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

September 30, 2018

 

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 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 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 November 14, 2018 the number of shares outstanding of the registrant’s class of common stock was 206,862,327.

 

 

 

TABLE OF CONTENTS

 

		Pages
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017	3
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2018 and 2017.	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2018 and 2017.	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II. OTHER INFORMATION		23
Item 1.	Legal Proceedings	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 5.	Other Information	25
Item 6.	Exhibits	25
SIGNATURES		27

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Balance Sheets

(Unaudited)

 

		September 30, 2018				December 31, 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	17,818			$	120,545
Marketable securities			164,581				176,345
Total Current Assets			182,400				296,890
PROPERTY AND EQUIPMENT (NET)			-				362
TOTAL ASSETS		$	182,400			$	297,252
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	2,174,934			$	1,665,537
Accrued interest payable			545,691				482,190
Private Placement Deposits			128,634				128,634
Asset retirement obligation			101,250				101,250
Due to officers and directors			347,014				192,441
Notes payable- in default			568,577				568,577
Current portion of long-term debt-related party			756,780				744,015
Current portion of long-term debt			566,082				571,181
Total Current Liabilities			5,188,962				4,453,825
Total Liabilities			5,188,962				4,453,825
STOCKHOLDERS' (DEFICIT)
Preferred Stock, par value $.001, 50,000 authorized, 1,000 issued			1				1
Common stock, par value $0.001 per share, 350,000,000 shares authorized; 155,557,996 and 155,557,996 issued and outstanding, respectively			161,327				155,577
Additional paid-in-capital			158,938,187				158,514,377
Unearned ESOP shares			(2,972,600	)			(2,972,600	)
Accumulated other comprehensive income			137,445				149,209
Retained (Deficit)			(161,270,921	)			(160,003,137	)
Total Stockholders' (Deficit)			(5,006,562	)			(4,156,573	)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)		$	182,400			$	297,252

 

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

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Statements of Operations

(Unaudited)

 

		For the								For the
		For The Three Months Ended								For The Nine Months Ended
		September 30,								September 30,
		2018				2017				2018				2017
REVENUES, net			-				-				-				-
COST OF SALES, net			-				-				-				-
GROSS PROFIT/(LOSS)			-				-				-				-
OPERATING EXPENSES
General and administrative			675,152				158,588				1,140,432				525,461
Compensation and professional fees			16,500				42,609				49,186				212,820
Depreciation			-				330				362				988
Total Operating Expenses			691,652				201,527				1,189,980				739,269
OPERATING LOSS			(691,652	)			(201,527	)			(1,189,980	)			(739,269	)
OTHER INCOME (EXPENSES)
Interest income			-				6				-				11
Other income			-				-				-				91,642
Interest expense			(26,356	)			(25,715	)			(77,804	)			(77,687	)
Total Other Income (Expenses)			(26,356	)			(25,709	)			(77,804	)			13,966
LOSS BEFORE INCOME TAXES			(718,008	)			(227,236	)			(1,267,784	)			(725,303	)
INCOME TAX EXPENSE			-				-				-				-
NET LOSS		$	(718,008	)		$	(227,236	)		$	(1,267,784	)		$	(725,303	)
OTHER COMPREHENSIVE INCOME /(LOSS) net of taxes
Unrealized gain (loss) on held for sale marketable securities			(29,871	)			20,043				(11,764	)			55,423
COMPREHENSIVE LOSS		$	(747,879	)		$	(207,193	)		$	(1,279,548	)		$	(669,880	)
BASIC AND DILUTED LOSS PER SHARE		$	(0.00	)		$	(0.00	)		$	(0.01	)		$	(0.01	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED			159,422,440				125,354,077				156,859,477				124,806,077

 

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

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Statements of Cash Flows

(Unaudited)

 

