ARGENTUM 47, INC. - Annual Report: 2012 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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, 2012

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 000-54557

GLOBAL EQUITY INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Level 28 – Al Habtoor Business Tower, P.O. Box 29805, Dubai Marina, Dubai, UAE

(Address of principal executive offices)

Registrant’s telephone number, including area code: +971 (7) 204 7593

Securities registered pursuant to Section 12(b) of the Act: None

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

Title of Each Class

Common Stock, $.001 par value

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 by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that he 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 Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit or post such files). Yes [X] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S- K is not contained herein, and will not be contained, to the best of the 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.

Yes [  ]  No [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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [  ] No [X]

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 (June 30, 2012) was approximately $ Zero because the common equity shares were not quoted or traded on or prior to such date.

As of April 1, 2013, there were 29,802,700 shares of our common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None

TABLE OF CONTENTS

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (“Annual Report”), in particular the Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in Item 7 herein (“MD&A”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give expectations or forecasts of future events. The reader can identify these forward-looking statements by the fact that they do not relate strictly to historical or current facts. They use words such as “believe(s),” “goal(s),” “target(s),” “estimate(s),” “anticipate(s),” “forecast(s),” “project(s),” plan(s),” “intend(s),” “expect(s),” “might,” may” and other words and terms of similar meaning in connection with a discussion of future operating, financial performance or financial condition. Forward-looking statements, in particular, include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends of operations and financial results.

Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Annual Report. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance; actual results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the Company’s actual results and financial condition. The reader should consider the following list of general factors that could affect the Company’s future results and financial condition.

Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are:

No assurances can be given that the results contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. We assume no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this Annual Report. The reader is advised, however, to consult any further disclosures we make on related subjects in our filings with the SEC.

Global Equity International, Inc. and Subsidiary

Consolidated Financial Statements

December 31, 2012 and 2011

CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of:

Global Equity International Inc.

We have audited the accompanying consolidated balance sheets of Global Equity International, Inc. and Subsidiary, as of December 31, 2011 and 2010, and the related consolidated statements of operations and comprehensive income (loss),stockholders’ equity and cash flows for the years ended December 31, 2011 and 2010. 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 audit 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 audit included considerations 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Global Equity International, Inc. and Subsidiary as of December 31, 2011 and 2010, and the results of its operations and comprehensive income (loss), and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has a net loss of $1,688,102 and net cash used in operations of $92,780 for the year ended December 31, 2011. The Company also has a working capital deficit of $185,123 at December 31, 2011. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in regards to these matters is also described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Office Locations
Las Vegas, NV
New York, NY
Pune, India
Beijing, China

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Global Equity International Inc. and subsidiary

We have audited the accompanying consolidated balance sheets of Global Equity International, Inc. and subsidiary (the “Company”) as of December 31, 2012 and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity (deficit), and cash flows for the year ended December 31, 2012. Global Equity International, Inc’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We did not audit the consolidated financial statements of Global Equity International, Inc. and subsidiary for the year ended December 31, 2011. Those statements were audited by other auditors and our opinion, in so far as it relates to the amounts included in the year ended December 31, 2011, is based solely on the other auditors.

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 audit 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 the 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Global Equity International, Inc. and subsidiary as of December 31, 2012 and the result of its operations and its cash flows for the year ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Global Equity International, Inc. and Subsidiary

Consolidated Balance Sheets

(Audited)

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

Global Equity International, Inc. and Subsidiary

 Consolidated Statements of Operations and Comprehensive Income (Loss)

(Audited)

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

Global Equity International, Inc. and Subsidiary

 Consolidated Statement of Stockholders’ Equity (Deficit)

(Audited)

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

Global Equity International Inc. And Subsidiary

Consolidated Statements of Cash Flows

(Audited)

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

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Note 1 - Nature of Operations

Global Equity Partners, PLC (“GEP”), a private company, was organized under the laws of the Republic of Seychelles on September 2, 2009. Global Equity International Inc. (the “Company” or “GEI”), a reporting company since June 21, 2012, was organized under the laws of the state of Nevada on October 1, 2010. On November 15, 2010, GEP executed a reverse recapitalization with GEI.

Revenue is generated from business consulting services, introduction fees, and equity participation.

Note 2 - Going Concern

As reflected in the accompanying financial statements, the Company had a loss of $2,855,556 for the year ended December 31, 2012, $975,000 of which is due to the permanent impairment of marketable securities; and net cash used in operations of $(178,689) for the year ended December 31, 2012; and a working capital deficit of $(453,843) and stockholders´ deficit of $767,381 for the year ended December 31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue its operations is dependent on Management’s plans, which include the raising of capital through debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur liabilities with certain related parties to sustain the Company’s existence.

The Company expects to use its working capital to implement a marketing program to increase awareness of its business model, which includes, but is not limited to, acquisition of private companies, with the intention of taking those companies public in the United States and possibly dual listing those entities abroad. In the event that operating cash flows are slowed or nonexistent, the Company plans to reduce its overhead wherever possible.

Depending upon market conditions, the Company may not be successful in raising sufficient additional capital to achieve its business objectives. In such event, the business, prospects, financial condition, and results of operations could be materially adversely affected hence there is certain doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Note 3 - Summary of Significant Accounting Policies

Principles of Consolidation

Global Equity International Inc. is the parent company of its 100% subsidiary Global Equity Partners Plc. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non confirming events. Accordingly, the actual results could differ from those estimates.

Risks and Uncertainties

The Company’s operations are subject to significant risk and uncertainties including financial, operational, competition and potential risk of business failure. The risk of social and governmental factors is also a concern since the Company is headquartered in Dubai.

Cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At the years ended December 31, 2012 and 2011 respectively; the Company had no cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

The Company recognizes accounts receivable in connection with the services provided. The Company recognizes an allowance for doubtful accounts based on an analysis of current receivables aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. During the year 2012, the Company recorded $35,000 of bad debt expense pertaining to two Invoices the Company deemed were uncollectible.

Marketable Securities

At the time of the acquisition, a security is designated as held-to-maturity, available-for-sale or trading, which depends on the ability and intent to hold such security to maturity. Securities classified as trading and available-for-sale are reported at fair value, while securities classified as held-to-maturity are reported at amortized cost.

All securities held at December 31, 2012 and December 31, 2011, respectively were designated as available for sale. Any un-realized gains and losses are reported as a component of other comprehensive income (loss). Realized gains (losses) will be computed on a specific identification basis and will be reflected in the statement of operations.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Cost Method Investment

At December 31, 2012, the Company has one investment, having a fair value of $160,000 that is treated as a cost method investment. The value of the cost method investment pertains to the receipt of 9.2% of the common stock in a private company in which the best evidence of fair value was the services rendered.

At December 31, 2011, the Company has one investment, having a fair value of $100,000 that is treated as a cost method investment. The value of the cost method investment pertains to the receipt of 10% of the common stock in a private company in which the best evidence of fair value was the services rendered.

In accordance with ASC NO.325-20, “COST METHOD INVESTMENTS”, the Company recognizes an investment in the stock of an investee as an asset, as a component of marketable securities.

Under the cost method of accounting for investments in common stock, dividends will be the basis for recognition by the Company of earnings from the investment. The net accumulated earnings of an investee subsequent to the date of investment are recognized by the Company only to the extent distributed by the investee as dividends. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions of cost of the investment. At December 31, 2011, the Company had not received any dividends.

