GTGP ~ Global Technologies Group, Inc. Due Diligence
Longer term play IMO
www.glbtech.com
First things first, before I delve into any DD I would like to make clear that a friend has spoken with
the CEO James Fallacaro on numerous occasions. He seems like a hard working and honest man.
Never did he not answer questions professionally and ethically. He’s been working on cleaning
up this company for years now and based on the latest deals they’ve communicated to the public
I would guess they are on the cusp of adding serious value to the stock.
The number one thing that attracted me to GTGP was the share structure:
100 million shares authorized
30,084,500 million shares outstanding
17,926,475 shares restricted
FLOAT = 12,158,025**
market cap (based on close of 11/19/2010) = $1,770,000
** the caveat with that float is that the CEO holds close to 6 million of those shares in a separate
brokerage account that was purchased on the open market between 2004-2006. I have seen a
screenshot of this account and the average for those shares is @ .24 so there is no reason to
believe that those shares will be coming out into the market anytime soon, the CEO has also
assured me of this. So really, that puts the tradable float right around 6,000,000 shares. Of those
6 million shares, I know that 4,600,000 are held between myself and two other trusted investors.
They have allowed me to go into their accounts and see their holdings for myself. The CEO has
also assured me there will be NO DILUTION as it is counter productive to their business model
at this time and in the foreseeable future, both short term and long.
Furthermore, as I’ll highlight in a moment, for the stock to be trading with a market cap of under
$2,000,000 is idiotic. In my opinion, based on the revenue stream GTGP has in place as
evidenced by press releases and 8k filings, they deserve a market cap of at least $5-$10 million.
Such a market cap would put the share price between .16-.30
About Global Technologies Group, Inc. :
Global Technologies Group Inc is a company with a licensed patented system to clean earth
polluted with heavy metals using an EPA tested and approved method which qualified it for
Superfund approval. Superfund is the federal government's program to clean up the nation's
uncontrolled hazardous waste sites. (http://www.epa.gov/superfund/) Currently there are over
450,000 contaminated sites which need to be remediated before the property can be further
developed for commercial or other use.
With the use of our licensed patented Molecular Bonding System (MBS) we are able to
chemically change heavy metals such as chromium, cadmium, mercury, arsenic and lead from
contaminated soil into non-hazardous forms.(in situ) Currently these chemicals are leaching into
the water tables below the surface of the land and thus contaminating the water systems. MBS is
comprised of carbonates, sulphides and phosphates which oxidize the heavy metals and turn
them into non-leachable sulphides. After we have chemically changed the hazardous chemicals
from the soil it is placed back in its original location and the land becomes safe to use for
development purposes, thus omitting the large cost of removing and trucking out the
contaminated soils.
Furthermore we have the capability to clean 50 to 100 tons of soil per day. With two patents; one
for technology, and one for the necessary process chemicals, our company is the only one of its
kind. The company has set up advantageous teaming agreements with MSE Technology
Applications, Inc. WWW.MSE-TA.COM qualified in both large remeadiation projects,
devleopement and new technology applications, M2 Polymer Technologies, Inc., http://
www.m2polymer.com specializing in dewatering remediation using polymer technology. Science
and Technology Applications LLC. has expertise in providing cost effective technologies for
health and environmental protection led by Dr. Dash Sayala. Advanced Environmental
Technologies LLC WWW.AETLLC.COM is a nationally recognized provider of comprehensive
environmental solutions. They are experts at environmental science and engineering with the
ability to tranlate that experience into on-site construction and field logistics.
Global Technologies Group applies next generation physical and chemical sciences to solve
environmental remediation and alternative energy related problems.The Company licenses
mature, patented technologies and applies them to carefully identified market niches.
8k highlighting where they get the technology:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=6575006
“Global Technologies Group, Inc., (OTC PK: GTGP), formally know as Global Music
International, has completed the acquisition of an exclusive Brownfield license to utilize MBS
technology from Solucorp Industries Ltd. for $4.0 million in preferred stock.”
Those preferred shares are restricted. The conversion rate on those preferred shares is only
applicable @ $1 and above so no need to worry about dilution there. So Global paid $4,000,000
for the exclusive rights. That may seem like a lot to eat into the bottom line, but just wait until
you realize how many revenues they already have secured...
8k highlighting first licensing agreement:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=6821247
“A payment of $1,250,000 U.S. at the closing hereunder to be paid in the form of a Certified
check or other form of compensation that Global deems acceptable and a minimum annual
royalty payment of $150,000 per annum, payable semiannually in the amount of $75,000”
Ok, so there’s our first deal, resulting in $1,250,000 in revenue
8k highlighting entry into a material definitive agreement with MSE Technology Associates:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7474628
“On July 7, 2010 Global Technologies Group, Inc (“Global”) entered into an exclusive
distribution and reseller agreement with MSE Technology Associates, Inc. (“MSE”) a company
that has been in business for 35 years and deals mainly with the Department of Energy and
Military developing new technologies for specific purposes. The agreement covers all products
that have been developed and manufactured and are being developed by MSE. Global will also
act as a purchasing agent as well. We are currently negotiating additional territories as progress
merits. We have recently appointed sales representatives in various countries covered under our
agreement.”
MSE has over 100 employees and their sales are upwards of $50 million
http://www.manta.com/c/mm80cqs/mse-technology-application-inc
Also, look at the list of current and former clients for MSE, pretty impressive if you ask me:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=56265740
Global now has their hands directly tied into a company that does millions of $$ per year in
revenue and is the EXCLUSIVE distributor and reseller for MSE. We don’t know what type of
revenue this will generate for Global just yet but my hunch is it will be at least $2,000,000.