		For the
		For The Nine Months Ended
		September 30,
		2018				2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(1,267,784	)			(725,303	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			362				988
Stock issued for services			419,481				42,100
Imputed interest on loan			10,080				10,080
Change in operating assets and liabilities, net of acquisition:
(Increase) decrease in accounts receivables and prepaids			-				130,345
Increase (decrease) in accounts payable and accrued expenses			572,894				390,371
Net Cash Used in Operating Activities			(264,967	)			(151,419	)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from private placement			-				128,634
Cash paid to related party loans			-				(220,275	)
Cash received from related party loans			162,240				270,369
Net Cash Provided by (Used in) Financing Activities			162,240				178,728
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(102,727	)			27,309
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			120,545				40,656
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	17,818			$	67,965
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued in exchange for debt			5,099
Unrealized gain on marketable securities		$	(11,764	)		$	55,422

 

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

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (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 September 30, 2018, 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, 2017 audited financial statements. The results of operations for the period ended September 30, 2018 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.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (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 third quarter of 2018 that would have a material effect on the accounting policies of the Company when adopted.

 

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.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (Unaudited)

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

The asset retirement obligation is as follows:

 

		9/30/2018				12/31/2017
Previous Balance		$	101,250			$	101,250
Increases/(decreases) current period			-				-
Ending Balance		$	101,250			$	101,250

 

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.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (Unaudited)

 

Marketable Securities-Available for Sale (Continued)

 

Marketable securities are as follows at September 30, 2018:

 

Balance at December 31, 2017:		$	176,345
Change in market value at June 30, 2018			(11,764	)
Balance at September 30, 2018:		$	164,581

 

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 September 30, 2018 and December 31, 2017.

 

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 September 30, 2018 and December 31, 2017:

 

		Level 1				Level 2				Level 3
Marketable Securities – December 31, 2017			176,345				-0-				-0-
Marketable Securities – September 30, 2018			164,581				-0-				-0-
Notes payable – December 31, 2017			-0-				-0-				1,883,773
Notes payable – September 30. 2018			-0-				-0-				1,891,439

 

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, 2018 and December 31, 2017:

 

		Notes payable
Balance, December 31, 2017		$	1,883,773
Note issuances			12,765
Note payments			5,099
Balance, September 30, 2018		$	1,891,439

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (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 September 30, 2018 and December 31, 2017.

 

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 2018 and 2017, no common equivalent shares were excluded from the calculation and as of September 30, 2018, 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.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (Unaudited)

 

		For the nine months
		Ended September 30, 2018				Ended September 30, 2017
Income (Loss) (numerator)		$	(1,267,784	)		$	(725,303	)
Shares (denominator)			156,859,477				124,806,077
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.

 

Income Taxes

 

The Company applies ASC 740 which requires the asset and liability method of accounting for income taxes. The asset and liability method require 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 September 30, 2018 and December 31, 2017 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 September 30, 2018 and December 31, 2017 are totals of $347,014 and $192,441, 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 nine months of 2018 Mr. Reichman advanced $103,967 to the Company to cover operating expenses.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (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 September 30, 2018 and December 31, 2017, notes payable amounted to $1,891,439 and $1,883,773, respectively. Below is a table summarizing the notes owed by the Company.

 

								Interest Expense				Interest Expense
Principal				Interest Rate				9/30/2018				9/30/2017				Maturity
	32,960				5	%			1,236				1,236				10/5/2018
	32,746				5	%			1,227				1,227				10/5/2018
	5,000				5	%			225				225				10/5/2018
	388,376				5	%			14,565				14,565				10/5/2018
	192,000				0	%			10,080				10,080				1/31/2017
	18,000				6	%			810				810				9/1/2002
	30,000				6	%			1,350				1,350				9/12/2002
	25,000				5	%			939				939				8/31/2000
	40,000				7	%			2,100				2,100				7/10/2002
	5,000				6	%			225				225				10/28/2013
	107,000				5% & 7	%			4,065				4,065				1/31/2017
	409,920				5	%			15,372				15,372				10/5/2018
	11,125				5	%			417				417				10/5/2018
	200,000				5	%			7,500				7,500				10/5/2018
	6,670				5	%			249				249				10/5/2018
	131,700				6.00% & 8.00	%			5,928				5,928				10/5/2018
	116,300				6	%			5,520				5,520				3/14-11/15
	139,642				6	%			2,940				2,940				03/16-12/16
$	1,891,439								74,748				74,748

