company's common stock. In addition, the Company granted Mr. Lonergan
warrants to purchase 20,000 shares of common stock. The warrants are exercisable
at $1.00 per share and expire on September 13, 2013 (18 months after the funds
were received).
On March 13, 2012, the Company entered into a Bridge Loan and Option Agreement
with Mr. Robert Hasnain, a resident of the United Kingdom, pursuant to which Mr.
Hasnain loaned the Company $50,000. The loan is unsecured and matures on July 9,
2012 ninety days after the Company received the final tranche of loan funds. We
agreed to issue Mr. Hasnain 100,000 shares of common stock as interest for the
loan. In the event we default on the loan, then additional interest will accrue
at the rate of 2% per month until the loan is paid in full.
The Company will record debt discounts of $70,000 on the above two loans. The
remaining valuation of the warrants granted to Mr. Lonergan will be record as
$7,000 of interest expense. The Company will credit additional paid in capital
for $77,000 on the two loans.
22
It is the Company's intention to seek additional debt financing, which we plan
to use as additional working capital to implement our marketing program to
increase awareness of our business model and also to expand our operations via
the acquisition of companies that are in a similar space and industry as ours,
although we have not identified any companies that we would consider acquiring.
However, we do not have any verbal or written agreements with anyone to provide
us with debt financing. Any short fall in our projected operating revenues will
be covered by:
1) The cash fees that we expect to receive during the next 12 months from
the four clients we currently have under contract.
2) Reducing our expenditures; and
3) Receiving loans from one or more of our officers even though at the
present time, we do not have verbal or written commitments from any of
our officers to lend us money.
Depending upon market conditions, the Company may not be successful in raising
sufficient additional capital for it to achieve its business objectives.
In such event, the business, prospects, financial condition, and results of
operations could be materially adversely affected.
The contracted fees with the four clients listed in the table below, the cash
fees we have received from the four clients to date, and the outstanding fees we
expect to receive from these clients are set forth in the following table.
Expected
Contracted Received to Future
Consulting date Contract
Fees (May 2012) Revenue
---- ---------- -------
Arrow Cars $135,000 $103,000 $ 32,000
RFC KK $312,000 $ 60,000 $252,000
Black Swan Data $270,000 $ 40,000 $230,000
Direct CCTV $240,000 $ 60,000 $180,000
-------- -------- --------
Totals $957,000 $263,000 $694,000
======== ======== ========
FUTURE PLANS
We currently have four clients under contract, Arrow Cars SL, Black Swan Data
Limited, RFC K.K. and CDP Security Group Limited ("Direct CCTV").
We anticipate signing up an additional three clients by the end of 2012.
However, we cannot guarantee that we will sign up any new clients in 2012 or
receive any revenues from new clients in 2012.
Our specific plan of operations and milestones for May 2012 through April 2013
are as follows:
23
DURING THE SECOND QUARTER OF 2012, WE INTEND TO:
DEVELOP THE INTRODUCER NETWORK FURTHER AND IN HOPES OF ATTRACTING NEW INTEREST
FOR OUR SERVICE.
We currently are relying on introductions to potential clients by the following
firms in Asia and Europe:
1. Merchant House Group (London), a United Kingdom registered investment
house;
2. TAP 09 Gmbh, an Austrian management consultancy firm based in Wien,
Vienna;
3. Mashreq Bank, an Asian retail bank based in Dubai, U.A.E.; and
4. ABN Amro Private Bank based in Amsterdam, the Netherlands
We do not have any verbal or written agreements with the four firms identified
above, as our relationship with each of them has been developed over the past
year or so.
We intend to develop relationships with a further five "introducers" to
potential new business for the Company before the end of June 2012. The
estimated additional expense of $10,000 to achieve this is mainly travel
expenses that will be funded by income receivable from clients currently under
contract.
DURING THE THIRD QUARTER OF 2012, WE INTEND TO:
CREATE A MORE EFFICIENT SYSTEM FOR REVIEWING PROSPECTIVE BUSINESS.
Our new business review system will change in 2012. We will concentrate our
efforts on the quality of the company that is introduced to us. We will start
off by sending the client a standard due diligence list and request that they
complete the list and send us the support for review. We will then follow-up the
due diligence with a "site visit" in order to properly understand our client's
business model and more importantly meet the principals in person. We intend to
begin this process in July 2012 and will have an added cost of $5,000 per
company reviewed. We will fund this additional expense from operational income,
mainly income receivable from clients currently under contract.
