ARGENTUM 47, INC. - Quarter Report: 2013 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2013

or

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

FOR THE TRANSITION FROM ______ TO ______.

Commission File Number: 000-54557

GLOBAL EQUITY INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number: +971 (7) 204 7593

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its 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 and post such files). Yes [X] No [  ]

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

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

Yes [  ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [  ] No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of May 8, 2013, there were 30,644,367 outstanding shares of the Registrant’s Common Stock, $.001 par value.

INDEX

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Global Equity International, Inc. and Subsidiary

Consolidated Financial Statements

March 31, 2013

(Unaudited)

Global Equity International, Inc. and Subsidiary

Consolidated Financial Statements

March 31, 2013

(Unaudited)

CONTENTS

Global Equity International, Inc. and Subsidiary

Consolidated Balance Sheets

(unaudited)

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

Global Equity International, Inc. and Subsidiary

Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

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

Global Equity International Inc. And Subsidiary

Consolidated Statements of Cash Flows

(unaudited)

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

Global Equity International, Inc. and Subsidiary

Consolidated Statement of Stockholders’ Equity (Deficit)

(unaudited)

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

Global Equity International, Inc. and Subsidiary

Consolidated Financial Statements

March 31, 2013

(Unaudited)

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.

The unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the periods ended December 31, 2012 and 2011. The interim results for the period ended March 31, 2013 are not necessarily indicative of results for the full fiscal year.

Note 2 – 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 3 – Going Concern

As reflected in the accompanying financial statements, the Company had a loss of $360,530 for the quarter ended March 31, 2013. Net cash used in operations of $(289) for the quarter ended March 31, 2013; and a working capital deficit of $(293,069) and stockholders’ deficit of $928,411 as of March 31, 2013. 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.

Global Equity International, Inc. and Subsidiary

Consolidated Financial Statements

March 31, 2013

(Unaudited)

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.

Note 4 – 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 quarter ended March 31, 2013 and at the year ended December 31, 2012 respectively; the Company had no cash equivalents.

Global Equity International, Inc. and Subsidiary

Consolidated Financial Statements

March 31, 2013

(Unaudited)

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. At the quarter ended March 31, 2013, the Company had no bad debt. 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. The Company recorded unrealized loss on marketable securities of $0 and $465,000 during the quarters ended March 31, 2013 and March 31, 2012.

Cost Method Investment

At March 31, 2013, the Company has investment in securities of two different Companies, having a cost of$163,000 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 value was the services rendered and a further 9.86% of the common stock in another private company in which the best evidence of value was the services rendered.

There are no identifiable events or changes in circumstances that had a significant adverse effect on the 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 didn’t record any permanent impairments during the quarters ended March 31, 2013 and 2012.

Global Equity International, Inc. and Subsidiary

Consolidated Financial Statements

March 31, 2013

(Unaudited)

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.

Debt issue costs and debt discount

The Company may pay debt issue costs, and record debt discounts in connection with raising funds 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 the consolidated financial statement.

During the quarters ended March 31, 2013 and March 31, 2012 the Company has expensed $329 and $0 respectively for depreciation.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

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 quarters ended March 31, 2013 and March 31, 2012 the Company received marketable securities and cash as consideration for services rendered.

At March 31, 2013 and December 31, 2012, the Company had the following concentrations of accounts receivables with customers:

For the three months ended March 31, 2013 and 2012, the Company had the following concentrations of revenues with customers:

The Company received from customer “C” 56.20% of its revenue in cash and 43.80% in Non-marketable securities.

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

During the three months ended March 31, 2013,the Company received $3,000 in equity securities in a private company in exchange for services performed. The valuation was based on 3,000,000 shares at $0.001 per share.

Deferred Revenue

Deferred revenue represents fees that have been received by the Company for requested services that have not been substantially completed. During the three months ended March 31, 2013 the Company received $120,000 from a client for service to be rendered during the second quarter of 2013.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

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.

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.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

Fair Value of Financial Assets and Liabilities

The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Loans to Third Parties

On March 22, 2013 the Company granted a loan to Dreamscapes Properties International Inc. The principal amount lent was $6,000, the agreed interest rate was 5% per annum and finally, the loan would have to be repaid no later than one year from the date that the loan was granted.

