(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip code) |
Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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EXPLANATORY NOTE
This amendment to the Form 10-Q, as filed on May 23, 2022, is being filed solely to correct a few rounding issues and correctly add the XBRL documentation. No other changes have been made to the document.
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Item 1. Financial Statements
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3
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4
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5
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6
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7
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8
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23
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29
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29
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31
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31
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31
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31
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32
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32
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32
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32
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March 31,
2022 |
December 31,
2021 |
|||||||
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(unaudited)
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||||||
ASSETS
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||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | $ | ||||||
Total current assets
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||||||||
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||||||||
Deposits for proposed acquisitions
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TOTAL ASSETS
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$ | $ | ||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
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||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | $ | ||||||
Accrued expenses
|
||||||||
Convertible promissory notes payable,
|
||||||||
net of debt discount of $
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Promissory notes payable
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Deferred revenue
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||||||||
Derivative liability
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Total current liabilities
|
||||||||
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STOCKHOLDERS' DEFICIT
|
||||||||
Global Arena Holdings, Inc.
|
||||||||
Preferred stock, $
authorized;
|
||||||||
Series B preferred stock;
|
||||||||
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||||||||
Common stock, $
|
||||||||
|
||||||||
Additional paid-in capital
|
||||||||
Accumulated deficit
|
( |
) | ( |
) | ||||
Total Global Arena Holdings, Inc. stockholders’ deficit
|
( |
) | ( |
) | ||||
Noncontrolling interest
|
( |
) | ( |
) | ||||
Total stockholders’ deficit
|
( |
) | ( |
) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
Three Months Ended March 31,
|
|||||||
2022
|
2021
|
|||||||
Revenues:
|
||||||||
Services
|
$ | $ | ||||||
Operating expenses:
|
||||||||
Salaries and benefits
|
||||||||
Marketing and advertising
|
||||||||
Software development
|
||||||||
Professional fees
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||||||||
General and administrative
|
||||||||
Printing
|
||||||||
Total operating expenses
|
||||||||
Loss from operations
|
( |
) | ( |
) | ||||
Other expenses:
|
||||||||
Interest expense and financing costs
|
( |
) | ( |
) | ||||
Change in fair value of derivative liability
|
( |
) | ||||||
Gain on settlement of debt
|
||||||||
Total other expenses
|
( |
) | ( |
) | ||||
Income (loss) before provision for taxes
|
( |
) | ( |
) | ||||
Provision for income taxes
|
||||||||
Net loss
|
( |
) | ( |
) | ||||
Net loss attributed to noncontrolling interest
|
||||||||
Net loss attributed to Global Arena Holdings, Inc.
|
$ | ( |
) | $ | ( |
) | ||
Weighted average shares outstanding
- basic and diluted
|
||||||||
Earnings (loss) per share - basic and diluted
|
$ | ( |
) | $ | ( |
) | ||
$ | ( |
) | $ | ( |
) |
Series B Preferred Stock
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total Global Stockholders'
|
Noncontrolling
|
Total
Stockholders’
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
Interest
|
Deficit
|
|||||||||||||||||||||||||||||
Balance, December 31, 2021
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
||||||||||||||||||||||
Issuance of common stock for convertible debt and accrued interest | |||||||||||||||||||||||||||||||||||||
Allocated value of warrants and beneficial conversion feature related to issuance of convertible note
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Net loss
|
|
(
|
) |
