UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission file number: 0-23532
GLOBETEL COMMUNICATIONS CORP.
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(Exact name of small business issuer as specified in its charter)
Delaware 88-0292161
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(State or other jurisdiction
of incorporation or organization) (IRS Employer Identification No.)
444 Brickell Avenue Suite 522 Miami, FL 33131
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(Address of principal executive offices)
305-579-9922
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(Issuer's telephone number)
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(Former name, former address, former fiscal year, if changed since last report)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 611,319,783 shares issued as of May
14, 2003
Transitional Small Business Disclosure Format: Yes __ No X
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheets - (Unaudited) 4
Statements of Income (Unaudited) 5
Statements of Cash Flows (Unaudited) 6
Notes to Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis or Plan of Operation 9
Item 3. Controls and Procedures 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Default Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holder 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
2
GLOBETEL COMMUNICATIONS CORP.
BALANCE SHEETS
(Unaudited) (Audited)
ASSETS March 31, December 31,
2003 2002
------------- ------------
CURRENT ASSETS
Cash and cash equivalents ............................................... $ 337,896 $ 201,631
Accounts receivable, less allowance for doubtful
accounts of $687,500 and $1,094,420 ................................. 2,625,379 1,747,819
Non-readily marketable, available-for-sale equity securities .............. 1,600,000 1,600,000
Deferred tax asset, less valuation allowance of $2,138,847 and $2,303,276 -- --
------------- ------------
TOTAL CURRENT ASSETS .................................................. 4,563,275 3,549,450
------------- ------------
PROPERTY AND EQUIPMENT, less
accumulated depreciation of $320,605 and $271,900 ....................... 404,325 403,030
------------- ------------
OTHER ASSETS
Non-readily marketable, available-for-sale equity securities
due from related party - Charterhouse Investment........................ 4,301,500 4,301,500
Organization costs, net ................................................... 226 283
Deposits .................................................................. 93,621 90,621
Miscellaneous receivable, less $125,000
allowance for uncollectibility ......................................... -- --
------------- ------------
TOTAL OTHER ASSETS .................................................... 4,395,347 4,392,404
------------- ------------
TOTAL ASSETS ............................................................... $ 9,362,947 $ 8,344,884
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts payable ........................................................ $ 786,065 $ 639,274
Accounts payable, to be satisfied with non-readily marketable,
available-for-sale equity securities .................................. 975,000 975,000
Notes payable, secured .................................................. 1,014,206 960,528
Notes payable, unsecured ................................................ 240,000 --
Current portion of capital lease obligations ............................ 81,788 82,984
Loan payable to related party - Charterhouse ............................ 361,960 311,960
Loan payable ............................................................ 10,000 --
Accrued payroll and related taxes ....................................... 12,785 12,785
Accrued expenses and other liabilities .................................. 63,508 48,700
Deferred revenues ....................................................... 67,515 51,353
Deferred revenue - related party ........................................ 110,610 184,350
Accrued officers' salaries .............................................. 825,000 730,000
Due to related parties .................................................. 189,568 134,081
------------- ------------
TOTAL CURRENT LIABILITIES ............................................. 4,738,005 4,131,015
------------- ------------
LONG-TERM LIABILITIES
Notes payable to stockholder ............................................ 55,000 55,000
------------- ------------
TOTAL LONG-TERM LIABILITIES ........................................... 55,000 55,000
------------- ------------
TOTAL LIABILITIES ................................................... 4,793,005 4,186,015
------------- ------------
STOCKHOLDERS' EQUITY
Preferred stock, Series A, $.001par value,
10,000,000 shares authorized; none issued and outstanding ............. -- --
Common stock, $.00001 par value, 1,500,000,000 shares
authorized; 605,320,283 shares issued and outstanding .................. 6,053 6,053
Additional paid-in capital............................................... 24,444,457 24,444,457
Accumulated deficit ..................................................... (19,880,568) (20,291,641)
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TOTAL STOCKHOLDERS' EQUITY ................................................. 4,569,942 4,158,869
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................. $ 9,362,947 8,344,884
============= ============
See accompanying notes.
