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EX-32 - EXHIBIT 32.1 - HST Global, Inc.exhibit321.htm
EX-32 - EXHIBIT 32.2 - HST Global, Inc.exhibit322.htm
EX-31 - EXHIBIT 31.1 - HST Global, Inc.exhibit311.htm
EX-31 - EXHIBIT 31.2 - HST Global, Inc.exhibit312.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549


FORM 10-K


Mark One)


[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended

December 31, 2013

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from

 

to

 


Commission file number  000-15303


HST GLOBAL, INC.

(Exact name of registrant as specified in its charter)


Nevada

 

73-1215433

State or other jurisdiction of

incorporation or organization

 

I.R.S. Employer

 Identification No.


 

 

150 Research Drive, Hampton, VA

23666

(Address of principal executive offices)

(Zip Code)


Registrant’s telephone number, including area code

757-766-6100


Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Name of each exchange on which registered

 

 

 

None

 

None

 

 

 



Securities registered pursuant to Section 12(g) of the Act:  

 

Common Stock

(Title of Class)

 

(Title of Class)




Page 1



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ]  No [X]

 

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ]  No [X]

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [x]  No [  ]

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [x]  No [  ]

 

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

[X]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer  [  ]

Accelerated filer  [  ]

Non-accelerated filer  [  ] (Do not check if a smaller reporting company)

Smaller reporting company  [x]


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

Yes [  ]  No [x]


State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

$ 946,469

 

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of March 31, 2013 the latest practicable date.

36,719,854 Shares








Page 2



HST Global, Inc.

TABLE OF CONTENTS


Part I


Forward Looking Statements

4

Item 1.

Business

4

Item 1A.

Risk Factors

4

Item 1B.

Unresolved Staff Comments

4

Item 2.

Properties

4

Item 3.

Legal Proceedings

4

Item 4.

Mine Safety Disclosures

4


Part II


Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities  5

Item 6.

Selected Financial Data

6

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

6

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

7

Item 8.

Financial Statements and Supplementary Data

8

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

20

Item 9A.

Controls and Procedures

20

Item 9B.

Other Information

21



Part III


Item 10.

Directors and Executive Officers of the Registrant

21

Item 11.

Executive Compensation

22

Item 12.

Security Ownership of Certain Beneficial Owners and Management

26

Item 13.

Certain Relationships and Related Transactions, and Director Independence

26

Item 14.

Principal Accounting Fees and Services

27



Part IV


Item 15.

Exhibits and Financial Statement Schedules

28

Signatures

29



Page 3



PART I

ITEM 1. BUSINESS


A. BUSINESS DEVELOPMENT


There have been no changes to our business development since our last annual report on Form 10-K.  We are still in the development stage and have not begun to earn any revenue.


B. FINANCIAL INFORMATION ABOUT SEGMENTS


As defined by generally accepted accounting principles ("GAAP"), we do not have any segments separate and apart from our business as a whole. Accordingly, there are no measures of revenue from external customers, profit and loss, or total assets aside from what is reported in the Financial Statements attached to this Form 10-K.


C. BUSINESS OF THE COMPANY


There have been no changes to our business since our last annual report on Form 10-K.  We are still in the development stage and have not begun to earn any revenue.


We continue to seek opportunities to implement our business plan as previously reported.



ITEM 1A. RISK FACTORS


Not required by smaller reporting companies.



ITEM 1B. UNRESOLVED STAFF COMMENTS


None.



ITEM 2. PROPERTIES


The Company's executive offices are located at 150 Research Dr., Hampton VA. We currently share these offices with The Health Network, Inc. ("THN"), of which Ron Howell is President. We have no formal sublease or rental agreement with THN; however, we currently pay to THN $0.00 per month as an operating fee, which includes use of the office space among other things. The combined office and warehouse space is 42,600 square feet.



ITEM 3. LEGAL PROCEEDINGS


None.



ITEM 4  MINE SAFETY DISCLOSURES


Not applicable to the Company.



Page 4


PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Market Information


Our common stock is quoted in United States markets on the Over-The-Counter Bulletin Boards ("OTC BB"), under the symbol "HSTC.OB." There is no assurance that the common stock will continue to be traded on the OTC BB or that any liquidity exists for our shareholders.


Market Price


The following table shows the high and low per share price quotations of the Company's common stock as reported by the OTC BB for the periods presented. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not necessarily represent actual transactions. The OTC BB market is extremely limited and the prices quoted by brokers are not a reliable indication of the value of the common stock. The periods presented represent fiscal quarters, with the fourth quarter of each year ending on December 31.


High

Low

Fiscal 2013

First Quarter

0.002

0.011

Second Quarter

0.002

0.011

Third Quarter

0.011

0.007

Fourth Quarter

0.025

0.007


Fiscal 2012

First Quarter

0.0022

0.0016

Second Quarter

0.0022

0.0022

Third Quarter

0.089

0.001

Fourth Quarter

0.027

0.0054


As of December 31, 2013, the Company had 100,000,000 shares of common stock authorized with 36,719,854, issued and outstanding.  The Company had 5,000,000 shares of preferred stock authorized with no shares issued and outstanding.  


Penny Stock Regulations


Our common stock is quoted in United States markets on the OTC BB under the symbol "HSTC.OB." The sale price of our common stock has been reported as low as $0.001 per share. As such, the Company's common stock may be subject to provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock rule."


Section 15(g) sets forth certain requirements for transactions in penny stocks, and Rule 15g-9(d) incorporates the definition of "penny stock" that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines "penny stock" to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. As long as the Company's common stock is deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors.