(
|
) |
( |
) | ||||||||||||||||||||||||||||||
Balance, March 31, 2022
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
||||||||||||||||||||||
Issuance of common stock for
convertible debt and accrued interest
|
|
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||||||||||||||||||||||||||||||||||
Fair value of stock options issued for Series B Preferred Stock
|
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||||||||||||||||||||||||||||||||||
Allocated value of warrants and beneficial conversion feature related to issuance of convertible debt
|
|
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|
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|||||||||||||||||||||||||||||||||
Net loss
|
(
|
) |
(
|
) |
(
|
) |
|||||||||||||||||||||||||||||||
Balance, March 31, 2021
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
|
Three Months Ended
March 31,
|
|||||||
2022
|
2021
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net income (loss) to
|
||||||||
net cash used in operating activities:
|
||||||||
Amortization of debt discount
|
||||||||
Change in fair value of derivative liability
|
( |
) | ||||||
Gain on settlement of debt
|
( |
) | ||||||
Change in assets and liabilities:
|
||||||||
Deferred revenue
|
( |
) | ( |
) | ||||
Accounts payable
|
( |
) | ( |
) | ||||
Accrued expenses
|
||||||||
Net cash used in operating activities
|
( |
) | ( |
) | ||||
FINANCING ACTIVITIES:
|
||||||||
Proceeds from convertible promissory notes payable
|
||||||||
Repayment of convertible promissory notes payable
|
( |
) | ||||||
Net cash used in financing activities
|
||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
( |
) | ||||||
|
||||||||
CASH AND CASH EQUIVALENTS, BEGINNING BALANCE
|
||||||||
|
||||||||
CASH AND CASH EQUIVALENTS, ENDING BALANCE
|
$ | $ | ||||||
CASH PAID FOR:
|
||||||||
Interest
|
$ | |||||||
Income taxes
|
$ | |||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Allocated value of warrants and beneficial conversion features
related to debt
|
$ | $ | ||||||
Debt converted to common stock
|
$ | $ | ||||||
Issuance of stock for debt settlement
|
$ | $ |
NOTE 1 - ORGANIZATION
Organization and Business
Global Arena Holding, Inc. (formerly, “Global Arena Holding Subsidiary Corp.”) (“GAHI”), was formed in February 2009, in the state of Delaware. GAHI and its subsidiaries (the “Company”) was previously a financial services firm and currently is focusing on the following businesses through these subsidiaries:
On February 25, 2015, Global Election Services, Inc. (GES) formed on February 25, 2015, provides comprehensive technology-enabled paper absentee/mail ballot and internet election services to organizations such as craft and trade organizations, labor unions, political parties, co-operatives and housing organizations, associations and professional societies, universities, and political organizations.
GES has developed proprietary election software for a data storage and retrieval registration system to determine voter eligibility and prevent duplicate votes with In-Person digital signature capture, as well as proprietary election software for scanning/tabulation utilizing advanced OMR/OCR/Barcode imaging software featuring de-skewing, de-speckling and image correction. This system provides three types of audit capabilities. The hardware includes high speed optical scanners that are hard lined to a computer with all Wi-Fi disabled so the entire tabulation utilizing process occurs offline, eliminating the opportunity for hacking. GES is also working with multiple vendors and has made investments in companies that are developing Blockchain Technology for a data storage and retrieval registration system, tabulation of paper Absentee/Mail Ballots, and internet voting.
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase
On May 20, 2015, the Company incorporated a new wholly owned entity in the State of Delaware called “GAHI Acquisition Corp.” This entity was incorporated at the time to be the merger subsidiary for the acquisition of Blockchain Technologies Corp. (BTC) and other software system development.
On May 20, 2015, the Company entered into an agreement and plan of merger with BTC. Under this agreement, BTC would have merged with GAHI Acquisition, and GAHI Acquisition, would have been the surviving corporation. As consideration for the merger, the Company was to reserve a number of shares equal to 1/3 the total issued and outstanding of the Company to be issued to BTC shareholders at closing. On October 20, 2015, the parties agreed to extend the closing date of the merger to December 15, 2015. This agreement expired on December 15, 2015.
Concurrently, on October 20, 2015, the Company paid $
8 |
On March 28, 2017, the United States Patent Office issued patents to BTC covering Election Intellectual Property, US Patent #9,608,829, Issued March 28, 2017. As an equity shareholder in BTC only, GAHC and GES have not used the BTC US Patent. Any use of the patent would require a new negotiation, and new contract with BTC.
