AHRO 10-Q Quarterly Report Sept. 30, 2016 | Alphaminr
Authentic Holdings, Inc.
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AHRO 10-Q Quarter ended Sept. 30, 2016

Balance Sheet
Cash Flow
Income Statement
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10-Q 1 gft10q033116.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
-----------------
(Mark One)

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

For the quarterly period ended March 31, 2016

or

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

Commission File Number:  000-52047

Global Fashion Technologies, Inc.
(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction of incorporation or organization)
11-3746201
(I.R.S. Employer Identification No.)
2001 Route 46, Suite 310
Parsippany, New Jersey
(Address of principal executive offices)
07054
(Zip Code)
(973)291-8900
(Registrant's telephone number, including area code)

1

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

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 (§232.405 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☒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. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer☐
Accelerated filer☐
Non-accelerated filer☐
(Do not check if a smaller reporting company)
Smaller reporting company☒
SEC 1296 (01-12) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 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

2
APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of March 31, 2016, there were 19,149,161 shares of the Issuer's common stock issued and outstanding.
3
PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.
Global Fashion Technologies, Inc. and Subsidiaries
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)
Consolidated Balance Sheets
March 31,
December 31,
2016
2015*
(Unaudited)
ASSETS
Current assets:
Cash
$
2,720
$
32,989
Subscription receivable
10,000
10,000
Total current assets
12,720
42,989
Property and equipment, net
2,252
2,252
Total assets
$
14,972
$
45,241
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable
$
76,108
$
51,108
Accrued compensation 144,000 108,000
Secured note and accrued interest payable
12,500
110,000
Convertible notes and accrued interest,
53,312
52,312
Advances from related party
104,575
115,633
Current liabilities from discontinued operations
870,045
870,045
Total current liabilities
1,260,540
1,307,098
Commitments and contingencies
Stockholders' deficit
Preferred stock $0.001 par value, 1,000,000
shares authorized, 200,000 shares issued and
outstanding
200
200
Common stock  $0.001 par value, 400,000,000
shares authorized, 19,149,161 and 17,537,660
shares issued and outstanding, 316,166 and 1,377,667 shares
issuable as of March 31, 2016 and December 31, 2015, respectively
19,465
18,915
Additional paid-in capital
28,094,528
27,630,906
Stock subscriptions received
-
Accumulated deficit
(29,359,761
)
(28,911,878
)
Total Global Fashion Technologies, Inc.
stockholders' deficit
(1,245,568
)
(1,261,857
)
Non-controlling interest
-
-
Total stockholders' deficit
(1,245,568
)
(1,261,857
)
Total liabilities and stockholders' deficit
$
14,972
$
45,241
*Derived from audited financial statements
The accompanying notes are an integral part of these financial statements
4
Global Fashion Technologies, Inc. and Subsidiaries
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)
Consolidated Statements of Operations
(Unaudited)
For The Three Months Ended
March 31,
2016
2015
Revenues
$
-
$
4,000
Operating expenses:
General and administrative
80,211
19,461
Consulting fees share and option expense
314,172
-
Stock based compensation
50,000
-
Debt extinguishment costs - related party
-
8,465,034
Total operating expenses
444,383
8,484,495
Loss from operations
(444,383
)
(8,480,495
)
Other expense
Interest expense and financing costs
3,500
6,676
Total other expense
3,500
6,676
Loss from continuing operations
before provision for income taxes
(447,883
)
(8,487,171
)
Provision for income taxes
-
-
Net loss
$
(447,883
)
$
(8,487,171
)
Net loss per share
$
(0.03
)
$
(2.21
)
Weighted average common shares outstanding
17,635,056
3,846,575
The accompanying notes are an integral part of these financial statements
5
Global Fashion Technologies, Inc. and Subsidiaries
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)
Consolidated Statements of Cash Flows
(Unaudited)
For The Three Months
Ended March 31,
2016
2015
Cash flows from operating activities:
Net loss
$
(447,883
)
$
(8,487,171
)
Adjustments to reconcile net loss to net cash
used in operating activities:
Debt extinguishment cost - related party
-
8,465,034
Failed acquisition costs paid in stock
-
20,683
Stock based compensation expense
50,000
-
Stock and option expense for services
314,172
-
Changes in assets and liabilities:
Accounts receivable - related party
-
(575
)
Accounts payable
25,000
(65,628
)
Accrued expenses
39,500
6,676
Net cash used in operating activities
(19,211
)
(60,981
)
Cash flows used in investing activities:
Additions to property and equipment
-
(2,650
)
Total cash flows used in investing activities
-
(2,650
)
Cash flows from financing activities:
Repayment of related party advance
(11,058
)
(26,564
)
Proceeds from the sale of common stock
-
92,500
Total cash flows provided by (used in) financing activities
(11,058
)
65,936
Net increase (decrease) in cash
(30,269
)
2,305
Cash at beginning of period
32,989
755
Cash at end of period
$
2,720
$
3,060
Supplemental disclosure of cash flow information:
Cash paid during the periods for:
Interest
$
-
$
-
Income taxes
$
-
$
-
Non-cash financing sources:
Common stock issued for reduction of debt
$
-
$
931,306
The accompanying notes are an integral part of these financial statements
6
GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016

