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

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

~~26381 Crown Valley Parkway,~~2 Park Plaza, Suite ~~230, Mission Viejo,~~400, Irvine, CA ~~92691~~92614

Registrant’s telephone number, including area code:(949) ~~582-5933~~769-3550

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.o YesxNo

Indicate by check mark whether the registrant (1) ~~has filed all reports~~ 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 periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.x YesoNo

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 ox No xo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form ~~10-k~~10-K or any amendment to this Form ~~10-k.~~10-K.o

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.

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant onwas $33,710,357 based upon the price ($2.60) at which the common stock was last sold as of June 30, ~~2014: $728,938~~

2016, the last business day of the registrant’s most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws.

The registrant had ~~38,063,410~~40,431,680 shares of common stock outstanding as of ~~March 30, 2015.~~

~~The following documents are incorporated herein by reference in Part IV, Item 15: (i) Registration Statement on Form 10SB, filed on January 18, 2002, (ii) Current Report on Form 8-K, filed on~~ April 7, 2005, (iii) Schedule 14C Definitive Information Statement, filed June 28, 2005, (iv) Current Report on Form 8-K, filed August 26, 2009, (v) Current Report on Form 8-K, filed January 22, 2010, (vi) Current Report on Form 8-K, filed April 6, 2010, (vii) Schedule 14C Definitive Information Statement, filed June 21, 2010, (viii) Current Report on Form 8-K, filed July 21, 2010, (ix) Form S-8 Registration Statement, filed March 28, 2011, (x) Form S-8 Registration Statement, filed May 18, 2011, (xi) Form S-8 Registration Statement, filed November 4, 2011, (xii) Schedule 14C Definitive Information Statement, filed January 10, 2013, (xiii) Schedule 14C Definitive Information Statement, filed October 1, 2013and (xiv) Current Report on Form 8-K, filed on January 13, 2014 and amended on April 3, 2014.17, 2017.

Certain information included in this Annual Report on Form 10-K and other filings of the Registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements in this Annual Report on Form 10-K, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are the availability of working capital to fund our operations, the competitive market in which we operate, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property, the effects of governmental regulation and other risks identified in the Registrant’s filings with the Securities and Exchange Commission from time to time.

In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the Registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the Registrant cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither the Registrant, nor any other person, assumes responsibility for the accuracy and completeness of such statements. The Registrant is under no duty to update any of the forward-looking statements contained herein after the date of this Annual Report on Form 10-K.

Global Future City Holding Inc., formerly FITT Highway Products, Inc. (the “Company”), is in the business of manufacturing (on an outsource basis), distribution and sale of energy drinks. We market three two-ounce energy shots named “F.I.T.T. Energy for Life” (the “FITT Energy Shot”), “F.I.T.T. Energy Extreme” and "F.I.T.T. Energy Rx". We have significant debt and our profitability and cash flow have been dependent upon our success in marketing our three energy shot products. As discussed in Note 14 to the accompanying consolidated financial statements, we have agreed to sell 80% of our common stock to Sky Rover Holdings Ltd. (“Sky Rover”). If we are successful in closing this transaction, our business will also include the marketing and promotion of an E-Gold coin (the “EGD”), a type of cryptoasset created by Sky Rover, to merchants and consumers.

If the Sky Rover transaction closes, we will continue to market and sell our FITT brand of energy shots while considering additional business alternatives, including among other things, a proposed business model where the Company shall establish four subsidiaries. The first subsidiary will market a mobile application (“IP Technology”). Because the price of EGD continuously fluctuates, the IP Technology provides merchants with proprietary software that enables these merchants to calculate how much Rewarded EGD (as defined below) a consumer is eligible to receive. The second subsidiary will operate an online store and various merchants that sell goods and services to consumers, and gives consumers a certain percentage for completing the task or for the purchased goods/services back in the form of EGD (“Rewarded EGD”) as part of a loyalty program. The third subsidiary will be a foreign company that will sell 4,000,000 EGD to foreign individuals and entities. The fourth subsidiary will continue to sell the Company’s current energy drinks while participating in giving away Rewarded EGD as well. The Company itself will provide marketing services to merchants that want to establish loyalty program(s) with its customers (collectively, the “Proposed Business Model”).

The Securities and Exchange Commission (“SEC”) has not deemed whether a form of digital currency or crypto asset itself is a security, Due to this uncertainty, the Company has submitted a Request for No-Action Relief (the “No-Action Letter) on February 10, 2015 to the SEC to obtain clarification that the SEC will not recommend enforcement action against the Company and its related subsidiaries regarding the Proposed Business Model if they conduct themselves as described in the No-Action Letter.

On October 16, 2014, our Board of Directors approved an agreement and plan to merge with our newly formed and wholly-owned subsidiary, Global Future City Holding Inc., a Nevada corporation, to effectuate a name change from FITT Highway Products, Inc. to Global Future City Holding Inc. Global was formed solely for the purpose of this name change and our Company would be the surviving entity following the merger. The Articles of Merger effectuating the merger and name change were filed with the Nevada Secretary of State on October 16, 2014 and became effective October 29, 2014. In connection with the name change, our ticker symbol was changed from FHWY to FTCY.

In 2012, F.I.T.T Energy Products, Inc. (“FITT”) proposed negotiating a business combination with us and, on November 5, 2012, our Board of Directors approved commencing formal negotiations with FITTWhen used in this ~~regard. On June 12, 2013,~~report, the ~~Board, by unanimous written consent, recommended that our stockholders approve~~terms “Global”, “Company”, “we”, “our or “us” mean, unless the Company entering into a Merger and Reorganization Agreement (the “Merger Agreement”) with FITT and on June 12, 2013, holders of a majority of the voting power of all shares of our common and preferred stock entitled to vote, by written consent in lieu of a special meeting of our stockholders, approved the following action: entry into the Merger Agreement with FITT whereby FITT would be merged into the Company, with the Company being the surviving entity (the “Merger”). The Merger Agreement, which was entered into on June 18, 2013, required that FITT obtain an independent valuation which would serve as the basis for a share exchange once all necessary approvals were obtained. A Definitive Information Statement on Schedule 14C (“DEF 14C”) was mailed to our shareholders on October 8, 2013 and the Merger became effective on October 29, 2013. On October 29, 2013, we issued 33,000,000 shares of common stock to the shareholders of FITT in the manner set out in the Merger Agreement. As such, the FITT shareholders owned approximately 89% of the post merged company as of the transaction date.context otherwise indicates, Global Future City Holding Inc. and ~~FITT are hereafter known collectively as~~its subsidiaries.

The following discussion should be read in conjunction with the ~~“Company.”~~Risk Factors presented in Item 1A of Part I and the Cautionary Statement for Forward-Looking Information and Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 7 of Part II.

On April 13, 2005, ~~the shareholders of Snocone Systems, Inc. voted to change its~~we changed our name to Who’s Your Daddy, Inc. and, effective June 1, 2010, ~~the shareholders of Who’s Your Daddy, Inc. voted to change the~~we changed our name to FITT Highway Products, Inc. ~~As stated under Name Change above, effective~~Effective October 29, 2013, we merged with F.I.T.T. Energy Products, Inc. (“FITT”) whereby FITT merged into our Company, with our Company being the surviving entity. Effective October 29, 2014 the name of our Company was changed to Global Future City Holding Inc. (the “Company” or “we”) and our trading symbol changed from ~~FHWY~~“FHWY” to ~~FTCY.~~“FTCY.”

On August 30, 2016, we reported on Form 8-K that our former Chief Executive Officer (“CEO”), President, and Chairman of the Board of Directors, Ning Liu, was detained in the People’s Republic of China (“PRC”) and we had begun investigating the facts and circumstances surrounding his detainment. On September 9, 2016, we filed Form 8-Kreporting that Mr. Liu was taking a 30 day leave of absence from all positions he held with our Company. Finally, on October 21, 2016, because of his ongoing legal challenges in the PRC, Mr. Liu resigned from all his positions in our Company. Also on October 21, 2016, our Board of Directors appointed Michael R. Dunn to the positions of Chief Executive Officer (“CEO”), President and Chairman of the Board.

Mr. Liu continues to be detained in the PRC. We have been informed by Mr. Liu’s attorney in the PRC that, on March 2, 2017, he was convicted in Hunan Province for violations of the PRC’s multi-level marketing regulations and sentenced to 10 years in prison. We have likewise been informed by Mr. Liu’s attorney that he has an appeal hearing scheduled in Hunan Province in the near future and, if he is unsuccessful in that hearing, he can appeal to a national court in Beijing China. This process could take months and it is very difficult to get reliable information on the particulars of Mr. Liu’s case to make any intelligent assessment as to the final outcome. While many of the facts of his detention and conviction are unclear, we have been informed that Mr. Liu allegedly raised capital through the sale of a digital coin, named Wan Fu Bi, all while representing himself as the CEO of our Company and an unaffiliated private company, Great Coin Inc. (“Great Coin”). As further described below, Great Coin, which was co-owned by Mr. Liu and Michael Dunn, is a technology company that developed the GX Coin, a digital currency, and a trading platform for the GX Coin. Through a February 2016 agreement with Great Coin, our Company’s direct-selling program members were able to convert a portion of their membership accounts into GX Coins. It is unclear whether investors in Wan Fu Bi believed it was the same as the GX Coin. Even though Mr. Liu was allegedly representing himself as the CEO of our Company and also of Great Coin, his activities were never authorized by either company, Wan Fu Bi has no affiliation with either company or Michael Dunn, and no funds resulting from the alleged activities were ever received by our Company, Great Coin or Michael Dunn.

While no actions have been filed against our Company as a result of Mr. Liu’s actions, his detention and legal challenges have had, and continue to have, a material adverse impact on us. We believe that potential business partners have refused and or avoided doing business with us due to Mr. Liu’s actions. Our efforts to implement our direct selling program became significantly more difficult due to questions surrounding Mr. Liu’s detention. In addition, our investment in Global Future City Regional LLC, an EB-5 Regional Center, was significantly impaired due to Mr. Liu’s actions, and potential project partners decided to investigate their opportunities elsewhere.

While Mr. Liu is no longer involved with our Company, many potential investors and strategic partners, particularly those in the PRC, became distrustful of us, resulting in significant harm to our credibility, our brand and our ability to raise capital. As a result of Mr. Liu’s alleged actions, we were forced to suspend our direct selling program (the “GX-Life Direct Selling Program”) in the fourth quarter of 2016 and to abandon and write-off our investment in our EB-5 Regional Center line of business. We believe Mr. Liu’s alleged actions were the primary factor in our stock price falling from a high of $3.64 per share in the first quarter of 2016 to a low of $0.51 per share in the fourth quarter of 2016, causing us to experience significant lost opportunities to raise capital. In addition, after focusing a significant portion of our resources for several months attempting to redirect our marketing strategy to an online sales program with little success, we were forced to lay off a majority of our employees in January 2017 to reduce costs to a minimal level.

In response to Mr. Liu’s alleged actions and their significant harm to our Company, on March 20, 2017 we entered into a Stock Issuance Cancellation Agreement with Mr. Liu and certain of his affiliates (the “Stockholders”) under which the Stockholders agreed to return 8,349,906 common shares owned by them to our Company for cancellation. We retain the right in the future to bring actions against Mr. Liu for any and all further damages his alleged actions may have caused. In a separate agreement, Mr. Liu also relinquished his 50% ownership in Great Coin to Mr. Dunn and Mr. Dunn retains the right to bring future actions against Mr. Liu for any damages his alleged actions may have caused.

We are ~~marketing~~a holding company currently focused in the area of consumer product sales through our wholly-owned subsidiary, GX-Life Global, Inc. (“GX-Life”). During late 2015 and early 2016, we spent considerable resources developing the GX-Life Direct Selling Program, including hiring specialized staff and retaining legal counsel with direct sales program experience. Our goal was to implement the GX-Life Direct Selling Program initially in both the U.S. and China and then, if successful, to expand it internationally. As a result of Mr. Liu’s alleged actions, as described above, we were forced to suspend the GX-Life direct selling program in the fourth quarter of 2016. We are currently pursuing relationships with a number of sales organizations who can purchase our existing inventory for resale purposes in an attempt to establish a wholesale relationship with these organizations. We believed that gaining consumer acceptance in this way would allow us to overcome any difficulties encountered in our direct-selling business.

We were previously also focused in the area of EB-5 investments for foreign investors who are interested in acquiring lawful permanent residence in the United States through our acquisition of Global Future City Regional Center LLC. However, with the difficulties encountered because of Mr. Liu’s detention resulting from his alleged actions, we have begun the process of looking into alternative strategies to utilize or sell our EB-5 Regional Center. We may not be able to utilize or find a buyer for the EB-5 Regional Center and cannot determine at this point whether it has any value at all.

We entered into the following agreements that helped pave and shape our business in its current direction:

On April 17, 2015, we completed the closing of a Stock Purchase Agreement (the “SPA”) with Sky Rover Holdings, Ltd., a corporation formed under the laws of the Republic of Seychelles (“Sky Rover”). Under the SPA, certain unaffiliated parties (collectively, the “Acquiring Shareholders”) cumulatively acquired approximately 87.3% of the outstanding shares of stock of our Company in exchange for our receipt of $400,000 in cash and the contribution of 4,000,000 E-Gold crypto-assets (“EGD”) to our then wholly-owned subsidiary, Global Modern Enterprise Limited, a Hong Kong entity (the “EGD Subsidiary”). In connection with the closing of the SPA, Mr. Lei Pei, an officer of Sky Rover, purchased 6,000,000 newly-issued shares of our common stock for $3,000,000 cash in a separate transaction that closed on March 30, 2015, which was meant to provide working capital for our business. Additionally, Mr. Pei, provided the initial down payment of $150,000 for the acquisition of Global Future City Regional Center, LLC (f/k/a Powerdyne Regional Center, LLC) which is described below. On August 17, 2015, Mr. Pei, resigned from our Company as its Chief Executive Officer, Chief Financial Officer and Chairman, and sold the 6,000,000 shares he owned in our Company in a private transaction.

In connection with the share purchase by Sky Rover, we intended to offer EGD in connection with a reward program (“Rewarded EGD”). We attempted to gain additional assurance that any sale or use of the EGD was in compliance with existing securities regulations, and on February 10, 2015, we filed a Request for No-Action relief (the “No-Action Request”) with the Securities and Exchange Commission (“SEC”) to obtain clarification that the SEC would not recommend enforcement action against us and our related subsidiaries regarding our use of the EGD. However, we were not able to obtain any such assurance or clarification, and we spun-off our EGD-related holdings on October 2, 2015 (as further explained below), and withdrew the No-Action Request on October 8, 2015.

On October 2, 2015, we completed a Share Exchange Agreement with GX-Life , whereby we spun-off 100% of our ownership interest in the EGD Subsidiary (including the 4,000,000 EGD received under the SPA) in exchange for 100% of the outstanding common stock of GX-Life, a private company owned primarily by Ning Liu, and our CEO/CFO, Michael Dunn. GX-Life has developed a platform to support direct-selling opportunities throughout the world (the “GX-Life Direct Selling Program”).

In a related transaction, on October 2, 2015, the former shareholders of GX-Life sold all of their interests in the EGD Subsidiary to the Acquiring Shareholders in the Sky Rover SPA in exchange for 21,280,000 shares of our Company’s common stock previously acquired in the Sky Rover SPA. Collectively, these two transactions are referred to as the “GX-Life Transactions”. As a result of the GX-Life Transactions, much of the Sky Rover SPA has been effectively unwound, as our Company (i) did not create three (3) of the four (4) subsidiaries it had intended to create under the SPA, (ii) did not receive the IP Technology that was intended to calculate Rewarded EGD, and (iii) no longer owns or controls the EGD Subsidiary or the 4,000,000 EGD crypto-assets it received under the Sky Rover SPA. Furthermore, of the four (4) entities that received shares in our Company (Future Continental Limited, Discover Future Limited, Global Future Development Limited, and Master Power Holdings Group), only Master Power Holdings Group retained the 9,120,000 shares it received under the Sky Rover SPA.

The GX-Life Transactions effected a change in control of our Company, as the former shareholders of GX-Life acquired 21,280,000 shares of our common stock representing an aggregate voting power of 44.7%. Individually, following the GX-Life Transactions, (i) Michael Dunn held a total of 24.1% of the voting power of our common stock, (ii) Ning Liu held a total of 2.6% of the voting power of our common stock, and (iii) Tomoe Masuya held a total of 32.9% of the voting power of our common stock. The former shareholders of GX-Life are all unaffiliated from one another and disclaim status as a "group" as defined by SEC Rules under Section 13(d) of the Exchange Act.

As described above, we had previously intended to market EGD in connection with a reward program. GX-Life believes that incorporating a crypto-asset other than EGD into a reward program would be important to GX-Life’s success. As a result, on October 21, 2015, GX-Life entered into a subscription agreement (the “Subscription Agreement”) with Great Coin. Great Coin is a technology development company that focuses on the development of “GX Coins”, a cryptocurrency that functions as a store of value and medium of exchange, and the associated online cryptocurrency platform (the “GX Coin Platform”). Great Coin intends for GX Coins, as a cryptocurrency, to be tradable on the GX Coin Platform that is open to the public, and the ownership and transfer of GX Coins is intended to be recorded on an encrypted, distributed ledger system that is based on blockchain technology developed and made available by Ethereum Foundation, a Switzerland company (“Ethereum”). The software utilized by Ethereum to record GX Coin transactions on the GX Coin Platform is developed by third parties that are beyond the control of our Company, its subsidiaries, or Great Coin, and may contain material defects and vulnerabilities. In the event that Ethereum or its software changes, becomes obsolete, gets regulated adversely in one more jurisdictions, does not meet the expectations of its users, or suffers a breach in security, such event may have an adverse effect on the value of GX Coin and thereby our business.

Great Coin has created seventy-five million (75,000,000) GX Coins using 256-bit encryption. To incorporate GX Coins into GX-Life's new business model, GX-Life originally agreed to purchase 5,000,000 GX Coins, at a price of $0.50 per GX Coin, for a total price of $2,500,000. In October 2015, GX-Life paid Great Coin $350,000 for 700,000 GX Coins under the Subscription Agreement. However, while Great Coin retained the $350,000 that was paid, the GX Coins were never delivered to GX-Life. Instead, the Subscription Agreement was superseded and replaced on February 17, 2016 by a Software License and Services Agreement (the “Services Agreement”) between GX-Life and Great Coin, as amended on June 30, 2016 (the “Access and Services Agreement”). Under the Access and Services Agreement, GX-Life agreed to pay an upfront fee of $350,000 which was deemed paid by GX-Life's previous payment made to Great Coin in October 2015, and the remaining obligations under the Subscription Agreement were canceled. The material difference(s) between the License Agreement and Access and Services Agreement is that under the Access and Services Agreement, (i) GX-Life Members receive their entire commissions in the form of GX-Coins as stated in the conversion notice provided to GX-Life rather than receiving their entire commissions in the form of GX-Coins over the course of twenty weeks, and (ii) clarifies that the conversion fee paid by GX-Life to Great Coin shall be calculated without any reference to any discounts, rewards, or incentives that a GX-Life Member may receive under the GX-Life Global Compensation Plan.