Dividends


The Company has not issued any dividends on the common stock to date, and does not intend to issue any dividends on the common stock in the near future. We currently intend to use all profits to further the growth and development of the Company.



Page 5


Number of Shares Outstanding


As of December 31, 2013, the Company had 100,000,000 shares of common stock authorized with 36,719,854, issued and outstanding and 9,951,329 freely tradable shares in the public float. These shares were held by approximately 590 shareholders of record. The Company had 5,000,000 shares of preferred stock authorized with no shares issued or outstanding.


Recent Sales of Unregistered Securities


None.


Purchases of Equity Securities


None.



ITEM 6. SELECTED FINANCIAL DATA


Not required by smaller reporting companies.



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION


Forward-Looking Statements


Statements about our future expectations are "forward-looking statements" within the meaning of applicable Federal Securities Laws, and are not guarantees of future performance. When used herein, the words "may," "will," "should," "anticipate," "believe," "appear," "intend," "plan," "expect," "estimate," "approximate," and similar expressions are intended to identify such forward-looking statements. These statements involve risks and uncertainties inherent in our business, including those set forth in Item 1A under the caption "Risk Factors," in this Annual Report on Form 10-K for the year ended December 31, 2013, and other filings with the SEC, and are subject to change at any time. Our actual results could differ materially from these forward-looking statements. We undertake no obligation to update publicly any forward-looking statement.


Overview


HST Global, Inc. is an Integrated Health and Wellness Biotechnology company that is developing and /or acquiring a network of Wellness Centers worldwide that are primarily focused on the homeopathic and alternative treatment of late stage cancer. In addition, the company intends to acquire innovative products for the treatment of individual health challenges.  In this regard, the company primarily focuses on homeopathic and alternative product candidates that are undergoing or have already completed significant clinical testing.


The company has identified the growing acceptance of alternative treatments worldwide which has placed us in a perfect position to open our own brand of Treatment Centers. This strategy will enable the company to address the challenges individuals face in the treatment challenging and in some cases life threatening diseases.


Plan of Operation


General and administrative expenses consist primarily of salaries and related personnel costs, professional fees, business insurance, rent, general legal activities, and other corporate expenses.


We have never been profitable and do not anticipate having net income unless and until we develop and/or acquire our wellness centers and/or develop new channels of distribution.  With respect to our current activities, this is not likely to occur until we obtain significant additional funding. We cannot provide any assurance that we will be able



Page 6


to achieve profitability on a sustained basis, if at all, obtain the required funding, obtain, or complete additional corporate partnering or acquisition transactions.


Accordingly, we will need to raise additional funds or pursue strategic transactions or other strategic alternatives. To date, we have financed our operations primarily through private sales of our equity securities, and we expect to continue obtaining required capital in a similar manner.


Results of Operations


The Company had no revenues and no cost of revenues for the years ended December 31, 2013 and 2012.  The Company incurred expenses of $157,348 for the year ended December 31, 2013, compared to $342,155 in 2012. The decrease in expenses in 2013 was primarily a result of a reduction in compensation paid to consultants and general and administrative expenses.  We do not believe these costs are indicative of future years, and we cannot at this time predict our costs if and when we begin earning revenues and exit the development stage.


Liquidity and Capital Resources


Our capital requirements are principally related to our efforts to implement our business plan.  Our cash balance as of December 31, 2013 was $230.


The Company does not currently have sufficient capital in its accounts, nor sufficient firm commitments for capital to assure its ability to meet its current obligations or to continue its planned operations. The Company is continuing to pursue working capital and additional revenue through the seeking of the capital it needs to carry on its planned operations. There is no assurance that any of the planned activities will be successful.


Off-Balance Sheet Arrangements


None.



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


None.



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Description

Page


Report of Independent Registered Public Accounting Firm

F-8


Consolidated Balance Sheets

F-9


Consolidated Statements of Operations

F-10


Consolidated Statements of Changes in Shareholders’ Interest

F-11


Consolidated Statements of Cash Flows

F-12


Notes to Consolidated Financial Statements

F-13




Page 7


[hstc10k2013001.jpg]


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors

HST Global, Inc.

(A Development Stage Company)


We have audited the accompanying balance sheets of HST Global, Inc. (the Company) as of December 31, 2013 and 2012 and the related statements of operations, stockholders’ deficiency and cash flows for the years then ended and for the cumulative period from August 6, 2007 (date of inception) through December 31, 2013.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.    


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of HST Global, Inc. as of December 31, 2013 and 2012, and the results of their operations and cash flows for the years then ended and for the cumulative period from August 6, 2007 (date of inception) through December 31, 2013, in conformity with U.S. generally accepted accounting principles.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had accumulated losses of $4,895,540 for the period from inception through December 31, 2013 which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Sadler, Gibb & Associates, LLC


Salt Lake City, UT

April 3, 2014   


801.783.2950 office

801.783.2960 fax

www.sadlergibb.com | 2455 East Parleys Way Suite 320, Salt Lake City, UT 84109



F-8




HST Global, Inc.