It is not practicable to estimate the fair value of the investment since the cost of obtaining an independent valuation appears excessive considering the materiality of the investment to the Company. Additionally, there are no identifiable events or changes in circumstances that had a significant adverse effect on the fair value of this investment.

Equity investment in companies is accounted for under the cost method as the equity investments do not have readily determinable fair values. As per ASC codification 320 “Certain Investments in Debt and Equity Securities”, non marketable equity securities that do not have a readily determinable fair value are not required to be accounted for under the equity method and are typically carried at cost.

The Company reviews its equity investment portfolio for any unrealized losses that would be deemed other-than-temporary and require the recognition of an impairment loss in income. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and the Company’s intent and ability to hold the investments. Management also considers the type of security, related-industry and sector performance, as well as published investment ratings and analyst reports, to evaluate its portfolio. Once a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, the Company may incur future impairments. The Company recorded as permanent impairment loss on available for sale marketable securities of $975,000 and $1,086,160, as of December 31, 2012 and 2011, respectively.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount.

When the Company records a BCF, the relative fair value of the BCF would be recorded as a debt discount against the face amount of the respective debt instrument. The discount would be amortized to interest expense over the life of the debt.

Derivative Liabilities

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Once the derivative liabilities are determined, they are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes pricing model.

Debt issue costs and debt discount

The Company may pay debt issue costs, and record debt discounts in connection with raising fund through the issuance of convertible debt. These costs are amortized over the life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Original issue discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

Fixed Assets

Fixed Assets are to be stated at cost of acquisition less accumulated depreciation. Depreciation is provided based on estimated useful lives of the assets. Cost of improvements that substantially extend the useful lives of assets can be capitalized. Repairs and maintenance expenses are to be charged to expense when incurred. In case of sale or disposal of an asset, the cost and related accumulated depreciation are removed from consolidated financial statement.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Revenue Recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.

The Company’s services do not include a provision for cancellation, termination, or refunds.

For the year ended December 31, 2012 and 2011 the Company received marketable securities and cash as consideration for services rendered.

At December 31, 2012 and December 31, 2011, the Company had the following concentrations of accounts receivables with customers:

For the years ended December 31, 2012 and 2011, the Company had the following concentrations of revenues with customers:

No securities were acquired from customers “C”, “D”, “G”, “H” & “I” as all of this revenue was received in cash.

*Non-marketable securities, accounted for under the cost method.

During the year ended December 31, 2012, the Company received $60,000 in equity securities in a private company in exchange for services performed. The valuation was based on 1,200,000 shares at $0.05 per share.

Share-based payments

The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants at their fair value on the grant date, which is based on the estimated number of awards that are ultimately expected to vest.

Share based payments, excluding restricted stock, are valued using a Black-Scholes pricing model. Share based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period.

When computing fair value, the Company considered the following variables:

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets if it is considered more likely than not that some portion, or all, of the deferred income tax assets will not be realized.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On November 15, 2010, the date of the reverse recapitalization, the Company became subject to federal and state income taxes.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company will record interest and penalties related to unrecognized tax benefits in income tax expense. There were no penalties or interest for the years ended December 31, 2012 and 2011.

The Company may be subject to examination by the Internal Revenue Service (“IRS”) and state taxing authorities for 2012 and 2011 tax years.

The Company’s subsidiary, GEP, is incorporated under the laws of the Republic of Seychelles (“Seychelles”). A company is subject to Seychelles income tax if it does business in Seychelles. A company that is incorporated in Seychelles, but that does not do business in Seychelles, is not subject to income tax there. GEP did not do business in Seychelles for the years ended December 31, 2012 and December 31, 2011, and GEP does not intend to do business in Seychelles in the future. Accordingly, the Company is not subject to income tax in Seychelles for the years ended December 31, 2012 and December 31, 2011. All business activities were performed by GEP in Dubai for the years ended December 31, 2012 and December 31, 2011. Dubai does not have an income tax.

Earnings per Share

Basic earnings (loss) per share are computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

The Company has no common stock equivalents, which, if exercisable, would be dilutive. A separate computation of diluted earnings (loss) per share is not presented.

Comprehensive Income (Loss)

The comprehensive income or loss consists of the change in unrealized gain (loss), on available-for-sale marketable securities and changes in accumulated foreign currency translation adjustments.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Foreign currency

The Consolidated Financial Statements are presented in United States Dollars. The Company has a bank account in foreign currency. The balance of this bank account was translated from its local currency (Euros) into the reporting currency, U.S. dollars, using period end exchange rates. The resulting translation adjustments were recorded as a separate component of accumulated other comprehensive loss. Revenues and expenses were translated using weighted average exchange rate for the period.

Transaction gains and losses resulting from foreign currency transactions were recorded as foreign exchange gains or losses in the consolidated statement of operations. The Company did not enter into any financial instruments to offset the impact of foreign currency fluctuations.

Fair Value of Financial Assets and Liabilities

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

The carrying amounts reported in the balance sheet for prepaid expenses, accounts receivable, accounts payable, accounts payable to related parties and loans payable to related parties, approximate fair value based on the short-term nature of these instruments.

The Company has assets measured at fair market value on a recurring basis. Consequently, the Company had gains and losses reported in the statement of comprehensive income (loss), that were attributable to the change in unrealized gains or losses relating to those assets still held at December 31, 2012.

The Company permanently impaired 1,500,000 shares of Monkey Rock Group Inc. due to the fact that the company was demoted to the Pink sheets; there was no current financial information available on the company and no market to allow the Company to sell the stock.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

The following is the Company’s assets measured at fair value on a recurring and nonrecurring basis at December 31, 2012 and December 31, 2011, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

The following section describes the valuation methodologies the Company uses to measure financial instruments at fair value:

Marketable Securities — the Level 2 position consists of the Company’s investment in equity securities of stock held in publically traded companies. The valuation of these securities is based on significant inputs that are observable or can be derived from or corroborated by observable market data. These valuations are typically based on quoted prices in active markets. The Company´s investments in equity securities are in relatively inactive markets.

Non-Marketable Securities at Fair Value on a Nonrecurring Basis — certain assets are measured at fair value on a nonrecurring basis. The level 3 position consist of investments accounted for under the cost method. The Level 3 position consists of investment in an equity security held in a private company. 

Management believes that an “other-than-temporary impairment” would not be justified, as according to ASC 320-10 an investment is considered impaired when the fair value of an investment is less than its amortized cost basis. The impairment is considered either temporary or other-than-temporary. The accounting literature does not define other-than-temporary. It does, however, state that other-than-temporary does not mean permanent; although, all permanent impairments are considered other-than-temporary. The literature does provide some examples of factors which may be indicative of an “other-than-temporary impairment”, such as:

* the length of time and extent to which market value has been less than cost;

* the financial condition and near-term prospects of the issuer; and

* the intent and ability of the holder to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Management believes that the fair value of its investment has been correctly measured, as the length of time that the stock has been less than cost is nominal. The financial condition and near-term prospects of the Company’s investment is expected to realize improved value due to a public reverse merger.

Changes in Level 3 assets measured at fair value for the years ended December 31, 2012 and 2011 were as follows:

Recent Accounting Pronouncements

There are no new accounting pronouncements that have any impact on the Company’s financial statements.

