x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
New Jersey
|
22-3392051
|
|
(State or Other Jurisdiction
|
(I.R.S. Employer
|
|
of Incorporation or Organization)
|
Identification No.)
|
|
777 South Flagler Drive, Suite 800 West Tower
West Palm Beach, Florida
|
33401
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
|
(561) 515-6163
|
||
(Registrants Telephone Number, Including Area Code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
¨
|
||
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
x
|
PART I
|
|
|
2
|
||
7
|
||
16
|
||
16
|
||
16
|
||
16
|
||
PART II
|
|
|
17
|
||
18
|
||
18
|
||
21
|
||
22
|
||
22
|
||
22
|
||
23
|
||
PART III
|
|
|
24
|
||
27
|
||
28
|
||
29
|
||
29
|
||
PART IV
|
|
|
31
|
Item 1.
|
(1)
|
Extended the Note’s maturity date to July 1, 2013;
|
(2)
|
Provided that on or before the maturity date, we may elect to convert the Note into 3,000,000 shares of our common stock at a conversion price of $0.25; and
|
(3)
|
Reduced the exercise price of the Warrant from $0.15 to $0.10.
|
Name
|
Title
|
|
Richard. J. Sullivan
|
President, Chief Executive Officer and Assistant Secretary
|
|
William J. Delgado
|
Executive Vice President
|
|
David A. Loppert
|
Executive Vice President, Chief Financial Officer, Treasurer and Secretary
|
Edwin J. Wang
|
Chairman, Advisory Board
|
|
Jennifer S. Carroll (1)
|
Senior Advisor
|
|
Senator Scott P. Brown
|
Senior Advisor
|
|
Matthew K. Kelley | Senior Advisor |
Item 1A.
|
●
|
We may not successfully identify companies that have complementary product lines or technological competencies or that can diversify our revenue or enhance our ability to implement our business strategy.
|
●
|
We may not successfully acquire companies if we fail to obtain financing, or to negotiate the acquisition on acceptable terms, or for other related reasons.
|
●
|
We may incur additional expenses due to acquisition due diligence, including legal, accounting, consulting and other professional fees and disbursements. Such additional expenses may be material, will likely not be reimbursed and would increase the aggregate cost of any acquisition.
|
●
|
Any acquired business will expose us to the acquired company’s liabilities and to risks inherent to its industry. We may not be able to ascertain or assess all of the significant risks.
|
●
|
We may require additional financing in connection with any future acquisition. Such financing may adversely impact, or be restricted by, our capital structure.
|
●
|
Achieving the anticipated potential benefits of a strategic acquisition will depend in part on the successful integration of the operations, administrative infrastructures and personnel of the acquired company or companies in a timely and efficient manner. Some of the challenges involved in such an integration include:
|
●
|
demonstrating to the customers of the acquired company that the consolidation will not result in adverse changes in quality, customer service standards or business focus;
|
●
|
preserving important relationships of the acquired company;
|
●
|
coordinating sales and marketing efforts to effectively communicate the expanded capabilities of the combined company; and
|
●
|
coordinating the supply chains.
|
●
|
manage our business and our subsidiaries as a cohesive enterprise;
|
|
●
|
manage expansion through the timely implementation and maintenance of appropriate administrative, operational, financial and management information systems, controls and procedures;
|
|
●
|
add internal capacity, facilities and third-party sourcing arrangements as and when needed;
|
|
●
|
maintain service quality controls; and
|
|
●
|
attract, train, retain, motivate and manage effectively our employees.
|
●
|
increased competition for less spending;
|
●
|
pricing pressure that may adversely affect revenue;
|
●
|
difficulty forecasting, budgeting and planning due to limited visibility into the spending plans of current or prospective customers; or
|
●
|
customer financial difficulty and increased risk of doubtful accounts receivable.