(a Development Stage Company)

CONSOLIDATED BALANCE SHEETS


 

December 31,

2013

 

December 31,

2012

ASSETS

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

$

230 

 

$

1,222 

 

 

 

 

Total Current Assets

230 

 

1,222 

 

 

 

 

Fixed Assets, Net

 

 

 

 

 

Total Assets

$

230 

 

$

1,222 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Bank overdraft payable

$

2,360 

 

$

Accounts payable and accrued expenses

5,402 

 

8,563 

Accounts payable and accrued expenses - related parties

505,959 

 

505,959 

Accrued officer compensation

510,000 

 

390,000 

Accrued related party interest

197,889 

 

162,502 

Notes payable - related party

1,252,616 

 

1,215,459 

 

 

 

 

Total Current Liabilities

2,474,226 

 

2,282,483 

 

 

 

 

Total Liabilities

2,474,226 

 

2,282,483 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

Preferred stock; 5,000,000 shares authorized, at $0.001 par value, -0- shares issued and outstanding, respectively

 

Common stock; 100,000,000 shares authorized, at $0.001 par value, 36,719,854 and 36,719,854 shares issued and outstanding, respectively

36,720 

 

36,720 

Additional paid-in capital

2,384,824 

 

2,384,824 

Deficit accumulated during the development stage

(4,895,540)

 

(4702,805)

 

 

 

 

Total Stockholders' Deficit

(2,473,996)

 

(2,281,261)

 

 

 

 

Total Liabilities and Stockholders' Deficit

$

230 

 

$

1,222 


The notes are an integral part of the consolidated financial statements



F-9




HST Global, Inc.

(a Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS


 

 

 

 

 

From Date of

 

Year Ended

 

Year Ended

 

Inception (August 6, 2007) to

 

December 31, 2013

 

December 31, 2012

 

December 31, 2013

 

 

 

 

 

 

Revenues

$

 

$

 

$

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

Salaries

$

 

$

 

$

176,031 

Consulting

120,000 

 

120,000 

 

2,321,600 

General and administrative expenses

37,348 

 

222,155 

 

1,990,270 

Loss on extinguishment of debt - related parties

 

 

160,000 

 

 

 

 

 

Total Operating Expenses

$

157,348 

 

$

342,155 

 

$

4,647,901 

 

 

 

 

 

 

Net Loss From Operations

$

(157,348)

 

$

(342,155)

 

$

(4,647,901)

 

 

 

 

 

 

Other Expenses

 

 

 

 

 

Interest expense

$

(35,387)

 

$

(33,768)

 

$

247,639 

 

 

 

 

 

 

Total Other Expenses

35,387 

 

33,768 

 

247,639 

 

 

 

 

 

 

Net Loss

$

(192,735)

 

$

375,923)

 

$

(4,895,540)

 

 

 

 

 

 

Net Loss Per Share: Basic And Diluted - Common

$

(0.01)

 

$

(0.01)

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding: Basic And Diluted - Common

36,719,854 

 

36,719,854 

 

 


The notes are an integral part of the consolidated financial statements



F-10




HST Global, Inc.

(a Development Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT


 

Preferred Stock

 

Common Stock

 

Additional

Paid-In

 

Deficit Accumulated during the Development

 

Total

Stockholders'

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Stage

 

Deficit

Balance at inception on August 6, 2007

-

 

$

-

 

-

 

$

-

 

$

 

$

 

$

Common stock issued for cash

-

 

-

 

1,500

 

2

 

1,498 

 

 

1,500 

Net loss from August 6, 2007 to December 31, 2007

-

 

-

 

-

 

-

 

 

(62,737)

 

(62,737)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2007

-

 

-

 

1,500

 

2

 

1,498 

 

(62,737)

 

(61,237)

Recapitalization - reverse acquisition

-

 

-

 

24,030,353

 

24,030

 

(40,625)

 

 

(16,595)

Common stock issued for cash

-

 

-

 

839,200

 

839

 

1,048,161 

 

 

1,049,000 

Common stock issued for services

-

 

-

 

15,000

 

15

 

142,485 

 

 

142,500 

Net loss for the year ended December 31, 2008

-

 

-

 

-

 

-

 

 

(1,513,333)

 

(1,513,333)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2008

-

 

-

 

24,886,053

 

24,886

 

1,151,519 

 

(1,576,070)

 

(399,665)

Common stock issued for cash

-

 

-

 

341,086

 

341

 

425,909 

 

 

426,250 

Common stock issued for services

-

 

-

 

7,000

 

7

 

7,883 

 

 

7,890 

Net loss for the year ended December 31, 2009

-

 

-

 

-

 

-

 

 

(1,362,612)

 

(1,362,612)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2009

-

 

-

 

25,234,139

 

25,234

 

1,585,311 

 

(2,938,682)

 

(1,328,137)

Common stock issued for services

-

 

-

 

3,485,715

 

3,486

 

327,513 

 

 

330,999 

Net loss for the year ended December 31, 2010

-

 

-

 

-

 

-

 

 

(847,850)

 

(847,850)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2010

-

 

-

 

28,719,854

 

28,720

 

1,912,824 

 

(3,786,532)

 

(1,844,988)

Common stock issued for services

-

 

-

 

1,000,000

 

1,000

 

59,000 

 

 

60,000 

Common stock issued for debt

-

 

-

 

7,000,000

 

7,000

 

413,000 

 

 

420,000 

Net loss for the year ended December 31, 2011

-

 

-

 

-

 

-

 

 

(540,350)

 

(540,350)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2011

-

 

-

 

36,719,854

 

36,720

 

2,384,824 

 

(4,326,882)

 

(1,905,338)

Net loss for the year ended December 31, 2012

-

 

-

 

-

 

-

 

 

(375,923)

 

(375,923)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2012

-

 

-

 

36,719,854

 

$

36,720

 

$

2,384,824 

 

$

(4,702,805)

 

$

(2,281,261)

Net loss for the year ended December 31, 2013

-

 

-

 

-

 

-

 

 

(192,735)

 

(192,735)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2013

-

 

-

 

36,719,854

 

$

36,720

 

$

2,384,824 

 

$

(4,895,540)

 

$

(2,473,996)


The notes are an integral part of the consolidated financial statements



F-11




HST Global, Inc.