Recent Accounting Pronouncements

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

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 quarter ended March 31, 2013 and the year ended December 31, 2012 respectively:

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

The Company has accrued salary to the officers and directors of the Company based on the terms of the employment agreements entered into with each officer. As at December 31, 2012, $209,475 was due to the Chief Executive Officer and $115,000 due to the Chief Financial Officer. During the current quarter ended March 31, 2013, the Company converted this amount to Convertible Loan Payable. This amount will be advanced for a term of two years and is repayable on demand and will accrue interest at 10% on the loan period. The agreement also gives an option to the officers of the Company to convert all or part of the debt that the Company maintains with them into restricted shares at $1.20 per share. The balance outstanding in the Loan Payable account as at March 31, 2013 is $324,475. The Company assessed if there is a beneficial conversion feature cost associated with this transaction, none was noted.

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. (Please refer to note C Stock Options)

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. During the current quarter ended March 31, 2013 the Company repaid the balance of $10,000.

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. The balance outstanding for the interest payment of $500 is outstanding as at March 31, 2013.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

The following table represents the accounts payable to related parties as of March 31, 2013 and December 31, 2012, respectively:

As discussed in note no. 5(B), the Company converted $324,475 of related party accounts payable into a convertible loan payable during the quarter ended March 31, 2013.

Note 6 – 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:

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 employees (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.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

Redeemable Preferred Stock

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

The Series “A”, convertible preferred stock is redeemable on December 1, 2014 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 three months ended March 31, 2013, the Company issued the following shares:

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

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

The weighted average remaining life for all outstanding options at March 31, 2013 is 0.50 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:

On February 15, 2013, the Company entered into a Securities Purchase Agreement (“SPA”) with Candelara Holdings Limited, a company domiciled in the Chanel Islands (“Candelara”). The SPA covered the potential sale by the Company of up to $1,300,000 worth of our Common Stock.

Candelara had the right to purchase up to 916,667 shares of our Common Stock at a price of $.60 per share between the date of the SPA and April 30, 2013, which would have resulted in the Company receiving $550,000 in proceeds from such purchase. In the event that Candelara purchased the entire 916,667 shares of Common Stock by April 30, 2013, Candelara would have had an option (“Option”) to purchase an additional $750,000 worth of our Common Stock at a per share purchase price 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.

Global Equity International Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

(Unaudited)

On April 26, 2013, Candelara unilaterally decided to not comply with the SPA and notified the Company that it would not buy any shares of our Common Stock because our Common Stock was highly volatile.

The Company has issued Candelara with 16,667 common restricted shares on May 3, 2013 for the $10,000 received.

On October 8, 2012 the Company entered into a commission agreement with a company called Tempest Holdings Limited where Tempest would receive a finder’s fee for the introduction of new business and also a retainer fee of 10,000 common restricted shares per month for twelve months commencing January 1, 2013. The Company has valued the 30,000 shares due to Tempest using fair market value at $27,000.

Note 7 – Subsequent Events

On April 5, 2013,the Company issued 150,000 to Tricon Holdings, Inc. for the services to be rendered to the Company over the period of 6 months valued at $0.25 per share.

On April 5, 2013, the Company issued 500,000 restricted common shares to Caro Capital LLC, respectively for services rendered to the Company. The Company will book the amount as Consulting Expense.

On April 15, 2013 the Company issued 25,000 restricted common shares to Phillip E. Brooks for services rendered to the Company ($0.55 per share). In addition to the 25,000 shares the Company has paid $2,500 as advance for the monthly services.

On April 23, 2013, the Company secured a nine month convertible loan for $42,500 with an 8% interest rate due on January 29, 2014. The terms of the conversion will be a 42% discount to market based on an average price calculated on the 10 trading days prior to the conversion date. If the Company opts to pay the loan back on or before the 9 month period ends hence not converting the debt into equity; borrower shall make payment to the holder of an amount in cash (the “Optional Prepayment Amount”) equal to 130%,of total amount due inclusive of principal and interest accrued.

On April 24, 2013, the Company issued 150,000 shares to Robert Sullivan as a compensation for consulting agreement. In addition the Company has paid $10,000 upon execution of the contract and $20,000 payable within 60 days of the agreement date. The agreement is for a total period of nine months from the date of the agreement.

