UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For Quarterly Period Ended

June 30, 2017

 

or

 

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition period from _______________ to ______________

 

Commission File Number: 000-10210

 

GLOBAL TECH INDUSTRIES GROUP, INC.

(Exact name of registrant as specified in its charter)

 

NEVADA   83-0250943
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

511 Sixth Avenue, suite 800

New York, NY 10011

(Address of principal executive offices) (Zip Code)

 

(212) 204 7926

Registrant’s telephone number, including area code

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

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 proceeding 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One).

 

  Large accelerated filer [   ]   Accelerated filer [   ]
 

Non-accelerated filer

(Do not check if a smaller reporting company)

[   ]  

Smaller reporting company

Emerging growth company

[X]

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [ ]

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

  Yes [   ]   No [X]

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

 

As of August 9, 2017 the   number of shares outstanding of the registrant’s class of common stock was 115,527,990

 

 

 

     

 

 

TABLE OF CONTENTS

 

      Pages
PART I. FINANCIAL INFORMATION   3
       
Item 1. Financial Statements   3
       
  Unaudited Condensed Consolidated Balance Sheets at June 30, 2017 and December 31, 2016   3
       
  Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2017 and 2016   4
       
  Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016   5
       
  Notes to Unaudited Condensed Consolidated Financial Statements   6
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   16
       
Item 3. Quantitative and Qualitative Disclosures About Market Risk   20
       
Item 4. Controls and Procedures   20
       
PART II. OTHER INFORMATION   22
       
Item 1. Legal Proceedings   22
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   22
       
Item 3. Defaults Upon Senior Securities   22
       
Item 5. Other Information   23
       
Item 6. Exhibits   23
       
SIGNATURES   25

 

  2  
 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Balance Sheets

 

         
    June 30, 2017     December 31, 2016  
ASSETS                
CURRENT ASSETS                
Cash and cash equivalents   $ 114,851     $ 40,656  
Prepaid expenses         130,345  
Marketable securities     150,766       115,388  
                 
Total Current Assets     265,617       286,389  
                 
PROPERTY AND EQUIPMENT (NET)     1,020       1,679  
                 
                 
TOTAL ASSETS   $ 266,637     $ 288,068  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
CURRENT LIABILITIES                
Accounts payable and accrued expenses   $ 1,107,117     $ -860,246  
Accrued interest payable     438,952       395,714  
Shares to be issued     128,634       -  
Asset retirement obligation     101,250       101,250  
Due to officers and directors     150,856       135,062  
Notes payable- in default     507,040       315,040  
Current portion of long-term debt-related party     -       744,015  
Current portion of long-term debt     -       763,181  
                 
Total Current Liabilities     2,433,849       3,314,508  
                 
LONG-TERM LIABILITIES                
Notes payable - related party (less current portion)     744,015       -  
Notes payable (less current portion)     571,181       -  
                 
Total Long-Term Liabilities     1,315,196       -  
                 
Total Liabilities     3,749,045       3,314,508  
                 
STOCKHOLDERS' (DEFICIT)                
Preferred Stock, par value $.001, 50,000 authorized, 1,000 and 0 issued     1       1  
Common stock, par value $0.001 per share, 350,000,000 shares authorized; 124,527,990 and 124,527,990 issued, 114,527,990 and 114,527,990 outstanding, respectively  
 
 
 
 
 
 
 
124,527
 
 
 
 
 
 
 
 
 
 
 
124,527
 
 
 
Additional paid-in-capital     158,012,802       158,006,082  
Unearned ESOP shares     (2,876,000 )     (2,876,000 )
Accumulated other comprehensive income     123,631       88,251  
Retained (Deficit)     (158,867,368 )     (158,369,301 )
                 
Total Stockholders' (Deficit)     (3,482,408 )     (3,026,440 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)   $ 266,637     $ 288,068  

 

The accompanying notes are an integral part of these consolidated financial statements.

 

  3  
 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Statements of Operations

 

    For the     For the  
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2017     2016     2017     2016  
                         
REVENUES, net     -       -       -       -  
                                 
COST OF SALES, net     -       -       -       -  
                                 
GROSS PROFIT/(LOSS)     -       -       -       -  
                                 
OPERATING EXPENSES                                
                                 
General and administrative     294,958       62,786       366,873       111,625  
Compensation and professional fees     28,457       165,145       170,211       199,822  
Depreciation     329       329       658       658  
                                 
Total Operating Expenses     323,744       228,260       537,742       312,104  
                                 
OPERATING LOSS     (323,744 )     (228,260 )     (537,742 )     (312,104 )
                                 
OTHER INCOME (EXPENSES)                                
                                 
Interest income     5       301       5       301  
Gain/(loss) on marketable securities     -       603       -       603  
Other expenses     91,642       -       91,642       -  
Interest expense     (25,744 )     (26,568 )     (51,972 )     (54,136 )
                                 
Total Other Income (Expenses)     65,903       (25,664 )     39,675       (53,232 )
                                 
LOSS BEFORE INCOME TAXES     (257,841 )     (253,924 )     (498,067 )     (365,336 )
                                 
INCOME TAX EXPENSE     -       -       -       -  
                                 
NET LOSS   $ (257,841 )   $ (253,924 )   $ (498,067 )   $ (365,336 )
                                 
OTHER COMPREHENSIVE INCOME /(LOSS) net of taxes                                                                
Unrealized gain (loss) on held for sale marketable securities           8,448               237               35,380               10,698    
                                 
COMPREHENSIVE LOSS   $ (249,393 )   $ (253,687 )   $ (462,688 )   $ (354,638 )
                                 
BASIC AND DILUTED LOSS PER SHARE   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
                                 
WEIGHTED AVERAGE NUMBER OF                                
SHARES OUTSTANDING, BASIC AND DILUTED     124,527,990       84,445,070       124,527,990       84,347,980  

 

The accompanying notes are an integral part of these consolidated financial statements.