EXPAND OUR CONSULTANCY TO INCLUDE MORE MERGER AND ACQUISITION ACTIVITY.
We intend to form relationships with merger and acquisition specialists in both
during 2012, which, hopefully, will enable us to: 1) find potential merger and
acquisition candidates, 2) introduce our clients to brokers and investment
bankers, and 3) introduce the our clients to the appropriate professionals
(attorneys and accountants) to assist them in a public offering or exchange
listing. The only additional cost for this activity will be a very small
administrative burden for telephone calls and communications to be funded out of
operational income, mainly income receivable from clients currently under
contract.
DURING THE FOURTH QUARTER OF 2012, WE INTEND TO:
EXPAND OUR NETWORK OF CONTACTS WITHIN THE INVESTMENT COMMUNITY IN DUBAI
Our network of investment companies in Dubai is currently small; however, we
intend to substantially expand our Dubai network in order to enable us to make
introductions on a more institutional level. From October 2012 onwards, we
intend to develop our network to at least twelve Investment Institutions who may
have interests in minority shareholding in companies from outside of the Middle
East Region. We anticipate a small administrative cost to be no more than
$10,000 for such development to be funded from operational income, mainly income
receivable from clients currently under contract.
24
BETWEEN JULY 2012 AND DECEMBER 2012, WE INTEND TO:
SIGN CONTRACTS WITH A MINIMUM OF THREE NEW CLIENTS.
We have a pipeline of at least twelve potentially new clients that we are
currently reviewing and we hope that we will gain at least three new consultancy
contracts in 2012. Hopefully, this pipeline will grow during 2012 and early
2013, making the possibility of attracting at least three new clients more
achievable.
Our estimated monthly cash burn rate for 2012 and through April 2013 will be
approximately $20,000, which does not include the $33,333 we will accrue in
salaries to our management team on a monthly basis. Our management team will not
be paid cash salaries until such time as our monthly revenues are sufficient to
pay our estimated $20,000 monthly burn rate and have money left over to pay a
portion or all of the accrued management team salaries. However, we cannot
assure investors that we will have sufficient revenues to fund our operations
for the next 12 months.
CASH BURN TABLE:
General & Administrative $11,000
Legal & Accounting $ 4,000
Other Expenses - Milestones $ 5,000
-------
TOTAL $20,000
=======
During the next twelve months, we estimate that the $4,000 per month (see table
above) in legal and accounting fees will cover the audit of our financial
statements for the fiscal year ended December 31, 2012, quarterly reviews by of
auditors of our interim (unaudited) financial statements to be included in our
Form 10-Q Quarterly Reports and preparation of our Form 10-K, Form 10-Qs, Form
8-Ks and information statements or proxy statements.
In the event that we are unable to generate revenues sufficient to cover our
monthly burn rate, we will have to lower the salaries of our three employees and
possibly curtail our operations until such time as we can generate sufficient
revenues to cover our overhead.
This section of the annual report includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like: believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this annual report. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from historical results or our predictions.
CAUTIONARY FORWARD - LOOKING STATEMENT
The following discussion and analysis of the results of operations and financial
condition of Networking Partners, Inc.. should be read in conjunction with the
unaudited financial statements, and the related notes. References to "we,"
"our," or "us" in this section refers to the Company and its subsidiaries. Our
discussion includes forward-looking statements based upon current expectations
that involve risks and uncertainties, such as our plans, objectives,
expectations and intentions.. We use words such as "anticipate," "estimate,"
"plan," "project," "continuing," "ongoing," "expect," "believe," "intend,"
"may," "will," "should," "could," and similar expressions to identify
forward-looking statements.
25
Certain matters discussed herein may contain forward-looking statements that are
subject to risks and uncertainties. Such risks and uncertainties include, but
are not limited to, the following:
* the volatile and competitive nature of our industry,
* the uncertainties surrounding the rapidly evolving markets in which we
compete,
* the uncertainties surrounding technological change of the industry,
* our dependence on its intellectual property rights,
* the success of marketing efforts by third parties,
* the changing demands of customers and o the arrangements with present
and future customers and third parties.