NOTE 1 – DESCRIPTION OF BUSINESS
Global Fashion Technologies, Inc. ("the Company") was incorporated in Nevada on March 25, 2005.  As of March 31, 2016 and December 31, 2015, the Company had 400,000,000 shares of authorized common stock.

On August 4, 2014, the Board of Directors of the Company and the majority shareholders of the Company approved a reverse stock split of the outstanding shares of the Company's Common Stock, par value $0.001 per share (the "Common Stock"), at a ratio of 1-for-350 (the "Reverse Stock Split") effective at 5:00 p.m. EDT on August 15, 2014.  The Amendment was filed with the Secretary of State of Nevada on August 6, 2014, and took effect on August 15, 2014 at 5:00 p.m. EDT.  As a result of the reverse stock split, every 350 shares of the Company's old authorized common stock was converted into one share of the Company's new authorized common stock.  All references to common stock shares have been adjusted to reflect the results of the reverse stock split.

Global Fashion Technologies, Inc. during the fourth quarter, 2013 became involved in the manufacturing and global distribution of ladies apparel.  Trident Merchant Group, Inc. is a wholly owned subsidiary which provided "value added" strategic advisory services. During the second quarter, 2014 the Company formed Leading Edge Fashions, LLC of which it controls 51%.  The non-controlling interest is recorded in the stockholders' deficit section. Effective December 31, 2014 the Company's Board of Directors determined it was in the best interest of the Company to discontinue the operations of Leading Edge Fashions, LLC.

The Company created a new limited liability company, Pure361, LLC ("Pure361") in May 2015 for the purpose of operating the portion of the Company's business that is involved with the collection, rejuvenation and manufacturing of garments and other accessories for the uniform marketplace that serves the hospitality, food service, medical, manufacturing, education, military, transportation and other commercial uniform industries.  The Company owns 51% of Pure361.  Pure361 entered into a license agreement with Pure System International Ltd. ("Pure") the minority owner of Pure 361, related to potential future operations, in which Pure361 was granted the exclusive license to use certain licensed intellectual property related to the manufacturing of uniforms from recyclable waste.

The Company created a new wholly owned subsidiary, Progressive Fashions Inc. ("PFI") in February 2016 for the purpose of designing, producing and marketing the EMME® Activewear Collection.  The Company has had no operations to date.

Basis of Presentation: Unaudited Interim Financial Information
The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period.


7
GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016

NOTE 1 – DESCRIPTION OF BUSINESS (Continued)

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto included in the Company's Report on Form 10-K filed on November 21, 2016 for the years ended December 31, 2015 and 2014.

Going Concern

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of $29,359,761 and $28,911,878 as of March 31, 2016 and December 31, 2015, respectively, that include losses of $447,883 and $19,132,725 for the three months ended March 31, 2016 and year ended December 31, 2015, respectively. Consequently, the aforementioned items raise substantial doubt about the Company's ability to continue as a going concern.

The Company's ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, acquire an operating business and raise capital through equity and debt financing or other means on desirable terms. Subsequent to March 31, 2016, the Company issued 600,000 shares of common stock in settlement of $785,764 of liabilities from discontinued operations. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary Trident Merchant Group, Inc., Leading Edge Fashion, LLC which is 51% owned, and Pure361, LLC which is 51% owned.  All significant intercompany accounts and transactions have been eliminated.
Reclassifications
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net (loss).

Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and investments in money market funds. The Company considers all highly-liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents.
8
GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Equipment
Property and equipment are stated at cost. Costs of replacements and major improvements are capitalized, and maintenance and repairs are charged to operations as incurred. Depreciation expense is provided primarily by the straight-line method over the estimated useful lives of the assets, seven years.

Revenue Recognition
Revenue for the women's fashion division is recognized at the point-of-sale for retail store sales, net of estimated customer returns. Revenue is recognized at the completion of a job or service for the consulting division. Revenue is presented on a net basis and does not include any tax assessed by a governmental or municipal authority. Payment for merchandise at stores and through the Company's direct-to-consumer channel is tendered by cash, check, credit card, debit card or gift card. Therefore, the Company's need to collect outstanding accounts receivable for its retail and direct-to-consumer channel is negligible and mainly results from returned checks or unauthorized credit card transactions. The Company maintains an allowance for doubtful accounts for its consulting service accounts receivable, which management reviews on a regular basis and believes is sufficient to cover potential credit losses and billing adjustments. Deposits for consulting services are recognized as a sale upon completion of service.
The Company accounts for a gift card transaction by recording a liability at the time the gift card is issued to the customer in exchange for consideration from the customer. A liability is established and remains on the Company's books until the card is redeemed by the customer, at which time the Company records the redemption of the card for merchandise as a sale or when it is determined the likelihood of redemption is remote, based on historical redemption patterns. Revenues attributable to gift card liabilities relieved after the likelihood of redemption becomes remote are included in sales and are not material.

Income Taxes
The Company accounts for income taxes pursuant to Accounting Standards Codification ("ASC") 740, Income Taxes, which utilizes the asset and liability method of computing deferred income taxes. The objective of this method is to establish deferred tax assets and liabilities for any temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled.

ASC 740 also provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a "more-likely-than-not" recognition threshold at the effective date to be recognized. During the three months ended March 31, 2016 and 2015 the Company recognized no adjustments for uncertain tax positions.
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. No interest and penalties related to uncertain tax positions were recognized at March 31, 2016 and 2015. The Company expects no material changes to unrecognized tax positions within the next twelve months.

9
GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company has not filed federal and state tax returns from inception through December 31, 2015. The tax periods since inception are open to examination by federal and state authorities.
Impairment or Disposal of Long-Lived Assets
ASC Topic 360 (formerly FASB issued Statement No. 144), "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS 144") clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business.  Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable.  When necessary, impaired assets are written down to their estimated fair value based on the best information available.
Use of Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Fair Value

FASB ASC 820, Fair Value Measurements and Disclosure s ("ASC 820") establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

Level 1 — Quoted market prices for identical assets or liabilities in active markets or observable inputs;
Level 2 — Significant other observable inputs that can be corroborated by observable market data; and
Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data.

The carrying amounts of cash, accounts receivable, accrued compensation, accounts payable and other liabilities, accrued interest payable, and short-term portion of notes payable approximate fair value because of the short-term nature of these items.

Earnings (Loss) per Share
In accordance with SFAS No. 128, "Earnings Per Share," the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding.  Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
10
GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016

NOTE 3 – NOTES PAYABLE
Secured Note Payable

On November 25, 2014, the Company issued a secured promissory note to an individual in the amount of $100,000 at 10% interest and due on April 1, 2015.  On April 1, 2016 the Company entered into a forbearance agreement.  The Company was granted an extension of the note through September 30, 2016 in consideration of 200,000 shares of common stock valued at $100,000, with interest accruing after March 29, 2016 at 12%.  The note is unpaid and in default after September 30, 2016.  The carrying value of this note, net of the $100,000 extension fee as of March 31, 2016 is $0, plus the accrued interest of $12,500.  The note and accrued interest was $110,000 as of December 31, 2015.  The extension fee is being amortized ratably over the extension period of 180 days.

Unsecured Notes Payable
Convertible Notes Payable
In August 2015, The Company issued an unsecured promissory note to an investor in the amount of $50,000, convertible to common stock at $1.00 per share.  The note bears an interest rate of 8% per annum and matures on August 8, 2016.  The note is currently unpaid and in default.  The note was also issued with a warrant for this investor to purchase 25,000 shares of common stock at $1.50 for a period of 2 years. The balance of this note plus accrued interest totals $53,312 and $52,312 at March 31, 2016 and December 31, 2015, respectively.