 

(1) Imputed interest due to 0% interest rate

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (Unaudited)

 

NOTE 6 - STOCKHOLDERS’ DEFICIT

 

ISSUANCES OF COMMON STOCK

 

During the nine months ended September 30, 2018, the Company recorded imputed interest on a non-interest-bearing note in the amount of $10,080, with an increase in paid in capital.

 

During the nine months ended September 30, 2018, the Company issued 5,750,000 shares of common stock, and no stock options or warrants. 500,000 of those shares were used to retire debt and 5,250,000 shares were issued for services.

 

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.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2018 (Unaudited)

 

NOTE 7 - LEGAL ACTIONS

 

During April 2012, the Company filed suit in Los Angeles Superior Court against GeoGreen Biofuels, Inc. and related parties, relating to GeoGreen’s failure to repay $192,000 advanced pursuant to a Bridge Loan Term Sheet. Although litigation is inherently unpredictable, GTII is confident in its position, and intends to pursue the action aggressively. GeoGreen has filed a cross-complaint against the Company and its two officers, the Chief Executive Officer and the President, however the charges against the officers were subsequently dismissed with prejudice. A motion was also passed denying GeoGreen’s motion to strike GTIIs request for punitive damages. The Company has dropped its law suit for the time being.

 

During March 2013, the Company was named in an action pertaining to the 75% working interest in the Ownbey Lease. Subsequent to the Company’s purchase of the assets and the termination of the operator, a mechanics lien was filed against the property claiming approximately $267,000 in fees are due to the previous operator. An action is pending in the District Court of Chautauqua County, Kansas, captioned Aesir Energy, Inc. vs. American Resource Technologies, Inc.; Nancy Ownbey Archer; Jimmy Stephen Ownbey; Robbie Faye Butts; Global Tech Industries Group, Inc. and TTII oil & Gas, Inc. Management intends to vigorously contest AESIR’s claims and, at this point, settlement appears unlikely. It has been presented in the County Court that some of ARUR’s Directors have acted without authorization in this matter, and GTII’s management is assessing how to proceed at this time. No monetary claims have been asserted against GTII or TTII Oil & Gas, Inc. The Company has made several attempts to recover the shares of GTII stock paid to ARUR for the asset acquisition and the various costs and expenses expended by GTII in fulfillment of its obligations under the contract with ARUR. The failure of non-litigation attempts to resolve the matter resulted in filing an action for declaratory judgment in the US District Court for the Eastern District of New York, case#17-CV-0698. On the 3rd of February 2017, GTII filed an action for declaratory relief in the Eastern District of New York, for the purpose of recovering the costs, expenses and consideration paid to ARUR for the rights and benefits associated with an Oil and Gas transaction entered into between the parties on December 31st, 2012. The action by GTII is predicated on the underlying contract for the sale of the assets of ARUR being vacated by a local Kansas Court on the basis that the company and its officers lacked the authority to enter into the contract. Because of that decision GTII lost all interest in the transaction, their associated benefits and any financial gain that may have been anticipated. Attempts were made to resolve this without litigation but have been unsuccessful. The matter is proceeding accordingly. The Company has made several attempts to recover the shares of GTII, f/k/a TTI stock paid to ARUR for the asset acquisition and the various costs and expenses expended by GTII in fulfillment of its obligations under the contract with ARUR. The failure of non-litigation attempts to resolve the matter resulted in filing an action for declaratory judgment in the US District Court for the Eastern District of New York, case#17-CV-0698. As of this writing the case has not yet been decided.