3
GLOBETEL COMMUNICATIONS CORP.
STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended March 31,
2003 2002
------------- ------------
REVENUES
Sales ................................................................... $ 3,097,655 $ 225,441
Sales - Related Party ................................................... -- 2,099,000
------------- ------------
Total sales .......................................................... 3,097,655 2,324,441
Cost of sales ........................................................... 2,121,449 1,166,164
------------- ------------
GROSS MARGIN .......................................................... 976,206 1,158,277
------------- ------------
EXPENSES
Payroll and related taxes ............................................... 96,040 46,408
Professional fees ....................................................... 119,137 73,462
Officers' salaries ...................................................... 141,251 103,000
Consulting and brokers' fees ............................................ 30,060 322,500
Other operating expenses ................................................ 43,437 16,562
Telephone and communications ............................................ 20,629 14,305
Travel and related expenses ............................................. 33,302 12,600
Rents ................................................................... 10,892 9,754
Insurance and employee benefits ......................................... 23,727 22,123
Depreciation and amortization ........................................... 11,178 8,177
------------- ------------
TOTAL EXPENSES ........................................................ 529,653 628,891
------------- ------------
INCOME BEFORE OTHER INCOME (EXPENSE) AND INCOME TAXES ...................... 446,553 529,386
------------- ------------
INTEREST INCOME (EXPENSE)
Interest income ......................................................... 109 7,450
Interest expense ....................................................... (35,589) (3,466)
------------- ------------
NET INTEREST INCOME (EXPENSE) .............................................. (35,480) 3,984
------------- ------------
INCOME BEFORE INCOME TAXES ................................................. 411,073 533,370
INCOME TAXES
Provision for income taxes .............................................. (164,429) (186,925)
Tax benefits from utilization of net operating loss carryforwards ....... 164,429 186,925
------------- ------------
TOTAL INCOME TAXES ......................................................... -- --
------------- ------------
NET INCOME ................................................................. $ 411,073 $ 533,370
============= ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
BASIC ............................................................. 605,320,283 470,865,834
============= ============
DILUTED ........................................................... 638,741,405 470,865,834
============= ============
NET INCOME (LOSS) PER SHARE
BASIC ............................................................. $ 0.00 $ 0.00
============= ============
DILUTED ........................................................... $ 0.00 $ 0.00
============= ============
See accompanying notes.
4
GLOBETEL COMMUNICATIONS CORP.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months ended March 31,
2003 2002
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .............................................................. $ 411,073 $ 533,370
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation and amortization ...................................... 48,762 33,634
Common stock exchanged for services................................... -- 92,500
(Increase) decrease in assets:
Accounts receivable.................................................... (877,560) (1,756,510)
Note receivable - trade ............................................... -- 250,000
Deposits .............................................................. (3,000) (13,000)
Increase (decrease) in liabilities:
Accounts payable....................................................... 146,791 885,421
Accrued payroll and related taxes ..................................... -- (9,052)
Accrued officers' salaries ............................................ 95,000 --
Accrued expenses and other liabilities................................. 14,808 (23,332)
Deferred revenues ..................................................... 16,162 (11,482)
Deferred revenues - related party ..................................... (73,740) --
------------- ------------
NET CASH USED BY OPERATING ACTIVITIES ................................... (221,704) (18,451)
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CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of property and equipment....................... (50,000) (1,225)
Payments for related party receivables, net.............................. -- 3,922
------------- ------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES......................... (50,000) 2,697
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on capital lease obligations ................................... (1,196) (3,253)
Proceeds from notes and loans payable ................................... 353,678 --
Proceeds from related party payables .................................... 144,194 10,000
Payments on related party payables ...................................... (88,707) (2,342)
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NET CASH PROVIDED BY FINANCING ACTIVITIES................................... 407,969 4,405
------------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....................... 136,265 (11,349)
CASH AND CASH EQUIVALENTS - BEGINNING....................................... 201,631 32,233
------------- ------------
CASH AND CASH EQUIVALENTS - ENDING ......................................... $ 337,896 $ 20,884
============= ============
SUPPLEMENTAL DISCLOSURES Cash paid during the period for:
Interest .............................................................. $ 30,780 $ 3,256
Income taxes .......................................................... $ -- $ --
============= ============
In addition to amounts reflected above, common stock was issued for:
Consulting services.................................................... $ -- $ 342,500
============= ============
See accompanying notes
6
GLOBETEL COMMUNICATIONS CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2003
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements reflect all
adjustments, which, in the opinion of management, are necessary for a fair
presentation of the financial position and the results of operations for the
interim periods presented. All adjustments are of a normal recurring nature,
except as otherwise noted below.
