GLOBAL TECH INDUSTRIES GROUP, INC. - Quarter Report: 2016 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For Quarterly Period Ended

September 30, 2016

 

or

 

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

 

For the Transition period from _______________ to ______________

 

Commission File Number:000-10210

 

GLOBAL TECH INDUSTRIES GROUP, INC.

(Exact name of registrant as specified in its charter)

 

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

 

511 Sixth Avenue, suite 800 New York, NY 10011
(Address of principal executive offices) (Zip Code)
(212) 204 7926
Registrant's telephone number, including area code
(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One).

 

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer (Do not check if a smaller reporting company)	☐		Smaller reporting company	☒

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ NO ☒

 

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

 

As of September 15, 2016 the number of shares outstanding of the registrant’s class of common stock was 109,327,990.

 

 

TABLE OF CONTENTS

 

			Pages
PART I. FINANCIAL INFORMATION			3
Item 1.	Financial Statements		3
	Unaudited Condensed Consolidated Balance Sheets at September 30, 2016 and December 31, 2015		3
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine months ended September 30, 2016 and 2015		4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2016 and 2015		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		18
Item 4.	Controls and Procedures		18
PART II. OTHER INFORMATION			19
Item 1.	Legal Proceedings		19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3.	Defaults Upon Senior Securities		19
Item 5.	Other Information		20
Item 6.	Exhibits		20
SIGNATURES			22

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Balance Sheets

ASSETS
	September 30,	December 31,
	2016	2015
CURRENT ASSETS
Cash and cash equivalents	$44,276	108
Accounts receivable	-	-
Prepaid expenses	73,500	-
Marketable securities	128,878	106,144
Total Current Assets	246,655	106,252
PROPERTY AND EQUIPMENT (NET)	2,008	2,995
TOTAL ASSETS	$248,663	$109,247
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$806,161	928,289
Accrued interest payable	374,095	309,249
Private Placement Deposits	-	-
Asset retirement obligation	101,250	101,250
Due to officers and directors	43,481	164,105
Notes Payable	21,800	-
Notes payable- in default	293,240	270,840
Current portion of long-term debt-related party	3,000	741,015
Current portion of long-term debt	-	807,382
Total Current Liabilities	1,643,027	3,322,130
LONG-TERM LIABILITIES
Notes payable - related party (less current portion)	741,015	-
Notes payable (less current portion)	763,181	-
Total Long-Term Liabilities	1,504,196	-
Total Liabilities	3,147,223	3,322,130
STOCKHOLDERS' (DEFICIT)
Preferred Stock, par value $.001, 50,000 authorized, 1,000 and 0 issued	1	-
Common stock, par value $0.001 per share,
350,000,000 shares authorized; 122,327,990 and 92,250,890
issued, 109,327,990 and 84,250,890 outstanding, respectively	122,327	92,251
Additional paid-in-capital	157,491,779	149,088,549
Unearned ESOP shares	(2,176,000)	(2,176,000)
Accumulated other comprehensive income	101,742	77,593
Retained (Deficit)	(158,438,408)	(150,295,275)
Total Stockholders' (Deficit)	(2,898,560)	(3,212,882)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)	$248,663	$109,247

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Consolidated Statements of Operations

	For the		For the
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2016	2015	2016	2015
REVENUES, net	-		-	1,126
COST OF SALES, net	-	-	377	8,990
GROSS PROFIT/(LOSS)	-	-	(377)	(7,864)
OPERATING EXPENSES
General and administrative	729,182	28,523	839,800	82,984
Compensation and professional fees	7,094,846	10,563	7,294,668	56,243
Depreciation	330	572	988	1,984
Total Operating Expenses	7,824,358	39,658	8,135,455	141,211
OPERATING LOSS	(7,824,358)	(39,658)	(8,135,832)	(149,075)
OTHER INCOME (EXPENSES)
Gain on debt forgiveness	-	-	-	-
Interest income & other income	2	-	303	-
Gain/(loss) on marketable securities	-	-	73,144	-
Interest expense	(26,612)	(26,590)	(80,748)	(78,469)
Total Other Income (ExpenseS)	(26,610)	(26,590)	(7,301)	(78,469)
LOSS BEFORE INCOME TAXES	(7,850,968)	(66,248)	(8,143,133)	(227,544)
INCOME TAX EXPENSE			-	-
NET LOSS	$(7,850,968)	$(66,248)	$(8,143,133)	$(227,544)
OTHER COMPREHENSIVE INCOME/(LOSS) net of taxes
Unrealized gain (loss) on held for
sale marketable securities	13,451	3,689	24,149	11,434
COMPREHENSIVE LOSS	$(7,837,517)	$(62,559)	$(8,118,984)	$(216,110)
BASIC AND DILUTED LOSS PER SHARE	$(0.08)	$(0.00)	$(0.09)	$(0.00)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING, BASIC AND DILUTED	104,284,353	84,250,890	91,041,945	84,250,890

 

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

 

 