 

  4  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Statements of Cash Flows

 

    For the  
    Six Months Ended  
    June 30,  
    2017     2016  
             
CASH FLOWS FROM OPERATING ACTIVITIES                
                 
Net loss   $ (498,067 )     (365,336 )
Adjustments to reconcile net loss to net cash used in
operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization     659       659  
(Gain)/Loss on marketable securities             (603 )
Imputed interest on loan     6,720       6,720  
Shares issued for services             106,411  
Change in operating assets and liabilities, net of acquisition:                
(Increase) decrease in accounts receivables and prepaids     130,345       (5,000 )
Increase (decrease) in accounts payable and accrued expenses     290,109       45,533  
                 
Net Cash Used in Operating Activities     (70,235 )     (211,616 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
                 
Cash received for sale of treasury & marketable securities     -       76,604  
Cash paid for marketable securities     -       (1,415 )
                 
Net Cash provided by Investing Activities     -       75,189  
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
                 
Cash received from private placement     128,634       370,000  
Cash received from notes payable     -       3,000  
Cash paid to related party loans     (220,275 )     (430,819 )
Cash received from related party loans     236,070       206,219  
                 
Net Cash Provided by Financing Activities     144,429       148,400  
                 
INCREASE IN CASH AND CASH EQUIVALENTS     74,194       11,973  
                 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     40,656       108  
                 
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 114,850     $ 12,081  
                 
SUPPLEMENTAL DISCLOSURES:                
                 
Cash paid for interest   $ -     $ -  
Cash paid for income taxes   $ -     $ -  
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES:                
                 
Unrealized gain on marketable securities   $ 35,379     $ (10,698 )

 

The accompanying notes are an integral part of these consolidated financial statements.

 

  5  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by GLOBAL TECH INDUSTRIES GROUP, INC. (“the Company”) without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2017, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2016 audited financial statements. The results of operations for the period ended June 30, 2017 are not necessarily indicative of the operating results for the full year.

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as disclosed in Item 2 below. All significant inter-company balances and transactions have been eliminated.

 

NOTE 2 - GOING CONCERN

 

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

  6  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

 

Use of 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 the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Beneficial Conversion Feature of Debentures and Convertible Notes Payable

 

In accordance with FASB ASC 470-20, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, we recognize the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert his debt into common stock at a price per share that is less than the trading price to the public on the day the loan is made to us. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debentures and related accruing interest, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the straight-line method.

 

Recent Accounting Pronouncements

 

No accounting pronouncements were issued during the second quarter of 2017 that would have a material effect on the accounting policies of the Company when adopted.

 

  7  
 

  

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Asset Retirement Obligation

 

The Company follows FASB ASC 410-20 “Accounting for Asset Retirement Obligations,” which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.

 

FASB ASC 410-20 requires recognition of the present value of obligations associated with the retirement of tangible long-lived assets in the period in which it is incurred. The liability is capitalized as part of the related long-lived asset’s carrying amount.

 

Over time, accretion of the liability is recognized as an operating expense and the capitalized cost is depreciated over the expected useful life of the related asset. The Company’s asset retirement obligations are related to the plugging, dismantlement, removal, site reclamation and similar activities of its oil and gas exploration activities.

 

The asset retirement obligation is as follows:

 

    6/30/2017     12/31/2016  
Previous Balance   $ 101,250     $ 101,250  
Increases/(decreases) current period     -       -  
                 
Ending Balance   $ 101,250     $ 101,250  

 

Investments at Cost

 

The Company accounts for its investment in private entities using the equity method for investments where the Company’s shares held are in excess of 20% of the outstanding shares of the investee. The Company acquired a 25% equity investment in three entities from Brazil as part of the assets of the ARUR acquisition in December 2012. Due to the inactivity of the entities, the Company did not allocate any purchase price to these investments. The Company evaluates its cost in investments for impairment of value annually. If cost investments become marketable they are reclassified to Marketable Securities-Available for Sale.

 

Investments are as follows:

 

Balance, December 31, 2016   $ 0  
Realized gains and losses     -  
Unrealized gains and losses     -  
Balance, June 30, 2017   $ 0  

 

Marketable Securities-Available for Sale

 

The Company purchased marketable securities and these marketable securities are classified as “available for sale”. Accordingly, the Company originally recognizes the shares at the market value purchased. The shares are evaluated quarterly using the specific identification method. Any unrealized holding gains or losses are reported as Other Comprehensive Income and as a separate component of stockholder’s equity. Realized gains and losses are included in earnings. Also, other than temporary impairments are recorded as a loss on marketable securities in the statements of operations.

 

  8  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

Marketable Securities-Available for Sale (Continued)

 

Marketable securities are as follows at June 30, 2017:

 

Balance at December 31, 2016:   $ 115,388  
Change in market value at June 30, 2017     35,378  
Balance at June 30, 2017:   $ 150,766  

 

Fair Value of Financial Instruments

 

On January 1, 2008, the Company adopted ASC 820, “Fair Value Measurements” ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices (unadjusted) 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 measurement.

 

The carrying amounts reported in the balance sheets for cash and cash equivalents, and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of June 30, 2017 and December 31, 2016.

 

Marketable securities are reported at the quoted and listed market rates of the securities held at the period end.

 

The following table presents the Company’s Marketable securities and Notes Payable within the fair value hierarchy utilized to measure fair value on a recurring basis as of June 30, 2017 and December 31, 2016:

 

    Level 1       Level 2       Level 3  
Marketable Securities – 2017     150,766       -0-       -0-  
Marketable Securities – 2016     115,388       -0-       -0-  
Notes payable - 2017     -0-       -0-       1,822,236  
Notes payable - 2016     -0-       -0-       1,822,236  

 

The following table presents a Level 3 reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs as of June 30, 2017 and December 31, 2016:

 

    Notes payable  
Balance, December 31, 2016   $ 1,822,236  
Note issuances     -0-  
Note payments     -0-  
Balance, June 30, 2017   $ 1,822,236  

 

  9  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, NetThruster, Inc., BioEnergy Applied Technologies Inc., GoHealthMD, Inc., MLN, Inc., Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc., TTI Strategic Acquisitions and Equity Group, Inc. and TTII Oil & Gas, Inc. All subsidiaries of the Company except TTII Oil & Gas, Inc. and TTII Strategic Acquisitions, currently have no financial activity. All significant inter-company balances and transactions have been eliminated.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained with major financial institutions in the U S. Deposits held with these banks at times exceed $250,000 of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash and cash equivalents. There were no cash equivalents at June 30, 2017 and December 31, 2016.

