Our Management's Discussion and Analysis should be read in conjunction with our
unaudited condensed consolidated financial statements and related notes thereto
included elsewhere in this quarterly report.
Forward-Looking Statements
This Quarterly Report contains forward-looking statements and information
relating to us that are based on the beliefs of our management as well as
assumptions made by, and information currently available to, our management.
When used in this report, the words "believe," "anticipate," "expect," "will,"
"estimate," "intend", "plan" and similar expressions, as they relate to us or
our management, are intended to identify forward-looking statements. Although we
believe that the plans, objectives, expectations and prospects reflected in or
suggested by our forward-looking statements are reasonable, those statements
involve risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements, and we can give no assurance that our plans,
objectives, expectations and prospects will be achieved. Important factors that
might cause our actual results to differ materially from the results
contemplated by the forward-looking statements are contained in the "Risk
Factors" section of and elsewhere in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2022, and in our subsequent filings with the SEC, and
include, among others, the following: marijuana is illegal under federal law,
the marijuana industry is subject to strong competition, our business is
dependent on laws pertaining to the marijuana industry, the marijuana industry
is subject to government regulation, our business model depends on the
availability of private funding, we will be subject to general real estate
risks, if debt payments to note holder are not made we could lose our investment
in our real estate properties, terms and deployment of capital. The terms
"Global Technologies, Ltd "Global Technologies," "Global," "we," "us," "our,"
and the "Company" refer to Global Technologies, Ltd., individually, or as the
context requires, collectively with its subsidiaries on a consolidated basis.
Company Overview
Global Technologies, Ltd. (hereinafter the "Company", "Our", "We", or "Us") is a
publicly quoted company that was incorporated under the laws of the State of
Delaware on January 20, 1999 under the name of NEW IFT Corporation. On August
13, 1999, the Company filed an Amended and Restated Certificate of Incorporation
with the State of Delaware to change the name of the corporation to Global
Technologies, Ltd. Our principal executive offices are located at 501 1st Ave
N., Suite 901, St. Petersburg, FL 33701 and our telephone number is (727)
482-1505. Our website address is www.globaltechnologiesltd.info. The information
contained on, or that can be accessed through, our website is not a part of this
Quarterly Report. We have included our website address in this Quarterly Report
solely as an inactive textual reference.
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Current Operations
Global Technologies, Ltd ("Global Technologies") is a publicly traded operating
corporation, which through its subsidiaries, has operations engaged in the
online sales of CBD and hemp related products, the acquisition of intellectual
property in the safety and security space and as a portal for entrepreneurs to
provide immediate access to live shopping, e-commerce, product placement in
brick and mortar retail outlets and logistics.
As of December 31, 2022, Global Technologies had five wholly-owned subsidiaries:
TCBM Holdings, LLC ("TCBM"), HMNRTH, LLC ("HMNRTH"), 911 Help Now, LLC ("911"),
Markets on Main, Inc. ("MOM") and Tersus Power, Inc. ("Tersus"). As of December
31, 2022, the Company had a minority investment in one entity, Global Clean
Solutions, LLC.
Our wholly owned subsidiaries:
About TCBM Holdings, LLC
TCBM Holdings, LLC ("TCBM") was formed as a Delaware limited liability company
on August 10, 2017. TCBM is a holding corporation, which operated through its
two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About HMNRTH, LLC
HMNRTH, LLC ("HMN") was formed as a Delaware limited liability company on July
30, 2019. HMNRTH operates as an online store selling a variety of hemp and CBD
related products. The Company's business model is to bridge the gap between the
lifestyle and knowledge components within the cannabis industry. The Company's
goal is to educate every consumer while cultivating an experience by providing
quality products, branded cutting-edge content, and diversified product lines
for any purpose. Most importantly, we want our clients to discover their inner
HMN, redefine their inner HMN and Empower their inner HMN.
In September 2019, the Company entered into a Quality Agreement with Nutralife
Biosciences for the development and production of its CBD line of products. The
Company's product line includes hemp derived, full spectrum cannabidiol
tinctures and creams in varying sizes.
In order for the Company to generate revenue through HMNRTH, we will need to:
(i) produce additional inventory for retail sales through the Company's
ecommerce site or sales, or (ii) sales to third party distributors, or (iii)
direct sales to brick and mortar CBD retail outlets, or (iv) generate additional
CBD formulas to be utilized in new products At present, the Company does not
have the required capital to initiate any of the options and there is no
guarantee that we will be able to raise the required funds.
About 911 Help Now, LLC
911 Help Now, LLC ("911") was formed as a Delaware limited liability company on
February 2, 2018. 911 was a holding company of intellectual property in the
safety and security space. At present, we own no intellectual property within
our 911 subsidiary. In order to generate future revenue within 911, we will need
to identify and either acquire or license intellectual property. In the event of
an acquisition, we will then need to either develop products utilizing our
intellectual property or license out our intellectual property to a third party.