Note 4 - Marketable Securities and Fair Value

Marketable securities are held for an indefinite period of time and thus are classified as available-for-sale securities. Realized investment gains and losses are included in the statement of operations, as are provisions for other than temporary declines in the market value of available-for-sale securities. Unrealized gains and unrealized losses deemed to be temporary are excluded from earnings (losses), net of applicable taxes, as a component of other comprehensive income (loss). Factors considered in judging whether an impairment is other than temporary include the financial condition, business prospects and creditworthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of decline, and the Company’s ability and intent to hold the investment until the fair value recovers. During 2012, the Company recorded an impairment charge of $975,000 regarding its investment in marketable securities because, based on management’s evaluation of the circumstances, management believed that the decline in fair value below the cost of certain of the Company’s marketable securities was not temporary.

Included in “Realized loss on marketable securities” on the statements of operations are $(975,000) and $(1,086,160) realized loss for the years ended December 31, 2012 and 2011, respectively. The Company did not sell any marketable securities during the year ended December 31, 2012. The Company recorded reclassification of comprehensive income as a result of permanent impairment of $615,000 of other comprehensive income (loss) associated with unrealized gains (losses), net of tax effect, on these investments during the year ended December 31, 2012.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

The following is a summary of available-for-sale marketable securities as of December 31, 2012 and December 31, 2011:

The Company classifies securities that have a readily determinable fair value and are not bought and not held principally for the purpose of selling them in the near term as securities available-for-sale, pursuant to FASB ASC 320-10, Investments-Debt & Equity Securities. Under FASB ASC 320-10, unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported in other comprehensive income until realized.

Note - 5 Debt

The Company received loans from related parties. The loans are non-interest bearing, unsecured and due on demand. The following table represents the loans payable activity for the years ended December 31, 2012 and 2011, respectively:

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

The following table represents the accounts payable to related parties as of December 31, 2012 and December 31, 2011, respectively:

(C) Notes Payable

In February and March 2012, the Company entered into two 90 day bridge loan agreements to raise a total of $70,000; $20,000 from “note holder A” and $50,000 from “note holder B”. The loans had interest rates ranging from 0% - 3%. The loans were unsecured.

In connection with these loans, the Company issued 140,000 shares of common stock, having a fair value of $70,000 ($0.50/share), based upon recent third party services rendered at that time, and 20,000 options to one lender having an exercise price of $1, expiring September 2013. The fair value of the options was $6,968.

The 140,000 shares of common stock issued in connection with the bridge loans were treated as a debt discount of $70,000. The remaining valuation of the options, $6,968, was recorded as interest expense.

The Company applied fair value accounting for the options issued to the lender. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes pricing model.

The Black-Scholes assumptions used were as follows:

On June 25, 2012, $30,000 was repaid to “note holder B” and the remaining $10,000 was converted into 40,000 shares of common stock ($0.25/share) in September of 2012, thereby leaving an outstanding balance as of December 31, 2012 of $10,000. There was no gain or loss on conversion.

On July 5, 2012, “note holder A”, $20,000 was converted into 40,000 shares of common stock ($0.50/share). There was no gain or loss on conversion.

On November 16, 2012, the Company issued 2,000 common restricted shares ($0.25/share) to “note holder A” Mr. Lonergan in lieu of $500 interest due.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(D) Other

In July 2011, the Company received an advance, of $35,500, from a third party. The advance was non-interest bearing, unsecured and due on demand. The loan was repaid in September 2011.

Note 6 - Income Taxes

The income tax provision differs from the amount of tax determined by applying the federal statutory rate approximately as follows:

Net deferred tax assets and liabilities are comprised approximately of the following:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income taxes.

During the years ended December 31, 2012 and 2011, the Company generated net operating losses of approximately $79,462 and $34,000, respectively, for federal and Florida income tax purposes. These losses can be carried forward and used to offset taxable income in future years and expire on December 31, 2032 and 2031, respectively.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of December 31, 2012 and 2011, based upon the levels of historical taxable income and the limited experience of the Company, the Company believes that it is more-likely-than-not that it will not be able to realize the benefits of some or all of these deductible differences. Accordingly, a valuation allowance of approximately $79,462 and $34,000 has been provided in the accompanying financial statements as of December 31, 2012 and 2011, respectively.

For the year ended December 31, 2012 and December 31, 2011, GEP incurred a loss of approximately $2,855,556 and $567,000, respectively.

Therefore, GEP had negative earnings and profits and does not have any foreign earnings and profits to be distributed. Since GEP does not have any undistributed earnings, the Company has not recorded a deferred tax liability associated with the foreign earnings as of December 31, 2012 and 2011.

The Company is not subject to any foreign income taxes for the years ended December 31, 2012 and 2011.

The Company may be subject to examination by the Internal Revenue Service (“IRS”) and state taxing authorities for 2012 and 2011 tax years.

Note 7 - Temporary Equity and Stockholders’ Equity

On November 30, 2011, the Company authorized and designated 5,000,000 Series “A” convertible preferred shares of stock, as a bonus to its Chief Executive Officer for services rendered, having a fair value of $480,000 ($0.096/share), based upon the fair value of the services rendered, which represented the best evidence of fair value.

On November 13, 2012, the Company´s board of directors approved an amendment to the Certificate of Designation; to amend the voting rights and conversion rights of the Company´s Series “A” preferred shares as follows:

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

The board of directors subsequently agreed that the Chief Executive Officer of the Company would retire to treasury 3,466,668 of these Series “A” preferred shares and retain, the balance, 1,533,332 shares.

On November 21, 2012 the Company´s CEO gave 533,332 of his Series “A” preferred shares to the Company´s CFO (400,000) and two other employee´s (133,332). As the 533,332 preferred shares will convert into 5,333,320 on December 1, 2014 and the price per common share on November 21 2012 was $0.25, the contribution by the officer to the Company was calculated at $1,333,330.

The Company has determined that no beneficial conversion feature or derivative financial instruments exist in connection with the Series “A”, convertible preferred stock, as the conversion rate was fixed at an amount equal to the market price of the Company’s common stock. Additionally, there are a stated number of fixed shares.

Redeemable Preferred Stock

Under Regulation S-X, Rule 5-02-28, preferred stock must be classified outside stockholders’ equity when the stock is:

●Redeemable at a fixed or determinable price on a fixed or determinable date,

●Redeemable at the option of the holder, or

●Redeemable based on conditions outside the control of the issuer.

The Series “A”, convertible preferred stock is redeemable on December 1, 2013 and it is presented on the balance sheets as “Redeemable Preferred Stock” in a manner consistent with temporary equity. There are no other features associated with this class of redeemable preferred stock, which require disclosure. The carrying amount and redemption amount is $480,000. There are no redemption requirements.

During the year ended December 31, 2011, the Company issued the following shares:

During the year ended December 31, 2012, the Company issued the following shares:

The following is a summary of the Company’s options activity:

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

The weighted average remaining life for all outstanding options at December 31, 2012 is 0.75 years. The fair value of each option granted is estimated on the date of grant using the Black-Scholes pricing model. The Black Scholes assumptions used are as follows:

Note 8 – Subsequent Events

On February 15, 2013, the Company entered into a Securities Purchase Agreement with Candelara Holdings limited, a company domiciled in the Channel Islands. The SPA covers the potential sale by the Company of up to $1,300,000 worth of our Common Stock. Candelara has the right to purchase up to 916,667 shares of our Common Stock at a price of $.60 per share between the date hereof and April 30, 2013, which would result in the Company receiving $550,000 in proceeds from such purchase. In the event that Candelara purchases the entire 916,667 shares of Common Stock by April 30, 2013, Candelara will have an option to purchase an additional $750,000 worth of our Common Stock at a per share purchase price that is equal to $.90 or 60% of the average closing price of our Common Stock during the ten (10) trading days immediately prior to Candelara’s written notice to the Company of its intent to exercise the Option.

