New Global Energy, Inc. - FORM 10-K

Attached files

file	filename
EX-31.1 - CERTIFICATION - New Global Energy, Inc.	ngey_ex311.htm
EX-32.1 - CERTIFICATION - New Global Energy, Inc.	ngey_ex321.htm

SECURITIESAND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From________ to _______

333-179669

Commission file number

NEW GLOBAL ENERGY, INC.

(Exact name of small business issuer as specified in its charter)

Wyoming		45-4349842
(State of incorporation)		(IRS Employer Identification Number)

109 East 17^th Street, Suite 4217

Cheyenne, WY 82001

(Address of principal executive office)

(307) 633-9192

(Issuer's telephone number)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

Common Stock: $.0001 Par Value

Title of each class Name of each exchange on which registered

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 30, 2015 was approximately $34,814,373 (based on the mean between the closing bid and asked prices of the Common Stock on such date), which value, solely for the purposes of this calculation, excludes shares held by Registrant's officers and directors. Such exclusion should not be deemed a determination by Registrant that all such individuals are, in fact, affiliates of the Registrant.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCYPROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

APPLICABLE ONLY TO CORPORATE REGISTRANTS

As of June 26, 2015 there were outstanding 13,097,365 shares of New Global Energy, Inc. common stock with a par value $.0001 per share (the "Common Stock").

PART I

Item 1.	Business	3
Item 1A.	Not Applicable
Item 1B.	Unresolved Staff Comments: NONE
Item 2.	Properties	7
Item 3.	Legal Proceedings	7
Item 4.	Mine Safety Disclosures: NONE REQUIRED	7

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8
Item 6.	Selected Financial Data: NONE REQUIRED	8
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	8
Item 7A.	Quantitative and Qualitative Disclosure about Market Risks: NONE REQUIRED
Item 8.	Financial Statements and Supplementary Data	13
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	35
Item 9A.	Controls and Procedures	35

PART III

Item 10.	Directors and Executive Officers and Corporate Governance	38
Item 11.	Executive Compensation	39
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	40
Item 13.	Certain Relationships and Related Transactions and Director Independence	41
Item 14.	Principal Accountant Fees and Services	41

PART IV

Item 15.	Exhibits, Financial Statement Schedules	42

Signature		43

ITEM 1. BUSINESS

New Global Energy, Inc. (“NGE” or the “Company”) is a sustainable agriculture and aquaculture company organized as a Wyoming corporation on January 24, 2012. The Company focuses on the use of advanced technology and farming techniques with the goal of increasing production and decreasing costs.

The first portion of the Company’s development included the development of its Global Energy Plantation (“GEP”) using its Global Cell concept which combines alternative energy (source of usable energy intended to replace fuel sources without the undesired consequences of the replaced fuels) production, sustainable agriculture (practice of farming using principles of ecology, the study of relationships between organisms and their environment) and aquaculture (the farming of aquatic organisms such as fish, crustaceans, molluscs and aquatic plants). It uses non centralized power plants to produce power for its own use and to feed into the power grid serving local power needs while producing farm grown fish and shrimp as food products.

In the process of development of its business and during the last two fiscal years, the Company acquired a noncontrolling interest in Aqua Farming Tech, Inc. (“AFT”), a California corporation with aquaculture and agriculture operations in the Coachella Valley in Southern California. (see Aqua Farming Tech, Inc. below) During the fiscal years reported, the Company acquired and maintains an equity interest of 36.69% in Aqua Farming Tech, Inc. (“AFT”), a California corporation with aquaculture and agriculture operations in the Coachella Valley in Southern California.

As of May 20, 2013, the Company had completed incremental acquisitions totaling 30.74% of Aqua Farming Tech, Inc. (“AFT”) from unrelated parties. By the end of 2013, the Company had completed additional incremental acquisitions from unrelated parties bringing its total ownership to 36.69%.

On July 15, 2014 the Company for and in consideration of One Million Two Hundred and Fifty Thousand Forty Three (1,250,043) shares of New Global Energy Inc. common stock, Aquaculture Joint Venture, a Nevada General Partnership, an unrelated third party, assigned a 43.66% Net Revenue Interest in and to the net revenues from the operations of AFT aquaculture operations in Southern California over a period of time. Cash allocable to the Net Revenue Interest is calculated and distributed on a quarterly basis within forty five (45) days after the end of each calendar quarter.

The Company has determined that the acquisition of this 43.6% net revenue interest, considering its previously held equity interest (PHEI), the outstanding debt owed by AFT to the Company and implicit variable interest resulting from the Net Revenue Interest, that AFT was a variable interest entity, of which the company was considered the primary beneficiary. Accordingly, the Company consolidated AFT as of July 15, 2014.

On September 5, 2014, for and in consideration of One Million Five Hundred and Twenty-nine Thousand Four Hundred Twelve (1,529,412) shares of New Global Energy Inc. common stock, BioFuel Development Joint Venture, a Nevada General Partnership, and unrelated third party, assigned a Twenty-seven and Thirty-five One Hundredths percent (27.35%) Net Revenue Interest in aquaculture operations of AFT as defined in Farm Development Agreement between AFT and XL BioFuels, Inc. dated July 7, 2009, and a Seven and Six Tenths percent (7.6%) interest in and to a Farm and Crop Lease covering to parcels of land (6.1 and 15.92 acres) in the Coachella Valley in Southern California.

On September 9, 2014, for and in consideration of Four Million Eight Hundred and Seventy-one Thousand Seven Hundred Fifty (4,871,750) shares of New Global Energy Inc. common stock, Global Energy Technology Group, Inc, a Nevada corporation, and unrelated third party, assigned a Ninety-one and fifty-six one hundredths percent (91.56%) interest in and to a Farm and Crop Lease covering to parcels of land (6.1 and 15.92 acres) in the Coachella Valley in Southern California.

Global Cell

The Global Cell is being designed to be a stand-alone “operational cell” where nothing enters the “cell wall” except sunlight, water, and feedstock (seeds & fish). The cell is being designed to produce electrical power onsite with excess electricity fed into the power Grid. The Global Cell is designed as a “Zero Waste” operation. It is designed for all waste material to be used onsite:

Fish tank effluent > Plant Irrigation & Fertilization

Aquaculture Products

Food Fish for Market

Fish Feed from processing wastes

Value Chain Services

Grower Purchase Contracts

Management Planning, and Operations

Harvesting and Processing

In this sustainable system, the plants feed the fish and the fish feed the plants. An array of photovoltaic panels or concentrated solar system powers the entire plantation and feed any excess electricity into the power grid. The design of the Global Cell has not been completed nor has it been constructed and there is no assurance that the performance of these Cells will produce these expected results.

The Company relies on unpatented proprietary know-how and other trade secrets of its Global Cell , and employs various methods, including confidentiality agreements with employees and consultants, customers and suppliers to protect our know-how and trade secrets. However, these methods may not afford complete protection and there can be no assurance that others will not independently develop the know-how and trade secrets or develop better production methods than us. Further, we may not be able to deter current and former employees, contractors and other parties from breaching confidentiality agreements and misappropriating proprietary information and it is possible that third parties may copy or otherwise obtain and use our information and proprietary technology licensed, without authorization or otherwise infringe on our intellectual property rights. Additionally, we may license in the future, trade secrets, and similar proprietary rights to third parties. While we attempt to ensure that our intellectual property and similar proprietary rights are protected when entering into business relationships, third parties may take actions that could materially and adversely affect our rights or the value of our intellectual property, similar proprietary rights or reputation. In the future, we may also rely on litigation to enforce our intellectual property rights and contractual rights, and, if not successful, we may not be able to protect the value of our intellectual property. Any litigation could be protracted and expensive and funds may not be available to pursue it.

The Company’s focus during the reported period has been on the development of the optimum organizational environment for the growth of food fish and for the growth of agricultural products on adjacent lands. The major impediments to the successful development and operation of aquacultural and agricultural projects has been the difficulty in control of foods prices, control of energy prices and the control of the price and availability of water.

With regard to the control of food prices, in the creation of the Company’s optimal farm environment, we have developed a new aquaculture food regimen which, while using no antibiotics or chemicals, feeds Tilapia the superfood Moringa and green algae for their first four months in grow-out ponds. These nutrient rich algae and other aquatic plants represent a natural environment while controlling the price of the total amount of food feed to fish during their growing cycle.

We have initiated a test project involving the growth of Moringa for use as fish food and other uses. Research from the National Institutes of Health, a part of the US Department of Health and Human Services indicates that “scientists agree this is the most nutrient dense botanical on earth” weighing in with over 92 verifiable cell-ready nutrients including 46 antioxidants, 36 anti-inflammatories, vitamins, minerals, omega oils and 18 amino acids including nine that are rarely found intact within our present food chain. In 2008 the National Institutes of Health named Moringa the “Botanical of the Year” in celebration of Earth Day.

Although the primary use of Moringa grown in the Company’s initial test will be as processed as food for fish, Moringa has other primary uses. It is sold around the world as a nutraceutical because of it high nutritional and medicinal value. In addition to other content, gram for gram Moringa leaves contain: 4 times the calcium of milk; 3 times the Potassium of bananas; 4 times the vitamin A of carrots; 7 times the Vitamin C of Oranges and 2 times the protein of yogurt. In addition of agricultural feed, it can be used as fertilizer, as pulp wood in making paper as well as in making other products. And, it is used in water purification, killing bacteria and pathogenic germs in polluted water.