Under the Access and Services Agreement, Great Coin has agreed to make available and manage the GX Coin Platform, in connection with which GX-Life Members will be able to receive their commissions in the form of either a debit card, Automatic Clearing House (“ACH”) deposit, or GX Coins. The GX Coin Platform will also allow GX-Life Members to sell GX Coins to other users of the GX Coin Platform, including the public and other GX-Life Members.

Acquisition of Global Future City Regional Center, LLC (formerly, Powerdyne Regional Center, LLC)

On March 26, 2015, we entered into a Membership Interest Purchase and Sale Agreement (the “Membership PSA”) with Powerdyne, Inc. (the “Selling Entity”), an entity which owned 100% of the membership interests in Powerdyne Regional Center, LLC (“Powerdyne” or “Regional Center”). Powerdyne is an EB-5 Regional Center (USCIS ID Number 1215250671) that was approved on March 28, 2013 by the U.S. Citizen and Immigration Service (“USCIS”). The closing (“Closing”) of the Membership PSA occurred on March 27, 2015.

Under the terms of the Membership PSA, we purchased 100% of the membership interest of Powerdyne (the “Purchased Membership Interest”) from the Selling Entity for the total purchase price of $250,000 (the “Purchase Price”) of which $125,000 (the “Deposit”) was paid by us at the Closing with the balance to be paid in five (5) quarterly installments of $25,000 (the “Installment Payments”) due on April 1, 2015, July 1, 2015, October 1, 2015, January 1, 2016, and April 1, 2016. As collateral for the timely payment of the Installment Payments, we pledged and granted a security interest in the Purchased Membership Interest of Powerdyne to the Selling Entity, until the Purchase Price was paid in full. As of the date of this filing, all remaining payments have been made for total payments of $250,000.

Shortly after the Closing, we submitted an Amendment to Articles of Organization (the “Amended Articles”) of Powerdyne to change its name to “Global Future City Regional Center, LLC” to better align its identity and brand with the public company. Such Amended Articles was filed and approved by the California Secretary of State on April 9, 2015.

As discussed above, due to the difficulties encountered because of Mr. Liu’s detention resulting from his alleged actions, we have commenced looking at alternative strategies to utilize or sell our interest in Powerdyne. However, because of the inactivity of the Regional Center, the USCIS has considered the project frozen, and accordingly, the value it may have to a third party may minimal until conditions change.

Historically, we marketed and distributed three, two-ounce energy drink shots ~~which are F.I.T.T.~~marketed under the FITT Energy ~~for Life, F.I.T.T. Energy Extreme and F.I.T.T. Energy Rx.~~brand. All three energy shots were designed in collaboration with Dr. Rand Scott, a Board Certified Anesthesiologist and Pain Management Specialist. Dr. Scott incorporated a number of unique ingredients into the products which allows for the use of lower levels of caffeine. We believe that higher levels of caffeine may be unhealthy and potentially dangerous for our consumers, especially for adolescents or people with blood pressure issues. Dr. Scott is a well-known medical/legal expert witness in his areas of medical expertise andSpecialist who has ~~significant~~ experience with the use of herbal products. ~~In addition,~~At the recommendation of Dr. Scott, we incorporated a number of ingredients into the FITT Energy products to reduce the amount of caffeine in each product.

Although we have implemented new business operations as outlined above, we have retained the FITT Energy drink brand by incorporating the sale of FITT energy drinks into the GX-Life direct-selling program as well as the online program selling direct to consumers.

GX-Life is ~~one~~our wholly-owned subsidiary selling a variety of consumer products which are described below. GX-Life began offering its products using a direct-selling platform to support sales opportunities throughout the world (the “GX-Life Direct Selling Program”). The GX-Life Direct Selling Program incorporated the use of GX Coins to allow its members to receive rewards, commissions and other forms of compensation. During the fourth quarter of 2016, we suspended the GX-Life Direct Selling Program due to difficulties resulting from Mr. Liu’s detention, as previously described. We may decide to reactivate this program in the future, but such reactivation cannot be assured.

In its place, we retained a consulting firm with significant experience in online sales to help us develop an online direct-to-consumer sales program (“GX-Life D2C Program”) to sell our ~~shareholders~~products. After spending considerable resources in connection with this program, we were unable to generate any appreciable results and ~~has no rights~~have now abandoned this potential sales avenue.

We are currently pursuing relationships with a number of sales organizations who can purchase our existing inventory for resale purposes in an attempt to establish a wholesale relationship with these organizations as well as liquidate large quantities of inventory to extract value before certain of the product reach an expiration date. Given the damage done to our energy shots beyond the payment of a royalty of $0.02 per bottle of each energy shot sold. Dr. Scott worked under a Product Development & Marketing Agreement with FITT (the “Scott Agreement”). According its terms, the Scott Agreement was transferred to us after the MergerCompany’s credibility by Mr. Liu’s actions and continues in full force and effect. The Scott Agreement is dated March 1, 2012 and has an initial term of 24 months. After the initial term, unless sooner terminated, the Scott Agreement automatically renews for successive one-year periods.

The energy shot formulae contain ingredients selected to not only provide energy, but to also enhance mental focus, muscle strength and endurance, and promote cardiovascular health. The energy shots feature Resveratrol, a substance found naturally in grapes. Whiledetention, there is no scientific consensus regarding the health benefits of Resveratrol, it has the scientific world fascinated by its potential to affect age related declines and is being widely studied for that as well as its potential to cause the body to act as if it is already on a diet, and to change the distribution of fat tissue in the body. It should be noted that neither the Food and Drug Administration (“FDA”) nor any comparable regulatory agency has approved resveratrol or resveratrol-based products for the treatment of any illness, injury or condition. Our energy shots also contain L-Arginine, an amino acid in dairy, brown rice and nuts which is essential for optimum growth, and regulation of protein metabolism. L-Arginine can make blood vessels wider, as opposed to the narrowing effect of caffeine. Further, L-Arginine may benefit in the treatment of sports related injuries, as well in building lean muscle and burning fat, since it facilitates the natural release of growth hormone (HGH) and is a building block for creatine. Additionally, the drink features L-Arginine AKG. L-Arginine AKG has been shown in a University study to help build additional strength when used during training. Beyond this, the FITT Energy Shot features antioxidant Green Tea extract, and Chromium. These ingredients have good safety profiles and have support as weight-loss aides. More than just a caffeine drink, our FITT Energy Shot adds natural energy boosters including Taurine & Guarana, as well as essential Vitamins B3, B5, B6, and B12. To optimize workouts, the FITT Energy Shot has a touch of Fructose, an easily absorbed fuel for the body and brain. All this is built on a base of healthy pomegranate and orange.

Since 2005, when we completed a merger with Snocone Systems, Inc., we have been unable to generate operating income and have become burdened with substantial debt. Due to a number of factors, including our substantial debt, we have had significant difficulty attracting the necessary investment dollars to produce and market our products. In addition, third parties performing marketing, production and fulfillment services have been unwilling to enter into agreements directly with us due to our poor financial condition, among other reasons. If the Sky Rover transaction closes, we are reasonably certainassurance that we will be ~~able to attract sufficient capital to sustain our operations as we perform our new business plan.~~successful in this endeavor.

Below is a list of products offered by GX-Life. These products were formulated mainly for the market in China and packaged with our direct selling program in mind.

GX-Life offers high quality consumer products concentrated in the areas of beauty, nutrition, energy drinks, and tea under the brand, “GX-Life”. Products have historically been ~~directed mainly~~sold via GX-Life’s Direct Selling Program to GX-Life Members and consumers and e-commerce channels on an international basis. During the ~~retail market segment. The retail market space for our product includes convenience stores, grocery chains, drug stores,~~fourth quarter of 2016, we suspended the GX-Life Direct Selling Program and are pursuing wholesale avenues.

GX-Life obtains its beauty products of high-end moisturizers, serums, and creams designed to protect the skin and combat the signs of aging from Advanced Medical Research Laboratories, Inc. (“AMR”). AMR is a health and ~~fitness centers~~beauty contract manufacturer that creates beauty product formulas using the latest innovations in active ingredients. In this regard, GX-Life uses AMR’s services to ~~name~~create unique beauty formulas for all of GX-Life’s beauty products, including its foaming cleanser, night cream, eye cream, regenerative pump, and skin pump, and tailors each beauty product’s look, feel, bottling, labeling, and packaging according to GX-Life’s instructions. After a ~~few. We believe sales into the retail market will provide the most stable method for marketing our energy shots. However, significant funds are required in order~~finished product is made, GX-Life places purchases orders to ~~conduct a sustained and supported rollout of our products. The Company has estimated~~AMR to acquire beauty product inventory that ~~approximately $5.0 million would be needed~~GX-Life sells to ~~conduct a proper rollout, but to date such funds have not been obtained.~~its customers.

In ~~October 2011,~~a similar fashion to GX-Life’s beauty products, GX-Life obtains its nutraceutical products from VFR Import Export, Inc (“VFR”). VFR is a vitamin and supplement contract manufacturer. In this regard, GX-Life uses VFR’s services to create unique formulas for all of GX-Life’s nutraceutical products, including its slim down caplets, berry shake, multi-vitamin, joint tablets, detox softgels, enxymas capsules, and probiotic capsules, and tailors each nutraceutical product’s taste, labeling, bottling, and packaging according to GX-Life’s instructions. After a finished product is made, GX-Life places purchases orders to VFR to acquire nutraceutical product inventory that GX-Life sells to its customers.

Unlike GX-Life’s beauty and nutraceutical products, GX-Life created the formulas for its energy drink products which include GX-Life Sustain, GX-Life F.I.T.T. Extreme, and GX-Life F.I.T.T. Rx Gel packs in collaboration with Dr. Rand Scott. GX-Life provides Universal Nutrients, LLC, a contract manufacturer (“Universal Nutrients”), the raw materials, formulas, and instructions needed to create each energy drink. In order to obtain energy drink products, GX-Life merely places a purchase order and provides the raw materials to Universal Nutrients to create the energy drink product that GX-Life then sells to its customers.

GX-Life obtains its tea products from Guangdong Authenmole Biotech, Inc. (“Authenmole”), a tea manufacturer located in the People’s Republic of China, to provide single-serve sachets of six Authentea® organic tea extracts, and three Herbalsoul herbal tea extracts, in addition to various teawares. GX-Life has no input on these products as GX-Life merely acts as a reseller of the tea products manufactured and produced by Authenmole.

More information about GX-Life and the products that it offers can be found on our website at: www.gx-life.com

The GX-Life Direct Selling Program was developed to support sales opportunities throughout the world. Under the program, enrolled members received various benefits depending on their enrolled status (based on each member’s deposit). Benefits were calculated under a compensation plan which was based on most recent industry developments and best practices for direct selling programs, and benefits included product discounts, bonuses, commissions, etc. Our program also incorporated the use of GX Coins as part of an award structure.

During the fourth quarter of 2016, we suspended the GX-Life Direct Selling Program due to difficulties resulting from Mr. Liu’s detention, as previously described, and we may or may not reactivate the program in the future. If we reactivate the program, we will again be subject to all regulations, both foreign and domestic, governing direct selling programs.

Prior to the suspension of the GX-Life Direct Selling Program, members had made deposits, net of repayments, of $5.2 million into the program, $4.7 million of which was converted into GX Coins in accordance with the terms of a February 17, 2016 License Agreement between GX-Life and Great Coin. The amount not converted into GX Coins, approximately $551,000, is reflected in Member Deposits as a current liability on our consolidated Balance Sheet at December 31, 2016.

As of December 31, 2016, GX-Life had 111 accounts established under this program, 66 of which were held by residents of China and the remainder by residents of the United States. With the exception of repayment of the Member Deposit current liability described above, we have met all of our obligations to the program’s account holders due to the suspension of the program.

GX-Life entered into an ~~exclusive Master Marketing~~Access and Services Agreement (see discussion above) with ~~GRIPS Marketing Corporation (“GRIPS”~~Great Coin that would allow GX-Life to distribute rewards to GX-Life Members in the form of GX Coins. GX Coin is a cryptocurrency that functions as a store of value and medium of exchange that was created by Great Coin and is intended to be traded on the GX Coin Platform, where the price of GX Coin may fluctuate depending on traditional market forces. GX-Life intends to use GX Coins as part of the GX-Life Global Compensation Plan for GX-Life Members. In order to qualify for GX Coin related benefits, receive GX-Coins, or participate on the GX-Coin Platform (collectively, the “GX-Coin Benefits”), GX-Life Members must reside in a ~~corporation managed by~~state or territory where Great Coin is approved and authorized to conduct business. Currently, only GX-Life Members who reside in California are eligible to receive the GX-Coin Benefits within the United States. GX-Life Members who reside in China may receive GX-Coin Benefits as well. All other GX-Life Members that reside outside of California or China will not be eligible to receive GX-Coin Benefits, and must receive their commissions in the form of a debit card or ACH deposit until Great Coin is approved and authorized to conduct business in the state or territory where such GX-Life Member resides.

After suspending our Direct Selling Program in the fourth quarter of 2016, we retained a consulting firm, Digital Market Labs (“DML”), to help us develop an ~~individual~~online direct-to-consumer sales program (“GX-Life D2C Program”) to sell our products. DML has significant experience in online sales and had developed numerous similar programs for other clients in the past. Based on their prior experience, DML stated that we should expect an approximate 1.5% conversion ratio for each online target. During a three-month period from late 2016 to early 2017 we focused a significant portion of our resources to redesigning our products’ packaging and advertising for the online consumer and, in the end, our results were minimal. We have since abandoned this effort due to DML’s estimated sales estimates not being met. As a result, we were forced to lay off a majority of our employees in January 2017 to reduce costs to a minimal level.

We currently are pursuing relationships with ~~over 40 years’ experience marketing~~ a ~~variety~~number of sales organizations who can purchase our existing inventory for resale purposes in an attempt to establish a wholesale relationship with these organizations. This would allow us to take advantage of established sales networks and, if successful, create a sustainable stream of revenue. We believe this approach gives us the best opportunity for future success at the least cost. There is no assurance that we will be successful in this endeavor.

Although GX-Life is not required to obtain governmental approval, including the U.S. Food and Drug Administration’s (“FDA”) approval, prior to selling its products to ~~convenience stores~~consumers, GX-Life’s products and related promotional and marketing activities are subject to extensive governmental regulation by numerous governmental agencies and authorities in the United States, including the FDA, the Federal Trade Commission (the “FTC”), the Consumer Product Safety Commission, the United States Department of Agriculture, State Attorneys General, and other ~~retail outlets.~~state regulatory agencies. In ~~April 2012, with~~GX-Life’s foreign markets, the ~~assistance~~products are generally regulated by similar government agencies.

GX-Life’s personal care products are subject to various laws and regulations that regulate cosmetic products and set forth regulations for determining whether a product can be marketed as a “cosmetic” or requires further approval as an over-the-counter (“OTC”) drug. In the United States, regulation of ~~GRIPS, we received a letter from Core-Mark International, a major national distributor, in which Core-Mark agreed to team up with~~cosmetics is under the ~~Company to distribute our energy shot products. The terms~~jurisdiction of the ~~agreement with GRIPS were negotiated with the Company’s understanding that the sales personnel of large distributors like Core-Mark would~~FDA. The Food, Drug and Cosmetic Act defines cosmetics by their intended use, as “articles intended to be ~~a significant factor in the sales and servicing of their retail customers. The Company was unable to acquire the penetration required to expand the initial rollout model with Core Mark due~~rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the ~~inability to finance~~human body . . . for cleansing, beautifying, promoting attractiveness, or altering the ~~support marketing which resulted~~appearance.” Among the products included in ~~poor sell-through at the store levels.~~

As noted above, in April 2012, with the assistance of GRIPS, we received a letter from Core-Mark International, a major national distributor, in which Core-Mark agreed to team up with the Company to distribute our energy shot products to Core-Mark’s customer base. Core-Mark is one of the largest broad-line, full-service marketersthis definition are skin moisturizers, eye and ~~distributors of packaged consumer products in North America. Founded in 1888, Core-Mark provides distribution~~facial makeup preparations, perfumes, lipsticks, fingernail polishes, shampoos, permanent waves, hair colors, toothpastes and ~~logistics services~~deodorants, as well as any material intended for use as a component of a cosmetic product. Conversely, a product will not be considered a cosmetic, but may be considered a drug if it is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or any function of the body. A product’s intended use can be inferred from marketing ~~programs~~or product claims. The other markets in which GX-Life operates have similar regulations. In China, personal care products are placed into one of two categories, “general” and “drug.” Products in both categories require submission of formulas and other information with the health authorities, and drug products require human clinical studies. The product registration process in China for these products can take from nine to ~~over 29,000 retail locations across~~more than 18 months or longer. Such regulations in any given market can limit GX-Life’s ability to import products and can delay product launches as GX-Life goes through the registration and approval process for those products.

The markets in which GX-Life operate all have varied regulations that distinguish foods and nutritional health supplements from “drugs” or “pharmaceutical products.” Because of the varied regulations, some products or ingredients that are recognized as a “food” in certain markets may be treated as a “pharmaceutical” in other markets. These regulations may require GX-Life to either modify a product or refrain from selling the product in a given market. As a result, GX-Life must regularly modify the ingredients and/or the levels of ingredients in its products for certain markets. In some circumstances, the regulations in foreign markets may require GX-Life to obtain regulatory approval prior to the introduction of a new product or limit GX-Life’s use of certain ingredients altogether. There has been an increased movement in the United States and ~~Canada through~~other markets to expand the regulation of dietary supplements. This could impose additional restrictions or requirements in the future. Because of this increased regulatory focus, GX-Life’s internal review efforts have been enhanced in order to comply with its ~~28 distribution centers. Core-Mark~~understanding of current regulations.

FDA regulations require current good manufacturing practices (“cGMP”) for dietary supplements. The regulations ensure that dietary supplements are produced in a quality manner, do not contain contaminants or impurities, and are accurately labeled. The regulations include requirements for establishing quality control procedures for GX-Life and its vendors and suppliers, designing and constructing manufacturing plants, and testing ingredients and finished products. The regulations also include requirements for record keeping and handling consumer product complaints. If dietary supplements contain contaminants or do not contain the type or quantity of dietary ingredient they are represented to contain, the FDA would consider those products to be adulterated or misbranded.

GX-Life’s business and products are subject to additional FDA regulations, such as those implementing an adverse event reporting system (“AER’s”), which requires GX-Life to document and track adverse events and report serious adverse events, which are events involving hospitalization or death, associated with consumers’ use of GX-Life’s products.

