10-Q: Global Technologies, Ltd. Reports Q2 2024 Results, Highlights Acquisition and Strategic Shift

Sentiment:

Quarterly Report 6 February 2024 5:09 PM

📋All filings for Global Technologies LTD

Global Technologies, Ltd. reported its financial results for the quarter ended December 31, 2023, alongside updates on a significant acquisition and strategic business changes.

Capital raiseThe company plans to secure additional funding sources, including issuing additional convertible debentures and public or private equity securities.The company may sell common stock through an at-the-market facility (ATM).The company's acquisition of Foxx Trot Tango, LLC involved the issuance of convertible promissory notes.

Worse than expectedThe company's financial results were worse than expected due to a significant net loss and zero revenue for the reported periods.The company's loss on derivative liability significantly impacted the net loss, indicating a negative financial performance.The company's total liabilities significantly exceeded its total assets, indicating a worsening financial position.

Summary

Global Technologies, Ltd. reported a net loss of $3,455,492 for the three months ended December 31, 2023, compared to a net income of $183,724 for the same period in 2022.
The company's revenue was $0 for the three months ended December 31, 2023, compared to $14,000 in the same period of 2022.
For the six months ended December 31, 2023, the company reported a net loss of $2,230,670, compared to a net income of $124,268 for the same period in 2022.
The company's revenue was $0 for the six months ended December 31, 2023, compared to $14,000 in the same period of 2022.
The company acquired Foxx Trot Tango, LLC on July 25, 2023, for $6,500,000, consisting of $3,100,000 in convertible promissory notes and $3,400,000 in contingent consideration.
The company entered into a Letter of Intent to acquire GOe3, LLC, with the transaction expected to close in the first quarter of 2024, structured as a share-for-share exchange.
The company's total assets were $6,515,850 and total liabilities were $10,125,039 as of December 31, 2023.
The company had $10,694 in cash and cash equivalents as of December 31, 2023.

Sentiment

Score: 3

Explanation: The document presents a concerning financial picture with significant losses, no revenue, and substantial liabilities. While there are some positive strategic moves, the overall sentiment is negative due to the company's financial instability and operational challenges.

Positives

The company acquired Foxx Trot Tango, LLC, which owns a commercial building, potentially providing a base for future real estate ventures.
The company is planning to acquire GOe3, LLC, which could bring new leadership and a potential uplisting to a national exchange or NASDAQ.
The company has established 10 Fold Services, LLC, a customer relationship and sales management subsidiary, which has entered into a sales agent agreement for pharmaceutical products.

Negatives

The company experienced a significant net loss of $3,455,492 for the three months ended December 31, 2023.
The company's revenue was $0 for both the three and six months ended December 31, 2023.
The company's total liabilities significantly exceed its total assets, indicating a potential financial risk.
The company has a history of net losses and expects to continue to incur negative cash flows.
The company's disclosure controls and procedures were deemed ineffective due to resource constraints and material weaknesses.

Risks

The company's ability to continue as a going concern is in doubt due to a history of net losses and negative cash flows.
The company relies on a limited number of suppliers and contract manufacturers, which could disrupt operations.
The company's CBD products are subject to regulatory risks from various federal, state, and local agencies.
The company's ability to generate revenue through its subsidiaries is uncertain, and there is no guarantee of raising required funds.
The company's proposed acquisition of GOe3, LLC is subject to several conditions, and there is no assurance it will be completed.
The company has a material weakness in internal controls over financial reporting due to a lack of resources and segregation of duties.

Future Outlook

The company anticipates the closing of the GOe3, LLC acquisition in the first quarter of CY 2024 and plans to apply for an uplist to a national exchange or the NASDAQ. The company expects to continue to incur negative cash flows until its operating segments generate sufficient cash inflows.

Management Comments

Management believes the third-party sources referred to in this Quarterly Report on Form 10-Q are reliable.
Management has developed its knowledge of such industries through its experience and participation in these industries.
Management has the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations.

Industry Context

The company's focus on acquiring and redeveloping distressed properties aligns with a broader trend of investors seeking value in underutilized assets. The company's entry into the cannabis industry through HMNRTH, LLC reflects the growing market for hemp and CBD products, though it also exposes the company to regulatory risks. The planned acquisition of GOe3, LLC and the potential uplisting suggest a strategic shift towards growth and increased market visibility.

Comparison to Industry Standards

The company's revenue of $0 for the reported periods is significantly below industry standards for companies with similar operating structures.
The company's negative cash flow from operations and substantial net losses are concerning when compared to industry benchmarks for companies in the same sector.
The company's high level of liabilities compared to assets is a significant deviation from industry norms, indicating a high level of financial risk.
The company's reliance on convertible debt and related party loans is not uncommon for early-stage companies, but the high interest rates and conversion terms may be unfavorable compared to industry standards.
The company's lack of an audit committee and independent directors is a significant deviation from corporate governance best practices for publicly traded companies.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
President	NA	Bruce Brimacombe	Upon closing of the GOe3 acquisition	Part of the GOe3 acquisition agreement

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Controls	The company's disclosure controls and procedures were deemed ineffective due to resource constraints and material weaknesses.	2023-12-31	The company lacks sufficient personnel with the appropriate level of knowledge, experience and training in GAAP to meet the demands for a public company, including the accounting skills and understanding necessary to fulfill the requirements of GAAP-based reporting. In addition, the Company has not established an audit committee, does not have any independent outside directors on the Companys Board of Directors, and lacks documentation of its internal control processes.