Certain financial information and footnote disclosures which are normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America, but which are not
required for interim reporting purposes, have been condensed or omitted. The
accompanying financial statements should be read in conjunction with the
financial statements and notes thereto as of December 31, 2002, contained in the
Company's Form 10-KSB.
The financial statements for periods prior to the merger and
reincorporation in July, 2002 include the consolidated accounts of American
Diversified Group, Inc. and its two then wholly-owned subsidiaries, Global
Transmedia Communications Corp. and NCI Telecom, Inc., all of which together and
individually are referred to as the Company. All material intercompany balances
and transactions were eliminated in the consolidation.
NOTE 2 - ACCOUNTS RECEIVABLE AND SALES - SIGNIFICANT CONCENTRATIONS OF CREDIT
RISK AND ECONOMIC DEPENDENCE
Two customers accounted for 94% of the Company's sales for the three months
ended March 31, 2003, including 24% attributable to the Brazil network and 70%
to the Mexico network. The same two (2) customers account for 99% of the
Company's accounts receivable, including 55% attributable to the Brazil network
and 44% to the Mexico network as of March 31, 2003.
Revenue of $73,740 was recognized during the three months ended March 31,
2003, in connection with the Company's service agreements for the Brazil and
Philippines networks, $36,870 for each network.
In connection with the Brazil network sales, the Company accrued $82,807
due to IPWorld, Ltd. (IPW), which represents 25% of the project income (after
allocated costs) payable pursuant to the tri-party agreement with Charterhouse
Investments (Charterhouse) and IPW and is recorded as a reduction to the
Company's revenue share from the Brazil network.
7
NOTE 3 - NON-READILY-MARKETABLE EQUITY SECURITIES, AVAILABLE-FOR-SALE
As of March 31, 2003, the Company has included in its current assets,
$1,600,000 in non-readily marketable, available-for-sale equity securities,
which represent 16 million shares of IPW unrestricted stock, valued at $.10 per
share, held in the company's name.
As of March 31, 2003, the Company also included in other assets, $4,301,500
in non-readily marketable, available-for-sale equity securities, due from a
related party, Charterhouse, which represent 70 million shares of IPW restricted
stock valued at $.06145 per share, held by Charterhouse on the Company's behalf.
The IPWorld Ltd. shares are not currently tradable. The Company believes
the above amounts which, together, represent 63% of the Company's total assets,
are fully realizable.
NOTE 4 - NOTES PAYABLE, SECURED
In connection with a $125,000 secured, subordinated promissory note payable
to a third party executed in November 2002, the Company received an additional
$53,678 from the lender during the three months ended March 31, 2003, to
increase the note amount to $178,678 as of March 31, 2003. The note includes
interest payable monthly, at a rate of 12% per annum, and is collateralized by
15 million shares of the Company's common stock held in escrow under the
agreement. The Chief Executive Officer of the Company is a minority shareholder
of the lending corporation.
NOTE 5 - NOTES PAYABLE, UNSECURED
In February 2003, the Company executed two unsecured promissory notes
payable, each for $100,000 used to fund operations and pay operating expenses,
to an unrelated third party, which is also a secured promissory note holder.
Each note is due in May 2003 and includes interest payable monthly at a rate of
25% per annum.
In February 2003, the Company executed a $40,000 promissory note payable to
another party, due on demand with interest and payable at a rate of 2.5% per
annum.