Most of GX-Life’s major markets also regulate advertising and product claims regarding the efficacy of products. This is particularly true with respect to GX-Life’s dietary supplements because GX-Life typically markets them as foods or health foods. For example, in the United States, GX-Life is unable to claim that any of its nutritional supplements will diagnose, cure, mitigate, treat or prevent disease. In the United States, the Dietary Supplement Health and Education Act, however, permits substantiated, truthful and non-misleading statements of nutritional support to be made in labeling, such as statements describing general well-being resulting from consumption of a dietary ingredient or the role of a nutrient or dietary ingredient in affecting or maintaining a structure or a function of the body. Most of the other markets in which GX-Life operates have not adopted similar legislation, although GX-Life may be subject to more restrictive limitations on the claims it can make about its products in these markets.

As a result of our strategic partnership with Great Coin and GX-Life's use of GX Coin as a component of the GX-Life Global Compensation Plan, it is possible that our Company and/or any one or more of our affiliates could be subject to regulation by the U.S. Commodity Futures Trading Commission (the “CFTC”), depending on the CFTC’s views of the regulation of cryptocurrencies. In such event, the GX Coin Platform, which will be managed by Great Coin, may be required to be registered as a “swap execution facility”, as such term is defined by the Commodity Exchange Act, and we and/or one or more of our affiliates may be required to register with the CFTC.

Moreover, the CFTC retains enforcement authority over any contract or sale of any commodity in interstate commerce. Because the definition of "commodity" under the Commodity Exchange Act includes cryptocurrencies, the CFTC retains broad antifraud and anti-manipulation enforcement authority with respect to GX Coin transactions.

Except with respect to the CFTC's broad antifraud and anti-manipulation enforcement authority (discussed above), "spot" or "cash" contracts for commodities (including cryptocurrencies) are generally beyond the regulatory scope of the CFTC, so long as such contracts result in the immediate sale and delivery of the commodity. How the CFTC views what constitutes "actual delivery" in the context of cryptocurrencies is still a developing area of law and regulation. As a result, the CFTC's regulatory and enforcement authority and scope with respect to cryptocurrencies is still a moving target and subject to change as the market and the regulatory oversight landscape develops.

As a result of GX-Life’s use of GX Coin in connection with the GX-Life Global Compensation Plan, our Company and/or any one or more of our affiliates may have to register with FinCEN as a money services ~~traditional convenience retailers, grocers, mass merchandisers, drug, liquor~~business, as such term is defined under applicable FinCEN regulations, and ~~specialty stores,~~obtain state money transmitter (or its equivalent) licenses, as required by the relevant state laws.

As a United States entity selling in foreign jurisdictions, GX-Life and/or the Company is subject to foreign exchange control, transfer pricing, and custom laws that regulate the flow of funds between our subsidiaries and use for product purchases, management services and contractual obligations, such as the payment of member commissions. As is the case with most companies that operate in GX-Life’s product categories, GX-Life might receive inquiries from time to time from government regulatory authorities regarding the nature of its business and other ~~stores~~issues, such as compliance with local direct selling, transfer pricing, customs, taxation, foreign exchange control, securities and other laws.

GX-Life is subject to general business and governmental regulations and laws relating to its business and products. Existing and future laws and regulations may impede the products that ~~carry~~GX-Life sells to its consumers. These regulations and laws may cover items such as: e-commerce, product labeling, product ingredients, pricing, distribution, reporting, consumer ~~packaged goods. Core-Mark’s plan was~~protections, and other similar regulations. Unfavorable outcomes of these issues may negatively impact the Company’s business and results of operations.

GX-Life's refund policies and procedures closely follow industry and country-specific standards, which vary greatly by country. For example, in the United States, the Direct Selling Association recommends that direct sellers permit returns during the twelve-month period following the sale, while in Hong Kong the standard return policy is 14 days following the sale. GX-Life's return policies typically conform to ~~launch our products~~local laws or the recommendation of the local direct selling association. In most cases, GX-Life Members who timely return unopened product that is in ~~California, Nevada and Arizona, then move across~~resalable condition may receive a refund. The amount of the refund may be dependent on the country in which the sale occurred, the timeliness of the return, and any applicable re-stocking fee. However, GX-Life Members must notify GX-Life about any product returns in writing, and such returns may lead to ~~other divisions. During~~ the ~~second quarter of 2012,~~GX-Life Member’s termination or a reduction in the ~~Company began shipping our energy shots~~GX-Life Member’s commissions with GX-Life. Furthermore, GX-Life may alter its return policy in response to ~~Core-Mark who then shipped the products~~special circumstances from time to certain of its convenience store customers. The Company’s marketing program for sales into this market included in-store display racks and signage, and also included support by field sales reps and by various forms of media designed to drive the consumer to purchase the product at the retail outlets. However, without sufficient financing, we were initially unable to support programs necessary to make our distribution program successful.time.

Our energy shots are produced at Wellington Foods Incorporated, a contract manufacturer of liquid and powder nutritional supplements since 1974. In addition to its manufacturing facilities, Wellington has the in-house capabilities to develop products from concept for flavoring ingredient content to production, or to take an existing formula and extend the product line with new flavors or innovative ingredients. Dr. Rand Scott, one of our medical experts and a shareholder, researched and recommended the ingredients and their quantities for our energy shots, and Wellington provided the final flavoring and formulations. Wellington owns the formulae for our energy shots and is under no obligation to provide us with these products for commercial sale. We are a party to a non-disclosure agreement (“NDA”) with Wellington which precludes either party from divulging information provided, which in our view includes the ingredient components of our energy shots. However, the NDA also acknowledges that Wellington provides products to many other clients and that some of these products may be similar in formulation content or manufacturing procedures.

~~The principal raw materials used to manufacture~~We compete with many organizations including companies in the ~~energy shot are plastic bottles, nutritional supplements, flavoring agents, and concentrates~~direct-selling and/or network marketing industry. These include very diverse companies, with giant multinational corporations as well as ~~other ingredients~~smaller, local operators competing amongst each other. Bigger companies include Nu Skin Enterprises, Inc., USANA Health Sciences, Inc., and Herbalife, Ltd, which have much greater name recognition and financial resources than GX-Life does and also have many more members. These companies are publicly traded. GX-Life faces significant competition from ~~independent suppliers. These raw materials~~a wide variety of medium and small-sized privately held companies, many of whom compete directly with GX-Life. With the exception of GX-Life’s tea products, all cosmetic, nutrition, supplement, and energy drink products are ~~readily available from any number of sources~~made in the United States. GX-Life believes that the distribution of these “Made in USA” products gives it a competitive advantage over its peers that do not distribute such products because GX-Life believes that these products are in great demand in the Chinese, Taiwanese and Hong Kong markets. Furthermore, GX-Life believes that incorporating GX Coins into the GX-Life Global Compensation Plan gives GX-Life a competitive advantage because it differentiates and distinguishes GX-Life from other competing businesses that do not offer GX Coins or similar types of programs.

GX-Life's ability to compete with other companies depends, in significant part, on GX-Life's success in attracting customers to its products. There is no assurance that GX-Life will be able to compete effectively against retail stores, internet-based retailers, or other direct sellers, no matter which sales avenue is used.

Acquisition of Global Future City Regional Center, LLC (f/k/aPowerdyne Regional Center, LLC)

On March 27, 2015, we closed on our acquisition of what became Global Future City Regional Center, LLC, an EB-5 Regional Center (USCIS ID Number 1215250671) that was approved by the USCIS on March 28, 2013. The ~~Industry~~

~~Energy drinks, including two-ounce shots~~closing (“Closing”) of the Membership PSA occurred on March 27, 2015. We intended on generating revenue in this line of business by collecting management fees for overseeing the development of a qualified investment project. We were never able to find an EB-5 investment project that met our internal criteria and, ~~canned drinks,~~given the difficulties caused by Mr. Liu’s alleged actions, our investment in the Regional Center became significantly impaired. Consequently, we have abandoned this line of business and are ~~beverages with legal stimulants, vitamins, and minerals that give users~~pursuing a lift of energy. It should be noted that neither the FDA nor any comparable regulatory agency reviews or pre-approves the sale of energy drinks, including ours, since they are marketed as dietary supplements rather than drugs. Common ingredients are caffeine, taurine, ginseng, sugars, and various amounts of vitamins and minerals. The products are consumed by individuals who are explicitly lookingbuyer for the extra boost in energy. While canned energy drinks are most commonly consumed by individuals in the 18-to-34 age group, energy shots have been appealing to a more expanded demographic. In an article discussing energy drinks published in the August 2011 issue of~~Beverage Industry~~, Garima Goel-lal, beverage analyst with Mintel International, a global leading market research company, states that “a lot of adults in the older age [group] who don’t want sugar in their beverages, but want the same benefit of an energy boost, are going toward energy shots”. In the same article, Jared Koerten, U.S. research associate for Euromonitor International, states “The appeal and benefits that energy shots offer consumers has driven sales in recent years. These products have capitalized on many consumer demands in the fast-paced global economy of today. First, these products offer extended energy to consumers who need to stay alert for long work hours. In addition, by promising ‘no crash later’, energy shots can provide a boost of energy without the accompanying loss in productivity that often stems from drinking coffee or other sugary drinks”.Regional Center.

In its June 2012 Executive Summary Report on energy drinks and energy shots, Mintel reports that sales of energy shots were nearly $1.6 billion in 2011, an increase of nearly $330 million over 2010 sales. Mintel also forecasts continued growth in energy shot sales to in excess of $3.4 billion by 2016. In this report, Ms. Goel-lal states “Energy drinks and shots continue to grow unabated, especially after the recession. In order to enjoy uninterrupted growth, the category needs to add new customers, engage in innovation, broaden its functional platform, and allay product safety concerns.” Mintel also reports that Living Essential’s 5-Hour Energy “continues to account for the lion’s share in the segment.”

The energy drink industry is intensely competitive and significantly affected by new product introductions and other market activities of industry participants. The principal areas of competition are pricing, packaging, development of new products and flavors, and marketing campaigns. Our energy shots compete with a number of other energy shots produced by a relatively few number of manufacturers, most of which have substantially greater financial, marketing and distribution resources than we do. The principal competitors include 5 Hour Energy®, Red Bull®, and Monster Energy® among many others. Management believes our products’ unique formulae and affiliation with qualified medical experts as well as renowned athletes will give us a vastly different entry into a rapidly expanding market.

~~We currently have the trademarks “F.I.T.T. Energy” and “Throw A F.I.T.T”. We also own the F.I.T.T. Energy logo.~~

As of the date of this Report, we employ one person who is full-time. We retain independent contractors as needed. Our employee is not represented by a labor union and we believe that our employee relations are satisfactory.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

~~We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.~~None.

We do not own any real property. Our principal executive offices are located at ~~26381 Crown Valley Parkway,~~2 Park Plaza, Suite ~~230, Mission Viejo,~~400, Irvine, CA ~~92691~~92614 where we are leasing approximately ~~900~~5,824 square feet ~~under a month-to-month agreement that commenced~~of office space. After completion of tenant improvements in ~~June 2009. Monthly payments under~~January 2016, the lease ~~are currently $2,000.~~commenced with a minimum term of 60 months and requires the following minimum annual payments, excluding property taxes and other common area costs: months 1 through 12 - $176,112; months 13 through 24 - $183,804; months 25 through 36 - $192,192; months 37 through 48 - $200,580; and months 49 through 60 - $209,664. As we have out-sourced manufacturing and product fulfillment, including product storage, we consider our leased office space adequate for the operation of our business.

On June 3, 2016 (the “Filing Date”), Kevin McAllister (“Claimant”) filed a claim against the Company and its CFO and director, Michael Dunn, as an individual (collectively, the “Defendants”), for (i) breach of contract and (ii) fraud with the Superior Court of California, County of Orange, in Santa Ana, California. Claimant alleges that he entered into a written contract, a convertible promissory note (the “McAllister Note”), with the Company on or around December 4, 2014, but that the Company breached the McAllister Note by failing to make certain payments owed to Claimant under the terms of the note. Claimant is also alleging that Defendants agreed to perform its duties under the McAllister Note, but because Defendants have not performed or paid Claimant yet, Claimant alleges that Defendants never intended to pay the amounts owed under the McAllister Note. Furthermore, Claimant alleges that the Company has misrepresented information in its financial statements that the McAllister Note (and other debt), has or will be paid, when the Company allegedly refuses to pay such note (and other debt). Claimant is seeking approximately $182,583 in damages as well as costs of collection, attorney’s fees, punitive damages, and expenses.

On June 30, 2016, the Claimant and Defendants entered into a settlement agreement (the “Settlement Agreement”) whereby the Company agreed to pay Claimant $160,000 (the “Settlement Amount”) in full satisfaction of any and all claims related to the Action. The Settlement Amount was paid to Claimant on July 1, 2016. On July 7, 2016, a Request for Dismissal to dismiss the entire Action against the Defendants from all causes of action was filed with prejudice in the Superior Court of California, County of Orange, in Santa Ana, California. Although the Company settled the Action with Claimant, the Company believes that Claimant’s lawsuit was without merit.

On September 29, 2016, Xinai Zhao (“Plaintiff”) filed a complaint (the “Complaint”) against Mr. Ning Liu, the Company’s former Chief Executive Officer, President, and Chairman of the Board, Grand Opus Co., Ltd., a California corporation, Goldenrise Development, Inc., a California corporation, and the Company (collectively, the “Defendants”) in the Superior Court of the State of California, County of Los Angeles (Central District) and is seeking to recover no less than $212,993 in damages.

The Complaint alleges, among other things, that in 2009 Mr. Liu sold a total of 150,000 shares in three separate Chinese companies, and 200,000 shares in China Yongxin Pharmaceuticals Inc. (“CYXN”), a Delaware corporation, to the Plaintiff under false and misleading information. The Complaint also alleges that after CYXN’s stock was suspended and delisted on the Nasdaq Smallcap Market, Mr. Liu provided Plaintiff with 100,000 shares of the Company’s common stock (the “Shares”) around June 2016 to help recoup her losses in these investments.

The Company believes that the Complaint has no merit as it pertains to the Company because (i) the Company never sold the Shares to the Plaintiff, (ii) the Shares were gifted to the Plaintiff by Mr. Liu to help recoup her losses, (iii) the Company is not Mr. Liu’s alter ego, and (iv) the Plaintiff’s claims stem from the sole actions of Mr. Liu prior to serving as a director and officer of the Company. As previously discussed, Mr. Liu has resigned as the Company’s Chief Executive Officer, President, and Chairman of the Board on October 21, 2016.

On August 30, 2016, we reported on Form 8-K that our former Chief Executive Officer (“CEO”), President, and Chairman of the Board of Directors, Ning Liu, was detained in the People’s Republic of China (“PRC”). On October 21, 2016, because of his ongoing legal challenges in the PRC, Mr. Liu resigned from all his positions in our Company. Mr. Liu continues to be detained in the PRC. The charges against Mr. Liu are personal to him and our Company is in no way named as a defendant or subject to the charges. We have been informed by Mr. Liu’s attorney in the PRC that, on March 2, 2017, he was convicted in Hunan province for violations of the PRC’s multi-level marketing regulations and sentenced to 10 years in prison. We have likewise been informed by Mr. Liu’s attorney that he has an appeal hearing scheduled in Hunan Province in the near future and, if he is unsuccessful in that hearing, he can appeal to a national court in Beijing, China.

From time to time, our Company may become subject to various legal proceedings that are incidental to the ordinary conduct of our business. Although we cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, we make provisions for potential liabilities when we deem them probable and reasonably estimable.

Other than as disclosed herein, we know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation and there are no proceedings in which our directors, officers or any affiliates, or any registered or beneficial shareholder is an adverse party or has a material interest adverse to our interest.

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is currently quoted under the symbol “FTCY” on the OTCQB marketplace. The following table reflects on a per share basis the reported high and low bid prices of our Common Stock for each quarter for the period indicated as reported by the OTCQB. Such prices are inter-dealer prices without retail mark-up, mark-down, or commission and may not represent actual transactions.

~~On March 30, 2015,~~The OTCQB is generally considered to be a less active and efficient market than the ~~closing per share price for our common stock was $0.83.~~NASDAQ Global Market, the NASDAQ Capital Market, or any national exchange and does not provide investors with the liquidity that the NASDAQ Global Market, the NASDAQ Capital Market, or a national exchange would offer.

~~On October 9, 2013~~As of December 31, 2016, the approximate number of registered holders of our common stock was 540 (although we ~~mailed~~believe that the number of beneficial owners of our common stock is substantially greater since a ~~notice~~significant number of shares are held in street name). As of December 31, 2016, the number of outstanding shares of our common stock was 48,781,586, and there were no shares of common stock subject to ~~our shareholders notifying them of the finalization of the Merger. According to the records from that mailing, we had 1,224 shareholders, which number changes from day to day based on market activity.~~outstanding stock options.

~~We have never paid~~No dividends were declared on our common stock in the years ended December 31, 2016, and 2015, and we have no plans to pay dividends in the near future. Our dividend policy is subject to the discretion of our Board and depends upon a number of factors, including operating results, financial condition, and general business conditions. Holders of our common stock are entitled to receive dividends if and when declared by our Board out of funds legally available therefor. We may pay cash dividends if net income available to stockholders fully funds the proposed dividends, and the expected rate of earnings retention is consistent with capital needs, asset quality, and overall financial condition. However, at this time, we intend to reinvest earnings, when and if ~~obtained,~~generated, in the continued development and operation of our business.

~~The following table gives information about~~On December 30, 2015, we elected to withdraw and terminate our ~~common stock that may be issued upon the exercise of options under all~~Option Plan for employees, officers, and consultants of our ~~equity compensation plans as~~Company. At the time of ~~December 31, 2013.~~cancellation, there were no options outstanding, and 13,889 shares were remaining for future issuance. We will re-evaluate the implementation of an option plan in the future in our Board’s discretion.

On February 26, 2016, we entered into a consulting agreement with a consultant, whereby we issued the consultant 50,000 shares of our common stock for services rendered. 25,000 of these shares were later returned to our Company under a separate agreement.

On September 30, 2016, we entered into a consulting agreement with a consultant, whereby we issued the consultant 25,000 shares of our common stock for services rendered.

On October 3, 2016, we sold 25,000 of our common stock to an accredited investor for a total of $25,000 ($1.00 per share).

In December 2016, we issued Promissory Notes with total face value of $350,000 to three (3) debt holders along with 150,000 shares of our common stock.

On December 8, 2016, we entered into a consulting agreement with a consultant, whereby we issued the consultant 150,000 shares of our common stock for services rendered.

In connection with the above stock issuances, we did not pay any underwriting discounts or commissions. None of the sales or issuances of securities described or referred to above was registered under the Securities Act. We had or one of our affiliates had a prior business relationship with each person or entity above, and no general solicitation or advertising was used in connection with the sales or issuances. In making the sales or issuances without registration under the Securities Act, we relied upon the exemption from registration contained in Section 4(a)(2) of the Securities Act.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

~~Our Management’s Discussion~~The purpose of this section is to discuss and ~~Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning~~analyze our consolidated financial condition, liquidity and capital resources and results of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changesoperations. This analysis should be read in or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filingsconjunction with the ~~Securities~~consolidated financial statements and ~~Exchange Commission.~~

~~Although the forward-looking statements~~related footnote disclosures contained in this report ~~reflect~~and the ~~good faith judgment~~following “Cautionary Statement for Forward-Looking Information.”