 

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. Subsequent to the agreement being signed, GoFun Group failed to substantially perform under the agreement, including, but not limited to providing audited financials of its assets, making the ongoing payments called for in the agreement, along with other matters that led Global Tech to initiate litigation in the United States. Currently, Global Tech and GoFun are litigating the matter in the U.S District Court for the southern district of New York. As of this writing, the matter was removed voluntarily by GTII from the NY Federal Court due to the failure and unwillingness of the defendants to participate in the action, and an action was initiated under the rules of the American Arbitration Association. As of this writing, the defendants have again failed to defend, and participate in the matter. GTII's Counsel is considering actions for declaratory judgment in local courts in order to vindicate GTII's rights, and to recover the shares, and value paid to the defendants. The matter remains open.

 

 

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 GoHealthMD, 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. and TTII Oil & Gas, Inc, all were formed by Global Tech in the anticipation of technologies, products or services being acquired. G T International, Inc. is a wholly owned subsidiary of Global Tech Industries Group, Inc., existing as a Wyoming corporation. 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 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. TTII Oil & Gas, Inc. intends to pursue more opportunities in Kansas to expand the current leases, and to aggressively continue pumping oil from the thirteen currently operating wells. At the same time, both Global Tech Industries Group, Inc. and TTII Oil & Gas, Inc. intend to aggressively pursue the two companies located in Brazil, who are responsible for the over $7,000,000 dollars in monies owed to TTII Oil & Gas, Inc. All accounts and notes receivable were deemed uncollectable due to the age and circumstances, and therefore were assessed no value in the asset purchase. The equity ownerships were also deemed to be impaired due to the inactive nature of the entities and were not allocated any value. The gun sight patent was also not readily assessable as to value and no purchase price was allocated to this asset. Also, due to the mechanic’s lien and lawsuit on the oil leases, as well as the absence of an official reserve report, the oil lease was also impaired, and no value was recorded for this asset. On September 2015, the Chautauqua County Court decided that American Resource Technologies Inc management and Board of Directors improperly acted and rendered the original Agreement a nullity. The Company has made several attempts to recover the shares of GTII stock paid to ARUR for the asset acquisition and the various costs and expenses expended by GTII in fulfillment of its obligations under the contract with ARUR. The failure of non-litigation attempts to resolve the matter resulted in filing an action for declaratory judgment in the US District Court for the Eastern District of New York, case#17-CV-0698. As of this writing the case has not yet been decided.

 

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. Subsequent to the agreement being signed, GoFun Group failed to substantially perform under the agreement, including, but not limited to providing audited financials of its assets, making the ongoing payments called for in the agreement, along with other matters that led Global Tech to initiate litigation in the United States. Currently, Global Tech and GoFun are litigating the matter in the U.S District Court for the southern district of New York. As of this writing the case has not yet been decided.

 

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, 2017. There have been no material changes to our critical accounting policies as of September 30, 2018 and for the nine months then ended.

 

 

Overview of Business

 

Global Tech Industries Group, Inc. (“Global Tech”, “GTII” , “we”. “our”, “us”, “the Company”, “management”) is a Nevada corporation which has been operating under several different names since 1980.

 

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 GoHealthMD, Inc., a Delaware corporation. Shortly thereafter, Nugget Exploration, Inc. changed its name to GoHealthMD, Inc. a Nevada corporation.

 

On Auust 18, 2004, GoHealthMD, Inc., the Nevada Corporation, changed its name to Tree Top Industries, Inc. On July 7, 2017, 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. MLN, Inc., BioEnergy Applied Technologies, Inc. (“BAT”), Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc., TTI Strategic Acquisitions and Equity Group, Inc., and TTII Oil & Gas, Inc., a Delaware corporation all were formed by Global Tech in the anticipation of technologies, products, or services being acquired. G T International, Inc. a Nevada corporation is an also wholly-owned subsidiary of Global Tech Industries Group, Inc, existing as a Wyoming corporation. Not all subsidiaries are currently active.