	For the
	Nine Months Ended
	September 30,
	2016	2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$(8,143,133)	(227,544)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization	988	1,984
(Gain)/Loss on marketable securities	(73,144)	-
Imputed interest on loan	10,080	10,080
Shares issued for services	7,879,727
Change in operating assets and liabilities, net of acquisition:
(Increase) decrease in accounts receivables and prepaids	-	2,385
Increase (decrease) in accounts payable and accrued expenses	42,805	136,083
Net Cash Used in Operating Activities	(282,677)	(77,012)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from sale of marketable securities	75,884	-
Cash paid for marketable securities	(1,415)	(1,931)
Net Cash provided by (used in) Investing Activities	74,469	(1,931)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from share issuances	370,000
Cash received from notes payable	3,000	54,200
Cash paid to related party loans	(476,172)	(56,200)
Cash received from related party loans	355,548	79,362
Net Cash Provided by (Used in) Financing Activities	252,376	77,362
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	44,168	(1,581)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	108	1,689
CASH AND CASH EQUIVALENTS, END OF PERIOD	$44,276	$108
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$-	$-
Cash paid for income taxes	$-	$-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Unrealized gain on marketable securities	$24,149	$(11,434)

 

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

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2016

(Unaudited)

 

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by GLOBAL TECH INDUSTRIES GROUP, INC. (“the Company”) without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2016, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2015 audited financial statements. The results of operations for the period ended September 30, 2016 are not necessarily indicative of the operating results for the full year.

 

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

 

NOTE 2 - GOING CONCERN

 

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

 

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

 

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

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

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

 

Beneficial Conversion Feature of Debentures and Convertible Notes Payable

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

 

Recent Accounting Pronouncements

No accounting pronouncements were issued during the second quarter of 2016 that would have a material effect on the accounting policies of the Company when adopted.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2016

(Unaudited)

Oil and Gas Interests

The Company utilizes the full cost method of accounting for oil and gas activities. Under this method, subject to a limitation based on estimated value, all costs associated with property acquisition, exploration and development, including costs of unsuccessful exploration; are capitalized within a cost center. No gain or loss is recognized upon the sale or abandonment of undeveloped or producing oil and gas interests unless the sale represents a significant portion of oil and gas interests and the gain significantly alters the relationship between capitalized costs and proved oil and gas reserves of the cost center. Depreciation, depletion and amortization of oil and gas interests are computed on the units of production method based on proved reserves. Amortizable costs include estimates of future development costs of proved undeveloped reserves.

 

Capitalized costs of oil and gas interests may not exceed an amount equal to the present value, discounted at 10%, of the estimated future net cash flows from proved oil and gas reserves plus the cost, or estimated fair market value, if lower, of unproved interests. Should capitalized costs exceed this ceiling, an impairment is recognized. The present value of estimated future net cash flows is computed by applying average prices, in the preceding twelve months, of oil and gas to estimated future production of proved oil and gas reserves as of year-end, less estimated future expenditures to be incurred in developing and producing the proved reserves and assuming continuation of existing economic conditions.

 

The oil and gas interests were purchased with the issuance of 46,685,300 shares and were valued at market value at the grant date as $513,538. However at December 31, 2012, due to a mechanics lien and impairment of title to the assets, the Company impaired the recorded cost, leaving no value associated with the acquisition. The Company recorded an impairment on long lived assets in the amount of $513,538.

 

Asset Retirement Obligation

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

 

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

 

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

 

The asset retirement obligation is as follows:
	9/30/2016	12/31/2015
Previous Balance	$101,250	$101,250
Increases/(decreases) current period	-	-
Ending Balance	$101,250	$101,250

 

Investments at Cost

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

 

Investments are as follows:
Balance, December 31, 2015	$0
Realized gains and losses	0
Unrealized gains and losses	0
Balance, September 30, 2016	$0

 

Marketable Securities-Available for Sale

The Company purchased marketable securities during 2012, 2015 and 2016. The Company's marketable securities are classified as "available for sale". Accordingly, the Company originally recognizes the shares at the market value purchased. The shares are evaluated quarterly using the specific identification method. Any unrealized holding gains or losses are reported as Other Comprehensive Income and as a separate component of stockholder's equity. Realized gains and losses are included in earnings. Also other than temporary impairments are recorded as a loss on marketable securities in the statements of operations.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2016

(Unaudited)

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Marketable Securities-Available for Sale (Continued)

 

Marketable securities are as follows at September 30, 2016:

 

Balance at December 31, 2015:	$106,144
Change in market value at September 30, 2016	22,734
Balance at September 30, 2016:	$128,878

 

Fair Value of Financial Instruments

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

 

o

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

o

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

o

Level 3 inputs to the valuation methodology are unobservable and significant to the fair measurement.

 

The carrying amounts reported in the balance sheets for cash and cash equivalents, and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of September 30, 2016 and December 31, 2015.