Integration of Solar, Agriculture & Aquaculture

The NGE business model addresses the need to maximize the cost savings available from alternative energy sources and to use alternative food sources to create a more viable environment for aquaculture operations.

Solar: Electrical power is a primary product of the Global Cell. Electricity, produced onsite from photovoltaic (“solar cell”) arrays used during daylight hours, to power all plantation operations including pumps, lighting and processing equipment. With excess power fed into the power grid where it is “banked” under the “net metering” provisions established by the U.S. Energy Policy Act 2005 which requires all public electric utilities to offer net metering on request to their customers.

Agriculture: Moringa or other products grown on site are initially used as food for aquaculture operations with additional crops sold for nutraceuticals or as biomass feed stock. Certain agricultural crops are fertilized with fish effluent using nutrient rich water to increase yields of these crops.

Fish: Aquaculture operations are designed to yield a sustainable food source in an environment where live catches decline each year. Processing the fish on site yields both a food fish product and SFO (Straight Fish Oil) which can be used to power Diesel generators or sold. Residue from fish processing is sun-dried and used as fish meal. Fish oil can also be used in the nutritional industry. Effluent from the fish tanks and ponds are used to irrigate the on site crops with a nutrient-rich broth of fertilizer.

MARKET FOR PRODUCTS & SERVICES:

The marketing and sale of the company’s products is subject to successful completion and performance of the Company’s Global Cell Concept and as such the Company has not yet entered any of these markets and there is not assurance that expected production levels will be achieved or that there will be any revenues forthcoming.

Electricity: A primary market opportunity for the Company is to provide electric power generated onsite from both solar power systems and onsite diesel-powered generators fired by renewable, sustainable biofuel. The Company expects that excess power over what it uses will be sold through net metering agreements and/or power purchase agreements with commercial power providers. These agreements are generally site specific and the Company does not yet have any such agreements in place and there is not assurance the sufficient power will be produced to sell.

The Company has done extensive reviews of solar technologies to determine the best currently available technology. It has done initial review and testing of solar technology used with concentrated solar power “CSP” generation and comparison reviews of photovoltaic panel technology. It has developed proposed layouts for CSP systems with thermal storage units which can be used for solar energy production both on and off grid.

Food Fish: The Company believes that the primary market advantaged aquaculture product in the US is the sale of live fish and shrimp, and non frozen fish fillets, limiting preferred geographic locations to those near major market areas where established markets now exist. To the extent the market dictates, the Company may enter the frozen fish fillet market. Although the Company believes that there is a significant market for the fish that it expects to produce, it does not have any purchase agreements or sales arrangements in place and whether or not the fish can be sold and at what price will be subject to market conditions at the time of the sale. There is no assurance that either a market will exist or that the price paid will produce a profit or even be sufficient to cover costs at that time.

The Company expects that its primary fish products will include Tilapia (both red and black Tilapia, Catfish and Silver Carp and are sold live). Tilapia is a mild white fish popular around the world. In its 2013 Report, the World Aquaculture Society shows Tilapia as the fifth most popular fish and Catfish as the seventh most popular fish consumed by weight in the United States (based on 2011 results).

US Tilapia consumption by weight by year has been:

Year	Metric Tons of Live Weight

2007		437,000
2008		453,264
2009		465,953
2010		579,443
2011		513,361
2012		613,406
2013		660,762
2014		633,759

A report from GLOBEFISH a unit in the Food and Agriculture Organization of the United Nations (“FAO”) Fisheries and Aquaculture Department responsible for information on international fish trade indicates that the popularity of tilapia, including the high value, air-flown fresh fillet, continues to grow among US consumers posting all-time records. Indeed, although imports in all product categories increased in volume only marginally (+2.9%) in 2013, the value of tilapia imports crossed over $1 billion, which is 7% higher than the value of imports in 2012.

An important market trend for 2013 was that almost 30% more fresh/chilled fillets were imported than compared with 2012, which was a value increase of $195.8 million (+33%). Also in 2013, fresh tilapia fillet supplies from Ecuador declined as farmers moved to more lucrative shrimp farming. The supply shortfall from Ecuador was well compensated by a 30% increase in imports of fresh fillets from Honduras, the leading exporter of fresh tilapia fillets in the US market. Fresh fillet imports also increased from Costa Rica (+54.8%) and Colombia (+46.2%).

Frozen tilapia fillets made up 76% of the total US tilapia imports in 2013, with a 5% decline in volume recorded but a 2.8% increase in value. Imports of whole frozen tilapia showed significant growth in volume (+50%) and in value (+67%). Major contributors were China, Taiwan Province of China and Panama.

Fishchoice.com Market Report Updated September 2014 indicated that after holding steady for the first six months of the year at record high levels, the price of frozen 5/7 oz. treated tilapia fillets to distributors dipped a dime in July to $2.60/lb. Given that imports from China through June were up 15% to 65,000 metric tons, the weakness is not a surprise. The weakness may be temporary, though. Chinese processors say they are having a harder and harder time finding raw material to process, as some farms have switched to shrimp, which are selling at near record high prices. Facing a shortage of fish, in early September some Chinese processors have raised the delivered price they are quoting importers from $2.15/lb. to $2.25/lb. for 5/7 oz. fillets. China accounted for almost 90% of the U.S. supply of frozen fillets, with Indonesia the only other significant source. Through June, Indonesian exports of tilapia fillets to the U.S. were flat at about 5,500 metric tons. Imports of fresh tilapia fillets through June declined slightly to 13,500 metric tons. The decline would have been worse, but Honduras, the leading supplier of fresh tilapia to the U.S. market, exported 5,250 metric tons of fresh fillets, an increase of 44% over last year. Large new farms in Mexico are also coming on line, as imports of fresh Mexican fillets more than doubled to 1,600 metric tons. Supplies from Ecuador, on the other hand, continue to plummet as farms switch to shrimp. Imports from Ecuador, which until three years ago was the largest fresh tilapia supplier, declined by more than half to just 1,400 metric tons, making Ecuador only the fifth ranking supplier. Pricing for fresh tilapia has held steady for the most part of 2014 at $4.10/lb. to distributors for 5/7 oz. fillets FOB Miami.

Moringa

The market for Moringa has been fragmented and is developing with methods of farming, use and proximity of biomass plants to production. The global market for moringa products was estimated at the recent 3d Global Moringa Meet International Workshop to be over $4 billion.

NEW GLOBAL ENERGY INC. EXPANSION

The Company is focused on internal growth and growth through the acquisition of high-growth firms, assets and properties in the Green market space; industry segments include sustainable agriculture, aquaculture, solar, biofuels and carbon credits. Management is targeting growth stage assets, operations and companies that possess proprietary market edge and demonstrate solid opportunity to scale its business. The Company expects to scale its business through the development of the acquisition of existing farms and through the acquisition of additional farms. The Company believes that it can lower the costs of operations in anticipated acquisition through the construction of the solar generating systems and algae based feeding programs. The Company anticipates that if it is able to improve the metrics associated with the cost of production it will be able to attain a competitive advantage over other farms in that market space.

ITEM 2. PROPERTIES:

The Company owns and operates a large aquaculture operation on two parcels of land totaling 118.9 acres in the Cochella Valley in Southern California. It includes a large working fish farm/hatchery , 90 masonry tanks, 5 wells, 12 earthen ponds, a newly constructed 221 kW-DC Photovoltaic electric generating system estimated to produce 381,267 kWh annually, a second newly constructed 176.25 kW-DC Photovoltaic System, which is estimated to produce 286,996 kWh annually, a fish processing facility, shop facilities, out buildings, generators and various additional equipment and parts inventory.

ITEM 3. LEGAL PROCEEDINGS: NONE

ITEM 4. MINE SAFETY DISCLOSURES: NONE REQUIRED

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES.

The following table sets forth the range of high and low bid information for the Common Stock of the Company as reported by the OTC Markets on a quarterly basis for each of the two preceding fiscal years. The Company's shares have traded in the over-the-counter market on the OTC market. The Company's Common Stock trades under the symbol NGEY.

Holders of our common stock are entitled to receive dividends as may be declared by the Board of Directors. Our Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No cash dividends have ever been declared and it is not anticipated that cash dividends will ever be paid. We currently intend to retain any future earnings to finance future growth. Any future determination to pay dividends will be at the discretion of our Directors and will depend on our financial condition, results of operations, capital requirements and other factors the Board of Directors considers relevant.

The bid quotations represent inter-dealer prices and do not include retail mark-ups, markdowns or commissions and may not necessarily represent actual transactions.

Common Stock

Fiscal 2014	High		Low
First Quarter	$	12.00	$	5.00
Second Quarter		12.00		5.00
Third Quarter		7.12		4.00
Fourth Quarter		5.50		3.15

Fiscal 2013	High		Low
First Quarter	$	8.50	$	6.00
Second Quarter		9.00		7.00
Third Quarter		8.00		7.00
Fourth Quarter		7.00		7.00

As of December 31, 2014, there were approximately 752 holders of record of the Company's Common Stock.