 

Accounts Receivable/Allowances for Doubtful Accounts

 

The Company regularly assesses the collectability of its accounts receivable, and considers receivables with aging exceeding 120 days to be potentially uncollectible. Management will analyze the need for an allowance for doubtful accounts at that time. As of June 30, 2017 and December 31, 2016, there are no allowances recorded.

 

Stock Based Compensation

 

The Company accounts for stock-based compensation in accordance with the provisions of ASC 718. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the reward- known as the requisite service period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments are estimated using the Black Scholes option-pricing model adjusted for the unique characteristics of those instruments.

 

Equity instruments issued to non-employees are recorded at their fair values as determined in accordance with ASC 718 and ASC 595, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods and Services”, and are periodically revalued as the stock options vest and are recognized as expense over the related service period.

 

Basic and Diluted Loss per Share

 

The Company calculates earnings per share in accordance with ASC 260, “Computation of Earnings Per Share.” Basic loss per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period; only in periods in which such effect is dilutive. For 2017 and 2016, no common equivalent shares were excluded from the calculation and as of June 30, 2017, there are not stock equivalents existing. The ESOP shares issued during 2012 and 2011 have also been excluded from the calculation as they were issued but not outstanding.

 

  10  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

    For the six months  
    Ended
June 30, 2017
    Ended
June 30, 2016
 
Income (Loss) (numerator)   $ (498,067 )   $ (365,336 )
Shares (denominator)     124,527,990       84,347,980  
Basic and diluted income (loss) per share   $ (0.00 )   $ (0.00 )

 

Intangible Assets and Business Combinations

 

The Company adopted ASC 805, “Business Combinations”, and ASC 350, “Goodwill and Other Intangible Assets”, effective June 2001 and revised in December 2007. ASC 805 requires the use of the purchase method of accounting for any business combinations initiated after June 30, 2002, and further clarifies the criteria to recognize intangible assets separately from goodwill. Under ASC 350, goodwill and indefinite−life intangible assets are no longer amortized, but are reviewed for impairment annually.

 

  11  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

Income Taxes

 

The Company applies ASC 740 which requires the asset and liability method of accounting for income taxes. The asset and liability method requires that the current or deferred tax consequences of all events recognized in the financial statements are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered.

 

The Company adopted ASC 740 at the beginning of fiscal year 2008. This interpretation requires recognition and measurement of uncertain tax positions using a “more-likely-than-not” approach, requiring the recognition and measurement of uncertain tax positions. The adoption of ASC 740 had no material impact on the Company’s financial statements. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards 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 to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment

 

NOTE 4 - RELATED PARTY TRANSACTIONS

 

The Company is indebted to the officers of the Company for unpaid wages and bonuses from previous years that were converted into Notes. The balances at June 30, 2017 and December 31, 2016 are $421,044 to Mr. Reichman and $206,670 to Mrs. Griffin, respectively. The notes bear interest at 5% are due at October 1, 2018 and are unsecured.

 

Due to officers as of June 30, 2017 and December 31, 2016 are totals of $150,856 and $135,062, respectively. These balances consist of net cash advances, and unpaid expense reimbursements due to David Reichman. The payables and cash advances are unsecured, due on demand and do not bear interest. During the first six months of 2017 Mr. Reichman advanced $236,070 to the Company to cover operating expenses, and was repaid $220,275.

 

During the first six months of 2017 and the year ended December 31, 2016, a board member advanced $0 and $3,000, respectively. These totals consist of several small advances, each covered by separate notes that bear interest at 6%, are unsecured, and are due in October 2018. The total notes payable to this board member at June 30, 2017 and December 31, 2016 amount to $116,300 and $116,300, respectively.

 

  12  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

NOTE 5 - NOTES PAYABLE

 

(a) NOTES PAYABLE

 

Notes payable consist of various notes bearing interest at rates from 5% to 8%, which are unsecured, with due dates between August 2000 and October 2018. Many notes with maturity dates that have passed are currently in default with the remaining note due on dates as specified below. At June 30, 2017 and December 31, 2016, notes payable amounted to $1,822,236 and $1,822,236, respectively. Below is a table summarizing the notes owed by the Company.

 

            Interest Expense     Interest Expense        
Principal     Interest Rate     3/31/17     3/31/2016     Maturity  
  5,099       5.00 %     128       128       10/5/2018  
  32,960       5.00 %     824       824       10/5/2018  
  37,746       5.00 %     968       968       10/5/2018  
  107,000       5.00 %     2710       2710       10/5/2018  
  388,376       5.00 %     9710       9710       10/5/2018  
  192,000       0.00 %     6720       6720       1/31/2017  
  18,000       6.00 %     540       540       09/01/2002  
  30,000       6.00 %     900       900       09/12/2002  
  25,000       5.00 %     626       626       08/31/2000  
  40,000       7.00 %     1400       1400       07/10/2002  
  5,000       6.00 %     150       150       10/28/2013  
                  0       0          
  409,920       5.00 %     10248       10248       10/5/2018  
  11,125       5.00 %     278       278       10/5/2018  
  200,000       5.00 %     5000       5000       10/5/2018  
  6,670       5.00 %     166       167       10/5/2018  
  116,300       6.00% & 8.00 %     3680       3680       10/5/2018  
  147,840       6.00 %     4436       4573       3/14-11/15  
  49,200       6.00 %     1476       1476       03/16-12/16  
$ 1,822,236               49,960       50,098          

 

(1) Imputed interest due to 0% interest rate

 

  13  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

NOTE 6 - STOCKHOLDERS’ DEFICIT

 

ISSUANCES OF COMMON STOCK

 

During the six months ended June 30, 2017, there were no common stock issuances.