Should one or more of these risks or uncertainties materialize or should any of
the underlying assumptions prove incorrect, actual results of current and future
operations may vary materially from those anticipated.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our Principal
Executive Officer and Principal Financial Officer of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our Principal Executive Officer and Principal Financial Officer
concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934) were
effective.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Commencing with our Annual Report for the 2011 fiscal year, our management is
responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act. Our internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. Our internal control over
financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of our
assets;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with U.S. GAAP, and that our receipts and expenditures are being made
only in accordance with the authorization of our management and
directors; and
(3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
26
At March 31, 2012, we carried out an evaluation required by Rule 13a-15 or Rule
15d-15 of the Securities Exchange Act of 1934 (the "Exchange Act") under the
supervision and with the participation of our management, including our
Principal Executive Officer and Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures.
Based upon such evaluation, such person concluded that as of such date, our
disclosure controls and procedures were not effective at the reasonable
assurance level because, due to financial constraints, the Company does not
maintain a sufficient complement of personnel with an appropriate level of
technical accounting knowledge, experience and training in the application of
generally accepted accounting principles commensurate with our financial
accounting and reporting requirements. In the event that we may receive
sufficient funds for internal operational purposes, we plan to retain the
services of additional internal management staff to provide assistance to our
current management with the monitoring and maintenance of our internal controls
and procedures.
This Quarterly Report does not include 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.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
We did not change our internal control over financial reporting during our last
fiscal quarter that materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not aware of any threatened or pending litigation against the
Company.
ITEM 1A. RISK FACTORS.
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETLY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
27
ITEM 6. EXHIBITS.
See Exhibit Index below for exhibits required by Item 601 of regulation S-K.
EXHIBIT INDEX
List of Exhibits attached or incorporated by reference pursuant to Item 601 of
Regulation S-K:
Exhibit No. Description
----------- -----------
2* Plan and Agreement of Reorganization dated November 15, 2010,
among Global Equity International, Inc., Global Equity Partners
PLC and Stockholders of Global Equity Partners LLC
3.1* Articles of Incorporation
3.2* Bylaws
4.1* Specimen Stock Certificate
4.2* Certificate of Amendment to Certificate of Designation of Series
A Convertible Preferred Stock
10.1* Employment Agreement dated September 1, 2011, with Peter J. Smith
10.2* Employment Agreement dated September 1, 2011, with Enzo Taddei
10.3* Employment Agreement dated September 1, 2011, with Adrian
Scarrott
10.4* Consulting Agreement between Global Equity Partners PLC and Black
Swan Data Ltd. dated July 29, 2011
10.5* Consulting Agreement between Global Equity Partners PLC and Arrow
Cars SL dated January 14, 2011
10.6* Consulting Agreement between Global Equity Partners PLC and RFC
K.K. dated October 19, 2011
10.7* Consulting Agreement between Global Equity Partners PLC and M1
Luxembourg AG dated December 20, 2010
10.8* Consulting Agreement between Global Equity Partners PLC and
Monkey Rock Group, Inc. dated November 26, 2009
10.9* Consulting Agreement between Global Equity Partners PLC and Voz
Mobile Cloud Ltd. dated December 12, 2011
10.10* Consulting Agreement between Global Equity Partners PLC and CDP
Security Group Limited dated March 31, 2012.
10.11* Bridge Loan and Option Agreement made as of February 28, 2012,
between Mr. David Lonergan, Global Equity Partners, PLC and
Global Equity International, Inc.
10.12* Bridge Loan and Option Agreement made as of March 13, 2012,
between Mr. Robert Hasnain and Global Equity International, Inc.
14* Code of Business Conduct and Ethics adopted on September 2, 2011
21** Subsidiaries
31.1*** Certification of Principal Executive Officer Pursuant to 18
U.S.C. Section 1350
31.2*** Certification of Principal Financial Officer Pursuant to 18
U.S.C. Section 1350
32.1*** 906 Certification of Principal Executive Officer
32.2*** 906 Certification of Principal Financial Officer
101*** Interactive data files pursuant to Rule 405 of Regulation S-T
----------
* Incorporated by reference to the Company's Form 10 Registration Statement
filed with the Commission on December 1, 2011, and as subsequently amended.
** Incorporated by reference to the Company's Form 10-K filed with the
Commission on March 30, 2012.
*** Filed herewith.
28
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 EQUITY INTERNATIONAL, INC.
Date: May 15, 2012 /s/Peter J. Smith
--------------------------------------
Peter J. Smith
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 15, 2012 /s/ Enzo Taddei
--------------------------------------
Enzo Taddei
Chief Financial Officer
(Principal Accounting and Financial
Officer)
29