NOTE 4 – CAPITAL STOCK
Preferred Stock
The Company has designated a "Class B Convertible Preferred Stock" (the "Class B Preferred".  The number of authorized shares totals 1,000,000 and the par value is $.001 per share.  The Class B Preferred shareholders vote together with the common stock as a single class.  The holders of Class B Preferred are entitled to receive all notices relating to voting as are required to be given to the holders of the Common Stock.  The holders of shares of Class B Preferred shall be entitled to 10,000 votes per share.  The Class B
Preferred Stock will have the rights to liquidation as all classes of the Common Stock of the Company.  The Class B Preferred stock holders are entitled to receive non-cumulative dividends at the rate of 8% per annum, in preference and priority to any payment of any dividend on the common stock.  The Class B Preferred Stock shall be redeemed by the Corporation for 100% of the original purchase price plus the amount of cash dividends accrued on the earlier of 6 months from the date of issuance, or the date that the Corporation received its funding from any outside source in conjunction with a merger, reverse merger or any change of control.  In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Class B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any assets of the Corporation to the holders of the Common Stock, the amount of $.035 per share plus any and all accrued but unpaid dividends.
11
GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016
NOTE 4 – CAPITAL STOCK (Continued)
During the fourth quarter of 2011, a total of 200,000 shares of the Series B Preferred Stock was issued to a related party for $7,500 of legal and accounting fees that the related party paid on behalf of the Company.

Common Stock

In April 2015, the Company issued 2.2 million shares of common stock and deemed 300,000 shares of common stock issuable in consideration for the settlement of $340,000 of outstanding payroll owed to two officers of the Company. The shares were valued at $1.25 per share, totaling $3,125,000. This issuance resulted in debt extinguishment costs of $2,785,000.  In the three months ended March 31, 2016, the Company issued 177,500 shares of its common stock, reducing the shares issuable to the president of the Company from 300,000 shares to 122,500 shares.

In February 2016, the Company issued 50,000 shares of its common stock at a value of $1.00 per share for $50,000 to a board director for payment of services.

In March 2016, the Company issued 250,000 shares of its common stock at a value of $1.00 per share for $250,000 in payment for consulting services.  In addition, the Company granted a warrant to the consultant to purchase 250,000 shares of common stock at $0.50 per share for a period of two years.  The fair value of these warrants at the time they were granted was approximately $170,000 and was calculated using the Black-Scholes-Merton model.   The expense related to this stock option for the three months ended March 31, 2016 was $14,172.

In March 2016, the Company issued 50,000 shares of its common stock at a value of $1.00 per share for $50,000 as payment for consulting services.

In the three month period ended March 31, 2016, the Company issued 200,000 shares of its common stock at a value of $.50 per share, the original principle of a note in the amount of $100,000, in conjunction with the extension of the terms of the note.  The $100,000 is being amortized to interest expense over the six month extension period.

In March 2016, the Company issued 884,001 shares of its common stock at approximately $0.25 per share amounting to $223,232 to five individuals for monies received in 2015 from subscription agreements that were entered into with the Company in 2015.  106,001 shares remain issuable related to these subscription agreements as of March 31, 2016.

NOTE 5 – INCOME TAXES
The Company uses the liability method, whereby deferred taxes and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.  On March 31, 2016 and December 31, 2015, the Company has no tax liability. The net deferred tax asset generated by the loss carryforward has been fully reserved.  The cumulative net operating loss carry-forward is approximately $13,000,000 at December 31, 2015, and will expire in the years 2026 through 2035.
12
GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016

NOTE 6 – COMMITMENTS AND CONTINGENCIES

On March 15, 2015 the Company entered into a trademark license agreement with True Beauty, LLC which controls the trademark EMME.  EMME is a market pioneer and trusted voice of the "Full-Figured" market. Under this licensing agreement the Company will design, produce and market the EMME® Activewear Collection.  On April 13, 2016, the agreement was amended regarding the term and minimum royalties.

The additional minimum royalties are as follows:

Year
2016
$
100,000
2017
150,000
2018
250,000
2019
250,000
Total
$
750,000

The license agreement is renewable for five consecutive one year terms commencing on January 1, 2020 if the Company reaches seventy percent of its projected sales by September 30 of the previous year.