ITEM 6. NOT REQUIRED

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial statements and the notes presented herein. In addition to historical information, the following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed in this Form 10-K.

Overview and Financial Condition

New Global Energy, Inc. (“NGE” or the “Company”) is a sustainable agriculture and aquaculture company organized as a Wyoming corporation on January 24, 2012 with executive offices located in Brevard County, Florida. The Company focuses on the use of advanced technology and farming techniques with the goal of increasing production and decreasing costs. The Company is focused on internal growth and growth through the acquisition of high-growth firms, assets and properties in the Green market space; industry segments include sustainable agriculture, aquaculture, solar, biofuels and carbon credits. Management is targeting growth stage assets, operations and companies that possess proprietary market edge and demonstrate solid opportunity to scale their business. We expect to pursue special opportunities that are anticipated to accelerate shareholder value by consolidating certain tiers of the $5 Trillion per year fragmented Green and Renewable Energy industry.

The first portion of the Company’s development included the development of its Global Energy Plantation (“GEP”) using its Global Cell concept which combines alternative energy (source of usable energy intended to replace fuel sources without the undesired consequences of the replaced fuels) production, sustainable agriculture (practice of farming using principles of ecology, the study of relationships between organisms and their environment) and aquaculture (the farming of aquatic organisms such as fish, crustaceans, molluscs and aquatic plants). It uses non centralized power plants, primarily solar power and aquaculture operations to produce power for its own use and to feed into the power grid serving local power needs while producing farm grown fish and shrimp as food products.

As of May 20, 2013, the Company had completed incremental acquisitions totaling 30.74% of Aqua Farming Tech, Inc. (“AFT”) from unrelated parties. AFT is a California corporation with aquaculture and agriculture operations in the Coachella Valley in Southern California that operates a large aquaculture operation on two parcels of land totaling 118.9 acres. It includes a large working fish farm/hatchery , 90 masonry tanks, 5 wells, 12 earthen ponds, a newly constructed 221 kW-DC Photovoltaic electric generating system estimated to produce 381,267 kWh annually, a second newly constructed 176.25 kW-DC Photovoltaic System, which is estimated to produce 286,996 kWh annually, a fish processing facility, shop facilities, out buildings, generators and various additional equipment and parts inventory. By the end of 2013, the Company had completed additional incremental acquisitions from unrelated parties bringing its total ownership to 36.69%.

On July 15, 2014 the Company for and in consideration of One Million Two Hundred and Fifty Thousand Forty Three (1,250,043) shares of New Global Energy Inc. common stock, Aquaculture Joint Venture, a Nevada General Partnership, an unrelated third party, assigned a 43.66% Net Revenue Interest in and to the net revenues from the operations of Aqua Farming Tech, Inc. (“AFT”) aquaculture operations in Southern California over a period of time Cash allocable to the Net Revenue Interest is calculated and distributed on a quarterly basis within forty five (45) days after the end of each calendar quarter. Prior to this acquisition, the Company maintained a 36.6% minority interest in AFT.

The Company has determined that the acquisition of this 43.6% profits interest, considering its previously held equity interest (PHEI) the outstanding debt owed by AFT to the Company and implicit variable interest resulting from the Net Revenue Interest, that AFT was a variable interest entity, of which the company was considered the primary beneficiary. Accordingly, the Company consolidated AFT as of July 15, 2014.

On September 5, 2014, for and in consideration of One Million Five Hundred and Twenty-nine Thousand Four Hundred Twelve (1,529,412) shares of New Global Energy Inc. common stock, BioFuel Development Joint Venture, a Nevada General Partnership, and unrelated third party, assigned a Twenty-seven and Thirty-five One Hundredths percent (27.35%) Net Revenue Interest in aquaculture operations of AFT, a California corporation as defined in Farm Development Agreement between AFT and XL BioFuels, Inc. dated July 7, 2009, and a Seven and Six Tenths percent (7.6%) interest in and to a Farm and Crop Lease covering to parcels of land (6.1 and 15.92 acres) in the Coachella Valley in Southern California.

On September 9, 2014, For and in consideration of Four Million Eight Hundred and Seventy-one Thousand Seven Hundred Fifty (4,871,750) shares of New Global Energy Inc. common stock, Global Energy Technology Group, Inc,, a Nevada corporation, and unrelated third party, assigned a Ninety-one and fifty-six one hundredths percent (91.56%) interest in and to a Farm and Crop Lease covering to parcels of land (6.1 and 15.92 acres) in the Coachella Valley in Southern California.

Forward-looking statements such as this are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by a forward-looking statement. These risks and uncertainties include, without limitation: (1) the potential acquisitions or mergers may not be consummated in a timely manner, if at all; (2) any merger agreement may be terminated in circumstances that require the Company to pay a termination fee or reimburse certain expenses; (3) the diversion of management's attention from the Company's ongoing business operations; (4) the ability of the Company to retain and hire key personnel; (5) the effect of the announcement of any acquisition or Merger on the Company's business relationships, operating results and business generally; (6) competitive responses to any proposed Merger; and (7) the failure to obtain any requisite approvals to any Merger, such as stockholder approval. The Company expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Results of Operations for the Fiscal Years ended December 31, 2014 and December 31, 2013

The Company had revenues for the year ended December 31, 2014 of $31,322, compared to no revenues 2013. Selling, general and administrative expenses for the year ended December 31, 2014 were $3,494,048, up from $181,384 for the prior year. The increases were significantly associated with the consolidation of AFT in July 2014 stock based compensation of $2,417,500.

The Company recognizes interest expense and amortization of debt discounts associated with loan transactions which included conversion rights and warrants as described below (see “Financing Activities”) and the derivative liability associated therewith. The Company entered into two loan transactions totaling $200,000 in the year ended December 31, 2012 and a third loan transaction in the original principal amount of $500,000 during the year ended December 31, 2013. All three included conversion rights and warrants. These notes and their provisions resulted in an Interest expense of $190,727 for the year ended December 31, 2014 and of $139,214 for the year ended December 31, 2013, the increase being attributable to the third note added in the year ended December 31, 2013.

We charge the initial valuation of the conversion feature and warrants by offsetting the carrying value of the note up to the principal. Initial derivative values in excess of note principal are immediately charged to interest expense. Derivative valuation charged to interest expense was $6,025,137 in 2014 and $10,763,505 in 2013.

The derivative and warrant liability at December 31, 2014 was $560,110, compared to $11,886,379 at December 31, 2013. The decrease was due to the conversion of notes and warrants in 2014.

Emerging Growth Company:

We qualify as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Liquidity and Capital Resources

	Cash Flows Year Ended
	December 31, 2013			December 31, 2014

Net Cash Used by Operating Activities	$	(181,385	)	$	(584,130	)
Net Cash Used by Investing Activities	$	(229,500	)	$	(342,129	)
Net Cash Generated by Financing Activities	$	423,000		$	932,350
Cash Ending Balance	$	19,076		$	25,008

Although consolidated financials with Aqua Farming Tech, Inc. show revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

Financing Activities

In order to provide for additional operations and for the expansion of existing operations, the Company during the reported period, entered into a Loan Agreement with Bio-Global Resources, Inc., a private unrelated company in the amount of $500,000 due July 19, 2015 with interest at the rate of 6.00% per annum. As of December 31, 2013, the Company had drawn down $350,000 of the face amount of the Loan. Bio-Global Resources, Inc. is entitled to convert any amounts outstanding on the loan into the Company’s common stock at the rate of $0.25 per share. In addition, to the extent funds are drawn against this Loan Agreement, Bio-Global Resources, Inc. is entitled to 200,000 warrants to purchase common shares at a price of $3.00 per share until July 19, 2018. Subsequent to the reported period, the company drew down the balance of the loan and the lender later converted all of the balance to common shares. In addition the Lender has exercised warrants to purchase 75,000 shares. In 2013, the Company issued 400,000 shares upon the conversion of a note payable of $100,000. At the end of 2013, the net carrying value of the note was $40,911. The net carrying value equals the note balance of $350,000 at the end of 2013 minus the unamortized discount of $309,089. Subsequent to the reporting period, in 2014, the outstanding balance was converted to 2,000,000 shares of common stock.

During the Company’s fiscal quarter ending December 31, 2014 and the fiscal quarter ending March 31, 2015, the Company borrowed an additional $285,500 from Bio-Global Resources, a private unrelated company, for operating capital under three $100,000 Promissory Notes (NP#4, NP#5 and NP#6), which carried interest at the rate of 4% and were due and payable one year from the date of the notes (October 1, 2015, October 15, 2015 and December 1, 2015, respectively). These notes carried no conversion or warrant provisions.

Effective January 22, 2015, by Unanimous Consent, the Board of Directors of the Company approved the designation of 25,000 shares of the Company’s Preferred Stock as “Series A Redeemable Convertible Preferred Stock” providing for redemption, conversion and preferences a set out in the Certificate of Designation of Rights, Privileges, Preferences and Restrictions of Series A Redeemable Convertible Preferred Stock of New Global Energy, Inc. file as Exhibit 4.1 with this Form 8-K filed January 22, 2015.

In February 2015, the Company offered to settle $208,000 outstanding under Notes NP#4, NP#5 and NP#6, for 4,160 shares of the Company’s Series A Redeemable Convertible Preferred stock. The Company has designated a total of 25,000 shares of Series A Preferred Stock.