 

During the six months ended June 30, 2017, the Company recorded imputed interest on a non-interest bearing note in the amount of $6,720, with an increase in paid in capital.

 

During the six months ended June 30, 2017, the Company did not issue any stock options or warrants.

 

ISSUANCES OF PREFERRED STOCK

 

Pursuant to the Articles of Incorporation of the Company, there was initially authorized 50,000 shares of Series A Preferred Stock. On April 7, 2016, the Company’s Board of Directors created out of the Series A Preferred Stock, 1,000 Series A Preferred shares with the following features:

 

a)

Super voting power, wherein the 1,000 shares have the right to vote in the amount equal to fifty-one percent (51%) of the total vote with respect to any proposal relating to (i) increasing the authorized share capital of the Company, and (ii) effecting any forward stock split of the Company’s authorized, issued or outstanding shares of capital stock, and (iii) any other matter subject to a shareholder vote.

 

b)

No entitlement to dividends.

 

c)

No liquidation preferences.

 

d)

No conversion rights.

 

e)

Automatic Redemption Rights upon certain triggers, to be redeemed at par value.

 

The Board of Directors also authorized the issuance of all 1,000 Series A Preferred shares to David Reichman, CEO, for no consideration.

 

  14  
 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

 

NOTE 7 - LEGAL ACTIONS

 

At present, GTII is involved with two separate matters in the US District Court in New York. The first matter, Case # 17-cv-000698 is in the Eastern District and was brought against ARUR to recover the shares paid to ARUR for the 75% working interest in the Owenby lease that was acquired by GTII, then TTII, from ARUR. Shortly thereafter, ARUR was sued by a shareholder claiming that ARUR lacked the authority to carry out the sale to GTII. Due to ARURs failure to answer and defend and to defend on behalf of GTII, the court ruled against ARUR and GTII. In Jan 2017, GTII, through its litigation Counsel, Warren Markowitz, Esq., proceed with an action to recover the shares paid. As of August 1st 2017, GTII has applied for and anticipates getting, a default judgment invalidating the shares paid to ARUR, on the grounds that ARUR, its officer and its management has failed to answer or defend the action brought.

 

In May 2017, GTII took action against Go Fun Group, its managers, and related companies for failing to fulfill its obligations under an agreement entered into in December 2016. Due to the complexity of the matter, GTII was required to serve the documents for the case, #17-cv-03727, Southern District of New York, under the Hague Convention through the Central Administrative Authority in Hong Kong SAR. In July 2017, litigation Counsel, Warren Markowitz, Esq., received confirmation that the papers were served in Hong Kong SAR. Counsel is weighing its options as to further action at this time.

 

NOTE 8 – SUBSEQUENT EVENTS

 

In accordance with ASC 855-10 Company management reviewed all material events through the date of this report and there are no material subsequent events to report.

 

  15  
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Cautionary Statements

 

This Form 10-Q may contain “forward-looking statements,” as that term is used in federal securities laws, about Global Tech’s consolidated financial condition, results of operations and business. These statements include, among others:

 

statements concerning the potential benefits that may be experienced from business activities and certain transactions contemplated or completed; and
statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this Form 10-Q. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” “opines,” or similar expressions used in this Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. The most important facts that could prevent us from achieving our stated goals include, but are not limited to, the following:

 

a) volatility or decline of Global Tech’s stock price; potential fluctuation of quarterly results;
   
b) Potential fluctuation of quarterly results;
   
c) failure to earn revenues or profits;
   
d) inadequate capital to continue or expand our business, and inability to raise additional capital or financing to implement our business plans;
   
e) failure to commercialize our technology or to make sales;
   
f) decline in demand for our products and services;
   
g) Rapid adverse changes in markets;
   
h) litigation with or legal claims and allegations by outside parties against GTII, including but not limited to challenges to intellectual property rights;
   
i) insufficient revenues to cover operating costs; and

 

There is no assurance that we will be profitable, we may not be able to successfully develop, manage or market our products and services, we may not be able to attract and retain qualified executives and technology personnel, we may not be able to obtain customers for our products or services, our products and services may become obsolete, government regulation may hinder our business, additional dilution in outstanding stock ownership may be incurred due to the issuance of more shares, warrants and stock options, or the exercise of outstanding warrants and stock options, and other risks inherent in our businesses.

 

Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution you not to place undue reliance on the statements, which speak only as of the date of this Form 10-K. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-Q, or to reflect the occurrence of unanticipated events.

 

Organizational History

 

We were incorporated in 1980 under the laws of the State of Nevada under the name of Western Exploration, Inc. Western Exploration, Inc., a Nevada corporation, was formed on July 24, 1980. In 1990, Western Exploration, Inc. changed its name to Nugget Exploration, Inc. On November 10, 1999, a wholly owned subsidiary of Nugget Exploration, Inc., Nugget Holdings Corporation merged with and into Health, Inc., a Delaware corporation. Shortly thereafter, Nugget Exploration, Inc. changed its name to GoHealthMD, Inc. a Nevada corporation.

 

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On August 18, 2004, GoHealthMD, Inc., the Nevada Corporation, changed its name to Tree Top Industries, Inc. On July 7, 2016, Tree Top Industries, Inc. changed its name to Global Tech Industries Group, Inc. GoHealthMD, Inc. continues to exist as a Delaware corporation and wholly owned subsidiary of Global Tech Industries Group, Inc. NetThruster, Inc. MLN, Inc., BioEnergy Applied Technologies, Inc. (BAT”), Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc., TTI Strategic Acquisitions and Equity Group, Inc., TTII Oil & Gas, Inc., and G T International, Inc. are also wholly owned subsidiaries of Global Tech Industries Group, Inc. Several of these subsidiaries have been formed by us in the anticipation of technologies, products or services being acquired. Not all subsidiaries are currently active.