NOTE 6 - LOAN PAYABLE TO RELATED PARTY - CHARTERHOUSE
In January 2003, the Company received a $50,000 loan from Charterhouse.
This loan payable, as well as the previous balance of $311,960, are unsecured,
non-interest bearing and provides for no formal repayment terms.
NOTE 7 - INVESTMENT BANKING AGREEMENT
In January, 2003, Fordham Financial Management, Inc., an investment banking
firm, based in New York City, assumed all functions and responsibilities of
Charles Morgan Securities to provide consulting services. Under the agreement,
the Company was obliged to pay a monthly fee of $10,000. The parties agreed that
the Company would issue one million shares of restricted stock as payment for
services. Such stock has not been issued to date. Upon issuance of the stock,
the Company will charge to expense an amount equal to one-half of the average
bid and asked price of the Company's share on the date of issuance.
8
Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
GlobeTel Communications Corp. ("GlobeTel") was organized in July 2002 under
the laws of the State of Delaware. Upon its incorporation, GlobeTel was a
wholly-owned subsidiary of American Diversified Group, Inc. (ADGI). ADGI was
organized January 16, 1979, under the laws of the State of Nevada. ADGI had two
other wholly-owned subsidiaries, Global Transmedia Communications Corporation
(Global), a Delaware corporation, and NCI Telecom, Inc. (NCI), a Missouri
corporation.
On July 1, 2002, both Global and NCI were merged into ADGI. On July 24,
2002, ADGI stockholders approved a plan of reincorporation for the exchange of
all outstanding shares of ADGI for an equal number of shares of GlobeTel.
Subsequently, ADGI was merged into GlobeTel, which is now conducting the
business formerly conducted by ADGI and its subsidiaries, and all references to
ADGI in these financial statements now apply to GlobeTel interchangeably.
In July 2002, pursuant to the reincorporation, we authorized the issuance
of up to 1,500,000,000 shares of common stock, par value of $0.00001 per share
and up to 10,000,000 shares of preferred stock, par value of $0.001 per share.
Forward-Looking Statements; Market Data; Risk Factors
Forward-Looking Statements: This Form 10-QSB and other statements issued or
made from time to time by GlobeTel and ADGI contain statements which may
constitute "Forward-Looking Statements" within the meaning of the Securities Act
of 1933, as amended and the Securities Exchange Act of 1934 by the Private
Securities Litigation Reform Act of 1995, 15 U.S.C.A. Sections 77Z-2 and 78U-5
(SUPP. 1996). Those statements include statements regarding our intent, belief
or current expectations, our officers and directors as well as the assumptions
on which such statements are based. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those contemplated by such forward-looking statements.
Forward-looking statements include, but are not limited to, statements
about our plans, objectives, expectations, intentions and assumptions and other
statements that are not historical facts. Words like "expect", "anticipate",
"intend", "plan", "believe", "seek", "estimate" and similar expressions identify
forward-looking statements.
9
This quarterly report contains certain estimates and plans related to the
telecommunications industry. The estimates and plans assume that certain events,
trends and activities will occur, of which there can be no assurance. In
particular, we do not know what level of growth to expect in the
telecommunications industry, and particularly in those Voice over Internet
Protocols markets.
The majority of our revenues are dependent on the Brazil and Mexico
networks and our ability to achieve revenues from additional networks,
including, networks in the Philippines, Venezuela, Colombia and other countries
we have identified as our potential market. In addition, our shares in IPW
represent the majority of our assets. Our ownership position in IPW totals 86
million shares of their common stock, valued at $5,901,500. We have 16 million
shares held by us, and 70 million shares held on our behalf by Charterhouse. The
IPW shares are not currently tradable. Based on information provided to us, we
believe the stock will become tradable and that the value of the shares is fully
realizable. However, in the event that the stock does not become tradable, the
share value may materially affect our asset value in the future.