 

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

 

The following table presents the Company’s Marketable securities and Notes Payable within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2016 and December 31, 2015:

 

	Level 1	Level 2	Level 3
Marketable Securities – 2016	128,878	-0-	-0-
Marketable Securities – 2015	106,144	-0-	-0-
Notes payable - 2016	-0-	-0-	1,822,236
Notes payable - 2015	-0-	-0-	1,819,236

 

The following table presents a Level 3 reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs as of September 30, 2016 and December 31, 2015:

 

	Notes payable
Balance, December 31, 2015	$1,819,236
Note issuances	3,000
Note payments	-0-
Balance, September 30, 2016	$1,822,236

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2016

(Unaudited)

 

Principles of Consolidation

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

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained with major financial institutions in the U S. Deposits held with these banks at times exceed $250,000 of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash and cash equivalents. There were no cash equivalents at September 30, 2016 and December 31, 2015.

 

Accounts Receivable/Allowances for Doubtful Accounts

The Company regularly assesses the collectability of its accounts receivable, and considers receivables with aging exceeding 120 days to be potentially uncollectible. Management will analyze the need for an allowance for doubtful accounts at that time. As of September 30, 2016 and December 31, 2015, there are no allowances recorded.

 

Stock Based Compensation

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

 

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

 

Basic and Diluted Loss per Share

The Company calculates earnings per share in accordance with ASC 260, “Computation of Earnings Per Share.” Basic loss per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period; only in periods in which such effect is dilutive. For 2016 and 2015, no common equivalent shares were excluded from the calculation and as of September 30, 2016, there are not stock equivalents existing. The ESOP shares issued during 2012 and 2011 have also been excluded from the calculation as they were issued but not outstanding.

 

	For the Nine months	For the Nine months
	Ended September 30,	Ended September 30,
	2016	2015
Income (Loss) (numerator)	$(8,143,133)	$(227,544)
Shares (denominator)	91,041,945+	84,250,890
Basic and diluted income (loss) per share	$(0.09)	$(0.00)

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2016

(Unaudited)

 

Revenue Recognition

Oil and Gas Revenues and Deferred Revenue

Revenue form sales of crude oil are recorded when deliveries have occurred and legal ownership of the commodity transfers to the customer. Title transfers for crude oil generally occur when a tanker lifting has occurred. Oil inventory in holding tanks at the period end are recorded as deferred revenue prior to tanker lifting.

 

Intangible Assets and Business Combinations

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

 

Oil & Gas Inventory

The Company accounts for the oil & gas extracted from the ground and held in holding tanks prior to pickup and sale as oil & gas inventory. It is computed using the measurement of barrels and is multiplied with the published oil purchase price from the customer that picks up and purchases our oil.

 

Concentrations of Credit Risk

During the quarter ended September 30, 2016, the Company had no oil revenues and no accounts receivable.

 

Income Taxes

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

 

The Company adopted ASC 740 at the beginning of fiscal year 2008. This interpretation requires recognition and measurement of uncertain tax positions using a “more-likely-than-not” approach, requiring the recognition and measurement of uncertain tax positions. The adoption of ASC 740 had no material impact on the Company’s financial statements. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment

 

NOTE 4 - RELATED PARTY TRANSACTIONS

 

The Company is indebted to the officers of the Company for unpaid wages and bonuses from previous years that were converted into Notes. The balances at September 30, 2016 and December 31, 2015 are $421,044 to Mr. Reichman and $206,670 to Mrs. Griffin, respectively. The notes bear interest at 5% are due at October 1, 2017 and are unsecured.

 

Due to officers as of September 30, 2016 and December 31, 2015 totals $43,481 and $164,105, respectively. These balances consist of net cash advances, and unpaid expense reimbursements due to David Reichman. The payables and cash advances are unsecured, due on demand and do not bear interest. During the first Nine months of 2016 Mr. Reichman advanced $355,548 to the Company to cover operating expenses, and was repaid $476,172. During the first Nine months of 2015 Mr. Reichman advanced $79,362, to the Company and was repaid $56,200. At September 30, 2016 and December 31, 2015, the balances due Mr. Reichman are $43,481 and $164,105, respectively.

 

During the first Nine months of 2016 and the year ended December 31, 2015, a board member advanced $3,000 and $54,200, respectively. These totals consist of several small advances, each covered by separate notes that bear interest at 6%, are unsecured, and are due in October 2017. The total notes payable to this board member at September 30, 2016 and December 31, 2015 amount to $116,300 and $113,300, respectively.

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2016

(Unaudited)

NOTE 5 - NOTES PAYABLE

 

(a)	NOTES PAYABLE

 

Notes payable consist of various notes bearing interest at rates from 5% to 8%, which are unsecured, with original due dates between August 2000 and October 2017. Many notes with maturity dates that have passed are currently in default with the remaining note due on dates as specified below. At September 30, 2016 and December 31, 2015, notes payable amounted to $1,822,236 and $1,807,397, respectively. Below is a table summarizing the notes owed by the Company.