On February 16, 2013, Global Equity Partners Plc., subsidiary of Global Equity International entered into commission agreement with Candelara Holdings Limited domiciled in the Channel Islands under which the Company agreed to pay Candelara Holdings Limited 20% of the equity that it receives from any client that Candelara Holdings Limited has formally introduced to GEP.

On February 15, 2013, the Company entered into consulting agreement with Tricon Holdings Ltd., to provide consulting and advisory services. The Company has agreed to issue 100,000 common restricted shares for services rendered.

On March 12, 2013, the Company authorized issuance of 75,000 common restricted shares at $1.00 each for services rendered.

PART I

BUSINESS DEVELOPMENT

BACKGROUND

Global Equity International Inc. (“Company”) was incorporated on October 1, 2010, as a Nevada corporation, for the express purpose of acquiring Global Equity Partners Plc, a corporation formed under the laws of the Republic of Seychelles (“GEP”) on September 2, 2009.

GEP is a Dubai based firm that provides consulting services, such as corporate restructuring, advice on management buy outs, management recruitment, website design and development for corporate marketing, investor and public relations, regulatory compliance and introductions to financiers, to companies desiring to be listed on stock exchanges in various parts of the world.

Our authorized capital consists of 70,000,000 shares of common stock, $.001 par value, and 5,000,000 shares of preferred stock, $.001 par value.

On November 15, 2010, we entered into a Plan and Agreement of Reorganization (“Plan of Reorganization”) with GEP and its sole shareholder, Peter J. Smith, pursuant to which we would acquire 100% of the common stock of GEP. We consummated the Plan of Reorganization effective December 31, 2010, by issuing 20,000,000 shares of our common stock to Peter J. Smith, at which time GEP became our wholly-owned subsidiary and Peter J. Smith was appointed as our President, Chief Executive Officer and Director.

As a result of our acquisition of GEP, we provide corporate advisory services to companies desiring to have their shares listed on stock exchanges or quoted on quotation bureaus in various parts of the world. We have offices in the United States, Dubai, London and Marbella (Spain). We have affiliations with firms located in some of the world’s leading financial centers such as London, New York, Frankfurt and Dubai. These affiliations are informal and are comprised of personal relationships with groups of people or people with whom our Company or our management has done, or attempted to do, business in the past. We do not have any contractual arrangements, written or otherwise, with our affiliations.

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

As a Company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (also known as the “JOBS Act”). As an emerging growth company, we are entitled to take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1 billion in annual revenues, if we have more than $700 million in market value of our stock held by non-affiliates, or if we issue more than $1 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens in the future. We have irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant Section 107(b) of the JOBS Act.

Peter Smith founded Global Equity Partners Plc to assist small to medium size businesses with management restructuring and corporate restructuring, in general, and also to obtain, if requested by its clients, access to capital markets via equity and debt financings.

GEP looks for promising small to medium size companies ($2,000,000 to $10,000,000 in assets) and introduces these clients to private and institutional investors in our network (“rol-a-dex”) of over 179 “financial introducers” around the world. These financial introducers are simply groups of people or institutions that are presently introducing new clients to us or who have introduced new clients to our management in the past. We do not have any contractual arrangements, written or otherwise, with these financial introducers.

Presently, GEP is our only operating business. Global Equity International’s present operations are limited to insuring compliance with regional, state and national securities regulatory agencies and organizations. In addition, GEI is charged with (i) handling our periodic obligations under the Securities Exchange Act of 1934; (ii) managing our investor relations; and (iii) raising debt and equity capital necessary to fund our operations and enhance and grow our business. GEI does not offer or conduct any consulting or advisory services; as such services are performed solely by our foreign subsidiary, GEP.

We currently offer the following services to our clients:

CORPORATE RESTRUCTURING SERVICES

We advise and assist our clients in determining the corporate structure that is most suitable to their business models. We recommend management changes where necessary. We also offer them corporate governance models customized to their specific organizations and desired exchange listings. We also review and analyze their balance sheets and capital structures and make recommendations on debt consolidations, equity exchanges for debt, proper capital structures and viability and timing of equity and debt offerings. We do not presently recommend and we do not intend in the future to recommend that our clients merge or be acquired by shell companies.

MANAGEMENT BUY OUTS

We assist our clients in every aspect of management buy outs from corporate restructuring to debt financing and also introduce buyers and sellers to financiers for private equity placements.

MANAGEMENT RECRUITING

We assist our clients with the recruitment of management and board members through our various contacts around the world. Management recruitment and retention is also an important part of our Corporate Restructuring Services and these services often overlap.

WEBSITE DESIGN AND DEVELOPMENT

We recognize that in these times, successful businesses must have comprehensive and professional internet profiles, interactive websites and excellent feedback mechanisms. We will assist our clients in this area by recommending third party consultants and organizations to design, develop and manage their websites and social networking capabilities.

INVESTOR AND PUBLIC RELATIONS

Since our clients and future clients will likely desire to have their shares listed or continue to be listed on a stock exchange or quoted on one of the quotation bureaus, we will advise our clients on the necessary requirements for communicating with their equity holders and stake holders, their customers and potential customers. We will assist our clients in this area by recommending third party financial professionals and investor relations and public relations organizations to provide them with such services.

REGULATORY COMPLIANCE

We are organizing a cadre of third party securities attorneys and accountants to assist our clients with their compliance with the many reporting and other requirements of stock exchanges, quotation bureaus and securities regulatory agencies and organizations in the states and countries where their shares will be or are listed.

EXCHANGE LISTINGS

We also assist our clients with the selection of stock exchanges that may be suitable to our clients. Various exchanges have listing requirements and standards that vary from one exchange to another. Typical listing requirements and standards relate to a number of things, such as pre-tax income, cash flows, revenue, net tangible assets, market value of a company’s listed securities, minimum trading prices of a company’s securities, minimum shareholders’ equity, operating history, number of shareholders, number of market makers, and corporate governance. We will try to identify appropriate exchanges for our clients based on the particular client’s operating history, pre-tax income, cash flow, revenue, net tangible assets, shareholder base and other factors described above.

We will assist our clients with retention of attorneys and accountants having experience with publicly held companies and stock exchanges in various countries. We will also assist our clients in locating market makers, investment bankers and broker-dealers to assist them with accessing capital markets.

INTRODUCTIONS TO FINANCIERS

After reviewing the business plans, prospects and problems that are unique to each of our clients, we will use our best efforts to introduce our clients to various third party financial resources around the world who may be able to assist them with their capital funding requirements.

As used throughout this Annual Report, references to “Global Equity International,” “GEI,” “Company,” “we,” “our,” “ours,” and “us” refer to Global Equity International, Inc. and our subsidiaries, unless the context otherwise requires. In addition, references to “financial statements” are to our consolidated financial statements contained herein, except as the context otherwise requires. References to “fiscal year” are to our fiscal year which ends on December 31 of each calendar year. Unless otherwise indicated, the terms “Common Stock,” “common stock” and “shares” refer to our shares of $.001 par value, common stock.