 

On December 31, 2012, Global Tech and its new subsidiary, TTII Oil & Gas, Inc., a Delaware corporation, signed a binding asset purchase agreement with American Resource Technologies, Inc. (“ARUR”), a Kansas corporation, to acquire all of the assets of ARUR for a purchase price of $513,538, which was paid in the form of 466,853 shares of Global Tech’s common stock as described in the asset purchase agreement. The shares were valued at $1.10 per share, based on the closing trading price of the common stock on the Closing Date. The assets purchased from ARUR include a 75% working interest in oil and gas leases in Kansas, as well as other oil field assets, a natural gas pipeline, currently shut down that is also located in Kansas, 25% interest in three other business entities operating in Kansas, and accounts receivables from two companies operating in Brazil in the amounts of $3,600,000 and $3,600,000 respectively. TTII Oil & Gas, Inc. also purchased three promissory notes in the amounts of $100,000, $100,000 and $350,000, as well an overdue contract for revenue in the amount of $1,000,000. Finally, a gun sight patent was also acquired from Century Technologies, Inc.

 

On September 8, 2015, a Kansas court deemed the acquisition transaction invalid due to the ARUR Board of Directors not complying with the Kansas Statute; therefore all oil and gas operations have ceased and litigation has been commenced (See litigation).

 

On December 30, 2016, Global Tech Industries Group, Inc., a Nevada corporation, executed a stock purchase agreement (the “Agreement”), which was signed and closed in Hong Kong, with GoFun Group, Ltd. through its wholly owned subsidiary Go F & B Holdings, Ltd. GoFun Group, Ltd. is a privately held company running a casual dining restaurant business, based in Hong Kong. Pursuant to the Agreement, GTII acquired all the issued and outstanding capital stock of Sky Sovereign (F&B), Ltd., Heartful Blessing Catering Investment Ltd., Shichirin Food & Beverage Corporation Ltd. and Go Inside Kitchen Ltd. for up to 73% of the issued and outstanding shares of GTII. The aforementioned companies (the “Companies”) were acquired from Go F&B Holdings Ltd. (the “Seller”), a subsidiary of GoFun Group, Ltd., for 10% of the issued and outstanding shares of common stock of GTII, as of December 30, 2016. Additionally, the Seller may acquire up to an additional 63% of the issued and outstanding shares of common stock of GTII as of December 30, 2017, if certain thresholds have been met. As of December 31, 2016, and the date of this report, the shares had not been exchanged with the GoFun shareholders, and due to the contingencies stated in the agreement having not been met, management has determined that the acquisition of GoFun has not been consummated, and has determined not to include the activities of GoFun in these financial statements. Further, GTII has filed an action for specific performance, in the US District Court in the Eastern District of New York on May 21, 2017.

 

Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We monitor our estimates on an on-going basis for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.

 

Certain of our accounting policies are particularly important to the portrayal and understanding of our financial position and results of operations and require us to apply significant judgment in their application. As a result, these policies are subject to an inherent degree of uncertainty. In applying these policies, we use our judgment in making certain assumption and estimates. Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2015. There have been no material changes to our critical accounting policies as of September 30, 2016 and for the nine months then ended.

 

  17  
 

 

Overview of Business

 

We were incorporated in 1980 under the laws of the State of Nevada under the name of Western Exploration, Inc. Western Exploration, Inc., a Nevada corporation, was formed on July 24, 1980. In 1990, Western Exploration, Inc. changed its name to Nugget Exploration, Inc. On November 10, 1999, a wholly owned subsidiary of Nugget Exploration, Inc., Nugget Holdings Corporation merged with and into Health, Inc., a Delaware corporation. Shortly thereafter, Nugget Exploration, Inc. changed its name to GoHealthMD, Inc. a Nevada corporation.

 

On August 18, 2004, GoHealthMD, Inc., the Nevada Corporation, changed its name to Tree Top Industries, Inc. On July 7, 2016, Tree Top Industries, Inc. changed its name to Global Tech Industries Group, Inc. GoHealthMD, Inc. continues to exist as a Delaware corporation and wholly owned subsidiary of Global Tech Industries Group, Inc. NetThruster, Inc. MLN, Inc., BioEnergy Applied Technologies, Inc. (BAT”), Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc., TTI Strategic Acquisitions and Equity Group, Inc., TTII Oil & Gas, Inc., and G T International, Inc. are also wholly owned subsidiaries of Global Tech Industries Group, Inc. Several of these subsidiaries have been formed by us in the anticipation of technologies, products or services being acquired. Not all subsidiaries are currently active.

 

On December 31, 2012, Global Tech and its new subsidiary, TTII Oil & Gas, Inc., a Delaware corporation, signed a binding asset purchase agreement with American Resource Technologies, Inc. (“ARUR”), a Kansas corporation, to acquire all of the assets of ARUR for a purchase price of $513,538, which was paid in the form of 466,853 shares of Global Tech’s common stock as described in the asset purchase agreement. The shares were valued at $1.10 per share, based on the closing trading price of the common stock on the Closing Date. The assets purchased from ARUR include a 75% working interest in oil and gas leases in Kansas, as well as other oil field assets, a natural gas pipeline, currently shut down that is also located in Kansas, 25% interest in three other business entities operating in Kansas, and accounts receivables from two companies operating in Brazil in the amounts of $3,600,000 and $3,600,000 respectively. TTII Oil & Gas, Inc. also purchased three promissory notes in the amounts of $100,000, $100,000 and $350,000, as well an overdue contract for revenue in the amount of $1,000,000. Finally, a gun sight patent was also acquired from Century Technologies, Inc.

 

On September 8, 2015, a Kansas court deemed the acquisition transaction invalid due to the ARUR Board of Directors not complying with the Kansas Statute; therefore all oil and gas operations have ceased and litigation has been commenced (See litigation).