(a Development Stage Company)

CONSOLIDATED CASH FLOWS


 

 

 

 

 

From Date of

Inception (August

 

Year Ended

 

Year Ended

 

6, 2007) to

 

December 31,

2013

 

December 31,

2012

 

December 31,

2013

Cash Flows From Operating Activities:

 

 

 

 

 

Net loss

(192,735)

 

(375,923)

 

(4,895,540)

Adjustments to reconcile net loss to net cash used by operating activities:

 

 

 

 

 

Depreciation and amortization

 

 

2,917 

Common stock issued for services

 

 

541,389 

Loss on extinguishment of debt - related parties

 

 

160,000 

Changes in operating assets and liabilities:

 

 

 

 

 

Bank overdraft payable

2,360 

 

 

2,360 

Accrued notes payable-related party penalties

 

 

50,000 

Accounts payable and accrued expenses  

(3,162)

 

(19,839)

 

265,402 

Accounts payable and accrued expenses - related parties

 

180,000 

 

505,959 

Accrued officer compensation

120,000 

 

120,000 

 

510,000 

Accrued related party interest

35,387 

 

33,768 

 

197,889 

Net Cash used in Operating Activities

(38,149)

 

(61,994)

 

(2,659,624)

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

Purchase of equipment

 

 

(2,917)

Net Cash used in Investing Activities

 

 

(2,917)

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

Proceeds from sale of common stock

 

 

1,476,750 

Proceeds from notes payable - related party

37,157 

 

62,760 

 

1,205,652 

Repayment on notes payable - related party

 

 

(3,036)

Effect of merger adjustment

 

 

(16,595)

Net cash provided by financing activities

37,157 

 

62,760 

 

2,662,771 

 

 

 

 

 

 

Net Increase (decrease) in cash

(992)

 

766 

 

230

 

 

 

 

 

 

Cash at Beginning of Period

1,222 

 

456 

 

 

 

 

 

 

 

Cash at End of Period

$

230

 

$

1,222 

 

$

230

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

Cash Paid For:

 

 

 

 

 

Cash paid for interest

$

 

$

 

$

Cash paid for taxes

$

 

$

 

$

 

 

 

 

 

 

Non-Cash Financing Activities:

 

 

 

 

 

Common stock issued for debt

 

 

420,000 


The notes are an integral part of the consolidated financial statements


NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES


The Company was incorporated on April 11, 1984 under the laws of the State of Delaware under the name of NT Holding Corporation. The Company has made several acquisitions and disposals of various business entities and activities. On May 9, 2008, the Company entered into a Merger and share exchange agreement with Health Source Technologies, Inc. This business acquisition has been accounted for as a reverse merger or recapitalization of Health Source Technologies, Inc. At the time of the merger NT Holding Corporation had disposed of its assets and liabilities and had minimal operations and was considered a development stage company. Immediately after the acquisition the Company changed its name to HST Global, Inc. Health Source Technologies, Inc. was incorporated under the laws of the State of Nevada on August 6, 2007. The Company is currently headquartered in Hampton, Virginia.


HST Global, Inc. is an integrated Health and Wellness Biotechnology company that is developing and/or acquiring a network of Wellness Centers worldwide with the primary focus on homeopathic and alternative treatments of late stage cancer and other life threatening diseases.  In addition, the Company intends to acquire innovative products for the treatment of life threatening diseases. The Company primarily focuses on homeopathic and alternative product candidates that are undergoing or have already completed significant clinical testing for the treatment of late stage cancer and/or life threatening diseases.


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The accompanying financial statements and related notes include the activity of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-K.  


Development Stage Company Classification


The Company is considered to be in the development stage as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915. This standard requires companies to report their operations, shareholders equity and cash flows from inception through the reporting date. The Company will continue to be reported as a development stage entity until, among other factors, revenues are generated from management’s intended operations. Management has provided financial data since inception (August 6, 2007).


Accounting Method


The Company’s financial statements are prepared using the accrual method of accounting.  The Company has elected an December 31 year-end.


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Cash and Cash Equivalents




F-12


HST Global, Inc.

(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2013 and 2012



We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.


Income Taxes


The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.


The Company applies the provisions of ASC 740, “Accounting for Uncertainty in Income Taxes”. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements.  The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed.  The Company did not recognize any interest or penalties for unrecognized tax benefits during the years ended December 31, 2013 and 2012, nor were any interest or penalties accrued as of December 31, 2013 and 2012.


Basic and Diluted Loss Per Share


The computations of basic loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements. The Company computes net income (loss) per share in accordance with ASC 260. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is antidilutive. The Company had no common stock equivalents outstanding as of December 31, 2013 and 2012.


Stock-Based Compensation


The Company adopted ASC 718, “Stock Compensation”, upon inception at August 6, 2007. Under ASC 718, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values. As of December 31, 2013, the Company has not issued any employer stock options.


Fair Value of Financial Instruments


The Company adopted ASC 820 which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under this standard certain assets and liabilities must be measured at fair value, and disclosures are required for items measured at fair value.


The Company currently does not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:




F-13


HST Global, Inc.

(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2013 and 2012



Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1.  


Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

     

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.


Recently Issued Accounting Pronouncements


Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.


NOTE 3 – 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.


Management’s plan to support the Company in its operations and to maintain its business strategy is to raise funds through public offerings and to rely on officers and directors to perform essential functions with minimal compensation. If the Company does not raise all of the money it needs from public offerings, it will have to find alternative sources, such as a second public offering, a private placement of securities, or loans from its officers, directors or others. If the Company requires additional cash and is unable to raise it, it will either have to suspend operations until the cash is raised, or cease business entirely.


