Global Equity International Inc (OTCBB:GEQU) Picks Up the Pace
Global Equity International Inc (OTCBB:GEQU) is in the business of providing services and securing funding for companies that want to become public. By the looks of things, the client base is growing.
GEQU isn’t exactly the most PR-active OTC enterprise, but the announcements do sound extremely optimistic. On Friday, for example, the management team said that a consultancy agreement has been signed with ATC Enterprises – a Dubai based diamond trading company. GEQU will help ATC with preparing the stock for listing on one of the recognized exchanges and they will also look for some pre-IPO funding.
Apparently, investors believe that this deal will bring in quite a lot of revenues for GEQU. On Friday, they traded more than $325 thousand worth of shares and they pushed the ticker up by 50%. The thing is, even after this jump, GEQU is sitting at just $0.0039 per share and it hasn’t seen levels of over a penny since the beginning of the year. Let’s take a look at some of the reasons why.
The first one is pretty obvious. GEQU promise companies from all over the world that they can help them find some much-needed cash, but in reality, they themselves are having serious problems with their balance sheet which looked like this at the end of Q1:
- cash: $1,979
- current assets: $70,150
- current liabilities: $2,923,920
- quarterly revenues: $15,000
- quarterly net loss: $795,820
The deeper you look into the 10-Q, the more problems you find. The most serious one is the toxic debt. Quite a lot of convertible notes have been issued over the years and most of them can be turned into stock at a 40% discount. Thanks to this, during Q1, GEQU issued more than 43 million shares at an average rate of $0.0038 apiece. Quite a lot more stock saw the light of day last week.
On July 8, Peter J. Smith and Enzo Taddei, the people running the company, decided to convert their accrued salaries into around 253 million GEQU shares issued at a rate of $0.00075 per share. They also wrote an update to the shareholders.
They admitted that going down the convertible notes path has been a mistake and they promised that they’ll stay well away from the toxic debt providers from now on. They also said that the worst of the dilution is now behind them. Apparently, only two notes totaling $35 thousand are outstanding at the moment and they should be dealt with within the next few months.
Investors are ready to trust the management team and their ability to turn the company around. And that may seem somewhat strange for some people.
The people in question are apparently unhappy about Mr. Enzo Taddei, GEQU‘s CFO and his previous business initiatives. The ones who put together the information in this link, for example, reckon that he has been a part of numerous schemes that left investors with a bitter taste in their mouths. Of course, we can’t know for sure what his role in the whole thing was, but we do know that he has been involved with Dolphin Digital Media Inc (OTCMKTS:DPDM). We also know that DPDM’s past is overflowing with controversy.