8k highlighting distribution agreement covering Europe and Canada:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7486319
“This new agreement covers member countries of the European Union and Canada.”
So not only does Global have the exclusive rights to distribute MSE products all over the
states, they now also have the rights to do so in Europe and Canada.
8k highlighting their first deal with a company in Europe:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7497755
“ON OCTOBER 09, 2010 Global Technologies Group, Inc., (OTC PK: GTGP), granted an
exclusive distribution and reseller rights contract for all technologies which are under license,
sub licensed or distributed by Global to Sadhana Equity Investments, Inc., a privately held
company for six hundred fifty thousand dollars. ($650,000) The agreement was executed by
Global and Sadhana on October 09, 2010. The exclusive agreement is for the country of Italy.
This agreement is a continuation of Global’s plan for expansion of distribution and sales in its’
covered countries.”
The thing I love most about this deal is that it proves they can deliver on their business strategy.
Any company can obtain the rights to distribute a product in a certain region of the world just to
say that they have the rights. However, Global actually used their rights and executed a deal
merely 5 days later! That is incredible. So that’s $650,000 from one private firm in one country
alone. From my talks with the CEO regarding their operations overseas, I hardly believe this will
be the only deal the market hears about.
The most important PR to come out regarding GTGP:
“SARASOTA, Fla., Nov 18, 2010 (BUSINESS WIRE) --Global Technologies Group, Inc. (Pink
Sheets: GTGP) has been in ongoing discussions for the acquisition of a company known for its
research, development and deployment of commercial projects in waste treatment,
environmental remediation, advanced materials, energy conservation, and other innovative
technology areas. The company's processes for technology development include bench-scale
apparatus, engineering-scale demonstrations and full-scale equipment development. Global
has been informed that a meeting of the company's board will be held in January to review this
pending transaction as well as the due diligence requirements for a proposed sale. Global, in
preparation for this transaction, has brought in a large, well known Investment banking firm to be
Global's financial advisors and, if it meets their criteria, fund the acquisition. Global intends to
incorporate the company as a wholly owned subsidiary. The name of the company and the
investment banking firm have not been disclosed as there are NDA agreements in place. The
unnamed company's revenue is in excess of 20 million dollars annually.”
I highlighted the section in bold for a reason, read that one more time and then take a look at this
summary of MSE Technology Associates:
“MSE was originally formed to test and demonstrate Magneto hydrodynamics (MHD)
technology at a new federally owned research site in Butte (the U.S. Department Of Energy
Western Environmental Technology Office (WETO). As they completed testing the MHD
technology (sponsored by the Department of Energy), MSE successfully shifted into testing,
demonstration, and commercial application of waste treatment systems using temperature
technologies and advanced chemical, biological, and physical processes. In September 1996,
MSE acquired and successfully privatized the WETO facility. The facility is nationally known
and a recognized, premier testing site, applying government-sponsored programs and
commercial projects in waste treatment, environmental remediation, advanced materials, energy
conservation, and other innovative military technology areas. Processes for technology
development include bench-scale apparatus, engineering-scale demonstrations and full-
scale equipment development. For a complete description of MSE technologies covered under
our agreement please visit www.GLBTECH.COM and view MSE.”
Sound familiar???? That’s right, I believe that Global is in the process of acquiring MSE for
themselves bringing in a company that does revenue’s IN EXCESS of $20 million annually.
Personally, after looking at the numbers for MSE if it is indeed them, I believe that is a very very
low ball figure. Furthermore, after speaking with the CEO I have reason to believe that the
investment banking firm they’re dealing with is Raymond James Financial, who manages over
$3 billion. The reason I say this is because when I asked the CEO for any hints as to which firm
was managing the acquisition he said do some research on firms in Tampa. And that it is the
“largest most recognizable” firm in Tampa. Well, only one firm meets that description, and that’s
Raymond James.
The bottom line here is this, GTGP, with the share structure the way it is and the fact that there
has been no dilution since 2004 is simply undervalued in terms of market cap valuations. From
the deals they have already made known and the pending ones, GTGP should see revenue’s in
excess of $25,000,000. You may be saying to yourself, well that’s great... but what about the
expenses? What good are $25,000,000 in revenue’s if they are going to be generating
$26,000,000 in expenses? Well, the answer is simple, their expenses are only $4,000,000 (that’s
what they paid for the rights) + general & administrative. Seeing as the CEO has forgone a salary
for the ladder part of 3 years in an effort to keep all available funds going directly to the
company, I hardly believe they’re going to have many G&A expenses. Bottom line is this, even
on an aggressive cost basis of say $10,000,000 for business operations, that still gives them a
NET INCOME of at least $15,000,000.
EPS = $15,000,000/30,000,000 (outstanding shares) = $0.50
Yes, that’s right, an EPS of FIFTY CENTS ON A STOCK THAT’S TRADING UNDER .07!!!!
That gives them a stupid low p/e ratio of .14. No not 14, 0.14... that’s less than 1. Are you
kidding me??? I think a realistic price target for GTGP over the next 30-90 days is .30-.50 and I
am not kidding either. This stock is so undervalued it’s crazy. Obviously, my numbers are just
estimations and this should be understood before making the decision to buy or sell the stock,
however, I challenge you all to do the DD and tell me you don’t see the same thing I see
regardless of estimations... A SEVERELY UNDERVALUED STOCK!
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