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.


NOTE 4 – ACCOUNTS PAYABLE AND ACCURED EXPENSES – RELATED PARTIES


Accounts payable and accrued expenses consist of the following at December 31, 2013 and 2012:


 

December 31,

2013

 

December 31,

2012

The Health Network, Inc.

$

365,462

 

$

365,462

Ronald Howell

43,770

 

43,770

Eric Clemons

96,727

 

96,727

Total

$

505,959

 

$

505,959


Please see Note 6 for further explanation of these liabilities.




F-14


HST Global, Inc.

(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2013 and 2012



NOTE 5 – NOTES PAYABLE – RELATED PARTIES


During the year ended December 31, 2013, the Company received $37,157 in additional cash loans from various related parties.


Total related party notes payable as of December 31, 2013 were $1,252,616.  Of this total, $595,800 of related party notes payable are unsecured, bear interest at 6 percent per annum, and are due on demand. Also of this total, $200,000 is unsecured, bears a flat owed interest amount of $46,000, and is due on demand.  The remaining $406,816 of related party notes payable is unsecured, bears no interest, and is due on demand.


Included in the related party notes payable balance is a $50,000 penalty fee associated with one of its related party notes due to nonpayment.


NOTE 6 - RELATED PARTY TRANSACTIONS


Executive Offices


The Company's executive offices are located at 150 Research Dr., Hampton VA. These offices are leased by The Health Network, Inc. ("THN"), of which Ron Howell is President. THN allows the Company to use the office space without a formal sublease or rental agreement.


The Company currently accrues $0.00 per month as a general operating fee, which covers use of the office space, use of certain equipment, and various other services. At December 31, 2013 and 2012, the Company owes THN an amount of $365,462 and $365,462 respectively, for amounts due under this agreement.


Consulting Agreements


The Company has entered into a consulting agreement with Mr. Howell, President of the Company, whereby the Company agreed to pay Mr. Howell $10,000 per month for consulting services through December 31, 2010.  The consulting agreement may be terminated at will by the Company. The Company intends to continue to engage Mr. Howell as a consultant until his consulting services are no longer required.  As of December 31, 2013 and 2012, the Company owes Mr. Howell $440,000 and $320,000, respectively under the agreement, of which is classified under accrued officer compensation on the balance sheet.


The Company has entered into a consulting agreement with Eric Clemons, a shareholder of the Company, whereby the Company agreed to pay Mr. Clemons $10,000 per month for consulting services through December 2009. This employment agreement carried the provision that it could be extended beyond this date upon mutual agreement by both parties and that the agreement could be canceled by the Company at any time after that date.  The Company continued to accrue amounts owed under this agreement through July of 2010.  As of December 31, 2013 and 2012, the Company owes Mr. Clemons $70,000 and $70,000, respectively under the agreement, of which is classified under accrued officer compensation on the balance sheet.


NOTE 7 - STOCKHOLDERS’ DEFICIT


The Company completed a business combination with Health Source Technologies Inc. on May 9, 2008 (see Note 4). In conjunction with this acquisition the Board of Directors approved a 25 for 1 reverse split of the Company's common stock. Prior to the acquisition the Company had 30,039,203 shares of common stock outstanding. The issuance of the 66,000,000 new shares of common stock to facilitate the business combination gave the company a total of 96,039,203 shares outstanding immediately before the stock split. After the stock split there were 4,041,568 shares outstanding. In addition, the post-acquisition equity structure was to reflect a 95% ownership by the shareholders of Health Source Technologies, Inc. In order to facilitate this structure, an additional 99,744,800 pre-split shares were issued and delivered to HST shareholders once sufficient authorized capital was available. On December 31, 2008, 3,989,792 post split shares were issued. On December 31, 2008, 3,989,792 post split shares



F-15


HST Global, Inc.

(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2013 and 2012



were issued to Ron Howell, an officer and shareholder of the Company and Eric Clemons, a shareholder of the Company to complete the terms of the acquisition agreement. These shares have been retroactively reported in the financial statements as being issued in conjunction with the acquisition that occurred on May 5, 2008.


As part of the consideration for this business combination there were also 1,000,000 shares of preferred stock issued which where convertible into 16.2 (post split) shares of the company's common stock. These preferred shares were converted into 16,200,000 shares of common stock.


On May 5, 2008, Health Source Technologies, Inc. issued 1,500 shares of common stock for cash at $1.00 per share, for an aggregate total of $1,500.  These shares were exchanged for shares of the Company on May 9, 2008.  


On August 20, 2008, the Company issued 839,200 shares of common stock for cash at $1.25 per share, for an aggregate total of $1,049,000. The Company also issued 15,000 shares of common stock for services at $9.50 per share, for an aggregate total of $142,500.


On February 20, 2009, the Company issued 60,037 shares of common stock for cash at $1.249 per share, for an aggregate total of $75,000.


On March 16, 2009, the Company issued 20,012 shares of common stock for cash at $1.249 per share, for an aggregate total of $25,000.


On June 9, 2009, the Company issued 61,037 shares of common stock for cash at $1.249 per share, for an aggregate total of $76,250.


On October 28, 2008, the Company issued 200,000 shares of common stock for cash at $1.25 per share, for an aggregate total of $250,000.


On June 10, 2009, the Company issued 5,000 shares of common stock for services at $1.25 per share, for an aggregate total of $6,250.


On June 15, 2009, the Company issued 2,000 shares of common stock for services at $0.82 per share, for an aggregate total of $1,640.