|
●
|
our ability to accurately forecast revenues and appropriately plan our expenses;
|
|
●
|
the impact of worldwide economic conditions, including the resulting effect on consumer spending;
|
|
●
|
our ability to maintain an adequate rate of growth;
|
|
●
|
our ability to effectively manage our growth;
|
|
●
|
our ability to attract new customers;
|
|
●
|
our ability to successfully enter new markets and manage our expansion;
|
|
●
|
the effects of increased competition in our business;
|
|
●
|
our ability to keep pace with changes in technology and our competitors;
|
|
●
|
our ability to successfully manage any future acquisitions of businesses, solutions or technologies;
|
|
●
|
the success of our marketing efforts;
|
|
●
|
changes in consumer behavior and any related impact on the advertising industry;
|
|
●
|
interruptions in service and any related impact on our reputation;
|
|
●
|
the attraction and retention of qualified employees and key personnel;
|
|
●
|
our ability to protect our intellectual property;
|
|
●
|
costs associated with defending intellectual property infringement and other claims;
|
|
●
|
the effects of natural or man-made catastrophic events;
|
|
●
|
the effectiveness of our internal controls; and
|
|
●
|
changes in government regulation affecting our business.
|
● |
to elect or defeat the election of our directors;
|
●
|
to amend or prevent amendment of our Certificate of Incorporation or By-laws;
|
●
|
to effect or prevent a transaction, sale of assets or other corporate transaction; and
|
●
|
to control the outcome of any other matter submitted to our stockholders for vote.
|
Item 1B.
|
Item 2.
|
Item 3.
|
●
|
On November 21, 2013,
the Company
filed a complaint against Airtronic USA, Inc. (“Airtronic”) in connection with Airtronic’s pending Chapter 11 bankruptcy proceeding. Airtronic’s bankruptcy proceeding is pending in the United States Bankruptcy Court for the Northern District of Illinois as case number 12-09776. The adversary proceeding is captioned
Global Digital Solutions, Inc. v. Airtronic USA, Inc
.
and is adversary proceeding number 13-01330.
The Company
’s complaint arises out of Airtronic’s refusal to complete a merger transaction with
the Company
as contemplated under the terms of Airtronic’s Amended Plan of Reorganization (the “Plan”) and a certain Agreement of Merger and Plan of Reorganization dated as of December 12, 2012, as amended by the First Amendment to Agreement and Plan of Reorganization dated as of August 5, 2013 (collectively, the “Merger Agreement”). The Plan and Merger Agreement called for the consummation of a transaction on or before December 2, 2013, by and among
the Company
; Airtronic Acquisition Corp., a to-be-formed subsidiary of
the Company
; and Airtronic, pursuant to which, among other things: (a) Airtronic Acquisition Corp. was to be merged with and into Airtronic, with Airtronic being the surviving corporation; (b)
the Company
was to make capital available to Airtronic of up to $2,000,000.00 (subject to adjustments for certain advances provided to or for the benefit of Airtronic and/or its creditors prior to the confirmation of the Plan or otherwise); and (c) seventy percent (70%) of the issued and outstanding common stock of Airtronic was to be issued to
the Company
. In its adversary complaint,
the Company
alleges Airtronic wrongfully refused to complete the contemplated merger transaction. T
he Company
sought an order requiring Airtronic to complete the merger transaction and an award of reasonable attorneys’ fees and costs incurred by it in connection
with the adversary proceeding. The case is stayed pending other motions before the Bankruptcy Court.