Contractual Obligations

As of 12-31-13 the Company was obligated on a single convertible promissory note with a face amount of $500,000 and interest at the rate of 6% per annum, for $350,000 drawn as of that date. In 2014 the Company drew down the remaining $150,000 of the face amount of the note and later in 2014 the entire note was converted to common stock.

In February 2015, the Company and Bio-Global Resources agreed to settle $208,000 of the outstanding notes under Notes NP#4, NP#5 and NP#6, in exchange for issuing 4,160 shares of the Company’s Series A Redeemable Convertible Preferred stock to Bio-Global Resources.

The company has acquired Net Revenue interests and crop leases (see Overview of Financial Condition above). In addition, the Company has been reviewing various real property to utilize in its business plan and has been exploring the use of project finance structures to fund such acquisition and development of business activities. The Company expects to enter into such transaction or transactions during the next 12 months. There are currently no transactions under contract and there is no assurance that the company will be able to complete such transactions.

Commitments and Capital Expenditures

The Company had no material commitments for capital expenditures as of December 31, 2014.

Off-Balance Sheet Arrangements

The Company does not have any relationships with entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet financial arrangements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

D. Brooks and Associates CPA’s, P.A.

Certified Public Accountants · Valuation Analyst · Advisors

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of New Global Energy, Inc.

We have audited the accompanying consolidated balance sheets of New Global Energy, Inc. as of December 31, 2014 and 2013, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended. New Global Energy, Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

We were not engaged to examine management’s assertion about the effectiveness of New Global Energy, Inc.’s internal control over financial reporting as of December 31, 2014 and, accordingly, we do not express an opinion thereon.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of New Global Energy, Inc. as of December 31, 2014 and 2013 and the results of its operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred operating losses, has incurred negative cash flows from operations and has a working capital deficit. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 1 to the financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

D. Brooks and Associates CPA’s, P.A

West Palm Beach, FL

June 30, 2015

D. Brooks and Associates CPA’s, P.A. 319 Clematis Street Suite 318, West Palm Beach, FL 33401 – (561) 429-6225

New Global Energy, Inc.

Consolidated Balance Sheets

	December 31, 2014		December 31, 2013
*Assets*
Current assets
Cash	$	25,008	$	19,076
Accounts receivable		3,661		0
Inventory		43,043		0
Total current assets		71,712		19,076

Property and equipment, net		5,400,251		0

Other assets:
Goodwill		16,182,601		0
Investment in unconsolidated investee		0		1,374,766
Deposits		6,238		0
Total Assets	$	21,660,802	$	1,393,842

*Liabilities and Stockholders' Equity*
Current liabilities:
Accounts payable-trade	$	170,685	$	2,000
Accrued expenses		486,052		8,907
Due to related parties		295,558		199
Current portion of long-term debt		812,108		0
Derivative liability		560,110		11,886,379
Total current liabilities		2,324,513		11,897,485

Notes payable, net of current portion and discount		182,157		40,911
Total liabilities		2,506,670		11,938,396

Stockholders' Equity:
Common stock-100,000,000 shares authorized $0.0001 par value; 13,097,365 shares issued and outstanding (2,487,876 in 2013)		1,310		249
Additional paid-in capital		34,108,982		4,358,486
Accumulated deficit		-21,972,929		-14,903,289
Total New Global stockholders' equity		12,137,363		-10,544,554
Non-controlling interest		7,016,769		0
Total stockholders' equity		19,154,132		-10,544,554

Total Liabilities and Stockholders' Equity	$	21,660,802	$	1,393,842

See Notes to Consolidated Financial Statements.

New Global Energy, Inc.

Consolidated Statements of Operations

	Year Ended December 31, 2014			Year Ended December 31, 2013

Revenue	$	31,322		$	0

Costs and Expenses:
Costs of goods sold		162,196			0
Depreciation and Amortization		41,091			0
General and administrative		3,290,761			181,384
Total Operating Costs & Expenses		3,494,048			181,384

Other (Gain) Expense:
Loss on Derivatives		6,025,137			10,763,505
Interest expense		190,727			139,214
Interest income		0			-4,060
Consolidation of equity method investee		-2,642,913
Net loss attributable to equity method investment		192,207			306,848
Total Other Expense		3,765,158			11,205,507

Net loss before income taxes		-7,227,885			-11,205,507
Provision for income taxes		0			0
Net loss		-7,227,885			-11,386,891
Net loss attributable to non-controlling interest		158,246			0
Net loss attributable to New Global	$	(7,069,639	)	$	(11,386,891	)

Basic and diluted per share amounts:
Basic and diluted net loss	$	(1.06	)	$	(5.08	)
Weighted average shares outstanding (basic & diluted)		6,693,639			2,243,690

See Notes to Consolidated Financial Statements.

New Global Energy, Inc.

Consolidated Statement of Cash Flows

	Year Ended December 31, 2014			Year Ended December 31, 2013

Cash flows from operating activities:
Net Loss	$	(7,227,885	)	$	(11,386,891	)
Adjustments required to reconcile net loss to cash used in operating activities:
Depreciation and Amortization		41,091
Net loss attributable to equity method investment		192,207			306,848
Gain on consolidation of previously held equity interest		(2,642,913	)		0
Derivative valuation charge (gain)		6,025,137			(68,933	)
Gain realized upon conversion of debt		0			(81,763	)
Amortization of debt discount		459,089			139,210
Amortization of intangible assets		0			0
Stock issued for services		2,417,500			0
Derivative based interest charge		0			10,909,438
Changes in operating assets and liabilities:
Increase in accounts receivable		(2,224	)		0
Increase in interest receivable		0			(4,060	)
Increase in accounts payable and accrued expenses		153,869			4,766
Cash used by operating activities:		(584,130	)		(181,385	)

Cash flows from investing activities:
Advances to Equity investee, net of cash acquired		(326,344	)		(229,500	)
Purchase of equipment		(15,785	)		0
Cash used in investing activities		(342,129	)		(229,500	)

Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of warrants		664,850			0
Proceeds of notes payable		137,500			0
Proceeds of convertible note advances		150,000			423,000
Cash provided by financing activities		932,350			423,000

Change in cash		5,932			12,115
Cash-beginning of year		19,076			6,961
Cash-end of year	$	25,008		$	19,076
Supplemental cash flow information Cash paid during the year for:
Interest	$	0		$	0
Income taxes	$	0		$	0
Schedule of non-cash financing activity:
Note principal converted to common stock	$	500,000		$	100,000
Debt discount recorded at issuance of convertible debt and warrants	$	150,000		$	73,000
Derivative liability reclassified upon exercise of warrants and conversion of debt	$	17,501,406		$	2,300,000

See Notes to Consolidated Financial Statements.

New Global Energy, Inc.

Consolidated Statement of Stockholders' Equity

	Shares		Amount		Additional paid-in capital		Accumulated Deficit			Non-Controlling interest in variable interest entity		Total Equity (Deficit)
Balance at December 31, 2012		1,855,700	$	186	$	565,493	$	(3,516,397	)	$	0	$	(2,950,718	)
Stock issued to acquire non-controlling interest in AFT		232,176		23		1,393,033		0			0		1,393,056
Reclassification of derivative liabilities upon conversion of convertible debt		0		0		2,300,000		0			0		2,300,000
Issuance of common stock upon conversion of convertible debt		400,000		40		99,960		0			0		664,803
Net Loss		0		0		0		-11,386,891			0		-11,386,891
Balance at December 31, 2013		2,487,876		249		4,358,486		(14,903,288	)		0		(10,544,554	)
Stock issued upon exercise of warrants		488,284		49		644,803		0			0		644,852
Issuance of common stock upon conversion of convertible debt		2,000,000		200		499,800		0			0		500,000
Reclassification of derivative liabilities upon conversion of convertible debt and exercise of warrants		0		0		17,501,406		0			0		17,501,406
Stock issued to acquire profits interest in variable interest entity		2,222,032		222		8,687,577		0			7,175,015		15,862,814
Stock issued to acquire farm lease		5,429,173		543		-543		0			0		0
Stock issued for services		470,000		47		2,417,453		0			0		2,417,500
Net Loss		0		0		0		-7,069,639			-158,246		-7,227,885
Balance at December 31, 2014		13,097,365	$	1,310	$	34,108,982	$	(21,972,927	)	$	7,016,769	$	19,154,132

See Notes to Consolidated Financial Statements.

NEW GLOBAL ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Background

New Global Energy, Inc. (“NGE” or the “Company”) was organized on January 24, 2012. NGE’s executive offices are located in Brevard County, Florida. The Company is focused on the development of its Global Energy Plantation (“GEP”) Platform which combines alternative energy production, sustainable agriculture and aquaculture. It anticipates the use of non-centralized power plants, primarily concentrated solar power, Jatropha based biofuels and aquaculture operations to produce power for its own use and to feed into the power grid serving local power needs while producing farm grown fish and shrimp as food products. Management has begun to execute this plan through the purchase of a noncontrolling equity interest and rights to majority of profits of Aqua Farming Tech, Inc. (“AFT”). The Company is in the process of raising additional equity capital to support the completion of its acquisition and development activities. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company.