On January 20, 2010, the Company issued 3,185,715 shares of common stock for services at $0.07 per share, for an aggregate total of $223,000.


On April 23, 2010, the Company issued 150,000 shares of common stock for services at $0.50 per share, for an aggregate total of $75,000.


On May 20, 2010, the Company issued 150,000 shares of common stock for services at $0.22 per share, for an aggregate total of $32,999.


On February 2, 2011, the Company issued 1,000,000 shares of common stock for services at $0.06 per share, for an aggregate total of $60,000.


On February 2, 2011, the Company issued 7,000,000 shares of common stock for settlement of debts.  These shares were valued at $420,000, or $0.06 per share based on the quoted market price of the shares on the date of issuance.


NOTE 8 – INCOME TAXES

 

The Company follows ASC 740, under which deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously.



F-16


HST Global, Inc.

(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2013 and 2012



Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.


The cumulative tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows:

 

December 31,

2013

 

December 31,

2012

Income tax benefit attributable to:

 

 

 

Net operating loss

$

(65,530)

 

$

(127,814)

Common stock issued for services

 

Change in valuation allowance

65,530 

 

127,814 

Net refundable amount

$

 

$


The cumulative tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows: 

 

December 31,

2013

 

December 31,

2012

Deferred tax asset attributable to:

 

 

 

Net operating loss carry forwards

$

(1,699,118)

 

$

(1,633,588)

Common stock issued for services

184,072 

 

184,072 

Valuation allowance

1,515,045 

 

1,449,516 

Net deferred tax asset

$

 

$


The Company’s zero percent effective tax rate for each year, as compared to the 34 percent statutory rate, results from non-deductible stock based compensation and the change in valuation allowance.


At December 31, 2013, the Company had an unused net operating loss carry-forward of approximately $1,699,118 that is available to offset future taxable income; the loss carry-forward will begin to expire in 2027.


NOTE 9 – SUBSEQUENT EVENTS


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



F-17




ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES


None.



ITEM 9A. CONTROLS AND PROCEDURES


(a) Evaluation of disclosure controls and procedures


Our management, including our Principal Executive and Principal Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2013. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized, and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2013.


(b) Management's Report on Internal Control over Financial Reporting


Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-a5(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of our assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Under the supervision of our Chief Executive Officer and Chief Financial Officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2013. In making this assessment, management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management has concluded that our internal control over financial reporting was ineffective as of December 31, 2013 and there are material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.


The material weaknesses relate to the limited number of persons responsible for the recording and reporting of financial information, the lack of separation of financial reporting duties, and the limited size of our management team in general. We are in the process evaluating methods of improving our internal control over financial reporting, including the possible addition of financial reporting staff and the increased separation of financial reporting responsibility, and intend to implement such steps as are necessary and possible to correct these material weaknesses.



Page 18





(c) Change in Internal Controls


There were no changes in our internal control over financial reporting during the quarter ended December 31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



ITEM 9B. OTHER INFORMATION


None.



PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


Director And Executive Officer Summary


The following table sets forth the names, ages, and principal offices and positions of our current directors, executive officers, and persons we consider to be significant employees. The Board of Directors elects our executive officers annually. Our directors serve one-year terms or until their successors are elected, qualified and accept their positions. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. There are no family relationships or understandings between any of the directors and executive officers. In addition, there was no arrangement or understanding between any executive officer and any other person pursuant to which any person was selected as an executive officer.


Name of Director or Officer

 

Age

 

Position

Ronald R. Howell

 

66

 

Chief Executive Officer,

Chairman of the Board of Directors and

Interim Chief Financial Officer


Executive Officer and Director Bios


Ronald R. Howell, Chief Executive Officer, Chairman and Interim Chief Financial Officer: Mr. Howell has over 30 years of diversified leadership experience. He has distinguished himself in various businesses and held executive positions in various industries including real estate, distribution, national and international sales, wholesale and retail marketing, financial service. Mr. Howell serves as the CEO and President of The Health Network, Inc. and has served in that capacity for over 5 years. The Health Network, Inc. is a direct sales and marketing company in the nutraceutical industry.  


Holding a Bachelor's Degree in Management from the University of Maryland and an MBA from the Sellinger School of Business and Management at Loyola College, Mr. Howell has also taught as an Adjunct Professor at Loyola College in Baltimore, Maryland. Ron also served his country as a United States Marine.


Legal and Disciplinary History


No officer, director or control person of the Company has been the subject of:


1. A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);


2. The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person's involvement in any type of business, securities, commodities, or banking activities;




Page 19




3. A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or


4. The entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended or otherwise limited such person's involvement in any type of business or securities activities.


Section 16(a) Beneficial Ownership Reporting Compliance


Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires our directors and officers, and persons who own more than ten percent of the Common Stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC") and the American Stock Exchange. SEC regulations require reporting persons to furnish us with copies of all Section 16(a) forms they file.


Based solely on our review of the copies of the Forms 3, 4 and 5 and amendments thereto furnished to us by the persons required to make such filings during fiscal 2013 and our own records, we believe that no director, officer or control person of the Company failed to file timely Section 16(a) report during fiscal 2013.


Corporate Governance.


We have not adopted a code of ethics do date. We are in the process of evaluating the standards of conduct necessary for the deterrence of malfeasance and the promotion of ethical conduct and accountability, and will determine whether a code of ethics is necessary based on our evaluation.


The Company does not have a standing Nominating Committee. There have been no changes to the procedures whereby security holders may recommend nominees to the registrant's board of directors.