|
●
|
On January 9, 2014, the Company filed a lawsuit against Merriellyn Kett Murphy (“Kett”) asserting three causes of action against her: Tortious Interference with Contract and/or with Prospective Economic Advantage; Fraudulent Inducement; and Negligent Misrepresentation. Kett is the CEO, President and sole director and stockholder of Airtronic. The Company had entered into a merger agreement with Airtronic and Kett had made numerous representations to the Company that she would close the merger if the Company met her personal demands, which the Company did. Nonetheless, Kett refused to close the merger. The case, captioned
Global Digital Solutions, Inc. v. Merriellyn Kett Murphy,
was filed in Palm Beach County Circuit Court and Kett later removed it to Federal Court in the Southern District of Florida. The case number is 14-cv-80190-DTKH and is in its early stages. The Company is seeking a judgment against Kett, damages, costs and such other relief as may be awarded by the court. Kett filed a Motion to Dismiss or Transfer Venue and is seeking a court stay pending the motion. The Company opposes Kett’s motions and is vigorously pursuing all claims against Kett.
|
Item 4.
|
Fourth
Quarter
|
Third
Quarter
|
Second
Quarter
|
First
Quarter
|
|||||||||||||
Fiscal 2013 price range per common share
|
$ | .87- $.26 | $ | 1.11 - $.70 | $ | 1.39 - $.09 | $ | .14 - $.07 | ||||||||
Fiscal 2012 price range per common share
|
$ | .17 - $.02 | $ | .095 - $.01 | $ | .12 - $.04 | $ | .31 - $.055 |
● |
On October 16, 2013, we issued a warrant to purchase 1,000,000 shares of our common stock at an exercise price of $1.00 per share to Midtown Partners, LLC, an investment banking company, for services to be rendered per an investment banking agreement. The agreement provides for a term of six months, a cash fee of $25,000 and customary transactions fees based on the success of each transaction.. The warrant was issued without registration in reliance upon the exemption provided by Section 4(2) of the Securities Act, as a transaction by the Company not involving any public offering, and Rule 506 promulgated thereunder.
|
|
● |
On October 16, 2013, we accepted subscriptions for a total of 100,000 shares of our common stock in a private placement from one investor. We received gross proceeds of $50,000. The private placement was made an “accredited investor,” as that term is defined in Regulation D under the Securities Act. The securities sold in the private placement were not registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving any public offering, and Rule 506 promulgated thereunder.
|
|
● |
On December 18, 2013, Gabriel De Los Reyes partially exercised a warrant and we issued 1,250,000 shares in connection with the exercise of this warrant. We received gross proceeds of $125,000. The securities issued in connection with the exercise of the warrant were not registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving any public offering, and Rule 506 promulgated thereunder.
|
Item 6.
|
For the Years Ended
|
||||||||
December 31,
|
||||||||
2013
|
2012
|
|||||||
Revenue
|
$ | - | $ | - | ||||
Cost of revenue
|
- | 300 | ||||||
Gross profit (loss)
|
- | (300 | ) | |||||
Operating expenses
|
||||||||
Selling, general and administrative expenses
|
8,384,247 | 301,284 | ||||||
Other (income)/expense
|
||||||||
Gain on extinguishment of debt
|
(31,712 | ) | - | |||||
Interest income
|
(59,701 | ) | - | |||||
Interest expense
|
733,198 | 10,000 | ||||||
Other income
|
- | (600 | ) | |||||
Total costs and expenses
|
9,026,032 | 310,684 | ||||||
Loss from continuing operations before provision for income taxes
|
(9,026,032 | ) | (310,984 | ) | ||||
Provision for income taxes
|
- | - | ||||||
Loss from continuing operations
|
(9,026,032 | ) | (310,984 | ) | ||||
Loss from discontinued operations
|
(271,221 | ) | (208,922 | ) | ||||
Net loss
|
(9,297,253 | ) | (519,906 | ) | ||||
Loss attributable to the noncontrolling interest
|
(28,815 | ) | ||||||
Net loss attributable to Global Digital Solutions, Inc.
|
$ | (9,297,253 | ) | $ | (491,091 | ) | ||
Loss per common share attributable to Global Digital Solutions, Inc.