Statements included in this report may contain forward-looking statements. Such statements may relate, but are not limited, to projections of ~~our management, such~~revenues, income or loss, development expenditures, plans for growth and future operations, competition and regulation, as well as assumptions relating to the foregoing. Such forward-looking statements ~~can only be based on facts and factors currently known by them. Consequently, and because forward-looking~~are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently subject to risks and uncertainties, many of which cannotbe predicted or quantified. When used in this report, the words “will,” “could,” “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends” and variations of such words and similar expressions are intended to identify forward-looking statements that involve risks and uncertainties. Future events and actual results ~~and outcomes may~~could differ materially from ~~the results and outcomes discussed~~those set forth in, contemplated by or underlying the forward-looking statements. ~~You~~

Factors that could cause actual results to differ materially from any results projected, forecasted, estimated or budgeted or may materially and adversely affect our actual results include, but are ~~urged~~not limited to, ~~carefully review~~those set forth in Item 1A. Risk Factors, and ~~consider the various disclosures made by us~~elsewhere in this report and in our other ~~reports~~public filings with the SEC.

Undue reliance should not be placed on these forward-looking statements, which are applicable only as ~~we attempt to advise interested parties~~ of the ~~risks and factors~~date hereof. Except as may be required by law, we undertake no obligation to revise or update these forward-looking statements to reflect events or circumstances that ~~may affect our business, financial condition, and results~~arise after the date of ~~operations and prospects.~~this report or to reflect the occurrence of unanticipated events.

~~Our business is the manufacturing (on an outsource basis), distribution and sale of energy drinks.~~ We market three two-ounce energy shots named “F.I.T.T. Energy for Life” (the “FITT Energy Shot”), “F.I.T.T. Energy Extreme” and "F.I.T.T. Energy Rx". We have significant debt and our profitability and cash flow have been dependent upon our success in marketing our three energy shot products. We agreed to transfer 80% of our common stock to Sky Rover Holdings Ltd. (“Sky Rover”). If we are ~~successful in closing this transaction, our business will also include the marketing and promotion of EGD.~~

~~If the Sky Rover transaction closes, we will continue to market and sell our FITT brand of energy shots while considering additional business alternatives, including among other things,~~ a proposed business model where the Company shall establish four subsidiaries. Accordingly, future operations, if the transaction closes, may be substantially different than pas operations. The first subsidiary will market a mobile application (“IP Technology”). Because the price of EGD continuously fluctuates, the IP Technology provides merchants with proprietary software that enables these merchants to calculate how much Rewarded EGD (as defined below) a consumer is eligible to receive. The second subsidiary will operate an online store and various merchants that sell goods and services to consumers, and gives consumers a certain percentage for completing the task or for the purchased goods/services backholding company focused in the ~~form~~area of EGD (“Rewarded EGD”) as part of a loyalty program. The third subsidiary will be a foreign company that will sell 4,000,000 EGD to foreign individuals and entities. The fourth subsidiary will continue to sell the Company’s current energy drinks while participating in giving away Rewarded EGD as well. The Company itself will provide marketing services to merchants that want to establish loyalty program(s) with its customers (collectively, the “Proposed Business Model”).

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States, which requires us to make estimates and assumptions in certain circumstances that affect amounts reported. In preparing these financial statements, management has made its best estimates and judgments of certain amounts, giving due consideration to materiality. We believe that of our significant accounting policies (more fully described in notes to the consolidated financial statements), the following are particularly important to the portrayal of our results of operations and financial position and may require the application of a higher level of judgment by our management, and as a result are subject to an inherent degree of uncertainty.

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. We review our estimates on an on-going basis, including those related to long-lived assets, contingencies related to pending or threatened litigation, and the valuation of stock grants, options and warrants to purchase common stock. We base our estimates on our historical experience, knowledge of current conditions and our beliefs of what could occur in the future considering available information. Actual results may differ from these estimates, and material effects on our operating results and financial position may result. We believe the following critical accounting policies involve our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue from product sales are recorded when the products are shipped and title passes to independent members. Net revenues are determined after deducting promotional and other allowances in accordance with ASC 605-50. Product sales to members are made pursuant to a member agreement that provides for transfer of both title and risk of loss upon our delivery to the carrier that completes delivery to the members. This is commonly referred to as “F.O.B. Shipping Point.” Amounts received for unshipped product are recorded as deferred revenue. Our sales arrangements do not contain right of inspection or customer acceptance provisions other than general rights of return. We estimate and accrue a reserve for product returns based on our return policies and historical experience, with the expense recorded as a reduction to revenue.

Cash receipts for enrollment packages include nonrefundable enrollment fees for all new members and an additional deposit for upgrading to a VIP status if a member so chooses under the terms of the compensation plan that was in effect during the second quarter of 2016 (the “Q2 Plan”). The nonrefundable enrollment fee is deferred and recognized over the term of the arrangement, generally twelve months.

For members under the Q2 Plan, a VIP status upgrade is a deposit which is repayable to a member either in cash, product, or convertible into GX Coin. There is no revenue associated with a VIP status upgrade deposit initially; however, related party revenue is recognized on the commission earned when VIP members under the Q2 Plan convert their membership or rewards points into GX-Coin. A VIP status upgrade earns reward status points that are also subject to repayment in cash or convertible into GX Coin. Pursuant to ASC 605-50, a cost and liability for amounts owed in cash or cash equivalents benefits under nondiscretionary loyalty programs should be accrued with a related contra-revenue, as by transferring the right to cash or cash equivalent benefits, the entity effectively reduces the revenue from conversions of VIP status and related accrued benefits to GX Coin. Each VIP member entering the Q2 Plan through the second quarter of 2016 have elected to convert their respective deposit to GX-Coin by such time or during the third quarter of 2016. The Company recognizes revenue on the conversion upon the completion of our performance obligation as part of the conversion process, at which point all necessary revenue recognition criteria have been met.

Based on industry developments and best practices of direct selling programs, GX-Life implemented a revised compensation plan on July 15, 2016, and finalized and released such plan on August 1, 2016 (the “GX-Life Global Compensation Plan”). The GX-Life Global Compensation Plan removed the VIP status upgrade deposits and accordingly, the revenues from the conversion of VIP status upgrade deposits is expected to cease during the 2016 year after all deferrals are recognized. GX-Life will continue to generate revenue from the conversion of certain membership transactions to GX Coin where GX-Life is able to make a margin on the conversion.

From time to time, GX-Life may make modifications and enhancements to the GX-Life Global Compensation Plan to help motivate GX-Life Members. GX-Life may also enter into agreements for business or market development, which may result in additional compensation to specific GX-Life Members. GX-Life intends to continue to examine and adjust the GX-Life Global Compensation Plan to reflect marketplace competition, demand, and U.S. regulations and foreign jurisdictions. Because of this, GX-Life recognizes that the compensation and rewards available under the GX-Life Global Compensation Plan may be different across different jurisdictions.

We account for stock-based compensation in accordance with ~~Accounting Standards Codification (“ASC”)~~ASC 718 – Compensation (“ASC 718”). ASC 718 requires that we account for all stock-based compensation transactions using a fair-value method and recognize the fair value of each award as an expense, generally over the service period. The fair value of stock grants is based upon the market price of our common stock at the grant date. We estimate the fair value of stock option awards, as of the grant date, using the Black-Scholes option-pricing model. The use of the Black-Scholes model requires that we make a number of estimates, including the expected option term, the expected volatility in the price of our common stock, the risk-free rate of interest and the dividend yield on our common stock. If our variable volatility assumptions were different, the resulting determination of the fair value of stock option awards could be materially different and our results of operations could be materially impacted.

We account for any equity-based payments to non-employees under ASC 505 – Equity. The fair value of the equity instrument issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of our common stock on the date the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to the statement of operations and credited to common stock and/or additional paid-in capital as appropriate.

Debt issued with common stock is accounted for under the guidelines established by ASC 470-20 – Accounting for Debt with Conversion or Other Options. We record the relative fair value of common stock related to the issuance of convertible debt as a debt discount or premium. The discount or premium is subsequently amortized over the expected term of the convertible debt to interest expense.

We review our long-lived assets in accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets. Under that directive, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Such group is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such factors and circumstances exist, we compare the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

~~In May 2014,~~From time to time, the FASB issued new accounting guidance regarding revenue recognition under GAAP. This new guidance will supersede nearly all existing revenue recognition guidance, and is effective for public entities for annual and interim periods beginning after December 31, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of this new guidance on the Company's consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements—Going Concern", which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early application is permitted. Management is still in the process of assessing the impact of ASU 2014-15 on the Company’s consolidated financial statements.

~~The FASB~~ issues ~~Accounting Standards Updates (“ASUs”)~~ASUs to amend the authoritative literature in ASC. ~~There have been a number of ASUs to date, including those above, that amend the original text of ASC.~~ Management believes that those issued to date that are not described below either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact on our consolidated financial statements.

Revenue Recognition.In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers”. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for us beginning January 1, 2018. We are currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

Financial Instruments. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall”. The new guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance on financial liabilities under the fair value option did not have a significant impact on our consolidated financial statements.

Leases.In February 2016, the FASB issued ASU No. 2016-02, Leases, that requires organizations that lease assets, referred to as “lessees”, to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will include qualitative and quantitative requirements. The new standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those annual years, and early application is permitted. We are currently assessing the impact that this standard will have on our consolidated financial statements.

Share-Based Payments to Employees.In March 2016, the FASB ASU 2016-09, “Improvements to Employee Share-based Accounting”, new guidance to simplify and improve accounting for share-based payments. The amendments include income tax consequences, the accounting for forfeitures, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2016. We do not believe the adoption of this accounting guidance will have a material effect on our consolidated financial statements.

Cash Flow Classifications. In August 2016, the FASB issued ASU 2016-15 providing new guidance to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The guidance adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2017. In November 2016, the FASB issued new guidance on restricted cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact this new guidance will have on our consolidated financial statements.

Results of Operations for the Years Ended December 31, ~~2014~~2016 and ~~2013~~2015

Net sales were ~~$51,255~~$3,507,513 for ~~2014~~2016 versus ~~$39,315~~zero for ~~2013. Our 2014 sales represented~~2015. The increase is directly related to the ~~clearance~~new member’s in our direct selling program and related deposits, membership and starter kit fees under the Q2 plan. The primary increase relates to $3,468,582 of ~~a significant part~~related party commissions earned through the members’ conversion of ~~our remaining inventory at reduced pricing since it was nearing expiration.~~deposits (including accrued rewards points) to GX-Coin during the period. We also recorded $20,206 in starter kit revenue and $18,725 of membership fees which we amortize over the requisite membership period of twelve months.

Cost of ~~goods sold~~net revenues for ~~2014~~2016 was ~~$45,924 resulting in a gross profit of $5,331. Cost of goods sold~~$1,128,504 versus zero for ~~the 2013 was $42,858 and contained a charge of $29,200~~2015. The 2016 amount includes charges for ~~product~~inventory impairment ~~due to expired inventory.~~totaling $1,122,520. Because of the ~~limited amount~~legal challenges faced by Ning Liu in the PRC, as described above, we were forced to suspend our direct selling program in the fourth quarter of 2016 and revalue our inventory to its net realizable value. We currently are pursuing relationships with a number of sales ~~during~~organizations who can purchase our existing inventory for resale purposes in an attempt to establish a wholesale relationship with these organizations as well as liquidate large quantities of inventory to extract value prior the ~~years ended 2014~~expiration date of certain products. This would allow us to take advantage of established sales networks and, ~~2013, margins indicated may not be indicative~~if successful, create a sustainable stream of ~~future margins at different sales levels.~~revenue.

Selling and marketing expenses were ~~$31,620~~$1,402,964 and ~~$276,444~~$102,915 in ~~2014~~2016 and ~~2013,~~2015, respectively. ~~In 2013 we hired a number~~The increase in these expenses was primarily attributable to the ramping up of ~~employees~~our direct selling program including the travel costs and ~~incurred payroll~~promotion required to attract new members. The main categories of cost in 2016 are consulting - $374,503; travel - $615,173; advertising and promotion - $239,023; fulfillment - $99,860; and product design and development - $53,727. 2016 consulting fees include $179,750 in expenses ~~totaling $176,422 ($83,250~~which are stock-based for shares issued to consultants for product and market development. 2015 includes $65,000 of ~~which was stock-based) while~~stock-based expenses (250,000 common shares) for marketing consulting concerning loyalty points in 2014 our payroll expense was $17,619. In addition, expenses in 2014 were lower than in 2013 in the following categories: marketing ($22,000 of which $20,000 was stock-based), advertising ($44,000) and commissions and royalties ($11,000).China.

General and administrative expenses for ~~2014~~2016 were ~~$674,157,~~$4,363,683 compared to ~~$336,830~~$1,036,108 for the comparable period in ~~2013.~~2015. The increase in these expenses was primarily attributable to beginning the implementation of our business plan including hiring personnel, expanding office space and increasing the use of outside professionals. The 2016 period includes $1,516,584 in employee compensation and benefits versus approximately $335,000 in 2015. During 2015, our Company’s management was transitioning and no formal employment agreements had been put in place. Therefore minimal compensation and benefits were accrued in connection with services. Our former CEO agreed to forgo any compensation prior to the SPA closing as any salary would be forgiven as part of his separation agreement. Our former controller was paid as a consultant for services rendered at a fraction of a cost compared to his previous full-time salary. In ~~2014,~~addition to employee compensation and benefits, other main categories of expense in 2016 are consulting - $1,110,085; legal & accounting - $773,047; bad debts - $275,967; and rent - $154,694. The bad debts in 2016 primarily resulted from deposits with vendors that went out of business before delivering products to us. All of these major expense categories were considerably higher in 2016 that 2015. The 2016 employee compensation costs include $237,078 in stock-based compensation expense for shares issued to our ~~payroll related expenses~~employees.

Our former CEO, Ning Liu, is currently detained in the PRC. In addition, we have been informed by Mr. Liu’s attorney in the PRC that, on March 2, 2017, he was convicted in Hunan Province for violations of the PRC’s multi-level marketing regulations and sentenced to 10 years in prison. Mr. Liu’s legal difficulties have had a severe adverse impact on our Company causing potential investors to look elsewhere for opportunities and existing stakeholders to distrust our brand. As a result, in the fourth quarter of 2016, we suspended our direct selling program which had been the main focus of our business plan and we abandoned our EB-5 program for lack of interest.

During 2016, we made significant advances to Great Coin to assist them in their development of a trading platform for the GX Coin, a digital currency we wished to use in a rewards program for our ~~CEO and Controller totaled $335,220 while~~direct selling program which we have suspended. Our impairment of amounts due from related parties of $1,518,300 consists mainly of our advances to Great Coin. In addition, we impaired the remaining unamortized Service Contract with Great Coin of $280,000. Finally, we impaired our $250,000 investment in ~~2013 we~~Powerdyne, our comparable payroll costs were post-Merger cost totaling $73,975. All payroll costs for our CEO and Controller were accrued and unpaid. Also in 2014, director’s fees, office supplies, office rent and telephone costs amounted to $67,000 while in 2013 the comparable post-Merger costs totaled $31,000. Finally, expenses in 2014 were higher than in 2013 in the following categories: investor relations ($22,500 of which $12,500 was stock-based) and corporation and SEC filing fees ($13,000).

Fair value of contributed services was $233,616 for 2013 and represented costs of certain shared administrative services and the costs for services provided by our CEO and Controller who did not accrue compensation from our Company prior to October 29, 2013, the effective date of the Merger. There were no such expenses in 2014.EB-5 investment.

Interest expense in ~~2014~~2016 was ~~$159,868~~$163,751 compared to ~~$465,532~~$104,799 for the same period in ~~2013.~~2015. The ~~2013 amount includes $272,015 amortization~~increase in interest expense during the 2016 period is primarily the result of ~~debt discount and accretion~~the high cost of ~~principal balance relating~~borrowing related to the $300,000 in promissory notes ~~payable that were repayable at two times principal. There are no similar costs for 2014.~~

~~Interest income~~issued during ~~2013 was $33,283 and represented an interest accrual on~~ the ~~advances to shareholder. 2014 contains no similar interest income since~~fourth quarter of the ~~shareholder advances were repaid in prior years.~~year.

~~See Note 13~~During 2016, we recorded a loss on extinguishment of debt of $9,627 related to the ~~accompanying consolidated financial statements for~~repayment of a ~~detail~~note payable. The 2015 gain on extinguishment of ~~the components for this category.~~debt totaling $333,823 consisted mainly of settlements and write-offs of notes payable, accounts payable and accrued expenses.

As a result of recurring losses and negative cash flows there is a substantial doubt about the Company’s ability to continue as a going concern. The company intends to fund its operations with additional equity and/or debt financing, but Mr. Liu’s legal challenges in the PRC have made this extremely difficult. Management is also making efforts to sell our remaining inventory. If we cannot raise additional short term capital, we may consume all of our cash reserved for operations. There are no assurances that management will be able to raise capital on terms acceptable to our Company or at all. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that would be necessary if we are unable to continue as a going concern.

As of December 31, ~~2014,~~2016, our principal source of liquidity is from cash proceeds from the ~~receipt~~issuance of ~~deposits~~notes payable. Previous sources of liquidity were proceeds received from ~~Greenome~~our direct selling program activities, but that program has been suspended and ~~Sky Rover~~may not be reactivated in ~~accordance~~the future. During the year ended December 31, 2016, we raised $2,658,086 in capital under our Form S-1 Registration Statement on file with the ~~terms of~~Securities and Exchange Commission. The S-1 is currently under review and we will not sell any shares under the ~~May 6, 2014 Share Exchange Agreement, which was subsequently cancelled, and~~S-1 until it is deemed effective by the ~~September 19, 2014 Stock Purchase Agreement. See Note 14~~SEC. Reference to the ~~accompanying consolidated financial statements. Our principal short-term~~S-1 is not an offer to sell the securities described therein, and ~~long-term liquidity needs have been, and~~we are ~~expected~~not soliciting an offer to ~~be, funding operating losses until profitability~~buy the securities in any state where the offer or sale is ~~achieved and making expenditures for general corporate purposes.~~not permitted.

~~Management continues to seek capital through various sources.~~ At December 31, ~~2014,~~2016, our cash and cash equivalents were ~~$155,271~~$85,650 and we had negative working capital in excess of ~~nearly $4.1~~$2.0 million.

In ~~prior years,~~2016, we issued ~~a number~~$300,000 in notes payable while also repaying $312,434 of notes payable and used the proceeds to fund operations. These notes payable were, in most cases, issued along with common shares of FITT or common shares of FTCY which were owned by FITT prior to the Merger. See Note 8 to the accompanying consolidated financial statements for additional information.accrued interest.