 

	Interest Rate	Interest Expense	Interest Expense
Principal		9/30/16	12/31/2015	Maturity
$19,000	8.00%	1,140	1520	10/1/2017
5,099	5.00%	292	255	10/1/2017
32,960	5.00%	1,236	1648	10/1/2017
37,746	5.00%	1,452	1936	10/1/2017
107,000	5.00%	4,065	5420	10/1/2017
388,376	5.00%	14,583	19419	10/1/2017
192,000	0.00%	10,080	13440	On Demand(1)
18,000	6.00%	810	1080	09/01/2002
30,000	6.00%	1,350	1800	09/12/2002
25,000	5.00%	939	1252	08/31/2000
40,000	7.00%	2,100	2800	07/10/2002
5,000	6.00%	225	300	10/28/2013
62,500	6.00%	2,812	3750	1/16-8/16
65,340	6.00%	2,940	3920	1/14-10/15
409,920	5.00%	15,522	20496	10/1/2017
11,125	5.00%	417	556	10/1/2017
200,000	5.00%	7,500	10000	10/1/2017
6,670	5.00%	250	334	1/31/2016
82,500	6.00%	3,714	4950	3/14-12/16
34,800	6.00%	1,566	1129	10/1/2017
49,200	6.00%	2,214	1107	04/14-9/16
$1,822,236		75,207	97,112

 

Note payable activity in the nine months ended September 30, 2016:

 

On January 22, 2016, the Company executed a note payable to an individual and board member in the total amount of $3,000, interest accrues at 6% per annum, unsecured, due after 12 months of execution

 

(1)	Imputed interest due to 0% interest rate

 

 

GLOBAL TECH INDUSTRIES GROUP, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

September 30, 2016

(Unaudited)

 

NOTE 6 - STOCKHOLDERS' DEFICIT

 

ISSUANCES OF COMMON STOCK

 

During the Nine months ended September 30, 2016, the Company issued 22,361,680 shares for services valued at $8,053,237.

 

During the Nine months ended September 30, 2016, the Company issued 7,715,420 shares for cash of $370,000 in a private placement.

 

During the Nine months ended September 30, 2016, the Company recorded imputed interest on a non-interest bearing note in the amount of $10,080, with an increase in paid in capital.

 

During the nine months ended September 30, 2016, the Company did not issue any stock options or warrants.

 

On April 7, 2016, the Board of Directors announced their intension to effect a 10 for 1 forward stock split, and change the authorized common shares to 350,000,000 shares, and on May 10, 2016, the forward stock split became effective. The stock split has been recorded retroactively in the financials statements and the 10Q for September 30, 2016.

 

ISSUANCES OF PREFERRED STOCK

 

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

 

 

 

 

 

 

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

 

NOTE 7 - LEGAL ACTIONS

 

During March 2013, the Company was named in an action pertaining to the 75% working interest in the Ownbey Lease. Subsequent to the Company’s purchase of the assets and the termination of the operator a mechanics lien was filed against the property claiming approximately $267,000 in fees are due to the previous operator. An action is pending in the District Court of Chautauqua County, Kansas, captioned Aesir Energy, Inc. vs. Amercian Resource Technologies, Inc.; Nancy Ownbey Archer; Jimmy Stephen Ownbey; Robbie Faye Butts; TREE TOP INDUSTRIES, INC.; and TTII Oil & Gas, Inc. Management intends to vigorously contest AESIR’s claims and, at this point, settlement appears unlikely. It has been presented in the County Court that some of ARUR’s Directors have acted without authorization in this matter, and TTII’s management is assessing how to proceed at this time. No monetary claims have been asserted against Global Tech or TTII Oil & Gas, Inc. The District Court of Chautauqua County, Kansas decided that the Board of American Resource Technologies, Inc., acted improperly and set aside the Acquisition Agreement as null and void. Management is consulting with legal counsel to evaluate the company options.

 

NOTE 8 – MATERIAL AGREEMENTS

 

On February 26, 2016, the Company announced in an 8-K, that on February 15, 2016, the Company entered into a non-binding letter of intent with Go Fun Group Holdings, Ltd, (“Go Fun”) an integrated O2O (online to offline) supply-chain facilitated company, which operates in the retail restaurant and online food service business sectors and is based in Hong Kong, to continue discussions and work on a mutual agreeable transaction and business plan, including a potential private placement for raising capital. Go Fun is also engaged in the ‘Green’ food sourcing and logistics business, working with sustainable, local companies to further the science of healthy food preparation. Go Fun’s retail entries include traditional Chinese, Italian, and Japanese Steakhouse restaurants. The purpose of the ongoing exchange between the Company and Go Fun is to explore possible synergies, and facilitate investment in or acquisition of several of Go Fun’s operating units and/or assets.