As of January 18, 2016, the Company is a party to one pending litigation matter entitled Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to evict Avani Holdings LLC from its rented premises in California and to recover unpaid rent. The Company does not operate out of that premises and has never signed any leases or other documents with the plaintiff. Consequently, management believes there to be no legitimate cause of action against the Company. However, the Company is attempting to resolve the matter due to the relatively small amount in controversy. The unpaid rent being sought by the plaintiff is $26,595.

As of January 18, 2016, the Company has been named as a defendant in the matter of Patrick Kalashyan v. Avani Holdings, LLC & Global Fashion Technologies, Inc.  This litigation was initiated by the plaintiff to recover monies owed on a September 23, 2011 settlement agreement signed between the Plaintiff and Avani Holdings, LLC.  The Company is not party to this agreement and never completed purchase of Avani Holdings, LLC.  Consequently, management believes there is no legitimate cause of action against the Company.  The Company is vigorously defending its position in the lawsuit.  The amount being sought by the plaintiff is $150,000 plus interest.

NOTE 7 – DISCONTINUED OPERATIONS

During 2014, the Company's Leading Edge Fashions, LLC retail businesses, of which it owned 51%, was classified as discontinued operations.  Based on the Company's strategy to allocate resources to its businesses relative to their growth potential and those with the greater right to win in the marketplace, the Company determined that this business did not align with the Company's long-term growth plans.

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GLOBAL FASHION TECHNOLOGIES, INC. AND SUBSIDIARIES
(f/k/a Premiere Opportunities Group, Inc. and Subsidiaries)

Notes To Consolidated Financial Statements
March 31, 2016

NOTE 7 – DISCONTINUED OPERATIONS (Continued)

As of March 31, 2016 and December 31, 2015, $870,045 of current liabilities from discontinued operations includes $785,764 loan payable and $84,281 accounts payable.  The loan payable was converted to common stock in July 2016.

NOTE 8 – RELATED PARTY TRANSACTIONS

The Company owed the president of the Company advances totaling $104,575 and $115,633 at March 31, 2016 and December 31, 2015, respectively.

NOTE 9 - NET LOSS PER SHARE
Potentially dilutive securities are excluded from the calculation of net loss per share when their effect would be anti-dilutive. For all periods presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective periods. Accordingly, basic shares equal diluted shares for all periods presented.  As of March 31, 2016, the Company had 250,000 options and 25,000 warrants outstanding.

NOTE 10 - SUBSEQUENT EVENTS
In April 2016, the Company issued an additional 15,000 shares of its common stock to the president of the Company reducing the outstanding shares issuable to the president from 122,500 to 107,500.

In April 2016, the Company issued 5,000 shares of common stock valued at $0.55 per share for $2,750 of consulting services.

In April 2016, the Company received a subscription receivable for 40,000 shares of common stock.

In July through September 2016, the Company received $200,000 from its chief operating officer as a loan.  The Company also received $65,000 in September 2016 from the president of the Company as an advance.

As of December 31, 2014, the Company owed $785,764 to trade creditors of Leading Edge Fashion LLC, a discontinued operation which was controlled by the Company.  The Company paid the outstanding obligations on July 1, 2016 by agreeing to issue as full consideration for the amount owed the trade creditors.  The 600,000 shares of common stock were issuable as of September 30, 2016.

Management has evaluated the impact of events occurring after March 31, 2016 up to the date of the filing of these interim unaudited condensed consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation.


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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion is intended to assist you in understanding our business and the results of our operations.  It should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this report as well as our Report on Form 10K filed with the Securities and Exchange Commission for the period ending December 31, 2015.  Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements".  These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof.  We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.  Any forward-looking statements represent management's best judgment as to what may occur in the future.  However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected.  We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Company Overview

Global Fashion Technologies Inc. ("GFTI", 'We" or the "Company") is a development stage rejuvenation technology company which will be offering branded fabrics, apparel and uniforms to the corporate, hotel, hospital and military markets.  We will achieve this by utilizing a patented and proprietary process for rejuvenating textile waste into high quality fabrics and apparel.  In addition, we will also be offering branded apparel into both online and brick and mortar environments.  This will initially be through a license we signed with EMME®, a former Ford Supermodel, for the purposes of marketing and manufacturing the EMME® brand of Activewear to the vastly under-served curvy/plus size market.

