Global Digital Solutions Inc (GDSI)

[PhenixBleu]

That 10-K is beyond ugly. Without a revenue source, the defaults on numerous funding agreements will continue to haunt this company. How assuring can it be that Delgado has committed his 1M Preferred shares in ECGS and 5M Commons from SHMP? ECGS and GDSI are both Shell-Risk stocks.

Delgado restarted ECGS when it was Falcon early 2019, after he committed that shell company's only Preferred Shares to this Note? Perhaps that's how trading ramped up before he publicly announced the change in direction. His funders, and related associates, would likely have known his intentions and may have been part of the crew with inside info that pushed the PPS to .60. None of the products promised in those fluff news releases hit any market.

On June 1, 2018, the Company entered into a $300,000 non-convertible note with an accredited investor with $150,000 original issue discount (“OID”) for net proceeds of $150,000. As part of the note agreement, the Company also agreed to issue the investor 5,000,000 warrants at an exercise price of $0.01, exercisable for a period of three (3) years. The warrants were valued using the Black Scholes Merton model, resulting in a relative fair value after allocation of $28,378. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.007 at issuance date; a risk-free interest rate of 2.62% and expected volatility of the Company’s common stock, of 275.26%, The relative fair value of the warrants as well as the OID have been classified as a debt discount to be amortized over the life of the note using the effective interest method. Amortization expense for the year ended December 31, 2019 was $111,667. Payments of $100,000 were made on May 31, 2019 and June 24, 2019. As of December 31,2019 and the issuance date of these financial statement $100,000 remains outstanding.

The note bears a personal guarantee by William Delgado, the Chief Executive Officer of the Company. As further security for the note, Mr. Delgado has also pledged the 1,000,000 Convertible Preferred Shares of the Company that he owns, as well as 5,000,000 common shares of another public company in which Mr. Delgado is a director and Chief Financial Officer.

There isn't going to be any money coming in any time soon from the expected Rontan Judgement due to the lengthy court processes in Brazil. That Court may set the Judgement aside, too, or a portion of it.