There is no guarantee that we will be successful with an acquisition or
licensing of any intellectual property.
37
About Markets on Main, Inc.
Markets on Main, LLC ("MOM") was formed as a Florida limited liability company
on April 2, 2020. MOM is A full service, sales and distribution, third-party
logistics provider and portal to multi-channel sales opportunities. MOM's focus
is on bringing small businesses and entrepreneurs to large opportunities and
distribution. MOM will provide the following services to its clients: inventory
management, brand management, fulfillment and drop-ship capabilities, retail
distribution and customer service. MOM's website can be found at
www.marketsonmain.com.
On May 4, 2020, MOM entered into a Drop Ship Agreement (the "Agreement") with
QVC, Inc. Under the terms of the Agreement, MOM shall provide products for
marketing, promotion, sale and distribution by QVC through certain televised
and/or other electronic shopping services developed or to be developed by QVC
and through other means and media.
On January 3, 2022, the Company filed Articles of Conversion with the State of
Florida to convert MOM from a limited liability company to a Florida profit
corporation. Simultaneous with the filing of the Articles of Conversion, the
Company filed Articles of Incorporation for MOM.
On January 19, 2022, MOM entered into an Exclusive Distribution Agreement (the
"Distribution Agreement") with Amfluent, LLC ("Amfluent"). Under the terms of
the Distribution Agreement, MOM will become an exclusive distributor for the
promotion and sale of products carried by Amfluent. As the exclusive
distributor, MOM shall be awarded the exclusive territory of e-commerce, live
shopping and digital sales. The Distribution Agreement has a term of one year
from the Effective Date unless both parties agree to renew the Distribution
Agreement for an additional term.
On January 30, 2022, MOM entered into a Marketing Management Agreement (the
"Agreement") with Chin Industries, LLC ("Chin"). Under the terms of the
Agreement, Chin shall provide day to day management of websites where MOM's
products may be sold. The Agreement has a term of one year. As compensation,
Chin shall receive a 50/50 split of net profits.
During the third quarter of fiscal 2022, MOM launched its first website,
www.sculptbaby.com, under the Agreement with Chin. Product sales initiated in
March 2022. During the fourth quarter of fiscal 2022, all Sculpt Baby inventory
was sold. The Company has not identified its next product to launch.
About Tersus Power, Inc. (Delaware)
Tersus Power, Inc. ("Tersus") (Delaware) was formed as a wholly owned
subsidiary as per the terms of the Share Exchange Agreement entered into with
Tersus Power, Inc., a Nevada corporation, and the Tersus Shareholders with the
sole purpose of entering into an Agreement and Plan of Merger to effect a name
change. The Articles of Incorporation were filed with the Secretary of State of
the State of Delaware on March 15, 2022.
Share Exchange Agreement with Tersus Power, Inc. (Nevada)
On November 17, 2021, the Company entered into a Letter of Intent to acquire
Tersus Power, Inc. ("Tersus Power"). On March 9, 2022, the Company entered into
a Share Exchange Agreement (the "Exchange Agreement") with Tersus Power and the
Tersus Shareholders. Under the terms of the Exchange Agreement, at Closing the
Company shall deliver to the Tersus Shareholders a to-be-determined pro-rata
number of shares of the Company's Class A Common Stock for each one (1) share of
Tersus common stock held by the Tersus Shareholder (the "Exchange Ratio"). Such
shares of the Company's Class A Common Stock shall collectively (i) be referred
to as the "Exchange Shares", and (ii) constitute 75% of the issued and
outstanding shares of stock, of all classes, of the Company immediately
following the Closing. Conditions precedent to the Closing shall require the
Company to complete the following corporate actions: (i) the Company will have
completed a merger with and into its wholly owned subsidiary sufficient to
change its name to "Tersus Power, Inc.", a Delaware corporation, with an
authorized capital of 500 million shares of common stock (of one class), and 10
million shares of preferred stock (none of which will be authorized as a
particular series), (ii) the Company will have completed, and FINRA will have
recognized and effectuated, a reverse split of its common stock in a range
between 1-for-1,000 and 1-for-4,000, at a level that is acceptable to the
Parties, (iii) all of the holders of the Company's Series K Preferred Stock and
Series L Preferred Stock will have converted their preferred shares into Class A
Common Stock of the Company, and (iv) certain nominees by the Tersus
Shareholders shall be appointed to the Company's Board of Directors.
38
The Exchange Agreement provides for mutual indemnification for breaches of
representations and covenants.
Unless the Exchange Agreement shall have been terminated and the transactions
therein contemplated shall have been abandoned, the closing of the Exchange
(the "Closing") will take place at 5:00 p.m. Pacific Time on the second business
day following the satisfaction or waiver of the conditions (the "Closing Date").
Either party may terminate the Exchange Agreement if a Closing has not occurred
on or before June 30, 2022. As of December 31, 2022, the Company is awaiting the
passing of its corporate action filed with FINRA so that the Closing may occur.
Please see NOTE M - SUBSEQUENT EVENTS for further information.
39
Consulting Services
On June 29, 2021, the Company entered into a Fee Agreement (the "Agreement") for
the preparation of a registration statement on Form S-1 and all follow up
correspondence with the appropriate regulatory agencies. As of December 31,
2022, the Company has initiated the work to be completed under the Agreement but
is awaiting additional information from its client.
On January 12, 2022, the Company entered into a Fee Agreement (the "Agreement")
for the preparation of a registration statement on Form 1-A and all follow up
correspondence with the appropriate regulatory agencies. The Company was fully
compensated for its services during the period ended March 31, 2022 and has
fulfilled its obligations under the Agreement.
On February 1, 2022, the Company entered into a Letter Agreement (the
"Agreement") with Donohoe Advisory Services, Inc. ("Donohoe") to provide
assistance to the Company in support of the Company's efforts to obtain a
listing on a national securities exchange. Under the terms of the Agreement, the
Company shall pay Donohoe an initial retainer in the amount of $17,500 and if
successful a "success fee" in the amount of $10,000 in cash or registered shares
of common stock. During the three months ended September 30, 2022, the Company
requested and received the balance of the retainer as it does not anticipate
requiring any additional assistance from Donohoe.
On February 5, 2022, the Company entered into a Fee Agreement (the "Agreement")
for the preparation of a registration statement on Form 1-A and all follow up
correspondence with the appropriate regulatory agencies. As of December 31,
2022, the Company has initiated the work to be completed under the Agreement but
is awaiting additional information from its client.
During the three months ended December 31, 2022, the Company provided consulting
services to another publicly traded entity by preparing its quarterly and annual
reports. The Company has been paid in full for these services.
40
Critical Accounting Policies, Judgments and Estimates
There were no material changes to our critical accounting policies and estimates
during the interim period ended December 31, 2022.
Please see our Annual Report on Form 10-K for the year ended June 30, 2022 filed
on October 13, 2022, for a discussion of our critical accounting policies and
estimates and their effect, if any, on the Company's financial results.
Components of our Results of Operations
Revenues
We sell consumer products either wholesale or direct to consumers. In addition,
we generate revenue through the logistics services we offer through our wholly
owned subsidiary, Market on Main and consulting services we offer to other
publicly traded companies.
Cost of Revenues
Our cost of revenues includes inventory costs, materials and supplies costs,
internal labor costs and related benefits, subcontractor costs, depreciation,
overhead and shipping and handling costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of selling, marketing,
advertising, payroll, administrative, finance and professional expenses.
41
Interest Expense, Net
Interest expense includes the cost of our borrowings under our debt
arrangements.
Results of Operations
Three Months Ended December 31, 2022 Compared to Three Months Ended December 31,
2021
The following table sets forth information comparing the components of net
(loss) income for the three months ended December 31, 2022 and 2021:
Three Months Ended Period over
December 31, Period Change
2022 2021 $ %
Revenues, net $ 14,000 $ 45,000 $ (31,000 ) -68.89 %
Cost of revenues - - - -
Gross profit 14,000 45,000 (31,000 ) -68.89 %
Operating expenses:
Selling, general and
administrative 10,314 42,934 (32,620 ) -75.98 %
Other operating expenses 28,198 46,617 (18,419 ) -39.51 %
Total operating expenses 38,512 89,551 (51,039 ) -56.99 %
Operating loss (24,512 ) (44,551 ) 20,039 44.98 %
Other income (expenses):
Interest income 4,411 277 4,134 1,492.42 %
Forgiveness of debt and
accrued interest - 15,445 (15,445 ) -100.00 %
Gain on derivative liability 211,387 560,912 (349,525 ) -62.31 %
Loss on issuance of notes
payable - (32,309 ) 32,309 100.00 %
Amortization of debt
discounts - (154,789 ) 154,789 100.00 %
Interest expense (7,562 ) (12,673 ) 5,111 40.33 %
Total other income 208,236 376,863 (168,627 ) -44.74 %
Income before income taxes 183,724 332,312 (148,588 ) -44.71 %
Income tax expense - - - -
Net income $ 183,724 $ 332,312 $ (148,588 ) -44.71 %
Revenue
For the three months ended December 31, 2022 and 2021, we generated revenue of
$14,000 and $45,000, respectively. The decrease in revenue for the three months
ended December 31, 2022 is largely attributable to the Company's decrease in
consulting revenue.
Cost of Revenues
For the three months ended December 31, 2022 and 2021, cost of revenues was $-
and $-, respectively.
Gross Profit
For the three months ended December 31, 2022 and 2021, gross profit was $14,000
and $45,000, respectively.
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Operating Expenses
Operating expenses were $38,512 and $89,551 for the three months ended December
31, 2022 and 2021, respectively, representing a decrease of $51,039, or 56.99%.
The Company's decrease in selling, general and administrative expenses is
largely attributable to a reduction in corporate operating expenses.
Other Expenses
Other income was $208,236 and $376,863 for the three months ended December 31,
2022 and 2021, respectively, representing a decrease of $168,627, or 44.74%. The
other income for the three months ended December 31, 2022 included interest
expense of ($7,562) offset by a gain on derivative liability of $211,387 and
interest income of $4,411. The decrease in other income for the three months
ended December 31, 2022 was largely attributable to a smaller gain on derivative
liability as compared to the three months ended December 31, 2021.
Income tax expense
There was no income tax expense for the three months ended December 31, 2022 and
December 31, 2021.
Net Income
For the three months ended December 31, 2022, our net income decreased to
$183,724, as compared to $332,312 for three months ended December 31, 2021, a
decrease of $148,588. The decrease in net income for the three months ended
December 31, 2022 was largely attributable to a smaller gain on derivative
liability as compared to the three months ended December 31, 2021.
Six Months Ended December 31, 2022 Compared to Six Months Ended December 31,
2021
The following table sets forth information comparing the components of net
(loss) income for the six months ended December 31, 2022 and 2021:
Six Months Ended
December 31, Period over Period Change
2022 2021 $ %
Revenues, net $ 14,000 $ 95,000 $ (81,000 ) -82.65 %
Cost of revenues - - - -
Gross profit 14,000 95,000 (81,000 ) -82.65 %
Operating expenses:
Selling, general and
administrative 12,669 59,252 (46,583 ) -78.62 %
Other operating expenses 368,863 138,665 230,198 166.01 %
Total operating expenses 377,352 197,917 179,435 90.66 %
Operating loss (363,532 ) (102,917 ) (260,615 ) -253.29 %
Other (expense) income:
Interest income 8,822 277 8,545 3,084.84 %
Forgiveness of debt and
accrued interest - 449,294 449,244 -100.00 %
Gain on derivative liability 544,017 562,995 (18,978 ) -3.37 %
(Loss) on issuance of notes
payable - (154,355 ) 154,355 100.00 %
Amortization of debt
discounts (49,863 ) (261,682 ) 211,819 80.95 %
Interest expense (15,176 ) (41,656 ) 26,480 63.57 %
Total other income
(expenses) 487,800 554,873 (67,073 ) -12.09 %
Income (loss) before income
taxes 124,268 451,956 (327,688 ) -72.50 %
Income tax expense - - - -
Net income $ 124,268 $ 451,956 $ (327,688 ) -72.50 %
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Revenue
For the six months ended December 31, 2022 and 2021, the Company generated
$14,000 and $95,000 revenue, respectively. Revenue for the six months ended
December 31, 2022 was entirely comprised of revenue generated from consulting
services. The decrease in revenue for the six months ended December 31, 2022 is
largely attributable to the Company's decrease in consulting revenue.
Cost of Revenues
For the six months ended December 31, 2022 and 2021, cost of revenues was $- and
$-, respectively.
Gross Profit
For the six months ended December 31, 2022 and 2021, gross profit was $14,000
and $95,000, respectively.
Operating Expenses
Operating expenses were $377,352 and $197,917 for the six months ended December
31, 2022 and 2021, respectively, representing an increase of $179,435, or
90.66%. The increase in operating expenses is largely attributable to the
increase in officer and director compensation for the six months ended December
31, 2022.
Other (Expenses) Income
Other income was $487,800 and $554,873 for the six months ended December 31,
2022 and 2021, respectively, representing a decrease of $67,073, or 12.09%. The
other income for the six months ended December 31, 2022 included amortization of
debt discounts of ($49,863), interest expense of ($15,176) offset by a gain on
derivative liability of $544,017 and interest income of $8,822. The decrease in
other income for the three months ended December 31, 2022 was largely
attributable to forgiveness of debt and interest in the amount of $449,294 for
the six months ended December 31, 2021 versus $0 for the six months ended
December 31, 2022.
Income tax expense
There was no income tax expense for the six months ended December 31, 2022 and
2021.
Net Income
For the six months ended December 31, 2022, our net income decreased to
$124,268, as compared to net income of $451,956 for six months ended December
31, 2021, a decrease of $327,688. The decrease in net income for the six months
ended December 31, 2022 was largely attributable to forgiveness of debt and
interest in the amount of $449,294 for the six months ended December 31, 2021
versus $0 for the six months ended December 31, 2022.
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