During the first quarter ended March 31, 2014, holders of $55,000 of debt (repayment value) elected to convert the obligations, including the related accrued interest totaling $15,479 into 115,637 common shares of the merged entity. Also during the first quarter of 2014, we entered intoWe also received a ~~convertible promissory note with a note holder which was assigned to a third party and amended~~$250,000 capital contribution from our former CEO in the ~~third quarter~~form of ~~2014. During the fourth quarter~~a repayment of 2014, we entered into new note agreements with noteholders of $1,515,000 of debt whereby the maturity dates were extended to August 2015, interest rates were reset at 10%, and a significant amount of accrued interest was forgiven. The new note agreements also contain a forced conversion feature at the option of the Company when certain market conditions are met. See Note 8 to the accompanying consolidated financial statements for further information.member deposits.

During 2014, we issued 50,000 common shares (valued at $12,500) to a service provider for various public relations services. In 2013, we issued 526,599 shares of common stock (total value of $27,500) in consideration of entering into agreements with two individuals for services. Also in 2013, we issued 213,300 of our common shares (total value of $83,250) to two employees as incentive for them to begin employment with us.

	2014			2013			Change			2016			2015
Operating activities
Net income (loss)	$	190,620		$	(1,666,458	)	$	1,857,078		$	(5,609,937	)	$	(910,786	)
Change in non-cash items		(1,030,624	)		1,036,381			(2,067,005	)		3,776,341			(262,456	)
Change in working capital		481,561			409,523			72,038			206,693			(1,147,835	)
Total		(358,443	)		(220,554	)		(137,889	)		(1,626,903	)		(2,321,077	)
Investing activities		(1,871	)		(80,629	)		78,758			(416,420	)		(449,634	)
Financing activities		515,000			294,500			220,500			1,473,568			3,270,845
Total	$	154,686		$	(6,683	)	$	161,369		$	569,755		$	500,134

During the 2016 period, non-cash items include write-offs totaling $2,048,300 of our investment in Powerdyne, our Service contract with Great Coin, and amounts due from related parties, principally Great Coin. Also included is an inventory impairment charge of $1,122,520 related to our suspended direct selling program. Finally, this category also includes a loss on extinguishment of debt and expenses related to stock-based compensation and depreciation and amortization. The change in working capital primarily results from payments for inventory offset by increases in accounts payable, accrued expenses and membership deposits.

During the 2015 period, non-cash items ~~includes gain/loss~~include gain on extinguishment of debt, shares issued for compensation and services ~~the fair value of contributed services, depreciation,~~ and ~~amortization of debt discount/debt accretion.~~depreciation. The change in working capital is primarily related to ~~increases in accounts payable, accrued expenses and accrued compensation.~~deposits made for inventory.

~~Cash used in investing activities consists of~~During the 2016 period, we made capital expenditures ~~along~~of $416,420. During the 2015 period, we paid $200,000 toward our acquisition of Powerdyne. We also made capital expenditures of $249,634 and paid $350,000 in connection with ~~cash advances to~~a Software License and ~~repayments from a related party and our major shareholder. For 2013, this category also includes net liabilities assumed in the Merger.~~Services Agreement with Great Coin.

~~Cash provided~~During the 2016 period, we received $2,683,086 in proceeds from the sale of common stock, primarily under our S-1 offering. We also received $300,000 in proceeds from the issuance of notes payable ~~was $40,000~~ and ~~$230,000~~$250,000 in a capital contribution from our former CEO. Offsetting this were repayments of notes receivable and accrued interest of $312,434 and advances to related parties, mainly Great Coin, of $1,497,055.

During the ~~2014~~2015 period, we received $3,000,000 from the sale of 6,000,000 shares of common stock, $150,000 from our former CEO for the acquisition of Powerdyne, $139,885 in connection with the Sky Rover SPA, and ~~2013 periods, respectively. The 2014 period includes $525,000~~$48,293 in ~~deposits~~finalizing all issues with Lei Pei. We repaid $52,844to a related party and ~~$50,000~~a shareholder and paid $14,489 in ~~payments~~deferred financing costs relating to ~~a proposed business combination while the 2013 period included $64,500 in capital contributions from a major shareholder.~~our S-1 offering.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

We have audited the accompanying consolidated balance sheets of Global Future City Holding Inc. ~~(formerly FITT Highway Products, Inc.)~~ and ~~subsidiary~~subsidiaries (collectively the “Company”) as of December 31, ~~2014~~2016 and ~~2013,~~2015, and the related consolidated statements of operations, shareholders’ ~~deficit,~~equity (deficit), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. 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 an audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company was 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 consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Global Future City Holding Inc. as of December 31, ~~2014~~2016 and ~~2013,~~2015, and the results of their operations and their 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 consolidated financial statements, the Company has suffered losses from operations and has a significant working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 1. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

	December 31,						December 31,
	2014			2013			2016			2015
Assets

Assets:
Current assets:
Cash and cash equivalents	$	155,271		$	585		$	85,650		$	655,405
Accounts receivable, net of allowance		51,256			–			4,355			–
Inventories		3,426			52,496
Inventories on hand								572,310			–
Inventory deposits								–			879,504
Deferred financing costs								–			14,489
Prepaid expenses		10,277			4,232			18,427			21,411
Total current assets		220,230			57,313			680,742			1,570,809
Property and equipment, net		6,059			12,169			549,019			249,325
Investment in Powerdyne								–			250,000
Service Contract – related party, net								–			350,000
Other assets								19,954			19,359
Total assets	$	226,289		$	69,482		$	1,249,715		$	2,439,493

Liabilities and Shareholders’ Deficit
Liabilities and Shareholders’ Equity (Deficit):
Current liabilities:
Accounts payable	$	505,602		$	694,003		$	526,417		$	326,700
Accrued expenses and deposits		526,238			324,522
Accrued expenses								270,714			138,677
Accrued compensation		1,996,559			1,712,724			315,277			211,905
Membership deposits and accrued benefits								550,808			10,020
Deferred revenue								1,375			600
Notes payable		1,100,000			1,650,000			1,006,453			1,050,000
Advances from related parties		157,203			159,074			89,966			89,359
Total current liabilities		4,285,602			4,540,323			2,761,010			1,827,261
Total liabilities		4,285,602			4,540,323			2,761,010			1,827,261

Commitments and contingencies (Note 10)
Commitments and contingent liabilities (Note 12)

Shareholders’ deficit:
Shareholders’ equity (deficit):
Preferred stock, $0.001 par value: 20,000,000 shares authorized, no shares issued and outstanding		–			–			–			–
Common stock, $0.001 par value: 150,000,000 shares authorized, 37,763,410 and 38,018,748 shares issued and outstanding at December 31, 2014 and 2013, respectively.		37,763			38,019
Common stock, $0.001 par value: 150,000,000 shares authorized, 48,781,586 and 47,533,029 shares issued and outstanding at December 31, 2016 and 2015, respectively.								48,782			47,533
Additional paid-in capital		435,040			213,876			9,492,762			6,007,601
Accumulated deficit		(4,532,116	)		(4,722,736	)		(11,052,839	)		(5,442,902	)
Total shareholders’ deficit		(4,059,313	)		(4,470,841	)
Total liabilities and shareholders’ deficit	$	226,289		$	69,482
Total shareholders’ equity (deficit)								(1,511,295	)		612,232
Total liabilities and shareholders’ equity (deficit)							$	1,249,715		$	2,439,493

	Year Ended December 31,						Year Ended December 31,
	2014			2013			2016			2015
Cash flows from operating activities:
Net income (loss)	$	190,620		$	(1,666,458	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
(Gain) loss on extinguishment of debt		(1,051,734	)		382,976
Net loss							$	(5,609,937	)	$	(910,786	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on extinguishment of debt								9,627			(333,823	)
Inventory impairment								1,122,520
Impairment of investment in Powerdyne								250,000			–
Impairment of service contract – related party								280,000			–
Reserve on due from related parties								1,518,300			–
Common stock issued for services and compensation		12,500			110,750			416,647			65,000
Fair value of contributed services		–			233,616
Depreciation		6,110			5,786
Amortization of debt discount/debt accretion		2,500			303,253
Depreciation and amortization								179,247			6,367
Changes in operating assets and liabilities:
Accounts receivable		(51,256	)		824			(4,355	)		51,256
Inventories		49,070			(1,825	)
Inventories and inventory deposits								(815,326	)		(876,078	)
Deferred financing costs								14,489			–
Prepaid expenses		(6,045	)		510			2,984			(11,133	)
Service contract - related party								–			(350,000	)
Other assets								(595	)		(19,359	)
Accounts payable		86,360			131,572			199,717			77,298
Accrued expenses		147,148			172,361			164,844			26,441
Accrued compensation		256,284			106,081			103,372			(56,880	)
Membership deposits and accrued benefits								540,788			10,020
Deferred revenue								775			600
Net cash used in operating activities		(358,443	)		(220,554	)		(1,626,903	)		(2,321,077	)

Cash flows from investing activities:
Capital expenditures		–			(3,015	)		(416,420	)		(249,634	)
Advances (repayments) to/from related party		(1,871	)		69,524
Advances to shareholder		–			(147,138	)
Acquisition of Powerdyne EB-5 license								–			(200,000	)
Net cash used in investing activities		(1,871	)		(80,629	)		(416,420	)		(449,634	)

Cash flows from financing activities:
Sale of common stock								2,683,086			3,000,000
Proceeds from capital contribution for acquisition of Powerdyne								–			150,000
Proceeds from capital contributions								250,000			188,178
Cash paid for deferred financing costs								–			(14,489	)
Borrowings from (repayments to) a related party								49,971			(52,844	)
Advances to related parties								(1,497,055	)		–
Proceeds from issuance of notes payable		40,000			230,000			300,000			–
Proceeds from deposit on proposed business combination		525,000			–
Payment to shareholder to facilitate proposed business combination		(50,000	)		–
Proceeds from capital contributions		–			64,500
Repayment of notes payable and accrued interest								(312,434	)		–
Net cash provided by financing activities		515,000			294,500			1,473,568			3,270,845

Net increase (decrease) in cash and cash equivalents		154,686			(6,683	)		(569,755	)		500,134

Cash and cash equivalents at beginning of year		585			7,268			655,405			155,271
Cash and cash equivalents at end of year	$	155,271		$	585		$	85,650		$	655,405

Supplemental disclosure of cash flow information:
Cash paid for interest	$	562		$	562		$	437		$	437
Cash paid for income taxes	$	–		$	–		$	–		$	–

Supplemental disclosure of non-cash investing and financing activities:
Repayment of advances with common stock	$	27,551		$	691,805
Repayment of accounts payable and advances with common stock							$	–		$	47,075
Conversion of notes payable and accrued interest	$	70,479		$	906,545		$	–		$	58,279
Discount on notes payable	$	2,500		$	128,000
Net liabilities assumed from reverse merger	$	–		$	2,987,791
Forgiven accrued compensation							$	–		$	1,673,774
Assets acquired from Powerdyne for note payable							$	–		$	250,000
Net liabilities assumed in GX-Life acquisition							$	–		$	17,247

Our Company was incorporated in the State of Nevada on October 12, 2000 under the name Cogen Systems, Inc. We changed our name to Snocone Systems, Inc. on December 6, 2001. On April 1, 2005, Snocone Systems, Inc. and its wholly-owned subsidiary, WYD Acquisition Corp., ~~formerly~~a California corporation (the “Merger Sub”), merged with Who’s Your Daddy, Inc. (“WYD”), an unrelated, privately held California corporation, whereby the Merger Sub merged with and into WYD. After the merger, WYD continued its corporate existence as a direct, wholly-owned subsidiary of Snocone Systems, Inc. under the laws of the State of California. On April 13, 2005, we changed our name to Who’s Your Daddy, Inc. and, effective June 1, 2010, we changed our name to FITT Highway Products, Inc. ~~(the “Company”~~Effective October 29, 2013, we merged with F.I.T.T. Energy Products, Inc. (“FITT”)~~, is in~~ whereby FITT merged into our Company, with our Company being the business of manufacturing (on an outsource basis), distribution and sale of energy drinks. We market three two-ounce energy shots named “F.I.T.T. Energy for Life” (the “FITT Energy Shot”), “F.I.T.T. Energy Extreme” and "F.I.T.T. Energy Rx". As discussed in Note 14, we have agreed to sell 80%surviving entity. Effective October 29, 2014 the name of our common stock to Sky Rover Holdings Ltd. (“Sky Rover”). If we are successful in closing this transaction, our business will also include the marketing and promotion of an E-Gold coin (the “EDG”), a type of cryptoasset created by Sky Rover, to merchants and consumers.

If the Sky Rover transaction closes, we will continue to market and sell our FITT brand of energy shots while considering additional business alternatives, including among other things, a proposed business model where the Company shall establish four subsidiaries. The first subsidiary will market a mobile application (“IP Technology”). Because the price of EGD continuously fluctuates, the IP Technology provides merchants with proprietary software that enables these merchants to calculate how much Rewarded EGD (as defined below) a consumer is eligible to receive. The second subsidiary will operate an online store and various merchants that sell goods and services to consumers, and gives consumers a certain percentage for completing the task or for the purchased goods/services back in the form of EGD (“Rewarded EGD”) as part of a loyalty program. The third subsidiary will be a foreign company that will sell a set amount of EGD to foreign individuals and entities. The fourth subsidiary will continue to sell the Company’s current energy drinks while participating in giving away Rewarded EGD as well. The Company itself will provide marketing services to merchants that want to establish loyalty program(s) with its customers (collectively, the “Proposed Business Model”).

The Securities and Exchange Commission (“SEC”) has not deemed whether a form of digital currency or crypto asset itself is a security, due to this uncertainty, the Company has submitted a Request for No-Action Relief (the “No-Action Letter) on February 10, 2015 to the SEC to obtain clarification that the SEC will not recommend enforcement action against the Company and its related subsidiaries regarding the Proposed Business Model if they conduct themselves as described in the No-Action Letter.

~~If the Sky Rover transaction fails to close, the Company will continue to market and sell our FITT brand of energy shots.~~

On October 16, 2014, our Board of Directors approved an agreement and plan to merge with our newly formed and wholly-owned subsidiary, Global Future City Holding Inc., a Nevada corporation, to effectuate a name change from FITT Highway Products, Inc.was changed to Global Future City Holding Inc. ~~Global was formed solely for the purpose of this name change~~(the “Company” or “we”) and our Company would be the surviving entity following the merger. The Articles of Merger effectuating the merger and name change were filed with the Nevada Secretary of State on October 16, 2014 and became effective October 29, 2014. In connection with the name change, our tickertrading symbol ~~was~~ changed from ~~FHWY~~“FHWY” to ~~FTCY.~~“FTCY.”

On August 30, 2016, we reported on Form 8-K that our former Chief Executive Officer, President, and Chairman of the Board of Directors, Ning Liu, was detained in the People’s Republic of China (“PRC”) and we had begun investigating the facts and circumstances surrounding his detainment. On September 9, 2016, we filed Form 8-K reporting that Mr. Liu was taking a 30 day leave of absence from all positions he held with ~~FITT~~

~~In 2012, F.I.T.T Energy Products, Inc. (“FITT”) proposed negotiating a business combination with us and,~~our Company. Finally, on ~~November 5, 2012,~~October 21, 2016, because of his ongoing legal challenges in the PRC, Mr. Liu resigned from all his positions in our Company. Also on October 21, 2016, our Board of Directors ~~approved commencing formal negotiations with FITT~~appointed Michael R. Dunn to the positions of Chief Executive Officer (“CEO”), President and Chairman of the Board.

Mr. Liu continues to be detained in ~~this regard. On June 12, 2013,~~ the ~~Board,~~PRC. We have been informed by ~~unanimous written consent, recommended~~Mr. Liu’s attorney in the PRC that, ~~our stockholders approve~~on March 2, 2017, he was convicted in Hunan province for violations of the ~~Company entering into~~PRC’s multi-level marketing regulations and sentenced to 10 years in prison. We have likewise been informed by Mr. Liu’s attorney that he has an appeal hearing scheduled in Hunan Province in the near future and, if he is unsuccessful in that hearing, he can appeal to a ~~Merger~~national court in Beijing China. This process could take months and ~~Reorganization Agreement (the “Merger Agreement”) with FITT~~it is very difficult to get reliable information on the particulars of Mr. Liu’s case to make any intelligent assessment as to the final outcome. While many of the facts of his detention and ~~on June 12, 2013, holders~~conviction are unclear, we have been informed that Mr. Liu allegedly raised capital through the sale of a ~~majority of~~digital coin, named Wan Fu Bi, all while representing himself as the ~~voting power of all shares~~CEO of our ~~common~~Company and ~~preferred stock entitled~~an unaffiliated private company, Great Coin Inc. (“Great Coin”). As further described below, Great Coin, which was co-owned by Mr. Liu and Michael Dunn, is a technology company that developed the GX Coin, a digital currency, and a trading platform for the GX Coin. Through a February 2016 agreement with Great Coin, our Company’s direct-selling program members were able to ~~vote, by written consent~~convert a portion of their membership accounts into GX Coins. It is unclear whether investors in ~~lieu of a special meeting~~Wan Fu Bi believed it was the same as the GX Coin. Even though Mr. Liu was allegedly representing himself as the CEO of our ~~stockholders, approved~~Company and also of Great Coin, his activities were never authorized by either company, Wan Fu Bi has no affiliation with either company or Michael Dunn, and no funds resulting from the ~~following action: entry into the Merger Agreement~~alleged activities were ever received by our Company, Great Coin or Michael Dunn.

While no actions have been filed against our Company as a result of Mr. Liu’s actions, his detention and legal challenges have had, and continue to have, a material adverse impact on us. We believe that potential investors in our Company and potential business partners have refused and or avoided doing business with FITT whereby FITT would be merged into the Company, with the Company being the surviving entity (the “Merger”). The Merger Agreement, which was entered into on June 18, 2013, required that FITT obtain an independent valuation which would serve as the basis for a share exchange once all necessary approvals were obtained. A Definitive Information Statement on Schedule 14C (“DEF 14C”) was mailedus due to Mr. Liu’s actions. Our efforts to implement our ~~shareholders on October 8, 2013 and the Merger~~direct selling program became ~~effective on October 29, 2013. On October 29, 2013, we issued 33,000,000 shares of common stock~~significantly more difficult due to ~~the shareholders of FITT~~questions surrounding Mr. Liu’s detention. In addition, our investment in ~~the manner set out in the Merger Agreement. As such, the FITT shareholders owned approximately 89% of the post merged company as of the transaction date.~~ Global Future City ~~Holding Inc.~~Regional LLC, an EB-5 Regional Center, was significantly impaired due to Mr. Liu’s actions, and ~~FITT are hereafter known collectively as the “Company”.~~potential project partners decided to investigate their opportunities elsewhere.