Legal Proceedings

There is no pending litigation involving the Company at this time.

Related Party Transactions

The company has loans payable to related parties totaling $124,865 as of December 31, 2023.
The company issued shares of Series L Preferred Stock to its former sole officer and director, Jimmy Wayne Anderson, in satisfaction of related party debt.

Stakeholder Impact

Shareholders face significant risk due to the company's net losses and going concern uncertainty.
Employees may be impacted by the company's financial instability and potential restructuring.
Customers may be affected by the company's ability to maintain operations and deliver products.
Suppliers and creditors face increased risk due to the company's high level of liabilities and potential inability to meet obligations.

Next Steps

The company plans to close the acquisition of GOe3, LLC in the first quarter of CY 2024.
The company will adopt a plan to apply for an uplist to a national exchange or the NASDAQ.
The company will seek additional funding sources to support its operations and growth.
The company will work to improve its internal controls and procedures.

Key Dates

Date	Description
1999-01-20	Global Technologies, Ltd. was incorporated under the laws of the State of Delaware.
1999-08-13	The company filed an Amended and Restated Certificate of Incorporation to change its name to Global Technologies, Ltd.
1999-09-30	The company filed a Certificate of Designations for Series A and Series B 8% Convertible Preferred Stock.
2000-02-15	The company filed a Certificate of Designations for Series C 5% Convertible Preferred Stock.
2001-04-26	The company filed a Certificate of Designations for Series D Convertible Preferred Stock.
2001-06-28	The company filed a Certificate of Designations for Series E 8% Convertible Preferred Stock.
2017-08-10	TCBM Holdings, LLC was formed as a Delaware limited liability company.
2018-02-02	911 Help Now, LLC was formed as a Delaware limited liability company.
2019-07-16	The Board of Directors approved the designation of Series K Super Voting Preferred Stock and Series L Preferred Stock.
2019-07-30	HMNRTH, LLC was formed as a Delaware limited liability company.
2019-07-31	The company filed a Certificate of Designations for Series K Super Voting Preferred Stock and Series L Preferred Stock.
2020-04-02	Markets on Main, LLC was formed as a Florida limited liability company.
2021-01-20	The company executed a Convertible Note payable to Tri-Bridge Ventures, LLC.
2021-02-22	The company executed a Convertible Note payable to Tri-Bridge Ventures, LLC.
2022-01-03	The company filed Articles of Conversion to convert Markets on Main, LLC to a Florida profit corporation.
2022-01-19	Markets on Main, Inc. entered into an Exclusive Distribution Agreement with Amfluent, LLC.
2022-01-30	Markets on Main, Inc. entered into a Marketing Management Agreement with Chin Industries, LLC.
2022-02-03	Foxx Trot Tango, LLC was formed as a Wyoming limited liability company.
2022-03-15	Tersus Power, Inc. (Delaware) was formed as a wholly owned subsidiary.
2023-01-06	Foxx Trot (the Borrower) issued the TK Secured Note to TK Management Services, LLC.
2023-05-17	The company entered into an Employment Agreement with Mr. Cutcher.
2023-05-31	The company issued a Convertible Promissory Note to Hillcrest Ridgewood Partners, LLC.
2023-07-18	The company executed a Convertible Note payable to Hillcrest Ridgewood Partners, LLC.
2023-07-25	The company acquired 100% ownership of Foxx Trot Tango, LLC.
2023-08-23	The company issued 50 shares of Series L Preferred Stock to a consultant.
2023-09-15	The Convertible Note issued on May 31, 2023 was assigned to MainSpring, LLC.
2023-10-31	The company executed a Convertible Note payable to MainSpring, LLC.
2023-11-17	The company issued 6 shares of Series L Preferred Stock as per the terms of the Securities Purchase Agreement.
2023-11-22	10 Fold Services, LLC was formed as a Wyoming limited liability company.
2023-11-23	10 Fold Services, LLC entered into a Sales Agent Agreement with a supplier of pharmaceutical products.
2023-12-03	10 Fold Services, LLC entered into an Operating Agreement with Rockwell Pharma, LLC.
2023-12-28	The company entered into a Letter of Intent to acquire GOe3, LLC.
2023-12-31	Six shares of the company's Series L Preferred Stock were returned by a consultant for cash compensation.
2024-01-25	The company and 10 Fold Services, LLC entered into an Asset Purchase Agreement for a Customer Relationship Management Sales Platform.

Keywords

acquisition, real estate, convertible notes, financial results, net loss, GOe3, Foxx Trot Tango, CBD, HMNRTH, 10 Fold Services, reverse merger, derivative liability

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