Going Concern: The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had a working capital deficit of $2,252,801 at December 31, 2014 incurred net losses for the fiscal years ended December 31, 2014 and 2013, respectively, and used net cash in operating activities of $584,130 and $181,385 for the fiscal years ended December 31, 2014 and 2013. These matters, among others, raise substantial doubt about our ability to continue as a going concern.

While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Principles of Consolidation: The consolidated financial statements include the accounts of New Global and as of July 15, 2014, AFT of which the company is determined to be the primary beneficiary. All significant inter-company balances and transactions have been eliminated.

Use of Estimates: The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related intangible assets, income taxes, insurance obligations and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions. Significant estimates included in the accompanying financial statements include judgments regarding the fair value of investments; the valuation of equity based transactions and the valuation of derivative liabilities.

Cash and Cash Equivalents: For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents as of December 31, 2014 and 2013.

Inventory: The Company’s inventory consists of live fish and is stated at the lower of cost or market.

Property and Equipment: Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.

Valuation of Long-Lived Assets: We review the recoverability of our long-lived assets including land, equipment, goodwill and investments, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Goodwill: Goodwill and other intangible assets are accounted for under ASC 350, “Intangibles—Goodwill and Other.” Goodwill and intangible assets with indefinite useful lives, rather than being amortized, are tested for impairment at least annually, and also following any events and changes in circumstances that might lead to impairment.

Revenue Recognition: The Company recognizes revenue during the period in which fish are delivered to the customer.

Stock Based Compensation: Stock-based awards are accounted for using the fair value method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options and warrants. The company had no stock based compensation as of December 31, 2014 and 2013.

Accounting For Obligations And Instruments Potentially To Be Settled In The Company’s Own Stock: We account for obligations and instruments potentially to be settled in the Company’s stock in accordance with FASB ASC 815, Accounting for Derivative Financial Instruments. This issue addresses the initial balance sheet classification and measurement of contracts that are indexed to, and potentially settled in, the Company’s own stock. The Company evaluates stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of FASB ASC 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

Fair Value of Financial Instruments: FASB ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At December 31, 2014 and 2013, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

Fair Value Measurements: The Company measures fair value under a framework that utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs which prioritize the inputs used in measuring fair value are:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2: Inputs to the valuation methodology include:

	·	Quoted prices for similar assets or liabilities in active markets;
	·	Quoted prices for identical or similar assets or liabilities in inactive markets;
	·	Inputs other than quoted prices that are observable for the asset or liability;
	·	Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the fiscal periods ended December 31, 2014 and 2013, there were no transfers of financial assets or financial liabilities between the hierarchy levels.

The following table summarizes assets and liabilities remeasured at fair value on a recurring basis as of December 31, 2014 and 2013:

	December 31, 2014
Description of assets:	Level 1		Level 2		Level 3		Total
None	$	-	$	-	$	-	$	-
Description of liabilities:
Derivatives	$	-	$	-	$	560,110	$	560,110

	December 31, 2013
Description of assets:	Level 1		Level 2		Level 3		Total
None	$	-	$	-	$	-	$	-
Description of liabilities:
Derivatives	$	-	$	-	$	11,886,379	$	11,886,379

Earnings per Common Share: We compute net (loss) per share in accordance with FASB ASC 260, Earning per Share. FASB ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period.

For the years ended December 31, 2014 and 2013, the following potentially dilutive securities have been excluded from the calculation of diluted loss per share because their impact was antidilutive.

	2014		2013
Convertible Debt		-		1,400,000
Warrants		117,416		605,700
		117,416		2,005,700

Income Taxes: We have adopted FASB ASC 740, Accounting for Income Taxes. Pursuant to FASB ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. FASB ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset. Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

FASB ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.

Uncertain Tax Positions

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of FASB ASC 740-10, Accounting for Uncertain Income Tax Positions, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Our federal and state income tax returns are open for fiscal years ending on or after December 31, 2012. We are not under examination by any jurisdiction for any tax year. At December 31, 2014 we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FASB ASC 740-10.

Certain amounts included in the financial statements for the year ended December 31, 2013 have been reclassified to conform with the current year presentation with no impact on net loss of stockholders’ equity.

Recent Accounting Pronouncements

On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-16—Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods.

On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-17—Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The standard requires management to evaluate, for each reporting period, whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of the ASU to have a significant impact on our consolidated financial statements.

Note 2. Acquisition of Aqua Farming Tech, Inc. (AFT):

On July 15, 2014 the Company issued 1,250,043 shares of its common stock to Aquaculture Joint Venture, a Nevada General Partnership, an unrelated third party, for the assignment of a 43.66% Net Revenue Interest in and to the net revenues from the operations of AFT’s aquaculture operations in Southern California. Cash allocable to the Net Revenue Interest is calculated and distributed on a quarterly basis within forty five (45) days after the end of each calendar quarter. Prior to this acquisition, the Company maintained a 36.6% minority equity interest in AFT.

The Company has determined that the acquisition of this 43.6% Net Revenue Interest, considering its previously held equity interest (PHEI) The outstanding debt owed by AFT to the Company and implicit variable interest resulting from the acquisition of Net Revenue Interest resulted in the Company being the Primary Beneficiary of AFT and consolidating AFT as of July 15, 2014.

The following summarizes the estimated fair value of assets acquired as of the date of the consolidation:

Consideration:
Fair value of Previously Held Equity Interest	$	4,035,946
Fair value of Common stock issued to acquire 43.66% NRI	$	8,687,798
Total non-cash consideration	$	12,723,745
Other consideration:
Assumption of certain liabilities:
Accounts payable		138,964
Accrued expense		353,158
Due related parties		857,058
Current & long-term debt		980,557
Total consideration		14,489,982
Fair Value of Minority Interest as of July 15, 2014		7,175,015
Assets received in exchange:
Cash		6,122
Receivables		1,437
Inventory		43,042
Property & equipment		5,425,557
Deposits		6,238
Total identifiable assets		5,482,396
Goodwill	$	16,182,601

Valuation Notes:

On September 5, 2014, the Company issued 1,529,412 shares of its common stock, BioFuel Development Joint Venture, a Nevada General Partnership, and unrelated third party, for the assignment of a Twenty-seven and Thirty-five One Hundredths percent (27.35%) Net Revenue Interest in aquaculture operations of AFT as defined in Farm Development Agreement between Aqua Farming Tech, Inc. and XL BioFuels, Inc. dated July 7, 2009, and an Eight and Forty-Four One Hundredths percent (8.44%) interest in and to a Farm and Crop Lease covering to parcels of land (6.1 and 15.92 acres) in the Coachella Valley in Southern California. Since AFT was consolidated on July 15, 2014, as a result of the company’s acquisition of the net revenue interest, the acquisition of the additional interest was accounted for as an equity transaction with no impact on the total assets of the Company.

On September 9, 2014, The Company issued 4,871,750 shares of its common stock to Global Energy Technology Group, Inc., a Nevada corporation, and unrelated third party for the assignment of a Ninety-one and fifty-six one hundredths percent (91.56%) interest in and to a Farm and Crop Lease covering to parcels of land (6.1 and 15.92 acres) in the Coachella Valley in Southern California. Since AFT was consolidated on July 15, 2014, as a result of the company’s acquisition of the net revenue interest, the acquisition of the additional interest was accounted for as an equity transaction with no impact on the total assets of the Company.

The Company determined that it was the primary beneficiary of AFT based on qualitative and quantitative factors. Specifically, the Company is entitled to a majority of the profits of AFT through its minority equity ownership in AFT and pursuant to Farm Development and Crop Lease agreements between the Company and AFT. The significance of the Company's interest in the Company's future profits were considered in determining that the Company has additional implicit variable interests resulting from its rights, which are disproportionate to its equity ownership. The carrying value of the assets and liabilities of AFT included in the accompanying consolidated balance sheet as of December 31, 2014 are as follows:

Cash	13,226
Receivables		3,661
Inventory		43,042
Property & equipment		5,400,251
Total assets		5,460,180

Accounts Payable		167,457
Accrued Expenses		467,845
Notes Payable		856,765
Due to related parties		295,558
Total Liabilities		1,787,625

Net Deficit		3,672,555

Note 3. Property and Equipment

The Company’s property and equipment consisted of the following as of December 31, 2014 and 2013:

	Useful Lives	2014			2013
Land	Indefinite	$	2,128,000		$	-
Buildings and Improvements			2,295,812			-
Equipment			889,030			-
Vehicles			128,500			-
			5,441,342			-
Accumulated depreciation			(41,091	)		-
Total		$	5,400,251		$	-

Depreciation and amortization totaled $41,091 for the year ended December 31, 2014.

Note 4. Long-Term Debt:

Convertible Notes Payable

During 2012, we issued two convertible promissory notes totaling $200,000 (NP#1 and NP#2). During 2013 we issued one convertible promissory note for $500,000 (NP# 3). Each of the three notes was issued with warrants and contains both standard dilution (i.e. dividends, stock splits and mergers) and non-standard dilution (price protection) clauses. Pursuant to the terms of the notes, both the exercise price of the warrants and the conversion price of the notes will be reset (“Down Round Provision”) in the event the company issues shares, convertible securities, options or warrants entitling the recipient to subscribe for or purchase shares at a price per share less than the fixed conversion or exercise price then in effect. Accordingly, management determined that the embedded conversion feature should be treated as a derivative and the warrants should be treated as a liability (see discussion of this determination and resulting valuations and accounting for derivatives in Note 4). NP#1 in the amount of $100,000 was fully satisfied upon conversion into common stock.