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The Women's Apparel Segment

On March 15, 2015 the Company entered into a trademark license agreement with True Beauty, LLC which controls the trademark EMME® .  EMME® is a market pioneer and trusted voice of the "Full-Figured" market. Under this licensing agreement the Company will design, produce and market the EMME® Activewear Collection.  The Company created a new wholly-owned subsidiary, Progressive Fashions Inc. in February 2016 for the purpose of desgining, producing and marketing the EMME® Activewear Collection.

As of November 1, 2016, the Company has completed the design of the Spring 2017 line and has received quotes from contract manufacturers.  Samples for fitting have been requested from the selected vendors.  The Fall 2017 line concept has been created and is now ready to enter into design phase.

The Rejuvenated Uniform Segment

In April 2015, we entered into a joint venture and license agreement with Pure Systems International, Ltd. to produce and market garments and other accessories for the commercial uniform marketplace and other market verticals by utilizing Pure Systems International, Ltd.'s patented processes to up-cycle pre-consumer textile waste into reusable fiber of equal or better quality than the original fabric.  (the "Rejuvenated Fiber")

In May of 2015, the Company created a new limited liability company, Pure361, LLC ("Pure361") of which the Company owns 51% and Pure Systems International, Ltd. owns 49%.  Pure361 has the exclusive licensee to use Pure System International Ltd.'s patented Rejuvenated Fiber in conjunction with the commercial uniform marketplace and other market verticals.

The Rejuvenated Cardboard Segment

In conjunction with its focus on rejuvenated technologies, the Company is exploring the possibility of also manufacturing a rejuvenated cardboard product, and is in the early stages of exploring this potential opportunity.
16

Trident Merchant Group, Inc.

Trident Merchant Group, Inc. is an operating subsidiary which is a "value added" strategic advisory services company specializing in rendering expertise in the areas of capital planning and procurement, licensing and branding as well as financial engineering and restructuring of its client company's balance sheet and going public process.

Liquidity, Capital Resources and Material Changes in Financial Condition

As of March 31, 2016, our current assets were $12,720 as compared to $42,989 in current assets as of December 31, 2015.

As of March 31, 2016, our current liabilities were $1,260,540 as compared to $1,307,098 in current liabilities as of December 31, 2015.  This change in the Company's financial condition was primarily related to a discount issued related to the extension of a note in consideration for 200,000 shares of common stock valued at $100,000 the repayment of a related party advance of $11,058, partially offset by an increase in accrued compensation of $36,000 and accounts payable and accrued interest of $28,500.

Net cash used in operating activities for the three months ended March 31, 2016 was $19,211 compared to net cash used in operating activities for the three months ended March 31, 2015 of $60,981.  Cash provided by or used by operating activities is driven by our net loss and adjusted by non-cash items as well as changes in operating assets and liabilities. Non-cash adjustments primarily include stock compensation expense and stock issued for services. The net loss for the three months ended March 31, 2016 of $447,883 was essentially offset by these non-cash adjustments totaling $364,172. Changes in assets and liabilities provided an additional offset to the net loss of $64,500.

Net cash flows used in investing activities consisted of $0 in additions to property and equipment for the three months ended March 31, 2016, compared to $2,650 for the three months ended March 31, 2015.

Net cash used in financing activities of $11,058 for the three month period ending March 31, 2016 was due to the repayment of a related party advance.

We are currently dependent upon receiving loans from our shareholders. We expect to raise additional capital to continue moving the Company towards profitability.

The Company does not currently have any substantial revenues, and is reliant on its ability to raise additional capital to continue execution of its business plan to move the Company forward towards profitability.
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Results of Operations for the Three Months Ended March 31, 2016 and 2015

The Company experienced a net loss of $447,883 in the first quarter of 2016 compared to net loss of $8,487,171 in the first quarter of 2015.  The change was due to a decrease in revenue of $4,000, a decrease in debt extinguishment costs of $8,465,034, a decrease in interest expense of $3,176, an increase in consulting fees share expense of $314,172, and increase in stock based compensation of $50,000, and an increase in general and administrative expense of $60,750 for the three months ended March 31, 2016 compared to the three months ended March 31, 2015.

General and administrative costs increased to $80,211 for the three months ended March 31, 2016 compared to $19,461 for the three months ended March 31, 2015. This increase of $60,750 is a result of an increase in first quarter operating expenses from 2015 to 2016 of $24,750, and an increase in accrued compensation of $36,000.