 

Effective August 12, 2009, Global Tech completed a stock exchange with BAT, BioEnergy Systems Management Inc., Wimase Limited and Energetic Systems Inc., LLC. whereby Global Tech acquired 100% of the issued and outstanding stock of BAT. BAT is the originator of various proprietary, clean-tech, environmentally friendly technologies and intellectual properties in the areas of hazardous waste destruction, energetic materials, chemical recycling processes, and coal gasification. BAT also maintains unique electrolytic technology that simplifies the production of bio fuels, specifically biodiesel and its byproducts. Global Tech acquired all the issued and outstanding shares of BAT. Global Tech issued 35,000 shares of its common stock, par value $.001 per share, to the stockholders of BAT in exchange for the transfer of all the issued and outstanding shares of common stock of BAT by such stockholders.

 

The Company also owns NetThruster, Inc., a Nevada corporation (“NetThruster”), which was formally known as Ludicrous, Inc. (“Ludicrous”). On January 28, 2011, the Board of Directors of Global Tech adopted resolutions approving the disposition by the Company of all the common stock of its wholly-owned subsidiary, NetThruster, Inc., a Delaware corporation (“NetThruster Delaware”), in a spin-off to Global Tech’s shareholders on a pro rata basis (the “Spin-Off”). Thereafter, NetThruster Delaware would be owned by Global Tech’s shareholders. David Reichman, the CEO of Global Tech was named Chairman of the Board, CEO and CFO of NetThruster Delaware. Kathy M. Griffin was named a Director and corporate secretary. The Board of Directors of NetThruster Delaware is comprised of David Reichman and Kathy Griffin. On February 9, 2011, Global Tech entered into a distribution agreement with NetThruster Delaware (the “Distribution Agreement”). The Spin-Off is governed by the Distribution Agreement. A copy of the Distribution Agreement is attached by reference. The Spin-Off was disclosed in a Form 8-K, filed on February 9, 2011, which announced that the NetThruster division would be spun-off into a separate entity. Subsequently, management and the board of directors agreed to postpone the spin-off indefinitely

 

On May 25, 2011 Global Tech signed a licensing agreement with WorldWithoutBlindness (“WWB”) for the right to market and sell their patented eye screening equipment on a global basis outside the United States, for a period of two years. Eye Care Centers International, Inc, was formed to support the further growth and development of (“WWB”), an organization whose primary mission is to bring patented eye screening equipment to the developing world. The WWB technology uses objective parameters instead of traditional subjective eye chart examinations, to screen children as young as six months old. This agreement was extended an additional two years through May 25, 2015.

 

 

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 the assets of ARUR for a purchase price of $513,538, which was paid in the form of shares of Global Tech’s common stock as described in the asset purchase agreement, which was disclosed in a Form 8 – K and is attached as an exhibit incorporated by reference. Subsequent to the Company’s purchase of the assets and the termination of the operator, a mechanics lien was filed against the property claiming approximately $267,000 in fees are due to the previous operator. At December 31, 2012, due to the lien, the Company impaired the recorded cost, leaving no value associated with the acquisition. See Note 11 for detail of the assets acquired from ARUR. An action is pending in the District Court of Chautauqua County, Kansas, captioned Aesir Energy, Inc. vs. American Resource Technologies, Inc.; Nancy Ownbey Archer; Jimmy Stephen Ownbey; Robbie Faye Butts; Tree Top Industries, Inc.; and TTII oil & Gas, Inc. Management intends to vigorously contest AESIR’s claims and, at this point, settlement appears unlikely. It has been presented in the County Court that some of ARUR’s Directors have acted without authorization in this matter. No monetary claims have been asserted against Global Tech or TTII Oil & Gas, Inc. The Company has made several attempts to recover the shares of GTII stock paid to ARUR for the asset acquisition and the various costs and expenses expended by GTII in fulfillment of its obligations under the contract with ARUR. The failure of non-litigation attempts to resolve the matter resulted in filing an action for declaratory judgment in the US District Court for the Eastern District of New York, case#17-CV-0698. As of this writing the case has not yet been decided.