 

NOTE 9 – SUBSEQUENT EVENTS

 

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

 

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

 

Cautionary Statements

 

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

 

●	statements concerning the potential benefits that may be experienced from business activities and certain transactions contemplated or completed; and

 

●

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

 

a)	volatility or decline of Global Tech’s stock price; potential fluctuation of quarterly results;

 

b)	Potential fluctuation of quarterly results;

 

c)	failure to earn revenues or profits;

 

d)	inadequate capital to continue or expand our business, and inability to raise additional capital or financing to implement our business plans;

 

e)	failure to commercialize our technology or to make sales;

 

f)	decline in demand for our products and services;

 

g)	Rapid adverse changes in markets;

 

h)	litigation with or legal claims and allegations by outside parties against TTII, including but not limited to challenges to intellectual property rights;

 

i)	insufficient revenues to cover operating costs; and

 

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

 

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

 

Organizational History

 

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

 

On August 18, 2004, GoHealthMD, Inc., the Nevada Corporation, changed its name to TREE TOP INDUSTRIES, INC., and on May 26, 2016, the name was changed to GLOBAL TECH INDUSTRIES GROUP, INC.. GoHealthMD, Inc. continues to exist as a Delaware corporation and wholly-owned subsidiary of GLOBAL TECH INDUSTRIES GROUP, INC. NetThruster, Inc. MLN, Inc., BioEnergy Applied Technologies, Inc. (BAT”), Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc., TTI Strategic Acquisitions and Equity Group, Inc. and TTII Oil & Gas, Inc. are also wholly-owned subsidiaries of GLOBAL TECH INDUSTRIES GROUP, INC. Several of these subsidiaries have been formed by us in the anticipation of technologies, products or services being acquired. Not all subsidiaries are currently active.

 

On December 31, 2012, the Company and its new subsidiary, TTII Oil & Gas, Inc., a Delaware corporation, signed a binding asset purchase agreement with American Resource Technologies, Inc. (“ARUR”), a Kansas corporation, to acquire all of the assets of ARUR for a purchase price of $513,538, which was paid in the form of 4,668,530 shares of the Company’s common stock as described in the asset purchase agreement. The shares were valued at $.110 per share, based on the weighted average trading price of the common stock over the ten trading days prior to the Closing Date. The assets purchased from ARUR include a 75% working interest in oil and gas leases in Kansas, as well as other oil field assets, a natural gas pipeline, currently shut down that is also located in Kansas, 25% interest in three other business entities operating in Kansas, and accounts receivables from two companies operating in Brazil in the amounts of $3,600,000 and$3,600,000 respectively. TTII Oil & Gas, Inc. also purchased three promissory notes in the amounts of $100,000, $100,000 and $350,000, as well an overdue contract for revenue in the amount of $1,000,000. Finally, several gun sight patents were also acquired from ARUR. TTII Oil & Gas, Inc. intends to pursue more opportunities in Kansas to expand the current leases, and to aggressively continue pumping oil from the thirteen currently operating wells. At the same time, both GLOBAL TECH INDUSTRIES GROUP, INC. and TTII Oil & Gas, Inc. intend to aggressively pursue the two companies located in Brazil, who are responsible for the over $7,000,000 dollars in monies owed to TTII Oil & Gas, Inc. All accounts and notes receivable were deemed uncollectable due to the age and circumstances, and therefore were assessed no value in the asset purchase. The equity ownerships were also deemed to be impaired due to the inactive nature of the entities, and were not allocated any value. The gun sight patents was also not readily assessable as to value and no purchase price was allocated to this asset. Also due to the mechanics lien and lawsuit on the oil leases, as well as the absence of an official reserve report, the oil lease was also impaired and no value was recorded for this asset.

 

Critical Accounting Policies

 

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

 

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

 

Overview of Business

 

During the 2nd quarter 2013, the Company commenced its oil and gas operations, and have brought 13 wells into production to date. It specializes in the utilization of modern technologies with known resources to enhance project output. The company has a working interest of 75% of a lease in S.E. Kansas. This lease has approximately 13 working wells out of a total of 30 well, and a natural gas pipeline that is currently shut down, that is also located in Kansas.

 

In May of 2013, TTII Oil and Gas Inc. with the help of its Operator, Clark Energy, Inc., opened up the wells on the Ownbey Lease for production. Upon opening up the lease for production, TTII Oil & Gas, Inc.’s Operator ran into several problems with the lease. It came to the company’s attention that the previous Operator, Aesir Energy Inc., owned and operated by Eric Oden, (son to the previous President and CEO, Fred Oden III, of American Resource Technologies, Inc.) had left the lease in sub-standard condition. Due to this fact, many repairs had to be made to the equipment on the lease that kept the company from being able to get the full benefit of the lease. During 2013 and 2014, the Company extracted oil from its Kansas oil wells, however in early 2015 with the steady decline of oil prices over the past two years, Management has determined that the costs to extract oil would exceed the revenues generated to an extent that it was necessary to suspend oil operations. Subsequent to the suspension of oil and gas operation, a Kansas Court ruled that the purchase agreement with ARUR would be nullified. In the wake of this decision, the Company’s management and the Board are considering appropriate steps to take, but will not be continuing our oil and gas operations in the future.