NP# 2-for $100,000, was issued November 15, 2012, bears interest at 2.50% per annum until paid or converted and matured November 15, 2014. The note allows for incremental draws in order to meet future working capital demands. Any or all of the outstanding balance of the note may be converted at the option of the holder at any time into common stock of the company at an initial conversion price of $0.25 per share. The note was issued with 200,000 detachable warrants that allow the holder to purchase up to a like amount of common stock at an initial exercise prices of $1.00. The warrants carry a three year exercise period that expires November 15, 2015. During 2012, upon of issuance of $27,000 of the convertible notes, the Company bifurcated the embedded conversion feature and recorded a derivative liability of $641,902 (the estimated fair market value at the date of grant based on the Black-Scholes option pricing model) on the convertible notes, $27,000 of which was allocated as debt discount up to the original note principal, and the remainder of $614,902 was charged as interest expense at the date of issuance. During 2013, upon of issuance of an additional $73,000 of the convertible notes, the Company bifurcated the embedded conversion feature and recorded a derivative liability of $1,786,315 (the estimated fair market value at the date of grant based on the Black-Scholes option pricing model) on the convertible notes, $73,000 of which was allocated as debt discount up to the original note principal, and the remainder of $1,713,315 was charged as interest expense at the date of issuance. During 2012, at the inception of the original note facility, the Company recorded a warrant liability of $1,190,276 (the estimated fair market value at the date of grant based on the Black-Scholes option pricing model) on the associated warrants issued, which was offset to interest expense at that date.

On June 19, 2013, in accordance with the original terms of the note, at the option of the note holder, the $100,000 balance of this note was converted at $0.25 per share into 400,000 shares of common stock. At the date of conversion, the entire derivative liability associated with the bifurcated conversion feature of NP #2 was marked-to-market, resulting in an increase of $45,311, to a total derivative liability of $2,381,763 which as reclassified to paid in capital on the date of conversion. The $45,311 change was recorded as a derivative valuation charge in the Consolidated Statement of Operations.

NP# 3-for up to $500,000, was issued July 19, 2013, bears interest at 6.0% per annum until paid or converted and matures July 19, 2015. The note allows for incremental draws in order to meet future working capital demands. Any or all of the outstanding balance of the note may be converted at the option of the holder at any time into common stock of the company at an initial conversion price of $0.25 per share. The note was issued with 200,000 detachable warrants that allow the holder to purchase up to a like amount of common stock at an initial exercise prices of $3.00. The warrants carry a three year exercise period that expires July 19, 2016. At December 31, 2013 the company had drawn down $350,000 and had unused credit of $150,000. During 2013 and the upon of issuance of the convertible notes, the Company bifurcated the embedded conversion feature and recorded a derivative liability of $8,344,373 (the estimated fair market value at the date of grant based on the Black-Scholes option pricing model) on the convertible notes, $350,000 of which was allocated as debt discount up to the original note principal, and the remainder of $7,994,373 was charged as interest expense at the date of issuance. At the same time, the Company recorded a warrant liability of $1,195,072(the estimated fair market value at the date of grant based on the Black-Scholes option pricing model) on the associated warrants issued, which was offset to interest expense at that date.

During 2014 we drew down the remainder of $150,000. The Company bifurcated the embedded conversion feature and recorded a derivative liability of $4,168,076 (the estimated fair market value at the date of grant based on the Black-Scholes option pricing model) on the convertible notes, $150,000 of which was allocated as debt discount up to the original note principal, and the remainder of $4,018,076 was charged to expense at the date of issuance.

On several dates in 2014, in accordance with the original terms of the note, at the option of the note holder, the entire balance of this note was converted at $0.25 per share into 2,000,000 shares of common stock. At the date of conversions, the entire derivative liability associated with the bifurcated conversion feature of NP #3 was marked-to-market, resulting in an increase of $586,293, to a total derivative liability of $14,057,285 which was reclassified to paid in capital on the date of conversion. The $586,293 change was recorded as a derivative valuation charge in the Consolidated Statement of Operations.

A summary of the convertible notes and activity is as follows:

	NP# 1			NP# 2			NP# 3
Issuance Date	01/25/12			11/15/12			07/19/13
Maturity Date	01/25/14			11/15/14			07/19/15
Interest rate		2.95	%		2.50	%		6.00	%
Balance at December 31, 2012		-			27,000			-
Advances		-			73,000			350,000
Conversion to common stock		-			(100,000	)		-
Balance at December 31, 2013	$	0		$	0		$	350,000
Advances		-			-			150,000
Conversion to common stock		-			-			(500,000	)
Balance at December 31, 2014	$	0		$	0		$	0

Initially, all the notes were fully discounted as a result of the bifurcation of the embedded derivative. The notes are carried net of any unamortized discount. The discount is amortized to interest expense over the remaining term of the notes using the straight-line method. Such amortization resulted in $139,210 and $139,210 being charged to interest expense in 2014 and 2013, respectively.

The balance sheet date carrying value of convertible notes is as follows:

	Dec 31, 2013
Outstanding note balances at December 31	$	350,000
Less unamortized discount		(309,089	)
Carrying Value	$	40,911

The remaining carrying value at December 31, 2013 is entirely related to the principal of NP #3, net of the unamortized debt discount. The original maturity of NP #3 was in 2015 however this balance, and an incremental $150,000 issued under this note payable in 2014, was converted in full to common shares during 2014. See further discussion in Note 5.

Conventional Notes Payable

During 2014 the Company signed two unsecured promissory notes with unrelated parties for an aggregate of $200,000. The notes bear interest at 6% per annum and are due one year from the date of issuance. The notes do not contain conversion rights. As of December 31, 2014, both of these notes had been paid in full by conversion into the Company’s Preferred Stock.

At December 31, 2014 and 2013 the Company has recognized $15,528 and $6,408, respectively, in accrued interest expense related to the notes.

As of December 31, 2014 AFT had outstanding notes payable to 3^rd parties as follows:

Note payable to bank with a balance of $415,591 with interest at 6.5% Matured December 7, 2014.

Note payable for vehicle financing with a balance of $6,000, accruing interest of 10% due on demand.

Notes payable for solar installation $25,000 with interest at 10% currently due.

Note payable pursuant to 2010 settlement with a balance of $178,361 matured on July 15, 2013.

Note payable for solar system with a balance of $157,813 with interest at 2.8% due in monthly installments of $4,138 through March of 2018.

Note payable for 3^rdparty advance of $74,000, with interest at the rate of 10% currently due.

Note 5. Stockholders' Equity:

Common Stock

We are currently authorized to issue up to 100,000,000 shares of $ 0.0001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis.

Recent Issuances:

2014

Shares issued for services: During 2014 we issued 470,000 shares for services to two unrelated entities. The shares were valued at the fair value as of the date of the agreements. The fair value ranged from $5.00 to $5.15 and totaled $2,417,500.

Shares issued upon conversion of debt: During the year ended December 31, 2014 the company issued 2,000,000 shares of common stock upon the conversion of $500,000 in principal due on a convertible note.

Shares issued upon exercise of warrants: During 2014, we issued 400,000 shares upon the exercise of 400,000 warrants at $1.00 per share and received proceeds of $400,000 and we issued 88,284 shares upon the exercise of 88,284 warrants at $3.00 per shares upon which we received $264,850.

Shares issued to acquire Net Revenue Interest and Crop Leases: On July 15, 2014 the Company issued 1,250,043 shares of its common stock to Aquaculture Joint Venture, a Nevada General Partnership, an unrelated third party, for the assignment of a 43.66% Net Revenue Interest in and to the net revenues from the operations of AFT’s aquaculture operations in Southern California. See Note 2.

2013

In April 2013 we issued 232,176 shares of common stock valued at the fair value of $6.00 per share, with an aggregate value of $1,393,056 for the acquisition of approximately 35.19% of Aqua Farming Tech (AFT) common stock (see note 5).

In June 2013 we issued 400,000 shares upon the conversion of a note payable for $100,000. The common shares issued in this conversion were valued at $6.00 per share. See Note 3.

Warrants

In conjunction with the June 2012 common stock offering, a total of 5,700 Class “A” Warrants and 5,700 Class “B” Warrants were issued to the individuals who purchased common stock. The A warrants are exercisable at $5.50 per share. The B warrants are exercisable at $6.00 per share. The A warrants have an exercise term of 1 year while the B warrants have a term of 3 years within which to exercise. Either series may be redeemed by the Company at $0.10 per warrant if the average mean bid and asked prices per share have been at least $7.50 on each of the 20 consecutive trading days ending on the third day before notice.

In conjunction with issuance of two convertible notes payable in 2012, (see Note 3), a total of 400,000 detachable warrants were issued with an exercise price of $1.00 per share, all for a term of 3 years from the date of issue. In conjunction with issuance of two convertible notes payable in 2013, (see Note 3), a total of 200,000 detachable warrants were issued with an exercise price of $1.00 per share, all for a term of 3 years from the date of issue. The exercise price of these warrants is to be adjusted in the event that the Company issues or sells any shares of common stock, options, warrants or any convertible instruments (other than exempted issuances) at an effective price per share which is less than the exercise price of these warrants. Accordingly, in accordance with FASB ASC 815, the Company has accounted for these warrants as derivative liabilities (See Note 4).