 

On December 30, 2016, Global Tech Industries Group, Inc., a Nevada corporation, executed a stock purchase agreement (the “Agreement”), which was signed and closed in Hong Kong, with GoFun Group, Ltd. through its wholly owned subsidiary Go F & B Holdings, Ltd. GoFun Group, Ltd. is a privately held company running a casual dining restaurant business, based in Hong Kong. Pursuant to the Agreement, GTII acquired all the issued and outstanding capital stock of Sky Sovereign (F&B), Ltd., Heartful Blessing Catering Investment Ltd., Shichirin Food & Beverage Corporation Ltd. and Go Inside Kitchen Ltd. for up to 73% of the issued and outstanding shares of GTII. The aforementioned companies (the “Companies”) were acquired from Go F&B Holdings Ltd. (the “Seller”), a subsidiary of GoFun Group, Ltd., for 10% of the issued and outstanding shares of common stock of GTII, as of December 30, 2016. Additionally, the Seller may acquire up to an additional 63% of the issued and outstanding shares of common stock of GTII as of December 30, 2017, if certain thresholds have been met. As of December 31, 2016, and the date of this report, the shares had not been exchanged with the GoFun shareholders, and due to the contingencies stated in the agreement having not been met, management has determined that the acquisition of GoFun has not been consummated, and has determined not to include the activities of GoFun in these financial statements.

 

  18  
 

 

Employees

 

As of August 1, 2017 we have 2 full-time employees. We have not experienced any work stoppages and we consider relations with its employees to be good.

 

RESULTS OF OPERATIONS

 

Results of Operations for the Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016 :

 

We realized revenues of $0 during the three months ended June 30, 2017 and 2016, due to our oil pumping operations being suspended in the first quarter 2015, until oil prices improve. Our general operating expenses increased from $ 62,786 in 2016 to $294,958 in 2017. The increase was primarily the result of legal and consulting fees incurred by our professionals and consultants, as part of the effort to get the Company current in its filings and operations.

 

Our net loss increased by $2,712 from $255,129 in 2016 to a loss of $257,841 in 2017. The primary reason for this increase was the result of legal and consulting fees incurred by our professionals and consultants. We expect that our losses will continue until we are able to establish a consistent revenue source. Management and the Board are considering multiple options currently available.

 

Results of Operations for the Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016 :

 

We realized revenues of $0 during the six months ended June 30, 2017 and 2016, due to our oil pumping operations being suspended in the first quarter 2015, until oil prices improve. Our general operating expenses increased from $ 111,625 in 2016 to $366,873 in 2017. The increase was primarily the result of legal and consulting fees incurred by our professionals and consultants, as part of the effort to get the Company current in its filings and operations.

 

Our net loss increased by $205,902 from $292,165 in 2016 to a loss of $498,067 in 2017. The primary reason for this increase was the result of legal and consulting fees incurred by our professionals and consultants. We expect that our losses will continue until we are able to establish a consistent revenue source. Management and the Board are considering multiple options currently available.

 

LIQUIDITY AND CAPITAL RESOURCES

 

At June 30, 2017 we had cash on hand of $114,851 compared to $40,656 at December 31, 2016. We used cash in our operations of $(70,234) in 2017 compared to cash used of $(211,616) in 2016. We generated cash-flow from investing activities during 2017 of $0, compared to $75,189 for the same quarter in 2016. We (paid back)/raised $15,795 and $(224,600) from related party loans in 2017 and 2016, and $0 and $3,000 from other notes payable, respectively. We also collected $128,634 pursuant to a Private Placement Memorandum during the three-month period of 2017 compared to $370,000 in the prior year. We anticipate that we will continue to have a negative cash flow from operations for 2017. We do not have sufficient cash on hand at June 30, 2017 to cover our negative cash flow. We will attempt to raise capital through the sale of our common stock or through debt financing, or engaging in other operations.

 

Some of Global Tech’s past due obligations, including $338,000 of accounts payable, and $113,000 of notes payable and judgments, some of which are duplicative, were incurred or obtained prior to 2005. No actions have been taken by any of the applicable creditors, and the statute of limitations has been exceeded for the creditors to seek legal action. Global Tech believes that these obligations will not be satisfied in the future because the statute of limitations has been exceeded, but is not allowed to remove them from our books and records due to accounting regulations.

 

  19  
 

 

During the six months ended June, 2017, the Company’s working capital deficit decreased from $(3,028,119) to $(2,168,232), a decrease of 30%, due to the extension of several long-term notes that had become current or in default.

 

Any remedy to our current lack of liquidity must take into account all the foregoing liabilities. Global Tech intends to continue its pursuit to find other operating activities, and as necessary, raise capital in order to monetize its business and pay all its liabilities. Capital raise plans are under consideration but it cannot be assured that they will materialize in the current economic environment. Currently, Global Tech is without adequate financing or assets. Because no actions have been taken on the aforementioned past due obligations and demand has not been made by the applicable current note holders, we are unable to accurately quantify the effect the overdue accounts have on Global Tech’s financial condition, liquidity and capital resources. However, in the event that all of these obligations and notes payable were required to be paid in an amount equal to the full balance of each, Global Tech would not be able to meet the obligations based upon its current financial status. The liquidity shortfall of $(2,168,232) would cause Global Tech to default and, further, would put our continued viability in jeopardy.

 

CONTRACTUAL OBLIGATIONS

 

None

 

Going Concern Qualification

 

The Company has incurred significant losses from operations, and such losses are expected to continue. The Company’s auditors have included a “Going Concern Qualification” in their report for the year ended December 31, 2016. In addition, the Company has limited working capital. The foregoing raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include seeking additional capital and/or debt financing. There is no guarantee that additional capital and/or debt financing will be available when and to the extent required, or that if available, it will be on terms acceptable to the Company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The “Going Concern Qualification” may make it substantially more difficult to raise capital.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information we are required to disclose is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission. David Reichman, our Chief Executive Officer and our Principal Accounting Officer, is responsible for establishing and maintaining our disclosure controls and procedures.