Interest expense was $3,500 and $6,676 for the three months ended March 31, 2016 and 2015, respectively.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item.

Item 4. Controls and Procedures.

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2016.  Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.  Such officer also confirmed that there was no change in our internal control over financial reporting during the three-month period ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




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PART II -- OTHER INFORMATION

Item 1. Legal Proceedings.

As of the date of this filing, the Company is a party to two pending litigation matters.  One matter is entitled Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to evict Avani Holdings LLC from its rented premises in California and to recover unpaid rent.  GFTI does not operate out of the premises in question and has never signed any leases or other documents with the plaintiff.  A judgment of eviction was entered, but GFTI does not operate out of the premises in question and therefore did not appear in the matter to oppose the judgment of eviction.  The plaintiff is also seeking unpaid rent in the amount of $26,595.

The second matter is entitled Patrick Kalashyan v. Avani Holdings, LLC & Global Fashion Technologies, Inc . This litigation was initiated by the plaintiff to recover monies owed on a September 23, 2011 settlement agreement signed between the Plaintiff and Avani Holdings, LLC.  The Company was never a party to this agreement and never acquired Avani Holdings, LLC.  Consequently, there is no legitimate cause of action against the Company, and the Company is vigorously defending itself as it has no legal liability for a debt of Avani Holdings, LLC.  The amount being sought by the plaintiff is $150,000 plus interest.

Item 1A. Risk Factors.

The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In February 2016, the Company issued 50,000 shares of its common stock at a value of $1.00 per share for $50,000 to a board director for payment of services.

In March 2016, the Company issued 250,000 shares of its common stock at a value of $1.00 per share for $250,000 in payment for consulting services.  In addition, the Company granted a warrant to the consultant to purchase 250,000 shares of common stock at $0.50 per share for a period of two years.  The fair value of these warrants was approximately $170,000 as of March 31, 2016 and was calculated using the Black-Scholes-Merton model.  The expense related to this stock option for the three months ended March 31, 2016 was $14,172.
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In March 2016, the Company issued 50,000 shares of its common stock at a value of $1.00 per share for $50,000 as payment for consulting services.

In the three month period ended March 31, 2016, the Company issued 200,000 shares of its common stock at a value of $.50 per share, the original principle of a note in the amount of $100,000, in conjunction with the extension of the terms of the note.  The $100,000 is being amortized to interest expense over the six month extension period.

In March 2016, the Company issued 884,001 shares of its common stock at approximately $0.25 per share amounting to $223,232 to five individuals for monies received in 2015 from subscription agreements that were entered into with the Company in 2015.  106,001 shares remain issuable related to these subscription agreements as of March 31, 2016.

All of the shares described above were issued by the Company in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(2). All of the purchasers of the unregistered securities were all known to us and our management, through pre-existing business relationships, as long standing business associates, friends, and employees.  All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to our management in connection with their purchases.  All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us.  All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

Item 3. Defaults Upon Senior Securities.

As of June 30, 2016, the Company was not in material default with respect to any indebtness.

As of December 1, 2016, the Company was in default with respect to a secured note payable that matured on September 30, 2016. The balance of this note plus accrued interest totaled $112,500 as of March 31, 2016.

As of December 1, 2016, the Company was in default with respect to a note issued to a related party that matured on August 16, 2016. The balance of this note plus accrued interest totaled $53,312 as of March 31, 2016.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

For the period covered by this Form 10-Q, there was no information required to be disclosed in a report on Form 8-K that was not reported.  In addition, there were no material changes to the procedures by which security holders may recommend nominees to the Company's board of directors.
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Item 6. Exhibits.

Exhibit
Description
3.1
Articles of Incorporation*
3.2(i)
By-Laws*
3.2(ii)
First Amended and Restated By-Laws of Premiere Publishing Group, Inc. dated December 14, 2007**
31.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).***
32.1
Certification pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002***
101
Interactive data files pursuant to Rule 405 of Regulation S-T.

*
Incorporated by reference to the Registration Statement filed with the Commission on November 29, 2005 (333-129977)
**
Incorporated by reference to Form 8-K filed with the Commission on December 12, 2007 (000-52047)
***
Filed herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


GLOBAL FASION TECHNOLOGIES, INC.
By:
/s/ Christopher Giordano
Christopher Giordano
Date: December 12, 2016
President, Treasurer and Director
Principal Executive Officer and
Principal Financial Officer
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