The Company has determined that the initial investment of Blockchain Technologies Corp. will be written off. The Company’s Board of Directors cancelled all transactions previously proposed but never acted on concerning GAHI Acquisition. GAHI Acquisition will remain a subsidiary for the exclusive use of any future transactions involving Blockchain Technologies Corporation.
The Company, GAHI, and GES do not trade crypto currency, nor participate in Initial Coin Offerings.
On June 15, 2019, GES entered into a Term Sheet to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members. The Company was formed to explore opportunities in the oil, gas, mineral and energy business. Tidewater Energy Group Inc. has
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the financial condition of the Company and its operating results for the respective periods. The condensed consolidated balance sheet at December 31, 2021 has been derived from the Company's audited consolidated financial statements. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021.
Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses from operations and cash flow deficits from its operations since inception and has had to continually borrow to continue operating. In addition, certain of the Company’s debt is in default as of March 31, 2022. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with their ability to raise additional funds that the Company should be able to continue as a going concern.
9 |
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp and Tidewater Energy Group, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.
Noncontrolling Interest
The Company follows ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.
The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss.
Basic and Diluted Earnings (Loss) Per Share
Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.
March 31, |
||||||||
2022 | 2021 | |||||||
Options |
||||||||
Warrants |
||||||||
Convertible notes |
||||||||
Total |
10 |
Management Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Convertible Debt
Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital. The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.
Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.
The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives pursuant to ASC 815, Derivatives and Hedging. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC 606, Revenue From Contracts with Customers. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.
11 |
The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.
Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.
Fair Value Measurements
The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:
|
• |
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. |
|
• |
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|
• |
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Cash, accounts payable and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.
Promissory notes payable and convertible promissory notes payable – Promissory notes payable and convertible promissory notes payable are recorded at amortized cost. The carrying amount approximates their fair value.
The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.
The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2022 and December 31, 2021.
Fair Value |
Fair Value Measurements at |
|||||||||||||||
|
As of |
March 31, 2022 |
||||||||||||||
Description |
March 31, 2022 |
Using Fair Value Hierarchy | ||||||||||||||
|
Level 1 | Level 2 | Level 3 | |||||||||||||
Beneficial conversion feature |
$ | $ | $ | $ | ||||||||||||
|
||||||||||||||||
Total |
$ | $ | $ | $ |
12 |
Fair Value |
Fair Value Measurements at |
|||||||||||||||
As of |
December 31, 2021 |
|||||||||||||||
Description |
December 31, 2021 |
Using Fair Value Hierarchy |
||||||||||||||
|
Level 1 | Level 2 | Level 3 | |||||||||||||
Beneficial conversion feature |
$ | $ | $ | $ | ||||||||||||
|
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
|
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
In June 2018, the FASB issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements as the Company did not have any lease arrangements that were subject to this new pronouncement.
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluation the impact this ASU will have on its consolidated financial statements.