Results of Operations - Comparison of Three Months Ended March 31, 2003 and 2002
Revenues. During the three-month period ended March 31, 2003, our sales
were $3,097,655 compared to sales of $2,324,441 during the same period last
year, or an increase of 33%. The sales for the three months ended March 31,
2003, were all from non-related parties, which represent an increase of
$2,929,655 from the same period in the prior year when sales from non-related
parties were $225,441. This increase is primarily attributable to the growth of
our operations in Mexico and Brazil. During the three months ended March 31,
2002, one customer, Global VoIP, accounted for $2,099,000 or 90% of our sales.
This customer was deemed to be an affiliate, our Chief Executive Officer had
an ownership interest in this entity.
Cost of Sales. Our cost of sales consists primarily of the wholesale cost
of buying band width purchased by us for resale, costs of telecommunication
equipment and technical services. We had cost of sales of $2,121,449 for the
three months ended March 31, 2003, compared to cost of sales of $1,166,164
during the three months ended March 31, 2002. We expect cost of sales to
increase in future periods only to the extent that our sales volume increases.
10
Gross Margin. The gross margin decreased to $976,206 for the three months
ended March 31, 2003 compared to the same period last year when the gross margin
was $1,158,277, or a decrease of $182,071 or 16%. The gross margin as a
percentage of revenue decreased from 50% to 32%, as result of increased costs of
sales related to the operations of the Brazil and Mexico networks.
Operating Expenses. Our operating expenses consist primarily of payroll and
related taxes, expenses for executive and administrative personnel, facilities
expenses, professional and consulting services, travel and other general
corporate expenses. Our operating expenses for the three months ended March 31,
2003, decreased to $529,653, or by 16%, compared to $628,191 for the same period
in 2002.
Our operating expenses are expected to further decrease as a percentage of
revenue in future periods because our existing operating infra structure will
allow increases in revenues without having to incrementally add operating
expenses. However, our expenses may increase in absolute dollars as we continue
to expand our network termination locations worldwide and incur additional costs
related to the growth of our business and being a public company.
Income from Operations. We had income from operations of $446,553 for the
three months ended March 31, 2003, compared to income from operations of
$529,386 for the same period in the prior year. The reduced income from
operations is mainly attributable to the reduced gross profit margin and reduced
operating expenses.
Interest Income (Expense). Interest income (expense) consists of interest
expense on our borrowings and interest income earned on our cash and cash
equivalents and, for the prior period, receivables from related parties.
Interest expense during the three months ended March 31, 2003, was $35,589
compared to $3,466 during the same period in the prior year. The increase in
interest expense resulted from increased debts.
Net Income. Our net income for the three months ended March 31, 2003, was
$411,073 compared to a net income of $533,070 during the three months ended
March 31, 2002.
11
Liquidity and Capital Resources.
As of March 31, 2003, we had $337,896 of cash and cash equivalents compared
to $201,631 at December 31, 2002 and $20,844 at March 31, 2002. We had accounts
receivable of $2,625,379 on March 31, 2003, compared to $1,747,819 on December
31, 2002 and $2,930,530 on March 31, 2002.
At March 31, 2003, $2,588,249 or 99% of the accounts receivable were
attributable to two (2) customers, including $1,438,693 or 55% related to the
Brazil network and $1,149,556 or 44% related to the Mexico network. We believe
that all of accounts receivable from these customers as of March 31, 2003, are
collectible.
At March 31, 2002, four (4) customers accounted for all of the accounts
receivable of the Company. One customer, Global VoIP, who is deemed to be our
affiliate, accounted for $2,099,000 or 90% of our sales, and two customers,
Global VoIP and Sigma Online, both of whom are deemed to be affiliates,
accounted for $2,848,299 or 97% of our accounts receivable at March 31, 2002.
One customer, Global VoIP, accounted for $2,562,248 or 87% of our accounts
receivable.
As of March 31, 2003, we had current assets of $4,563,275 compared to
current assets of $3,549,450 as of December 31, 2002 and $3,199,734 as of March
31, 2002. Total assets increased by 12% from $8,344,884 at December 31, 2002,
to $9,362,947 at March 31, 2003.