|
||||||||
common stockholders - basic and diluted:
|
||||||||
Loss from continuing operations
|
$ | (0.12 | ) | $ | (0.01 | ) | ||
Loss from discontinued operations
|
- | - | ||||||
Loss attributable to the noncontrolling interest
|
- | - | ||||||
Net loss
|
$ | (0.12 | ) | $ | (0.01 | ) | ||
Shares used in computing net loss per share:
|
||||||||
Basic and diluted
|
74,484,164 | 45,302,055 |
2013
|
2012
|
Increase/ (decrease)
|
% Change
|
|||||||||||||
Communications
|
$ | 5,016 | $ | 1,226 | $ | 3,790 | 309.1 | % | ||||||||
Compensation and benefits
|
5,443,707 | 200,000 | 5,243,707 | 2,621.9 | % | |||||||||||
Debt issuance costs
|
1,385,000 | - | 1,385,000 | 100.0 | % | |||||||||||
Facility expense
|
13,275 | - | 13,275 | 100.0 | % | |||||||||||
Investment expense
|
514,808 | - | 514,808 | 100.0 | % | |||||||||||
Investor relations and marketing
|
380,944 | 81,125 | 299,819 | 369.6 | % | |||||||||||
Office supply and support
|
55,231 | 3,205 | 52,026 | 1,623.3 | % | |||||||||||
Professional and filing fees
|
554,408 | 11,075 | 543,333 | 4,905.9 | % | |||||||||||
Travel and entertainment
|
31,858 | 4,653 | 27,205 | 584.7 | % | |||||||||||
$ | 8,384,247 | $ | 301,284 | $ | 8,082,963 | 2,682.8 | % |
● |
Accounting and & auditing fees of $99,802;
|
● |
Consulting fees of $92,369;
|
● |
Legal fees of $353,978;
|
● |
Public company/SEC related fees and expenses of $6,325; and
|
● |
Transfer agent fees of $1,934.
|
● |
Interest on notes payable and convertible notes payable of $56,712; and
|
● | The beneficial conversion feature of convertible notes payable of $676,486. |
Net sales
|
$ | - | $ | 144,337 | ||||
Cost of goods sold
|
- | 114,071 | ||||||
Gross profit
|
- | 30,266 | ||||||
Selling, general and administrative expenses
|
25,477 | 236,564 | ||||||
Loss on sale of assets of discontinued operations
|
245,744 | - | ||||||
Interest expense
|
- | 7,000 | ||||||
Other income
|
- | (4,376 | ) | |||||
Loss before provision for income taxes
|
(271,722 | ) | (208,922 | ) | ||||
Provision for income taxes
|
- | - | ||||||
Loss from discontinued operations
|
$ | (271,722 | ) | $ | (208,922 | ) |
Index to Consolidated Financial Statements
|
Page
|
|
Report of PMB Helin Donovan LLP, Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated Balance Sheets as of December 31, 2013 and 2012
|
F-3
|
|
Consolidated Statements of Operations for the years ended December 31, 2013 and 2012
|
F-4
|
|
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2013 and 2012
|
F-5
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012
|
F-6
|
|
Notes to Consolidated Financial Statements
|
F-7-18
|
Item 9A.
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;
|
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
|
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
|
Item 9B.
|
Name
|
Title
|
|
Richard J. Sullivan
|
President, Chief Executive Officer and Assistant Secretary
|
|
William J. Delgado
|
Executive Vice President
|
|
David A. Loppert
|
Executive Vice President, Chief Financial Officer, Treasurer and Secretary
|
Item 11.