The Company is not a "listed issuer" as defined by Rule 10A-3, and does not have a standing Audit Committee. We do not have a financial expert serving on our board of directors.



ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS


Compensation Discussion and Analysis


We do not have a standing compensation committee. Our board of directors as a whole makes the decisions as to employee benefit programs and officer and employee compensation. The primary objectives of our executive compensation programs are to:


·

attract, retain and motivate skilled and knowledgeable individuals;

·

ensure that compensation is aligned with our corporate strategies and business objectives;

·

promote the achievement of key strategic and financial performance measures by linking short-term and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals; and

·

align executives' incentives with the creation of stockholder value.  


To achieve these objectives, our board of directors evaluates our executive compensation program with the objective of setting compensation at levels they believe will allow us to attract and retain qualified executives. In addition, a portion of each executive's overall compensation is tied to key strategic, financial and operational goals set by our board of directors. We also generally provide a portion of our executive compensation in the form of options that vest over time, which we believe helps us retain our executives and align their interests with those of our stockholders by allowing the executives to participate in our longer term success as reflected in asset growth and stock price appreciation.




Page 20




Named Executive Officers


The following table identifies our principal executive officer, our principal financial officer and our most highly paid executive officers, who, for purposes of this Compensation Disclosure and Analysis only, are referred to herein as the "named executive officers."


Name

 

Corporate Office

Ron Howell

 

Chief Executive Officer and

Interim Chief Financial Officer


Components of our Executive Compensation Program


At this time, Named Executive Officers receives compensation for their services to the Company. Compensation will be negotiated in the near future and may be contingent on the availability of financing. The primary elements of our executive compensation program will be base salaries and option grant incentive awards, although the board of directors has the authority to award cash bonuses, benefits and other forms of compensation as it sees fit.


The Company has entered into a consulting agreement with Mr. Howell whereby the Company agreed to pay Mr. Howell $10,000 per month for consulting services thru December 31, 2013. The consulting agreement may be terminated at will by the Company. The Company intends to continue to engage Mr. Howell as a consultant until his consulting services are no longer required.


We do not have any formal or informal policy or target for allocating compensation between short-term and long-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, we have determined subjectively on a case-by-case basis the appropriate level and mix of the various compensation components. Similarly, we do not rely on benchmarking against our competitors in making compensation related decisions.


Base salaries –  Base salaries will be used to recognize the experience, skills, knowledge and responsibilities required of our named executive officers. Base salary, and other components of compensation, may be evaluated by our board of directors for adjustment based on an assessment of the individual's performance and compensation trends in our industry.


Equity AwardsOur stock option award program will be the primary vehicle for offering long-term incentives to our executives. To date, we have not issued any equity awards. We intend our equity awards to executives to generally be made in the form of warrants. We believe that equity grants in the form of warrants provide our executives with a direct link to our long-term performance, create an ownership culture, and align the interests of our executives and our stockholders.


Cash bonusesOur board of directors has the discretion to award cash bonuses based on our financial performance and individual objectives. The corporate financial performance measures (revenues and profits) will be given the greatest weight in this bonus analysis. We have not yet granted any cash bonuses to any named executive officer nor have we yet developed any specific individual objectives while we wait to attain revenue and profitability levels sufficient to undertake any such bonuses.  


Benefits and other compensationOur named executive officers are permitted to participate in such health care, disability insurance, bonus and other employee benefits plans as may be in effect with the Company from time to time to the extent the executive is eligible under the terms of those plans. As of the date of this Registration Statement, with exception to health care, we have not implemented any such employee benefit plans.




Page 21




Description of Compensation Agreements and Arrangements


As discussed below, we have not agreed to pay the Named Executive Officers an annual salary. We will negotiate base salary in the near future. Base salary may be increased from time to time with the approval of the board of directors. The following table summarizes the agreed annual salary of each of the named executive officers:


Summary Annual Salary


Name

 

Annual Salary

Ron Howell

 

01


(1)

Mr. Howell has agreed to defer receiving an annual salary. He has received $10,000 per month thru December 31, 2013 from the Company pursuant to a consulting agreement. See "Relationships and Related Transactions," below.


Ron Howell, Chief Executive OfficerMr. Howell currently does not receive compensation for his services as Chief Executive Officer. He has agreed to defer compensation until the Company obtains sufficient financing. The Board of Directors will determine what level of compensation is appropriate to offer Mr. Howell in the near future.


Grants of Plan-Based Awards Table for Fiscal Year 2013


The Company currently does not participate in any equity award plan. During fiscal 2012, we did not grant any equity awards under any equity award plan.


Option Exercises for Fiscal 2013


During fiscal 2013, none of the named executive officers exercised options.


Nonqualified Deferred Compensation


To date, we currently offer no defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified to any of our employees, including the named executive officers.


Compensation of Directors


We intend to use a combination of cash and equity-based compensation to attract and retain candidates to serve on our board of directors. We intend to compensate directors who are also our employees for their service on our board of directors. Therefore, Mr. Howell will receive compensation for his service on our board of directors, which compensation has not yet been determined.


Compensation Committee Interlocks and Insider Participation


We do not currently have a standing Compensation Committee. Our entire board of directors participated in deliberations concerning executive officer compensation.


Compensation Committee Report


The board of directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the board of directors has recommended that this Compensation Discussion and Analysis be included in this Registration Statement on Form 10.



Page 22




Summary Compensation Table

The following table sets forth the total compensation paid to, or accrued by, the Named Executive Officers and other employees earning over $100,000 per year during the fiscal years ended December 31, 2013 and 2012. No restricted stock awards, long-term incentive plan payout or other types of compensation, other than the compensation identified in the chart below and its accompanying notes, were paid to these executive officers during those fiscal years.