 

On February 26, 2016, the Company entered into a non-binding letter of intent with Go Fun Group Holdings, Ltd, (“Go Fun”) an integrated O2O (online to offline) supply-chain facilitated company, which operates in the retail restaurant and online food service business sectors and is based in Hong Kong, to continue discussions and work on a mutual agreeable transaction and business plan, including a potential private placement for raising capital. Go Fun is also engaged in the ‘Green’ food sourcing and logistics business, working with sustainable, local companies to further the science of healthy food preparation. Go Fun’s retail entries include traditional Chinese, Italian, and Japanese Steakhouse restaurants. The purpose of the ongoing exchange between the Company and Go Fun is to explore possible synergies, and facilitate investment in or acquisition of several of Go Fun’s operating units and/or assets. The Company is currently involved in continued discussions with Go Fun and is engaged in due diligence processes with its professionals.

 

Competitors

 

There are many competitors in the oil and gas industry that are larger than us and have better resources.

 

Suppliers and Customers

 

We have hired an operator who operates and services our wells. When our crude oil reaches a certain level, the operator orders a pickup by our local crude oil purchaser, who pickups up and delivers our crude oil to a refinery. We have only one company that currently purchases our crude oil, therefore we have a concentration risk attached to our revenue stream. Because there are several other crude oil purchasers in our region, we believe this risk will not affect our oil and gas operations.

 

Government and Environmental Regulation

 

Governmental authorities may in the future impose obstacles to the production and sale of oil and gas through laws or regulations. Recent tax and energy legislation has been enacted, the total effect of which is not yet known. Various types of mineral properties have come under attack in certain areas because of their potential impact upon the surrounding environment. Therefore, leases or production in which we may have an interest could be adversely affected by either governmental regulations or private litigation involving such environmental concerns. We are not able to predict the outcome of such controls, regulations or laws on its operations or on the operations of the Company.

 

Intellectual Property

 

Pursuant to the ARUR acquisition, the Company acquired a 25% ownership in an Oklahoma corporation that designed a new software for gamma ray survey interpretation. This new software interprets data accumulated during aerial or surface surveys and provides a 3D blueprint of the areas with the highest concentration of hydrocarbons and/or uranium, dependent upon the algorithm application. This intellectual property is not a significant asset of our business.

 

Employees

 

As of May 13, 2016 we have 1 full-time employee and one part time employee. We have not experienced any work stoppages and we consider relations with its employees to be good.

 

RESULTS OF OPERATIONS

Results of Operations for the Three Months Ended September 30, 2016, Compared to Three Months Ended September 30, 2015:

 

We realized revenues of $0 during the three months ended September 30, 2016 and 2015, due to our oil pumping operations being suspended in the first quarter 2015, until oil prices improve. Our oil operations expenses totaled $0 for the three months ended September 30, 2016 and 2015, respectively. Our general operating expenses increased from $ 39,658 in 2015 to $7,824,358 in 2016. The increase was primarily the result of shares issued for services incurred by our professionals, consultants and directors, as part of the effort to get the Company current in its filings and from the increased travel expenses related to due diligence. General and administrative expenses increased from $28,523 to $729,182 due to the value of the shares issued to the employee benefit plan.

 

Our net loss increased by $7,788,720 from $(62,248) in 2015 to a loss of $(7,850,968) in 2016. The primary reason for this decrease was the result of the value of the shares issued for services and consulting expenses by our professionals and directors. We expect that our losses will continue to be approximately $20,000 per month until we are able to establish a consistent revenue source. Management and the Board are considering multiple options currently available.

 

Results of Operations for the Nine months Ended September 30, 2016, Compared to Nine months Ended September 30, 2015:

 

We realized revenues of $0 during the nine months ended September 30, 2016 and $1,126 during the nine months ended September 30, 2015. The decrease in our oil revenues were a factor of suspending our oil pumping operations in the first quarter 2015 until oil prices improve. Our oil operations expenses totaled $377 for the nine months ended September 30, 2016 compared to $8,990 in the comparative quarter last year. Our general operating expenses increased from $ 141,211 in 2015 to $8,135,455 in 2016. The increase was primarily the result of shares issued for services incurred by our professionals, consultants and directors, as part of the effort to get the Company’s filings current and increased travel expenses associated with our due diligence activities in Hong Kong. General and administrative expenses increased from $82,984 to $839,800 due mostly to the issuance of shares to the employee benefit plan.. Compensation and professional fees increased by $7,238,425, due to the issuance of shares to our professionals for their services in assisting the company in getting current with our annual and quarterly filings, as well as legal and consulting services in connection with our letter of intent.

 

Our net loss decreased by $7,915,589 from $(216,110) in 2015 to a loss of $(8,143,133) in 2016. The primary reason for this decrease is discussed above. We expect that our losses will continue to be approximately $20,000 per month until we are able to establish a larger revenue flow from our oil & gas leases, or other operations.