~~For accounting purposes, this merger was treated as a reverse-acquisition since control of~~While Mr. Liu is no longer involved with our Company, ~~passed~~many potential investors and strategic partners, particularly those in the PRC, became distrustful of us, resulting in significant harm to ~~the FITT shareholders.~~our credibility, our brand and our ability to raise capital. As a result of ~~this accounting treatment, subsequent~~Mr. Liu’s alleged actions, we were forced to October 29, 2013, the effective date of the reverse-acquisition, the historical financial statements of FITT, the accounting acquirer, are presented for all periods prior to the acquisition as a change in reporting entity. The financial statements of Global Future City Holding Inc. are included from October 29, 2013. The assets acquired and liabilities assumed of Global Future City Holding Inc. were recorded at fair value, which approximated the carrying value, on the acquisition date and includedsuspend our direct selling program (the “GX-Life Direct Selling Program”) in the ~~financial information post-merger. The following is pro-forma revenue~~fourth quarter of 2016 and ~~earnings information~~to abandon and write-off our investment in our EB-5 Regional Center line of business. We believe Mr. Liu’s alleged actions were the primary factor in our stock price falling from a high of $3.64 per share in the first quarter of 2016 to a low of $0.51 per share in the fourth quarter of 2016, causing us to experience significant lost opportunities to raise capital. In addition, after focusing a significant portion of our resources for ~~the year ended December 31, 2013 assuming both~~several months attempting to redirect our marketing strategy to an online sales program with little success, we were forced to lay off a majority of our employees in January 2017 to reduce costs to a minimal level.

In response to Mr. Liu’s alleged actions and their significant harm to our Company, on March 20, 2017 we entered into a Stock Issuance Cancellation Agreement with Mr. Liu and ~~FITT had been combined as~~certain of ~~January 1, 2013. Amounts~~his affiliates (the “Stockholders”) under which the Stockholders agreed to return 8,349,906 common shares owned by them to our Company for cancellation. We retain the right in the future to bring actions against Mr. Liu for any and all further damages his alleged actions may have ~~been rounded~~caused. In a separate agreement, Mr. Liu also relinquished his 50% ownership in Great Coin to Mr. Dunn and Mr. Dunn retains the ~~nearest thousand and are unaudited:~~right to bring future actions against Mr. Liu for any damages his alleged actions may have caused.

~~Management’s Plan~~We are a holding company focused in the area of ~~Operations~~

consumer product sales. We entered this market space through our October 2015 acquisition of GX-Life Global, Inc. (“GX-Life”). See Note 3. Through GX-Life, we sell high quality consumer products such as personal care, wellness, and quality-of-life products under the brand, “GX-Life”. Our sales, although limited, were previously made via a direct-selling membership program and through e-commerce channels. Our direct-selling program includes a reward program featuring a digital currency (the “GX Coin”) we access through an agreement with Great Coin, Inc. (“Great Coin”). See Note 6. During the ~~years ended December 31, 2014~~fourth quarter of 2016, we suspended the direct-selling program for reasons associated with the detention of our CEO described above.

We currently are pursuing relationships with a number of sales organizations who can purchase our existing inventory for resale purposes in an attempt to establish a wholesale relationship with these organizations. This would allow us to take advantage of established sales networks and, ~~2013,~~if successful, create a sustainable stream of revenue. We believe this approach gives us the ~~Company has generated minimal revenue and had significant~~best opportunity for future success at the least cost. There is no assurance that we will be successful in this endeavor.

For a more detailed description of our business, please see the section titled, “Business Summary” under Part I, Item 1. Business.

As a result of recurring losses, ~~from operations. Given the Company’s lack of historical revenue,~~ negative cash flows from operations ~~operating losses,~~ and ~~lack of significant~~working capital ~~to execute our business and marketing plan for the FITT Energy Drinks,~~deficiency, there ~~are factors present that indicate~~is a substantial doubt about the Company’s ability to continue as a going concern. ~~Subsequent~~We intend to ~~year end,~~fund our operations with additional equity and/or debt financing. Management is also making efforts to increase revenue generating activities though the pursuit of wholesale relationships with interested sales organizations. If we cannot raise additional short term capital, we may consume all of our cash reserved for operations. There are no assurances that management will be able to raise capital on terms acceptable to the Company ~~has secured $3,000,000 in financing (see Note 14)~~or at all. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that ~~is expected~~would be necessary if we are unable to be used for working capital, repayment of certain debts, and investments into projects and/or inventory that Management expects will provide the Company with future revenues and the ability to obtain add-on financing if needed. In addition, the Company has agreements in place, such that if and when the Sky Rover transaction is closed, approximately $1,680,000 in accrued compensation and payroll taxes will be alleviated from the Company’s current liabilities, $845,000 in notes payable, plus the related interest thereon can be forced to convert if market conditions are met, and $400,000 in deposits from Sky Rover will no longer be subject to return, for total reductions in liabilities of $2.9 million before any cash is used to settle additional liabilities. Accordingly, we believe based on historical operating costs and planned future operating costs, that the capital received and resulting debt alleviation subsequent to year end will be sufficient to finance our working capital needs over the next 12 months.continue as a going concern.

~~On November 29, 2012, our Board executed a unanimous written consent authorizing~~Basis of Presentation and recommending that our stockholders approve a proposal to institute a one-for-sixty (1:60) reverse stock split. On the same day, holders of a majority of the voting power of all shares of our common and preferred stock entitled to vote, by written consent in lieu of a special meeting of our stockholders, approved the Board’s recommendation. The reverse split became effective February 15, 2013. All references to shares and per share information in these consolidated financial statements have been restated to give effect to the Reverse Split.

The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities. On an on-going basis, we evaluate all of these estimates and assumptions. The most important of these estimates and assumptions relate to revenue recognition including reserves for right of return, inventory valuation, collectability of receivables, impairment assessments on long-lived assets, and the ~~methods~~valuation of ~~app~~l~~ying~~t~~hose principles to fairly present~~stock compensation and awards. Although these and other estimates and assumptions are based on the ~~company~~'~~s financial position and~~best available information, actual results ~~of operations in accordan~~c~~e with generally accepted accounting principles~~.could be different from these estimates.The policies discussed below include those that management has determined to be the most appropriate in preparing ~~the company's~~our consolidated financial ~~statements~~statements.

The accompanying consolidated financial statements include the accounts of Global Future City Holding Inc. and its ~~wholly owned subsidiary.~~wholly-owned subsidiaries. All significant intercompany accounts and transactionshave been eliminated in consolidation.Management makes estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Actual results could differ from those estimates.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Our significant estimates relate to ~~the assessment of contingent events, the valuation of stock awards,~~revenue recognition including reserves for right of return, inventory valuation, collectability of receivables, impairment assessments on ~~revenues,~~long-lived assets, and ~~inventory valuation.~~the valuation of stock compensation and awards.

We will invest any cash balances we may have through high-credit quality financial institutions. From time to time, we may maintain bank account levels in excess of FDIC insurance limits. If the financial institution in which we have our accounts has financial difficulties, any cash balances in excess of the FDIC limits could be at risk.

~~Accounts receivable at December 31, 2014 was from one customer. There were no accounts receivable at December 31, 2013.~~

~~The Company considers~~We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents.

~~The Company maintains~~We maintain allowances for doubtful accounts for estimated losses resulting from the inability of ~~the Company’s~~our customers to make required payments. ~~The Company considers~~We consider the following factors when determining if collection of required payments is reasonably assured: customer credit-worthiness, past transaction history with the customer, and current economic industry trends. As of December 31, ~~2014~~2016 and ~~2013,~~2015, there were no allowances for doubtful accounts.

Inventories are valued at the lower of first-in, first-out, cost or market value (net realizable value). We regularly review our inventory quantities on hand and record a provision for excess and slow moving inventory based primarily on our estimated forecast of product demand and related product expiration dates.

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of five years. Significant renewals and betterments are capitalized while maintenance and repairs are charged to expense as incurred. Leasehold improvements are amortized on the straight-line basis over the lesser of their estimated useful lives or the term of the related lease.

We incur software development costs to develop software programs to be used solely to meet our internal needs and cloud-based applications used to deliver our services. In accordance with ASC 350-40, Internal-Use Software, we capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended.

~~The Company follows~~We follow the guidance of ASC 820 – Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Our financial instruments consisted primarily of (level 1) accounts payable, accrued expenses and deposits, and notes payable. The carrying amounts of ~~the Company's~~our financial instruments generally approximate their fair values due to the short term nature of these instruments.

As of December 31, ~~2014~~2016 and ~~2013,~~2015, we did not have any level 2 or 3 assets or liabilities.

Our Company accounts for lease rentals that have escalating rents on a straight-line basis over the life of each lease. This accounting generally results in a deferred liability (for the lease expense) recorded on the balance sheet.

Debt issued with common stock is accounted for under the guidelines established by ASC 470-20 – Accounting for Debt With Conversion or Other Options. We record the relative fair value of common stock related to the issuance of convertible debt as a debt discount or premium. The discount or premium is subsequently amortized to interest expense over the expected term of the convertible debt.

We account for free-standing derivative instruments and hybrid instruments that contain embedded derivative features in accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities, as well as related interpretations of this topic. In accordance with this topic, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. We determine the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument. We record all of these liabilities at their fair value at issuance and adjust the liabilities quarterly to reflect changes in their fair value.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Due to historical net losses, a valuation allowance has been established to offset the deferred tax assets.

~~We recognize revenue~~Revenue from product sales are recorded when ~~persuasive evidence of an arrangement exists, delivery has occurred,~~ the ~~sales price is fixed or determinable and collectability is reasonably assured. Ownership of~~products are shipped and title passes to ~~our products pass to customers upon delivery of the products to customers.~~independent members. Net ~~sales~~revenues are determined after deducting promotional and other allowances in accordance with ASC 605-50. ~~The Company's promotional~~Product sales to members are made pursuant to a member agreement that provides for transfer of both title and risk of loss upon our delivery to the carrier that completes delivery to the members. This is commonly referred to as “F.O.B. Shipping Point.” Amounts received for unshipped product are recorded as deferred revenue. Our sales arrangements do not contain right of inspection or customer acceptance provisions other ~~allowances are calculated~~than general rights of return. We estimate and accrue a reserve for product returns based on ~~various programs with its distributors~~our return policies and ~~retail customers, and accruals are established during the year for anticipated liabilities. These accruals are based on agreed upon terms, as well as the Company's~~ historical experience, with ~~similar~~the expense recorded as a reduction to revenue.

For members under the Q2 Plan, a VIP status upgrade is a deposit which is repayable to a member either in cash, product, or convertible into GX Coin. There is no revenue associated with a VIP status upgrade deposit initially; however, related party revenue is recognized on the commission earned when VIP members under the Q2 Plan convert their membership or rewards points into GX-Coin. A VIP status upgrade earns reward status points that are also subject to repayment in cash or convertible into GX Coin. Pursuant to ASC 605-50, a cost and liability for amounts owed in cash or cash equivalents benefits under nondiscretionary loyalty programs should be accrued with a related contra-revenue, as by transferring the right to cash or cash equivalent benefits, the entity effectively reduces the revenue from conversions of VIP status and ~~require management's judgment with respect~~related accrued benefits to ~~estimating consumer participation and/~~GX Coin. Each VIP member entering the Q2 Plan through the second quarter of 2016 have elected to convert their respective deposit to GX-Coin by such time or ~~distributor~~during the third quarter of 2016. The Company recognizes revenue on the conversion upon the completion of our performance obligation as part of the conversion process, at which point all necessary revenue recognition criteria have been met.

Based on industry developments and ~~retail customer performance levels. Differences between~~best practices of direct selling programs, GX-Life implemented a revised compensation plan on July 15, 2016, and finalized and released such ~~estimated expense~~plan on August 1, 2016 (the “GX-Life Global Compensation Plan”). The GX-Life Global Compensation Plan removed the VIP status upgrade deposits and ~~actual expenses~~accordingly, the revenues from the conversion of VIP status upgrade deposits is expected to cease during the 2016 year after all deferrals are recognized.

From time to time, GX-Life may make modifications and enhancements to the GX-Life Global Compensation Plan to help motivate GX-Life Members. GX-Life may also enter into agreements for ~~promotional~~business or market development, which may result in additional compensation to specific GX-Life Members. GX-Life intends to continue to examine and ~~other allowance~~adjust the GX-Life Global Compensation Plan to reflect marketplace competition, demand, and U.S. regulations and foreign jurisdictions. Because of this, GX-Life recognizes that the compensation and rewards available under the GX-Life Global Compensation Plan may be different across different jurisdictions.

Shipping and handling costs ~~have historically been insignificant~~are recorded as a cost of net revenue and are ~~recognized in earnings in the period such differences are determined.~~expensed as incurred.

~~The Company presents~~We present basic income (loss) per share (“EPS”) and diluted EPS on the face of the consolidated statement of operations. Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. At December 31, ~~2014~~2016 and ~~2013,~~2015, we had no outstanding options or warrants to purchase any of our common shares, respectively. As of December 31, ~~2014, the Company had certain debt with conversion features, which was convertible into approximately 1,346,191 shares of common stock. The Company added these dilutive shares to the denominator~~2016 and ~~added back approximately $18,000 of related interest in the numerator for weighted average diluted earnings per share. As of December 31, 2013, the Company~~2015, we had convertible debt; however, the effects of the convertible debt would have been anti-dilutive due to loss in the period.

We account for our stock-based compensation in accordance with ASC 718 – Stock Compensation. We account for all stock-based compensation using a fair-value method on the grant date and ~~recognizes~~recognize the fair value of each award as an expense over the requisite vesting period.

We account for our equity-based payments to non-employees under ASC 505 – Equity. The fair value of the equity instrument issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of our common stock on the date the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to the statement of operations and credited to common stock and/or additional paid-in capital as appropriate.

In April 2015, the FASB issued ASU No. 2015-05 “Intangibles-Goodwill and Other-Internal-Use Software.” The standard amended the existing accounting standards for intangible assets and provides explicit guidance to customers in determining the accounting for fees paid in a cloud computing arrangement, wherein the arrangements that do not convey a software license to the customer are accounted for as service contracts. The pronouncement is effective for reporting periods beginning after December 15, 2015. We early adopted ASU 2015-05 and applied service contract treatment to the Software License and Service Agreement (Note 6) as we do not have the right to take possession of the software, and thus the contract is deemed a service contract.

Share-Based Payments to Employees. In March 2016, the FASB ASU 2016-09, “Improvements to Employee Share-based Accounting”, new guidance to simplify and improve accounting for share-based payments. The amendments include income tax consequences, the accounting for forfeitures, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2016. We do not believe the adoption of this accounting guidance will have a material effect on our consolidated financial statements.

On April 17, 2015, our Company and Sky Rover Holdings, Ltd., a corporation formed under the laws of the Republic of Seychelles (“Sky Rover”) completed the closing of a Stock Purchase Agreement (the “SPA”) whereby certain unaffiliated parties that contributed cash, E-Gold coin (“EGD”) crypto-assets, and other consideration to complete the SPA (including the shares issued to Mr. Lei Pei as described below) (collectively, the “Acquiring Shareholders”) cumulatively acquired 30,400,000 of the outstanding shares of stock of our Company (approximately 87.3%) in exchange for our receipt of $400,000 in cash and the contribution of 4,000,000 EGD to our wholly-owned subsidiary, Global Modern Enterprise Limited, a Hong Kong entity (the “EGD Subsidiary”). To complete the transaction, 29,868,649 of the common shares acquired were conveyed by certain affiliated and unaffiliated existing shareholders and 3,371,351 were newly issued. Prior to the closing, Sky Rover advanced $539,885, consisting of the $400,000 purchase price and $139,885 towards reimbursement of certain corporate costs. Additionally, Sky Rover’s officer, Mr. Lei Pei, provided the initial down payment for the purchase of Powerdyne.

In connection with the closing of the SPA, Mr. Lei Pei purchased 6,000,000 newly-issued shares of our common stock for $3,000,000 in cash in a separate transaction that closed on March 30, 2015, which was meant to provide working capital for our anticipated expansion programs. On August 17, 2015, Mr. Pei, resigned from our Company as its Chief Executive Officer, Chief Financial Officer and Chairman.

Also in connection with the share purchase by Sky Rover, we intended to market and deploy the EGD through a reward program (“Rewarded EGD”). In order to ensure compliance with existing securities regulations, on February 10, 2015 we filed a Request for No-Action Relief (the “No-Action Letter”) with the Securities and Exchange Commission (“SEC”) to obtain clarification that the SEC will not recommend enforcement action against our Company and its related subsidiaries regarding our use of the EGD. Despite several inquiries made by our Company, we did not receive a substantive response from the SEC on the No-Action Letter. This led management to elect to rescind the previous contribution of EGD and to focus on the acquisition of GX-Life as described below. As a result, on October 9, 2015, we withdrew the No-Action Letter from consideration by the SEC.

The acquisition of the EGD is considered an asset purchase for accounting purposes based on the guidance of ASC 805 - Business Combinations, as the EGD does not have features of a business nor does it have any operations. Due to management’s election to effectively rescind the contribution of EGD and to focus on the acquisition of GX-Life Global, we recorded the value of the EGD as of the date of acquisition at $0.

On October 2, 2015, we completed a Share Exchange Agreement with GX-Life, whereby we spun-off 100% of our ownership interest in the EGD Subsidiary (including 4,000,000 EGD) in exchange for 100% of the outstanding common stock of GX-Life. GX-Life is a consumer products business, which was primarily owned by our former CEO, Ning Liu, and our current CEO, Michael Dunn. As part of their marketing strategy, GX-Life had developed a robust, scalable network marketing platform that utilizes iMatrix’s software to support direct selling opportunities throughout the world. In a related transaction, on October 2, 2015, the former shareholders of GX-Life sold all of their interests in the EGD Subsidiary to the Acquiring Shareholders in the Sky Rover SPA in exchange for 21,280,000 shares of our Company’s common stock previously acquired in the Sky Rover SPA. Collectively these two transactions are referred to as the “GX-Life Transactions”. As a result of the GX-Life Transactions, much of the Sky Rover SPA has been effectively unwound and the 4,000,000 EGD crypto-assets are no longer owned or controlled by our Company or any of our subsidiaries.

The GX-Life Transactions effectuated a change in control of our Company, as the former shareholders of GX-Life acquired 21,280,000 shares of our common stock representing an aggregate voting power of 45.9%. Individually, (i) Michael Dunn acquired an additional 24.1% voting power of our common stock, (ii) Ning Liu acquired 2.6% voting power of our common stock, and (iii) Tomoe Masuya acquired an additional 26.65% voting power of our common stock. The former shareholders of GX-Life Global are all unaffiliated from one another, and none of them have a beneficial interest or hold any ownership interest in each other's entity and disclaim status as a "group" as defined by SEC Rules.

In accordance withASC 805, we have included the financial results of GX-Life in our consolidated financial statements as of the date of acquisition.The assets and liabilities of GX-Life assumed on the acquisition datewererecordedatfair value,which approximatedthecarrying value, and are includedinthe consolidated financial informationpost-merger. Following is a summary of the assets and liabilities assumed as of the acquisition date:

Following is pro-forma revenue and earnings information for the year ended December 31, 2015 assuming both our Company and GX-Life had been combined as of September 1, 2015, the date of formation of GX-Life. Amounts are unaudited:

Our direct-selling program includes a reward program featuring a digital currency (the “GX Coin”) we access through an agreement with Great Coin, Inc. (“Great Coin”). See Note 6.