HISTORICAL BUSINESS TRANSACTED

2010 TRANSACTIONS

GEP completed two transactions in 2010. The first transaction involved M1 Luxembourg AG, a Swiss company that we helped get listed on the Frankfurt Open Market, a German stock exchange.

M1 Luxembourg AG, through its subsidiaries, offers financial advisory services. The firm’s subsidiaries include Cannon Regus, Sumner Holdings, ISIS financial Associates Ltd, Britannia Overseas Property, and M1 Lux (Cyprus) Ltd. It provides mortgage, private banking, company formation, real estate management and trust formation advisory services. Additionally, the firm offers property documentation, education fees planning, retirement planning, healthcare insurance policies and private wealth management advisory services. M1 Luxembourg A.G. is headquartered in Hunenberg, Switzerland.

Our contract with M1 Luxembourg AG originally called for us to receive a cash fee of $200,000. However, we renegotiated our fee to take 2,000,000 shares of the client’s common stock, valued at $1,086,160, an amount substantially in excess of the $200,000 in fees payable to us, due to the fact that the shares of M1 Luxembourg AG were thinly traded and subject to highly volatile price fluctuations and we had no guarantee they would continue to be listed. Our total fees received from M1 Luxembourg AG in 2010 represented approximately 52.7% of our gross revenues for 2010.

On November 15, 2011, M1 Luxembourg AG’s shares were delisted from the Frankfurt Open Market when it fell out of compliance with the capital adequacy rules of the Frankfurt Open Market. M1 Luxembourg AG’s shares are no longer quoted on the Frankfurt Open Market. M1 Luxembourg is still in business. However, since its shares are no longer quoted, we will have to write-down the value of this asset in the fourth quarter of 2011 to $0. The resulting accounting loss on our M1 Luxembourg AG shares was $1,086,160 and was accounted for in our audited financial statements for the fiscal year ended December 31, 2011.

The second transaction in 2010 involved consulting with Monkey Rock Group Inc. (MKRO), a United States company operated by two British nationals. Monkey Rock initially focused on organizing motorbike events, such as Sturgis, South Dakota, which is one of the largest gatherings of bikers in the world with an average of 400,000 bikers participating. GEP was engaged by Monkey Rock to assist it in expanding in Europe and to assist with branding and marketing. GEP introduced Monkey Rock to Brand Union, a division of WPP, one of the largest advertising firms in the world.

In 2009, GEP received $15,000 in cash compensation from Monkey Rock Group, Inc. In 2010, GEP received compensation from Monkey Rock in the form of 1,500,000 shares of common stock, valued at $975,000 at the time of issuance, an amount substantially in excess of the fees payable to us, due to the fact that the shares of Monkey Rock were thinly traded and subject to highly volatile price fluctuations and we had no guarantee they would continue to be quoted or traded.

Our total fees received from Monkey Rock Group, Inc. in 2010 represented approximately 47.3% of our gross revenues for 2010.

Although we received 52.7% of our gross revenues from M1 Luxembourg AG and 47.3% of our gross revenues from Monkey Rock Group, Inc. during 2010, these companies represent non-recurring revenues and we were not dependent on revenues from these two companies in 2011 or 2012 nor will we be dependent on them in any subsequent period.

NEW BUSINESS TRANSACTED IN 2011

In 2011, we initially had contracts with three companies: (1) RFC K.K., a Japan based company; (2) Black Swan Data Limited, a United Kingdom based company; and (3) Arrow Cars SL, a company based in Spain. In addition, we entered into another contract on December 12, 2011 with Voz Mobile Cloud Ltd, a U.S. corporation, and we concluded our work on that contract on December 31, 2011.

RFC K.K. has been in business for a little over three years and they are in the online race simulation business. RFC K.K. has engaged us to assist them in their expansion into the Middle Eastern and Asian markets. We have arranged meetings between RFC K.K. and a few high profile, potential Dubai based partners/investors. As of this time, RFC K.K. has not entered into any agreements with these potential Dubai partners/investors, but has entered into preliminary, non-binding verbal agreements with the Shanghai local government and Ferrari to set up a Race Fight Club in Shanghai, Peoples Republic of China.

We entered into our contract with RFC K.K. on October 19, 2011. We have contracted to provide the following services to RFC K.K.:

A “target business” would be a company having a business plan that is compatible with RFC K.K.’s business because it has a similar business to RFC K.K. and have net assets, net profits and projected growth that would be suitable for RFC K.K. and that, if combined with RFC K.K., could help RFC K.K. grow its business and ultimately meet various requirements or standards for having RFC K.K.’s shares listed on an exchange or quoted on a stock quotation medium. At this time, RFC K.K. has not decided on a particular exchange or identified any particular target business.

RFC K.K. has agreed to pay us a total of $240,000 over the initial 12 months of our contract. We have received $60,000 under this contract so far and have nine more payments due to us at $20,000 each. During months 13-24 of the contract, RFC K.K. will pay us $6,000 per month. In addition, we will receive a 10% equity stake in RFC K.K. in the event that we assist RFC K.K. in acquiring a “target business.”

Black Swan Data Limited is a United Kingdom based company (“Black Swan”) that has developed algorithm based artificial intelligence that audits and merges internal and external data feeds from various sources, such as sales and transactional data, web and mobile statistics, consumer services data, social network analysis and customer relationship management databases.

We entered into our contract with Black Swan Data Limited on July 28, 2011. We have contracted to provide the following services to Black Swan Data Limited:

A “target business” would be a company having a business plan that is compatible with Black Swan Data Limited’s business because it has a similar business to Black Swan Data Limited, and having net tangible assets, net profits and projected growth that would be suitable for Black Swan Data Limited and that, if combined with Black Swan Data Limited, could help Black Swan Data Limited grow its business and ultimately meet the various requirements or standards for having Black Swan Data Limited’s shares listed on an exchange or quoted on a stock quotation medium. At this time, Black Swan Data Limited has not decided on a particular exchange or target business.

Black Swan Data Limited has agreed to pay us $180,000, of which $40,000 has been paid. We will receive the balance of $140,000 over the next 12 months. In addition, we will receive a 10% equity stake in Black Swan Data Limited in the event we assist Black Swan Data Limited in acquiring a target business. Upon successful quotation of Black Swan Data Limited’s shares on a stock market, GEP will be appointed as a consultant to Black Swan Data Limited for a 24 month period at $7,500 per month to assist Black Swan Data Limited in obtaining a listing on NASDAQ in the United States or listing on an alternative, high profile American stock exchange (i.e., American Stock Exchange or New York Stock Exchange).

Arrow Cars SL is currently based in southern Spain and has been in business since 2008. Arrow Cars SL is a national rent a car business operating only in Spain. Arrow Cars SL has engaged us to consult with them and to design a three year strategy to expand their business model into other high density tourist areas of Spain, Portugal and southern France, with the objective of opening a similar business in the United States, primarily in Florida.

We entered into our contract with Arrow Cars SL on January 14, 2011. We have contracted to provide the following services to Arrow Cars SL:

A “target business” would be a company having a business plan that is compatible with Arrow Cars SL’s business because it has a business similar to Arrow Cars SL, and having net tangible assets, net profits and projected growth that would be suitable for Arrow Cars SL and that, if combined with Arrow Cars SL, could help Arrow Cars SL grow its business and to ultimately meet various requirements or standards for having Arrow Cars SL’s shares listed on an exchange or quoted on a stock quotation medium. At this time, Arrow Cars SL has not decided on a particular exchange or a target business.

