GEX Management Inc (GXXM)

[beer$$money]

The property in Texas is no longer in the mix here? The Current owner is
CIVITAS ALTERNATIVE LENDING, LLC.

Deed Transfer Date was 2/26/2019.

It's all in the 10K "Subsequently on March 5, 2019, Civitas proceeded to execute its rights to enforce the liens on the Setco property through a foreclosure process which resulted in Civitas taking possession of the Setco property"

Owner (Current 2019)
CIVITAS ALTERNATIVE LENDING LLC
1722 ROUTH ST STE 800
DALLAS, TEXAS 752012502
Multi-Owner (Current 2019)

Owner Name Ownership %
CIVITAS ALTERNATIVE LENDING LLC 100%

Legal Desc (Current 2019)
1: BLK 8048
2: TR 9 ACS 16.84
3:
4: INT201900047869 DD02152019 CO-DC
5: 8048 000 00900 3008048 000
Deed Transfer Date: 2/26/2019

2019 Proposed Values
Improvement:
Land:
Market Value: $0
+ $1,100,330

Revaluation Year:2019
Previous Revaluation Year:2017

Total Estimated Taxes: $31,834.75

http://dallascad.org/SearchOwner.aspx CIVITAS




FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2018

In connection with the Setco Property Purchase Transaction consummated on September 28, 2018, the Company had previously deposited with Setco an earnest money escrow payment of $25,000 (“Escrow Deposit”). At the closing of the Property Purchase Transaction, (a) the Company paid real estate taxes due for the Property of approximately $784, and (b) approximately $7,559 of fees were applied to the Escrow Deposit. As a result, Setco owes the Company approximately $18,225. The September 2018 Note had a principal balance of $1,125,000, and a stated maturity date of October 5, 2018.

The Principal Amount of the September 2018 Note bears interest at a rate of 18% per annum (in this case, the “Interest”), which is also payable on the Maturity Date.

The Company failed to pay Setco the Principal Amount and accrued and unpaid Interest due under the September 2018 Note on the stated Maturity Date and, therefore, is in default under the September 2018 Note. The Company’s obligations to repay amounts due under the September 2018 Note are secured by the Property, and the Company has executed and delivered the September 2018 Deed of Trust, with Setco as the beneficiary.




While the Company intended to take advantage of the collateral provided by the Setco real estate to obtain loan against property for working capital purposes as well as reduce high interest loan obligations related to Merchant Cash Advances, the prior management was unable to secure required financing because of

(1) challenges associated with identifying an investor who was ready to match the valuation of $11,000,000 provided by the valuation company introduced by Setco for evaluating the property

(2) feedback from multiple lending sources related to the lack of readily available access to the property which would further depress the value of the property against the established valuation by the valuation company, and

(3) lack of sophisticated investors ready to invest in the land at the valuation provided by the valuation company that would have provided the Company sufficient funds to immediately take care of its short and long term debt obligations.

As a result of this assessment and given failure to gain traction on the intended but missed capital opportunity on account of potentially misleading information by a service provider, management is currently reviewing with counsel available options to review and, if required, possibly seek damages from targeted parties to compensate the firm for the damages incurred related to pursuing transaction options related to this potentially incorrect valuation.

NOTE 10. SUBSEQUENT EVENTS
Pg 39


On June 4, 2018, the Company entered into a discounted Promissory Note Payable with a principal balance of $500,000, and bearing interest at a rate of 15% per annum.

This note was personally guaranteed by Carl Dorvil, the Company’s former Chief Executive Officer and principal shareholder and secured, among other things, certain liens and security interests including the Setco property purchased on September 28, 2019. This note was due to be paid in full by August 1, 2018.

The Company had been in negotiations to restructure this loan, as it was originally intended as a bridge loan with a term of 57 days. Pursuant to these negotiations, in August 2018, the maturity date on the note was extended to August 30, 2018.

As of December 31, 2018, the Company failed to pay the Principal Amount and, therefore, continued to be in default under the Note. Subsequently on March 5, 2019, Civitas proceeded to execute its rights to enforce the liens on the Setco property through a foreclosure process which resulted in Civitas taking possession of the Setco property resulting in the elimination of the $500,000 Civitas note and any accrued interest on the principal amount and the elimination of $1,125,000 Setco real estate lien note made to Setco along with any accrued interests from the Company books.