13 |
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
NOTE 3– ACQUISITION DEPOSITS
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase
On June 15, 2019, GES entered into a Term Sheet, and Common Stock Purchase Agreement to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members. The Company was formed to explore opportunities in the oil, gas, mineral, and energy business. Tidewater Energy Group Inc. has
14 |
NOTE 4– ACCRUED EXPENSES
Accrued expenses at March 31, 2021 and December 31, 2020 consisted of the following:
|
March 31, |
December 31, |
||||||
|
2022 |
2021 |
||||||
Accrued interest |
$ | $ | ||||||
Accrued compensation |
||||||||
Other accrued expenses |
||||||||
|
$ | $ |
In March 2014, the Company issued two promissory notes for a total of $
NOTE 6 - CONVERTIBLE PROMISSORY NOTES PAYABLE
Convertible promissory notes payable at March 31, 2022 and December 31, 2021 consist of the following:
March 31, |
December 31, |
|||||||
2022 |
2021 |
|||||||
Convertible promissory notes with interest rates ranging from |
$ | $ | ||||||
Convertible promissory notes with interest rates ranging from |
||||||||
Convertible promissory notes with interest at |
||||||||
Total convertible promissory notes payable |
||||||||
Unamortized debt discount |
( |
) | ( |
) | ||||
Convertible promissory notes payable, net discount |
||||||||
Less current portion |
( |
) | ( |
) | ||||
Long-term portion |
$ | $ |
15 |
A rollforward of the convertible promissory notes payable from December 31, 2021 to March 31, 2022 is below:
Convertible promissory notes payable, December 31, 2021 |
$ | |||
Issued for cash |
||||
Issued for original issue discount |
( |
) | ||
Conversion to common stock |
( |
) | ||
Issuance of common stock for debt settlement |
||||
Debt discount related to new convertible promissory notes |
( |
) | ||
Amortization of debt discounts |
||||
Convertible promissory notes payable, March 31, 2022 |
$ |
NOTE 7 - DERIVATIVE FINANCIAL INSTRUMENTS
|
March 31, |
December 31, |
||||||
|
2022 |
2021 |
||||||
Risk-free interest rate |
% | % | ||||||
Expected life of the options (Years) |
||||||||
Expected volatility |
% | % | ||||||
Expected dividend yield |
% | % | ||||||
|
||||||||
Fair Value |
$ | $ |
A rollfoward of the derivative liability from December 31, 2021 to March 31, 2022 is below:
Derivative liabilities, December 31, 2021 |
$ | |||
Change in fair value of derivative liabilities |
( |
) | ||
Derivative liabilities, March 31, 2022 |
$ |
NOTE 8 - STOCKHOLDERS’ DEFICIT
Series B Preferred Stock
Pursuant to the Company’s Certificate of Incorporation, the Company has authorized
16 |
During the year ended December 31, 2017, the Company sold
Common Stock
On April 28, 2016, the stockholders approved an amendment to the Company’s articles of incorporation to increase the number of authorized common shares from
On October 11, 2019, the Company’s shareholders approved an increase of the Company’s authorized shares to One Billion (
On September 7, 2021, the stockholders of the Company re-elect the three (3) directors to serve as members of the Board of Directors of the Company to serve for the ensuing three years and or until their successors are duly elected and qualified. The directors named to our Board are John Matthews, Martin Doane, and Facundo Bacardi;
On September 7, 2021, the stockholders of the Company voted to authorize an increase in the Company’s authorized capital stock to
On September 7, 2021, the stockholders of the Company voted to authorize the Company to effectuate a
On September 7, 2021, the stockholders of the Company voted to ratify the appointment of Raul Carrega, CPA as the Company’s independent registered public accounting firm for the year ending December 31, 2021
During the three months ended March 31, 2021, the Company issued
Option Activity
A summary of the option activity is presented below:
|
Number of |
Weighted |
Weighted |
Aggregate |
||||||||||||
Outstanding, December 31, 2021 |
||||||||||||||||
Granted |
||||||||||||||||
Exercised |
||||||||||||||||
Forfeited/Canceled |
||||||||||||||||
Outstanding, March 31, 2022 |
|
|||||||||||||||
Exercisable, March 31, 2022 |
17 |
The exercise price for options outstanding at March 31, 2022 is as follows:
Outstanding and Exercisable |
||||
Number of |
Exercise |
|||
|
$ | |||
|
Warrant Activity
A summary of warrant activity is presented below:
|
Number of |
Weighted |
Weighted |
Aggregate |
||||||||||||
Outstanding, December 31, 2021 |
||||||||||||||||
Granted |
||||||||||||||||
Exercised |
|
|||||||||||||||
Forfeited/Canceled |
( |
) |
|
|
|
|||||||||||
Outstanding, March 31, 2022 |
||||||||||||||||
Exercisable, March 31, 2022 |
The exercise price for warrants outstanding at March 31, 2022 is as follows:
Outstanding and Exercisable |
||||
Number of |
Exercise Price |
|||
|
$ | |||
|
||||
|
||||
|
||||
|
||||
|
||||
|
||||
|
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|
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|
|
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|
18 |
During the three months ended March 31, 2022, the Company issued a total of
• Expected life of
• Volatility of
• Dividend yield of
• Risk free interest rate of
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.