At March 31, 2003, $1,600,000 or 17% of total assets consisted of
non-readily marketable, available-for-sale equity securities. At December 31,
2002, the same $1,600,000 receivable represented 19% of total assets. Further,
at March 31, 2003, $4,301,500 or 46% of the total assets consisted of
non-readily marketable equity securities, available-for-sale, which was due from
a related party, Charterhouse. The same $4,301,500 non-readily marketable
securities represented 52% of all assets as of December 31, 2002. We had no such
assets at March 31, 2002.
Our total current liabilities increased to $4,738,005 at March 31, 2003,
compared to total current liabilities of $4,131,015 at December 31, 2002 and
$2,175,901 at March 31, 2002, principally due to increases in notes payable,
accrued officers' salaries, loans payable, related party payables and accounts
payable. Our long-term liabilities did not change materially. Total liabilities
increased by 15% from $4,186,015 at December 31, 2002 and by 114% from
$2,235,141 at March 31, 2002 to $4,793,005 at March 31, 2003.
Our cash used in operating activities was $221,704 for the three months
ended March 31, 2003, compared to $18,841 during the same period in the prior
year. Our cash used by investing activities during the three months ended March
31, 2003 totaled $50,000 compared to $2,697 provided by these activities in the
prior year. Cash provided by financing activities was $407,969 for the three
months ended March 31, 2003, compared to $4,405 for the same period in the prior
year.
We do not have existing capital resources or credit lines available that
are sufficient to fund our operations and capital requirements as presently
planned over the next twelve months. However, we are actively pursuing
additional funds through the issuance of debt and equity instruments, and we
believe sufficient capital resources will in fact be obtained to fund our
operations and cash requirements over the next twelve months.
As of March 31, 2003 we committed to purchase telecommunications equipment
for the Brazil network, placed into service during the second quarter of this
year, at a cost of $79,227. On April 7, 2003 we paid $59,476 or 75% of the total
and the balance of $19,751 is due 60 days thereafter. There are currently no
other material commitments for capital expenditures.
12
Item 3. Controls and Procedures
Within the 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon the evaluation, they concluded that the Company's disclosure
controls and procedures are effective in timely alerting them to material
information relating to the Company required to be included in this report.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the evaluation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There was no new litigation to report during the period ended March 31, 2003,
and there are no new developments related to previously reported litigation. For
legal proceedings regarding previously reported litigations, refer to the
discussion in our Annual Report on Form 10-KSB for the year ended December 31,
2002.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. Document Description
2 Agreement and Plan of Exchange (filed as Annex A to our
Special Meeting Proxy Statement on Schedule 14A and
incorporated herein by reference).
3.1 Articles of Incorporation (filed as Exhibits 3.1, 3.2 and 3.3 to
our Registration Statement on Form 10-SB and incorporated herein
by reference)
3.2 Bylaws (filed as Exhibit 3.4 to our Registration Statement on
Form 10-SB and incorporated herein by reference)
99.1 Statement Pursuant to Section 906 of Sarbanes-Oxley Act
of 2002 - Chief Executive Officer
99.2 Statement Pursuant to Section 906 of Sarbanes-Oxley Act
of 2002 - Chief Financial Officer
(b) Form 8-K.
We did not file a Report on Form 8-K during the quarter ended March 31, 2003.
13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GLOBETEL COMMUNICATIONS CORP.
Registrant
By: /s/ Timothy Huff
Timothy Huff, Chief Executive Officer
Dated: May 16, 2003
By: /s/ Thomas Y. Jimenez
Thomas Y. Jimenez, Chief Financial Officer
Dated: May 16, 2003
14
Certification
I, Timothy Huff, Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GlobeTel
Communications Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 16, 2003
/s/ Timothy Huff
Name: Timothy Huff
Title: Chief Executive Officer
15
Certification
I, Thomas Y. Jimenez, Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GlobeTel
Communications Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 16, 2003
/s/ Thomas Y. Jimenez
Name: Thomas Y. Jimenez
Title: Chief Financial Officer
16