On March 26, 2015, we entered into a Membership Interest Purchase and Sale Agreement with Powerdyne, Inc., an entity which owned 100% of the membership interests in Global Future City Regional Center, LLC, formerly Powerdyne LLC (“Powerdyne” or “Regional Center”). Powerdyne is an EB-5 Regional Center (USCIS ID Number 1215250671) that was approved by the USCIS on March 28, 2013. The purchase price was $250,000, of which $150,000 was contributed by our former CEO Lei Pei. The acquisition closed on March 27, 2015. As an EB-5 Regional Center, we intended to attract and pool investments from qualified foreign investors for the purpose of job creation within a defined geographic region.

The purchase of Powerdyne is considered an asset purchase for accounting purposes based on the guidance of ASC 805 - Business Combinations, as Powerdyne does not have features of a business nor does it have any operations. Through the Powerdyne acquisition, we acquired the right to issue licenses to projects such that the projects will benefit from its regional center approved status.

We have been unable to find an EB-5 investment project that meets our internal criteria and, given the difficulties caused by Mr. Liu’s alleged actions discussed in Note 1, we believe our investment in the Regional Center became significantly impaired. Consequently, during the fourth quarter of 2016 we commenced evaluating alternative strategies to utilize or sell the Regional Center. Because of the inactivity of the Regional Center, the USCIS has deemed it frozen and the value the license would have to a third party may be minimal. We may not be able to utilize or find a buyer for the EB-5 Regional Center and cannot determine at this point whether it has any value at all. Accordingly, a full impairment was deemed necessary.

We have included the capitalized amount as a separate line item in the accompanying consolidated balance sheet as of December 31, 2016 and 2015 and a separate line for the impairment in the accompanying consolidated statements of operations.

Inventories on hand at December 31, 2016 consist of finished goods. Because of the difficulties associated with Mr. Liu’s legal challenges in the PRC, we have suspended our direct-selling program and reduced the value of our inventory to its net realizable value resulting in an impairment charge of $1,122,520 during 2016. The impairment estimate was based on the movement of products to date, negotiations with third party to purchase certain inventory, and expiration dates of perishable goods that our Company may have difficulty selling in a timely manner. In addition, we had made deposits of $242,777 for future deliveries of inventory to companies that went out of business or declared bankruptcy. During the fourth quarter of 2016 we wrote-off these deposits as bad debts as the ability to receive inventory or recoup deposits is in doubt.

Deposits for inventories at December 31, 2015 are down payments for products of our new direct-selling business which were shipped to us in the first quarter of 2016.

	2014			2013			2016			2015
Furniture	$	6,536		$	6,536		$	374,299		$	103,515
Computers		11,091			11,091			107,790			10,001
Software		16,894			16,894			101,330			62,610
Leasehold improvements								89,765			80,638
								673,184			256,764
Less accumulated depreciation		(28,462	)		(22,352	)		(124,165	)		(7,439	)
	$	6,059		$	12,169		$	549,019		$	249,325

Depreciation expense was ~~$6,110~~$95,482 and ~~$5,786~~$6,367 for the years ended December 31, ~~2014~~2016 and ~~2013,~~2015, respectively.

As described in Note 3 under the captionSky Rover Stock Purchase Agreement, we had previously intended to market the EGD through a reward program. GX-Life determined that incorporating a crypto-asset other than EGD into a reward program for its direct selling program would be important to its success. As a result, on October 21, 2015, GX-Life entered into a $2.5 million Subscription Agreement with Great Coin under which it made an initial purchase of 700,000 GX Coins for $350,000. However, the purchase was never consummated because the Subscription Agreement was subsequently superseded and replaced by way of a February 17, 2016 Software License and Services Agreement with Great Coin (the “Services Contract”) under which Great Coin granted a license for the GX Coins for an upfront license fee of $350,000 which was deemed paid by the payment made in October 2015 and the remaining obligations under the Subscription Agreement were canceled. The agreement was accounted for under ASU 2015-05 as documented in Note 2. The GX Coins are a digital currency, a form of crypto-asset, which we are incorporating into a reward program for our consumer products sales programs.

Under the Services Contract, which has a term of 10 years, members of our direct selling program may elect to convert certain membership account balances into GX Coins at agreed-to conversion rates. When a member converts status or reward points, we will record revenues, excluding the conversion fee payable to Great Coin, equal to 80% of the conversion amount, up to $4,000,000 in total conversion amounts, and 50% of the conversion amount thereafter.

We had classified the $350,000 as a separate line item in our consolidated balance sheet and began amortizing it on a straight-line basis over the expected period of benefit. However, given the difficulties we’ve experienced as a result of Mr. Liu’s detention in the PRC as described in Note 1, our efforts to implement our direct selling program became significantly more difficult and we decided to suspend our direct selling program. Accordingly, although the agreement remains in place and the platform run by the Great Coin remains operational, the usage of the Service Contract has been suspended, as it is no longer being integrated with our suspended direct selling program and therefore provides no future economic benefit to the Company based on current circumstances. As a result, during the fourth quarter of 2016, we have impaired the remaining unamortized balance of the Service Contract of $280,000.

	2014		2013		2016		2015
Accrued interest	$	38,773	$	312,057	$	242,211	$	126,512
Accrued royalties and commissions		11,666		11,666		11,346		11,366
Deposit on proposed business combination		475,000		–
Deferred rent						16,358		–
Other		799		799		799		799
	$	526,238	$	324,522	$	270,714	$	138,677

During the fourth quarter of 2014, we reached settlement agreements with most all of our noteholders and we restructured their notes. The settlements included an agreement by the noteholders to forgo payment of nearly all of the interest which had been accrued but unpaid as of the dates of the each settlement agreement. See Note 8 for further information.

During 2014, we entered into agreements first with Greenome, then with Sky Rover under which we agreed to sell 80% of our outstanding common stock. As part of the agreements, we received advances from Greenome and Sky Rover to be used to mitigate debt, to acquire common stock from a major shareholder on their behalf, and to continue our operations. See Note 14 for further information with respect to these agreements.

	2014		2013		2016		2015
Accrued officers compensation – CEO	$	1,053,187	$	912,343
Accrued other compensation – employee		441,462		330,599
Accrued officer’s compensation - CEO					$	55,231	$	–
Accrued other compensation						70,786		–
Accrued payroll taxes – delinquent		316,044		311,595		181,905		211,905
Accrued payroll taxes on accrued payroll (not yet due)		185,866		158,187		7,355		–
	$	1,996,559	$	1,712,724	$	315,277	$	211,905

~~In prior years,~~As further discussed in Note 13, in 2016, we ~~made minimal payments~~issued common stock to certain of our employees ~~and accrued most~~as part of the condition of their employment. During the fourth quarter of 2016, the employees earned common stock valued at $34,079 which is included in the table above under Accrued other compensation. ~~In addition, we~~

We have delinquent Federal and State payroll taxes incurred mainly under previous ~~management.~~management during the years 2006 through 2008. In ~~October 2010,~~2015 we made payments of $52,597 against the Federal obligation. Additionally, based on an accounting received from the Internal Revenue Service (“IRS”), we determined that our accrual for past-due Federal payroll taxes was overstated due to collections made, which were unknown to us, from other responsible parties along with lower than estimated interest and penalties. As a result, at December 31, 2015, we reduced our liability by $60,000, with $6,000 reducing interest expense accrued during 2015 and $54,000 recorded as a gain on extinguishment of debt. In January 2016, we received approval from the IRS ~~filed~~for a ~~federal tax lien against us~~4-year payment plan to repay this obligation with the first payment scheduled for April 2016. Due to the reduced availability of capital, we are delinquent with respect to this payment plan and are in contact with the ~~amount of $136,678 related to past-due payroll taxes. The Company has accrued estimated interest for non-payment of those past due payroll liabilities.~~IRS about adjusting the plan.

In 2014, in order to facilitate the investment by Sky Rover discussed in Note 1, ~~on September 19, 2014~~ we entered into ~~a Settlement Agreement~~settlement agreements with our former CEO and Controller under which ~~will become effective once all closing conditions for the Sky Rover SPA have become effective as more fully described in Note 14. Under the Settlement Agreement, our CEO~~they agreed to forgive all accrued but unpaid salary ~~which amounted to $1,053,187 and any additional accrued salary though the~~once all closing ~~date~~conditions of the ~~Stock Purchase Agreement. We did not accrue any compensation for our CEO during~~Sky Rover SPA had been met. During the fourth quarter of 2014 based on mutual agreement of the CEO and Sky Rover. In addition, our CEO gave up his right to any severance payment which would be due him under his employment agreement upon the closing of the Stock Purchase Agreement. For our part, we agreed to issue our CEO a promissory note for the amount of unpaid advances made to us by him in the amount of $142,203. The note will bear interest at 8% per annum and becomes due and payable one year from its effective date. Finally, the CEO will be allowed to retain no less than 2,000,000 of his currently held common shares. The terms of the Settlement Agreement with our CEO will only be effective and recorded if andthree months ended March 31, 2015, when all closing conditions toof the Sky Rover SPA ~~have~~became effective, our former Chief Executive Officer and former Controller forgave all accrued compensation owed to them in accordance with settlement agreements which, along with the related accrued payroll taxes, totaled $1,673,774. This amount has been ~~met.~~recorded as contributed capital in the accompanying consolidated financial statements due to the related party nature of the transaction.

Membership deposits and accrued benefits activity for the ~~Merger, FITT made advances to~~years ended December 31, 2016 and 2015 consists of the following:

During 2016, our ~~CEO, either personally or to a company he owns, of $691,805, including annual interest of 6%. During the fourth quarter of 2013, our~~former CEO repaid certain member deposits totaling $250,000 ($240,400 in member deposits and $8,600 in enrollment fees and prepaid product purchases). We have accounted for this repayment as contributed capital.

Member conversions to GX Coins were made in conformity with the ~~advances through an agreement to surrender 668,386 shares of common stock of our post-merged company which were beneficially owned by him as part~~provisions of the ~~Merger.~~ Service Contract discussed in Note 6.

The ~~shares were valued~~balance at ~~approximately $1.04, the volume weighted adjusted price~~December 31, 2016 consists of the common stock for the 20 trading days prior to his agreement to surrender the shares. While the advances were formally relieved in fiscal 2013, the shares were surrendered during the first quarter 2014.following:

Although we believe these advances made to our CEO by FITT have been appropriately accounted for, it is reasonably possible that a future examination by an external party may deem a portion of these advances to be compensatory. If such determination is made, the Company may be liable for employer payroll taxes on advances deemed compensatory. Based on our estimation, if such a determination is made, the corresponding liability could range from approximately $17,000 to approximately $50,000. Such amount could increase if penalties and interests are assessed. As of the date of filing, there are no examinations by eternal parties that would indicate our initial treatment was incorrect.

On November 10, 2014, we entered into a Settlement Agreement with a former employee who served as our Controller. The Settlement Agreement will become effective once all closing conditions for the Sky Rover SPA have become effective. Under the Settlement Agreement,the former employee agreed to forgive all accrued but unpaid salary which amounted to $441,462 and any additional accrued salary though the closing date of the Stock Purchase Agreement. In addition, our employee gave up his right to any severance payment which might be due him under his employment agreement upon the closing of the Stock Purchase Agreement. For our part, we agreed to repay our employee $3,699 for advances he had made to our Company and repay a relative of our former employee $15,984 for employee health insurance premiums she had made on behalf of our Company. Finally, the former employee will be allowed to retain no less than 300,000 shares of our common stock issued to him in the Merger with FITT. The terms of the Settlement Agreement with our employee will only be effective and recorded if and when all closing conditions to the Sky Rover SPA have been met.

Effective January 14, 2014 a former employee repaid certain advances made to him in 2013 in the amount of $27,551 through an agreement to surrender 27,350 shares of common stock of our post-merged company which were beneficially owned by him. The shares were valued at the volume weighted adjusted price of the common stock for the 20 trading days prior to his agreement to surrender the shares.

This obligation arose in connection with our acquisition of Powerdyne (see Note 3). Remaining payments on this note were made in 2016.

In the fourth quarter of 2016, we issued promissory notes to three individuals with face values totaling $300,000. The notes are to be repaid from proceeds from the sale of our inventory, with 50% of the proceeds payable on apari passu basis to each note holder.

In lieu of a stated interest rate, each note contains the following bonus payment provisions:

All principal and accrued but unpaid bonus payments are due 90 days from the date of each note. As of the date of this filing, no inventory has been sold and no payments have been made under the notes. As a result, the notes are in default.

The note holders were issued 150,000 shares of our common stock under these notes. We have valued the shares at $87,312, their relative fair market value on the issue date of each note (the date the share obligation arose) and recorded a debt discount for that amount. We are amortizing the debt discount over the 90-day length of the note and we recognized an interest expense of $13,765 in 2016 in connection therewith. The remaining discount of $73,547 will be amortized in the first quarter of 2017.

During the fourth quarter of 2014 and the first quarter of 2015, we reached settlements (“Settlement ~~Agreements~~Agreements”) with ~~most~~virtually all of our noteholders ~~to restructure their notes.~~holding debt acquisition promissory notes and bridge notes (original through bridge #3). In the restructuring of ~~our~~the notes payable, ~~which is one of our Company’s conditions for closing of the Sky Rover SPA,~~ our noteholders agreed to a) forgo payment of nearly all of the interest which had been accrued but unpaid as of the dates of ~~the~~ each settlement agreement, b) a new interest rate of 10% per annum, c) a new maturity date of August 1, 2015, and d) a Company option to convert into free-trading shares of our common stock at any time ~~our~~the common stock has a closing bid price per share of $1.00 or more for 20 consecutive trading days after the closing of the Sky Rover SPA. Certain of noteholders also agreed to relinquish to Sky Rover shares of ~~our~~their common stock they received with their original notes, contingent upon the Sky Rover SPA ~~closing. If the Sky Rover SPA closes, the shares will be transferred to Sky Rover. Because the shares are contingent upon the~~ closing ~~and until then remain in the name and possession of the note holders, the shares are considered contingent consideration and will be accounted for if and when the shares are transferred.~~which occurred on April 17, 2015. In addition, holders of the restructured convertible promissory notes ~~– debt acquisition, notes payable – bridge loan #2 and notes payable – bridge loan #3~~ also agreed to forgo any additional principal (over and above the original principal) payable under their notes. These notes are no longer convertible at the option of the holder. As a result of these settlements, we recorded gains on extinguishment of debt totaling ~~$952,400~~$35,403 in ~~2014. After modification of the notes described above, all notes are now considered convertible.~~2015.

~~During~~These notes originated during the first quarter of 2013 ~~we entered into Debt Acquisition Agreements (“Debt Agreements”)~~ with ~~two parties affiliated with each other (the “Debt Funders”). Under~~original face values totaling $150,000. In the ~~Debt Agreements, we issued convertible promissory notes totaling $150,000, $50,000~~fourth quarter of which was subsequently converted to equity. The notes bore interest at 10% per annum and were repayable at two times the principal amount of the notes. Repayment was to be made by conversion into shares of our common stock based on a 20-day volume weighted average price with the minimum conversion price based on a market valuation for our company of $10 million the maximum based on a market valuation of $20 million. The due date by which the Debt Funders were to convert the notes was December 31, 2013, but such conversion has not yet been made. In December 2014, we entered into Settlement Agreements with the holders of these notes, with the same terms as described under the above captionSettled and Restructured Notes Payable ~~Settlement Agreements~~. ~~Accordingly,~~During the years ended December 31, 2016 and 2015, we repaid $5,000 and $0, respectively, on these ~~notes are no longer convertible at the option of the holder.~~notes.

~~The~~These notes which originated in 2009 and 2010 had an original face value totaling $245,000, bore interest from 10% to 12% per annum and were to be repayable from a pool of 10% of gross proceeds from the sales of the FITT Energy Shot. In December 2013, a noteholder converted $75,000 of this debt to equity.$245,000. In the fourth quarter of 2014, we entered into Settlement Agreements with the holders of ~~$120,000 face value of~~ these notes, with the same terms as described under the above captionSettled and Restructured Notes Payable ~~Settlement Agreements~~. In 2014, we facilitated a share purchase agreement between Greenome and a significant shareholder. Per the terms of the agreement (see Note 14), the Company was relieved of $50,000 in debt from the shareholder.

~~This debt arose from an offering we initiated~~These notes which originated in 2010 ~~of up to $1.0 million of units of securities, each unit consisting of a 12% unsecured promissory note~~ and ~~0.083 shares of common stock of FTCY for every dollar invested. In connection with this offering, we issued notes with~~2011 had an original face value totaling $580,000. During the three-month periods ended December 31, 2013 and March 31, 2014, respectively, noteholders converted $175,000 and $50,000 into equity, respectively. The notes were repayable 12 months from the date of issue and repayment was to come from a pool of 10% of cash receipts from the sales of the FITT Energy Shot. In the fourth quarter of 2014, we entered into Settlement Agreements with the holders of $345,000 face value of these notes, with the same terms as described under the above captionSettled and Restructured Notes Payable ~~Settlement Agreements~~. During 2016 and 2015, we repaid $125,000 and $0, respectively, on these notes.

~~In November 2011, we initiated a Bridge Loan offering of up to $1.0 million of units of securities, each unit consisting of a 10% convertible promissory note (interest rate increasing to 18% upon~~These notes originated in 2012 and had an event of default) and 5.5 shares of our common stock for every dollar invested with repayment to be made at two times the principal amount of the notes. The notes matured at various dates, all of which are within twelve months of the date of issuance. In connection with this offering, we issued notes with principal amountsoriginal face value totaling ~~$255,000 (repayment amounts totaling $510,000). The additional principal of $255,000 was accreted over the respective term of each of the notes.~~$175,000. We also recorded an initial discount on the notes of $11,275 based on the estimated fair market value of our common shares on the date of issuance. In connection with the debt discount and accretion, during the years ended December 31, 2014 and 2013, we charged interest expense with zero and $303,253, respectively. As of December 31, 2013, there was no remaining unamortized discount.

~~During the three-month period ended December 31, 2013, $160,000~~entered into Settlement Agreements in ~~repayment amounts were converted to equity. In~~ the fourth quarter of 2014 ~~we entered into Settlement Agreements~~ with ~~the~~ holders of $150,000 face value of these notes, and in the first quarter of 2015 with holders of $25,000 face value of these notes, all with the same terms as described under the above captionSettled and Restructured Notes Payable ~~Settlement Agreements~~. During 2016 and 2015, we repaid $90,000 and $0, respectively, on these notes.

In December 2012 we initiated a Bridge Loan offering of up to $1.0 million of units of securities, each unit consisting of a 10% convertible promissory note (interest rate increasing to 18% upon an event of default). During the second quarter of 2013, we issued a note with face value totaling $250,000These notes originated in ~~connection with the offering and received proceeds of $225,000. The note was repayable at two times the principal amount of the note (repayment amount of $500,000) and matured June 30,~~ 2013. We recorded an initial discount of $25,000 on this note which we amortized through June 30, 2013, the effective maturity date of the note. The additional principal of $250,000 was accreted through the effective maturity date of June 30, 2013.