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock awards
($) (4)
|
All other
compensation
($) (5)
|
Total ($)
|
|||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(i)
|
(j)
|
|||||||||||||||
Richard J. Sullivan (1),
|
2013
|
$ | - | $ | - | $ | 2,635,000 | $ | 157,000 | $ | 2,792,000 | ||||||||||
Chairman, CEO, President and Assistant Secretary
|
2012
|
$ | - | $ | - | $ | - | ||||||||||||||
David A. Loppert (2),
|
2013
|
$ | - | $ | - | $ | 1,282,500 | $ | 78,500 | $ | 1,361,000 | ||||||||||
Executive Vice President, CFO, Treasurer and Secretary
|
2012
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
William J. Delgado (3),
|
2013
|
$ | 50,000 | $ | - | $ | 227,500 | $ | - | $ | 277,500 | ||||||||||
Director, Former President, Chief Executive Officer & Chief Financial Officer, currently Executive Vice President
|
2012
|
$ | 199,990 | $ | - | $ | - | $ | - | $ | 199,990 |
(1)
|
Mr. Sullivan was appointed Chairman, CEO, President and Assistant Secretary on August 12, 2013. Mr. Sullivan acted as a consultant from January 2013 to August 2013.
|
(2)
|
Mr. Loppert was appointed Executive Vice President, CFO, Treasurer and Secretary on August 12, 2013. Mr. Loppert acted as a consultant from January 2013 to August 2013.
|
(3)
|
Mr. Delgado was appointed Executive Vice President on August 12, 2013. Prior thereto he served as our CEO, President and CFO.
|
(4)
|
The amounts in this column represent the fair value of the award as of the grant date as computed in accordance with FASB ASC Topic 718. These amounts represent restricted stock awards granted to the named executive officers, and do not reflect the actual amounts that may be realized by those officers.
|
(5)
|
Paid as consulting fees.
|
Name
|
Number of
Shares or Units
of Stock That
Have Not Vested
(#)(1)
|
Market Value
of Shares of
Stock That
Have Not
Vested ($)(2)
|
Equity Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested (#)
|
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned Shares,
Units, or Other
Rights That
Have Not
Vested ($)
|
||||||||||||
Richard J. Sullivan
|
13,000,000 | $ | 5,850,000 | - | $ | - | ||||||||||
David A. Loppert
|
8,000,000 | $ | 3,600,000 | - | $ | - | ||||||||||
William J. Delgado
|
1,000,000 | $ | 450,000 | - | $ | - |
(1)
|
All restricted stock granted to the named executives vested in January 2014.
|
(2)
|
Computed by multiplying the closing market price of a share of our common stock on December 31, 2013, or $0.45, by the number of shares of common stock that have not vested.
|
Item 12.
|
Name and Address of Beneficial Owner
|
Number of
shares of
Common Stock
Beneficially
Owned (1)
|
Percent of
Class (%)
|
||||||
Officers and Directors:
|
||||||||
Richard J. Sullivan (2)
|
27,240,000 | 27.4 | % | |||||
David A. Loppert (3)
|
8,000,000 | 8.0 | % | |||||
William J. Delgado (4)
|
5,390,029 | 5.4 | % | |||||
Arthur F. Noterman
|
0 | 0.0 | % | |||||
Stephanie C. Sullivan
|
500,000 | * | ||||||
All Directors and Officers
|
38,130,029 | 38.3 | % | |||||
5% or Greater Shareholders:
|
||||||||
Gabriel De Los Reyes/ Maria Lourdes De Los Reyes (5)
|
7,250,000 | 7.3 | % | |||||
17795 SW 158th Street
|
||||||||
Miami
,
FL 33187
|
* Less than 1%.
|
||||||||
(1) - Applicable percentages are based on 99,524,117 shares outstanding as of March 26, 2014. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days whether upon the exercise of options or otherwise. Shares of Common Stock subject to options and warrants currently exercisable, or exercisable within 60 days after the date of this report, are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, the Company believes that each of the shareholders named in the table has sole voting power.
|
||||||||
(2) - Includes (a) 13,000,000 shares of restricted stock issued under restricted stock grants, (b) 3,000,000 shares owned by Bay Acquisition Corp., an entity controlled by Mr. Sullivan, and (c) 530,000 shares owned by Mr. Sullivan's minor son.