On April 26, 2013, Candelara Holdings Limited unilaterally decided to not comply with the Special Purchase Agreement and notified the Company that it would not buy any shares of our Common Stock because our Common Stock was highly volatile. On May 3, 2013,the Company issued Candelara 16,667 common restricted shares for the $10,000 received during the quarter ended March 31, 2013.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

For the three months ended March 31, 2013 and March 31, 2012:

The Company had revenues amounting to $6,849 and $107,500 for the three months ended March 31, 2013 and March 31, 2012, respectively. The Company recorded deferred revenue amounting to $120,000 and $0 as of March 31, 2013 and March 31, 2012.

The general and administrative costs were $367,050 and $246,948 for the three months ended March 31, 2013 and March 31, 2012, respectively. The increase was mainly due to commissions paid to third parties that had introduced new business to the Company.

G&A analysis for the period ended March 31, 2013 and March 31, 2012:

The Company accounted for $329 for depreciation for the three months ended March 31, 2013. No depreciation was accounted for in the same period of 2012 as the Company had no tangible assets.

The net loss for the three months ended March 31, 2013 and March 31, 2012 was $360,530 and $(139,448), respectively. The comprehensives losses amounted to $360,530 and $604,448 for the three months ended March 31, 2013 and March 31, 2012. The comprehensive loss for March 31, 2012 was much higher due to the fact that the Company recorded $(465,000) of unrealized losses on available for sale marketable securities.

At March 31, 2013, the Company had 29,802,700 shares issued and outstanding, the weighted average was 29,692,422 shares hence the loss per share was $(0.01). At March 31, 2012, the Company had 28,920,700 shares issued and outstanding, the weighted average was 28,814,546 shares hence the loss per share was $(0.00).

LIQUIDITY AND CAPITAL RESERVES

As of March 31, 2013, the Company had $3,882 in cash and net cash used in operations of $(289). For the three months ended March 31, 2013, the Company had a net and comprehensive loss of $360,530. The working capital deficit amounted to $293,069. Finally, the Company had stockholders’ deficit of $928,411 as of March 31, 2013.

On April 23, 2013, the Company secured a nine month convertible loan for $42,500 with an 8% interest rate due on January 29, 2014. The terms of the conversion will be a 42% discount to market based on an average price calculated on the 10 trading days prior to the conversion date. If the Company opts to pay the loan back on or before the 9 month period ends hence not converting the debt into equity; borrower shall make payment to the holder of an amount in cash (the “Optional Prepayment Amount”) equal to 130%,of total amount due inclusive of principal and interest accrued.

It is the Company’s intention to seek additional debt financing, which we plan to use as additional working capital to implement our marketing program to increase awareness of our business model and also to expand our operations via the acquisition of companies that are in a similar space and industry as ours, although we have not identified any companies that we would consider acquiring.

However, we do not have any verbal or written agreements with anyone to provide us with debt financing. Any short fall in our projected operating revenues will be covered by:

1) The cash fees that we expect to receive during the next 12 months from the clients that we currently have under contract.

2) Reducing our expenditures; and

3) Receiving loans from one or more of our officers even though at the present time, we do not have verbal or written commitments from any of our officers to lend us money.

Depending upon market conditions, the Company may not be successful in raising sufficient additional capital for it to achieve its business objectives.

In such event, the business, prospects, financial condition, and results of operations could be materially adversely affected.

FUTURE PLANS

We currently have following clients under contract, Arrow Cars International Inc., Black Swan Data Limited, RFC KK., Voz Mobile Cloud Limited, Direct Security Integration Inc., Regis Cards Limited, Scorpion Performance Inc., Universal Energy Solutions BV and Innoveas AG.

We anticipate signing up an additional ten clients by the end of 2013. However, we cannot guarantee that we will sign up any new clients in 2013 or receive any revenues from new clients in 2013.

Our specific plan of operations and milestones for April 2013 to March 2014 are as follows:

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.

1) Administration – To assist in the day to day requirements of the business.

2) General Manager Dubai – To assist in the development of new relationships and support existing relationship as well as client liaison duties.

3) Back Office support – Generic support for all elements of the company and due diligence.

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:

1) Find potential merger and acquisition candidates.

2) Introduce our clients to brokers and investment bankers.

3) Introduce our clients to the appropriate professionals (attorneys and accountants) to assist them in a public offering or exchange listing.

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