 

  20  
 

 

Under the supervision and with the participation of our management, including the Chief Executive Officer and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Principal Accounting Officer has concluded that, as of September 30, 2016 these disclosure controls and procedures were ineffective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s controls are not effective due to a lack of the segregation of duties. The Company lacks the appropriate personnel to handle all the varying recording and reporting tasks on a timely basis. The Company plans to address these material weaknesses as resources become available by hiring additional professional staff, such as a Chief Financial Officer, as funding becomes available, outsourcing certain aspects of the recording and reporting functions, and separating responsibilities. The Company believes that it would require approximately $250,000 per year in available funds in order to retain the qualified personnel required for effective disclosure controls and procedures.

 

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, 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 and includes those policies and procedures that:

 

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
   
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
   
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

 

Changes in Internal Controls over Financial Reporting

 

There were no additional changes in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Inherent Limitations over Internal Controls

 

Global Tech’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Global Tech have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

Our disclosure controls and procedures are designed to provide reasonable assurance of that our reports will be accurate. Our Chief Executive Officer and Principal Accounting Officer concludes that our disclosure controls and procedures were ineffective at that reasonable assurance level, as of the end of the period covered by this Form 10-Q. Our future reports shall also indicate that our disclosure controls and procedures are designed for this reason and shall indicate the related conclusion by the Chief Executive Officer and Principal Accounting Officer as to their effectiveness.

 

  21  
 

 

PART II OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

At present, GTII is involved with two separate matters in the US District Court in New York. The first matter, Case # 17-cv-000698 is in the Eastern District and was brought against ARUR to recover the shares paid to ARUR for the 75% working interest in the Owenby lease that was acquired by GTII, then TTII, from ARUR. Shortly thereafter, ARUR was sued by a shareholder claiming that ARUR lacked the authority to carry out the sale to GTII. Due to ARURs failure to answer and defend and to defend on behalf of GTII, the court ruled against ARUR and GTII.

 


In Jan 2017, GTII, through its litigation Counsel, Warren Markowitz, Esq., proceed with an action to recover the shares paid. As of August 1st 2017, GTII has applied for and anticipates getting, a default judgment invalidating the shares paid to ARUR, on the grounds that ARUR, its officer and its management has failed to answer or defend the action brought.

 

In May 2017, GTII took action against Go Fun Group, its managers, and related companies for failing to fulfill its obligations under an agreement entered into in December 2016. Due to the complexity of the matter, GTII was required to serve the documents for the case, # 17-cv-03727, Southern District of New York, under the Hague Convention through the Central Administrative Authority in Hong Kong SAR. In July 2017, litigation Counsel, Warren Markowitz, Esq., received confirmation that the papers were served in Hong Kong SAR. Counsel is weighing its options as to further action at this time.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

There were no shares of common stock issued during the three months ended June 30, 2017.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

The Company has the following note payable obligations in default:        
         
Note payable to Facts and Comparisons due September 1, 2002, with interest accrued at 6% per annum, unsecured, in settlement of a trade payable; unpaid to date and in default     18,000  
         
Note payable to Luckysurf.com due September 12, 2002 with interest accrued at 6% per annum, unsecured, in settlement of a trade payable; unpaid to date and in default     30,000  
         
Note payable to Michael Marks (a shareholder) due August 31, 2000 with interest accrued at 5% per annum, unsecured; unpaid to date and in default     25,000  
         
Note payable to Steven Goldberg (a former consultant) due July 10, 2002, unsecured with interest of 7% accrued if unpaid at due date, in settlement of liability; unpaid to date and in default     40,000  
         
Note payable to an individual, unsecured with interest of 6% per annum, unpaid to date and in default     5,000  
         
Note payable to an LLC, unsecured with interest accruing at 6% per annum, unpaid to date and in default     5,000  
         
Various Notes payable to a Trust, unsecured with interest accruing at 6% per annum, unpaid to date and in default     131,700  
         
Various Notes payable to an individual, unsecured with interest accruing at 6% per annum, unpaid to date and in default     60,340  
         
Notes payable to an individual, unsecured with interest accruing at 0% per annum, unpaid to date and in default     192,000  
         
Totals   $ 571,181  

 

None of these notes have been paid, and management has indicated that no demand for payment for any of these notes has been received by the Company. However, the Company received a notice of motion from Luckysurf.com dated October 22, 2002, seeking entry of a judgment for $30,000. No further information or action has been received by the Company relating to this note.

 

  22  
 

 

ITEM 5. OTHER INFORMATION

 

Not Applicable

 

ITEM 6. EXHIBITS

 

3. Exhibits

 

EXHIBIT NO.   DESCRIPTION
     
3.1   Articles of incorporation of Tree Top Industries, as amended (1)
     
3.2   By-Laws (2)
     
10.1   Employment Agreement, dated October 1, 2007, by and between GLOBAL TECH INDUSTRIES GROUP, INC. and David Reichman (3)
     
10.2   Employment Agreement, dated April 1, 2009, by and between Tree Top Industries Inc. and Kathy Griffin (4)
     
10.3   Bridge Loan Term Sheet, dated January 11, 2010, by and between TTII and GeoGreen Biofuels, Inc. (5)
     
10.4   Business and Financial Consulting Agreement, dated February 22, 2010 by and between GLOBAL TECH INDUSTRIES GROUP, INC. and Asia Pacific Capital Corporation (6)
     
10.5   Distribution Agreement, by and between GLOBAL TECH INDUSTRIES GROUP, INC. and NetThruster, Inc., dated February 9, 2011(7)
     
10.6   Term Agreement by and between GLOBAL TECH INDUSTRIES GROUP, INC. and Sky Corporation, doo, dated April 18, 2011 (8)
     
10.7   Term Agreement by and between GLOBAL TECH INDUSTRIES GROUP, INC. and Adesso Biosciences, Ltd, dated October 12, 2011(9)
     
10.8   Term Agreement by and between GLOBAL TECH INDUSTRIES GROUP, INC. and Stemcom, LLC d/b/a Pipeline Nutrition, dated March 1, 2012(10)
     