On December 26, 2017, the Company entered into a settlement agreement with a prior attorney with regards to outstanding legal fees owed. Pursuant to this settlement agreement, the Company paid $
On October 16, 2020, the Company’s subsidiary, Tidewater Energy Group Corp. was named as a defendant in a lawsuit filed in District Court in and For Tulsa County, State of Oklahoma, CJ-2020-3172. On January 13, 2021, the plaintiffs added the Company to the lawsuit. The plaintiffs are seeking damages, disgorgement and specific performance relief relating to a Purchase and Sale Agreement to purchase all of the membership interests in Foster Energy. The Company has obtained counsel to dispute the charges. On March 18, 2021, the Company filed a motion to dismiss and brief in support. The Company asserted that the plaintiffs’ claims are entirely without merit as the Company was not a party to the Purchase and Sale Agreement or the related non-disclosure agreement. Tidewater concurrently filed a motion to dismiss based on legal remedies available to Tidewater. The litigation is ongoing.
NOTE 10 - AGREEMENTS
On March 25, 2021, the Company entered into a second amended purchase agreement (APA) with Election Services Solutions. Under the second APA the Company entered into an amended asset purchase agreement with Election Services Solutions, LLC. Under the amended APA, the Company will purchase
On May 13, 2019, the Company entered into a joint venture agreement with Voting Portals, LLC (VP), a Florida limited liability company. Pursuant to this agreement, the joint venture will be making use of the VP online e-voting web portal solutions and proprietary e-voting software programs to service and fulfill GES’s clients’ online elections and other e-voting events pursuant to the terms of the agreement, as well as any other ventures and relationships agreed to pursuant to the goals of the agreement. The Agreement was amended and as part of this agreement, the Company will be issuing
19 |
On January 14, 2022, GES entered into an Independent Consulting Agreement (ICA) with Magdiel Rodriquez. Under the terms of the ICA Magdiel Rodriquez will receive
On June 27, 2019, Blockchain Valley Ventures and GES signed an amended agreement calling for a $
GES made payments of $25,000 CHF and received the working paper primarily covering the following matters:
|
• |
Development and facilitation of an extended workshop with relevant and best in class third party blockchain technology companies such as Phoenix Systems AG, Securosys AG and others as well as any subject matter expert to be invited by Global Election Services Inc. |
|
• |
Development of a high-level technology solution architecture and its requirements for the blockchain based voting registration platform with inputs from third party blockchain technology. |
|
• |
Documentation of the results of a) and b) in order to provide the basis of the technical development of the platform. |
|
• |
Development of an implementation recommendation with respect to Voting on the Blockchain Platform. |
|
• |
Legal facilitation with respect to outside tax and legal advisors in connection with compliance with local and international regulation. |
|
• |
Project Management during the engagement. |
The Working Paper discusses a high-level envisaged Blockchain platform, including a foundational flowchart, and implementation recommendation; BVV is a Crypto Valley, Switzerland based venture capital firm who consists of highly successful entrepreneurs, finance experts, blockchain technology experts and ICO experienced analysts and consultants. The documents created will be used by GES, to begin to create a Minimal Viable Product. This Product, along with GES licensing rights on GES existing Registration and Tabulation Software will be owned by GES. The anticipated development start is in the 1st quarter 2023.
20 |
1) GES Investment in TrueVote Inc.