|
||||||||
(3) Includes 8,000,000 shares of restricted stock issued under restricted stock grants.
|
||||||||
(4) - Includes (a) 1,000,000 shares of restricted stock issued under a restricted stock grant, (b) 4,289,029 shares owned by Bronco Communications, LLC, an entity which Mr. Delgado controls and (c) 100,000 shares owned by Mr. Delgado's minor daughter.
|
||||||||
(5) - Includes 1,750,000 currently exercisable warrants.
|
(1)
|
Extend the Note’s maturity date to July 1, 2013;
|
|
(2)
|
Provide that on or before the maturity date, we may elect to convert the Note into 3,000,000 shares of our common stock at a conversion price of $0.25; and
|
|
(3)
|
Reduce the exercise price of the Warrant from $0.15 to $0.10.
|
2013
|
2012
|
|||||||
Audit Fees (1)
|
$ | 32,500 | $ | 32,500 | ||||
Audit Related Fees (2)
|
2,465 | - | ||||||
Tax Fees (tax-related services)
|
- | - | ||||||
All other fees (3)
|
58,556 | - | ||||||
Total Fees
|
$ | 93,521 | $ | 32,500 |
(1)
|
Audit fees — these fees relate to the audit of our annual financial statements and the review of our interim quarterly financial statements.
|
(2)
|
Audit related fees — these fees relate to assistance with a registration statement.
|
(3)
|
All other fees – these fees relate to fees incurred in connection with the proposed acquisition of Airtronic and the audit of its historical financial statements.
|
(a)
|
Documents filed as part of this report
|
(1)
|
All financial statements
|
Index to Consolidated Financial Statements
|
Page
|
||
Report of PMB Helin Donovan LLP, Independent Registered Public Accounting Firm
|
F-2 | ||
Consolidated Balance Sheets as of December 31, 2013 and 2012
|
F-3 | ||
Consolidated Statements of Operations for the years ended December 31, 2013 and 2012
|
F-4 | ||
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2013 and 2012
|
F-5 | ||
Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012
|
F-6 | ||
Notes to Consolidated Financial Statements
|
F-7-18 |
(2)
|
Financial Statement Schedules
|
(b)
|
Exhibits required by Item 601 of Regulation S-K
|
GLOBAL DIGITAL SOLUTIONS, INC.
|
|||
By:
|
/s/ Richard J. Sullivan
|
||
Richard J. Sullivan
|
|||
Chief Executive Officer
|
|||
Date:
|
March 28, 2014
|
Name
|
Title
|
Date
|
||
/s/ Richard J. Sullivan
|
Chief Executive Officer and Chairman
of the Board
(Principal Executive Officer)
|
March 28, 2014
|
||
Richard J. Sullivan
|
||||
/s/ David A. Loppert
|
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
|
March 28, 2014
|
||
David A. Loppert
|
||||
/s/ William J. Delgado
|
Director, Executive Vice President
|
March 28, 2014
|
||
William J. Delgado
|
||||
|
||||
/s/ Arthur F. Noterman
|
Director
|
March 28, 2014
|
||
Arthur F. Noterman
|
|
|||
/s/ Stephanie C. Sullivan
|
Director
|
March 28, 2014
|
||
Stephanie C. Sullivan
|
Index to Consolidated Financial Statements
|
Page
|
|||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7-18 |
CONSOLIDATED BALANCE SHEETS
|
||||||||
December 31, | ||||||||
2013
|
2012
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 509,224 | $ | 385,141 | ||||
Notes receivable
|
1,465,874 | - | ||||||
Prepaid expenses
|
122,056 | - | ||||||