10.9   Mutual disengagement agreement by and between GLOBAL TECH INDUSTRIES GROUP, INC. and Stemcom, LLC d/b/a Pipeline Nutrition, dated March 23, 2012(11)
     
10.10   Reserve Equity financing agreement by and between GLOBAL TECH INDUSTRIES GROUP, INC. and AGS Capital Group, dated August 15, 2012. (12)
     
10.11   Asset purchase Agreement by and between TTII Oil & Gas, Inc. a subsidiary of GLOBAL TECH INDUSTRIES GROUP, INC. and American Resource Technologies, Inc. (13)
     
10.12   Resignation of Mr. Robert Hantman, Esq. as a member of the board of directors (14)
     
10.13   Stock purchase Agreement by and between GLOBAL TECH INDUSTRIES GROUP, INC., G T International, Inc. and Go F & B Holdings, Ltd., dated December 30, 2016(15)
     
10.14   Documents filed for a lawsuit, Case #17-cv-03727 in the United States District Court, Southern District of New York, on May 17, 2017, against Go Fun Group Holdings, Ltd. and Go F & B Holdings, Ltd.
     
21.1   Subsidiaries of the registrant
     
31.1   Section 302 Certification of Chief Executive Officer and Chief Financial Officer
     
32.1   Section 906 Certification of Chief Executive Officer

 

  23  
 

 

(1)

Filed November 13, 2009, as an exhibit to a Form 10-Q and incorporated herein by reference.

Filed January 3, 2012, as an exhibit to an 8 – K and incorporated herein by reference.

Filed April 12, 2013, as an exhibit to an 8 – K and incorporated herein by reference.

   
(2) Filed July 19, 2010, as an exhibit to a Form 10-K/A and incorporated herein by reference.
   
(3) Filed November 7, 2007, as an exhibit to a Form 8-K and incorporated herein by reference.
   
(4) Filed March 25, 2010, as an exhibit to a Form 8-K and incorporated herein by reference.
   
(5) Filed January 19, 2010, as an exhibit to a Form 8-K and incorporated herein by reference.
   
(6) Filed July 19, 2010, as an exhibit to a Form 10-Q/A and incorporated herein by reference.
   
(7) Filed February 9, 2011, as an exhibit to a Form 8-K and incorporated herein by reference.
   
(8) Filed April 19, 2011, as an exhibit to a Form 8 - K and incorporated herein by reference.
   
(9) Filed October 18, 2011 as an exhibit to a Form 8 - K and incorporated herein by reference.
   
(10) Filed March 6, 2012 as an exhibit to a Form 8 – K and incorporated herein by reference.
   
(11) Filed March 23, 2012 as an exhibit to a Form 8 – K and incorporated herein by reference.
   
(12) Filed August 21, 2012 as an exhibit to a Form 8 – K and incorporated herein by reference.
   
(13) Filed January 8, 2013 as an exhibit to a Form 8 – K and incorporated herein by reference.
   
(14) Filed January 8, 2013 as an exhibit to a Form 8 – K and incorporated herein by reference.
   
(15) Filed January 5, 2017 as an exhibit to a Form 8 – K and incorporated herein by reference.
   
(16) Filed May 22, 2017 as an exhibit to a Form 8 - K and incorporated herein by reference.

 

(a) Exhibits

 

  24  
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: August 11, 2017 GLOBAL TECH INDUSTRIES GROUP, INC.
     
  By: /s/ David Reichman
   

David Reichman, Chairman of the Board, Chief

Executive Officer, Chief Financial Officer and

Principal Accounting Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By: /s/ David Reichman   Dated: August 11, 2017
  David Reichman, Chairman of the Board, Chief    
  Executive Officer, Chief Financial Officer    
  and Principal Accounting Officer    
       
By: /s/ Kathy M. Griffin   Dated: August 11, 2017
  Kathy M. Griffin, Director, President    
       
By: /s/ Frank Benintendo   Dated: August 11, 2017
  Frank Benintendo, Director & Secretary    
       
By: /s/ Donald Gilbert   Dated: August 11, 2017
  Donald Gilbert, Director & Treasurer    
       
By: /s/ Greg Ozzimo   Dated: August 11, 2017
  Greg Ozzimo, Director    
       
By: /s/ Mike Valle   Dated: August 11, 2017
  Mike Valle, Director    

 

  25  
 

 

 

EXHIBIT 31.1

 

SECTION 302 CERTIFICATION

 

I, David Reichman, certify that:

 

1. I have reviewed this report on Form 10-Q of GLOBAL TECH INDUSTRIES GROUP, INC.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (of persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

 

Date: August 11, 2017  
   
/s/ David Reichman  
David Reichman, Chief Executive Officer  
(Principal Executive Officer)  

 

 
 

 

 

EXHIBIT 31.2

 

SECTION 302 CERTIFICATION

 

I, David Reichman, certify that:

 

1. I have reviewed this report on Form 10-Q of GLOBAL TECH INDUSTRIES GROUP, INC.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (of persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

 

Date August 11, 2017  
   
/s/ David Reichman  
David Reichman, Chief Financial Officer  
(Principal Financial/Accounting Officer)  

 

 
 

 

 

EXHIBIT 32.1

 

SECTION 906 CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of GLOBAL TECH INDUSTRIES GROUP, INC. (the “Company”) on Form 10-Q for the period ending June 30, 2017 (the “Report”) I, David Reichman, Chief Executive Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

 

  (1) The Report fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ David Reichman Date: August 11, 2017
David Reichman,  
Chief Executive Officer  

 

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

 

 
 

 

 

EXHIBIT 32.2

 

SECTION 906 CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of GLOBAL TECH INDUSTRIES GROUP, INC. (the “Company”) on Form 10-Q for the period ending June 30, 2017 (the “Report”) I, David Reichman, Chief Financial Officer (Principal Financial/Accounting Officer) of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

 

  (1) The Report fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ David Reichman Date August 11, 2017
David Reichman,  
Chief Financial Officer  

 

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.