The following table summarizes common stock warrants issued and outstanding:

	Shares			Weighted average exercise price		Weighted average remaining contractual term (months)		Aggregate intrinsic value*
Warrants outstanding at December 31, 2012		411,400		$	1.13		2.45	$	2,002,850
Granted		200,000		$	3.00			$	600,000
Expired		(5,700	)	$	5.50			$	2,850
Warrants outstanding at December 31, 2013		605,700		$	1.71		1.8	$	2,600,000
Exercised		(488,284	)	$	1.36
Lapsed		-			-
Warrants outstanding at December 31, 2014		117,416		$	3.15		18.0	$	212,260
Warrants exercisable at December 31, 2014		117,416		$	3.15		18.0	$	212,260

_____________

* Amount by which the fair value of the stock at the balance sheet date exceeds the exercise price

The following table summarizes the status of the Company's aggregate warrants as of December 31, 2014:

Range of exercise prices	Shares		Weighted average remaining life in months
$3.00		111,716		18.6
$6.00		5,700		5.6
Total Warrants		117,416

Note 6. Derivative and Warrant Liabilities

Embedded Conversion Feature

To properly account for the convertible notes payable discussed in Note 3, the Company performed a detailed analysis to obtain a thorough understanding of the transaction. The Company reviewed FASB ASC 815, to identify whether any equity-linked features in the notes are freestanding or embedded. The notes were then analyzed in accordance with FASB ASC ASC 815 to determine if the embedded conversion feature should be bifurcated and accounted for at fair value and remeasured at fair value in income. The Company determined that the embedded conversion features met the requirements for bifurcation pursuant to FASB ASC 815 due to the “Down Round Provision” and therefore accounted for the embedded conversion features of the notes as derivative liabilities. Changes in fair value of the derivative financial instruments are recognized in the Company’s consolidated statement of operations as a derivative valuation gain or loss.

The calculated value of the embedded conversion feature resulted in a value greater than the value of the debt and as such, the total discount was limited to the original value of the related note principal. The convertible debt is recorded net of the discount. Any excess value of the initial derivative liability over the discount amount was charged to expense at the date of the notes’ inception.

Warrants

The current and previous convertible debt was issued with an aggregate of 600,000 detachable warrants to purchase the Company’s common stock. Each warrant entitles the holder to purchase one share at prices ranging from $1.00 to $3.00 and they expire at various dates in 2016.The exercise price of these warrants and the conversion rate of the debt is to be adjusted in the event that the Company issues or sells any shares of common stock, options, warrants or any convertible instruments (other than exempted issuances) at an effective price per share which is less than the exercise price of these warrants. Accordingly, in accordance with FASB ASC 815, the Company has accounted for these warrants as liabilities.

The Company values its warrant derivatives and simple conversion option derivatives using the Black-Scholes option-pricing model. Assumptions used include:

	·	risk-free interest rate- 0.15%-.0.36%
	·	warrant life is the remaining contractual life of the warrants,
	·	expected volatility-319% to 334%,
	·	expected dividends-none
	·	exercise prices as set forth in the agreements,
	·	common stock price of the underlying share on the valuation date, and
	·	number of shares to be issued if the instrument is converted

The aggregate fair value of the warrants and the conversion feature was determined to be $560,110 and $0, respectively, at December 31, 2014. The following table summarizes the changes in the derivative liabilities for 2013 and 2014 and as of December 31 of each year:

	Totals			Warrants			Conversion Feature
Fair value at December 31, 2012		3,004,637			2,363,878			640,759
Initial fair value-incremental issuance of NP#2		1,786,315			-			1,786,315
Initial fair value-issuance of NP#3 and warrants		9,546,123			1,195,072			8,351,051
Adjustments to fair value at date of conversion-NP#2		(45,311	)		-			(45,311	)
Conversion of NP#2		(2,381,763	)		-			(2,381,763	)
Adjustments to fair value at December 31, 2013		(23,622	)		(16,945	)		(6,677	)
Fair value at December 31, 2013	$	11,886,379		$	3,542,005		$	8,344,374
Initial fair value-incremental issuance of NP#2		4,168,076			-			4,168,076
Adjustments to fair value upon exercise of warrants		(81,384	)		(81,384	)		-
Exercise of warrants		(3,097,896	)		(3,097,896	)		-
Adjustments to fair value at dates of conversion-NP#3		586,293			-			586,293
Conversion of NP#3		(14,057,285	)		-			(14,057,285	)
Adjustment to fair value at December 31, 2014		1,155,927			197,385			958,542
Fair value at December 31, 2014	$	560,110		$	560,110		$	0

Note 7. Income Taxes

The provision for income taxes for the periods ended December 31, 2014 and 2013 assumes a 34% effective tax rate for federal income taxes. The company has no state tax liability.

	December 31,
	2014		2013

Currently payable:
Federal	$	0	$	0
Taxable income-Federal	$	0	$	0

State	$	0	$	0
Taxable income-State	$	0	$	0

Total currently payable	$	0	$	0

The company has deferred tax assets at December 31, 2014 and 2013 as follows:

	Dec 31, 2014			Dec 31, 2013
Individual components giving rise to the deferred tax assets are as follows:
Future tax benefit arising from net operating loss carryovers	$	1,726,190		$	472,469
Less valuation allowance		(1,726,190	)		(472,469	)
Net deferred	$	-		$	-

The Company provided a valuation allowance equal to the deferred income tax assets for the fiscal years ended December 31, 2014 and 2013, respectively, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

At December 31, 2014, the Company had approximately $4,000,000 in Federal and State tax loss carryforwards that can be utilized in future periods to reduce taxable income, and begin to expire in 2032. Pursuant to Internal Revenue Code Section 382, the future utilization of our net operating loss carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future.

In the normal course of business, the Company’s income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessment by these taxing authorities. Accordingly, the Company believes that it is more likely than not that it will realize the benefits of tax positions it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with FASB ASC 740-10-15.

Note 8. Related Party Transactions

As of December 31, 2014, AFT owed certain stockholders $293,558 and such amounts are noninterest bearing and due on demand.

During the years ended December 31, 2014 and 2013, the Company paid professional fees totaling $243,000 and $106,200, respectively to an entity owned by its chair and chief executive officer.

Note 9. Subsequent Events:

On May 11, 2015, the Company’s Board of Directors approved the acquisition of certain technologies through three agreements including an exclusive license to VIP Patient Management Software System (Electronic Medical Records (EMR) and Electronic Health Records (EHR) Platforms) an exclusive license to Canacard Patient Management Systems Software, a HIPAA compliant platform that manages end-to-end transactions involved in providing safe access to controlled substances. The exclusive license from ALTERNATE HEALTH, INC., and is for a period of 20 years for the United States and Puerto Rico. This software is included under the International Patent Application PCT/CA2014/050890. The Company agreed to issue 1,500,000 commons shares for these licenses as well as warrants to purchase an additional 1,100,000 at a price equal to 50% of the market price on the day of issue. There is additional consideration of $1,500,000 due when as and if funding of operations under these licenses is closed.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None

ITEM 9A. INTERNAL CONTROLS AND PROCEDURES.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by our Company is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Perry West, our Chief Executive Officer and our Principal Accounting Officer, is responsible for establishing and maintaining disclosure controls and procedures for our Company.

Our management has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2014 (under the supervision and with the participation of the Chief Executive Officer and the Principal Accounting Officer), pursuant to Rule13a-15(b) promulgated under the Exchange Act. As part of such evaluation, management considered the matters discussed below relating to internal control over financial reporting. Based on this evaluation, our Company's Chief Executive Officer and Principal Accounting Officer have concluded that our Company's disclosure controls and procedures were not effective as of December 31, 2014 due to the lack of sufficient personnel to assure segregation of duties and lack of a GAAP accounting professional on staff. Management with the assistance of its Securities Counsel will closely monitor all future filings to ensure completeness of all Company filings.

The term "internal control over financial reporting" is defined as a process designed by, or under the supervision of the registrant's principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant's assets that could have a material effect on the financial statements.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of the Chief Executive Officer, evaluated the effectiveness of the Company's internal control over financial reporting as of December 31, 2014. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control -- Integrated Framework. Based on this evaluation, our Company's Chief Executive Officer and Principal Accounting Officer have concluded that our Company's disclosure controls and procedures were not effective as of December 31, 2014 due to the following: Company's disclosure controls and procedures were not effective as of December 31, 2014 due to the lack of sufficient personnel to assure segregation of duties and the lack of a GAAP accounting professional on staff. As a result, we did not adequately test whether our financial activity level controls or our information technology general controls were operating sufficiently to identify a deficiency, or combination of deficiencies, that may result in a reasonable possibility that a material misstatement of the financial statements would not be prevented or detected on a timely basis. In addition, we did not properly evaluate the accounting and valuation for certain convertible debt and the equity linked instruments embedded within convertible debt. Furthermore, we did not properly evaluate the requirement to provide summary financial data of our significant equity method investee. While Management has reviewed the financial statements and underlying information included in this Annual Report on Form 10-K in detail and believes the procedures performed are adequate to fairly present our financial position, results of operations and cash flows for the periods presented in all material respects, the deficiency in accounting personnel that existed in fiscal 2014 could have led to an error in the original accounting of the estimated fair market value of certain equity instruments.