Arrow Cars SL agreed to pay us an initial fee of $20,000 and then an additional aggregate fee of $115,000 over the subsequent twelve months. Arrow Cars has paid us $135,000 through December 31, 2012. In addition, we will receive a 10% equity stake in Arrow Cars SL in the event we assist Arrow Cars SL in acquiring a target business.

On December 12, 2011, we entered into a contract with Voz Mobile Cloud Ltd, a “voice to mail” technology company based in the U.S. We consulted with Voz Mobile Cloud Ltd on corporate restructuring, and we concluded our work on that contract on December 31, 2011. As compensation, we received 2,000,000 shares of Voz Mobile Cloud Ltd common stock, which we valued at $100,000 in the fourth quarter of 2011.

During 2011, the Company had revenues totaling $288,041, of which $188,041 was comprised entirely of cash received from these three clients: Arrow Cars SL, Black Swan Data Limited and RFC KK. We also received 2,000,000 shares of a private company called Voz Mobile Cloud Ltd, valued at $100,000.

In 2011, our total operating expenses amounted to $337,991:

In 2011, we paid a total of $10,000 to Mr. Patrick Dolan, a resident of London, United Kingdom, as a commission for introducing us to RFC K.K.

COMMISSION EXPENSES:

COMMISSIONS PAID TO INTRODUCERS

In 2011, the Company incurred other “non-recurring expenses” amounting to $1,632,160:

In 2011, the net loss was $(1,688,102) and the unrealized gain on the “available for sale marketable securities” owned by the Company amounted to $448,924; hence, the comprehensive loss amounted to ($1,239,178) for 2011.

The Company recorded interest income amounting to $690, paid $500 of interest and also recorded an exchange rate loss of $4,197.

Based on 28,735,897 weighted average shares outstanding for the year ended December 31 2011, the loss per share was $(0.06).

NEW BUSINESS TRANSACTED IN 2012

At the beginning of 2012, we already had contracts with four companies: (1) RFC K.K., a Japan based company; (2) Black Swan Data Limited, a United Kingdom based company; (3) Arrow Cars SL, (now called Arrow Cars International Inc.), a company based in Spain; and (4) Voz Mobile Cloud Ltd., a U.S. corporation.

RFC K.K. has been in business for a little over three years and they are in the online race simulation business. RFC K.K. has engaged us to assist them in their expansion into the Middle Eastern and Asian markets. We have arranged meetings between RFC K.K. and a few high profile, potential Dubai based partners/investors.

As of this time, RFC K.K. has not entered into any agreements with these potential Dubai partners/investors, but has entered into preliminary, non-binding verbal agreements with the Shanghai local government and Ferrari to set up a Race Fight Club in Shanghai, Peoples Republic of China.

We entered into our contract with RFC K.K. on October 19, 2011. We have contracted to provide the following services to RFC K.K.:

A “target business” would be a company having a business plan that is compatible with RFC K.K.’s business because it has a similar business to RFC K.K and have net assets, net profits and projected growth that would be suitable for RFC K.K. and that, if combined with RFC K.K., could help RFC K.K. grow its business and ultimately meet various requirements or standards for having RFC K.K.’s shares listed on an exchange or quoted on a stock quotation medium. At this time, RFC K.K. has not decided on a particular exchange or identified any particular target business.

RFC K.K. has agreed to pay us a total of $240,000 over the initial 12 months of our contract. We have received $60,000 under this contract so far and have nine more payments due to us at $20,000 each. During months 13-24 of the contract, RFC K.K. will pay us $6,000 per month. In addition, we will receive a 10% equity stake in RFC K.K. in the event that we assist RFC K.K. in acquiring a “target business.”

Black Swan Data Limited is a United Kingdom based company (“Black Swan”) that has developed algorithm based artificial intelligence that audits and merges internal and external data feeds from various sources, such as sales and transactional data, web and mobile statistics, consumer services data, social network analysis and customer relationship management databases.

We entered into our contract with Black Swan Data Limited on July 28, 2011. We have contracted to provide the following services to Black Swan Data Limited:

A “target business” would be a company having a business plan that is compatible with Black Swan Data Limited’s business because it has a similar business to Black Swan Data Limited, and having net tangible assets, net profits and projected growth that would be suitable for Black Swan Data Limited and that, if combined with Black Swan Data Limited, could help Black Swan Data Limited grow its business and ultimately meet the various requirements or standards for having Black Swan Data Limited’s shares listed on an exchange or quoted on a stock quotation medium. At this time, Black Swan Data Limited has not decided on a particular exchange or target business.

Black Swan Data Limited has agreed to pay us $180,000, of which $40,000 has been paid. We will receive the balance of $140,000 over the next 12 months. In addition, we will receive a 10% equity stake in Black Swan Data Limited in the event we assist Black Swan Data Limited in acquiring a target business. Upon successful quotation of Black Swan Data Limited’s shares on a stock market, GEP will be appointed as a consultant to Black Swan Data Limited for a 24 month period at $7,500 per month to assist Black Swan Data Limited in obtaining a listing on NASDAQ in the United States or listing on an alternative, high profile American stock exchange (i.e., American Stock Exchange or New York Stock Exchange).

Arrow Cars SL is currently based in southern Spain and has been in business since 2008. Arrow Cars SL is a national rent a car business operating only in Spain. Arrow Cars SL has engaged us to consult with them and to design a three year strategy to expand their business model into other high density tourist areas of Spain, Portugal and southern France, with the objective of opening a similar business in the United States, primarily in Florida.

We entered into our contract with Arrow Cars S.L. on January 14, 2011. We have contracted to provide the following services to Arrow Cars S.L.:

A “target business” would be a company having a business plan that is compatible with Arrow Cars SL’s business because it has a business similar to Arrow Cars SL, and having net tangible assets, net profits and projected growth that would be suitable for Arrow Cars SL and that, if combined with Arrow Cars SL, could help Arrow Cars SL grow its business and to ultimately meet various requirements or standards for having Arrow Cars SL’s shares listed on an exchange or quoted on a stock quotation medium.

On April 1, 2012, Arrow Cars SL was acquired by Arrow Cars International, Inc. (a Nevada corporation) by way of a reverse recapitalization. Arrow Cars International, Inc. has since decided to have its shares quoted on the NASDAQ OTCBB.

Arrow Cars agreed to pay us $135,000, which amount has been paid in full. In addition, we will receive a 10% equity stake in Arrow Cars International Inc. when our contract with it has been fully carried out.

On December 12, 2011, we entered into a contract with Voz Mobile Cloud Ltd., a “voice to mail” technology company based in the U.S. We consulted with Voz Mobile Cloud Ltd. on corporate restructuring, and we concluded our initial work on that contract on December 31, 2011. As compensation, we received 2,000,000 shares of Voz Mobile Cloud Ltd. common stock, which we valued at $100,000 in the fourth quarter of 2011.

During 2012, Voz Mobile Cloud retained our services again to carry out the following:

As compensation, we received 1,000,000 shares of Voz Mobile Cloud Ltd common stock, which we valued at $60,000 in the first quarter of 2012. Voz Mobile Cloud Ltd. has since decided to have its shares quoted on the NASDAQ OTCBB.