 

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. Subsequent to the agreement being signed, GoFun Group failed to substantially perform under the agreement, including, but not limited to providing audited financials of its assets, making the ongoing payments called for in the agreement, along with other matters that led Global Tech to initiate litigation in the United States. Currently, Global Tech and GoFun are litigating the matter in the U.S District Court for the southern district of New York. As of this writing the case has not yet been decided.

 

Employees

 

As of September 30, 2018, 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 September 30, 2018 Compared to Three Months Ended September 30, 2017:

 

We realized revenues of $0 during the three months ended September 30, 2018 and 2017. Our general operating expenses increased from $ 158,588 in 2017 to $675,152 in 2018. The increase was primarily the 5,250,000 shares of stock issued for services in the quarter.

 

Our net loss increased by $490,772 from $227,236 in 2017 to a loss of $718,008 in 2018. The primary reason for this in increase was primarily the result of stock issued for compensation recorded as operating expenses. We expect that our losses will continue until we are able to establish a consistent revenue source and finalize any projected acquisition. Management and the Board are considering multiple options currently available. 

 

Results of Operations for the Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017:

 

We realized revenues of $0 during the Nine months ended June  30, 2018 and 2017. Our general operating expenses increased from $ 525,461 in 2017 to $1,140,432 in 2018. The increase was primarily from the stock issued for services on the last quarter of the period. 

 

Our net loss increased by $542,481 from $725,303 in 2017 to a loss of $1,267,784 in 2018. The primary reason for this increase was compensation shares of stock issued in the last quarter recorded as operating expenses.  We expect that our losses will continue until we are able to establish a consistent revenue source and finalize our projected acquisition. Management and the Board are considering multiple options currently available.

 

LIQUIDITY AND CAPITAL RESOURCES

 

At September 30, 2018 we had cash on hand of $17,818 compared to $120,545 at December 31, 2017. We used cash in our operations of $(264,967) in 2018 compared to cash used of $(151,419) in 2017. We generated cash-flow from investing activities during 2018 of $162,240, compared to $178,728 for the same period in 2017. We anticipate that we will continue to have a negative cash flow from operations for 2018. We do not have sufficient cash on hand at September 30, 2018 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 $651,059 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. During the six months ended September 30, 2018, the Company’s working capital deficit increased from $(4,156,935) to $(5,006,562), an increase of 20%, due to continued lack of operations.

 

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 $(5,006,562) 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, 2017. 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.

 

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 December 31, 2017 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, 2018 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.

 

 

PART II OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

During April 2012, the Company filed suit in Los Angeles Superior Court against GeoGreen Biofuels, Inc. and related parties, relating to GeoGreen’s failure to repay $192,000 advanced pursuant to a Bridge Loan Term Sheet. Although litigation is inherently unpredictable, GTII is confident in its position, and intends to pursue the action aggressively. GeoGreen has filed a cross-complaint against the Company and its two officers, the Chief Executive Officer and the President, however the charges against the officers were subsequently dismissed with prejudice. A motion was also passed denying GeoGreen’s motion to strike GTIIs request for punitive damages. The Company has dropped its law suit for the time being.