 

LIQUIDITY AND CAPITAL RESOURCES

 

At September 30, 2016 we had cash on hand of $44,276 compared to $108 at December 31, 2015. We used cash in our operations of $(282,677) in 2016 compared to cash used of $(77,012) in 2015. We generated cash-flow from investing activities during 2016 of $74,469, compared to $(1,931) for the same quarter in 2015. We (paid back)/raised $(120,624) and $23,162 from related party loans in 2016 and 2015, and $3,000 and $54,200 from other notes payable, respectively. We also collected $370,000 from the receipt of stock issuances pursuant to a Private Placement Memorandum during the nine month period of 2016 compared to $0 in the prior year. We anticipate that we will continue to have a negative cash flow from operations of approximately $15,000 per month for 2016. We do not have sufficient cash on hand at September 30, 2016 to cover our negative cash flow. We will attempt to raise capital through the sale of our common stock or through debt financing, or engaging in other operations.

 

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

 

During the nine months ended September 30, 2016, the Company’s working capital deficit decreased from $(3,215,878) to $(1,396,372), a decrease of 43%, due to the extension of several long term notes that had become current or in default. If the old payables and notes that have exceeded the statute of limitations were removed from the calculation, the working capital deficit would be $(945,372), a 71% decrease over 2015.

 

Any remedy to our current lack of liquidity must take into account all the foregoing liabilities. Global Tech intends to continue its pursuit to find other operating activities, and as necessary, raise capital in order to monetize its business and pay all its liabilities. Capital raise plans are under consideration but it cannot be assured that they will materialize in the current economic environment. Currently, Global Tech is without adequate financing or assets. Because no actions have been taken on the aforementioned past due obligations and demand has not been made by the applicable current note holders, we are unable to accurately quantify the effect the overdue accounts have on Global Tech’s financial condition, liquidity and capital resources. However, in the event that all of these obligations and notes payable were required to be paid in an amount equal to the full balance of each, Global Tech would not be able to meet the obligations based upon its current financial status. The liquidity shortfall of $(1,396,372) would cause Global Tech to default and, further, would put our continued viability in jeopardy.

 

CONTRACTUAL OBLIGATIONS

 

None

 

Going Concern Qualification

 

The Company has incurred significant losses from operations, and such losses are expected to continue. The Company's auditors have included a "Going Concern Qualification" in their report for the year ended December 31, 2015. In addition, the Company has limited working capital. The foregoing raises substantial doubt about the Company's ability to continue as a going concern. Management's plans include seeking additional capital and/or debt financing. There is no guarantee that additional capital and/or debt financing will be available when and to the extent required, or that if available, it will be on terms acceptable to the Company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The "Going Concern Qualification" may make it substantially more difficult to raise capital.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

  

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

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

 

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

 

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

♦	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

 

♦

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and

 

♦	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

 

Changes in Internal Controls over Financial Reporting

 

There were no additional changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Inherent Limitations over Internal Controls

 

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

 

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

 

PART II OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

During March 2013, the Company was named in an action pertaining to the 75% working interest in the Ownbey Lease. Subsequent to the Company’s purchase of the assets and the termination of the operator a mechanics lien was filed against the property claiming approximately $267,000 in fees are due to the previous operator. An action is pending in the District Court of Chautauqua County, Kansas, captioned Aesir Energy, Inc. vs. Amercian Resource Technologies, Inc.; Nancy Ownbey Archer; Jimmy Stephen Ownbey; Robbie Faye Butts; TREE TOP INDUSTRIES, INC.; and TTII oil & Gas, Inc. Management intends to vigorously contest AESIR’s claims and, at this point, settlement appears unlikely. It has been presented in the County Court that some of ARUR’s Directors have acted without authorization in this matter, and Global Tech’s management is assessing how to proceed at this time. No monetary claims have been asserted against Global Tech or TTII Oil & Gas, Inc. The District Court of Chautauqua County, Kansas decided that the Board of American Resource Technologies, Inc., acted improperly and set aside the Acquisition Agreement as null and void. Management is consulting with legal counsel to evaluate the company options.

 

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

 

The following shares of common stock were issued during the nine months ended September 30, 2016 without registration:

 

During the Nine months ended September 30, 2016, the Company issued 7,715,420 shares for cash of $370,000 in a private placement.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

The Company has the following note payable obligations in default:
Note payable to Facts and Comparisons due September 1, 2002, with interest accrued at 6% per annum, unsecured, in settlement of a trade payable; unpaid to date and in default	18,000
Note payable to Luckysurf.com due September 12, 2002 with interest accrued at 6% per annum, unsecured, in settlement of a trade payable; unpaid to date and in default	30,000
Note payable to Michael Marks (a shareholder) due August 31, 2000 with interest accrued at 5% per annum, unsecured; unpaid to date and in default	25,000
Note payable to Steven Goldberg (a former consultant) due July 10, 2002, unsecured with interest of 7% accrued if unpaid at due date, in settlement of liability; unpaid to date and in default	40,000
Note payable to an individual, unsecured with interest of 6% per annum, unpaid to date and in default	5,000
Note payable to an LLC, unsecured with interest accruing at 6% per annum, unpaid to date and in default	5,000
Various Notes payable to a Trust, unsecured with interest accruing at 6% per annum, unpaid to date and in default	109,900
Various Notes payable to an individual, unsecured with interest accruing at 6% per annum, unpaid to date and in default	60,340
Totals	$293,240

 

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

 

ITEM 5. OTHER INFORMATION

 

Not Applicable

 

ITEM 6. EXHIBITS

 

3. Exhibits

 

EXHIBIT NO.		DESCRIPTION
3.1		Articles of incorporation of Tree Top Industries, as amended (1)
3.2		By-Laws (2)
10.1		Employment Agreement, dated October 1, 2007, by and between Tree Top Industries, Inc. and David Reichman (3)
10.2		Employment Agreement, dated April 1, 2009, by and between Tree Top Industries Inc. and Kathy Griffin (4)
10.3		Bridge Loan Term Sheet, dated January 11, 2010, by and between Tree Top Industries, Inc. and GeoGreen Biofuels, Inc.(5)
10.4		Business and Financial Consulting Agreement, dated February 22, 2010 by and between Tree Top Industries, Inc. and Asia Pacific Capital Corporation(6)
10.5		Distribution Agreement, by and between Tree Top Industries, Inc. and NetThruster, Inc., dated February 9, 2011(7)
10.6		Term Agreement by and between Tree Top Industries, Inc. and Sky Corporation, doo, dated April 18, 2011 (8)
10.7		Term Agreement by and between Tree Top Industries, Inc. and Adesso Biosciences, Ltd, dated October 12, 2011(9)
10.8		Term Agreement by and between Tree Top Industries, Inc. and Stemcom, LLC d/b/a Pipeline Nutrition, dated March 1, 2012(10)
10.9		Mutual disengagement agreement by and between Tree Top Industries, Inc. and Stemcom, LLC d/b/a Pipeline Nutrition, dated March 23, 2012(11)
10.10		Reserve Equity financing agreement by and between Tree Top Industries, Inc. and AGS Capital Group, dated August 15, 2012.(12)
10.11		Asset purchase Agreement by and between TTII Oil & Gas, Inc. a subsidiary of Tree Top Industries, Inc. and American Resource Technologies, Inc.(13)
10.12		Resignation of Mr. Robert Hantman, Esq. as a member of the board of directors(14)
21.1		Subsidiaries of the registrant
31.1		Section 302 Certification of Chief Executive Officer and Chief Financial Officer
32.1		Section 906 Certification of Chief Executive Officer

 

_________________

(1)	Filed November 13, 2009, as an exhibit to a Form 10-Q and incorporated herein by reference. Filed January 3, 2012, as an exhibit to an 8 – K and incorporated herein by reference. Filed April 12, 2013, as an exhibit to an 8 – K and incorporated herein by reference.

 

(2)	Filed July 19, 2010, as an exhibit to a Form 10-K/A and incorporated herein by reference.

 

(3)	Filed November 7, 2007, as an exhibit to a Form 8-K and incorporated herein by reference.

 

(4)	Filed March 25, 2010, as an exhibit to a Form 8-K and incorporated herein by reference.

 

(5)	Filed January 19, 2010, as an exhibit to a Form 8-K and incorporated herein by reference.

 

(6)	Filed July 19, 2010, as an exhibit to a Form 10-Q/A and incorporated herein by reference.

 

(7)	Filed February 9, 2011, as an exhibit to a Form 8-K and incorporated herein by reference.
(8)	Filed April 19, 2011, as an exhibit to a Form 8 - K and incorporated herein by reference.
(9)	Filed October 18, 2011 as an exhibit to a Form 8 - K and incorporated herein by reference.
(10)	Filed March 6, 2012 as an exhibit to a Form 8 – K and incorporated herein by reference.
(11)	Filed March 23, 2012 as an exhibit to a Form 8 – K and incorporated herein by reference.
(12)	Filed August 21, 2012 as an exhibit to a Form 8 – K and incorporated herein by reference.
(13)	Filed January 8, 2013 as an exhibit to a Form 8 – K and incorporated herein by reference.
(14)	Filed January 8, 2013 as an exhibit to a Form 8 – K and incorporated herein by reference.
(15)	Filed April 22, 2016 as an exhibit to a Form 8 – K and incorporated herein by reference.

 

(a)

Exhibits

 

SIGNATURES

 

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

 

Dated: November 14, 2016	GLOBAL TECH INDUSTRIES GROUP, INC.
	By:	/s/ David Reichman
		David Reichman, Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer

 

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

 

By:	/s/ David Reichman		Dated: November 14, 2016
	David Reichman, Chairman of the Board, Chief
	Executive Officer, Chief Financial Officer
	and Principal Accounting Officer
By:	/s/ Kathy M. Griffin		Dated: November 14, 2016
	Kathy M. Griffin, Director, President
By:	/s/ Frank Benintendo		Dated: November 14, 2016
	Frank Benintendo, Director & Secretary
By:	/s/ Donald Gilbert, Phd.		Dated: November 14, 2016
	Donald Gilbert, Director & Treasurer
By:	/s/ Greg Ozzimo		Dated: November 14, 2016
	Greg Ozzimo, Director
By:	/s/ Mike Valle		Dated: November 14, 2016
	Mike Valle, Director