On March 31, 2011, we entered into a contract with Direct Security Integration Inc. and its U.K. subsidiaries (“Direct CCTV”), which are engaged in the business of installing closed circuit television and other security equipment. Direct CCTV is based in the U.S. and also in the United Kingdom.

We have contracted to provide Direct CCTV the following services:

Direct CCTV agreed to pay us $240,000 and to date we have been paid in full. In addition, we have agreed that we will receive a 10% equity stake in Direct CCTV upon Direct CCTV’s shares being quoted on the NASDAQ OTCBB.

On May 25, 2012, we entered into a contract with Regis Card Limited (“Regis”), a “Pre-Paid” credit card company based in the U.S. and in the United Kingdom.

We have contracted to provide Regis the following services:

Regis agreed to pay us $250,000 and to date we have been paid a total of $150,000. In addition, we have agreed that we will receive a 10% equity stake in the company upon listing Regis on the Dubai NASDAQ.

On December 5, 2012, we entered into a contract with Scorpion Performance Inc. (Scorpion”), a U.S. corporation based in Ocala, Florida. Scorpion manufactures precision metal performance engine components and also precision medical instruments.

We have contracted to provide Scorpion the following services:

Scorpion agreed to pay us $350,000 and to date we have been paid in full. In addition, we have agreed that we will receive a 6% equity stake in Scorpion upon its initial public offering on the Dubai NASDAQ.

In December, 2012, we were engaged by two more companies:

During 2012, we had revenues totaling $609,000, of which $549,000 was comprised entirely of cash received from our current clients. We also received 1,000,000 shares of Voz Mobile Cloud Ltd, valued at $60,000.

In 2012, our total operating expenses amounted to $880,637.

In 2012, the Company incurred other “non-recurring expenses” amounting to $2,583,919:

Based on 29,149,498 weighted average shares outstanding for the year ended December 31 2012, the loss per share was $(0.10).

OUR BUSINESS IN 2013

We have three distinct divisions (none of which will be treated as a segment for financial reporting purposes):

1. Introducers Network. We have developed and continue to develop a number of finance professionals, accountants, attorneys and financial advisers who will introduce us to their clients. We will review businesses introduced to us through these introducers and we will compensate them on sum “to be determined” based on the event that we are engaged by to assist the companies they introduce to us.

2. Project Review. Our management team and advisors will carefully review and vet each business plan and opportunity submitted to us. Our management team and advisors will determine which services we can offer these clients and assess the potential propositions to best assist our clients in achieving their goals.

3. Placing. Working with our business associates in Dubai, Europe and the United States, we will use our best efforts to assist our clients with listings on stock exchanges in these cities in order to maximize their exposure to capital markets and to access funding via debt and equity offerings.

FUTURE PLANS

We currently have nine clients under contract:

MILESTONES THROUGH MARCH 2014

Our specific plan of operations and milestones through March 2014 are as follows:

DURING THE SECOND QUARTER OF 2013, WE INTEND TO:

DEVELOP THE INTRODUCER NETWORK FURTHER AND IN HOPES OF ATTRACTING NEW INTEREST FOR OUR SERVICES.

We currently are relying on introductions to potential clients by the following firms in Asia and Europe:

· Merchant House Group (London), a United Kingdom registered investment house;

· TAP 09 Gmbh, an Austrian management consultancy firm based in Wien, Vienna;

· Mashreq Bank, an Asian retail bank based in Dubai, U.A.E.; and

· ABN Amro Private Bank based in Amsterdam, the Netherlands

We do not have any verbal or written agreements with the four firms identified above, as our relationship with each of them has been developed over the past year or so.

We intend to develop relationships with a further five “introducers” to potential new business for the Company before the end of June 2013. The estimated additional expense of $20,000 to achieve this is mainly travel expenses that will be funded by income receivable from clients currently under contract.

DUBAI EXPANSION

We will establish a firm presence in Dubai, UAE where we are attracting clients, relationships and awareness. The Dubai operation will be a branch office of the company allowing us a license to trade in the area. With the branch office formed we will recruit three members of staff in Dubai.

The expected additional costs for the branch office, the license and the staff is estimated to be $12,000 per month to be funded by additional consultancy fees levied to the client.

We have recently completed an agreement with an International consultancy firm, Adam Holdings, to offer our services to their clients; we will explore this relationship further with a focus on seminars and circulars exposing our services to their clients in an effective manner.

CREATE A MORE EFFICIENT SYSTEM FOR REVIEWING PROSPECTIVE BUSINESSES.

We will concentrate our efforts on the quality of the company that is introduced to us. We will start off by sending the client a standard due diligence list and request that they complete the list and send us the support for review. We will then follow-up the due diligence with a “site visit” in order to properly understand our client’s business model and more importantly meet the principals in person.

We will create a deeper Due Diligence program allowing us to dig deep on any prospective client prior to engagement thus protecting the company from any future problems, one of the new staff members will be responsible for the due diligence activities and creating a report for our file on their findings.

DURING THE THIRD QUARTER OF 2013, WE INTEND TO:

EXPAND OUR CONSULTANCY TO INCLUDE MORE MERGER AND ACQUISITION ACTIVITY.

We intend to form relationships with merger and acquisition specialists during 2013 which will hopefully enable us to:

The only additional cost for this activity will be a very small administrative burden for telephone calls and communications to be funded out of operational income, mainly income receivable from clients currently under contract.

DEVELOP IN HOUSE IT DEPARTMENT

Commencing initially with one member we will start to develop a proprietary program allowing us to easily monitor a client’s development status and work in progress. We will also use this tool to manage our pipeline of clients and therefore it will become vital in our cash flow forecasting. Additional anticipated cost is $3,000 per month.

DUAL LISTING DUBAI

We have already entered talks with some of the major investment banks such as Deutsche Bank Dubai and the Dubai NASDAQ in order to effect a dual listing in Dubai allowing us a more prominent position in the market place and an ability to raise capital for acquisition should we need to from the retail and institutional community in the UAE. We intend to become one of the first companies to dual list on Dubai NASDAQ; our plan is to carry out a public relations campaign alongside the dual listing process with the public relations firm we have selected with a view to prepare a campaign that will have a maximum effect.

DURING THE FOURTH QUARTER OF 2013, WE INTEND TO:

EXPAND OUR NETWORK OF CONTACTS WITHIN THE INVESTMENT COMMUNITY IN DUBAI

Our network of investment companies in Dubai is currently small; however, we intend to substantially expand our Dubai network in order to enable us to make introductions on a more institutional level. We intend to develop our network to at least twelve Investment Institutions who may have interests in minority shareholding in companies from outside of the Middle East Region. We anticipate a small administrative cost to be no more than $10,000 for such development to be funded from operational income, mainly income receivable from clients currently under contract.

At present we are being received with open arms by the Dubai and Middle Eastern financial community; hence we have plans to host various hospitality events for our current clients, our key contacts and upper management of the company. The anticipated additional cost will be $15,000.

EXPAND OUR RANGE OF BUSINESS AND CONTACTS

We intend to take our consultancy service outside of the Middle East and Europe into Asia and Sri Lanka. We will expand on a 'Commission Only' basis for the individuals or companies who take on our service to offer to their clients. Accountants, lawyers and finance professionals are the target market for overlaying our service into their existing client banks in return for a percentage of fees received. We also intend to add at least one new member to our administration team within the fourth quarter of 2013. We anticipate the cost to be approximately $3,000 per month funded from any new client being attracted as a result of the expansion.