On June 15, 2019, GES entered into a Term Sheet, and Common Stock Purchase Agreement to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES was to invest $
The TrueVote Voting System will be based on traditional, proven database methodologies and layered with a “checksum” that is posted on the blockchain, proving all data is immutable and unalterable.
TrueVote is directed by Brett Morrison recently the Director of Enterprise Information Systems at SpaceX. Brett was as an e-commerce pioneer, getting brands online and creating a new channel for sales at the beginning of the e-commerce boom. Brett co-founded Onestop Internet in 2003 out of his garage and built the original e-commerce and warehouse management software that started the company. Throughout his time as Chief Technology Officer and Chief Innovation Officer at Onestop, he oversaw and managed its growth and architected and helped build the new Onestop 2.0 platform. Prior to Onestop, Brett co-founded one of the first photo sharing companies on the Internet, ememories.com, which was sold to PhotoWorks, one of the largest photo processing companies in the U.S. True Vote is also directed by Ped Hasid who graduated UCLA with Magna Cum Laude Honors in 2007. Ped later went on to cofound Block26, a venture vehicle for the DLT space established in 2014, leading the technology and investment strategy for the firm. Block26 to date has financed and incubated innovative projects that aim to enhance consumer adoption of DLT technology.
On June 15, 2019, GES entered into a Term Sheet to create a joint venture with TrueVote, Inc. Under the terms of the agreement GES will invest $
2) Tidewater Energy Group Inc.
On November 19, 2019, the Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc. The Board of Directors appointed John S. Matthews and Jason Old as Board members.
The Company was formed to explore opportunities in the oil, gas, mineral, and energy business. Tidewater Energy Group Inc. has
21 |
3) GAHI Acquisition Corp.
On June 7, 2019, the Company’s second subsidiary, GAHI Acquisition Corp. (GAHI) was authorized by the Company’s Board of Directors to infuse an initial deposit of $
On January 11, 2022, the Company entered into a
On February 2, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On February 3, 2022, Global Election Services, Inc. entered into a promissory note with an investor for the amount of $
On March 30, 2022, the Company entered into a convertible note with an investor for the amount of $
NOTE 11 – SUBSEQUENT EVENTS
On April 7, 2022, Global Election Services, Inc. entered into a convertible note with an investor for the amount of $
On April 7, 2022, Global Election Services, Inc. entered into a convertible note with an investor for the amount of $
On May 20, 2022, Global Election Services, Inc. entered into a convertible note with an investor for the amount of $
On April 15, 2022, the Company made a $
On March 31, 2022, the Company was named as a defendant in a lawsuit filed in the Supreme Court of the State of New York, Index No. 651531/2002. The plaintiff has alleged breach of their individual employment contract and unjust enrichment. The plaintiff is seeking damages relating to a plaintiff’s 2015 prior employment agreement with the Company. The Company has obtained counsel to dispute the charges.
22 |
• | On December 20, 2019, President Trump signed the Consolidated Appropriations Act of 2020 into law. The Act includes $425 million in new HAVA funds made available. | |
• | In 2019, Hawaii (SB 166) allocated $789,598 for the purpose of a vote counting system contract. | |
• | In 2019, Georgia issued a $150 million bond package for the replacement of voting equipment statewide. The state also appropriated $12,840,000 from the General Fund for the purpose of financing projects and facilities for the Office of Secretary of State. | |
• | In 2019, Wyoming appropriated $7.5 million into an election readiness account (HB 21). The state's $3 million HAVA allocation will also be placed in this account, the majority of which will go toward replacing outdated voting equipment statewide. | |
• | In 2019, North Dakota enacted SB 2002, which included a one-time appropriation for voting equipment and electronic poll books statewide. The total amount of $11.2 million included $8.2 million in state funds and $3 million in HAVA funds. |
GLOBAL ARENA HOLDING, INC. a Nevada corporation | ||
Date: May 24, 2022 | By: | /s/ JOHN MATTHEWS |
John Matthews | ||
Chief Executive Officer Chief Financial Officer |