Total current assets
|
2,097,154 | 385,141 | ||||||
Assets of discontinued operations
|
- | 395,133 | ||||||
Deposits
|
198 | - | ||||||
Total assets
|
$ | 2,097,352 | $ | 780,274 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 166,256 | $ | 155 | ||||
Accrued expenses
|
165,537 | 191,344 | ||||||
Convertible notes payable
|
529,309 | 504,309 | ||||||
Notes payable
|
25,000 | 117,600 | ||||||
Total current liabilities
|
886,102 | 813,408 | ||||||
Liabilities of discontinued operations
|
- | 33,974 | ||||||
Total Liabilities
|
886,102 | 847,382 | ||||||
Commitments and Contingencies
|
||||||||
Stockholders’ equity
|
||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding
|
- | - | ||||||
Common stock, $0.001 par value, 175,000,000 shares authorized, 93,024,117 and 52,263,451 shares issued and outstanding
|
93,025 | 52,264 | ||||||
Additional paid-in capital
|
17,976,600 | 7,326,336 | ||||||
Accumulated deficit
|
(16,858,375 | ) | (7,561,122 | ) | ||||
Total Global Digital Solutions, Inc. stockholders' equity (deficit)
|
1,211,250 | (182,522 | ) | |||||
Noncontrolling interest
|
- | 115,414 | ||||||
Total stockholders’ equity (deficit)
|
1,211,250 | (67,108 | ) | |||||
Total liabilities and stockholders' equity
|
$ | 2,097,352 | $ | 780,274 |
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
For the Years Ended
|
||||||||
December 31,
|
||||||||
2013
|
2012
|
|||||||
Revenue
|
$ | - | $ | - | ||||
Cost of revenue
|
- | 300 | ||||||
Gross profit (loss)
|
- | (300 | ) | |||||
Operating expenses
|
||||||||
Selling, general and administrative expenses
|
8,384,247 | 301,284 | ||||||
Other (income)/expense
|
||||||||
Gain on extinguishment of debt
|
(31,712 | ) | - | |||||
Interest income
|
(59,701 | ) | - | |||||
Interest expense
|
733,198 | 10,000 | ||||||
Other income
|
- | (600 | ) | |||||
Total costs and expenses
|
9,026,032 | 310,684 | ||||||
Loss from continuing operations before provision for income taxes
|
(9,026,032 | ) | (310,984 | ) | ||||
Provision for income taxes
|
- | - | ||||||
Loss from continuing operations
|
(9,026,032 | ) | (310,984 | ) | ||||
Loss from discontinued operations
|
(271,221 | ) | (208,922 | ) | ||||
Net loss
|
(9,297,253 | ) | (519,906 | ) | ||||
Loss attributable to the noncontrolling interest
|
- | (28,815 | ) | |||||
Net loss attributable to Global Digital Solutions, Inc.
|
$ |
(9,297,253
|
) | $ |
(491,091
|
) | ||
Loss per common share attributable to Global Digital Solutions, Inc.
common stockholders - basic and diluted:
|
||||||||
Loss from continuing operations
|
$ | (0.12 | ) | $ | (0.01 | ) | ||
Loss from discontinued operations
|
- | - | ||||||
Loss attributable to the noncontrolling interest
|
- | - | ||||||
Net loss
|
$ | (0.12 | ) | $ | (0.01 | ) | ||
Shares used in computing net loss per share:
|
||||||||
Basic and diluted
|
74,484,164 |
45,302,055
|
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
|
||||||||||||||||||||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2013
|
||||||||||||||||||||||||||||||||
Additional
|
||||||||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
|
Paid-In
|
Accumulated
|
Noncontrolling
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Interest