It is our intention to create a US subsidiary of our Dubai based Company, Global Equity Partners Plc. This subsidiary will most likely be based in Florida; our group´s CFO will be relocated there and given the task to setup, manage and properly staff this office.

ROAD SHOWS

We will commence the first of two “Road shows”, both held in Dubai with the support of the Dubai NASDAQ for companies already listed in Sri Lanka who could be seeking a dual listing in Dubai to provide liquidity and more capital raising options. We have commenced initial conversations with a brokerage house in Sri Lanka to look at their clients they have that would be suitable for the Dubai market. We will initially invite management of selected companies to Dubai for a two day event in conjunction with Nasdaq Dubai and a number of leading Investment Institutions, the anticipated cost of this is to be met by the prospective clients themselves and sponsorship from the institutions and Nasdaq Dubai.

DURING THE FIRST QUARTER OF 2014, WE INTEND TO:

ROAD SHOWS

We will organize a second “Road show” targeted at Chinese companies in conjunction with a major broker dealer, based on the West Coast of the USA, who deals exclusively with Chinese companies; we will follow the same procedure and costing as the Sri Lanka “Road shows”.

FURTHER EXPAND OUR RANGE OF BUSINESS AND CONTACTS

The foundation for this development will be done in fourth quarter of 2013. Within the first quarter of 2014, we intend to cement in the relationships created in prior quarters and appoint a new member of staff, based in each region to manage and nurture the relationships created. The target markets for attracting clients are: Thailand, Sri Lanka, China, Hong Kong and Singapore

To service the clients generated from these markets we will spend time creating a network of service companies who we can utilize to assist us on a local basis. We will explore the possibilities of dual listings for our clients in Singapore to allow us a local market for any Asian clients we will attract and giving the company a firm foothold in the Asian territory.

EMPLOYEES; IDENTIFICATION OF A SIGNIFICANT EMPLOYEE

We currently have two employees: Peter J. Smith, and Enzo Taddei. Peter J. Smith, our President, and Enzo Taddei, our Chief Financial Officer, each has an employment agreement with the Company. Peter J. Smith and Enzo Taddei are full time employees. We intend to hire additional employees when they are needed.

COMPETITION

We face intense competition in every aspect of our business, and particularly from other firms which offer management, compliance and other consulting services to private and public companies. We would prefer to accept a relatively low cash component as our fee for management consulting and regulatory compliance services and take a greater portion of our fee in the form of restricted shares of our private clients’ common stock. We also face competition from a large number of consulting firms, investment banks, venture capitalists, merchant banks, financial advisors and other management consulting and regulatory compliance services firms similar to ours. Many of our competitors have greater financial and management resources and some have greater market recognition than we do.

REGULATORY REQUIREMENTS

We are not required to obtain any special licenses, nor meet any special regulatory requirements before establishing our business, other than a simple business license. If new government regulations, laws, or licensing requirements are passed that would restrict or eliminate delivery of any of our intended products, then our business may suffer. Presently, to the best of our knowledge, no such regulations, laws, or licensing requirements exist or are likely to be implemented in the near future that would reasonably be expected to have a material impact on or sales, revenues, or income from our business operations.

We are not a broker-dealer. We do not believe we are an investment adviser or an investment company. We are not a hedge fund or a mutual fund or any similar type of fund. We are primarily an operating business that offers and performs corporate consultancy services.

EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS

The Company’s common stock is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“1934 Act”). As a result of such registration, the Company is subject to Regulation 14A of the “1934 Act,” which regulates proxy solicitations. Section 14(a) requires all companies with securities registered pursuant to Section 12(g) thereof to comply with the rules and regulations of the Commission regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to stockholders of the Company at a special or annual meeting thereof or pursuant to a written consent will require the Company to provide its stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the Commission at least 10 days prior to the date that definitive copies of this information are forwarded to stockholders.

The Company is also required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Commission on a regular basis, and will be required to disclose certain events in a timely manner, (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K.

WE ARE SUBJECT TO THE REQUIREMENTS OF SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002. IF WE ARE UNABLE TO TIMELY COMPLY WITH SECTION 404 OR IF THE COSTS RELATED TO COMPLIANCE ARE SIGNIFICANT, OUR PROFITABILITY, STOCK PRICE AND RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD BE MATERIALLY ADVERSELY AFFECTED.

The Company is required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which requires that we document and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures for the 2013 fiscal year. We are currently evaluating our existing controls against the standards adopted by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). During the course of our ongoing evaluation and integration of the internal controls of our business, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review (see Item 9A, below for a discussion of our internal controls and procedures).

We believe that the out-of-pocket costs, the diversion of management’s attention from running the day-to-day operations and operational changes caused by the need to comply with the requirement of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations and the future filings of our Company could be materially adversely affected.

DEPENDENCE ON KEY EMPLOYEES

The Company is heavily dependent on the ability of our President, Peter Smith, and our Chief Financial Officer, Enzo Taddei. The loss of the services of Mr. Smith or Mr. Taddei would seriously undermine our ability to carry out our business plan.

In the event of future growth in administration, marketing, manufacturing and customer support functions, the Company may have to increase the depth and experience of its management team by adding new members. The Company’s success will depend to a large degree upon the active participation of its key officers and employees, as well as the continued service of its key management personnel and its ability to identify, hire, and retain additional qualified personnel. There can be no assurance that the Company will be able to recruit such qualified personnel to enable it to conduct its proposed business successfully.

REPORTS TO SECURITY HOLDERS

The public may view and obtain copies of the Company’s reports, as filed with the Securities and Exchange Commission, at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Information on the Public Reference Room is available by calling the SEC at 1-800-SEC-0330. Additionally, copies of the Company’s reports are available and can be accessed and downloaded via the internet on the SEC’s internet site at http://www.sec.gov.

ITEM 1A. RISK FACTORS.

An investment in our Common Stock involves a high degree of risk. Prospective investors should carefully consider the following risk factors and the other information in this Annual Report and in our other filings with the SEC before investing in our Common Stock. Our business and results of operations could be seriously harmed by any of the following risks. You should carefully consider the risks described below, the other information in this Annual Report and the documents incorporated by reference herein when evaluating our Company and our business. If any of the following risks actually occurs, our business could be harmed. In such case, the trading price of our Common Stock could decline and investors could lose all or a part of the money paid for our Common Stock.

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF THE FOLLOWING RISKS ACTUALLY MATERIALIZES, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WOULD SUFFER AND OUR SHAREHOLDERS COULD LOSE ALL OR PART OF THEIR INVESTMENT IN OUR SHARES.

RISKS ASSOCIATED WITH OUR COMPANY

WHILE WE HAVE A LITTLE OVER TWO YEARS OF OPERATING HISTORY AND HAVE ACCUMULATED PROFITS, THERE IS NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE REVENUES. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE WILL CEASE OPERATIONS AND YOU WILL LOSE YOUR INVESTMENT.

We were incorporated in Nevada on October 1, 2010, and our wholly-owned subsidiary, GE Partners Plc., was formed on September 2, 2009. For the fiscal year ended December 31, 2012, we incurred a net loss from operations of $2,777,240 and which included a realized loss on impairment of marketable securities of $975,000. If we cannot generate sufficient revenues to operate profitably, we will cease operations and you will lose your investment in our Company. Our ability to achieve and maintain profitability and positive cash flow is dependent, among other things, upon: