UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
Under
The
Securities Act of 1933
|
GEI
Global Energy Corp. |
(Name
of small business issuer in its charter) |
|
Nevada |
|
3699 |
|
27-3429931 |
(State
or jurisdiction of
incorporation or organization) |
|
(Primary
Standard Industrial
Classification Code Number) |
|
(IRS
Employer
Identification
No.) |
GEI
Global Energy Corp.
6060
Covered Wagon Trail
Flint,
Michigan 48532
(810)
610-2816
(Address
and telephone number of Registrant’s principal executive offices)
10300
W. Charleston, Blvd. #13-56
Las
Vegas, NV 89135
702-425-2873
(Name,
address and telephone number of Registrant’s agent for service) |
|
Please
send copies of all communications to: |
Joseph
Lambert Pittera, Esq. |
Law
Offices of Joseph Lambert Pittera
2214
Torrance Boulevard
Torrance,
California 90501
Telephone:
(310) 328-3588
Facsimile
No. (310) 328-3063 |
APPROXIMATE
DATE OF PROPOSED SALE TO THE PUBLIC:
As
soon as practicable after this Registration Statement becomes effective.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement
for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. ☐
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filed or a smaller
reporting company.
Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
|
|
|
|
Non-accelerated
filer |
☐ |
Smaller reporting
company |
☒ |
CALCULATION
OF REGISTRATION FEE
Title
of Each
Class of
Securities to be
Registered | |
Amount
to
be
Registered (1) | | |
Proposed
Maximum
Offering
Price
Per Share
($) | | |
Proposed
Maximum
Aggregate
Offering
Price
($)(2) | | |
Amount
of
Registration
Fee
($) | |
| |
| | | |
| | | |
| | | |
| | |
Shares of Common Stock, $ Par Value $0.001 | |
| 150,000,000 | | |
$ | 0.067 | (1) | |
$ | 10,000,000 | (1) | |
$ | 1162.00 | |
1 |
We
are registering 150,000,000 shares of our common stock that we will sell to River North Equity, pursuant to an Investment
Agreement entered into on September 12, 2014, which together shall have an aggregate initial offering price not to exceed
$10,000,000. In the event the maximum aggregate offering price is reached, any remaining unsold shares shall be removed from
registration. The proposed maximum offering price per share will be determined by the registrant in connection with the issuance
of the securities registered hereunder. |
|
|
2 |
The
registration fee is calculated pursuant to Rule 457(c) of the Securities Act of 1933 based on the average of the high and
low transaction prices on November 26, 2014. |
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. Neither we, nor the selling shareholders, may sell
these securities until the registration statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and neither we, nor the selling stockholders, are soliciting offers to buy
these securities in any state where the offer of sale is not permitted.
PROSPECTUS
GEI
Global Energy Corp.
6060
Covered Wagon Trail
Flint,
Michigan 48532
(810)
610-2816
A
Maximum of 150,000,000 Shares of Common Stock
We
are hereby registering 150,000,000 shares of GEI Global Energy Corp common stock for sale by River North Equity, LLC, a Illinois
limited liability company, pursuant to an Investment Agreement. These securities represent 18.1% of the fully-diluted outstanding
common stock and 15.3% equity ownership of our fully-diluted outstanding common stock. The securities further
represent 19.12% of the fully-diluted common stock and 16.1% of our fully-diluted common stock considering only non-affiliates.
The percent ownership is based upon a total of 831,066,776 issued and outstanding common stock as of October 15, 2014.
The agreement allows GEI Global to require River North Equity, LLC to purchase up to $10,000,000 of our common stock.
We
are not selling any shares of common stock in the resale offering. We, therefore, will not receive any proceeds from the sale
of the shares by a selling shareholder. We will, however, receive proceeds from the sale of securities to River North Equity,
LLC pursuant to Put Notice(s) under the Investment Agreement.
This
offering will terminate on the earlier of (i) when all 150,000,000 shares are sold, (ii) when the maximum offering amount of $10,000,000
has been achieved, or (iii) on the date which is 18 months after the effective date hereof, unless we terminate the agreement
earlier.
Investing
in the common stock involves risks. GEI Global Energy Corp., Inc. is a development stage company with limited operations, limited
income, and limited assets, and you should not invest unless you can afford to lose your entire investment. See “Risk Factors”
beginning on page 8. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved
of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal
offense. Our common stock is governed under The Securities Enforcement and Penny Stock Reform Act of 1990, and as a result you
may be limited in your ability to sell our stock.
Our
common stock is registered under Section 12(g) of the Securities Exchange Act of 1934 and is listed on the OTCQB under the symbol
“GEIG.”
These
shares may be sold by River North Equity, LLC from time to time in the over-the-counter market or other national securities exchange
or automated interdealer quotation system on which our common stock is then listed or quoted, through negotiated transactions
or otherwise at market prices prevailing at the time of sale or at negotiated prices.
| |
Number of Shares | | |
Offering Price | | |
Underwriting Discounts & Commissions | | |
Proceeds to Company | |
Per Share Maximum | |
| 150,000,000 | | |
$ | 0.067 | | |
$ | 0.0 | | |
$ | 10,000,000 | |
GEI
Global Energy Corp. does not plan to use this offering prospectus before the effective date. River North Equity, LLC, and any
participating broker-dealers, may be deemed to be “underwriters” within the meaning of the Securities Act of 1933,
as amended, or the “Securities Act,” and any commissions or discounts given to any such broker-dealer may be regarded
as underwriting commissions or discounts under the Securities Act. River North Equity, LLC will purchase the shares of our common
stock for seventy percent (70%) of the lowest closing bid price of the common stock during the five consecutive trading days immediately
following the date of our notice to River North Equity, LLC of our election to put shares pursuant to the Investment Agreement.
River North Equity, LLC has informed us that they do not have any agreement or understanding, directly or indirectly, with any
person to distribute their common stock.
Subject
to Completion, Dated November ___, 2014
ABOUT
THIS PROSPECTUS
You
should rely only on the information contained in this prospectus. Neither we, nor the selling shareholders have authorized anyone
to provide you with different or additional information. We take no responsibility for, and can provide no assurance
as to the reliability of, any other information that others may give you. This prospectus is not an offer to sell nor is it seeking
an offer to buy shares of our common stock in any jurisdiction where the offer or sale is not permitted. The information contained
in this prospectus is correct only as of the date of this prospectus, regardless of the time of the delivery of this prospectus
or any sale of shares of our common stock.
Table
of Contents
PROSPECTUS
SUMMARY
You
should read the following summary together with the more detailed business information, financial statements and related notes
that appear elsewhere in this prospectus. In this prospectus, unless the context otherwise denotes, references to “we”,
“us”, “our”, and “Company” are to GEI Global Energy Corp.
GLOBAL
ENERGY INNOVATIONS, INC.
Global
Energy Innovations, Inc. (“GEI”) is a Michigan corporation incorporated on March 13, 2007 and was established to develop
and commercialize innovative technologies that provide world markets with clean and secure energy that is sustainable and environmentally
benign. GEI is focused on the development of next-generation fuel cells to provide electric power at costs significantly below
the average cost of electricity from most traditional sources, such as oil, natural gas, and coal-fired electric power plants.
The GEI proprietary high temperature PEM (Polymer Exchange Membrane) fuel cell electrical power generation systems technology
represents a potential advantage in terms of performance, scalability, and efficiency.
GEI
as a private fuel cell development company, since 2007, designed and fabricated pre-commercial fuel cell electrical power generation
systems for industrial customers, the federal government, and research organizations.
On
August 15, 2013 Global Energy Innovations, Inc., the Michigan private company merged with SUJA Minerals, Inc., a public
company listed on the OTCQB. SUJA Minerals, Inc. was originally incorporated as a State of Nevada public company on April 28,
2010 to conduct exploration activities on the Crawford Creek Property located in British Columbia, Canada. Post-merger, the
combined entity, now public, changed its name from SUJA Minerals, Inc. to GEI Global Energy Corp.
The
Company’s corporate headquarters are located at 6060 Covered Wagon Trail, Flint, Michigan, 48532, with telephone number
of (810) 610-2816 and website address of http://www.geiglobal.com/.
THE
OFFERING
Following
is a brief summary of this offering. Please see the Plan of Distribution section for a more detailed description of
the terms of the offer.
Securities
Offered: |
|
Under
the Investment Agreement, River North Equity, LLC has agreed to provide us with up to $10,000,000 of funding upon effectiveness
of this prospectus; for which 100, 000,000 shares of our common stock are being registered pursuant to this prospectus. During
this period, we can deliver a put under the Investment Agreement by selling shares of our common stock to River North Equity,
LLC and River North Equity, LLC will be obligated to purchase the shares. An individual put transaction must close before
we can deliver another put notice to River North Equity, LLC. |
|
|
|
Offering
Price Per Share: |
|
The
purchase price per share of common stock will be set at seventy percent (70%) of the lowest closing bid price of the common
stock during the five consecutive trading days immediately following the date of our notice to River North Equity, LLC of
our election to put shares pursuant to the Investment Agreement (i.e. 25% discount to market). The maximum offering price
is $0.067 for the 150,000,000 for a maximum aggregate offering price of $10,000,000. |
|
|
|
|
● |
Offering
Period: |
|
The shares
are being offered for a period not to exceed December 31, 2015. |
● |
Company Proceeds: |
|
$10,000,000
maximum |
|
|
|
|
● |
Use of Proceeds: |
|
See Use of
Proceeds |
|
|
|
|
● |
Shares Outstanding
Before: |
|
831,066,776 |
|
|
|
|
● |
Shares Outstanding
After: |
|
981,066,776 |
RISK FACTORS
Investment
in the securities offered hereby involves certain risks and is suitable only for investors of substantial financial means. Prospective
investors should carefully consider the following risk factors in addition to the other information contained in this prospectus,
before making an investment decision concerning the common stock.
RISKS
ASSOCIATED WITH OUR COMPANY
High
Capital Requirements
Significant
capital will be required to build large scale production facilities once contracts with government and private parties are finalized.
One of GEI’s core strategies for revenue diversification is to establish power generation contracts with developing economies
with an abundant supply of natural gas. During the last three (3) years GEI initiated high level discussions with countries such
as Italy and The Dominican Republic (DR) for the consideration of large scale fuel cell electric power generation purchase agreements
resulting in an improved ability to expand the economy and to create jobs for the local population.
As
such, as we are able to complete such agreements for large scale power purchase agreements (PPA), significant capital will be
required to production of the fuel cell electric power systems for delivery. However, initial thoughts are the PPA can be capitalized
through private funding sources and perhaps through energy expansion and security programs through the World Bank.
Lack
of a Sustainable Operating History
Although, the Company has consistently
filed U.S Federal and State tax returns from 2007 to the present, during 2009-2011 the Company received revenues of over $1.1
million USD, $0.0 revenues in 2012 due to restructuring, and has obtained additional financing of nearly $800,000 USD since January
2013 to the present. However, the Company’s ability to achieve stable and sustainable profitability will depend upon a number
of factors, including, but not limited to, whether the Company:
|
● |
has
funds available for working capital, project development and sales and marketing efforts; |
|
● |
has funds
for the continuous upgrading of its production operations and facilities; |
|
● |
achieves
the projected sales revenues; |
|
● |
controls
the Company’s operating expenses; |
|
● |
continues
to attract new business; |
|
● |
endures competition
in the Company’s marketplace. |
Competition
The
Company’s competitors are rapidly changing and may be well capitalized and financially stronger than GEI Global Energy Corp. Our
competitors could reproduce the company’s business model without significant barriers to entry. Once again, the Company
business model from the 2012 business plan includes:
|
1. |
Manufacturing
and selling of fuel cell electrical power generation systems. |
|
2. |
License
of core technology for third party integration (similar to the INTEL model of licensing proprietary microprocessor chips to
multiple computer makers) For example, licensing of hydrogen extraction technology or system controls technology for integration
with third party fuel cell stack technology. |
|
|
|
|
3. |
License
of fuel cell power system for third party private label manufacturing for specific application. For example, licensing of
fuel cell electric power systems technology to third party developing military applications. |
|
|
|
|
4. |
License
of fuel cell power systems technology for third party power purchase agreement (PPA) and revenue sharing. For example, a private
company in Italy contracts with the government utility to provide cleans stable energy for grid back-up and support through
a joint venture with the parent company GEI Global. Both entities would share in the PPA net profits. |
The
Company’s activities may require additional financing, which may not be obtainable.
The
Company had limited cash deposits. Based on the Company’s expectations as to future performance, the Company considers these
resources and existing and anticipated credit facilities, to be adequate to meet the Company’s anticipated cash and working
capital needs at least through December 31, 2014. The Company, however, expects to be able to raise capital to fund the Company’s
operations, current and future acquisitions and investment in new program development. The Company may also need to raise additional
capital to fund expansion of the Company’s business by way of one or more strategic acquisitions. The Company believes that
to resolve future energy security and sustainability issues requires the integration of novel technologies, rather than providing
a single “one solution” fix for all applications.
Increasing
the Company’s business depends on the Company’s ability to increase demand for the Company’s products and services.
While
the Company is confident of the market acceptance of the Company’s products and services, there is no guarantee that the
Company will be successful in its choice of products or technology or that consumer demand will increase as the Company anticipates
without allocating resources for marketing and product promotion.
The
Company’s ability to operate and compete effectively requires that the Company hires and retains senior technical personnel.
The
Company’s business requires us to be able to continuously attract, train, motivate and retain highly skilled employees as
a technology based company. The Company’s failure to attract and retain the highly trained personnel who are integral to
the Company’s product development and research may limit the rate at which the Company can grow and to offer new and expanded
products and services. The Company’s inability to attract and retain the individuals the Company needs could adversely impact
the Company’s business and the Company’s ability to achieve profitability. To mediate this risk, the Company will
embrace the hiring and training of engineering and business co-op students at both undergraduate and graduate levels to strengthen
and to maintain the Company’s internal knowledge infrastructure. Considering that Dr. Berry has a 28 years history with
Kettering University as a 80 year co-op school with programs in engineering, science and business, the Company feels this strategy
will be effective to mitigate this risk element.
The
Company may suffer from a business interruption and continuity of its ongoing operations might be affected.
The
Company’s ability to implement its business plans may be adversely affected by any business interruption that will affect
the continuity of its operations. While the Company may take reasonable steps to protect itself, there could be interruptions
from computer viruses, server attacks, network or production failures and other potential interruptions that would be beyond the
Company’s reasonable control. There can be no assurance that the Company’s efforts will prevent all such interruptions.
There
is a limitation on the officers and directors liability.
The
articles of the Company limit the personal liability of directors and officers for breach of fiduciary duty and the Company provides
an indemnity for expenses and liabilities to any person who is threatened or made a party to any legal action by reason of the
fact that the person is or was a director or officer of the Company unless the action of proven to that the person was liable
to be negligent or misconduct in the performance of their duty to the Company.
The
loss of our key officers or directors may raise substantial doubt as to the continued viability of the Company.
GEI
Global Energy Corp.’s operations depend on the technical efforts of key officers and directors and the loss of their services
may subsequently harm the company.
Because
of our new business model, we have not proven our ability to generate profit, and any investment in GEI Global Energy Corp. is
risky.
We
have very little meaningful operating history so it will be difficult for you to evaluate an investment in our stock. We
cannot assure that we will ever be profitable. Since we have not proven the essential elements of profitable operations,
you will be furnishing venture capital to us and will bear the risk of complete loss of your investment in the event we are not
successful.
We
may be unsuccessful in monitoring new trends.
Our
net revenue might decrease with time. Consequently, our future success depends on our ability to identify and monitor trends and
the development of new markets. To establish market acceptance of a new technologies, we will dedicate significant resources to
research and development, production and sales and marketing. We will incur significant costs in developing, commissioning and
selling new products, which often significantly precedes meaningful revenues from its sale. Consequently, new business can require
significant time and investment to achieve profitability. Prospective investors should note, however, that there can be no assurance
that our efforts to introduce new products or other services will be successful or profitable.
We
may face distribution and product risks.
Our
future financial results depend in large part on our ability to develop relationships with our customers. Any disruption in our
relationships with our future customers could adversely affect our financial performance.
We
may face claims of infringement on intellectual property rights.
Other
parties may assert claims of ownership or infringement or assert a right to payment with respect to the exploitation of certain
intellectual properties against us. In many cases, the rights owned or being acquired by us are limited in scope, do not extend
to exploitation in all present or future uses or in perpetuity. We cannot assure you that we will prevail in any of these claims.
In addition, our ability to demonstrate, maintain or enforce these rights may be difficult. The inability to demonstrate or difficulty
in demonstrating our ownership or license rights in these technologies may adversely affect our ability to generate revenue from
or use of these intellectual property rights.
If
our operating costs exceed our estimates, it may impact our ability to continue operations.
We
believe we have accurately estimated our needs for the next 18 months. It is possible that we may need to purchase additional
equipment, hire additional personnel, and further develop new business ventures, or that our operating costs will be higher than
estimated. If this happens, it may impact our ability to generate revenue and we would need to seek additional funding. We
intend to establish our initial client base via existing relationships that our directors and officers have established in past
business relationships. Should these relationships not generate the anticipated volume of business, any unanticipated
costs would diminish our working capital.
GEI
Global Energy Corp. may not be able to attain profitability without additional funding, which may be unavailable.
GEI
Global Energy Corp. has limited capital resources. Unless GEI Global Energy Corp. begins to generate sufficient revenues to finance
operations as a going concern, GEI Global Energy Corp. may experience liquidity and solvency problems.
RISKS
ASSOCIATED WITH THIS OFFERING
Existing
stockholders may experience significant dilution from the sale of our common stock pursuant to the River North Equity, LLC Investment
Agreement.
The
sale of our common stock to River North Equity, LLC in accordance with the Investment Agreement may have a dilutive impact on
our shareholders. As a result, our net income per share could decrease in future periods and the market price of our common stock
could decline. In addition, the lower our stock price is at the time we exercise our put options, the more shares of our common
stock we will have to issue to River North Equity, LLC in order to exercise a put under the Investment Agreement. If our stock
price decreases, then our existing shareholders would experience greater dilution for any given dollar amount raised through the
Offering.
The
perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our common
stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors
to engage in short sales of our common stock. By increasing the number of shares offered for sale, material amounts of short selling
could further contribute to progressive price declines in our common stock.
River
North Equity, LLC will pay less than the then-prevailing market price of our common stock which could cause the price of our common
stock to decline.
The
purchase price per share of common stock will be set at seventy percent (70%) of the lowest closing bid price of the common stock
during the 10 consecutive trading days immediately prior the date of our notice to River North Equity, LLC pursuant to the Investment
Agreement. The foregoing purchase price shall always remain below the maximum offering price of $0.067.
River
North Equity, LLC has a financial incentive to sell our shares immediately upon receiving the shares to realize the profit between
the discounted price and the market price. If River North Equity, LLC sells our shares, the price of our common stock may decrease.
If our stock price decreases, River North Equity, LLC may have a further incentive to sell such shares. Accordingly, the discounted
sales price in the Investment Agreements may cause the price of our common stock to decline.
River
North Equity, LLC has entered into similar agreements with other public companies and may not have sufficient capital to meet
our put notices.
River
North Equity, LLC has entered into similar investment agreements with other public companies, and some of those companies have
filed registration statements with the intent of registering shares to be sold to River North Equity, LLC pursuant to investment
agreements. We do not know if management at any of the companies who have or will have effective registration statements intend
to raise funds now or in the future, what the size or frequency of each put request would be, if floors will be used to restrict
the amount of shares sold, or if the investment agreement will ultimately be cancelled or expire before the entire amount of shares
are put to River North Equity, LLC. Although we do not have any control over the requests of these other companies, if River North
Equity, LLC receives significant requests. However, River North Equity, LLC should have the financial ability to meet our requests
if River North Equity, LLC establishes a reserve of funds in advance on our behalf.
We
are registering an aggregate of 150,000,000 shares of common stock to be issued under the River North Equity, LLC Investment Agreement.
The sale of such shares could depress the market price of our common stock.
We
are registering an aggregate of 150,000,000 shares of common stock under the registration statement of which this Prospectus forms
a part for issuance pursuant to the River North Equity, LLC Investment Agreement. The sale of these shares into the public market
by River North Equity, LLC could depress the market price of our common stock.
The
Board of the Company has full discretion to reallocate the Proceeds.
The
Company intends to use the net proceeds from this offering for the purposes and in the amounts described ‘USE OF PROCEEDS’. The
Company’s estimates of its allocation of the net proceeds of the offering are based upon the current state of its business
operations, its current plans and current economic and industry conditions. These estimates are subject to change based
on material factors such as delays in project development, unanticipated or changes in the level of competition, adverse market
trends and new business opportunities. Thus the Company will have broad discretion to make material changes in the allocation
of the proceeds.
However,
the only event that would result in a major departure from the anticipated use of funds herein is a major reduction in the River
North Equity, LLC funding levels. If this scenario does result, the priority on funding will be Auditing and Legal, Personnel,
and Operations and Supplies.
The
Company’s Common Stock may be thinly traded, and the public market may provide little or no liquidity for holders of the
Company’s Common Stock.
Purchasers
of shares of the Company’s Common Stock may find it difficult to resell their shares at prices quoted in the market or at
all. There is currently a limited volume of trading in the Company’s Common Stock and due to the historically low trading
price of the Company’s Common Stock, many brokerage firms may be unwilling to effect transactions in the Company’s
Common Stock, particularly because low-priced securities are subject to an SEC rule that imposes additional sales practice requirements
on broker-dealers who sell low-priced securities (generally those below $5.00 per share). The Company cannot predict when or whether
investor interest in the Company’s Common Stock might lead to an increase in its market price or the development of a more
active trading market or how liquid that market might become.
Investors
in this offering will bear a substantial risk of loss due to immediate and substantial dilution.
The
principal shareholders of GEI Global Energy Corp. own a majority of the outstanding shares of GEI Global Energy Corp. common stock.
Further issues of stock will mean that shareholders may experience substantial “dilution.” Therefore, the investors
in this offering will bear a substantial portion of the risk of loss. The example below illustrates dilution based upon a $0.14
market price without regard to River North Equity, LLC’s 4.99% ownership limit and assuming if the entire $10,000,000 were
issued in a single “put” request (which is not likely).
Stock Price | |
Purchase Price | |
+/- Percent | |
Shares Issued | |
% Ownership |
$0.140 | |
0.098 | |
100.00 | |
102,040,816 | |
10.40 |
$0.130 | |
0.091 | |
85.71 | |
109,890,110 | |
11.20 |
$0.120 | |
0.084 | |
71.43 | |
119,047,619 | |
12.13 |
$0.110 | |
0.077 | |
57.14 | |
129,870,130 | |
13.24 |
$0.100 | |
0.070 | |
42.86 | |
142,857,143 | |
14.56 |
$0.090 | |
0.063 | |
28.57 | |
158,730,159 | |
16.18 |
$0.080 | |
0.056 | |
14.29 | |
178,571,429 | |
18.20 |
$0.070 | |
0.049 | |
0.00 | |
204,081,633 | |
20.80 |
$0.060 | |
0.042 | |
-14.29 | |
238,095,238 | |
24.27 |
$0.050 | |
0.035 | |
-28.57 | |
285,714,286 | |
29.12 |
Based
upon issued and outstanding shares of 831,066,776
The
Company may not have access to the full amount available under the investment agreement based upon the company’s recent
share price.
Based
upon the company opening share price of $0.001 on October 13, 2014, “if” the company would elect to issue a “put”
notice to the purchaser, the Company would only receive a portion of the aggregate amount listed herein. Understandably this
is not the desired execution sell price. As such, we are not obligated in any way to deliver to the purchaser a “put”
notice to sell stock at this low price minus the market discount, and thus will not do so.
On
the contrary, we anticipate positive market reaction to impending company and product developments, along with customer acquisitions
that will improve stock price and will allow the Company to execute a timely River North Equity, LLC “put” notice
to build company and shareholder value.
Purchasers
in this offering will have limited control over decision making because a small group of shareholders control a majority of shares
issued and outstanding before and after this offering.
Such
concentrated control may also make it difficult for stockholders to receive a premium for their shares of the Company in the event
the Company enters into transactions, which require stockholder approval. This concentration of ownership limits the power to
exercise control by the minority shareholders.
RISKS
RELATED TO OUR COMMON STOCK
The
market price of our common stock may be volatile and may be affected by market conditions beyond our control.
The
market price of our common stock is subject to significant fluctuations in response to, among other factors such as:
|
● |
Variations
in our operating results and market conditions specific to Fuel Cell Industry companies; |
|
● |
Announcements
of innovations or new products or services by us or our competitors; |
|
● |
Operating
and market price performance of other companies that investors deem comparable; |
|
● |
Changes
in our board or management; |
|
● |
Sales
or purchases of our common stock by insiders; |
|
● |
Commencement
of, or involvement in, litigation; |
In
addition, if the market for stocks in our industry or the stock market in general, experiences a loss of investor confidence,
the market price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.
If any of the foregoing occurs, it could cause the price of our common stock to fall and may expose us to lawsuits that, even
if unsuccessful, could be costly to defend and a distraction to the board of directors and management.
Our
principal stockholders have the ability to exert significant control in matters requiring stockholder approval and could delay,
deter, or prevent a change in control of our company.
Principal
stockholders hold a considerable percentage of stock and have the ability to influence matters affecting our shareholders, including
the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because they
control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being
operated. Because the influence by these shareholders could result in management making decisions that are in the best interest
of those shareholders and not in the best interest of the investors, you may lose some or all of the value of your investment
in our common stock. Investors who purchase our common stock should be willing to entrust all aspects of operational control to
our current management team.
We
do not intend to pay dividends in the foreseeable future.
We
do not intend to pay any dividends in the foreseeable future. We do not plan on making any cash distributions in the manner of
a dividend or otherwise. Our Board presently intends to follow a policy of retaining earnings, if any.
We
have the right to issue additional common stock and preferred stock without consent of stockholders. This would have the effect
of diluting investors’ ownership and could decrease the value of their investment.
We
are authorized to issue up to 5,000,000,000 shares of common stock, of which there are currently 831,066,776 shares issued and
outstanding.
In
addition, our certificate of incorporation authorizes the issuance of shares of preferred stock, the rights, preferences, designations
and limitations of which may be set by the Board of Directors. Our certificate of incorporation has authorized the issuance of
up to 10,000,000 shares of preferred stock in the discretion of our Board. The shares of authorized but undesignated preferred
stock may be issued upon filing of an amended certificate of incorporation and the payment of required fees; no further stockholder
action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our
Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences
as to dividends and distributions on liquidation.
SPECIAL
NOTE ABOUT FORWARD-LOOKING STATEMENTS
We
have made forward-looking statements in this Prospectus, including the sections entitled “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and “Business,” that are based on our management’s
beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information
concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry
environment, potential growth opportunities, the effects of future regulation, and the effects of competition. Forward-looking
statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology
such as the words “believe,” “expect,” “anticipate,” “intend,” “plan,”
“estimate” or similar expressions. These statements are only predictions and involve known and unknown risks and uncertainties,
including the risks outlined under “Risk Factors” and elsewhere in this Prospectus.
Although
we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results,
events, levels of activity, performance or achievement. We are not under any duty to update any of the forward-looking statements
after the date of this Prospectus to conform these statements to actual results, unless required by law.
USE
OF PROCEEDS
When
all of the shares are sold the gross proceeds over a period of 18 months from this offering will be $10,000,000. Our
management will have broad discretion to allocate the net proceeds from this offering. The primary use of funds will be to complete
the development of the GEI X5 fuel cell technology, obtain North America, and European certifications, deploy pre-commercial field
test units in the United States, Italy, India, and Asia, and build-out 5,000 sq. feet of manufacturing and final assembly space
to launch global commercialization.
Actual
expenditures may vary from our estimates, but we expect to disburse the proceeds from this offering in the priority set forth
below, within the first 18 months after successful completion of this offering:
Proceeds to Us: | |
$ | 10,000,000 | |
| |
| | |
Capital Equipment | |
$ | 2,000,000 | |
Personnel | |
$ | 1,200,000 | |
Certifications | |
$ | 100,000 | |
Field Test | |
$ | 800,000 | |
Auditing and Legal | |
$ | 150,000 | |
Brand Development and Marketing | |
$ | 250,000 | |
Operations & Supplies | |
$ | 900,000 | |
Facilities Expansion | |
$ | 1,800,000 | |
Acquisitions | |
$ | 2,000,000 | |
Reserve | |
$ | 800,000 | |
| |
| | |
Total Net Proceeds | |
$ | 10,000,000 | |
In
the event the expected funding is much less than anticipated ($3,000,000) due to a reduced share price (say $0.02 vs. $0.67),
funding priority will be Capital Equipment ($2,000,000) Facilities Expansion ($460,000), Auditing and Legal ($50,000), Personnel
($310,000), and Operations and Supplies ($180,000). However, the Company considers this event as unlikely, as there is
not a requirement for the Company to issue a “put” request to River North Equity, LLC to purchase stock as
any price. As such, the Company will only issue a “put” request to River North Equity, LLC to purchase stock when
it is advantageous and is in the best interest of the Company and stockholders.
INVESTMENT
AGREEMENT and TERMS OF THE OFFERING
On
September 12, 2014, we entered into the Investment Agreement and a Registration Rights Agreement with River North Equity, LLC
in order to establish a possible GEI Global Energy Corp. funding source.
Under
the Investment Agreement, River North Equity, LLC, an Illinois limited liability company, has agreed to provide us with up to
$10,000,000 of funding upon effectiveness of this prospectus; for which 150,000,000 shares of our common stock are being registered
pursuant to this prospectus. During this period, we can deliver a put under the Investment Agreement by selling shares of our
common stock to River North Equity, LLC will be obligated to purchase the shares. A put transaction must close before we can deliver
another put notice to River North Equity, LLC.
We
may request a “put” dollar investment amount by sending a put notice to River North Equity, LLC, stating the amount
of the put. The purchase put price per share of common stock will be set at seventy percent (70%) of the lower of: a) the average
closing bid price of the common stock during the ten (10) consecutive trading days prior to, or b) the closing bid price
on the date of our notice to River North Equity, LLC.
The
maximum purchase share quantity shall be the lessor of a) 4.99% of the then-current issued and outstanding, or b) the previous
10-day average trading volume multiplied by 3. As such, the share quantity is determined by dividing the dollar amount of the
put by the purchase put price per share (as limited by the 4.99% ownership).
The
minimum amount we can ‘put’ to River North Equity, LLC at any one time is $25,000 and the maximum amount is $250,000
unless agreed to by both parties. Upon effectiveness of the Registration Statement, the Company shall deliver instructions to
its transfer agent to issue shares of Common Stock to River North Equity, LLC free of restrictive legends on or before each closing
date.
Pursuant
to the Investment Agreement, River North Equity, LLC and its affiliates shall not be issued shares of our common stock that would
result in its beneficial ownership equaling more than 9.99% of our outstanding common stock.
River
North Equity, LLC will not enter into any short selling or any other hedging activities during the pricing period. On April 9,
2014, we entered into a Registration Rights Agreement with River North Equity, LLC requiring, among other things that we prepare
and file with the SEC a Registration Statement on Form S-1 covering the shares issuable to River North Equity, LLC under the Investment
Agreement. As per the Investment Agreement, none of River North Equity, LLC’s obligations there under are transferrable
and may not be assigned to a third party.
The
example below illustrates dilution based upon a $0.20 market price and without regard to River North Equity, LLC’s 4.99%
ownership limit or the 150,000,000 shares River North Equity, LLC limit, and assuming if the entire $10,000,000 were issued in
a single “put” request (which is not likely).
Stock Price | |
Purchase Price | |
+/- Percent | |
Shares Issued | |
% Ownership |
$0.140 | |
0.098 | |
100.00 | |
102,040,816 | |
10.40 |
$0.130 | |
0.091 | |
85.71 | |
109,890,110 | |
11.20 |
$0.120 | |
0.084 | |
71.43 | |
119,047,619 | |
12.13 |
$0.110 | |
0.077 | |
57.14 | |
129,870,130 | |
13.24 |
$0.100 | |
0.070 | |
42.86 | |
142,857,143 | |
14.56 |
$0.090 | |
0.063 | |
28.57 | |
158,730,159 | |
16.18 |
$0.080 | |
0.056 | |
14.29 | |
178,571,429 | |
18.20 |
$0.070 | |
0.049 | |
0.00 | |
204,081,633 | |
20.80 |
$0.060 | |
0.042 | |
-14.29 | |
238,095,238 | |
24.27 |
$0.050 | |
0.035 | |
-28.57 | |
285,714,286 | |
29.12 |
Based
upon issued and outstanding shares of 831,066,776
As
of the date of this Prospectus, there are approximately 831,066,776 issued and outstanding shares of our common stock, of which,
784,573,176 shares are held by non-affiliates, or 94.4%. After the River North Equity, LLC registration and if all 150,000,000
million shares were issued, River North Equity, LLC’s ownership would represent 15.3% of the total issued and outstanding
shares.
However,
we cannot sell shares to River North Equity, LLC if such shares would cause River North Equity, LLC to own more than 4.99% of
our common stock. As a result, as of the date of this Prospectus, River North Equity, LLC cannot own more than approximately 41,470,232
shares prior to issuance to River North Equity, LLC.
If
our total number of outstanding shares of common stock increases, as it will as we sell shares to River North Equity, LLC under
the Investment Agreement, then we would be able to sell more shares to River North Equity, LLC before reaching the 4.99% threshold.
In the event gross proceeds reach $10,000,000 from the sale of less than 150,000,000 shares, the offering will end with no further
shares sold. It is also likely that each sale will decrease our stock price which means subsequent sale may provide less proceeds
per share that the previous sale. In addition, we have only registered 150,000,000 shares for resale by River North Equity, LLC.
In connection with the Investment Agreement,
we (i) paid to River North Equity, LLC $nil cover their legal and administrative costs, (ii) issued to River North Equity, LLC
an aggregate of 3,000,000 shares of our common stock, restricted in accordance with Rule 144, as a commitment for the investment.
River
North Equity, LLC intends to sell up to 150,000,000 shares and is an “underwriter” within the meaning of the Securities
Act of 1933, as amended, in connection with the resale of our common stock under the Investment Agreement. As of date of this
Prospectus, River North Equity, LLC or its affiliates owns 3,000,000 shares of our common stock prior to the offering. After the
offering is completed, unless they have sold some or all of the shares held as of the date hereof, River North Equity, LLC will
continue to own 3,000,000 shares of our common stock.
All
of the shares held by the selling stockholders are restricted securities as that term is defined in Rule 144 promulgated under
the Securities Act of 1933.
DETERMINATION
OF OFFERING PRICE
The
offering price of the 150,000,000 shares of common stock offered for sale at the maximum price of $0.067 per share bears no relationship
to any objective criterion of value and bears no relationship to GEI Global Energy Corp.’s assets, book value, historical
earnings, or net worth. In determining the offering price, management considered such factors as the prospects, if
any, for similar companies, anticipated results of operations, present financial resources and the likelihood of acceptance of
this offering. Accordingly, the offering price should not be considered an indication of the actual value of our securities.
PLAN
OF DISTRIBUTION--INVESTMENT AGREEMENT
On
September 12, 2014, we entered into the Investment Agreement and a Registration Rights Agreement with River North Equity, LLC
in order to establish a possible source of funding for us.
Under
the Investment Agreement, River North Equity, LLC has agreed to provide us with up to $10,000,000 of funding upon effectiveness
of this prospectus; for which 100,000,000 shares of our common stock are being registered pursuant to this prospectus. During
this period, we can deliver a put under the Investment Agreement by selling shares of our common stock to River North Equity,
LLC and River North Equity, LLC will be obligated to purchase the shares. A put transaction must close before we can deliver another
put notice to River North Equity, LLC.
We
may request a put by sending a put notice to River North Equity, LLC, stating the amount of the put. During the five trading days
following a notice, we will calculate the amount of shares we will sell to River North Equity, LLC and the purchase price per
share. The number of shares of Common Stock that River North Equity, LLC shall purchase pursuant to each put notice shall be determined
by dividing the amount of the put by the purchase price.
The
purchase price per share of common stock will be set at seventy percent (70%) of the lowest closing bid price of the common stock
during the five consecutive trading days immediately following the date of our notice to River North Equity, LLC of our election
to put shares pursuant to the Investment Agreement. The foregoing purchase price shall always remain within the maximum offering
price of $0.067.
Pursuant
to the Investment Agreement, River North Equity, LLC and its affiliates shall not be issued shares of our common stock that would
result in its beneficial ownership equaling more than 9.99% of our outstanding common stock.
River
North Equity, LLC will not enter into any short selling or any other hedging activities during the pricing period. On April 9,
2014, we entered into a Registration Rights Agreement with River North Equity, LLC requiring, among other things that we prepare
and file with the SEC a Registration Statement on Form S-1 covering the shares issuable to River North Equity, LLC under the Investment
Agreement. As per the Investment Agreement, none of River North Equity, LLC’s obligations there under are transferrable
and may not be assigned to a third party.
DESCRIPTION
OF SECURITIES
Common
Stock
Our
authorized capital stock consists of 5,000,000,000 shares of common stock, par value $0.001 per share. The holders
of our common stock (i) have equal ratable rights to dividends from funds legally available therefore, when, as and if declared
by our Board of Directors; (ii) are entitled to share in all of our assets available for distribution to holders of common stock
upon liquidation, dissolution or winding up of our affairs; (iii) do not have preemptive, subscription or conversion rights and
there are no redemption or sinking fund provisions or rights; and (iv) are entitled to one non-cumulative vote per share on all
matters on which stockholders may vote.
There
are currently no outstanding option awards, but the Company has implemented an employee and consultant stock equity compensation
plan through an S8 registration. There are currently 297 warrant awards outstanding. Each warrant is exercisable into one common
share at a price of $126 per share for a period of five years.
Reverse
Acquisition
On August
15, 2013, Global Energy Innovation Inc. (“GEI”) signed a share purchase agreement (the “Acquisition”)
with Suja Minerals Corp. (“Suja”), a public company incorporated in Nevada, United States, according to which Suja
has acquired 100% of the 9,000,000 outstanding shares of GEI for $250,000 and 15,000,000 (75,000 post-split) shares of common
stock of Suja and 2,500 shares of Series A Convertible Super-Voting Preferred Stock of Suja. Each share of preferred stock in
the new company public Company, i.e. GEI GLOBAL ENERGY CORP., has a conversion rate of 1/1000 of the issued and outstanding common
stock and the total carries 50% of the voting rights until converted. In addition,
the Company’s President received a right to a royalty of 2.5% of sales up to $150,000,000 per year and 1.5% of sales over
$150,000,000 per year for 10 years.
Upon
issuance of additional shares by the Company, the President, at his sole discretion, may be issued additional shares equal to
a pro-rata percentage of the additional shares issued by the Company, effectively making these shares non-dilutable. This pro-rata
percentage based on shares held by the President at the date of the transaction is 65.2%. Should these shares be sold or transferred,
this provision will cease to be in effect.
Preferred
Stock
We
are authorized to issue 10,000,000 shares of preferred stock, $0.001 par value per share. The preferred stock may be divided into
number of series as our board of directors may determine. Our board of directors is authorized to determine and alter the rights,
preferences, privileges and restrictions granted to and imposed upon any wholly issued series of preferred stock, and to fix the
number of shares of any series of preferred stock and the designation of any such series of preferred stock. Currently there are
2,500 shares of Series A Convertible Super-Voting Preferred Stock issued and outstanding.
Series
A Convertible Super-Voting Preferred Stock
Our
Board of Directors has designated a series of preferred stock entitled Series A Convertible Super-Voting Preferred Stock. Each
of these preferred shares has a common stock conversion rate of 1/1000 of the total issued shares of the common stock of the Purchaser
at the time of conversion. Furthermore, these preferred shares will at all times prior to their total conversion have
a collective voting right equal to 50% of the total outstanding voting power of the corporation. As a result of the
issuance to Dr. Berry of 2,500 shares of Series A Convertible Super-Voting Preferred Stock and 15,000,000 (75,000 post-split)
shares (of a total 23,050,000 (115,250 post-split) issued and outstanding shares as of 9/16/2013) of the Company’s common
stock, Dr. Berry has voting control of the Company, with the voting power to elect the Company’s Board of Directors.
Non-Cumulative
Voting
Holders
of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding
shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event,
the holders of the remaining shares will not be able to elect any of our directors.
Cash
Dividends
As
of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future
cash dividend will be at the discretion of our Board of Directors and will depend on our earnings, if any, our capital requirements
and financial position, our general economic conditions, and other pertinent conditions. It is our present intention
not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
INTEREST
OF NAMED EXPERTS AND COUNSEL
None
of the below described experts or counsel have been hired on a contingent basis and none of them will receive a direct or indirect
interest in the Company.
Our audited financial statements for the period
from inception to December 31, 2013 and reviewed by the Accountants for the period ended September 30, 2014, included in this
prospectus has been audited by Manning Elliott LLP. We include the financial statements in reliance on their report,
given upon their authority as experts in accounting and auditing.
The
Law Offices of Joseph L. Pittera, 2214 Torrance Boulevard, Suite 101, Torrance, California 90501, has passed upon the validity
of the shares being offered and certain other legal matters and is representing us in connection with this offering.
DESCRIPTION
OF OUR BUSINESS
General
Information
Global
Energy Innovations was incorporated within the State of Michigan in 2007 as a private company, and became a public company listed
as GEI Global Energy Corp. (GEIG) August 15, 2013, through a reverse acquisition with the public company SUJA Minerals Corp. incorporated
within the State of Nevada.
Our
corporate headquarters are located at 6060 Covered Wagon Trail, Flint, Michigan, 48532, and our telephone number is (810) 610-2816.
Our website is http://www.geiglobal.com/. Information contained on our website is not incorporated into, and does not constitute
any part of this Prospectus.
Our fiscal
year-end is December 31.
GEI
GLOBAL ENERGY CORP.
What
is a Fuel Cell?
A
fuel cell is a device that produces electricity using a “chemical reaction” between hydrogen and oxygen without any
moving parts with heat and water as by-products. Unlike the “combustion” process that occurs within say an automobile,
a chemical reaction is more efficient with smaller losses, and with fewer harmful by-products that contribute to global warming
concerns. Hence, fuel cells are efficient in generating electricity at a greater efficiency of over 50% compared to other non-renewable
sources of electricity generation such as a back-up internal combustion engine generator which have energy efficiency of approximately
18% to 28%.
Fuel
cells continue to generate electricity so long as they have a source of fuel. Therefore, the fuel cell requires “refueling”
and not recharging like a battery. Furthermore, the chemical by-products of the fuel cell power generation process are almost
entirely CO2, water, and a small amount of NO. The fuel cell waste heat can also be harnessed, which further improves system efficiency.
In
comparison, waste heat from conventional diesel electric generators is rarely used due to the carbon monoxide generated and inconsistent
levels of heat produced.
Since
the origin of the Company in 2007 as Global Energy Innovation, GEI Global Energy Corp.’s primary mission has been the design
and fabrication of fuel cell electrical power generation systems. The Company is located in Flint, Michigan and since July
2013 has occupied 2500 square feet of office and fabrication space for building and testing fuel cell electric power generation
systems.
Prior
to July 2013, the Company was located within the commercialization incubator on the campus of Kettering University with access
to the Kettering Fuel Cell Research Center for development and testing (2007-2012). During this time period at Kettering University
the Company developed and delivered its first fuel cell electric power generator for industrial customer Ingersoll Rand as a demo
evaluation unit (2008) for commercial trucking applications. Subsequent development contracts included fuel cell electric power
generator evaluation units for governmental (U.S. Air Force) and private research organizations.
The
GEI fuel cell product is denoted as the GEI X5 fuel cell electric power generator and incorporates a high temperature polymer
exchange membrane (PEM) fuel cell and a high density energy storage system. These two technological innovations provide GEI with
what we feel could lead to a competitive advantage in the market place. The high temperature PEM fuel cell technology allows for
the extraction of the hydrogen fuel from existing industry fuels, such as natural gas (and other fuels), in a more cost effective
manner and resulting in higher system efficiencies. The second innovation is the energy storage system (Lithium Polymer Battery)
which allows the fuel cell system to respond instantaneously to the customer’s load request, say a microwave or an air conditioning
unit switching on/off intermittently. This “load following” requirement can cause much undesirable system
operating issues and eventual fuel cell membrane failure if the system is not designed correctly. The GEI fuel cell electrical
power generator does not have this concern, but could be an issue with perhaps other fuel cell providers. A typical fuel cell
system has high energy density but lacks the peak power and load carrying capacities of a typical battery. The GEI X5 hybrid system
combines the qualities of both. Without a battery, a fuel cell system would be unable to satisfy different load demands and require
different control strategies. The GEI X5 hybrid system, by combining a high power density with a fuel cell, provides a simple
and reliable control system.
Another
benefit of the integrated fuel cell and battery “hybrid” power generation system is the opportunity to interface with
solar, wind and other renewable energy technologies as an electrical charging source for GEI’s Lithium Polymer battery.
Within this configuration, the energy required for battery charging is provided by the solar or wind technology, which reduces
the use of natural gas required by the fuel cell system for battery charging. This increases the overall system efficiency through
reduced fuel consumption; as such we feel that our technology has the potential to provide a competitive advantage in the market.
Additionally,
since many solar energy power plants have power purchase agreements (PPA) to sell grid power to local utilities, they are limited
in their ability to generate income to approximate 8 hours per day and even less during cloudy days or during bad weather conditions.
Also since the power output is not steady or consistent; many solar energy power plants are unable to charge maximum rates (i.e.
cents per kW-h) as a primary power source. However, upon integration with a “hybrid” fuel cell power system operating
on affordable natural gas the output grid power is continuous 24 hours per day and thereby allowing the solar energy facility
to charge premium rates as a primary power source and generate revenue 24 hours per day rather than only 8-hours per day. The
company is pursuing this hybrid solar/fuel cell configuration through discussions with the solar energy community. Nevertheless,
the company feels this configuration will provide a competitive advantage in the alternative power generation market.
Currently (June 2014), the Company is fabricating
a hydrogen fuel electric power generation system for commercial customer. (College Station, TX) to
generate electric power using hydrogen from a biogas fuel produced from a high temperature plasma used to transform bio waste
products. Although not the initial fuel cell system for the Company since 2007, the project represents the initial system since
becoming public in August 15, 2013 and after the Company’s re-engineering and design optimization process.
Industry
Background
Across
the world, the call for using renewable sources of energy for electricity generation has been increasing. In terms of megawatts
shipped, the stationary sector continued to lead the fuel cell industry thanks to the large size of individual units with a predicted
52% increase for 2013 with over 190 MW of newly installed fuel cell power (Fuel Cell Industry Review 2013). Fuel cell markets
will grow from an estimated $629.8 million in 2013 to $2.5 billion by 2018 aided by the flexibility in size, power and varied
applications, with a CAGR of 32.2% from 2013 to 2018 (Markets and Markets, Dallas, TX). Not only does the power retail market
dwarf the GDP of all countries, it also provides an insight into the subdued demand of the energy sector.
Although,
the electricity generation industry is a multi-trillion dollar industry and as demand is projected to increase, the industry faces
substantial wastage in terms of heat generation during production. Approximately 68% of the fuel spent is wasted as heat and only
about 30% energy in the fuel reaches the consumer after transmission losses. Hence improving efficiency in production can immediately
improve the statistics for this multi-trillion dollar industry. The dynamics of the industry are such that they have led to a
concentration of power in a few national energy production companies. Concentration, most of the times, is absolute since there
is usually a single major producer in a local area. We believe that the size of the industry and the potential problems it is
facing can lead to a more sustainable, cost effective and environmentally friendly alternative.
The
current emphasis on electricity generation via conventional sources has resulted in an insecure, inefficient and environmentally
detrimental system. GEIG’s fuel cell electrical power generation systems have the potential to drive the market into an
entirely new direction. The GEIG system can be economically produced, is scalable, and does not tap into an electricity grid.
Therefore, it eliminates most of the waste currently associated with electricity generation and distribution. Its ability to combine
with other sources of renewable energy, such as wind and solar, can also contribute to the improvement of economic conditions
for a vast majority of the population.
The
Michigan facility will provide employment as the Company scales to build strategic partnerships to provide an end-to-end power
solution. The Company intends to build fuel cell electric power generation systems ranging from 2kW–100 kW.
Competition
And Competitive Advantage
Due
to the varied application of the GEI fuel cell systems, the Company faces competition from a number of companies with different
applications as listed below. However, we feel that GEI has a strategic advantage in terms of fuel conversion efficiency, systems
integration, integration with solar and wind, system cost, and a robust design methodology.
Plug
Power Systems: Low temperature PEM fuel cell operate on pure hydrogen designed for fork lift trucks.
Clear
Edge Power: California based high temperature PEM 5kW fuel cells operating on natural gas and focused on residential customers.
Nordic
Power Systems: European based high temperature 1kW fuel cells operating on low sulfur diesel fuel.
UltraCell
Power: Portable high temperature 25kW fuel cells operating on reformed methanol.
Bloom
Energy: We believe Bloom could be a serious competitor in the large stationary and base load stationary markets.
Sources
And Availability Of Bill-of-Material Components
Off-the-shelve
Bill of Materials (BOM) components such as pumps, blowers, gaskets, tubing, pipes, insulation, nuts, bolts, catalyst, heat exchangers,
power converters, and electronics, etc., are readily available from suppliers to accommodate the Company’s short term sales
objectives of ten (10) 5-kW fuel cell power systems per month. Additionally, our supply chain production can be increased with
relatively short notice as we seek to establish more than one (1) supplier when possible.
GEI
Global Energy Corp. is seeking to also established an international supply chain partners for sourcing high-volume-low cost electric
components such as DC-DC power converters used in every fuel cell power system. Although not used today, as we are still within
the low-volume pre-commercial stage, we are developing the strategies to establish and to control our future high-volume global
supply chain cost and logistics.
Dependence
On One Or A Few Major Customers
GEI Global
Energy Corp. is not dependent on one or a few major customers.
Patents
And Trademarks
GEI Global
Energy Corp. currently holds the U.S. copyright for the company name “GEI Global Energy Innovations”.
Currently
GEIG holds an exclusive commercialization license on one patent held by Dr. Berry (co-Inventor). Dr. Berry is also the co-Inventor
on two additional pending patents relating to fuel cell stack design. The 2008 US patent 7,843,185 relates to Configurable Input
High-Power DC-DC Converter (power management) and the two pending patents relate to its fuel cell bipolar plate for
optimal uniform delivery of reactant gases and efficient water removal (thermal systems management). This
includes its stack design and assembly of high temperature PEM fuel cells. An accumulation of patents and proprietary rights on
related technologies will give GEIG a strong, competitive advantage over its competitors.
The commercialization
license runs concurrent with the US patent ownership of 17 years, or 2025.
Need
For Any Government Approval Or Principal Products
It
will be required to obtain electrical power certifications for commercialization of products for U.S. and European markets. Certification
signifies that a product has met consumer safety, health and environmental requirements. The certification is awarded based on
the successful completion of a series of tests designed to meet essential requirements on appliances operating on hydrogen, including
electro-magnetic compliance, low voltage and machine directives. The specific safety certifications are:
|
● |
ANSI/CSA
FC 1-2014: Stationary Fuel Cell Power Systems |
|
● |
UL
1741: Inverters for Use With Distributed Energy Resources |
The approximate
time frame for completion is 6-9 months.
Government
And Industry Regulation
We
will be subject to federal laws and regulations that relate directly or indirectly to our operations including securities laws. We
will also be subject to common business and tax rules and regulations pertaining to the operation of our business.
Environmental
Laws
Our operations
are not subject to environmental laws and regulations.
Employees
And Employment Agreements
GEI Global
Energy Corp. currently has three (3) full-time employees.
Organization
Within The Last Five Years
GEI Global
Energy Corp. has not formed any new organizations within the last 5 years
Description
Of Property
GEI
Global Energy Corp. leases 2,500 sq. ft. of space in Flint, Michigan and serves as office, testing, and final assembly. Lease
rates are $5,080 per month.
Legal
Proceedings
We are not
involved in any pending legal proceeding nor are we aware of any pending or threatened litigation against us.
In
the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation
process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon
our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein,
matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position
or results of operations.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No public
market currently exists for shares of our common stock. Following completion of this offering, we intend to apply to
have our common stock listed for quotation on the Over-the-Counter Bulletin Board.
Penny
Stock Rules
The
Securities and Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in
penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered
on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or system).
A
purchaser is purchasing penny stock that limits the ability to sell the stock. The shares offered by this prospectus
constitute penny stock under the Securities and Exchange Act. The shares will remain penny stocks for the foreseeable
future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary
market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by
the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities
and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt
to sell penny stock.
The
penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver
a standardized risk disclosure document, which:
|
● |
Contains
a description of the nature and level of risk in the market for penny stock in both Public offerings and secondary trading; |
|
● |
Contains
a description of the broker or dealer’s duties to the customer and of the rights and remedies available to the customer
with respect to a violation of such duties or other requirements of the Securities Act of 1934, as amended; |
|
● |
Contains
a brief, clear, narrative description of a dealer market, including “bid” and “ask” price for the
penny stock and the significance of the spread between the bid and ask price; |
|
● |
Contains
a toll-free number for inquiries on disciplinary actions; |
|
● |
Defines
significant terms in the disclosure document or in the conduct of trading penny stocks; and |
|
● |
Contains
such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission
shall require by rule or regulation. |
|
● |
The
broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer: |
|
● |
The
bid and offer quotations for the penny stock; |
|
● |
The
compensation of the broker-dealer and its salesperson in the transaction; |
|
● |
The
number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity
of the market for such stock; and |
|
● |
Monthly
account statements showing the market value of each penny stock held in the customer’s account. |
In
addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the
broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive
the purchaser’s written acknowledgement of the receipt of a risk disclosure statement, a written agreement to transactions
involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements
will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these
penny stock rules. Therefore, stockholders may have difficulty selling their securities.
REPORTS
We
are subject to certain reporting requirements and will furnish annual financial reports to our stockholders, certified by our
independent accountants, and will furnish un-audited quarterly financial reports in our quarterly reports filed electronically
with the SEC. All reports and information filed by us can be found at the SEC website, www.sec.gov.
STOCK
TRANSFER AGENT
Our transfer
agent will be: VStock Transfer, 77 Spruce Street Suite 200, Cedarhurst, New York 11516.
FINANCIAL
STATEMENTS
Our
fiscal year-end is December 31. We intend to provide financial statements audited by an Independent Registered Accounting
Firm to our shareholders in our annual reports. The audited financial statements for the years ended December 31, 2013
and 2012 are included.
MANAGEMENT’S
DISCUSSION AND ANALYSIS
The
following discussion and analysis is intended as a review of significant factors affecting our financial condition and results
of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial
statements and the notes presented herein. In addition to historical information, the following Management's Discussion
and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties.
Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain
factors discussed in this annual report.
MANAGEMENT’S
PLAN OF OPERATION
The
following discussion of our financial condition, changes in financial condition and results of operations for the period ended
December 31, 2013, should be read in conjunction with our audited financial statements and related notes for the period ended
December 31, 2013.
The
analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of the Company.
The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities.
GOING
CONCERN
The accompanying
financial statements have been prepared assuming the Company will continue as a going concern.
The
future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development
of its new business opportunities. Management has plans to seek additional capital through one of more private placement
and public offering of its common stock. These conditions will enhance the Company's ability to continue as a going concern. These
financial statements do not include any adjustments that might arise from this uncertainty.
The
financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the
amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Although
the auditors has expressed a valid concern, the S1 registration and subsequent funding will help to reduce this as a going concern.
Additionally, we continue to evaluate other funding opportunities.
Fiscal
Year Ended December 31, 2013, Compared to Fiscal Year Ended December 31, 2012
The Company
did not generate any revenues for the years ended December 31, 2013 and 2012.
Selling,
general and administrative expenses increased to $442,469 from $6,348 for the years ended December 31, 2013 and 2012, respectively.
The increase in our selling, general and administrative expenses are related to the salaries of management of $103,129 , business
development of $147,635, professional fees of $116,029, rent of $45,450 and office expense of $30,226 in the year ended December
31, 2013 compared to a total of $6,348 in the year ended December 31, 2012. The increase in the selling, general and
administrative expenses is due to the stock based compensation for marketing and sales consultants.
Interest
expense increased to $79,433 from $78,822 for the year ended December 31, 2013 and 2012, respectively. Our interest expense increased
as a result of interest and accretion on convertible promissory notes and other borrowings outstanding throughout the year.
Depreciation
expense increased to $9,838 from $1,530 for the year ended December 31, 2013 and 2012, respectively. Our depreciation expense
increased as a result of the increase in our leasehold improvements to our warehouse.
Liquidity
and Capital Resources
We
expect to incur substantial expenses and generate significant operating losses as we continue to grow our operations, as well
as incur expenses related to operating as a public company and compliance with regulatory requirements.
We
have an accumulated deficit at December 31, 2013 of $3,697,339 and need additional cash flows to maintain our operations. We depend
on the continued contributions of our executive officers to finance our operations and need to obtain additional funding sources
to explore potential strategic relationships and to provide capital and other resources for the further development and marketing
of our products and business. We expect our cash needs for the next 12 months to be $850,000 to fund our operations. The ability
of the Company to continue its operations is dependent on the successful execution of management’s plans, which include
expectations of raiding debt or equity based capital until such time that funds from operations are sufficient to fund working
capital requirements. The Company may need to incur additional liabilities with related parties to sustain the Company’s
existence. There is no assurance that such funding, if required will be available to us or, if available, will be available upon
terms favorable to us.
Cash
flows from operations. Our cash (used in) operating activities were ($413,186) and ($23,495) for the years ended December
31, 2013 and 2012, respectively. The increase in cash used in operations was primarily attributable to the increase of general
and administrative expenses in 2013 as compared to the 2012 period.
Cash
flows from investing activities. Our cash (used in) investing activities were ($219,687) and ($0.00) for the years ended December
31, 2013 and 2012, respectively. The increase in cash used in investing activities was the purchase of equipment for our demonstration
asset and lease hold improvements in our warehouse.
Cash flows from financing activities. Cash
by provided by financing activities was $638,329 and $9,437 for the years ended December 31, 2013 and 2012, respectively. We received
cash from advances of $674,500, proceeds from convertible debt of $30,000, and proceeds from the sale of our common stock of $67,500
for year ended December 31, 2013. During the year ended December 31, 2013, received $12,500 and repaid $110,742 from our CEO. We
repaid our loan to the City of Flint Michigan and accrued interest of $35,429 for the year ended December 31, 2013.
PROPOSED
MILESTONES TO IMPLEMENT BUSINESS OPERATIONS
The
following milestones are estimates only. The working capital requirements and the projected milestones are approximations
only and subject to adjustment based on costs and needs of the Company, and market conditions of the media and broadcasting industry,
none of which can be forecast exactly.
The
costs associated with operating as a public company are included in our budget. Management will be responsible for
the preparation of the required documents to keep the costs to a minimum.
The
GEI Global Energy Corp. technology has been developed and refined since 2007 and resulting in field test units for evaluation
and improvements. The base technology has been further documented in scientific journals and publications with Dr. Berry as the
author/co-author since 2010. The current 2014 design and the latest development have been highlighted in the following press releases:
|
● |
GEI
Global Energy Corp. Announces Biogas Power Generation Order
(http://finance.yahoo.com/news/gei-global-energy-corp-announces-122530663.html) |
|
● |
GEI
Global Energy Corp. Completes GEI X5 Core Technology Testing for Fuel Cell Electric Power Generation |
|
|
(http://finance.yahoo.com/news/gei-global-energy-corp-completes-124318281.html) |
|
● |
GEI
GLOBAL and C&S Engineering Solutions Technology Development |
|
|
(http://finance.yahoo.com/news/gei-global-c-engineering-solutions-125500625.html) |
As
GEI Global Energy Corp has already achieved initial milestones associated with design, development and launch of a new product,
all of which are familiar to the company and its management team. These include:
|
1. |
Design, fabricate, and test of integrated fuel cell and energy storage
electronic charging and discharging control system. |
|
2. |
Design,
fabricate, and test of high power density Lithium Polymer battery pack. |
|
3. |
Design,
fabricate, and test Balance-of-Plant integration system to combine fuel cell stack and fuel reforming technology. |
|
|
|
|
4. |
Design,
fabricate, and test technology for extracting hydrogen from natural gas. |
|
5. |
Design,
fabricate and test of efficient fuel cell power system integrated thermal management system. |
|
|
|
|
6. |
Design,
fabricate and test oil based high temperature PEM (Polymer Electrode Membrane) fuel cell electric power generator. |
The
following milestone remains to complete fully commercial unit with an estimated cost of $200,000:
|
● |
Design
and prototype of scalable and distributed command and control imbedded microprocessor hardware and software. (Currently under
development with 3-month timeline for completion) |
CRITICAL
ACCOUNTING POLICIES
A.
Nature of Business
GEI
Global Energy Corp. is a Fuel Cell Company incorporated in the state of Nevada in 2013. The Company was formed to develop to commercialize
fuel cell power systems technology developed by Dr. K. J. Berry, GEI Chairman and CEO.
B.
Basis Of Accounting
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.
Cash
and Cash Equivalents
The
Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents
to the extent the funds are not being held for investment purposes.
Stock-Based
Compensation
The
Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation, which requires
the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees
and directors, including stock options.
ASC
718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. We
use the Black-Scholes option pricing model as its method in determining fair value. This model is affected by our stock price
as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to
our expected stock price volatility over the terms of the awards, and actual and projected employee stock option exercise behaviors.
The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations
over the requisite service period
Fair
Value of Financial Instruments
ASC
820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent,
objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the
fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes
the inputs into three levels that may be used to measure fair value:
Level
1
Level
1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level
2
Level
2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability
such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in
markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant
inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level
3
Level
3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to
the measurement of the fair value of the assets or liabilities.
The
Company’s financial instruments consist principally of cash, accounts payable, advances received, an amount due to a related
party, loan payable, convertible note and note payable. Pursuant to ASC 820, the fair value of cash is determined based on “Level
1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial
instruments approximate their current fair values because of their nature and respective maturity dates or durations. Management
does not believe that the Company is subject to significant interest, currency or credit risk arising from these financial instruments.
Basic
and Diluted Loss Per Share
The
basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding.
Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by
the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential
dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
Revenue
Recognition
Revenue
is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably
measured. Revenues related to fixed-price contracts that provide for development of full-cell generation systems development services
are recognized as the service is performed using the percentage of completion method of accounting, under which the total value
of revenue is recognized on the basis of the percentage that each contract’s total labor cost to date bears to the total
expected labor costs (cost to cost method). Revenue from the sale of goods is recognized when the significant risks and rewards
of ownership have been transferred, which is considered to occur when title passes to the customer. This generally occurs when
product is physically transferred onto a vessel, train, conveyor or other delivery mechanisms. Revenue is measured at the fair
value of the consideration received or receivable.
Research
and Development Expenses
We
anticipate incurring significant research and development expenses in the future as we discover, develop, and bring to market
new products and treatments. We do not currently have an estimate of those costs because we do not know the extent or scope of
products that we may be able to develop. We have not estimated the amount nor timing of costs, internal or external, that we expect
to incur on any of our major research and development projects because we do not have the financial capital necessary to hire
consultants and financial analysts necessary to do so. We do intend, in the future at a time when we are more comfortably capitalized,
to prepare thorough estimates. There are significant risks associated with developing projects on schedule and within budget,
including but not limited to capital funding, loss of market share, and unforseen product liability. To date, we have spent a
total of $112,488 developing the patents, consisting of $46,591 of patent application related fees and $78,404 of research and
development costs.
Income Taxes
The Company
utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities
are recognized for operating loss and tax credit carry-forwards and for the future tax consequences attributable to differences
between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which
those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance
is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets
will be realized.
The Company
uses the two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position
for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will
be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure
the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers
many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments.
At December 31, 2013, the Company did not record any liabilities for uncertain tax positions.
Recently
Issued Accounting Pronouncements
In
February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive
Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency
of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net
income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into
net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income
in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial
statements under U.S. GAAP. The new amendments will require an organization to:
● Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net
income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is
required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
● Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required
under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case
when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance
sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
The
amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required
to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods
beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 did not
have a material impact on our financial position or results of operations.
In
January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting
Assets and Liabilities , which clarifies which instruments and transactions are subject to the offsetting disclosure requirements
originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under
ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement
users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable
and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant
presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like
ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption
of ASU 2013-01 did not have a material impact on our financial position or results of operations.
In
October 2012, the FASB issued Accounting Standards Update ASU 2012-04, “Technical Corrections and Improvements” in
Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards
Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming
amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after
December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our financial position or results of operations.
In
August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs
Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections
Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update
amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 did not have a material impact
on our financial position or results of operations.
In
July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible
Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill
and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative
factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining
whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill
and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed
for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment
tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual
or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption
of ASU 2012-02 did not have a material impact on our financial position or results of operations.
In
December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications
of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement
to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income
where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 did
not have a material impact on our financial position or results of operations.
In
December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities”
(“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements
to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective
of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of
U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for
annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. This accounting
pronouncement did not have a material impact on our financial position or results of operations.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There
are no disagreements between the company and with either its accountants or auditors.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors
of the corporation are elected by the stockholders to a term of three (3) years and serve until a successor is elected and qualified. Officers
of the corporation are appointed by the Board of Directors to a term of one year and serves until a successor is duly appointed
and qualified, or until he or she is removed from office. The Board of Directors has no nominating, auditing or compensation
committees.
The
name, age and position of our officer and director is set forth below:
Name |
|
Age |
|
First
Year as
Director |
|
Position |
|
|
|
|
|
|
|
Dr.
K. J. Berry |
|
58 |
|
2013 |
|
Chairman
and CEO |
Dave
Namenye |
|
62 |
|
2013 |
|
Director |
Cleamon Moorer |
|
38 |
|
2014 |
|
Director |
The
term of office of each director of the Company is three (3) years and can be re-approved by the Board of Directors at the subsequent
annual meeting.
Directors
are entitled to reimbursement for expenses in attending meetings and receive 25,000 common shares annually if they receive no
other compensation. Directors who are employees may receive compensation for services other than as director. During the year
ended December 31, 2013 no compensation has been paid to directors for services.
BACKGROUND
INFORMATION ABOUT OUR OFFICERS AND DIRECTORS
The
following information sets forth the backgrounds and business experience of the executive officers and directors:
K.
J. Berry, Ph.D., P.E.
Chairman
and CEO, and Director
Dr.
Berry is principal owner and founder of Global Energy Innovations, Inc. (GEI). Dr. Berry served as Professor and Head of the Department
of Mechanical Engineering at Kettering University, formerly GMI Engineering & Management Institute for 17 years (1994-2012),
and continues to be Professor of Mechanical Engineering. While attending GMI (1973-1979) Dr. Berry worked as a co-op Durability
& Test Engineer for Detroit Diesel. Upon graduation and during his MSU graduate school studies, Dr. Berry worked in advanced
product research to advance the state-of-the-art for diesel engine development and performance. Dr. Berry has a Ph.D in Mechanical
Engineering from Carnegie Mellon University. Dr. Berry was appointed to the Eugene W. Kettering Chair of Power Engineering in
2002 for his leadership in developing state-of-the-art engineering laboratories, for his vision and foresight, and for developing
one of the largest and strongest undergraduate mechanical engineering programs in the nation. In 2005 Dr. Berry received the Automation
Alley Emerging Leader Award for his visionary efforts. Dr. Berry has received advanced academic leadership and administrative
training through the Harvard University Institutes for Higher Education, and is a registered professional engineer with
the State of Michigan.
Dave
Namenye,
Director
Mr.
Namenye is a specialist in communications, curriculum architecture design, organizational development and marketing. Dave has
21 years of experience in the automotive industry working in a variety of capacities from project management to organizational
leadership. He has extensive experience conducting training needs analysis, developing assessment tools, designing
and developing training materials, programs and educational systems for the automotive industry and classroom training. He
was president of his own human performance improvement consulting company. He was a key contributor to a national training
company serving as training project manager and project director. Mr. Namenye also served as a training manager for
a tier one manufacturing organization of 1,800 employees responsible for all aspects of the training and organizational development
process. He also was Midwest Regional Director of Technical Learning and Development for Comcast Communications.
Mr.
Namenye’s accomplishments include the design and development of supervisory training programs, assisting in the design and
implementation of a Career Launch Program for newly hired salaried employees for a 7 billion dollar tier one-auto supplier. Mr.
Namenye also worked with GM Advanced Engineering assisting in the design of a hydrogen vehicle education program to promote the
awareness and knowledge of alternative energy focusing on GM’s Hydrogen Vehicle Program. The program was to be
conducted at Science Centers in 10 major cities during a national tour of GM’s Hydrogen 3 vehicle, the predecessor the current
hydrogen Equinox. He has also supported Kettering University in the design and development of a Sustainable Energy
Workshop for Teachers and alternative energy summer camp for students.
Mr.
Namenye holds Masters Degrees in Educational Leadership, with an emphasis on instructional and curriculum design and Counseling
and Personnel from Western Michigan University. He also holds a Bachelor of Arts Degree in Education (Communications Arts and
Sciences) from Western Michigan University.
Mr.
Namenye has extensive training in manufacturing quality control, and IS9000 certification and documentation development.
Cleamon
Moorer, Ph.D.
Dr.
Cleamon Moorer, Dean of the School of Business at Madonna University, Livonia, Michigan. Dr. Moorer has held faculty positions
while assuming leadership roles at Dominican University, Kettering University, Saint Xavier University, and Roosevelt University.
His corporate experience stems from serving as a consultant, service executive, project manager and telecommunications engineer
at (2) Fortune 100 Corporations: (General Motors and AT&T). He teaches international business, management, and strategic management.
Jeff
Berkowitz (JB)
VP
New Markets and Global Acquisitions
Mr.
Berkowitz has been a consultant for an array of public companies as well as private companies striving to become public since
1997. His specialties include Mergers and acquisitions, asset purchases, consulting, negotiating, strategic planning, crisis management,
public relations, and venture capital funding. He was a funding liaison for many banking institutions, brokers and private lenders
throughout his tenure as a real estate investor and general contractor.
MANAGEMENT
STAFF
Aravind
S Krishna
Systems
Engineer
Mr.
Aravind S Krishna’s serves as GEI’s Fuel Cell Systems Design Engineer and has a current background in Body sealing
for water and air leaks at Chrysler LLC. Past experience includes development of Hybrid Vehicles and Fuel cell powered vehicles
from Kettering University, design, development, and releasing of automotive components like Rear Axles, Front Cradles, LCA, Ladder
Frames, and Sheet-metal components at Magna.
Jeremy
Gnida
Systems
Analyst
Mr.
Jeremy Gnida serves as GEI’s lead Systems Analysis, and has been a Fuel Cell Lab Technician at the Kettering University
Fuel Cell Research Center from 2006-2013. He also has served as an Alternative Energy System Technician at Kettering University
for Select Engineering Services for 2 years. He was Electronics/Hardware Technician at the Delphi Electronic Systems (Trialon
Corporation) and was a Radar Maintenance Journeyman, US Air Force. From 1991 to 2000 and was stationed in San Antonio and Italy.
Mr Gnida completed Community College of the Air Force, 58 credit hours toward A.A.S in Electronics in 1999 and has a number of
other educational trainings as well.
BOARD
OF ADVISORS
Timothy
Skillman,
Financial
Advisor
With
over 20 years of experience in working with financially and operationally challenged companies, Mr. Skillman has specialized in
developing, financing, and implementing performance improvement and growth strategies for manufacturing, distribution and service
companies. His areas of expertise include: process improvement, cash flow improvement; organizational design and employee productivity
within the company. Mr. Skillman is also adept at managing relationships with key external constituents during the transition.
Mr. Skillman has held several key management positions in his career including, Chief Executive Officer of Ditech.com, Chief Operating
Officer of Mortgage Corporation of America, and Chief Restructuring Officer of Performance Transportation Services.
Mr.
Skillman and two partners founded an asset-based finance company, focused on providing working capital and equipment loans to
manufacturing companies. Under the guidance of the founding partners, the firm grew to $1.5 billion in assets before being sold
Mr. Skillman’s prior experience includes 13 years as a commercial banker, including six years working with high-volume and
job shop manufacturing and engineering companies, principally focused in the supply chain to major consumer durable goods manufacturers.
For four years, Mr. Skillman managed banking relationships with the energy industry. Mr. Skillman’s clients included transportation
and Power Production projects as well as oil and gas production and refining companies.
Mr.
Skillman is a Certified Turnaround Professional and is a member of the Board of Advisors of The Receivables Exchange and the Board
of Advisors of the City of Los Angeles Minority Business Development Agency. He is a past member of the Board of Directors of
the Association of Certified Turnaround Professionals, and past Chairman and President of the Michigan Environmental Trust, Ltd.
Mr. Skillman earned a Bachelor’s degree in Geography and a Master’s degree in Corporate Finance and Marketing from
the University of Michigan.
Antonio
M. Reis
Research
Engineer (Consultant)
Mr.
Antonio M. Reis served as GEI Chief Research Engineer from 2008-2012, and currently provides on-going consulting. He was a Fuel
Cell System Test Engineer for 2 years at Oorja Protonics, Fremont, CA. Before, he was a Senior Research and Test Engineer at Schatz
Energy Research Center (SERC), Arcata, CA. He was also a Lecturer for the Spring 2006 Semester at the ERE Department, Humboldt
State University, Arcata, CA and has an exemplary record as an Infantryman (Airborne) in the United States Army. Mr Reis has completed
his B.S., Environmental Resources Engineering from Humboldt State University in 2001. He also has authored a number of publications
and reports.
Abdrahamane
Traore (Consultant)
Systems
Engineer
Mr.
Abdrahamane Traore served as Systems Engineer at GEI Global Energy Corp. Before, he was a Mechatronics Engineer - Electric Energy
Management Group Chrysler Group LLC. He has been the Program Administrator at Kettering University, and currently is
a Ph.D. candidate at Wayne State University pursuing Nanotechnology and Sensor development. He was the Lead Research Assistant
at the Center for Fuel Cell Systems & Powertrain Integration. He was the Engineering Co-op - Electronics Research & Development
Division at Emerson Climate Technologies Inc. He has completed his M.Sc. Degree in Engineering from Kettering University.
Joseph
L. Pittera
GEI
Global Corporate Counsel
Joseph
Pittera currently practices law in the State of California where he maintains a practice that specializes in issues of corporate
and security law. Mr. Pittera has served as President of Integrated Health Care, Inc. and later served as President of Access
TradeOne.com, Inc. (NASD Symbol “GMKT”) where he currently serves as Secretary of the Company. Mr. Pittera has a Bachelor’s
degree in International Politics from The American University in Washington, D.C. along with a Master’s degree in international
politics and law. Mr. Pittera graduated with a JD from The Washington College of Law at American University in 1991 and was admitted
to practice law in the State of California. In addition Mr. Pittera is admitted to practice before the Federal Courts of the Central
and Southern Districts of California. Having grown up in Switzerland, Mr. Pittera speaks German, French, Italian and Spanish fluently.
Pamela
Jo Thompson
GEI
Global Accounting Consultant
Pamela
Jo Thompson has been Consultant to publicly traded companies, principal outside accountant and/or Chief Financial Officer, Treasurer,
Secretary, Board of Director, and principle accountant to a number of companies for 28 years. She has been Tax Specialist –
Expatriate Division, Tokyo, Japan - Arthur Andersen and Senior Tax Accountant – Pannell Kerr Forrester, LLP/Mukai Greenlee
& Co. She has been a Tax Specialist – Eide, Bailey & Company – Mansberger, Patterson & Co. and the Staff
Auditor – Arthur Andersen. She has authored a number of featured articles and publications. She is a member of
the Arizona Society of Certified Public Accountants, Association of Certified Fraud Examiners, Arizona Association of Certified
Fraud Examiners & Member of the Multiple Joys: Parents of Triplets, Quads and Quints. She is a Certified Public Accountant
licensed in Arizona and is a Bachelor of Science in Accounting from Minnesota State University - Moorhead 1986.
CORPORATE
GOVERNANCE GUIDELINES
Our
Board has long believed that good corporate governance is important to ensure that we are managed for the long-term benefit of
our stockholders. Our common stock is not currently quoted on any listed exchange. However, our Board believes that the corporate
governance rules of NASDAQ and AMEX represent good governance standards and, accordingly, during the past year, our Board has
continued to review our governance practices in light of the Sarbanes-Oxley Act of 2002, the new rules and regulations of the
Securities and Exchange Commission and the new listing standards of NASDAQ and AMEX, and it has implemented certain of the foregoing
rules and listing standards during this past fiscal year.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than ten
percent of our common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes
of ownership of our common stock. Officers, directors and greater than ten percent stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file.
We
intend to ensure to the best of our ability that all Section 16(a) filing requirements applicable to our officers, directors and
greater than ten percent beneficial owners are complied with in a timely fashion.
EXECUTIVE
COMPENSATION
Currently,
our officers and directors receive no compensation (except for Dr. Berry as Chairmen and CEO), other than shares of common stock
for services during the development stage of our business operations. Officers and directors are reimbursed for any
out-of-pocket expenses that are incurred on the Company’s behalf. In the future, we may approve payment of salaries
for officers and directors, but currently, no such plans have been approved. We also do not currently have any benefits,
such as health or life insurance, available to our employees.
On
December 5, 2013 the Board of the Directors authorized the annual issue of 25,000 common shares to directors serving without compensation.
SUMMARY COMPENSATION TABLE |
|
| |
Annual Compensation | | |
| | |
Long-Term Compensation | |
Name and Principal Position | |
Year | | |
Salary ($) | | |
Bonus ($) | | |
Stock Awards ($) | | |
Option Awards ($) | | |
Non-Equity Incentive (#) | | |
Deferred Comp Earnings ($) | | |
All Other ($) | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Dr. K. J. Berry (1) Chief Executive Officer, Chairman, President, and Director | |
2013 | | |
$ | 103,129 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Dave Namenye Director | |
- | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cleamon Moorer Director | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
OPTION
GRANTS
There
have been no individual grants of stock options to purchase our common stock made to the executive officer named in the Summary
Compensation Table.
AGGREGATED
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE
There
have been no stock options exercised by the executive officer named in the Summary Compensation Table.
LONG-TERM
INCENTIVE PLAN (“LTIP”) AWARDS
There
have been no awards made to a named executive officer in the last completed fiscal year under any LTIP.
COMPENSATION
OF DIRECTORS
Directors
are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors
has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, our director in
such capacity.
EMPLOYMENT
CONTRACTS AND OFFICERS’ COMPENSATION
Since
the date of incorporation August 15, 2013, the Company has two (2) paid full time employees, six (6) paid part-time consultants,
and Dr. Berry (Chairman and CEO) who agreed to deferred compensation.
The
Board of Directors will determine future compensation and, as appropriate, employment agreements executed. We
do have an employment agreement in place with our Chairman and CEO.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of the date of this prospectus, the total number of shares owned beneficially by our directors,
officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The
table also reflects what the percentage of ownership will be assuming completion of the sale of all shares in this offering, which
we cannot guarantee. The stockholders listed below have direct ownership of their shares and possess sole voting and
dispositive power with respect to the shares.
| |
| |
| | |
Percent of Class | |
Title of Class | |
Name, Title & Address of Beneficial Owners | |
Amount of Beneficial Ownership | | |
Before Offering | | |
After Offering | |
Common | |
K.J. Berry, CEO 6060 Covered Wagons Trail, Flint, MI | |
| 46,493,600 | | |
| 5.59 | % | |
| 4.74 | % |
Preferred | |
Same | |
| 2,500 | | |
| 100.0 | | |
| 100.0 | |
1. The
address of each executive officer and director is c/o GEI Global Energy Corp., 6060 Covered Wagons Trail, Flint, Michigan 48532
2. As
used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security,
or the sole or share investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition
of a security).
3. Assumes
the sale of the maximum amount of this offering (150,000,000 shares of common stock)
by GEI Global Energy Corp. The aggregate amount of shares to be issued and outstanding after the offering is 981,066,776.
FUTURE
SALES BY EXISTING STOCKHOLDERS
Further
new issues of stock unless registered will be restricted securities, as that term is defined in Rule 144 of the Rules and Regulations
of the SEC promulgated under the Act. Under Rule 144, such shares can be publicly sold, subject to volume restrictions
and certain restrictions on the manner of sale, commencing one year after their acquisition. Any sale of shares held
by the existing stockholders (after applicable restrictions expire) and/or the sale of shares purchased in this offering (which
would be immediately resalable after the offering), may have a depressive effect on the price of our common stock in any market
that may develop, of which there can be no assurance.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
We
do not currently have any conflicts of interest by or among our current officer, director, key employee or advisors. We
have not yet formulated a policy for handling conflicts of interest, however, we intend to do so upon completion of this offering
and, in any event, prior to hiring any additional employees.
INDEMNIFICATION
Pursuant
to the Articles of Incorporation and By-Laws of the corporation, we may indemnify an officer or director who is made a party to
any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed
to be in our best interest. In certain cases, we may advance expenses incurred in defending any such proceeding. To
the extent that the officer or director is successful on the merits in any such proceeding as to which such person is to be indemnified,
we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative
action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer
or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted
by the laws of the State of Nevada.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
In
the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid
by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted
by one of our directors, officers, or controlling person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed
by the final adjudication of such issue.
AVAILABLE
INFORMATION
We
have filed a registration statement on Form S-1, of which this prospectus is a part, with the U.S. Securities and Exchange Commission. Upon
completion of the registration, we will be subject to the informational requirements of the Exchange Act and, in accordance therewith,
will file all requisite reports, such as Forms 10-K, 10-Q, and 8-K, proxy statements, under Section 14 of the Exchange Act and
other information with the Commission. Such reports, proxy statements, this registration statement and other information,
may be inspected and copied at the public reference facilities maintained by the Commission at 100 Fifth Street NE, Washington,
D.C. 20549. Copies of all materials may be obtained from the Public Reference Section of the Commission’s Washington,
D.C. office at prescribed rates. You may obtain information regarding the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The Commission also maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically with the Commission at http://www.sec.gov.
GEI
Global Energy Corp.
INDEX
TO FINANCIAL STATEMENTS
|
PAGE |
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
F-2 |
|
|
BALANCE
SHEETS DECEMBER 31, 2013 |
F-3 |
|
|
STATEMENTS
OF OPERATIONS DECEMBER 31, 2013 |
F-4 |
|
|
STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT) DECEMBER 31, 2013 |
F-5 |
|
|
STATEMENTS
OF CASH FLOWS DECEMBER 31, 2013 |
F-6 |
|
|
NOTES
TO FINANCIAL STATEMENTS DECEMBER 31, 2013 |
F-7 |
|
|
BALANCE
SHEETS FOR PERIOD ENDED June 30, 2014 |
F-35 |
|
|
STATEMENT
OF OPERATIONS June 30, 2014 |
F-36 |
|
|
STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT) June 30, 2014 |
|
|
|
STATEMENTS
OF CASH FLOWS June 30, 2014 |
F-37 |
|
|
NOTES
TO FINANCIAL STATEMENTS June 30, 2014 |
F-38 |
|
|
CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2014 (UNAUDITED) AND DECEMBER 31, 2013 |
F-36 |
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER
30, 2014 AND SEPTEMBER 30, 2013
|
F-37 |
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2014
AND SEPTEMBER 30, 2013 |
F-38 |
|
|
CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS |
F-39 |
Report of Independent Registered Public
Accounting Firm
To the Directors and Stockholders of
GEI Global Energy Corp.
(formerly Suja Minerals, Corp.)
We have audited the accompanying consolidated
balance sheets of GEI Global Energy Corp. as of December 31, 2013 and 2012 and the related consolidated statements of comprehensive
loss, stockholders' deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of GEI Global Energy Corp. as of
December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States.
The accompanying consolidated financial
statements have been prepared assuming that GEI Global Energy Corp. will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, GEI Global Energy Corp. has accumulated losses since inception and has a net working capital
deficiency. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in
regard to these matters are also described in Note 1. These consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ Manning Elliott LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
May 6, 2014
GEI GLOBAL ENERGY CORP. |
CONSOLIDATED BALANCE SHEETS |
(Expressed in U.S. Dollars) |
| |
December 31, | | |
December 31, | |
| |
2013 | | |
2012 | |
| |
| | |
| |
ASSETS: | |
| | |
| |
Current Assets | |
| | |
| |
Cash | |
$ | 5,553 | | |
$ | 97 | |
Prepaid rent (Note 10) | |
| 5,075 | | |
| - | |
Total Current Assets | |
| 10,628 | | |
| 97 | |
| |
| | | |
| | |
Property and Equipment, net (Note 3) | |
| 213,177 | | |
| 3,328 | |
| |
| | | |
| | |
Total Assets | |
$ | 223,805 | | |
$ | 3,425 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT: | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 375,951 | | |
$ | 313,261 | |
Accrued liabilities | |
| 286,867 | | |
| 278,288 | |
Due to related party (Note 4) | |
| 249,703 | | |
| 97,945 | |
Advances received (Note 7) | |
| 674,500 | | |
| - | |
Convertible notes payable (Note 6) | |
| 500,000 | | |
| 608,000 | |
Notes payable (Note 5) | |
| - | | |
| 62,004 | |
Total Current Liabilities | |
| 2,087,021 | | |
| 1,359,498 | |
| |
| | | |
| | |
Convertible notes payable (Note 6) | |
| 6,843 | | |
| 20,000 | |
| |
| | | |
| | |
Total Liabilities | |
| 2,093,864 | | |
| 1,379,498 | |
| |
| | | |
| | |
Going Concern (Note 1) | |
| | | |
| | |
Commitments (Note 10) | |
| | | |
| | |
Subsequent Events (Note 13) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders' Deficit: | |
| | | |
| | |
Preferred stock, $0.001 par value, 10,000,000 shares authorized; | |
| | | |
| | |
2,500 issued and outstanding as of December 31, 2013 | |
| 50,000 | | |
| - | |
Common stock, $0.001 par value, 800,000,000 shares authorized; | |
| | | |
| | |
126,970 and 30,000 issued and outstanding as of | |
| | | |
| | |
December 31, 2013 and 2012 (Note 8) | |
| 128 | | |
| 1 | |
Stock issuable | |
| 1,451,838 | | |
| | |
Additional paid in capital | |
| 325,314 | | |
| - | |
Deficit accumulated during development stage | |
| (3,697,339 | ) | |
| (1,376,074 | ) |
Total Stockholders' Deficit | |
| (1,870,059 | ) | |
| (1,376,073 | ) |
| |
| | | |
| | |
Total Liabilities and Stockholders' Deficit | |
$ | 223,805 | | |
$ | 3,425 | |
The accompanying notes are an integral
part of these audited consolidated financial statements.
GEI GLOBAL ENERGY CORP. |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
(Expressed in U.S. dollars) |
| |
Years ended December 31, | |
| |
2013 | | |
2012 | |
| |
| | |
| |
REVENUE | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
OPERATING EXPENSES: | |
| | | |
| | |
Selling, general, and administrative (Note 9) | |
| 442,469 | | |
| 6,348 | |
Depreciation | |
| 9,839 | | |
| 1,530 | |
Consulting expense | |
| 1,448,410 | | |
| - | |
Total operating expenses | |
| 1,900,718 | | |
| 7,878 | |
| |
| | | |
| | |
OTHER EXPENSES | |
| | | |
| | |
Interest expense (Note 5 and 6) | |
| 79,433 | | |
| 78,822 | |
Total other expenses | |
| 79,433 | | |
| 78,822 | |
| |
| | | |
| | |
NET LOSS | |
$ | 1,980,151 | | |
$ | 86,700 | |
Deemed dividends | |
| 3,427 | | |
| - | |
NET LOSS AND COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | |
$ | 1,983,578 | | |
$ | 86,700 | |
| |
| | | |
| | |
NET LOSS PER COMMON SHARE: | |
| | | |
| | |
Basic and diluted | |
$ | 21.69 | | |
$ | 1.16 | |
| |
| | | |
| | |
Weighted average common shares outstanding, basic and diluted | |
$ | 91,442 | | |
$ | 75,000 | |
The accompanying notes are an integral
part of these audited consolidated financial statements.
GEI GLOBAL ENERGY CORP. |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2013 |
(Expressed in U.S. Dollars) |
| |
Preferred Stock | | |
Common Stock | | |
Additional Paid-in | | |
Stock | | |
Accumulated | | |
| |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Issuable | | |
Deficit | | |
Total | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
DECEMBER 31, 2011 | |
| - | | |
$ | - | | |
| 30,000 | | |
$ | 1 | | |
$ | - | | |
$ | - | | |
$ | (1,289,374 | ) | |
$ | (1,289,373 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (86,700 | ) | |
| (86,700 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
DECEMBER 31, 2012 | |
| - | | |
$ | - | | |
| 30,000 | | |
$ | 1 | | |
$ | - | | |
$ | - | | |
$ | (1,376,074 | ) | |
$ | (1,376,073 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Reverse merger (Note 11) | |
| 2,500 | | |
| 50,000 | | |
| 85,250 | | |
| 115 | | |
| - | | |
| - | | |
| (337,687 | ) | |
| (287,572 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for the conversion of debt | |
| - | | |
| - | | |
| 8,000 | | |
| 8 | | |
| 210,354 | | |
| - | | |
| - | | |
| 210,362 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for consulting services | |
| - | | |
| - | | |
| 875 | | |
| 1 | | |
| 21,349 | | |
| - | | |
| - | | |
| 21,350 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Rounding shares upon reverse stock split | |
| - | | |
| - | | |
| 83 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for cash | |
| - | | |
| - | | |
| 2,762 | | |
| 3 | | |
| 67,497 | | |
| - | | |
| - | | |
| 67,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Convertible notes | |
| - | | |
| - | | |
| - | | |
| - | | |
| 26,114 | | |
| - | | |
| - | | |
| 26,114 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stock issuable for consulting services | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,448,411 | | |
| - | | |
| 1,448,411 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Deemed dividend for stock issuable for anti-dilution provision | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 3,427 | | |
| (3,427 | ) | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,980,151 | ) | |
| (1,980,151 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
DECEMBER 31, 2013 | |
| 2,500 | | |
$ | 50,000 | | |
| 126,970 | | |
$ | 128 | | |
$ | 325,314 | | |
$ | 1,451,838 | | |
$ | (3,697,339 | ) | |
$ | (1,870,059 | ) |
The accompanying notes are an integral
part of these audited consolidated financial statements.
GEI GLOBAL ENERGY CORP. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Expressed in U.S. Dollars) |
| |
Years ended December 31, | |
| |
2013 | | |
2012 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| |
Net loss | |
$ | (1,980,151 | ) | |
$ | (86,700 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to net cash used in operating activities | |
| | | |
| | |
Depreciation | |
| 9,838 | | |
| 1,530 | |
Shares issued for services | |
| 21,350 | | |
| - | |
Accretion on convertible note | |
| 2,957 | | |
| - | |
Stock issuable for services | |
| 1,448,411 | | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid rent | |
| (5,075 | ) | |
| (8,559 | ) |
Accounts payable and accrued liabilities | |
| 89,484 | | |
| 70,234 | |
Net cash used in operating activities | |
| (413,186 | ) | |
| (23,495 | ) |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Investment in equipment and tenant improvements | |
| (219,687 | ) | |
| - | |
Net cash used in investing activities | |
| (219,687 | ) | |
| - | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| |
| - | | |
| | |
Proceeds from convertible note | |
| 30,000 | | |
| - | |
Proceeds from the sale of common stock | |
| 67,500 | | |
| - | |
Receipt from advances receivable | |
| 674,500 | | |
| - | |
Advances from related party | |
| 12,500 | | |
| 9,437 | |
Repayment to related party | |
| (110,742 | ) | |
| - | |
Repayment of debt | |
| (35,429 | ) | |
| - | |
Net cash provided by financing activities | |
| 638,329 | | |
| 9,437 | |
| |
| | | |
| | |
INCREASE (DECREASE) IN CASH | |
| 5,456 | | |
| (14,058 | ) |
CASH, BEGINNING OF YEAR | |
| 97 | | |
| 14,155 | |
CASH, END OF YEAR | |
$ | 5,553 | | |
$ | 97 | |
| |
| | | |
| | |
SUPPLEMENTAL CASH FLOW INFORMATION: | |
| | | |
| | |
| |
| | | |
| | |
Interest paid | |
$ | 1,994 | | |
$ | - | |
Income taxes paid | |
$ | - | | |
$ | - | |
The accompanying notes are an integral
part of these audited consolidated financial statements.
GEI GLOBAL ENERGY CORP.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2013
AND 2012
(Expressed in U.S. Dollars)
NOTE 1 – DESCRIPTION
OF BUSINESS AND GOING CONCERN
GEI Global Energy Corp., formerly Suja
Minerals Corp. (the “Company”) was incorporated in the State of Nevada on April 28, 2010. The Company’s
principal business activity is the construction and sale of fuel cell auxiliary electric power generation systems for residential,
commercial, military, and industrial electric applications. These consolidated financial statements have been prepared
on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal
course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its
stockholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable
operations. As at December 31, 2013, the Company has a working capital deficiency of $2,076,393 and has accumulated losses of $3,697,339
since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These
consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Subsequent
to year-end the Company has entered into an Investment Agreement and a Registration Rights Agreement with Kodiak Capital Group,
LLC, in order to establish a possible source of funding up to $10,000,000.
NOTE 2 – BASIS
OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary, Global Energy Innovations, Inc. (see Note 11).
On December 12, 2013, the Company completed a 200 for 1 common
share consolidation; the share consolidation has been retroactively applied to all common share, weighted average common share,
and loss per common share disclosures.
Cash and Cash Equivalents
The Company considers all highly liquid
investments with an original maturity of three months or less to be cash equivalents. At December 31, 2013, cash includes
cash on hand and cash in the bank and the FDIC insures these deposits up to $250,000.
Impairment of Long-Lived Assets
Long-lived assets are evaluated for
impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully
recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of
the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to
its estimated fair value. Management has assessed the impairment of long-lived assets and noted no impairment.
Income Taxes
The Company utilizes the asset and liability
method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss
and tax credit carry-forwards and for the future tax consequences attributable to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results
of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts
of deferred tax assets unless it is more likely than not that the value of such assets will be realized.
The Company uses the two-step approach
to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining
if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount,
which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and
estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At December 31, 2013, the Company
did not record any liabilities for uncertain tax positions.
Share-Based Compensation
The Company records stock-based compensation
in accordance with ASC 718, Compensation – Stock Based Compensation, which requires the measurement and recognition of compensation
expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.
ASC 718 requires companies to estimate
the fair value of share-based awards on the date of grant using an option-pricing model. We use the Black-Scholes option pricing
model as its method in determining fair value. This model is affected by our stock price as well as assumptions regarding a number
of subjective variables. These subjective variables include, but are not limited to our expected stock price volatility over the
terms of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that
is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.
Property, Plant and Equipment
Property and equipment is depreciated on a straight-line
basis over its estimated life:
Furniture & fixtures | |
| 5 years | |
Equipment | |
| 5 years | |
Computer software and hardware | |
| 5 years | |
Leasehold improvements | |
| 5 years | |
At December 31, 2013, the Company had $157,872 in demonstration
equipment under construction on which no depreciation is taken.
Revenue Recognition
Revenue is recognized to the extent
that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenues related
to fixed-price contracts that provide for development of full-cell generation systems development services are recognized as the
service is performed using the percentage of completion method of accounting, under which the total value of revenue is recognized
on the basis of the percentage that each contract’s total labor cost to date bears to the total expected labor costs (cost
to cost method). Revenue from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred,
which is considered to occur when title passes to the customer. This generally occurs when product is physically transferred onto
a vessel, train, conveyor or other delivery mechanisms. Revenue is measured at the fair value of the consideration received or
receivable.
Financial Instruments and Fair
Value Measures
ASC 820, “Fair Value Measurements
and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding
the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon
the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that
may be used to measure fair value:
Level 1
Level 1
applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities
for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar
assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume
or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can
be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities
for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value
of the assets or liabilities.
The Company’s financial instruments
consist principally of cash, accounts payable, advances received, an amount due to a related party, loan payable, convertible note
and note payable. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist
of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their
current fair values because of their nature and respective maturity dates or durations. Management does not believe that the Company
is subject to significant interest, currency or credit risk arising from these financial instruments.
Use of Estimates
The preparation of these statements
in accordance with United States generally accepted accounting principles 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 in the reporting period. We regularly evaluate estimates and assumptions related to useful life and recoverability
of long-lived assets, deferred income tax asset valuations, asset retirement obligations, financial instrument valuations, stock-based
compensation and loss contingencies. We base our estimates and assumptions on current facts, historical experience and various
other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other
sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material
differences between the estimates and the actual results, future results of operations will be affected.
Basic and Diluted Net Income (Loss) per Common Share
Basic income (loss) per share is computed
by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during
the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding. Diluted earnings per share reflects the potential dilution that could
occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in
the issuance of common stock that could share in the earnings of the Company.
Diluted loss per share is the same as basic loss per share
during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive
as a result of the net loss.
Concentration of Credit Risk
All of the Company’s cash is maintained
in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash exceeds amounts
covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s
opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is
remote.
Recently Issued Accounting Pronouncements
In February 2013, the Financial Accounting Standards Board
(FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified
Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive
income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are
later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current
requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU
requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require
an organization to:
|
● |
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net
income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is
required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and |
|
● |
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required
under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case
when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance
sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense. |
The amendments apply to all public and
private companies that report items of other comprehensive income. Public companies are required to comply with these amendments
for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15,
2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 did not have a material impact on our
financial position or results of operations.
In January 2013, the FASB issued ASU
No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities , which clarifies
which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11.
The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed
unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope
of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while
still giving financial statement users sufficient information to analyze the most significant presentation differences between
financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in
this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 did not have
a material impact on our financial position or results of operations.
In October 2012, the FASB issued Accounting
Standards Update ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04.
The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical
corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements.
The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04
did not have a material impact on our financial position or results of operations.
In August 2012, the FASB issued
ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting
Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards
Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant
to the issuance of SAB No. 114. The adoption of ASU 2012-03 did not have a material impact on our financial position or results
of operations.
In July 2012, the FASB issued ASU 2012-02,
“Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in
Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing
Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether
it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary
to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles
Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning
after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date
before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet
been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 did not have
a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU
2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated
Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that
are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is
presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 did not have a material
impact on our financial position or results of operations.
In December 2011, the FASB issued ASU
No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This
Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements
to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison
between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their
financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after
January 1, 2013, and interim periods within those annual periods. The adoption of this pronouncement did not have a material impact
on our results of operations or financial position.
NOTE 3 – PROPERTY AND EQUIPMENT
| |
Cost $ | | |
Accumulated Depreciation $ | | |
December 31, 2013 Net Carrying Value $ | | |
December 31, 2012 Net Carrying Value $ | |
| |
| | |
| | |
| | |
| |
Computer hardware | |
| 4,323 | | |
| 4,323 | | |
| - | | |
| 124 | |
Equipment | |
| 21,182 | | |
| 21,182 | | |
| - | | |
| 3,204 | |
Furniture and fixtures | |
| 23,653 | | |
| 2,761 | | |
| 20,892 | | |
| - | |
Demonstration equipment | |
| 157,872 | | |
| - | | |
| 157,872 | | |
| - | |
Computer software | |
| 392 | | |
| 392 | | |
| - | | |
| - | |
Leasehold improvements | |
| 38,163 | | |
| 3,750 | | |
| 34,413 | | |
| - | |
| |
| 245,585 | | |
| 32,408 | | |
| 213,177 | | |
| 3,328 | |
As at December 31, 2013, demonstration equipment was under
construction and therefore no depreciation has been taken.
During the year ended December 31, 2013 and 2012, the Company
recorded no impairment write-downs on the property and equipment.
NOTE 4 – DUE TO RELATED PARTY AND RELATED PARTY
TRANSACTIONS
| |
December 31, 2013 | | |
December 31, 2012 | |
Due to the President of the Company | |
$ | 249,703 | | |
$ | 97,945 | |
As at December 31, 2013 the Company
owed $249,703 (December 31, 2012 - $97,945) for cash advances received from the President of the Company and the amount payable
under the reverse acquisition (see Note 11), which are non-interest bearing, unsecured, and due on demand.
NOTE 5 – NOTES PAYABLE
The Company had the following notes payable outstanding as
of December 31, 2013 and 2012:
| |
December 31, 2013 | | |
December 31, 2012 | |
| |
| | |
| |
Kristy Thurber (N-1) | |
$ | - | | |
$ | 30,000 | |
Dated – December 15, 2010 | |
| | | |
| | |
| |
| | | |
| | |
City of Flint (N-2) | |
| - | | |
| 32,004 | |
Dated – July 15, 2010 | |
| | | |
| | |
Total notes payable | |
$ | - | | |
$ | 62,004 | |
N-1 Kristy Thurber: On December 15, 2010, the
Company entered into a promissory note agreement with Kristy Thurber Investments for the amount of $30,000. The loan bears interest
at 3% per annum and is due on December 15, 2012. During the year ended December 31, 2013, the Company accrued interest of $900
(2012: $3,900). During the year ended December 31, 2013, The outstanding principal and interest of $32,700 was assigned to another
party. The Company and another party agreed to convert this debt and accrued interest into 5,000 common shares of the
Company on December 4, 2013.
N-2 City of Flint: On July
15, 2010, the Company entered into a promissory note agreement with the Economic Development Corporation of the City of Flint (“EDC”)
for the amount of $43,391. The loan bears interest at 5.25% per annum and is due on July 1, 2013. The loan is to be repaid in 36
installments commencing August 1, 2010. If the interest and principal are not paid during the calendar month in which an installment
is due, the Company shall pay the EDC a late charge penalty of two percent of the amount due. During the year ended December 31,
2010, the Company repaid principal of $5,712 and interest of $815. During the year ended December 31, 2011, the Company repaid
principal of $5,675, interest of $570 and accrued interest of $1,327. During the year ended December 31, 2012, the Company repaid
principal of $nil, interest of $nil and accrued interest of $1,994. During the year-ended December 31, 2013, the Company repaid
the remaining principal and accrued interest.
NOTE 6 - CONVERTIBLE NOTES PAYABLE
The Company had the following convertible notes payable outstanding
as of December 31, 2013 and 2012:
| |
December 31, 2013 | | |
December 31, 2012 | |
| |
| | |
| |
Note C-1 | |
$ | - | | |
$ | 20,000 | |
Dated – February 4, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-1 | |
| - | | |
| 20,000 | |
Dated - February 4, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-1 | |
| - | | |
| 27,000 | |
Dated - February 4, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-1 | |
| - | | |
| 21,000 | |
Dated - February 4, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-2 | |
| - | | |
| 20,000 | |
Dated – February 15, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-3 | |
| 250,000 | | |
| 250,000 | |
Dated – March 18, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-4 | |
| 250,000 | | |
| 250,000 | |
Dated – August 15, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-5 | |
| - | | |
| 20,000 | |
Dated – August 31, 2011 | |
| | | |
| | |
| |
| | | |
| | |
Note C-6 | |
| | | |
| | |
Dated – November 8, 2013 (Note $37,375 less Discount $30,532) | |
| 6,843 | | |
| - | |
Total notes payable | |
$ | 506,843 | | |
$ | 628,000 | |
| |
| | | |
| | |
Less: current portion of long-term debt | |
| 500,000 | | |
| 608,000 | |
Long-term debt | |
$ | 6,843 | | |
$ | 20,000 | |
Notes C-1: On February 4, 2008, the Company
entered into four convertible promissory note agreements for a total of $88,000. Pursuant to the agreements, the notes bear interest
at 8% per annum. The principal balance and all accrued interest was due and payable on February 4, 2011 (the “Maturity Date”)
provided that the note holder has given notice to the Company on or after August 4, 2008, but prior to the Maturity Date, demanding
full payment of the note as of the Maturity Date. The principal amount and accrued interest shall be converted into shares of common
stock of the Company upon the first occurrence of any one of the following events: (i) If the Company has not received a Payoff
Notice and no event of default has occurred as of the Maturity Date; (ii) the final closing date of a minimum of $500,000 financing
(the “Next Financing Closing”) which results in the Company receiving new capital investment in exchange for the issuance
by the Company of a capital interest in the Company; and (iii) immediately prior to the occurrence of any of the following (“Change
of Control”): when (1) the Company sells, conveys, or otherwise disposes of all or substantially all of its property or business;
or (2) when the Company causes to be registered and sold any of its shares of common stock pursuant to and under a registration
statement prepared and filed in compliance with the Federal Securities Act of 1933; or (3) when the Company effects any transaction
which results in one or more stockholders who were not stockholders of the Company immediately prior to such transaction owning
more than eighty percent (80%) of the voting rights of the Company. The Company shall provide a written notice to the note holder
of the occurrence of any such conversion event (“Conversion Notice”).
If conversion occurs at the Next Financing Closing, then
the note is convertible into the same type, series, and class of securities issued under the Next Financing Closing. The conversion
price shall equal to conversion amount divided by the average price per share received by the Company at the Next Financing Closing,
multiplied by 95% if the Next Financing Closing occurs on or before August 4, 2008, 90% if the Next Financing Closing occurs after
August 4, 2008 but on or before August 4, 2009, 85% if the Next Financing Closing occurs after August 4, 2008 but on or before
February 4, 2010, or 80% if the Next Financing Closing occurs after February 4, 2010.
If the conversion occurs at the Maturity
Date or upon a Change of Control, then the conversion price shall be equal to $1,872 per share.
Pursuant to ASC 470-20, “Debt with Conversion and Other
Options,” the Company did not allocate any proceeds to the conversion feature at issuance as the value of the conversion
feature should not be recognized until the contingency event occurs. The Company also evaluated the conversion feature under ASC
815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity,” and determined that the conversion
feature did not meet the criteria necessary for derivative treatment.
As
of the Maturity Date, the Company has not received new capital investment of a minimum of $500,000 or a Payoff Notice from the
note holders. Pursuant to the terms of the agreement, the principal amounts and accrued interest were then convertible into common
stock of the Company.
On July 13, 2013, the Company and the
note holder agreed to convert the principal balance of $88,000 into 2,063 shares of common stock of the Company.
Note C-2: On February 15, 2008, the Company
entered into a convertible promissory note agreement for $20,000. Pursuant to the agreement, the note bears interest at 8% per
annum. The principal balance and all accrued interest was due and payable on February 15, 2011 (the “Maturity Date”)
provided that the note holder has given notice to the Company on or after August 15, 2008, but prior to the Maturity Date, demanding
full payment of the note as of the Maturity Date. The principal amount and accrued interest shall be converted into common stock
of the Company upon the first occurrence of any one of the following events: (i) If the Company has not received a Payoff Notice
and no event of default has occurred as of the Maturity Date; (ii) the final closing date of a minimum of $500,000 financing (the
“Next Financing Closing”) which results in the Company receiving new capital investment in exchange for the issuance
by the Company of a capital interest in the Company; and (iii) immediately prior to the occurrence of any of the following (“Change
of Control”): when (1) the Company sells, conveys, or otherwise disposes of all or substantially all of its property or business;
or (2) when the Company causes to be registered and sold any of its shares of common stock pursuant to and under a registration
statement prepared and filed in compliance with the Federal Securities Act of 1933; or (3) when the Company effects any transaction
which results in one or more stockholders who were not stockholders of the Company immediately prior to such transaction owning
more than eighty percent (80%) of the voting rights of the Company. The Company shall provide a written notice to the note holder
of the occurrence of any such conversion event (“Conversion Notice”).
If conversion occurs at the Next Financing Closing, then
the note is convertible into the same type, series, and class of securities issued under the Next Financing Closing. The conversion
price shall equal to conversion amount divided by the average price per share received by the Company at the Next Financing Closing,
multiplied by 95% if the Next Financing Closing occurs on or before August 15, 2008, 90% if the Next Financing Closing occurs after
August 15, 2008 but on or before August 15, 2009, 85% if the Next Financing Closing occurs after August 15, 2008 but on or before
February 15, 2010, or 80% if the Next Financing Closing occurs after February 15, 2010.
If the conversion occurs at the Maturity
Date or upon a Change of Control, then the conversion price shall be equal to $1,872 per share.
Pursuant to ASC 470-20, “Debt with Conversion and Other
Options,” the Company did not allocate any proceeds to the conversion feature at issuance as the value of the conversion
feature should not be recognized until the contingency event occurs. The Company also evaluated the conversion feature
under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity,” and determined that the
conversion feature did not meet the criteria necessary for derivative treatment.
As of the Maturity Date, the Company
has not received new capital investment of a minimum of $500,000 or a Payoff Notice from the note holder. Pursuant
to the terms of the agreement, the principal amount and accrued interest was then convertible into shares of common stock of the
Company.
On July 13, 2013, the Company and the
note holder agreed to convert the principal balance of $20,000 into 468 shares of common stock of the Company.
Note C-3: On March
18, 2008, the Company entered into a convertible promissory note agreement for $250,000. Pursuant to the agreement, the note bears
interest at 8% per annum. The principal balance and all accrued interest was due and payable on March 18, 2011 (the “Maturity
Date”) provided that the note holder has given written notice to the Company on or after September 18, 2010, but prior to
the Maturity Date, demanding full payment of this note as of the Maturity Date (the “Payoff Notice”). The principal
amount and accrued interest shall be converted into common stock of the Company upon the first to occur of the following events
and the Company shall provide a written notice to the note holder of the occurrence of any such conversion event (“Conversion
Notice”): (i) If the Company has not received a Payoff Notice and no event of default has occurred as of the Maturity Date;
(ii) the final closing date of a minimum of $500,000 financing (the “Next Financing Closing”) which results in the
Company receiving new capital investment in exchange for the issuance by the Company of a capital interest in the Company; and
(iii) immediately prior to the occurrence of any of the following (“Change of Control”): when (1) the Company sells,
conveys, or otherwise disposes of all or substantially all of its property or business; or (2) when the Company causes to be registered
and sold any of its shares of common stock pursuant to and under a registration statement prepared and filed in compliance with
the Federal Securities Act of 1933; or (3) when the Company effects any transaction which results in one or more stockholders who
were not stockholders of the Company immediately prior to such transaction owning more than sixty-five percent (65%) of the voting
rights of the Company.
If conversion occurs at the Next Financing Closing, then
the note is convertible into the same type, series, and class of securities issued under the Next Financing Closing. The
conversion price shall equal to conversion amount divided by the average price per share received by the Company at the Next Financing
Closing, multiplied by 95% if the Next Financing Closing occurs on or before September 18, 2008, 90% if the Next Financing Closing
occurs after September 18, 2008 but on or before September 18, 2009, 85% if the Next Financing Closing occurs after September 18,
2009 but on or before March 18, 2010, or 80% if the Next Financing Closing occurs after March 18, 2010.
If the conversion occurs at the Maturity
Date or upon a Change of Control, then the conversion price shall be equal to $1,872 per share.
Pursuant to ASC 470-20, “Debt
with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion feature at issuance as the
value of the conversion feature should not be recognized until the contingency event occurs. The Company also evaluated
the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity,”
and determined that the conversion feature did not meet the criteria necessary for derivative treatment.
As of the Maturity Date, the Company
has not received new capital investment of a minimum of $500,000 or a Payoff Notice from the note holder. Pursuant to
the terms of the agreement, the principal amount and accrued interest was then convertible into common stock of the Company. At
December 31, 2013, the promissory note has not been repaid or converted.
Note C-4: On August
15, 2008, the Company entered into a secured convertible promissory note agreement for $250,000. The convertible promissory note,
which was due on September 1, 2010, bears interest at the rate of 9% per annum. In the event the note is not repaid or converted
on or prior to September 1, 2010 or after an event of default, the rate of interest applicable to the unpaid principal amount shall
increase to 15% per annum. Pursuant to the agreement, the holder of the note has the right to convert upon written notice to the
Company the principal then due under the note on the following terms: (i) automatically into the Company’s next issued series
of preferred stock for not less than $1,500,000 at the per share price. Interest will either be paid or converted at the option
of the holder; or (ii) in the event that the conversion in (i) does not occur by August 30, 2010, then the holder will have the
option of converting the note into the requisite number of units of the Company’s preferred stock. The conversion price will
be determined by the Company immediately prior to the time of conversion.
The conversion price will be determined
through (i) or (ii) below at the option of the Company:
i). The per share
value of each share of preferred stock will equal to the result of the following formula: (1) six times the average earnings before
interest, taxes, depreciation and amortization (“EBITDA”) of the Company for the 2008 and 2009 fiscal years, divided
by the product of (1) by the number of preferred stock issued and outstanding.
ii). The fair market value of each share
of preferred stock as of August 30, 2010. The fair market value of the preferred stock shall be determined
by a qualified appraiser jointly selected by the Company and the note holder.
Pursuant to ASC 470-20, “Debt with Conversion and Other
Options,” the Company did not allocate any proceeds to the conversion feature at issuance as the value of the conversion
feature should not be recognized until the contingency event occurs. The Company also evaluated the conversion
feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity,” and determined
that the conversion feature did not meet the criteria necessary for derivative treatment.
As of August 30, 2010, the Company had not completed a financing
of a minimum of $1,500,000 and the note holder did not contact the Company to determine the fair market value of the preferred
stock or demand payment. At December 31, 2013, the promissory note has not been repaid or converted. On
January 1, 2014 the Company converted $50,000 of the principal balance for 1,700,000 shares of common stock of the Company (See
also Note 13).
Note C-5: On August 31, 2011, the Company entered
into a convertible promissory note agreement for $20,000. Pursuant to the agreement, the note bears interest at 6% per annum. The
principal balance and all accrued interest is due and payable on August 31, 2014 (the “Maturity Date”) provided that
the note holder has given notice to the Company on or after February 28, 2014, but prior to the Maturity Date, demanding full payment
of the note as of the Maturity Date. The principal amount and accrued interest shall be converted into shares of common stock of
the Company upon the first occurrence of any one of the following events: (i) If the Company has not received a Payoff Notice and
no event of default has occurred as of the Maturity Date; (ii) the final closing date of a minimum of $500,000 financing (the “Next
Financing Closing”) which results in the Company receiving new capital investment in exchange for the issuance by the Company
of a capital interest in the Company; and (iii) immediately prior to the occurrence of any of the following (“Change of Control”):
when (1) the Company sells, conveys, or otherwise disposes of all or substantially all of its property or business; or (2) when
the Company causes to be registered and sold any of its shares of common stock pursuant to and under a registration statement prepared
and filed in compliance with the Federal Securities Act of 1933; or (3) when the Company effects any transaction which results
in one or more stockholders who were not stockholders of the Company immediately prior to such transaction owning more than eighty
percent (80%) of the voting rights of the Company. The Company shall provide a written notice to the note holder of the occurrence
of any such conversion event (“Conversion Notice”).
If conversion occurs at the Next
Financing Closing, then the note is convertible into the same type, series, and class of securities issued under the Next Financing
Closing. The conversion price shall equal to conversion amount divided by the average price per share received
by the Company at the Next Financing Closing, multiplied by 95% if the Next Financing Closing occurs on or before February 29,
2012, 90% if the Next Financing Closing occurs after February 29, 2012 but on or before February 28, 2013, 85% if the Next Financing
Closing occurs after February 28, 2013 but on or before August 31, 2013, or 80% if the Next Financing Closing occurs after August
31, 2013.
If the conversion occurs at the Maturity
Date or upon a Change of Control, then the conversion price shall be equal to $1,872 per share.
Pursuant to ASC 470-20, “Debt with Conversion and Other
Options,” the Company did not allocate any proceeds to the conversion feature at issuance as the value of the conversion
feature should not be recognized until the contingency event occurs. The Company also evaluated the conversion
feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity,” and determined
that the conversion feature did not meet the criteria necessary for derivative treatment.
On July 13, 2013, the Company agreed to convert the principal
balance of $20,000 into 468 shares of common stock of the Company.
Note C-6: On November
8, 2013, the Company entered into a convertible promissory note with a face value of $37,375 (the “Principal Amount”),
which includes $30,000 advanced by the Holder, $2,500 in expenses incurred by the Holder and original issuer discount of $4,875.
The Principal Amount outstanding shall be due and payable on the date that is 18 months from the Issuance Date. In addition, pursuant
to the convertible promissory note the Company issued 59,325 common stock purchase warrants. Each warrant is exercisable into one
common share at a price of $126 per share ($0.63 per share pre-split) for a period of five years.
At any time after the Issuance Date, this Note shall be convertible
(in whole or in part), at the option of the Holder (the “Conversion Option”), into such number of fully paid and non-assessable
shares of Common Stock (the “Conversion Rate”) as is determined by dividing that portion of the outstanding principal
balance under this Note as of such date that the Holder elects to convert by the Conversion Price. The term “Conversion
Price” shall mean a 40% discount of the lowest reported sale price of the common stock for the 20 trading days immediately
prior to (i) the date of the Purchase Agreement, or (ii) the Voluntary Conversion Date. As of December 31, 2013 this note has not
been converted or repaid.
During the year ended December 31, 2013, the Company recognized
in aggregate of $48,415 (2012-$59,117) in interest expense for the convertible notes.
NOTE 7 – ADVANCES RECEIVED
During the year ended December 31, 2013,
the Company received $674,500 (December 31, 2012 - $Nil) in advances from Global Energy Innovations Inc., an independent company
incorporated in British Columbia, Canada with no contractual affiliation with Global Energy Innovations, Inc. (Michigan), or with
GEI Global Energy Corp. (Nevada). The amounts are non-interest bearing, unsecured and have no fixed terms of repayment. The terms
of repayment are currently under negotiation.
NOTE 8 – EQUITY
Common Stock
On December 31, 2013 the Company had
126,970 issued and outstanding and the Company had 800,000,000 common shares authorized (See Note 13).
Each share of common
stock shall have one (1) vote per share for all purpose subject to the voting rights of the Company’s preferred shares (see
below). Our common stock does not provide a preemptive, subscription or conversion rights and there are no redemption or sinking
fund provisions or rights. Our common stock holders are not entitled to cumulative voting for election of Board of Directors.
Fiscal Year Ended December 31, 2013
On December 18, 2013 the Company approved a 1 for 200 reverse
stock split.
Stock Issued for Services
On November 12, 2013 the Company issued
875 of its common stock for consulting services with an estimated fair value of $21,350 per share and recorded an expense of $21,350.
Stock Issued for Cash
On November 4, 2013 the Company issued
2,762 of its common stock for $67,500. The shares issued are non-dilutable, up to 5% of the issued and outstanding capital stock
of the Company. Should these shares be sold or transferred, this provision will cease to be in effect. At December 31, 2013, there
are 2,022 shares of common stock issuable for the non-dilution provision.
Stock Cancelled
During the year ended December 31, 2013, the Company cancelled
57,000 shares of common stock as follows:
Date | |
Number of Shares | |
July 24, 2013 | |
| 7,000 | |
August 19, 2013 | |
| 50,000 | |
Total | |
| 57,000 | |
Stock Issued in Connection with the Conversion of
Debt
During the year ended December 31, 2013,
the Company issued 3,000 shares of common stock valued at $177,662 for the conversion of the principal and accrued interest
of debt held by six (6) convertible debt holder. The Company also issued 5,000 shares of common stock valued at $32,700 for the
conversion of the principal and accrued interest of debt held by one (1) convertible debt holders. The conversion price
was agreed to by the transacting parties. The fair values of the shares of common stock issued for the conversion
of debt was recorded as a reduction in convertible notes payable and accrued interest for the year ended December 31, 2013.
Date | |
Number of Shares | | |
Fair Value | |
July 31, 2013 | |
| 3,000 | | |
$ | 177,662 | |
December 4, 2013 | |
| 5,000 | | |
$ | 32,700 | |
Total | |
| 8,000 | | |
$ | 210,362 | |
Stock Issued for Reverse
Merger Acquisition
On August 15, 2013, the Company issued 75,000 shares of common
stock of the Company. The Company also issued 2,500 super voting preferred shares of the Company (see Note
11).
Stock Issuable for Services
At December 31, 2013, the Company had
11,872,817 shares issuable to consultant, officers and directors services performed during the year-ended December 31, 2013, recorded
as consulting expenses of $1,448,410.
Fiscal Year Ended December 31, 2012
No shares were issued for the year ended December 31, 2012.
Preferred Stock
We are authorized to issue 10,000,000
shares of preferred stock, $0.001 par value per share. The preferred stock may be divided into number of series as our Board of
Directors may determine. Our Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions
granted to and imposed upon any wholly issued series of preferred stock, and to fix the number of shares of any series of preferred
stock and the designation of any such series of preferred stock. Currently there are 2,500 shares of Series A Convertible Super-Voting
Preferred Stock issued and outstanding, held by the President.
Series A Convertible Super-Voting Preferred Stock
Our Board of Directors has designated
a series of preferred stock entitled Series A Convertible Super-Voting Preferred Stock. Each of these preferred shares has a common
stock conversion rate of 1/1000 of the total issued shares of the common stock of the purchaser at the time of conversion. Furthermore,
these preferred shares will at all times prior to their total conversion have a collective voting right equal to 50% of the total
outstanding voting power of the company. As of December 31, 2013 the President has voting control of the Company, with the voting
power to elect the Company’s Board of Directors.
Share Purchase Warrants
| |
| | |
Weighted Average | |
| |
| | |
Exercise | |
| |
Number of | | |
Price | |
| |
Warrants | | |
$ | |
Balance, December 31, 2011 and 2012 | |
| - | | |
| - | |
Warrants issued with convertible debentures | |
| 297 | | |
| 126 | |
| |
| | | |
| | |
Balance, December 31, 2013 | |
| 297 | | |
| 126 | |
Details of share purchase warrants outstanding as of December
31, 2013 are:
Number of Warrants Outstanding and Exercisable | | |
|
Number | | |
Exercise Price per Share | | |
Expiry Date |
| | |
| | |
|
| 297 | | |
$ | 126 | | |
November 8, 2019 |
| 297 | | |
$ | 126 | | |
|
NOTE 9 – SELLING, GENERAL, AND ADMINISTRATIVE
| |
Year Ended | |
| |
December 31, 2013 | | |
December 31, 2012 | |
| |
| | |
| |
Business development | |
$ | 147,635 | | |
$ | 1,150 | |
Professional fees | |
| 116,029 | | |
| 500 | |
Rent | |
| 45,450 | | |
| 1,862 | |
Office expense | |
| 30,226 | | |
| 2,836 | |
Management salaries | |
| 103,129 | | |
| - | |
Selling, general, and administrative | |
$ | 442,469 | | |
$ | 6,348 | |
NOTE 10 – COMMITMENTS
The Company entered into an agreement with Atlanta Marketing
Consultant (“Atlanta”), which commenced on May 15, 2010 where Atlanta will be entitled to a 5% commission of the total
amount received by the Company on all business generated as a result of each business arrangement introduced by the efforts of
Atlanta. In the event Atlanta is able to assist the Company in the raising of capital through said contacts, Atlanta
will be entitled to a one-time consulting fee of 3% to 5% of the amount of capital raised. If the amount
of capital raised by the Company is $750,000 or below, Atlanta will receive a 5% consulting fee. If the amount of capital
raised is over $750,000 but below $1,500,000, Atlanta will receive in a consulting fee of 4% of monies raised. Any amount
of capital raised by the Company exceeding $1,500,000 will result in a consulting fee payment of 3%. All payments will
be due on a quarterly basis and paid on the 5th day of the month of each new quarter of the calendar year. The
agreement shall not terminate as long as the Company is receiving income or equity positions from parties brought to the Company
as a result of Atlanta’s efforts for a period ending 5 years from the first transaction.
The Company entered into a service agreement with Troy Spencer
(“Spencer”) dated on November 19, 2012 in which Spencer has been engaged to assist the Company in raising capital through
said contracts. Spencer will be entitled to a consulting fee of 3% to 10% of the amount of capital raised. If the amount
of capital raised by the Company is $750,000 or below, Spencer will receive a 10% consulting fee. If the amount of capital
raised is over $750,000 but below $1,500,000, Spencer will receive a consulting fee of 4% of monies raised. Any amount
of capital raised by the Company exceeding $1,500,000 will result in a consulting fee payment of 3%. All aforementioned
payments will be due within 10 business days after the Company receives funding from an investor. Spencer will receive
fee payments for investments from the same investors for a period of 36 months from the initial investment. The agreement
shall not terminate as long as the Company is receiving income or equity positions from all aforementioned parties and other potential
parties brought to the Company as a result of Spencer’s efforts.
On March 2, 2013 the Company entered into a consulting agreement
with Earl H. Roberts Limited (“Roberts”). The Company agreed to pay a fee of 10% of the total cash or stock
values of business derived from Roberts’ efforts from introductions, for licensing of technologies, or sale of technology. Furthermore,
the Company agrees to pay a fee equal to 2% of the equity ownership for technology commercialization partnerships as a result of
introductions. Roberts can elect to forgo cash payment for stock in the Company.
On May 30, 2013, the Company entered into a lease agreement
for Engineering and Office Rental Space with Trialon Corporation for a period of one year commencing on July 1, 2013 to June 30,
2014. The monthly lease rate is $5,075. The Company has paid a security deposit of
$5,075 and the first six-month rent of $30,450 in June 2013. Rent consideration for January 1, 2014 to June
30, 2014 will be payable on January 1, 2014.
Currently no capital has been raised from these agreements.
NOTE 11 – REVERSE ACQUISITION
On August 15, 2013, Global Energy Innovation
Inc. (“GEI”) signed a share purchase agreement (the “Acquisition”) with Suja Minerals Corp. (“Suja”),
a public company incorporated in Nevada, United States, according to which Suja has acquired 100% of the 9,000,000 outstanding
shares of GEI for $250,000 and 15,000,000 (75,000 post-split) shares of common stock of Suja and 2,500 shares of Series A Convertible
Super-Voting Preferred Stock of Suja. Each share of preferred stock has a conversion rate of 1/1000 of the issued and outstanding
common stock and the total carries 50% of the voting rights until converted. In
addition, the Company’s President received a right to a royalty of 2.5% of sales up to $100,000,000 per year and 1.5% of
sales over $100,000,000 per year for 10 years.
Upon
issuance of additional shares by the Company, the President, at his sole discretion, may be issued additional shares equal to a
pro-rata percentage of the additional shares issued by the Company, effectively making these shares non-dilutable. This pro-rata
percentage based on shares held by the President at the date of the transaction is 65.2%. Should these shares be sold or transferred,
this provision will cease to be in effect. At December 31, 2013, based on the total number of outstanding common shares of 126,970,
26,066 common shares of the Company are issuable to the President.
For accounting purposes, the Acquisition
has been treated as a reverse recapitalization, rather than a business combination. Accordingly, for accounting purposes GEI is
considered the acquirer and surviving entity in the reverse recapitalization. The accompanying historical financial statements
prior to the Acquisition are those of GEI.
The consolidated financial statements
present the previously issued shares of Suja common stock as having been issued pursuant to the Acquisition on August 15, 2013,
with the consideration received for such issuance being the estimated fair value of Suja shares issued, based on the number of
equity interest GEI would have had to issue to give Suja the same percentage equity interest in the combined entity that results
from the reverse acquisition. The excess of the consideration issued over the net assets of Suja is recognized as an adjustment
to deficit. As at the date of the acquisition Suja was in a net liability position.
| |
$ | |
| |
| |
Preferred shares issued | |
| 50,000 | |
Common shares issued | |
| 130,000 | |
Total consideration | |
| 180,000 | |
| |
| | |
Net liabilities acquired | |
| | |
Liabilities assumed | |
| (159,924 | ) |
Liabilities forgiven on acquisition | |
| (122,452 | ) |
Net liabilities acquired | |
| 37,572 | |
| |
| | |
Adjustment to deficit | |
| 217,572 | |
The shares of common stock of Suja issued to GEI’s
stockholders in the Acquisition are presented as having been outstanding since the original issuance of the shares. The adjustment
to the share capital has been retroactively applied to all share, weighted average share, and loss per share disclosures.
NOTE 12 - INCOME TAXES
The provision (benefit) for income taxes from continued operations
for the years ended December 31, 2013 and 2012 consist of the following:
| |
Year Ended December 31, | |
| |
2013 | | |
2012 | |
Current: | |
| | |
| |
Federal | |
$ | - | | |
$ | - | |
State | |
| - | | |
| - | |
| |
| - | | |
| - | |
Deferred: | |
| | | |
| | |
Federal | |
$ | 148,912 | | |
$ | 29,478 | |
State | |
| - | | |
| - | |
| |
| 148,912 | | |
| 29,478 | |
Valuation allowance | |
| (148,912 | ) | |
| (29,478 | ) |
Provision benefit for income taxes, net | |
$ | - | | |
$ | - | |
The difference between income tax expense
computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows:
| |
December 31, | |
| |
2013 | | |
2012 | |
| |
| | |
| |
Statutory federal income tax rate | |
| (34.0 | %) | |
| (34.0 | %) |
State income taxes and other | |
| 0.0 | % | |
| 0.0 | % |
Change in valuation allowance | |
| 34.0 | % | |
| 34.0 | % |
Effective tax rate | |
| - | | |
| - | |
Deferred income taxes result from temporary differences in
the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary
differences representing deferred tax asset and liabilities result principally from the following:
| |
December 31, | |
| |
2013 | | |
2012 | |
| |
| | |
| |
Net operating loss carryforward | |
| 148,912 | | |
| 278,076 | |
Valuation allowance | |
| (148,912 | ) | |
| (278,076 | ) |
| |
| | | |
| | |
Deferred income tax asset | |
$ | - | | |
$ | - | |
The Company has a net operating loss
carry forward of approximately $437,976 available to offset future taxable income through 2030, subject to limitations of Section
382 of the Internal Revenue Code, as amended. The Company lost the Net Operating Loss of $1,042,423 from 2012 in accordance with
IRC 382 Change in Control. The Company has provided a valuation reserve against the full amount of the net operating
loss benefit, because in the opinion of management based upon the earning history of the Company, it is more likely than not that
the benefits will not be realized. The Company anticipates it will continue to record a valuation allowance against the losses
of certain jurisdictions, primarily federal and state, until such time as we are able to determine it is “more-likely-than-not”
the deferred tax asset will be realized. Such position is dependent on whether there will be sufficient future taxable income to
realize such deferred tax assets. The Company’s effective tax rate may vary from period to period based on changes
in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to federal, state or foreign tax
laws, future expansion into areas with varying country, state, and local income tax rates, deductibility of certain costs and expenses
by jurisdiction.
Under the Tax Reform Act of 1986, the benefits from net operating
losses carried forward may be impaired or limited in certain circumstances. Events which may cause limitations in the amount of
net operating losses that the Company may utilize in any one year include, but are not limited to, a cumulative ownership change
of more than 50% over a three-year period. The effect of any limitations that may be imposed for future issuances of equity securities,
including issuances with respect to acquisitions have not been determined.
NOTE 13– SUBSEQUENT EVENTS
On January 1, 2014 the Company issued
230,000 of its common stock for conversion of debt and accrued interest of $35,000. The conversion was for unpaid salaries
to prior officer of the Company.
On January 1, 2014 the Company issued
1,700,000 of its common stock for conversion of debt of $50,000 for the reduction of the outstanding principal balance due to Ann
Arbor Sparks (see Note 6).
On January 1, 2014 the Company issued 42,757,999 of its common
stock for officer consideration, consulting and marketing services.
On April 11, 2014 the Company amended its Articles of Incorporation
and authorized 1,400,000,000 common shares at $0.001 par value.
GEI GLOBAL ENERGY CORP.
CONSOLIDATED
BALANCE SHEETS
(Expressed
in U.S. Dollars)
| |
June
30, | | |
December
31, | |
| |
2014
(unaudited) | | |
2013 | |
| |
| | |
| |
ASSETS: | |
| | |
| |
Current Assets | |
| | |
| |
Cash | |
$ | 16,447 | | |
$ | 5,553 | |
Prepaid
rent | |
| - | | |
| 5,075 | |
Total
Current Assets | |
| 16,447 | | |
| 10,628 | |
| |
| | | |
| | |
Property
and Equipment, net (Note 3) | |
| 257,619 | | |
| 213,177 | |
| |
| | | |
| | |
Total
Assets | |
$ | 274,066 | | |
$ | 223,805 | |
| |
| | | |
| | |
LIABILITIES
AND STOCKHOLDERS' DEFICIT: | |
| | | |
| | |
| |
| | | |
| | |
Current
Liabilities | |
| | | |
| | |
Accounts
payable | |
$ | 381,545 | | |
$ | 375,951 | |
Accrued
liabilites | |
| 306,265 | | |
| 286,867 | |
Due
to related party (Note 4) | |
| 282,203 | | |
| 249,703 | |
Advances
received (Note 6) | |
| 674,500 | | |
| 674,500 | |
Convertible
notes payable (Note 5) | |
| 529,124 | | |
| 500,000 | |
Total
Current Liabilities | |
| 2,173,637 | | |
| 2,087,021 | |
| |
| | | |
| | |
Convertible
notes payable (Note 5) | |
| 7,933 | | |
| 6,843 | |
| |
| | | |
| | |
Total
Liabilities | |
| 2,181,570 | | |
| 2,093,864 | |
| |
| | | |
| | |
Description
of business and going concern (Note 1) | |
| | | |
| | |
Commitments
(Note 9) | |
| | | |
| | |
Subsequent
events (Note 10) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders'
Deficit: | |
| | | |
| | |
Preferred
stock, $0.001 par value, 10,000,000 shares authorized;
2,500 issued and outstanding as of June 30, 2014 | |
| 50,000 | | |
| 50,000 | |
Common
stock, $0.001 par value, 800,000,000 shares authorized;
57,127,410 and 126,970 issued outstanding as of June 30, 2014
and December 31, 2013 (Note 7) | |
| 57,128 | | |
| 128 | |
Stock
issuable | |
| 713,959 | | |
| 1,451,838 | |
Additional
paid in capital | |
| 6,184,355 | | |
| 325,314 | |
Deficit | |
| (8,912,946 | ) | |
| (3,697,339 | ) |
Total
Stockholders' Deficit | |
| (1,907,504 | ) | |
| (1,870,059 | ) |
| |
| | | |
| | |
Total
Liabilities and Stockholders' Deficit | |
$ | 274,066 | | |
$ | 223,805 | |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
GEI
GLOBAL ENERGY CORP.
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(Expressed
in U.S. dollars)
| |
Three
Months Ended | | |
Six
Months Ended | |
| |
June
30, | | |
June
30, | | |
June
30, | | |
June
30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| | |
| |
REVENUE | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | |
OPERATING
EXPENSES: | |
| | | |
| | | |
| | | |
| | |
Selling,
general, and administrative (Note 8) | |
| 383,400 | | |
| 153,553 | | |
| 2,512,906 | | |
| 153,641 | |
Depreciation | |
| 3,048 | | |
| 1,746 | | |
| 6,096 | | |
| 2,571 | |
Deferred
financing expense | |
| 26,550 | | |
| - | | |
| 26,550 | | |
| - | |
Consulting
expense | |
| 153,550 | | |
| - | | |
| 1,654,581 | | |
| - | |
Total
operating expenses | |
| 566,548 | | |
| 155,299 | | |
| 4,200,133 | | |
| 156,212 | |
| |
| | | |
| | | |
| | | |
| | |
OTHER
EXPENSES | |
| | | |
| | | |
| | | |
| | |
Interest
expense (Note 5) | |
| 84,851 | | |
| 17,074 | | |
| 99,446 | | |
| 34,046 | |
Total
other expenses | |
| 84,851 | | |
| 17,074 | | |
| 99,446 | | |
| 34,046 | |
| |
| | | |
| | | |
| | | |
| | |
NET
LOSS AND COMPREHENSIVE LOSS | |
$ | 651,398 | | |
$ | 172,373 | | |
$ | 4,299,579 | | |
$ | 190,258 | |
| |
| | | |
| | | |
| | | |
| | |
Deemed
dividends | |
| 228,805 | | |
| - | | |
| 916,028 | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
NET
LOSS AND COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | |
$ | 880,203 | | |
$ | 172,373 | | |
$ | 5,215,607 | | |
$ | 190,258 | |
| |
| | | |
| | | |
| | | |
| | |
NET LOSS
PER COMMON SHARE: | |
| | | |
| | | |
| | | |
| | |
Basic
and diluted | |
$ | 0.01 | | |
$ | 0.02 | | |
$ | 0.04 | | |
$ | 0.02 | |
Weighted
average common shares outstanding, basic and diluted | |
| 62,867,716 | | |
| 9,000,000 | | |
| 100,848,324 | | |
| 9,000,000 | |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
GEI
GLOBAL ENERGY CORP.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(Expressed
in U.S. Dollars)
| |
Six
Months Ended | |
| |
June
30, | | |
June
30, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
CASH FLOWS
FROM OPERATING ACTIVITIES: | |
| | |
| |
Net
loss | |
$ | (4,299,579 | ) | |
$ | (190,258 | ) |
| |
| | | |
| | |
Adjustments
to reconcile net loss to net cash used in operating activities | |
| | | |
| | |
Depreciation | |
| 6,096 | | |
| 2,571 | |
Shares
issued for services | |
| 3,950,851 | | |
| - | |
Accretion
on convertible notes | |
| 77,425 | | |
| - | |
Impairment
of assets | |
| - | | |
| - | |
| |
| | | |
| | |
Changes
in operating assets and liabilities: | |
| | | |
| | |
Prepaid
rent | |
| 5,075 | | |
| (35,524 | ) |
Accounts
payable and accrued liabilities | |
| 69,564 | | |
| 15,254 | |
Net
cash used in operating activities | |
| (190,568 | ) | |
| (207,957 | ) |
| |
| | | |
| | |
CASH
FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Investment
in equipment and tenant improvements | |
| (50,538 | ) | |
| (82,615 | ) |
Net
cash used in investing activities | |
| (50,538 | ) | |
| (82,615 | ) |
| |
| | | |
| | |
CASH
FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| |
| | | |
| | |
Proceeds
from convertible notes | |
| 176,500 | | |
| - | |
Stock
issued for cash | |
| 43,000 | | |
| - | |
Proceeds
from (repayment of) notes payable | |
| - | | |
| (1,305 | ) |
Receipt
from advances receivable | |
| - | | |
| 425,000 | |
Advances
from related party | |
| 43,500 | | |
| 25,000 | |
Repayment
to related party | |
| (11,000 | ) | |
| (115,000 | ) |
Net
cash provided by financing activities | |
| 252,000 | | |
| 333,695 | |
| |
| | | |
| | |
INCREASE
IN CASH | |
| 10,894 | | |
| 43,123 | |
CASH,
BEGINNING OF PERIOD | |
| 5,553 | | |
| 97 | |
CASH,
END OF PERIOD | |
$ | 16,447 | | |
$ | 43,220 | |
| |
| | | |
| | |
SUPPLEMENTAL
CASH FLOW INFORMATION: | |
| | | |
| | |
| |
| | | |
| | |
Interest
paid | |
$ | 586 | | |
$ | - | |
Income
taxes paid | |
$ | - | | |
$ | - | |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
GEI
GLOBAL ENERGY CORP.
Notes
to the Consolidated Financial Statements
For
the three and six months ended June 30, 2014 and June 30, 2013
(unaudited)
(Expressed
in U.S. dollars)
NOTE
1 – DESCRIPTION OF BUSINESS AND GOING CONCERN
GEI
Global Energy Corp., formerly Suja Minerals Corp. (the “Company”) was incorporated in the State of Nevada on
April 28, 2010. The Company’s principal business activity is the construction and sale of fuel cell auxiliary electric power
generation systems for residential, commercial, military, and industrial electric applications. These financial statements
have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities
in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial
support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, and the
attainment of profitable operations. As at June 30, 2014, the Company has a working capital deficiency of $2,157,190 and has accumulated
losses of $8,912,946 since inception. These factors raise substantial doubt regarding the Company’s ability to continue
as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE
2 – BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
These
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Global Energy Innovations,
Inc.
These
interim consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”)
Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete
consolidated financial statements. Therefore, these interim consolidated financial statements should be read in conjunction
with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2013, included
in the Company’s Annual Report on Form 10-K filed May 8, 2014 with the SEC.
The
consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and
adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at June
30, 2014, and the results of its operations and cash flows for the six months ended June 30, 2014 and 2013. The results of operations
for the period ended June 30, 2014 are not necessarily indicative of the results to be expected for future quarters or the full
year.
On
December 12, 2013, the Company completed a 200 for 1 common share consolidation; the share consolidation has been retroactively
applied to all common share, weighted average common share, and loss per common share disclosures.
Recent
Accounting Pronouncements
The
Company has adopted all mandatory effective new accounting pronouncements with no material impact on its consolidated financial
statements or disclosures.
The
Company has evaluated all other recent accounting pronouncements and determined that they would not have a material impact on
the Company’s financial statements or disclosures.
NOTE
3 – PROPERTY AND EQUIPMENT
| |
Cost
$ | | |
Accumulated
Depreciation $ | | |
June
30, 2014 Net Carrying Value $ | | |
December
31, 2013 Net Carrying Value $ | |
| |
| | |
| | |
| | |
| |
Computer
hardware | |
| 4,323 | | |
| 4,323 | | |
| - | | |
| - | |
Equipment | |
| 21,182 | | |
| 21,182 | | |
| - | | |
| - | |
Furniture
and fixtures | |
| 23,653 | | |
| 4,895 | | |
| 18,758 | | |
| 20,892 | |
Demonstration
equipment | |
| 208,411 | | |
| - | | |
| 208,411 | | |
| 157,872 | |
Computer
software | |
| 392 | | |
| 392 | | |
| - | | |
| - | |
Leasehold
improvements | |
| 38,163 | | |
| 7,713 | | |
| 30,450 | | |
| 34,413 | |
| |
| 296,124 | | |
| 38,505 | | |
| 257,619 | | |
| 213,177 | |
As
at June 30, 2014, demonstration equipment was under construction and was 40% complete.
During
the six month period ended June 30, 2014 and year ended December 31, 2013, the Company recorded no impairment write-downs on the
property and equipment.
NOTE
4 – DUE TO RELATED PARTY
| |
June
30, 2014 | | |
December
31, 2013 | |
| |
| | | |
| | |
Due
to the President of the Company | |
| 282,203 | | |
| 249,703 | |
As
at June 30, 2014 the Company owed $282,203 (December 31, 2013 - $249,703) for cash advances received from the President of the
Company and the amount payable under the reverse acquisition, which are non-interest bearing, unsecured, and due on demand.
NOTE
5 - CONVERTIBLE NOTES PAYABLE
The
Company had the following notes payable outstanding as of June 30, 2014 and December 31, 2013:
| |
June
30, 2014 | | |
December
31, 2013 | |
| |
| | |
| |
Note
C-1 | |
| 250,000 | | |
| 250,000 | |
Dated –
March 18, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-2 | |
| 185,038 | | |
| 250,000 | |
Dated –
August 15, 2008 | |
| | | |
| | |
| |
| | | |
| | |
Note C-3 | |
| 81,500 | | |
| - | |
Dated –
March 18, 2014 | |
| | | |
| | |
| |
| | | |
| | |
Note C-4 | |
| 7,933 | | |
| 6,843 | |
Dated
– November 5, 2013 (Note $28,000 less Discount $20,067) | |
| | | |
| | |
| |
| | | |
| | |
Note C-5 | |
| | | |
| | |
Dated
– June 18, 2014 (Note $9,500 less Discount $9,500) | |
| - | | |
| - | |
| |
| | | |
| | |
Note C-6 | |
| | | |
| | |
Dated
– May 23, 2014 (Note $42,500 less Discount $42,500) | |
| - | | |
| - | |
| |
| | | |
| | |
Note C-7 | |
| | | |
| | |
Dated
– June 24, 2014 (Note $32,500 less Discount $19,914) | |
| 12,586 | | |
| - | |
Total
convertible notes payable | |
$ | 537,057 | | |
$ | 506,843 | |
Less:
current portion of convertible notes payable | |
| 529,124 | | |
| 500,000 | |
Long-term
convertible notes payable | |
$ | 7,933 | | |
$ | 6,843 | |
Note
C-1: On March 18, 2008, the Company entered into a convertible promissory note agreement for $250,000. Pursuant
to the agreement, the note bears interest at 8% per annum. The principal balance and all accrued interest was due and
payable on March 18, 2011 (the “Maturity Date”) provided that the note holder has given written notice to the Company
on or after September 18, 2010, but prior to the Maturity Date, demanding full payment of this note as of the Maturity Date (the
“Payoff Notice”). The principal amount and accrued interest shall be converted into common stock of the
Company upon the first to occur of the following events and the Company shall provide a written notice to the note holder of the
occurrence of any such conversion event (“Conversion Notice”): (i) If the Company has not received a Payoff Notice
and no event of default has occurred as of the Maturity Date; (ii) the final closing date of a minimum of $500,000 financing (the
“Next Financing Closing”) which results in the Company receiving new capital investment in exchange for the issuance
by the Company of a capital interest in the Company; and (iii) immediately prior to the occurrence of any of the following (“Change
of Control”): when (1) the Company sells, conveys, or otherwise disposes of all or substantially all of its property or
business; or (2) when the Company causes to be registered and sold any of its shares of common stock pursuant to and under a registration
statement prepared and filed in compliance with the Federal Securities Act of 1933; or (3) when the Company effects any transaction
which results in one or more stockholders who were not stockholders of the Company immediately prior to such transaction owning
more than sixty-five percent (65%) of the voting rights of the Company.
If
conversion occurs at the Next Financing Closing, then the note is convertible into the same type, series, and class of securities
issued under the Next Financing Closing. The conversion price shall equal to conversion amount divided by the average
price per share received by the Company at the Next Financing Closing, multiplied by 95% if the Next Financing Closing occurs
on or before September 18, 2008, 90% if the Next Financing Closing occurs after September 18, 2008 but on or before September
18, 2009, 85% if the Next Financing Closing occurs after September 18, 2009 but on or before March 18, 2010, or 80% if the Next
Financing Closing occurs after March 18, 2010.
If
the conversion occurs at the Maturity Date or upon a Change of Control, then the conversion price shall be equal to $1,872 per
share.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment.
As
of the Maturity Date, the Company has not received new capital investment of a minimum of $500,000 or a Payoff Notice from the
note holder. Pursuant to the terms of the agreement, the principal amount and accrued interest was then convertible
into common stock of the Company. The Company determined that there was no beneficial conversion feature as the fair
value of common stock of the Company is below the conversion price of $1,872. At June 30, 2014, the promissory note has not been
repaid or converted.
Note
C-2: On August 15, 2008, the Company entered into a secured convertible promissory note agreement for $250,000. The
convertible promissory note, which was due on September 1, 2010, bears interest at the rate of 9% per annum. In the
event the note is not repaid or converted on or prior to September 1, 2010 or after an event of default, the rate of interest
applicable to the unpaid principal amount shall increase to 15% per annum. Pursuant to the agreement, the holder of
the note has the right to convert upon written notice to the Company the principal then due under the note on the following terms:
(i) automatically into the Company’s next issued series of preferred stock for not less than $1,500,000 at the per share
price. Interest will either be paid or converted at the option of the holder; or (ii) in the event that the conversion
in (i) does not occur by August 30, 2010, then the holder will have the option of converting the note into the requisite number
of units of the Company’s preferred stock. The conversion price will be determined by the Company immediately
prior to the time of conversion.
The
conversion price will be determined through (i) or (ii) below at the option of the Company:
i). The
per share value of each share of preferred stock will equal to the result of the following formula: (1) six times the average
earnings before interest, taxes, depreciation and amortization (“EBITDA”) of the Company for the 2008 and 2009 fiscal
years, divided by the product of (1) by the number of preferred stock issued and outstanding.
ii).
The fair market value of each share of preferred stock as of August 30, 2010. The fair market value of the preferred
stock shall be determined by a qualified appraiser jointly selected by the Company and the note holder.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment.
As
of August 30, 2010, the Company had not completed a financing of a minimum of $1,500,000 and the note holder did not contact the
Company to determine the fair market value of the preferred stock or demand payment. On January 1, 2014, the Company
converted $50,000 of the principal balance for 1,700,000 shares of common stock of the Company (see also Note 7).
On
May 23, 2014 the Company entered into an Assignment and Assumption Agreement where as a third-party has assumed the obligation
of this convertible note. The Agreement required that the third-party pay the principle and interest of the outstanding
debt over 5 tranches. These payments are discounted as agreed by all parties and the total payment to be paid on the
note is $200,000. The payment of the first tranche to extinguish the debt has been completed as of June 30, 2014.
Note
C-3: On March 18, 2014 the Company entered into a convertible promissory note agreement for $70,000. Pursuant
to the agreement, the note bears no interest. The principle balance is due and payable on June 18, 2014. During the
three months ended June 30, 2014, an additional $11,500 was loaned to the Company. The principal amount shall be converted into
shares of common stock of the Company at a fixed conversion price of $0.0001 at the option of the Holder, in whole at any time
and from time to time. The Holder shall effect conversions by delivering the company the form of Notice of Conversion.
In the event the note is not repaid or converted on or prior to June 18, 2014 or after an event of default, the rate of interest
applicable to the unpaid principal amount shall increase to 22% per annum.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment. At
June 30, 2014 this note has not been converted or been repaid.
Note
C-4: On November 8, 2013, the Company entered into a convertible promissory note with a face value
of $37,375 (the “Principal Amount”), which includes $30,000 advanced by the Holder, $2,500 in expenses incurred by
the Holder and original issue discount of $4,875. The Principal Amount outstanding shall be due and payable on the date that is
18 months from the Issuance Date. In addition, pursuant to the convertible promissory note the Company issued 59,325 common stock
purchase warrants. Each warrant is exercisable into one common share at a price of $126 per share for a period of five years.
At
any time after the issuance date, this Note shall be convertible (in whole or in part), at the option of the Holder (the “Conversion
Option”), into such number of fully paid and non-assessable shares of Common Stock (the “Conversion Rate”) as
is determined by dividing that portion of the outstanding principal balance under this Note as of such date that the Holder elects
to convert by the Conversion Price. The term “Conversion Price” shall mean a 40% discount of the lowest
reported sale price of the common stock for the 20 trading days immediately prior to (i) the date of the Purchase Agreement, or
(ii) the Voluntary Conversion Date. As of December 31, 2013 this note has not been converted or repaid. On June 20,
2014 the Company converted $9,375 principal balance of this note for 1,250,000 common stock of the Company.
The
remaining balance of the note at June 30, 2014 is $28,000.
Note
C-5: On June 18, 2014, the Company entered into a convertible promissory note with a face value of
$9,500 (the “Principal Amount”). The Principal Amount outstanding shall be due and payable on the date that is 12
months from the Issuance Date. In addition, pursuant to the convertible promissory note the holder has the right to convert the
Note at a price of $0.0001 per share.
At
June 30, 2014, the promissory note has not been repaid or converted.
Note
C-6: On May 23, 2014, the Company entered into a convertible promissory note agreement for $42,500. The
convertible promissory note, which was due on February 28, 2015, bears interest at the rate of 8% per annum. In the
event the note is not repaid or converted on or prior to February 28, 2015 or after an event of default, the rate of interest
applicable to the unpaid principal amount shall increase to 22% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 55% multiplied
by the Market Price which represents a 45% discount. The Market Price means the average of the lowest three Trading
Prices for the Common stock during the (30) Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
June 30, 2014, the promissory note has not been repaid or converted.
Note
C-7: On June 24, 2014, the Company entered into a convertible promissory note agreement for $32,500. The
convertible promissory note, which is due on March 24, 2015, bears interest at the rate of 8% per annum. In the event
the note is not repaid or converted on or prior to February 28, 2015 or after an event of default, the rate of interest applicable
to the unpaid principal amount shall increase to 22% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 55% multiplied
by the Market Price which represents a 45% discount. The Market Price means the average of the lowest three Trading
Prices for the Common stock during the (30) Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
June 30, 2014, the promissory note has not been repaid or converted.
Other
Notes
Note
C-8: On March 11, 2014, the Company entered into a convertible promissory note agreement for $15,000. The
convertible promissory note, which was due on April 1, 2014, bore interest at the rate of 0% per annum. On April 3,
2014 this note was converted into 150,000 common shares and has been fully satisfied.
Note
C-9: On March 26, 2014, the Company entered into a convertible promissory note agreement for $5,000. The
convertible promissory note, which was due on June 26, 2014, bears interest at the rate of 0% per annum. Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note, the holder will have the option of converting the note into the requisite number of units of the Company’s common
stock. The conversion price will be determined by the Company immediately prior to the time of conversion.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment.
On
April 29, 2014 this note was converted into 10,000 common shares and has been fully satisfied.
Note
C-10: On March 26, 2014, the Company entered into a convertible promissory note agreement for $2,000. The
convertible promissory note, which was due on June 26, 2014, bears interest at the rate of 0% per annum. Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note, the holder will have the option of converting the note into the requisite number of units of the Company’s common
stock. The conversion price will be determined by the Company immediately prior to the time of conversion.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment.
On
April 29, 2014 this note was converted into 16,667 common shares and has been fully satisfied.
During
the six-months ended June 30, 2014, the Company recognized an aggregate of $99,446 (June 30, 2013-$34,046) in interest expense
for the convertible notes.
NOTE
6 – ADVANCES RECEIVED
During
the year ended December 31, 2013, the Company received $674,500 in advances from Global Energy Innovations Inc., an independent
company incorporated in British Columbia, Canada with no contractual affiliation with Global Energy Innovations, Inc., or with
GEI Global Energy Corp. The final terms of the repayment agreement are currently under negotiation.
NOTE
7 - EQUITY
On
June 30, 2014, the Company had 57,127,410 issued and outstanding and the Company had 800,000,000 share of common stock authorized.
Each
share of common stock shall have one (1) vote per share for all purpose. The common stock does not provide a preemptive, subscription
or conversion rights and there are no redemption or sinking fund provisions or rights. Our common stock holders are not entitled
to cumulative voting for election of Board of Directors.
Six
months ended June 30, 2014
Stock
Issued for Cash
During
the six months ended June 30, 2014, the Company issued 2,283,333 shares of common stock for proceeds of $43,000.
Stock
Issued for Services
During
the six months ended June 30, 2014, the Company issued 45,173,601 shares of common stock valued at $5,387,709, of which 11,872,217
shares of common stock valued at $1,448,410 relate to stock issuable for services as at December 31, 2013 as follows:
Date |
|
|
Number
of Shares |
|
January 1, 2014 |
|
|
|
40,823,601 |
|
March 19, 2014 |
|
|
|
1,400,000 |
|
April 26, 2014 |
|
|
|
1,350,000 |
|
May 29, 2014 |
|
|
|
1,500,000 |
|
June 6, 2014 |
|
|
|
100,000 |
|
Total |
|
|
|
45,173,601 |
|
Stock
Issued in Connection with the Conversion of Debt
During
the three months ended March 31, 2014, the Company issued 1,930,000 shares of common stock valued at $87,572 for the
conversion of the principal and accrued interest of debt held by 2 convertible debt holders. During the three months
ended June 30, 2014 the Company issued 4,429,107 shares of common stock valued at $46,337. The fair values of the shares issued
for the conversion of debt was recorded as a reduction in convertible notes payable and accrued interest payable for the three
and six months ended June 30, 2014.
Date |
|
|
Number
of Shares |
|
|
Fair
Value |
|
March 31, 2014 |
|
|
|
1,930,000 |
|
|
$ |
87,572 |
|
June 30, 2014 |
|
|
|
4,429,107 |
|
|
|
46,337 |
|
Total |
|
|
|
6,359,107 |
|
|
$ |
133,909 |
|
Stock
Issued for Deferred Financing Cost
During
the six-month period ended June 30, 2014, the Company issued 1,500,000 shares of common stock valued at $11,500 for deferred financing
costs. The Company determined that this financing was not going to be completed and expensed it during the three months ended
June 30, 2014.
Stock
Issued and Issuable under Anti-Dilution Provisions
During
the six-month period ended June 30, 2014, the Company issued 1,684,399 shares of common stock under anti-dilution provisions.
As at June 30, 2014, the Company had 86,559,328 shares of common stock issuable under anti-dilution provisions.
Six
months ended June 30, 2013
No
shares were issued for the three and six months ended June 30, 2013.
Preferred
Stock
We
are authorized to issue 10,000,000 shares of preferred stock, $0.001 par value per share. The preferred stock may be divided into
number of series as our board of directors may determine. Our board of directors is authorized to determine and alter the rights,
preferences, privileges and restrictions granted to and imposed upon any wholly issued series of preferred stock, and to fix the
number of shares of any series of preferred stock and the designation of any such series of preferred stock. Currently there are
2,500 shares of Series A Convertible Super-Voting Preferred Stock issued and outstanding.
Series
A Convertible Super-Voting Preferred Stock
Our
Board of Directors has designated a series of preferred stock entitled Series A Convertible Super-Voting Preferred Stock. Each
of these preferred shares has a common stock conversion rate of 1/1000 of the total issued shares of the common stock of the Company
at the time of conversion. Furthermore, these preferred shares will at all times prior to their total conversion have
a collective voting right equal to 50.00% of the total outstanding voting power of the corporation. As a result of
the issuance to Dr. Berry of 2,500 shares of Series A Convertible Super-Voting Preferred Stock and his holdings of the Company’s
common stock, Dr. Berry has voting control of the Company, with the voting power to elect the Company’s Board of Directors.
Share
Purchase Warrants
|
|
|
|
|
Weighted Average |
|
|
|
|
|
|
Exercise |
|
|
|
Number of |
|
|
Price |
|
|
|
Warrants |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013 and
June 30, 2014 |
|
|
297 |
|
|
|
126 |
|
Details
of share purchase warrants outstanding as of June 30, 2014 are:
Number
of Warrants Outstanding and Exercisable | | |
|
Number | | |
Exercise
Price per Share | | |
Expiry
Date |
| | |
| | |
|
| 297 | | |
$ | 126 | | |
November
8, 2019 |
| 297 | | |
$ | 126 | | |
|
NOTE
8 – SELLING, GENERAL AND ADMINISTRATIVE
| |
Six
Months Ended | |
| |
June
30, 2014 | | |
June
30, 2013 | |
Business
development | |
$ | 535,849 | | |
$ | 96,253 | |
Professional
services | |
| 1,097,514 | | |
| 22,621 | |
Rent | |
| 26,134 | | |
| 15,000 | |
Office
expense | |
| 61,975 | | |
| 15,992 | |
Management
salaries | |
| 791,434 | | |
| 3,775 | |
Total
general and administrative | |
$ | 2,512,906 | | |
$ | 153,641 | |
NOTE
9 – COMMITMENTS
The
Company entered into an agreement with Atlanta Marketing Consultant (“Atlanta”), which commenced on May 15, 2010 where
Atlanta will be entitled to a 5% commission of the total amount received by the Company on all business generated as a result
of each business arrangement introduced by the efforts of Atlanta. In the event Atlanta is able to assist the Company
in the raising of capital through said contacts, Atlanta will be entitled to a one-time consulting fee of 3% to 5% of the amount
of capital raised. If the amount of capital raised by the Company is $750,000 or below, Atlanta will receive a 5% consulting fee. If
the amount of capital raised is over $750,000 but below $1,500,000, Atlanta will receive in a consulting fee of 4% of monies raised. Any
amount of capital raised by the Company exceeding $1,500,000 will result in a consulting fee payment of 3%. All payments
will be due on a quarterly basis and paid on the 5th day of the month of each new quarter of the calendar year. The
agreement shall not terminate as long as the Company is receiving income or equity positions from parties brought to the Company
as a result of Atlanta’s efforts for a period ending 5 years from the first transaction.
The
Company entered into a service agreement with Troy Spencer (“Spencer”) dated on November 19, 2012 in which Spencer
has been engaged to assist the Company in raising capital through said contracts. Spencer will be entitled to a consulting fee
of 3% to 10% of the amount of capital raised. If the amount of capital raised by the Company is $750,000 or below,
Spencer will receive a 10% consulting fee. If the amount of capital raised is over $750,000 but below $1,500,000, Spencer
will receive a consulting fee of 4% of monies raised. Any amount of capital raised by the Company exceeding $1,500,000
will result in a consulting fee payment of 3%. All aforementioned payments will be due within 10 business days after
the Company receives funding from an investor. Spencer will receive fee payments for investments from the same investors
for a period of 36 months from the initial investment. The agreement shall not terminate as long as the Company is
receiving income or equity positions from all aforementioned parties and other potential parties brought to the Company as a result
of Spencer’s efforts.
On
March 2, 2013 the Company entered into a consulting agreement with Earl H. Roberts Limited (“Roberts”). The
Company agreed to pay a fee of 10% of the total cash or value of stock issued of business derived from Roberts’ efforts
from introductions, for licensing of technologies, or sale of technology. Furthermore, the Company agrees to pay a
fee equal to 2% of the equity ownership for technology commercialization partnerships as a result of introductions. Roberts
can elect to forgo cash payment for stock in the Company.
On
May 30, 2013, the Company entered into a lease agreement for Engineering and Office Rental Space with Trialon Corporation for
a period of one year commencing on July 1, 2013 to June 30, 2014. The monthly lease rate is $5,075. The
Company paid a security deposit of $5,075 and the first six-month rent of $30,450 in June 2013. There is
no prepaid rent balance as of June 30, 2014.
NOTE
10 – SUBSEQUENT EVENTS
On
July 16, 2014 the Company issued 22,098,638 shares of common stock for conversion of debt.
On
July 21, 2014 the Company issued 39,000,000 shares of common stock for consulting services/employee compensation.
On
July 24, 2014 the Company issued 23,205,605 shares of common stock for conversion of debt.
GEI GLOBAL ENERGY CORP. |
CONSOLIDATED BALANCE SHEETS |
(Expressed in U.S. Dollars) |
| |
| | |
| |
| |
September 30, | | |
December 31, | |
| |
2014 | | |
2013 | |
| |
unaudited | | |
audited | |
| |
| | | |
| | |
ASSETS: | |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 31,053 | | |
$ | 5,553 | |
Prepaid rent (Note 9) | |
| - | | |
| 5,075 | |
Total Current Assets | |
| 31,053 | | |
| 10,628 | |
| |
| | | |
| | |
Property and equipment, net (Note 3) | |
| 403,781 | | |
| 213,177 | |
Restricted cash (Notes 3 and 10) | |
| 41,848 | | |
| - | |
Debt issuance cost | |
| 167,419 | | |
| - | |
| |
| | | |
| | |
Total Assets | |
| 644,101 | | |
| 223,805 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT: | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 360,301 | | |
$ | 375,951 | |
Accrued liabilities | |
| 189,906 | | |
| 286,867 | |
Due to related party (Note 4) | |
| 251,888 | | |
| 249,703 | |
Advances received (Note 6) | |
| 674,500 | | |
| 674,500 | |
Convertible notes payable (Note 5) | |
| 437,466 | | |
| 500,000 | |
Total Current Liabilities | |
| 1,914,061 | | |
| 2,087,021 | |
| |
| | | |
| | |
Convertible notes payable (Note 5) | |
| 11,446 | | |
| 6,843 | |
| |
| | | |
| | |
Total Liabilities | |
| 1,925,507 | | |
| 2,093,864 | |
| |
| | | |
| | |
Description of business and going concern (Note 1) | |
| | | |
| | |
Commitments (Note 9) | |
| | | |
| | |
Subsequent events (Note 11) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders' Deficit: | |
| | | |
| | |
Preferred stock, $0.001 par value, 10,000,000 shares authorized; | |
| | | |
| | |
2,500 issued and outstanding as of September 30, 2014 and December 31, 2013 | |
| 50,000 | | |
| 50,000 | |
Common stock, $0.001 par value, 8,000,000,000 shares authorized; | |
| | | |
| | |
981,345,686 and 126,970 issued and outstanding as of | |
| | | |
| | |
September 30, 2014 and December 31, 2013 (Note 7) | |
| 981,346 | | |
| 128 | |
Stock issuable | |
| 3,169,153 | | |
| 1,451,838 | |
Additional paid-in capital | |
| 6,841,927 | | |
| 325,314 | |
Accumulated deficit | |
| (12,323,832 | ) | |
| (3,697,339 | ) |
Total Stockholders' Deficit | |
| (1,281,406 | ) | |
| (1,870,059 | ) |
| |
| | | |
| | |
Total Liabilities and Stockholders' Deficit | |
$ | 644,101 | | |
$ | 223,805 | |
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
GEI GLOBAL ENERGY CORP. |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
(Expressed in U.S. dollars) |
unaudited |
| |
| | |
| | |
| | |
| |
| |
Three Months Ended | | |
Nine Months Ended | |
| |
September 30, | | |
September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| | |
| |
REVENUE | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | |
OPERATING EXPENSES: | |
| | | |
| | | |
| | | |
| | |
Selling, general, and administrative (Note 8) | |
| 607,430 | | |
| 154,675 | | |
| 3,120,336 | | |
| 308,317 | |
Depreciation | |
| 3,048 | | |
| 4,150 | | |
| 9,144 | | |
| 6,721 | |
Deferred financing expense | |
| 79,181 | | |
| - | | |
| 105,731 | | |
| - | |
Consulting expense | |
| 236,747 | | |
| - | | |
| 1,891,328 | | |
| - | |
Total operating expenses | |
| 926,406 | | |
| 158,825 | | |
| 5,126,539 | | |
| 315,038 | |
| |
| | | |
| | | |
| | | |
| | |
OTHER (INCOME) EXPENSES | |
| | | |
| | | |
| | | |
| | |
Other income | |
| (20,924 | ) | |
| - | | |
| (20,924 | ) | |
| - | |
Interest expense (Note 5) | |
| 50,210 | | |
| 15,393 | | |
| 149,656 | | |
| 49,439 | |
Total other expenses | |
| 29,286 | | |
| 15,393 | | |
| 128,732 | | |
| 49,439 | |
| |
| | | |
| | | |
| | | |
| | |
NET LOSS | |
$ | 955,692 | | |
$ | 174,218 | | |
$ | 5,255,271 | | |
$ | 364,477 | |
Deemed dividends | |
| 2,455,194 | | |
| - | | |
| 3,371,222 | | |
| - | |
NET LOSS AND COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | |
$ | 3,410,886 | | |
$ | 174,218 | | |
$ | 8,626,493 | | |
$ | 364,477 | |
| |
| | | |
| | | |
| | | |
| | |
NET LOSS PER COMMON SHARE: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted | |
$ | 0.00 | | |
$ | 1.83 | | |
$ | 0.01 | | |
$ | 4.45 | |
Weighted average common shares | |
| | | |
| | | |
| | | |
| | |
outstanding, basic and diluted | |
| 1,294,325,221 | | |
| 95,200 | | |
| 1,232,277,348 | | |
| 81,932 | |
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
GEI GLOBAL ENERGY CORP. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Expressed in U.S. Dollars) |
unaudited |
| |
| | |
| |
| |
Nine Months Ended | |
| |
September 30, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (5,255,271 | ) | |
$ | (364,477 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Depreciation | |
| 9,144 | | |
| 6,721 | |
Shares issued for services | |
| 4,500,523 | | |
| - | |
Deferred financing expense | |
| 79,181 | | |
| - | |
Accretion on convertible notes | |
| 123,666 | | |
| - | |
| |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid rent | |
| 5,078 | | |
| (20,300 | ) |
Accounts payable and accrued liabilities | |
| 71,944 | | |
| 26,221 | |
Net cash used in operating activities | |
| (465,735 | ) | |
| (351,835 | ) |
| |
| | | |
| | |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | |
| | | |
| | |
Investment in property and equipment | |
| (199,751 | ) | |
| (166,967 | ) |
Net cash used in investing activities | |
| (199,751 | ) | |
| (166,967 | ) |
| |
| | | |
| | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
| |
| | | |
| | |
| |
| | | |
| | |
Proceeds from convertible notes | |
| 715,801 | | |
| - | |
Receipt from advances receivable | |
| 43,000 | | |
| 664,500 | |
Advances from related party | |
| 47,200 | | |
| 2,500 | |
Repayment of debt | |
| (70,000 | ) | |
| (35,429 | ) |
Repayment to related party | |
| (45,015 | ) | |
| (97,945 | ) |
Net cash provided by financing activities | |
| 690,986 | | |
| 533,626 | |
| |
| | | |
| | |
INCREASE IN CASH | |
| 25,500 | | |
| 14,824 | |
CASH, BEGINNING OF PERIOD | |
| 5,553 | | |
| 97 | |
CASH, END OF PERIOD | |
$ | 31,053 | | |
$ | 14,921 | |
| |
| | | |
| | |
SUPPLEMENTAL CASH FLOW INFORMATION: | |
| | | |
| | |
| |
| | | |
| | |
Interest paid | |
$ | 679 | | |
$ | - | |
Income taxes paid | |
$ | - | | |
$ | - | |
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
GEI
GLOBAL ENERGY CORP.
Notes
to the Consolidated Financial Statements
For
the three and nine months ended September 30, 2014 and September 30, 2013
(unaudited)
(Expressed
in U.S. dollars)
NOTE
1 – DESCRIPTION OF BUSINESS AND GOING CONCERN
GEI
Global Energy Corp., formerly Suja Minerals Corp. (the “Company”) was incorporated in the State of Nevada on
April 28, 2010. The Company’s principal business activity is the construction and sale of fuel cell auxiliary electric power
generation systems for residential, commercial, military, and industrial electric applications. These consolidated
financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets
and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent
upon the continued financial support from its stockholders, the ability of the Company to obtain necessary equity financing to
continue operations, and the attainment of profitable operations. As at September 30, 2014, the Company has a working capital
deficiency of $1,883,008 and has accumulated losses of $12,323,832 since inception. These factors raise substantial doubt regarding
the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments
to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.
NOTE
2 – BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
These
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Global Energy Innovations,
Inc.
These
interim consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”)
Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete
consolidated financial statements. Therefore, these interim consolidated financial statements should be read in conjunction
with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2013, included
in the Company’s Annual Report on Form 10-K filed May 8, 2014 with the SEC.
The
consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and
adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at September
30, 2014, and the results of its operations and cash flows for the nine months ended September 30, 2014 and 2013. The results
of operations for the period ended September 30, 2014 are not necessarily indicative of the results to be expected for future
quarters or the full year.
On
December 12, 2013, the Company completed a 200 for 1 common share consolidation; the share consolidation has been retroactively
applied to all common share, weighted average common share, and loss per common share disclosures.
Recent
Accounting Pronouncements
The
Company has adopted all mandatory effective new accounting pronouncements with no material impact on its consolidated financial
statements or disclosures.
The
Company has evaluated all other recent accounting pronouncements and determined that they would not have a material impact on
the Company’s consolidated financial statements or disclosures.
NOTE
3 – PROPERTY AND EQUIPMENT
| |
Cost $ | | |
Accumulated Depreciation $ | | |
September 30, 2014 Net Carrying Value $ | | |
December 31, 2013 Net Carrying Value $ | |
| |
| | |
| | |
| | |
| |
Computer hardware | |
| 4,323 | | |
| 4,323 | | |
| - | | |
| - | |
Equipment | |
| 21,182 | | |
| 21,182 | | |
| - | | |
| - | |
Furniture and fixtures | |
| 23,653 | | |
| 6,060 | | |
| 17,593 | | |
| 20,892 | |
Demonstration equipment | |
| 357,620 | | |
| - | | |
| 357,620 | | |
| 157,872 | |
Computer software | |
| 392 | | |
| 392 | | |
| - | | |
| - | |
Leasehold improvements | |
| 38,163 | | |
| 9,595 | | |
| 28,568 | | |
| 34,413 | |
| |
| 445,333 | | |
| 41,552 | | |
| 403,781 | | |
| 213,177 | |
As
at September 30, 2014, demonstration equipment was under construction and was 40% complete.
During
the nine month period ended September 30, 2014 and year ended December 31, 2013, the Company recorded no impairment write-downs
on the property and equipment.
The
Company has $41,848 held in escrow with a lender to finance a purchase order intended to be used for its demonstration asset (Note
10).
NOTE
4 – DUE TO RELATED PARTY
As
at September 30, 2014 the Company owed $251,888 (December 31, 2013 - $249,703) for cash advances received from the President of
the Company, which are non-interest bearing, unsecured, and due on demand.
NOTE
5 - CONVERTIBLE NOTES PAYABLE
The
Company had the following notes payable outstanding as of September 30, 2014 and December 31, 2013:
| |
September 30, 2014 | | |
December 31, 2013 | |
| |
| | |
| |
Note C-1
Dated – March 18, 2008 | |
| - | | |
| 250,000 | |
| |
| | | |
| | |
Note C-2
Dated – August 15, 2008 | |
| 62,821 | | |
| 250,000 | |
| |
| | | |
| | |
Note C-3
Dated – March 18, 2014 | |
| 11,500 | | |
| - | |
| |
| | | |
| | |
Note C-4
Dated – November 8, 2013 (Note $28,000 less Discount $16,554) | |
| 11,446 | | |
| 6,843 | |
| |
| | | |
| | |
Note C-5 | |
| | | |
| | |
Dated – June 18, 2014 (Note $9,500 less Discount $7,125) | |
| 2,375 | | |
| - | |
| |
| | | |
| | |
Note C-6 | |
| | | |
| | |
Dated – May 23, 2014 (Note $42,500 less Discount $38,452) | |
| 4,048 | | |
| - | |
| |
| | | |
| | |
Note C-7 | |
| | | |
| | |
Dated – June 24, 2014 (Note $32,500 less Discount $16,286) | |
| 16,214 | | |
| - | |
| |
| | | |
| | |
Note C-11 | |
| | | |
| | |
Dated – July 30, 2014 (Note $200,000 less Discount $9,796) | |
| 190,204 | | |
| - | |
| |
| | | |
| | |
Note C-12 | |
| | | |
| | |
Dated – August 12, 2014 (Note $32,500 less Discount $9,070) | |
| 23,430 | | |
| - | |
| |
| | | |
| | |
Note C-13 | |
| | | |
| | |
Dated – August 29, 2014 (Note $32,500 less Discount $15,646) | |
| 16,854 | | |
| - | |
| |
| | | |
| | |
Note C-14 | |
| | | |
| | |
Dated – July 1, 2014 | |
| 35,000 | | |
| - | |
| |
| | | |
| | |
Note C-15 | |
| | | |
| | |
Dated – July 11, 2014 (Note $35,000 less Discount $35,000) | |
| - | | |
| - | |
| |
| | | |
| | |
Note C-16 | |
| | | |
| | |
Dated – July 9, 2014 (Note $70,000 less Discount $67,293) | |
| 2,707 | | |
| - | |
| |
| | | |
| | |
Note C-17 | |
| | | |
| | |
Dated – July 1, 2014 (Note $13,750 less Discount $0) | |
| 13,750 | | |
| - | |
| |
| | | |
| | |
Note C-18 | |
| | | |
| | |
Dated – July 14, 2014 (Note $50,000 less Discount $50,000) | |
| - | | |
| - | |
| |
| | | |
| | |
Note C-19 | |
| | | |
| | |
Dated – September 12, 2014 (Note $75,000 less Discount $26,437) | |
| 48,563 | | |
| - | |
| |
| | | |
| | |
Note C-20 | |
| | | |
| | |
Dated – July 7, 2014 | |
| 10,000 | | |
| - | |
| |
| | | |
| | |
Total convertible notes payable | |
$ | 448,912 | | |
$ | 506,843 | |
Less: current portion of convertible notes payable | |
| 437,466 | | |
| 500,000 | |
Long-term convertible notes payable | |
$ | 11,446 | | |
$ | 6,843 | |
Note
C-1: On March 18, 2008, the Company entered into a convertible promissory note agreement for $250,000. Pursuant
to the agreement, the note bears interest at 8% per annum. The principal balance and all accrued interest was due and
payable on March 18, 2011 (the “Maturity Date”) provided that the note holder has given written notice to the Company
on or after September 18, 2010, but prior to the Maturity Date, demanding full payment of this note as of the Maturity Date (the
“Payoff Notice”). The principal amount and accrued interest shall be converted into common stock of the
Company upon the first to occur of the following events and the Company shall provide a written notice to the note holder of the
occurrence of any such conversion event (“Conversion Notice”): (i) If the Company has not received a Payoff Notice
and no event of default has occurred as of the Maturity Date; (ii) the final closing date of a minimum of $500,000 financing (the
“Next Financing Closing”) which results in the Company receiving new capital investment in exchange for the issuance
by the Company of a capital interest in the Company; and (iii) immediately prior to the occurrence of any of the following (“Change
of Control”): when (1) the Company sells, conveys, or otherwise disposes of all or substantially all of its property or
business; or (2) when the Company causes to be registered and sold any of its shares of common stock pursuant to and under a registration
statement prepared and filed in compliance with the Federal Securities Act of 1933; or (3) when the Company effects any transaction
which results in one or more stockholders who were not stockholders of the Company immediately prior to such transaction owning
more than sixty-five percent (65%) of the voting rights of the Company.
If
conversion occurs at the Next Financing Closing, then the note is convertible into the same type, series, and class of securities
issued under the Next Financing Closing. The conversion price shall equal to conversion amount divided by the average
price per share received by the Company at the Next Financing Closing, multiplied by 95% if the Next Financing Closing occurs
on or before September 18, 2008, 90% if the Next Financing Closing occurs after September 18, 2008 but on or before September
18, 2009, 85% if the Next Financing Closing occurs after September 18, 2009 but on or before March 18, 2010, or 80% if the Next
Financing Closing occurs after March 18, 2010.
If
the conversion occurs at the Maturity Date or upon a Change of Control, then the conversion price shall be equal to $1,872 per
share.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the
criteria
necessary for derivative treatment.
As
of the Maturity Date, the Company has not received new capital investment of a minimum of $500,000 or a Payoff Notice from the
note holder. Pursuant to the terms of the agreement, the principal amount and accrued interest was then convertible
into common stock of the Company. The Company determined that there was no beneficial conversion feature as the fair
value of common stock of the Company is below the conversion price of $1,872. At September 30, 2014, the promissory note has been
repaid or converted.
Note
C-2: On August 15, 2008, the Company entered into a secured convertible promissory note agreement for $250,000. The
convertible promissory note, which was due on September 1, 2010, bears interest at the rate of 9% per annum. In the
event the note is not repaid or converted on or prior to September 1, 2010 or after an event of default, the rate of interest
applicable to the unpaid principal amount shall increase to 15% per annum. Pursuant to the agreement, the holder of
the note has the right to convert upon written notice to the Company the principal then due under the note on the following terms:
(i) automatically into the Company’s next issued series of preferred stock for not less than $1,500,000 at the per share
price. Interest will either be paid or converted at the option of the holder; or (ii) in the event that the conversion
in (i) does not occur by August 30, 2010, then the holder will have the option of converting the note into the requisite number
of units of the Company’s preferred stock. The conversion price will be determined by the Company immediately
prior to the time of conversion.
The
conversion price will be determined through (i) or (ii) below at the option of the Company:
i). The
per share value of each share of preferred stock will equal to the result of the following formula: (1) six times the average
earnings before interest, taxes, depreciation and amortization (“EBITDA”) of the Company for the 2008 and 2009 fiscal
years, divided by the product of (1) by the number of preferred stock issued and outstanding.
ii).
The fair market value of each share of preferred stock as of August 30, 2010. The fair market value of the preferred
stock shall be determined by a qualified appraiser jointly selected by the Company and the note holder.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment.
As
of August 30, 2010, the Company had not completed a financing of a minimum of $1,500,000 and the note holder did not contact the
Company to determine the fair market value of the preferred stock or demand payment. On January 1, 2014, the Company
converted $50,000 of the principal balance for 1,700,000 shares of common stock of the Company. On June 2, 2014, the Company converted
$14,962 of the principal balance for 2,992,440 shares of common stock of the Company. For the quarter September 30, 2014, the
Company converted $122,218 of the principal balance for 367,046,966 shares of common stock of the Company.
On
May 23, 2014, the Company entered into an Assignment and Assumption Agreement where as a third-party has assumed the obligation
of this convertible note. The Agreement required that the third-party pay the principal and interest of the outstanding debt over
5 tranches. These payments are discounted as agreed by all parties and the total payment to be paid on the note is $200,000. The
full principal balance has been converted or repaid. The remaining balance relates to interest accrued on the balance.
Note
C-3: On March 18, 2014 the Company entered into a convertible promissory note agreement for $70,000. Pursuant to the agreement,
the note bears no interest. The principle balance was due and payable on June 18, 2014. During the three months ended June 30,
2014, an additional $11,500 was loaned to the Company. The principal amount shall be converted into shares of common stock of
the Company at a fixed conversion price of $0.0001 at the option of the Holder, in whole at any time and from time to time. The
Holder shall effect conversions by delivering the company the form of Notice of Conversion. In the event the note is not repaid
or converted on or prior to June 18, 2014 or after an event of default, the rate of interest applicable to the unpaid principal
amount shall increase to 22% per annum.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment. During
the three month period ended September 30, 2014, $70,000 of the principal balance was repaid with a remaining balance of $11,500.
The balance of the note has not been converted or been repaid.
Note
C-4: On November 8, 2013, the Company entered into a convertible promissory note with a face value of $37,375 (the
“Principal Amount”), which includes $30,000 advanced by the Holder, $2,500 in expenses incurred by the Holder and
original issue discount of $4,875. The Principal Amount outstanding shall be due and payable on the date that is 18 months from
the Issuance Date. In addition, pursuant to the convertible promissory note the Company issued 59,325 common stock purchase warrants.
Each warrant is exercisable into one common share at a price of $126 per share for a period of five years. During the three month
period ended September 30, 2014 the Company issued 36,291,360 common shares for the exercise of the 59,325 of cashless warrants.
At
any time after the Issuance Date, this Note shall be convertible (in whole or in part), at the option of the Holder (the “Conversion
Option”), into such number of fully paid and non-assessable shares of Common Stock (the “Conversion Rate”) as
is determined by dividing that portion of the outstanding principal balance under this Note as of such date that the Holder elects
to convert by the Conversion Price. The term “Conversion Price” shall mean a 40% discount of the lowest
reported sale price of the common stock for the 20 trading days immediately prior to (i) the date of the Purchase Agreement, or
(ii) the Voluntary Conversion Date. On June 20, 2014, the Company converted $9,375 principal balance of this note for 1,250,000
common stock of the Company. The remaining balance of the note at September 30, 2014 is $28,000.
Note
C-5: On June 18, 2014, the Company entered into a convertible promissory note with a face value of $9,500 (the “Principal
Amount”). The Principal Amount outstanding shall be due and payable on the date that is 12 months from the Issuance Date.
In addition, pursuant to the convertible promissory note the holder has the right to convert the Note at a price of $0.0001 per
share. At September 30, 2014, the promissory note has not been repaid or converted.
Note
C-6: On May 23, 2014, the Company entered into a convertible promissory note agreement for $42,500. The convertible
promissory note, which is due on February 28, 2015, bears interest at the rate of 8% per annum. In the event the note
is not repaid or converted on or prior to February 28, 2015 or after an event of default, the rate of interest applicable to the
unpaid principal amount shall increase to 22% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 55% multiplied
by the Market Price which represents a 45% discount. The Market Price means the average of the lowest three Trading Prices for
the Common stock during the (30) Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At September 30, 2014, the promissory note has not been repaid or converted.
Note
C-7: On June 24, 2014, the Company entered into a convertible promissory note agreement for $32,500. The convertible
promissory note, which is due on March 24, 2015, bears interest at the rate of 8% per annum. In the event the note
is not repaid or converted on or prior to February 28, 2015 or after an event of default, the rate of interest applicable to the
unpaid principal amount shall increase to 22% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 55% multiplied
by the Market Price which represents a 45% discount. The Market Price means the average of the lowest three Trading Prices for
the Common stock during the (30) Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted.
Note
C-11: On July 30, 2014, the Company entered into a revolving line of credit for $200,000. The revolving line
of credit, which renews annually, bears interest at the rate of 12% per annum. Of the $200,000 principal, $39,252 was received
in cash, $70,000 was received to pay down Note C-3, $41,848 was held in escrow with the note holder, and $48,900 was required
in legal fees. The maximum draw amount for the revolving line of credit is $5,000,000.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 85% multiplied
by the Market Price. The Market Price means the average of the lowest Five Trading Prices for the Common stock during the (30)
Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted.
Note
C-12: On August 12, 2014, the Company entered into a convertible promissory note agreement for $32,500. The
convertible promissory note, which is due on October 12, 2014, bears interest at the rate of 8% per annum. In the event
the note is not repaid or converted on or prior to October 12, 2014 or after an event of default, the rate of interest applicable
to the unpaid principal amount shall increase to 22% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 55% multiplied
by the Market Price which represents a 45% discount. The Market Price means the average of the lowest three Trading Prices for
the Common stock during the (30) Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-13: On August 29, 2014, the Company entered into a convertible promissory note agreement for $32,500. The
convertible promissory note, which was due on October 29, 2014, bears interest at the rate of 8% per annum. In the
event the note is not repaid or converted on or prior to October 12, 2014 or after an event of default, the rate of interest applicable
to the unpaid principal amount shall increase to 22% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 55% multiplied
by the Market Price which represents a 45% discount. The Market Price means the average of the lowest three Trading Prices for
the Common stock during the (30) Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-14: On July 1, 2014, the Company entered into a convertible promissory note agreement for $35,000. The convertible
promissory note, which is due on July 1, 2015, bears interest at the rate of 8% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 52% multiplied
by the Market Price. The Market Price means the average of the lowest fifteen Trading Prices for the Common stock during the (30)
Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-15: On July 11, 2014, the Company entered into a convertible promissory note agreement for $35,000. The convertible
promissory note, which is due on July 11, 2015, bears interest at the rate of 8% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 52% multiplied
by the Market Price. The Market Price means the average of the lowest fifteen Trading Prices for the Common stock during the (30)
Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-16: On July 9, 2014, the Company entered into a convertible promissory note agreement for $70,000. The convertible
promissory note, which is due on July 9, 2015, bears interest at the rate of 8% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 52% multiplied
by the Market Price. The Market Price means the average of the lowest fifteen Trading Prices for the Common stock during the (30)
Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-17: On July 1, 2014, the Company entered into a convertible promissory note agreement for $13,750. The convertible
promissory note, which is due on July 1, 2015, bears interest at the rate of 10% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 52% multiplied
by the Market Price. The Market Price means the average of the lowest fifteen Trading Prices for the Common stock during the (30)
Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-18: On July 14, 2014, the Company entered into a convertible promissory note agreement for $50,000. The convertible
promissory note, which is due on July 14, 2015, bears interest at the rate of 8% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 52% multiplied
by the Market Price. The Market Price means the average of the lowest fifteen Trading Prices for the Common stock during the (30)
Trading Day period ending on the last complete Trading Day prior to Conversion Date.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-19: On September 12, 2014, the Company entered into a convertible promissory note agreement for $75,000. The
convertible promissory note, which is due on September 12, 2015, bears interest at the rate of 6% per annum. In the
event the note is not repaid or converted on or prior to September 12, 2014 or after an event of default, the rate of interest
applicable to the unpaid principal amount shall increase to 16% per annum.
Pursuant
to the agreement, the holder of the note has the right to convert upon written notice to the Company the principal then due under
the note on the following terms: (i) automatically into the Company’s common stock at a conversion price of 65% multiplied
by the Market Price which represents a 35% discount. The Market Price means the average of the lowest ten days Trading Prices
for the Common stock during the (30) Trading Day period ending on the last complete Trading Day prior to Conversion Date.
This
note is secured by 10,000,000 of common stock of the Company.
At
September 30, 2014, the promissory note has not been repaid or converted
Note
C-20: On July 7, 2014, the Company entered into a convertible promissory note agreement for $10,000. The note is non-interest
bearing. The convertible promissory note is due on December 31, 2014.
On
October 3, 2014 this note was converted into 1,515,000 of common stock of the Company (Note 11).
Other
Notes Paid or Converted
Note
C-8: On March 11, 2014, the Company entered into a convertible promissory note agreement for $15,000. The convertible
promissory note, which was due on April 1, 2014, bore interest at the rate of 0% per annum. On April 3, 2014 this note
was converted into 150,000 common shares and has been fully satisfied.
Note
C-9: On March 26, 2014, the Company entered into a convertible promissory note agreement for $5,000. The convertible
promissory note, which was due on June 26, 2014, bore interest at the rate of 0% per annum. Pursuant to the agreement,
the holder of the note had the right to convert upon written notice to the Company the principal then due under the note, the
holder had the option of converting the note into the requisite number of units of the Company’s common stock. The
conversion price was determined by the Company immediately prior to the time of conversion.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment. On
April 29, 2014 this note was converted into 10,000 common shares and has been fully satisfied.
Note
C-10: On March 26, 2014, the Company entered into a convertible promissory note agreement for $2,000. The convertible
promissory note, which was due on June 26, 2014, bore interest at the rate of 0% per annum. Pursuant to the agreement,
the holder of the note had the right to convert upon written notice to the Company the principal then due under the note, the
holder had the option of converting the note into the requisite number of units of the Company’s common stock. The
conversion price was determined by the Company immediately prior to the time of conversion.
Pursuant
to ASC 470-20, “Debt with Conversion and Other Options,” the Company did not allocate any proceeds to the conversion
feature at issuance as the value of the conversion feature should not be recognized until the contingency event occurs. The
Company also evaluated the conversion feature under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s
Own Equity,” and determined that the conversion feature did not meet the criteria necessary for derivative treatment. On
April 29, 2014 this note was converted into 16,667 common shares and has been fully satisfied.
During
the nine months ended September 30, 2014, the Company recognized an aggregate of $35,761 (September 30, 2013-$45,715) in interest
expense for the convertible notes.
NOTE
6 – ADVANCES RECEIVED
During
the year ended December 31, 2013, the Company received $674,500 in advances from Global Energy Innovations Inc., an independent
company incorporated in British Columbia, Canada with no contractual affiliation with Global Energy Innovations, Inc., or with
GEI Global Energy Corp. The final terms of the repayment agreement are currently under negotiation.
NOTE
7 - EQUITY
On
September 30, 2014, the Company had 981,345,686 issued and outstanding and the Company had 8,000,000,000 shares of common stock
authorized.
Each
share of common stock shall have one (1) vote per share for all purpose. The common stock does not provide a preemptive, subscription
or conversion rights and there are no redemption or sinking fund provisions or rights. The Company’s common stock holders
are not entitled to cumulative voting for election of Board of Directors.
Nine
months ended September 30, 2014
Stock
Issued for Cash
During
the nine months ended September 30, 2014, the Company issued 2,283,333 shares of common stock for proceeds of $43,000.
Stock
Issued for Services
During
the nine months ended September 30, 2014, the Company issued 116,523,601 shares of common stock valued at $5,937,384 as follows:
Date | |
Number of Shares | |
Period ended March 31, 2014 | |
| 41,723,601 | |
Period ended June 30, 2014 | |
| 3,450,000 | |
Period ended September 30, 2014 | |
| 71,350,000 | |
Total | |
| 116,523,601 | |
Stock
Issued in Connection with the Conversion of Debt
During
the three months ended March 31, 2014, the Company issued 1,930,000 shares of common stock valued at $87,572 for the
conversion of the principal and accrued interest of debt held by 2 convertible debt holders. During the three months ended June
30, 2014 the Company issued 4,429,107 shares of common stock valued at $46,337. During the three months ended September 30, 2014
the Company issued 567,572,283 shares of common stock valued at $504,997. The fair value of the shares issued for the conversion
of debt was recorded as a reduction in convertible notes payable and accrued interest payable for the nine months ended September
30, 2014.
Date | |
Number of Shares | | |
Fair Value | |
March 31, 2014 | |
| 1,930,000 | | |
$ | 87,572 | |
June 30, 2014 | |
| 4,429,107 | | |
| 46,337 | |
September 30, 2014 | |
| 567,572,283 | | |
| 504,997 | |
Total | |
| 573,931,390 | | |
$ | 638,906 | |
Stock
Issued in Connection with the Conversion of Accounts Payable
During
the nine months ended September 30, 2014, the Company issued 233,379,633 shares of common stock valued at $158,742.
Stock
Issued in Connection with the cashless warrants
During
the nine months ended September 30, 2014, the Company issued 36,291,360 shares of common stock upon the exercise of cashless warrants.
As at September 30, 2014, no more exercisable warrants remain outstanding.
Stock
Issued for Deferred Financing Cost
During
the six month period ended June 30, 2014, the Company issued 1,500,000 shares of common stock valued at $11,500 for deferred financing
costs. The Company determined that this financing was not going to be completed and expensed it during the three months ended
June 30, 2014.
During
the nine month period ended September 30, 2014, the Company issued 15,625,000 of common stock valued at $125,000 for deferred
financing costs. These costs will be amortized using the effective interest rate method.
Stock
Issued and Issuable under Anti-Dilution Provisions
During
the nine month period ended September 30, 2014, the Company issued 1,684,399 shares under anti-dilution provisions. As at September
30, 2014, the Company had 2,129,523,186 shares of common stock issuable under anti-dilution provisions.
Preferred
Stock
The
Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par value per share. The preferred stock may be divided
into number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the
rights, preferences, privileges and restrictions granted to and imposed upon any wholly issued series of preferred stock, and
to fix the number of shares of any series of preferred stock and the designation of any such series of preferred stock. Currently
there are 2,500 shares of Series A Convertible Super-Voting Preferred Stock issued and outstanding.
Series
A Convertible Super-Voting Preferred Stock
The
Board of Directors has designated a series of preferred stock entitled Series A Convertible Super-Voting Preferred Stock. Each
of these preferred shares has a common stock conversion rate of 1/1000 of the total issued shares of the common stock of the Company
at the time of conversion. Furthermore, these preferred shares will at all times prior to their total conversion have
a collective voting right equal to 50.00% of the total outstanding voting power of the corporation. As a result of
the issuance to the Chief Executive Officer of 2,500 shares of Series A Convertible Super-Voting Preferred Stock and his holdings
of the Company’s common stock, the Chief Executive Officer has voting control of the Company, with the voting power to elect
the Company’s Board of Directors.
Share
Purchase Warrants
| |
| | |
Weighted Average | |
| |
| | |
Exercise | |
| |
Number of | | |
Price | |
| |
Warrants | | |
$ | |
| |
| | |
| |
Balance, December 31, 2013 | |
| 297 | | |
| 126 | |
Cashless warrants exercised (1) | |
| (297 | ) | |
| - | |
Balance, September 30, 2014 | |
| - | | |
| - | |
| (1) | The
Company issued 297 (59,325 pre-split) warrants during the year ended December 31, 2013.
The exercise price per share of common stock under this warrant was $126 per share ($0.63
pre-split) subject to anti-dilution provisions. |
If
at any time after the earlier of (i) the six month anniversary of the date of the agreement and (ii) the completion of the then-applicable
holding period required by Rule 144, or any successor provision then in effect, then these warrants may also be exercised, in
whole or in part, at such time by means of a “cashless exercise” in which the Holder is entitled to receive a number
of warrant shares equal to the quotient obtained by dividing [(A-B)(X)] by (A), where:
| (A) | =
the volume weighted average price on the trading day immediately preceding the date on
which the holder elects to exercise this warrant by means of a “cashless exercise.” |
| (B) | =
the exercise price of this warrant, adjusted for dilution provisions. |
|
(X) |
= the number of warrant shares that would be issuable upon exercise of
warrant in accordance with the terms of this warrant if such exercise were by means of a cash exercise rather then a cashless
exercise. |
During the
nine months ended September 30, 2014, the Company issued 36,291,360 shares of common stock upon the exercise of cashless warrants.
As at September 30, 2014, no more warrants remain outstanding.
NOTE
8 – SELLING, GENERAL AND ADMINISTRATIVE
| |
Nine Months Ended | |
| |
September 30, 2014 | | |
September 30, 2013 | |
Business development | |
$ | 551,871 | | |
$ | 136,251 | |
Professional services | |
| 1,157,360 | | |
| 27,622 | |
Rent | |
| 41,359 | | |
| 30,225 | |
Office expense | |
| 90,098 | | |
| 34,590 | |
Management salaries | |
| 1,279,648 | | |
| 76,629 | |
Total general and administrative | |
$ | 3,120,336 | | |
$ | 308,317 | |
NOTE
9 – COMMITMENTS
The
Company entered into an agreement with Atlanta Marketing Consultant (“Atlanta”), which commenced on May 15, 2010 where
Atlanta will be entitled to a 5% commission of the total amount received by the Company on all business generated as a result
of each business arrangement introduced by the efforts of Atlanta. In the event Atlanta is able to assist the Company
in the raising of capital through said contacts, Atlanta will be entitled to a one-time consulting fee of 3% to 5% of the amount
of capital raised. If the amount of capital raised by the Company is $750,000 or below, Atlanta will receive
a 5% consulting fee. If the amount of capital raised is over $750,000 but below $1,500,000, Atlanta will receive in
a consulting fee of 4% of monies raised. Any amount of capital raised by the Company exceeding $1,500,000 will result
in a consulting fee payment of 3%. All payments will be due on a quarterly basis and paid on the 5th day of the
month of each new quarter of the calendar year. The agreement shall not terminate as long as the Company is receiving
income or equity positions from parties brought to the Company as a result of Atlanta’s efforts for a period ending 5 years
from the first transaction.
The
Company entered into a service agreement with Troy Spencer (“Spencer”) dated on November 19, 2012 in which Spencer
has been engaged to assist the Company in raising capital through said contracts. Spencer will be entitled to a consulting fee
of 3% to 10% of the amount of capital raised. If the amount of capital raised by the Company is $750,000 or below,
Spencer will receive a 10% consulting fee. If the amount of capital raised is over $750,000 but below $1,500,000, Spencer
will receive a consulting fee of 4% of monies raised. Any amount of capital raised by the Company exceeding $1,500,000
will result in a consulting fee payment of 3%. All aforementioned payments will be due within 10 business days after
the Company receives funding from an investor. Spencer will receive fee payments for investments from the same investors
for a period of 36 months from the initial investment. The agreement shall not terminate as long as the Company is
receiving income or equity positions from all aforementioned parties and other potential parties brought to the Company as a result
of Spencer’s efforts.
On
March 2, 2013 the Company entered into a consulting agreement with Earl H. Roberts Limited (“Roberts”). The
Company agreed to pay a fee of 10% of the total cash or value of stock issued of business derived from Roberts’ efforts
from introductions, for licensing of technologies, or sale of technology. Furthermore, the Company agrees to pay a
fee equal to 2% of the equity ownership for technology commercialization partnerships as a result of introductions. Roberts
can elect to forgo cash payment for stock in the Company.
On
May 30, 2013, the Company entered into a lease agreement for Engineering and Office Rental Space with Trialon Corporation. The
monthly lease rate is $5,075. The Company paid a security deposit of $5,075 and the first six months of
rent of $30,450 in June 2013. There is no prepaid rent balanced as of September 30, 2014.
NOTE
10– RESTRICTED CASH
During
the three month period ended September 30, 2014, the Company entered into an agreement with a lender to provide financing for
a purchase order for its demonstration asset (See Note 5 – Note C-11). As at September 30, 2014, $41,848 is held in escrow
until the purchase order is finalized and complete.
NOTE
11– SUBSEQUENT EVENTS
On
October 3, 2014, the Company recorded the issuance of common stock of 1,515,000 for the conversion of $10,000 debt.
On
October 10, 2014, the Company recorded the issuance of common stock of 56,300,000 for the conversion of $5,630 debt.
On
October 3, 2014, the Company recorded the issuance of common stock of 69,531,249 for the conversion of $37,350 debt.
On
October 5, 2014, the Company recorded the issuance of common stock of 5,000,000 for purchase of demonstration supplies.
On
October 10, 2014, the Company recorded the issuance of common stock of 113,806,019 for the conversion of $25,276 debt.
DEALER
PROSPECTUS DELIVERY OBLIGATION
“UNTIL___________________________,
ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER
A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS’ OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.”
PART
II – INFORMATION NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses Of Issuance And Distribution
The
following table sets forth the costs and expenses payable by GEI Global Energy Corp. in connection with registering the sale of
the common stock. GEI Global Energy Corp. has agreed to pay all costs and expenses in connection with this offering of common
stock. Set for the below is the estimated expenses of issuance and distribution, assuming the maximum proceeds are raised.
Legal and Professional Fees | |
$ | 20,000 | |
Accounting Fees | |
$ | 2,000 | |
Audit-related Fees | |
$ | 5,000 | |
| |
| | |
Total | |
$ | 27,000 | |
Item
14. Indemnification Of Directors And Officers
As
permitted by the Nevada General Corporation Law, we have adopted provisions in our by-laws to be in effect that limits or eliminates
the personal liability of our directors. Consequently, a director will not be personally liable to us, or our stockholders, for
monetary damages or breach of fiduciary duty as a director, except for liability for:
|
● |
any
breach of the director's duty of loyalty to us or our stockholders; |
|
|
|
|
● |
any
act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
|
|
|
|
● |
any
unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or |
|
|
|
|
● |
any
transaction from which the director derived an improper personal benefit. |
These
limitations of liability do not alter director liability under the federal securities laws and do not affect the availability
of equitable remedies such as an injunction or rescission.
In
addition, our by-laws provide that:
|
● |
we
will indemnify our directors, officers and, in the discretion of our board of directors, certain employees to the fullest
extent permitted by the Nevada General Corporation Law; and |
|
|
|
|
● |
we
will advance expenses, including attorneys' fees, to our directors and, in the discretion of our board of directors, to our
officers and certain employees, in connection with legal proceedings, subject to limited exceptions. |
We
intend to obtain and thereafter maintain general liability insurance that covers certain liabilities of our directors and officers
arising out of claims based on acts or omissions in their capacities as directors or officers, including liabilities under the
Securities Act of 1933, as amended. Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers, or persons controlling the Company pursuant to the foregoing provisions, we have been informed that in
the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.
These
provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These
provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though
such an action, if successful, might otherwise benefit our stockholders and us. Furthermore, a stockholder's investment may be
adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these
indemnification provisions. We believe that these provisions, the indemnification agreements and the insurance are necessary to
attract and retain talented and experienced directors and officers.
At
present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be
required or permitted. We are not aware of any threatened litigation or proceedings that might result in a claim for such indemnification.
Item
15. Recent Sales Of Unregistered Securities
Fiscal
Year Ending December 31, 2014
On
January 1, 2014 the Company issued 230,000 of its common stock for conversion of debt and accrued interest of $35,000.
On
January 1, 2014 the Company issued 1,700,000 of its common stock for partial conversion of debt of $50,000.
On
January 1, 2014 the Company issued 45,557,999 of its common stock for management, consulting and marketing services.
Fiscal
Year Ended December 31, 2013
On December
18, 2013 the Company approved a 1 for 200 reverse stock split.
Stock
Issued for Services
On
November 12, 2013 the Company issued 875 of its common stock for consulting services with an estimated fair value of $21,350 per
share and recorded an expense of $21,350.
Stock
Issued for Cash
On
November 4, 2013 the Company issued 2,762 of its common stock for $67,500. The shares issued are non-dilutable, up to 5% of the
issued and outstanding capital stock of the Company. Should these shares be sold or transferred, this provision will cease to
be in effect. At December 31, 2013, there are 2,022 shares of common stock issuable for the non-dilution provision.
Stock
Cancelled
During
the year ended December 31, 2013, the Company cancelled 57,000 shares of common stock as follows:
Date | |
Number of Shares | |
July 24, 2013 | |
| 7,000 | |
August 19, 2013 | |
| 50,000 | |
Total | |
| 57,000 | |
Stock
Issued in Connection with the Conversion of Debt
During
the year ended December 31, 2013, the Company issued 3,000 shares of common stock valued at $177,662 for the conversion of
the principal and accrued interest of debt held by six (6) convertible debt holders. The Company also issued 5,000
shares of common stock valued at $32,700 for the conversion of the principal and accrued interest of debt held by one (1) convertible
debt holders. The conversion price was agreed to by the transacting parties. The fair values of the shares
of common stock issued for the conversion of debt was recorded as a reduction in convertible notes payable and accrued interest
for the year ended December 31, 2013.
Date |
|
Number
of
Shares |
|
|
Fair
Value |
|
July
31, 2013 |
|
|
3,000 |
|
|
$ |
177,662 |
|
December
4, 2013 |
|
|
5,000 |
|
|
$ |
32,700 |
|
Total |
|
|
8,000 |
|
|
$ |
210,362 |
|
ITEM
16. EXHIBITS
The following
exhibits are included with this registration statement:
Exhibit
Number.
|
|
Name/Identification
of Exhibit
|
|
|
|
3.1 |
|
Articles
of Incorporation |
|
|
|
3.3 |
|
Bylaws |
|
|
|
5 |
|
Opinion
of Joseph L. Pittera, Esq. |
|
|
|
10.1 |
|
Subscription
Agreement for River North Equity, LLC |
|
|
|
10.2 |
|
Extended
Line of Credit Registration Rights Agreement for River North Equity, LLC |
|
|
|
23.1 |
|
Consent
of Independent Auditor |
|
|
|
23.2 |
|
Consent
of Counsel (See Exhibit 5) |
ITEM
17. UNDERTAKINGS
Under
Rule 415 of the Securities Act, we are registering securities for an offering to be made on a continuous or delayed basis in the
future. The registration statement pertains only to securities (a) the offering of which will be commenced promptly, will be made
on a continuous basis and may continue for a period in excess of 30 days from the date of initial effectiveness and (b) are registered
in an amount which, at the time the registration statement becomes effective, is reasonably expected to be offered and sold within
two years from the initial effective date of the registration.
Based
on the above-referenced facts and in compliance with the above-referenced rules, GEI Global Energy Corp. includes the following
undertakings in this Registration Statement:
A.
The undersigned Registrant hereby undertakes:
(1)
To file, during any period, in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i)
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b)
if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of the Registration Fee” table in the effective Registration Statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement.
(1)
That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(2)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
B.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant, the Registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements of filing on Form S-1 and authorized this Registration Statement to be signed on its behalf
by the undersigned, in the City of Flint, State of Michigan on November 07, 2014.
|
GEI
Global Energy Corp
(Registrant) |
|
|
|
|
By:
|
/s/ K.
J. Berry |
|
|
Chairman
and CEO |
|
|
|
|
By: |
/s/
K. J. Berry |
|
|
Chief
Financial Officer |
|
Board |
|
|
|
|
By:
|
/s/ K.
J. Berry |
|
|
Chairman
and CEO, Director |
|
|
|
|
By:
|
/s/ Dave
Namenye |
|
|
Director
|
|
|
By: |
/s/
Cleamon Moorer |
|
|
|
Director |
II-5
EXHIBIT
5.1
Law
Offices of Joseph L. Pittera
2214
Torrance Boulevard
Suite
101
Torrance,
California 90501
Telephone
(310) 328-3588
Facsimile
(310) 328-3063
E-mail:
jpitteralaw@gmail.com
GEI Global
Energy Corp.
6060 Covered
Wagon Trail
Flint, Michigan
48532
Ladies and
Gentlemen:
We
have acted as counsel to GEI Global Energy Corp., a Nevada corporation (the “Company”), in connection with the filing
by the Company of a registration statement on Form S-1 with the Securities and Exchange Commission (the “Registration Statement”)
relating to an aggregate of 150,000,000 shares of the Company’s Common Stock, $ .001 par value per share, to be offered
pursuant to the Registration Statement.
In
our opinion, the shares to be offered pursuant to the Registration Statement have been duly authorized and when sold and issued
in the manner specified in the Registration Statement will be validly issued, fully paid for and non-assessable.
We
hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the prospectus
constituting a part thereof in connection with the matters referred to under the caption “Legal Matters” in such prospectus.
The filing of this consent shall not be deemed an admission that the undersigned is an “expert” within the meaning
of the Securities Act of 1933, as amended.
|
Sincerely yours, |
|
|
|
/S /Joseph
Pittera |
|
Joseph Pittera |
Exhibit 10.1
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this
“Agreement”) is made and entered into as of September 12, 2014, among GEI Global Energy Corp., a Nevada corporation
(the “Company”) and River North Equity, LLC (the “Buyer”).
This Agreement is made pursuant to the
Securities Purchase Agreement, dated as of the date hereof between the Company and the Buyer (the “Purchase Agreement”).
The Company and Buyer hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings
given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Advice” shall have the meaning set forth
in Section 6(d).
“Effectiveness Date”
means, with respect to the initial Registration Statement required to be filed hereunder, the 120th calendar day following
the date hereof.
“Effectiveness Period” shall have the
meaning set forth in Section 2(a).
“Filing Date” means,
with respect to the initial Registration Statement required hereunder, the 45th calendar day following the date hereof.
“Holder” or "Holders"
means the holder or holders, as the case may be, from time to time of Registrable Securities. Holder may refer to Holders where
appropriate.
“Indemnified Party” shall have the meaning
set forth in Section 5(c). “Indemnifying Party” shall have the meaning set forth in Section 5(c). “Losses”
shall have the meaning set forth in Section 5(a).
“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering
of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
“Registrable
Securities” means all of (i) the Draw Down Shares issuable, (ii) the Shares, (iii) any additional shares issuable
in connection with any anti-dilution provisions in the Warrants (without giving effect to any limitations on exercise set
forth in the Warrant), and (iv) any shares of Common Stock issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing.
“Registration Statement”
means the initial Registration Statement required to be filed hereunder and any additional registration statements filed pursuant
to the Purchase Agreement, including (in each case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference
or deemed to be incorporated by reference in such registration statement.
“Rule 415” means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
2. Shelf Registration.
(a) On
or prior to the Filing Date, the Company shall prepare and file with the Commission a “Shelf” Registration Statement
covering the resale of the Registrable Securities for an offering to be made by the Holder(s) on a continuous basis pursuant to
Rule 415; provided, however, that if 100% of the Registrable Securities hereunder shall equal or exceed 30% of the
issued and outstanding Common Stock less any such shares held by Affiliates of the Company on the actual filing date of the initial
Registration Statement (“Registration Cap”), the initial Registration Statement shall register a number of
shares of Common Stock which is equal to the Registration Cap; provided, further, that if any Registration Statement
is subject to a Registration Cap, the Shares shall have priority in such Registration Statement over the Draw Down Shares if such
shares are not then registered. The Registration Statement shall be on Form S-1. Subject to the terms of this Agreement, the Company
shall use its commercially reasonable efforts to cause any Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, and with respect to the initial Registration Statement in any event prior
to the applicable Effectiveness Date, and shall use its commercially reasonable efforts to keep such Registration Statement continuously
effective under the Securities Act until all Registrable Securities covered by such Registration Statement have been sold or the
Commitment Period has expired and no Registrable Securities are then outstanding, as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected
Holders (the “Effectiveness Period”). The Company shall promptly notify the Holders via facsimile of the effectiveness
of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission.
The Company shall file a final Prospectus with the Commission as required by Rule 424.
3. Registration
Procedures
In connection with the Company’s
registration obligations hereunder, the Company shall:
(a) Not less than five Trading Days prior to the filing of a Registration Statement and not less than 1 Trading Day prior to the filing
of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), the Company shall, (i) furnish to Holder copies of all such documents proposed to be
filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review
of Holder, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such
inquiries as shall be necessary, in the reasonable opinion of respective counsel to Holder to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which the Holder shall reasonably object in good faith, provided that, the Company is notified of such
objection in writing no later than 5 Trading Days after the Holder has been so furnished copies of a Registration Statement or
1 Trading Day after the Holder has been so furnished copies of any related Prospectus or amendment or supplement thereto and provided
that such failure to file shall not constitute a default under any of the Transaction Documents provided that the Company use
commercially reasonable effort to address such objections promptly.
(b) (i) Prepare and file with the Commission such amendments, including post-effective amendments,
to the Registration Statement and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement
continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of
this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible
to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly
as reasonably possible provide the Holder true and complete copies of all correspondence from and to the Commission relating to
the Registration Statement (provided that the Company may excise any information contained therein which would constitute material
non-public information as to Holder); and (iv) comply in all material respects with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable
period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holder set forth
in such Registration Statement as so amended or in such Prospectus as so supplemented.
(c) If during the Effectiveness Period, the number of Registrable Securities at
any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall
file as soon as reasonably practicable an additional Registration Statement covering the resale by the Holder of not less than
100% of the number of such Registrable Securities.
(d) Notify
the Holder of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied
by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than 1 Trading Day prior to such filing) and (if requested by any such Person) confirm
such notice in writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether
there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration
Statement; and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or any other federal
or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all
of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities
for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any
event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein
or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents
so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may be material and that, in the determination of
the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus;
provided that any and all of such information shall remain confidential to Holder until such information otherwise becomes public,
unless disclosure by Holder is required by law; provided, further, notwithstanding Holder’s agreement to keep
such information confidential, the Holder makes no acknowledgement that any such information is material, non-public information.
(e) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(f) Furnish
to Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.
(g) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement
thereto by the Holder in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h) Should any broker-dealer be required to make a filing or have the Company make a filing with any regulatory authority prior to
executing a sale by Holder, the Company shall (i) make an issuer filing with such authority or authorities, (ii) respond within
five Trading Days to any comments received in connection therewith, and (iii) pay the filing fees required in connection therewith.
(i) Prior to any resale of Registrable Securities by Holder, use its commercially reasonable efforts
to register or qualify or cooperate with the Holder in connection with the registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws
of such jurisdictions within the United States as Holder reasonably requests in writing, to keep each registration or qualification
(or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary
to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided,
that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified,
subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service
of process in any such jurisdiction.
(j) If requested by the Holder, cooperate with the Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as Holder may request.
(k) Upon the occurrence of any event contemplated by this Section 3, as promptly as reasonably possible under the circumstances taking
into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the
premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference,
and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies
the Holder in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the
requisite changes to such Prospectus have been made, then the Holder shall suspend use of such Prospectus. The Company will use
its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.
(l) Comply with all applicable rules and regulations of the Commission.
(m) The Company may require the Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially
owned by the Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over
the Shares. The Holder acknowledges that it will be named as an “underwriter” of the Registrable Securities in the
Prospectus, as required by Commission policies.
4. Registration
Expenses. All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i)
all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for trading, (B) in compliance with applicable state securities
or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel
for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (C) if not previously
paid by the Company in connection with an issuer filing, with respect to any filing that may be required to be made by any broker
through which a Holder intends to make sales of Registrable Securities, so long as the broker is receiving no more than a customary
brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel
for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.
In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company
be responsible for any broker or similar commissions of Holder or, except to the extent provided for in the Transaction Documents,
any legal fees or other costs of the Holder.
5. Indemnification
(a) Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless Holder,
the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal
as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of Holder, each Person who controls Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, members, shareholders, partners, agents and employees (and any other Persons
with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title)of
each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”),
as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration
Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, or (2) any violation or alleged violation by the Company of the Securities Act, Exchange
Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under
this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon
information regarding Holder furnished in writing to the Company by Holder expressly for use therein, or to the extent that such
information relates to Holder or Holder’s proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus
or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or
(ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by Holder of an outdated
or defective Prospectus after the Company has notified Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holder promptly of the institution,
threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which
the Company is aware.
(b) Indemnification by Holder. Holder shall, severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely
upon: (x) Holder’s failure to comply with the prospectus delivery requirements of the Securities Act
or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating
to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein
not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information
so furnished in writing by Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus
or (ii) to the extent that such information relates to Holder’s proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by Holder expressly for use in a Registration Statement , such Prospectus or
such form of Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type
specified in Section 3(d)(iii)-(vi), the use by Holder of an outdated or defective Prospectus after the Company has notified Holder
in writing that the Prospectus is outdated or defective and prior to the receipt by Holder of the Advice contemplated in Section
6(d). In no event shall the liability of Holder hereunder be greater in amount than the dollar amount of the net proceeds received
by Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.
(c) Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal
or further review) that such failure shall have prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or
(3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more
than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld
or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of
any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
Subject to the terms of this Agreement,
all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party; provided, that
the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to
such actions for which such Indemnified Party is judicially determined to be not entitled to indemnification hereunder.
(d) Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party,
in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement
or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), Holder shall not be required to
contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by Holder from the
sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud
by Holder.
The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
6. Miscellaneous
(a)
Remedies. In the event of a breach by the Company or by the Holder, of any of their respective obligations under this Agreement,
Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and Holder
agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect
of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
(b) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holder in such capacity
pursuant hereto) may include securities of the Company in the Registration Statement other than the Registrable Securities. In
addition, from the date hereof until the end of the Commitment Period, other than Registration Statement(s) required to be filed
hereunder, the Company shall not file any other registration statements with the Commission seeking to register shares issuable
pursuant to an equity line of credit or similar transaction.
(c) Compliance. Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.
(d) Discontinued Disposition. Holder agrees by its acquisition of Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section 3(d), Holder will forthwith discontinue disposition
of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as it practicable.
(e) Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and each Holder of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and
that does not directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities
to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.
(f) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be delivered as set forth in the Purchase Agreement.
(g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors.
Neither party may assign this Agreement or any rights or obligations hereunder (other than by merger).
(h) Piggy
Back Registration Rights. If at any time during the Effectiveness Period there is no effective Registration Statement covering
all of the Shares then issued and outstanding and the Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection
with the stock option or other employee benefit plans, then the Company shall include in such registration statement all of such
Shares; provided, however, that the Company shall not be required to register any Shares pursuant to this Section
6(h) that are eligible for resale pursuant to Rule 144 promulgated under the Securities Act or that are the subject of a then
effective Registration Statement. For clarity, the provisions of this Section 6(h) shall require that the Company include the
Shares to be issued pursuant to Section 2.2 and Section 2.3 of the Purchase Agreement on the first registration statement it files
following the date hereof.
(i) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall
the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holder in this Agreement or otherwise conflicts with the provisions
hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its subsidiaries has previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied
in full.
(j) Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf' format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf' signature page were an original thereof.
(k) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be determined in accordance with the provisions of the Purchase Agreement.
(l) Cumulative
Remedies: The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(m) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.
(n) Headings. The headings in this Agreement are for convenience only, do not constitute a part of this Agreement, and shall
not be deemed to limit or affect any of the provisions hereof.
*************************
IN WITNESS WHEREOF,
the parties have executed this Registration Rights Agreement as of the date first written above.
|
GEI GLOBAL ENERGY CORP. |
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|
|
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BY: |
/s/ K. Joel Berry |
|
Name: |
K. J. Berry |
|
Title: |
Chairman |
|
|
|
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RIVER NORTH EQUITY, LLC |
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|
|
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BY: |
/s/ Edward M. Liceaga |
|
Name: |
Edward M. Liceaga |
|
Title: |
President |
13
Exhibit
10.2
STOCK
PLEDGE AGREEMENT
This
STOCK PLEDGE AGREEMENT (this “Agreement”) made as of September 12, 2014 by and between River North Equity LLC,
an Illinois limited liability company (“River North”), and Kingsley Joel Berry, resident of Michigan, (“Pledgor”).
RECITALS
| A. | Pledgor
is the record and beneficial owner of ten million (10,000,000) shares of common stock,
$.001 par value, of GEI Global Energy Corp. (the “Company”), a Nevada
corporation acquired by Pledgor [ Services: GEI Global Energy Corp]. |
| B. | Pledgor
has agreed to secure, to the extent hereinafter set forth, the payment in full and the
performance of the obligations of Company under the Purchase Agreement and the Note (as
defined below). |
| C. | In
connection with River North extending a loan to Company, Company has signed a convertible
note purchase agreement dated September 12, 2014 (the "Purchase Agreement")
and issued that certain convertible promissory note (the “Note”) dated
September 12, 2014 payable to the order of River North in the principal amount of seventy-five
thousand Dollars ($75,000). |
| D. | Such
Note is secured by the Pledged Shares (as defined below) and other collateral upon the
terms set forth in this Agreement. |
NOW, THEREFORE,
it is hereby agreed as follows:
1.
Grant of Security Interest. Pledgor hereby grants and pledges to River North a security interest in, and assigns, transfers
to and pledges with River North, the following securities and other property (collectively, the “Collateral”):
(i)
ten million (10,000,000) shares of common stock of Company issued in the name of Pledgor (the “Pledged Shares”)
delivered to and deposited with River North as collateral for the Note (for purposes of this Agreement, common stock shall refer
to the common stock of the Pledgor);
(ii) any
and all new, additional or different securities or other property subsequently distributed with respect to the Pledged Shares
which are to be delivered to and deposited with River North pursuant to the requirements of Section 3 of this Agreement;
(iii) any
and all other property and money which is delivered to or comes into the possession of River North pursuant to the terms of this
Agreement; and
(iv) the
proceeds of any sale, exchange or disposition of the property and securities described in subsections (i), (ii) or (iii) above.
2. Warranties.
Pledgor hereby warrants that Pledgor is the owner of the Collateral and has the right to pledge the Collateral and that the Collateral
is free from all liens, adverse claims and other security interests (other than those created hereby).
3. Duty
to Deliver. Any new, additional or different securities or other property (other than regular cash dividends) which may now
or hereafter become distributable with respect to the Collateral by reason of (i) any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the Pledged Shares as a class without River North’s
receipt of consideration or (ii) any merger, consolidation or other reorganization affecting the capital structure of the Company
shall, upon receipt by Pledgor, be promptly delivered to and deposited with River North as part of the Collateral hereunder. Any
such securities shall be accompanied by one or more properly-endorsed stock power assignments.
4. Payment
of Taxes and Other Charges. For as long as the Collateral secures the Note, all taxes, liens, assessments and other charges
against the Collateral, and in the event of Pledgor’s failure to do so, River North may at its election pay any or all of
such taxes and other charges without contesting the validity or legality thereof. The payments so made shall become part of the
indebtedness secured hereunder and until paid shall bear interest at the minimum per annum rate, compounded semi-annually, required
to avoid the imputation of interest income to River North and compensation income to Pledgor under the Federal tax laws.
5. Shareholder
Rights. So long as there exists no event of default under Section 10 of this Agreement, Pledgor may exercise all shareholder
voting rights and be entitled to receive any and all regular cash dividends paid on the Collateral and all proxy statements and
other shareholder materials pertaining to the Collateral.
6. Rights
and Powers of River North. River North may, without obligation to do so, exercise at any time and from time to time one or
more of the following rights and powers with respect to any or all of the Collateral:
(i) subject
to the applicable limitations of Section 9, accept in its discretion other property of Pledgor in exchange for all or part of
the Collateral and release Collateral to Pledgor to the extent necessary to effect such exchange, and in such event the other
property received in the exchange shall become part of the Collateral hereunder;
(ii) perform
such acts as are necessary to preserve and protect the Collateral and the rights, powers and remedies granted with respect to
such Collateral by this Agreement; and
(iii) transfer
record ownership of the Collateral to River North or its nominee and receive, endorse and give receipt for, or collect by legal
proceedings or otherwise, dividends or other distributions made or paid with respect to the Collateral, provided and only if there
exists at the time an outstanding event of default under Section 10 of this Agreement. Any cash sums which River North may so
receive shall be applied to the payment of the Note and any other indebtedness secured hereunder, in such order of application
as River North deems appropriate. Any remaining cash shall be paid over to Pledgor. Any action by River North pursuant to the
provisions of this Section 6 may be taken without notice to Pledgor. Expenses reasonably incurred in connection with such action
shall be payable by Pledgor and form part of the indebtedness secured hereunder as provided in Section 12.
7. Care
of Collateral. River North shall exercise reasonable care in the custody and preservation of the Collateral. However, River
North shall have no obligation to (i) initiate any action with respect to, or otherwise inform Pledgor of, any conversion, call,
exchange right, preemptive right, subscription right, purchase offer or other right or privilege relating to or affecting the
Collateral, (ii) preserve the rights of Pledgor against adverse claims or protect the Collateral against the possibility of a
decline in market value or (iii) take any action with respect to the Collateral requested by Pledgor unless the request is made
in writing and River North determines that the requested action will not unreasonably jeopardize the value of the Collateral as
security for the Note and other indebtedness secured hereunder.
8. Transfer
of Collateral. In connection with the transfer or assignment of the Note (whether by negotiation, discount or otherwise),
River North may transfer all or any part of the Collateral, and the transferee shall thereupon succeed to all the rights, powers
and remedies granted to River North hereunder with respect to the Collateral so transferred. Upon such transfer, River North shall
be fully discharged from all liability and responsibility for the transferred Collateral.
9. Release
of Collateral. Provided all indebtedness secured hereunder shall at the time have been paid in full and there does not otherwise
exist any event of default under Section 10, the Pledged Shares, together with any additional Collateral which may hereafter be
pledged and deposited hereunder, shall be released from pledge and returned to Pledgor in accordance with the following provisions:
(i) Upon
payment or prepayment of principal under the Note, along with any accrued interest to date on the principal amount so paid or
prepaid, one or more of the Pledged Shares held as Collateral hereunder shall (subject to the applicable limitations of Section
9(iii) and 9(iv) below) be released at the time of such payment or prepayment. The number of shares to be so released shall be
equal to the number obtained by multiplying (i) the total number of Pledged Shares held under this Agreement at the time of payment
or prepayment, by (ii) a fraction, the numerator of which shall be the amount of principal together with any accrued interest
paid or prepaid and the denominator of which shall be the unpaid principal balance of the Note together with all accrued interest
thereunder immediately prior to such payment or prepayment. In no event, however, shall any fractional shares be released.
(ii) Any
additional Collateral which may hereafter be pledged and deposited with River North (pursuant to the requirements of Section 3)
with respect to the Pledged Shares shall be released at the same time the particular shares of common stock to which the additional
Collateral relates are to be released in accordance with the applicable provisions of Section 9(i).
(iii) Under
no circumstances, however, shall any Pledged Shares or any other Collateral be released if previously applied to the payment of
any indebtedness secured hereunder. In addition, in no event shall any Pledged Shares or other Collateral be released pursuant
to the provisions of Section 9(i) or 9(ii) if, and to the extent, the fair market value of the common stock and all other Collateral
which would otherwise remain in pledge hereunder after such release were effected would be less than the unpaid principal and
accrued interest under the Note.
(iv)
For all valuation purposes under this Agreement, the fair market value per share of common stock on any relevant date shall be
determined as follows: the fair market value shall be the closing bid price per share of common Stock on the applicable Trading
Market (as such term is defined in the Purchase Agreement) on the date in question. If there is no reported closing bid price
for the common Stock on the date in question, then the closing bid price on the last preceding date for which such quotation exists
shall be determinative of fair market value.
10.
Events of Default. Each of the following occurrences shall constitute an Event of Default under this Agreement: (i) Pledgor
shall fail to observe or perform any material covenant applicable to such Pledgor under this Agreement and such failure shall
continue for a period of thirty (30) consecutive days after written notice by River North; (ii) any default by the Company under
the Note which is not timely cured by the Company or Pledgor; (iii) the occurrence of any other acceleration event specified in
the Note; (iv) the failure of the Company to perform any obligation imposed upon it by reason of the Purchase Agreement and the
Note (including, but not limited to honoring conversion of the Note); or (v) the breach of any warranty of Pledgor contained in
this Agreement.
Upon
the occurrence of any such event of default, River North may, at its election, declare the Note and all other indebtedness secured
hereunder to become immediately due and payable and may exercise any or all of the rights and remedies granted to a secured party
under the provisions of the Illinois Uniform Commercial Code (as now or hereafter in effect), including (without limitation) the
power to dispose of the Collateral by public or private sale or to accept the Collateral in full payment of the Note and all other
indebtedness secured hereunder.
Any
proceeds realized from the disposition of the Collateral pursuant to the foregoing power of sale shall be applied first to the
payment of expenses incurred by River North in connection with the disposition, then to the payment of the Note and finally to
any other indebtedness secured hereunder. Any surplus proceeds shall be paid over to Pledgor. However, in the event such proceeds
prove insufficient to satisfy all obligations of the Company under the Note, then Pledgor shall remain personally liable for the
resulting deficiency.
11. Other
Remedies. The rights, powers and remedies granted to River North pursuant to the provisions of this Agreement shall be in
addition to all rights, powers and remedies granted to River North under any statute or rule of law. Any forbearance, failure
or delay by River North in exercising any right, power or remedy under this Agreement shall not be deemed to be a waiver of such
right, power or remedy. Any single or partial exercise of any right, power or remedy under this Agreement shall not preclude the
further exercise thereof, and every right, power and remedy of River North under this Agreement shall continue in full force and
effect unless such right, power or remedy is specifically waived by an instrument executed by River North.
12. Costs
and Expenses. All costs and expenses (including reasonable attorneys' fees) incurred by River North in the exercise or enforcement
of any right, power or remedy granted to it under this Agreement shall become part of the indebtedness secured hereunder and shall
constitute a personal liability of Pledgor payable immediately upon demand and bearing interest until paid at the minimum per
annum rate, compounded semi-annually, required to avoid the imputation of interest income to River North and compensation income
to Pledgor under the Federal tax laws.
13.
Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois
without resort to that State’s conflict-of-laws rules. The parties hereby submit to the exclusive jurisdiction of, and waive
any venue objections against any superior, municipal, or other state court located in DuPage County in Illinois or any federal
court for the Northern District of Illinois in any litigation arising under or in connection with this Agreement. The parties
hereby consent to the exclusive jurisdiction of the above listed courts.
14. Successors.
This Agreement shall be binding upon River North and its successors and assigns and upon Pledgor and the executors, heirs and
legatees of Pledgor’s estate.
15. Severability.
If any provision of this Agreement is held to be invalid under applicable law, then such provision shall be ineffective only to
the extent of such invalidity, and neither the remainder of such provision nor any other provisions of this Agreement shall be
affected thereby.
IN
WITNESS WHEREOF, this Agreement has been executed by Pledgor and River North as of September 12, 2014.
SIGNED by Edward M. Liceaga
Signature: |
/s/ Edward M. Liceaga |
|
for and on behalf of |
River North Equity LLC |
SIGNED by: K. J. Berry
Signature: |
/s/ K. Joel Berry |
|
for and on behalf of |
K. J. Berry |
ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR VALUE RECETVED, Kingsley Joel Berry hereby sell(s), assign(s) and transfer(s) to River North
Equity LLC (“River North”), ten million (10,000,000) shares (as collateral only) of the common stock of GET Global
Energy Corp. (the “Company”) standing in his name on the books of the Company, represented by Certificate No. 20975
herewith and do(e)s hereby irrevocably constitute and appoint Joseph Pittera attorney to transfer the said stock on the books
of the Company with full power of substitution in the premises.
Dated: 9/12/14
|
Signature: |
/s/ K. Joel Berry |
|
6
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation of our auditors’
report dated May 6, 2014 in the Comany’s Registration Statement on Form S-1 pertaining to the Company’s
registration of shares of its common stock. We also consent to the reference to our firm under the caption
“Experts” in the Form S-1.
/s/ Manning Elliott LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
November 25, 2014
Exhibit
23.2
Law
Offices of Joseph L. Pittera
2214
Torrance Boulevard
Suite
101
Torrance,
California 90501
Telephone
(310) 328-3588
Facsimile
(310) 328-3063
E-mail:
jpitteralaw@gmail.com
GEI Global
Energy Corp.
6060 Covered
Wagon Trail
Flint, Michigan
48532
Ladies and
Gentlemen:
We
have acted as counsel to GEI Global Energy Corp., a Nevada corporation (the “Company”), in connection with the filing
by the Company of a registration statement on Form S-1 with the Securities and Exchange Commission (the “Registration Statement”)
relating to an aggregate of 150,000,000 shares of the Company’s Common Stock, $ .001 par value per share, to be offered
pursuant to the Registration Statement.
In
our opinion, the shares to be offered pursuant to the Registration Statement have been duly authorized and when sold and issued
in the manner specified in the Registration Statement will be validly issued, fully paid for and non-assessable.
We
hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the prospectus
constituting a part thereof in connection with the matters referred to under the caption “Legal Matters” in such prospectus.
The filing of this consent shall not be deemed an admission that the undersigned is an “expert” within the meaning
of the Securities Act of 1933, as amended.
|
Sincerely
yours, |
|
|
|
/S/
Joseph Pittera |
|
Joseph
Pittera |