Named

Executive

Officer



Year

Annual

Compensation

Salary ($)

Annual

Compensation

Bonus ($)

Other

Annual

Compensation

Compensation

Restricted

Stock

Long Term

Compensation

Options


LTIP

Payouts



All Other

Ron Howell

2013

0

0

120,000(1)

0

0

0

0

Ron Howell

2012

0

0

120,000(1)

0

0

0

0


1. Mr. Howell receives $10,000 per month from the Company pursuant to a consulting agreement.

Outstanding Equity Awards At Fiscal Year End Table

The following table sets forth information regarding the outstanding warrants held by our named officers as of December 31, 2009.


Name

Number of

Securities Underlying

Unexercised Options

(#) Exercisable

Number of

Securities Underlying

Unexercised Options

(#) Unexercisable

Equity Incentive Plan Awards:

Number of Securities

Underlying Unexercised

Unearned Options

Option

Exercise

Price

($)

Option

Expiration

Date

Ron Howell

-

-

-

-

-




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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


The following table shows the beneficial ownership of our common stock as of December 31, 2013. The table shows the amount of shares owned by:


Identity of Person or Group

 

Shares Beneficially Owned

 

Percent of Shares Beneficially Owned1

 

Class

Ronald R. Howell2,
Chief Executive Officer, Interim Chief Financial Officer and Chairman

 

27,041,982

 

73.6%

 

Common

All Directors and Officers as a Group

 

27,041,982

 

73.6%

 

Common


(1)

The percentage of shares owned is based on 36,719,854 shares of common stock outstanding as of December 31, 2013.  Where the beneficially owned shares of any individual or group in the following table includes any options, warrants, or other rights to purchase shares, the percentage of shares owned includes such shares as if the right to purchase had been duly exercised.


(2)

Includes 12,371,982 held personally, and 14,670,000 held by The Health Network, Inc., of which he is President.  


Beneficial Ownership of Securities: Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, involving the determination of beneficial owners of securities, a beneficial owner of securities is person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has, or shares, voting power and/or investment power with respect to the securities, and any person who has the right to acquire beneficial ownership of the security within sixty days through means including the exercise of any option, warrant or conversion of a security.



ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE


Executive Offices


The Company's executive offices are located at 150 Research Dr., Hampton VA. These offices are leased by The Health Network, Inc. ("THN"), of which Ron Howell is President. THN allows the Company to use the office space without a formal sublease or rental agreement.


The Company currently pays The Health Network, Inc. $0.00 per month as a general operating fee, which covers use of the office space, use of certain equipment, and various other services.


Consulting Agreements


The Company has entered into a consulting agreement with Mr. Howell whereby the Company agreed to pay Mr. Howell $10,000 per month for consulting services thru December 31, 2013. The consulting agreement may be terminated at will by the Company. The Company intends to continue to engage Mr. Howell as a consultant until his consulting services are no longer required.




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Debt Conversion


On February 7, 2011, the directors of the Company agreed with its Chief Executive Officer, Ron Howell, to convert $320,000 in debt owed to him and to The Health Network, Inc., of which he is president and sole shareholder, into restricted common shares of the Company at a conversion price of $0.06.  The conversion was approved by the disinterested directors of the Company.  Pursuant to the conversion agreement, the Company will issue 1,000,000 shares to Ron Howell, and 7,000,000 shares to The Health Network, Inc.


Director Independence


The Company is not listed on any national exchange, or quoted on any inter-dealer quotation service, that imposes independence requirements on any committee of the Company's directors, such as an audit, nominating or compensation committee. The company's Board of Directors consists of Ron Howell, who is not independent.



ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES


The following is a summary of the fees paid to Sadler Gibb LLC, the Company's independent public accounting firm, during the fiscal years ended December 31, 2012 and 2013.


 

2012

 

2013

Audit fees

$

29,495

 

$

17,500

Audit-related fees

-

 

-

Tax fees

-

 

-

All other fees

-

 

-

Total

$

29,495

 

$

17,500


Audit Committee Pre-Approval of Services of Principal Accountants


We do not currently have an audit committee appointed by the Board of Directors and the full Board of Directors did not vote on whether any non-audit services impacted our auditor's independence. We currently do not have any policy for approval of audit and permitted non-audit services by our independent auditor. We plan to appoint an audit committee by our Board of Directors and adopt procedures for approval of audit and non-audit services.





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PART IV


ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


Financial Statements and Schedules.


The following consolidated financial statements of HST Global, Inc. are included herein beginning on page F-9:


Report of Independent Registered Public Accounting Firm


Consolidated Balance Sheets as of December 31, 2012 and 2013


Consolidated Statements of Operations for the years ended December 31, 2012, and 2013


Consolidated Statements of Changes in Shareholders' Interest for the years ended December 31, 2012 and 2013


Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2013


Notes to Consolidated Financial Statements


Exhibits


The following Exhibits are included herein:


Exhibit No.

 

Description

31.1

 

Certification by the Chief Executive Officer of Competitive Technologies, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

 

 

 

31.2

 

Certification by the Chief Financial Officer of Competitive Technologies, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

 

 

 

32.1

 

Certification by the Chief Executive Officer of Competitive Technologies, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

 

 

 

32.2

 

Certification by the Chief Financial Officer of Competitive Technologies, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

 

 

 

101

 

Interactive Data Files*


*to be added by amendment



Page 26




SIGNATURES


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


HST GLOBAL, INC.

(the registrant)



By: \s\ Ron Howell

Ron Howell

Chief Executive Officer



Date: April 4, 2014



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