Remediation of Material Weaknesses.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5), or combination of control deficiencies, that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. While management believes that the Company’s financial statements previously filed in the Company’s SEC reports have been properly recorded and disclosed in accordance with US GAAP, we have designed and plan to implement, or in some cases have already implemented, the specific remediation initiatives described below:

	·	We plan to obtain and hire additional accounting personnel, and continue to enhance our internal finance and accounting organizational structure.

	·	We may hire a third party consultant who has the required background and experience in accounting principles generally accepted in the United States of America and with SEC rules and regulations.

	·	We are in the process of further enhancing the supervisory procedures to include additional levels of analysis and quality control reviews within the accounting and financial reporting functions.

	·	We are in the process of strengthening our internal policies and enhancing our processes for ensuring consistent treatment and recording of reserve estimates and that validation of our conclusions regarding significant accounting policies and their application to our business transactions are carried out by personnel with an appropriate level of accounting knowledge, experience and training.

While we have not yet remediated these material weaknesses, we will continue our remediation efforts during fiscal 2016.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to such attestation pursuant to rules of the Securities and Exchange Commission that permits us to provide only management’s report in this Annual Report.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

The Company's management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The directors and executive officers of the Company for the reported period are as follows:

Name	Age	Position

Perry D. West	68	Director, Chairman of the Board and CEO/President

Perry D. West, President, CEO, Vice President, Secretary and Chairman of the Board of Directors

Mr. West has been an officer and director of the Company since its inception. During the last five years, he has been engaged in the practice of law as well as being a Director of VoiceLift, Inc., a business VoIP telephone company. Formerly, he was Chairman and Chief Executive Officer of Interactive Technologies Corporation; a NASDAQ listed Technology Company developing interactive digital media and interactive television. Earlier, he served as Vice Chairman and Executive Vice President/General Counsel of American Financial Network, another NASDAQ company. Mr. West was previously Chairman of the Board and Chief Executive Officer of Cambridge Energy Corporation, a public oil and gas Exploration and Production company; he was a former partner in the consulting firm of Cambridge Equity, Inc. an international business consulting firm. Mr. West has been director and officer of a number of small private companies including Nanogen Power Systems, LLC, a concentrated solar power company, Homeport, LLC, a financial products developer; GETG, Inc., an alternative energy company, TriMark Explorations, Ltd. a mining company and Highlight Networks, Inc. a small public company engaged in wireless network development. Mr. West was admitted to the practice of law in Florida in 1974. He was graduated with a Bachelor of Arts degree from The Florida State University in 1968 and with a Juris Doctorate degree from The Florida State University College of Law in 1974. He was graduated from the Army Engineer Officer Candidate School and served as an officer with the United States Army Security Agency. Mr. West was selected as an officer and Director of the Company based upon his considerable experience with growth and development of early stage companies, both public and private including general management and technology development and growth.

Section 16(a) Beneficial Ownership Reporting Compliance. A review of forms submitted to the registrant with respect to the most recent fiscal year indicates that there are no persons who failed to file a form or forms required by Section 16(a) of the Securities Exchange Act.

Code of Ethics. The Company had not adopted a Code of Ethics applicable to its principal executive, financial, and accounting officers and persons performing similar functions as of December 31, 2013. Subsequently, on January 20, 2014, the Company adopted a Code of Ethics and the Board of Directors was given authority and discretion to implement the Code of Ethics.

Compensation Committee. The Company does not have a compensation committee. The company’s Directors serve as its audit committee.

There was no director compensation paid during the fiscal year.

Lack of Independent Directors. The Company’s Directors are not independent Directors as that term is defined in section 803 of the listing standards of the NYSE AMEX. No Director is a “financial expert” as that term is defined in the regulations of the Securities and Exchange Commission.

Note 11. Certain Relationships and Related Transactions

During the years ended December 31, 2014 and 2013, the Company paid related parties for the following expenses:

	Consulting Fees
	Years Ending
Related Party	December 31, 2014		December 31, 2013

Perry Douglas West Chartered	$	243,000	$	106,200

Perry Douglas West Chartered is wholly owned by Perry D. West, who serves as President, CEO and Chairman of the Company.

ITEM 11. EXECUTIVE COMPENSATION.

The following table sets forth, for the fiscal years indicated, all compensation awarded to, earned by or paid to the chief executive officer of the Company, December 31, 2014 and 2013:

Summary Compensation Table

Annual Compensation

Payouts

Name and Principal Position

Fiscal

Year

Salary

Bonus

Other Annual Compensation

Underlying
Options

All Other Compensation

Perry D. West, President/CEO

2014*

______________

*Mr. West received separate attorneys fees for legal and consulting work performed for the Company during the year.

Options/Stock Appreciation Rights:

There were no stock options and stock appreciation rights ("SARs") granted to executive officers during the fiscal year ended December 31, 2014 (since inception).

Note: No bonus has been paid or distributed in this reporting period or fiscal 2014.

Director Compensation

The Company does not have any standard arrangements pursuant to which directors of the Company are compensated for services provided as a director. All directors are entitled to reimbursement for expenses reasonably incurred in attending Board of Directors' meetings. There have been no distributions of Stock to the Board Members as of the end of December 31, 2014 (since inception)

Compensation Agreements, Termination of Employment and Change-in-Control Arrangements:

Compensation Committee Interlocks and Insider Participation. The Company’s Directors act as its compensation committee. During the year ended December 31, 2014, none of the Company’s officers was a Director of another entity, which other entity had one of its executive officers serving as one of the Company’s Directors.

Compensation of Directors During Year Ended December 31, 2014. The Company does not compensate its Directors for acting as such.

Long-Term Incentive Plans. The Company does not provide its officers or employees with pension, stock appreciation rights, long-term incentive or other plans.

Employee Pension, Profit Sharing or other Retirement Plans. The Company does not have a defined benefit, pension, nor profit sharing plan, nor does it offer a 401(k) plan.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER MATTERS.

The following table sets forth information concerning ownership of common stock, as of December 31, 2014, by each person known by the Company to be the beneficial owner of more than 5% of the common stock, each director and executive officer, and by all directors and executive officers of the Company as a group.

Name of beneficial owner	Status	Shares Beneficially Owned		Percentage of Class

Perry D. West	Director, President and CEO		1,000,000		7.39	%
BioGlobal Resources, Inc.	Related Person		1,061,630		7.85	%

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

Directors

Perry D. West		Director, Chairman, President and CEO

Bio-Global Resources, Inc.		Related person

Perry D. West. At inception Mr. West purchased 1,000,000 shares of the company’s common stock for $1,000.00

Bio-Global Resources, Inc., a third party unrelated company converted $100,000 of a convertible promissory note to 100,000 common shares of the company at a conversion price of $1.00 per share. It later entered into a second loan transaction of $100,000. In order to provide for additional operations and for the expansion of existing operations, the Company during the reported period, entered into a Loan Agreement with Bio-Global Resources, Inc., a private unrelated company in the amount of $500,000 due July 19, 2015 with interest at the rate of 6.00% per annum. There were additional notes funded by Bio-Global Resources, Inc. to New Global Energy, Inc. All of these notes have been paid.

(see Financing Activities in Management’s Discussion and Analysis)

ITEM 14. PRINCIPAL ACCOUNTANT FEEES AND SERVICES

(1) Audit Fees: The Company’s current principal accountant has billed for Audit services $45,000 for the Years ended 2014 and 2013.

(2) Audit Related Fees:

None

(3) Tax Fees:

None

(4) All Other Fees:

None

PART IV - OTHER INFORMATION

ITEM 15. Exhibits, Financial Statement Schedules.

a) Exhibits

3.1		Articles of Incorporation. (Incorporated by reference-S-1 Registration)
3.2		By Laws (Incorporated by reference-S-1 Registration)
4.1		Class A Warrant Certificate (Incorporated by reference-S-1 Registration)
4.1		Class B Warrant Certificate (Incorporated by reference-S-1 Registration)
5.1		Opinion of Legality (Incorporated by reference-S-1 Registration)
10.1		Convertible Promissory Note with Warrants (Incorporated by reference-S-1 Registration)
10.2		Legal Services Agreement (Incorporated by reference-S-1 Registration)
10.3		Intellectual Property Agreement (Incorporated by Reference from 8-K 5/12/15
10.4		License Agreement (Incorporate by Reference from 8-K 5/12/15
10.5		Serices Agreement (Incorporated by Reference from 8-K 5/12/15
23		Consents of Experts and Counsel
23.1.2		Hartley Moore Accountancy Corporation
31.1		Section 302 Certification By Chief Executive Officer and Principal Financial Officer
32.1		Section 906 Certification of Principal Executive Officer and Principal Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NEW GLOBAL ENERGY, INC.

Dated: July 1, 2015	By:	/s/ Perry D. West
		Perry D. West
		CEO and Director

New Global Energy, Inc. - FORM 10-K - July 1, 2015

Attached files

New Global Energy, Inc. Reports