|
Total
|
|||||||||||||||||||||||||
Balance, December 31, 2011
|
1,000,000 | $ | 1,000 | 33,111,054 | $ | 33,111 | $ | 5,045,429 | $ | (7,100,022 | ) | $ | - | $ | (2,020,482 | ) | ||||||||||||||||
Shares issued for Bronco acquisition
|
- | - | 4,289,029 | 4,289 | 145,827 | - | - | 150,116 | ||||||||||||||||||||||||
Assumption of Bronco's assets
|
- | - | - | - | 1,009,657 | (685,321 | ) | - | 324,336 | |||||||||||||||||||||||
Assumption of Bronco's equity
|
- | - | - | - | (859,541 | ) | 715,312 | 144,229 | - | |||||||||||||||||||||||
Private placements of common stock
|
- | - | 1,666,667 | 1,667 | 148,333 | - | - | 150,000 | ||||||||||||||||||||||||
Common stock issued for conversion of debt
|
- | - | 11,546,701 | 11,547 | 1,410,781 | - | - | 1,422,328 | ||||||||||||||||||||||||
Common stock issued for rent
|
- | - | 150,000 | 150 | 13,350 | - | - | 13,500 | ||||||||||||||||||||||||
Common stock issued for services
|
- | - | 1,000,000 | 1,000 | 52,000 | - | - | 53,000 | ||||||||||||||||||||||||
Warrants issued
|
- | - | 360,000 | - | - | 360,000 | ||||||||||||||||||||||||||
Conversion of preferred stock to common stock
|
(1,000,000 | ) | (1,000 | ) | 500,000 | 500 | 500 | - | - | - | ||||||||||||||||||||||
Net loss
|
- | - | - | - | - | (491,091 | ) | (28,815 | ) | (519,906 | ) | |||||||||||||||||||||
Balance, December 31, 2012
|
- | - | 52,263,451 | 52,264 | 7,326,336 | (7,561,122 | ) | 115,414 | (67,108 | ) | ||||||||||||||||||||||
Loss on disposal of discontinued operations
|
- | - | - | - | - | - | (115,414 | ) | (115,414 | ) | ||||||||||||||||||||||
Stock-based compensation expense
|
- | - | 26,000,000 | 26,000 | 5,792,208 | - | - | 5,818,208 | ||||||||||||||||||||||||
Shares or warrants issued for services
|
- | - | 1,876,666 | 1,877 | 1,078,353 | - | - | 1,080,230 | ||||||||||||||||||||||||
Sale of common stock
|
- | - | 5,634,000 | 5,634 | 1,960,466 | - | - | 1,966,100 | ||||||||||||||||||||||||
Issuance of warrant included in the convertible debt
|
- | - | - | - | 776,487 | - | - | 776,487 | ||||||||||||||||||||||||
Common stock issued upon conversion of debt
|
- | - | 3,000,000 | 3,000 | 747,000 | - | - | 750,000 | ||||||||||||||||||||||||
Common stock issued upon exercise of warrants
|
- | - | 4,250,000 | 4,250 | 420,750 | - | - | 425,000 | ||||||||||||||||||||||||
Stock subscription receivable
|
- | - | - | - | (125,000 | ) | - | - | (125,000 | ) | ||||||||||||||||||||||
Net loss
|
- | - | - | - | (9,297,253 | ) | - | (9,297,253 | ) | |||||||||||||||||||||||
Balance, December 31, 2013
|
- | $ | - | 93,024,117 | $ | 93,025 | $ | 17,976,600 | $ | (16,858,375 | ) | $ | - | $ | 1,211,250 |
2013
|
2012
|
|||||||
Cash in bank
|
$ | 509,224 | $ | 385,141 | ||||
Cash and cash equivalents
|
$ | 509,224 | $ | 385,141 |
Type
|
Collateral
(If any)
|
Interest Rate
|
Monthly Payment
|
Maturity
|
2013
|
2012
|
|||||||||||||
Laurus Master Fund
|
None
|
5.00 | % | $ | - |
May-13
|
$ | 529,309 | $ | 504,309 |
Type
|
Collateral (if any)
|
Interest Rate
|
Monthly Payments
|
Matur-ity
|
2013
|
2012
|
|||||||||||||
Private
|
Assets
|
8.25 | % | $ | - |
May-13
|
$ | - | $ | 375,100 | |||||||||