 

During March 2013, the Company was named in an action pertaining to the 75% working interest in the Ownbey Lease. Subsequent to the Company’s purchase of the assets and the termination of the operator, a mechanics lien was filed against the property claiming approximately $267,000 in fees are due to the previous operator. An action is pending in the District Court of Chautauqua County, Kansas, captioned Aesir Energy, Inc. vs. American Resource Technologies, Inc.; Nancy Ownbey Archer; Jimmy Stephen Ownbey; Robbie Faye Butts; Global Tech Industries Group, Inc. and TTII oil & Gas, Inc. Management intends to vigorously contest AESIR’s claims and, at this point, settlement appears unlikely. It has been presented in the County Court that some of ARUR’s Directors have acted without authorization in this matter, and GTII’s management is assessing how to proceed at this time. No monetary claims have been asserted against GTII or TTII Oil & Gas, Inc. On the 3rd of February 2017, GTII filed an action for declaratory relief in the Eastern District of New York, for the purpose of recovering the costs, expenses and consideration paid to ARUR for the rights and benefits associated with an Oil and Gas transaction entered into between the parties on December 31st, 2012. The action by GTII is predicated on the underlying contract for the sale of the assets of ARUR being vacated by a local Kansas Court on the basis that the company and its officers lacked the authority to enter into the contract. Because of that decision GTII lost all interest in the transaction, their associated benefits and any financial gain that may have been anticipated. Attempts were made to resolve this without litigation but have been unsuccessful. The matter is proceeding accordingly. The Company has made several attempts to recover the shares of GTII, f/k/a TTI stock paid to ARUR for the asset acquisition and the various costs and expenses expended by GTII in fulfillment of its obligations under the contract with ARUR. The failure of non-litigation attempts to resolve the matter resulted in filing an action for declaratory judgment in the US District Court for the Eastern District of New York, case#17-CV-0698. As of this writing the case has not yet been decided.

 

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. Subsequent to the agreement being signed, GoFun Group failed to substantially perform under the agreement, including, but not limited to providing audited financials of its assets, making the ongoing payments called for in the agreement, along with other matters that led Global Tech to initiate litigation in the United States. Currently, Global Tech and GoFun are litigating the matter in the U.S District Court for the southern district of New York. As of this writing, the matter was removed voluntarily by GTII from the NY Federal Court due to the failure and unwillingness of the defendants to participate in the action, and an action was initiated under the rules of the American Arbitration Association. As of this writing, the defendants have again failed to defend, and participate in the matter. GTII's Counsel is considering actions for declaratory judgment in local courts in order to vindicate GTII's rights, and to recover the shares, and value paid to the defendants. The matter remains open.

 

 

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

 

During the quarter ending September 30, 2018, the Company issued 5,750,000 shares of common stock, and no stock options or warrants. 500,000 of those shares were used to retire debt and 5,250,000 shares were issued for services.

 

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
Totals		$	379,181

 

 

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.

 

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 GLOBAL TECH INDUSTRIES GROUP, INC. and Kathy Griffin (4)
10.3		Bridge Loan Term Sheet, dated January 11, 2010, by and between GLOBAL TECH INDUSTRIES GROUP, INC. 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)
21.1		Subsidiaries of the registrant
31.1		Section 302 Certification of Chief Executive Officer
31.2		Section 302 Certification of Chief Financial Officer
32.1		Section 906 Certification of Chief Executive Officer
32.2		Section 906 Certification of Chief Financial Officer

 

(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.

 

(a)

Exhibits

 

 

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: November 14, 2018	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: November 14, 2018
	David Reichman, Chairman of the Board, Chief
	Executive Officer, Chief Financial Officer
	and Principal Accounting Officer
By:	/s/ Kathy M. Griffin		Dated: November 14, 2018
	Kathy M. Griffin, Director, President
By:	/s/ Frank Benintendo		Dated: November 14, 2018
	Frank Benintendo, Director & Secretary
By:	/s/ Donald Gilbert		Dated: November 14, 2018
	Donald Gilbert, Director & Audit Chair
By:	/s/ Greg Ozzimo		Dated: November 14, 2018
	Greg Ozzimo, Director
By:	/s/ Mike Valle		Dated: November 14, 2018
	Mike Valle, Director