In the fourth quarter of 2014, we entered into Settlement Agreements with the holder of these notes, with the same terms as described under the above captionSettled and Restructured Notes Payable ~~Settlement Agreements~~, with the exception that the modified note does not contain a conversion option.

During 2016, we ~~issued a convertible promissory note~~made net advances to ~~Asher Enterprises, Inc. (“Asher”)~~Great Coin in the amount of ~~$42,500. The note bore interest at 8% per annum~~$1,494,002, mainly for the purpose of their development of the GX Coin trading platform which could be used by our direct-selling members as part of our reward program. In addition, our former CEO, Mr. Ning Liu, became responsible for credit card charges totaling $24,298 which were unrelated to our business and ~~matured~~unauthorized. Because of the legal difficulties encountered by Mr. Liu in the PRC discussed in Note 1, it has become extremely difficult for Great Coin to raise capital needed to repay these advances. In addition, the reduced activity on ~~October 8, 2014. Any amount~~the trading platform, related to the suspension of ~~principal or interest which was not paid by~~our direct selling program in the ~~maturity date would bear interest at 22% per annum~~fourth quarter, reduces the ability for Great Coin to generate revenue from transactional activity. As a result, while we will continue to pursue collection from the ~~maturity date. The note was convertible into common stock beginning 180 days from~~applicable parties, during the date of the note at a conversion price of 58% of the market price of our stock. The note had a ratchet provision, which adjusted the conversion price in the event of a capital raise at a lower amount per share than the conversion price. We recorded an on-issuance discount of $2,500 on this note which we were amortizing through October 8, 2014, the maturity date, and accelerated the amortization due to the note assumption by Goldenrise Development, Inc. (“Goldenrise”) as discussed below. During the year ended December 31, 2014, $2,500 was amortized to expense.

Prior to the date the note became convertible, we began negotiating the repayment of this note to Asher. On July 15, 2014, we formalized and entered into an Assignment Agreement with Asher and Goldenrise under which Asher agreed to assign the note to Goldenrise for consideration of $55,000. Also effective on July 15, 2014 and subsequent to the assignment, we amended the note to revise the principal amount to $55,000 and to modify the conversion feature so that the conversion price cannot be lower than $0.15 per share. The amendment also eliminated the note’s ratchet provision. As such, derivative accounting does not apply under the new terms. During the quarter ended September 30, 2014, we accounted for the July 15, 2014 assignment and amendment as an extinguishment of debt and recorded a loss on extinguishment of debt in the amount of $9,948.

~~During the first~~fourth quarter of ~~2013,~~2016, we ~~became obligated to issue convertible promissory notes totaling $20,000 to a company under a Service Agreement. The notes bear no interest and were to~~reserved $1,518,300 representing the total of these advances as it is unclear whether any of these advances will be ~~repayable through a conversion into shares of our common stock. We have determined that the service provider has not performed any services under the agreement and the note is in dispute.~~

On April 3, 2013, we issued a note payable in the amount of $5,000 together with 28,440 shares of our restricted common stock. The note carried an interest rate of 10% per annum and matured on October 3, 2013. During the second quarter of 2013, we recorded an initial discount on this note of $5,000 based on the estimated fair market value of our common shares on the date of issuance. The debt discount was amortized over the 6-month term of the note. In February 2014, this note was converted to equity.

In February 2014, a creditor holding notes payable with repayment amounts totaling $55,000 ($50,000 in Notes Payable- Bridge Loan #1 and $5,000 in Notes Payable – Other) converted his notes and related accrued interest into 115,637 shares of common stock of our merged company. Prior to conversion, these notes contained no stated conversion features. We valued the shares at their fair market value on the date of conversion and during the year ended December 31, 2014, we recorded a loss on extinguishment of debt totaling $33,594 in connection with this transaction.

Advances from related ~~parties~~party consist of ~~the following at December 31:~~

~~Also see Note 7 for additional information regarding related parties transactions.~~net advances made by our CEO, Michael Dunn.

WeOn October 16, 2015, we entered into a lease ~~our current~~agreement for 5,824 square feet of office space in ~~Mission Viejo, California on~~Irvine, California. The lease has a ~~month-to-month basis~~minimum term of 60 months and ~~have no~~requires the following minimum annual payments, excluding property taxes and other ~~non-cancellable operating leases. The monthly payment under~~common area costs: months 1 through 12 - $176,112; months 13 through 24 - $183,804; months 25 through 36 - $192,192; months 37 through 48 - $200,580; and months 49 through 60 - $209,664. Tenant improvements made by the landlord were completed at the end of January 2016, at which time we moved into the space and our lease ~~is $2,000. Rent~~commenced. Accordingly, the annual payments as just described also substantially reflect the five-year payout schedule through 2020. Annual rent expense ~~under operating leases amounted to $24,109 and $4,000, respectively,~~ for the years ended December 31, ~~2014~~2016 and ~~2013.~~2015 was $150,907 and $33,335, respectively.

Due to the escalating rent we have recorded a deferred rent liability of $16,358 as of December 31, 2016 which equates to the accumulated difference between the amount paid each month and the expense on a straight-line basis over the lease term.

On May 8, 2015, we filed a Form S-1 Registration Statement with the SEC for the initial registration of 10 million shares of our common stock at $3.50 per share, as amended on June 8, 2016, and amended further on June 19, 2016 (collectively the “S-1”). The S-1 was declared effective by the SEC on July 6, 2015.

The Company has filed and continues to file Post-Effective Amendments to keep the S-1 current and effective. However, as of the date of this filing, the S-1 is currently ineffective and under review by the SEC.

The summary below details the Post-Effective Amendments we have filed with the SEC as of the date of this filing:

On July 29, 2016, we filed a Form S-8 Registration Statement (“S-8”) with the SEC to register 32,500 shares of our common stock at $1.69 per share. On October 5, 2016, we filed an S-8 with the SEC to register 33,500 shares of our common stock at $1.01 per share. The S-8’s were deemed effective as of the filing date pursuant to Rule 462 of the Securities Act.

We have authorized the issuance of a total of 20,000,000 shares of our preferred stock, each share having a par value of ~~$0.0001.~~$0.001.

We have authorized the issuance of 150,000,000 shares of our common stock, each share having a par value of $0.001. As discussed under the above captionS-1 Registration Statement, during 2016 we sold 759,453 shares for net proceeds of $2,658,086. In addition, during 2016 we sold 25,000 shares of our restricted common stock to an investor for net proceeds of $25,000.

Effective April 17, 2015 in connection with the closing of the Sky Rover SPA, Sky Rover's designees received 33,240,000 shares of our common stock of which 3,371,351 were newly issued and 29,868,649 were conveyed by certain affiliated and unaffiliated existing shareholders to complete the transaction. All shares were considered to be part of the $400,000 acquisition price to acquire the stock per the terms described in Note 3. Prior to the closing of the Sky Rover SPA, Mr. Lei Pei purchased 6,000,000 newly-issued shares of our common stock for $3,000,000 in cash in a separate transaction that closed on March 30, 2015.

During ~~2014,~~2016, we issued ~~50,000~~97,000 shares of our common stock to certain of our employees for services relating to ~~investor relations~~conditions of their employment. 66,000 of these shares were issued under Form S-8 as described above and ~~the development~~31,000 of ~~shareholder awareness.~~these shares were issued under our S-1 Registration Statement. The shares were valued at ~~$12,500 which was~~$237,077 based on our ~~determination~~Company’s stock price and we recorded general and administrative expense of that amount in connection with the ~~fair market value~~share issuance. No shares were issued for employee services in 2015.

During 2016, we issued 203,000 shares of ~~the shares.~~our common stock for consulting services rendered. 3,000 of these shares were issued under our S-1 Registration Statement and 200,000 of these shares were restricted. We recorded general and administrative expense of ~~$12,500~~$179,570 in connection with the share issuances based on the fair market value (quoted market price) of our common stock on the dates of issuance.

During ~~2013,~~2015, we issued ~~526,599~~250,000 shares of our common stock ~~in payment~~ for consulting services ~~relating~~related to ~~retail distribution, product representation and strategic counseling.~~marketing. The shares were valued at ~~$27,500 which was our determination of~~$65,000 based on the fair market value (quoted market price) of our common stock on the ~~shares.~~dates of issuance. We recorded selling and marketing expense of ~~$20,000 and general and administrative expense of $7,500~~$65,000 in connection with the share issuances.

During ~~2013,~~2016, we ~~hired~~entered into a ~~Director of Sales and~~settlement agreement with a ~~Retail Business Manager. As part of the employment arrangements,~~vendor under which we issued ~~the individuals a total of 214,555~~14,104 shares of our common stock ~~and~~to settle $49,364 of outstanding amounts due. The shares were issued under our S-1 Registration Statement. No gain or loss was recorded ~~selling and marketing expense~~with respect to this settlement.

During 2015, we entered into settlement agreements with two vendors under which we issued 25,000 shares of ~~$83,250 in connection with the share issuances~~our common stock to settle $49,189 of outstanding amounts due. We recorded a gain of on extinguishment of debt of $2,089 on these settlements based on ~~our determination of~~ the fair market value (quoted market price) of our common stock on the ~~shares.~~date of issuance.

As discussed in Note 9, during 2016 our former CEO repaid certain member deposits totaling $250,000 which we have we have accounted for as contributed capital.

During 2015, our former Chief Executive Officer, Michael Dunn and our former Controller forgave accrued compensation due to each of them. In connection with these transactions, we recorded contributed capital of $1,673,774.

During the years ended December 31, ~~2014~~2016 and ~~2013,~~2015, there were no warrants or stock options outstanding and there was no expense related to warrants or stock options.

On ~~June 29, 2007,~~December 30, 2015, we elected to withdraw and terminate our Option Plan for employees, officers, and consultants of our Company. At the time of cancellation, there were no options outstanding and 13,889 shares were remaining for future issuance. We will re-evaluate the implementation of an option plan in the future at the Board of Directors adopted the 2007 Equity Incentive Plan (the “2007 Plan”). The 2007 Plan provides for the grant of equity awards to our directors, officers, other employees, consultants, independent contractors and agents, including stock options to purchase shares of our common stock, stock appreciation rights (“SARs”), restricted stock, restricted stock units, bonus stock and performance shares. Up to 13,889 shares of our common stock may be issued pursuant to awards granted under the 2007 Plan, subject to adjustment in the event of stock splits and other similar events. The 2007 Plan is administered by our Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board. As of December 31, 2014, there have been no grants made under the 2007 Plan.Director’s discretion.

Reconciliations of the U.S. federal statutory rate to the actual tax rate are as follows for the years ended December 31:

	2014		2013		2016		2015
Federal tax at statutory rate		34.0%		34.0%		34.0%		34.0%
Permanent differences:
State income taxes, net of federal benefit		5.8%		5.8%		5.8%		5.8%
Fair value of contributed services		–		-5.6%
Stock issued for services						-3.0%		–
Gain/loss on extinguishment of debt		-191.2%		-9.2%		-0.1%		4.6%
Amortization of debt discount and accretion of debt		0.5%		-7.3%		-0.1%		–
Interest income on shareholder advances		–		0.8%
Common stock issued for employee services		–		-2.0%
Non-deductible entertainment		0.3%		-0.1%		–		-0.1%
Temporary differences:
Accrued liabilities and other		0.4%		–		–		-0.1%
Change in valuation allowance		150.5%		-16.5%		-36.6%		-44.3%
Total provision		0.4%		-0.1%		-0.0%		-0.1%

	Asset (Liability)						Asset (Liability)
	2014			2013			2016			2015
Current:
Reserves and accruals	$	309,724		$	195,880		$	501,907		$	51,290
Noncurrent:
Net operating losses		504,644			330,413			2,770,239			1,166,436
Valuation allowance		(814,368	)		(526,293	)		(3,272,146	)		(1,217,726	)
Net deferred tax asset	$	–		$	–		$	–		$	–

Based on federal tax returns filed or to be filed through December 31, ~~2014,~~2016, we had available approximately ~~$26,749,000~~$8,322,000 in U.S. tax net operating loss carryforwards, pursuant to the Tax Reform Act of 1986, which assesses the utilization of a Company’s net operating loss carryforwards resulting from retaining continuity of its business operations and changes within its ownership structure. Net operating loss carryforwards expire in 20 years for federal income tax reporting purposes. For Federal income tax purposes, the net operating losses begin to expire in 2026. State net operating loss carryforwards through December 31, ~~2014~~2016 are approximately ~~$24,401,000~~$8,197,000 and begin to expire in ~~2013.~~2030. We have relied on the issuance of common stock to fund certain operating expenses.

With the finalization of ~~the Merger,~~our merger with FITT, we ~~have~~ experienced a change in ownership as defined in Section 382 of the Internal Revenue Code. As a result, our net operating loss carryforwards for federal income tax reporting ~~will be~~became significantly limited based on the fair value of our Company on the date of change in ownership. Such change is expected to provide benefit to us only upon the attainment of profitability.

Due to the Sky Rover and GX-Life transactions (Note 1) there has been a significant change in ownership. A change in ownership requires management to compute the annual limitation under Section 382 of the Internal Revenue Code. The amount of benefits we may receive from the operating loss carry forwards for income tax purposes is further dependent, in part, upon the tax laws in effect, our future earnings, and other future events, the effects of which cannot be determined.

During the years ended December 31, ~~2014~~2016 and ~~2013,~~2015, our valuation allowance increased by ~~$288,075~~$2,054,420 and ~~$275,210,~~$403,358, respectively.

The United States Federal return years ~~2010~~2013 through ~~2013~~2016 are still subject to tax examination by the United States Internal Revenue Service, however, we do not currently have any ongoing tax examinations. We are subject to examination by the California Franchise Tax Board for the years ~~2010~~2013 through ~~2013~~2016 and currently ~~does~~do not have any ongoing tax examinations.

~~Gain (loss) on extinguishment of debt for the years ended December 31, 2014 and 2013 consist of:~~

On December 12 2014, our legal counsel agreed to convert our $274,761 accounts payable balance owed by us into 274,761 shares of our common stock. We valued the shares at the market price of our common stock on December 12, 2014, the date of issuance, and recorded a gain on extinguishment of debt of $142,876 in connection with this transaction.

On May 6, 2014, we entered into a Share Exchange Agreement (“SEA”) with Greenome under which we agreed to sell to Greenome 80% of our outstanding common stock at a purchase price of $400,000, $175,000 of which was payable at the closing. The SEA required that both Greenome and our Company meet certain conditions in order for a closing to take place. The SEA also required Greenome to make certain advance payments to us prior to the closing which were refundable under certain circumstances. Both parties eventually became aware that the closing conditions would be difficult to meet, and on September 19, 2014, we entered into a Financing Agreement with Greenome which also terminated the SEA.

On May 30, 2014, on behalf of Greenome, we entered into a stock purchase transaction with a significant shareholder for the purchase of 9,669,575 shares of our common stock. Per the agreement, we were to receive funds as indicated above from Greenome, and remit a portion of those funds totaling $125,000 to the shareholder in the following tranches: $25,000 upon the signing of the agreement with the shareholder, $25,000 within ten days of the shares being turned over to an escrow agent, and $75,000 when the Company receives the final payment of $175,000 from Greenome as part of the SEA described above. In turn, the shareholder was to submit to an escrow agent, shares of our common stock totaling 9,669,575 shares.

Under the September 19, 2014 Financing Agreement, we agreed to raise up to $3.0 million through a private placement memorandum (“PPM”) and loan these funds to a subsidiary of Greenome (the “Greenome Sub”) under a promissory note bearing interest at the rate of 10% per annum (the “Greenome Loan”). The promissory note will mature twelve months from its inception and will be secured by the assets of the Greenome Sub.

Greenome has already made $180,000 in advance payments to us under the SEA. The first $150,000 of the Greenome Loan proceeds will count towards the repayment of the amount advanced us by Greenome with the remainder of the advances forgiven. If the private placement is unsuccessful, the $150,000 will be formalized into a note payable. Accordingly, the Company has maintained the advanced amounts in accrued expenses and deposits in the accompanying balance sheets, which also includes advances from Sky Rover as noted below.

On September 19, 2014 we entered into the Sky Rover SPA under which we agreed to sell to Sky Rover 80% of our outstanding common stock at a purchase price of $400,000. Sky Rover is in the business of marketing, promoting, and selling of an E-Gold coin (the “EGD”), a type of cryptoasset created by Sky Rover, which is marketed to consumers and merchants. Under the agreement, Sky Rover will acquire 30,600,000 shares of our common stock, which will equal exactly 80% of the outstanding shares, for a purchase price of $400,000. $345,000 of the purchase price was received as of December 31, 2014 and included in accrued expenses and deposits in the accompanying balance sheet due to the possibility the Company will have to repay such amounts if the Company does not meet specific conditions as part of the SPA which are described below. The remaining purchase price was received subsequent to year end. Our Company’s conditions include the mitigation of certain of our debt and the restructure of our notes payable with the following features:

For their part, Sky Rover’s only condition to close is that they have made the applicable payments required under the SPA. The transaction was to close no later than no later than December 31, 2014; however, the two parties verbally agreed to extend the deadline as needed in order to achieve the responsibilities of each party. On February 17, 2015, the agreement was amended for additional requirements.

The Parties have cooperated and agreed to a proposed business model where if the closing conditions to the Agreement have been met, the Company shall establish four subsidiaries. The first subsidiary will market the IP Technology as defined below. The second subsidiary will operate an Online Store and various merchants that sell goods and services to consumers, and gives Rewarded EGD (as defined below) to consumers as part of a loyalty program. The third subsidiary will be a foreign company that will sell 4,000,000 E-Gold (“EGD”) to foreign individuals and entities. The fourth subsidiary will continue to sell the Company’s current energy drinks while participating in giving away Rewarded EGD as well. The Company itself will provide marketing services to merchants that want to establish loyalty program(s) with its customers (the “Proposed Business Model”). If we do not meet the conditions imposed on us by the agreement, we will be obligated to repay Sky Rover for monies received from them (50% in cash and 50% in common stock valued at $0.20 per share). If Sky Rover does not meet their condition, no monies received from them will need to be repaid.

~~On July 21, 2014,~~ we entered into a Consulting Agreement with ~~The Scott Group.~~Mo Feng Yi (“Consultant”), an individual with extensive contacts and business relationships in Asia. Under the agreement, which has a term of sixty (60) days, The Scott Group will provide a variety of public relations services to assist us in increasing our investor base and shareholder awareness and in obtaining sponsorship from the brokerage community. In addition, The Scott Group will assist us with converting our debt. As compensation for the services, we6 months, Consultant agreed to provide various business and market development services for our direct-selling business. The agreement required us to pay ~~The Scott Group $2,500 per month~~Consultant $200,000 in 2015 in two equal installments for ~~the months of July and August 2014 and to issue them 50,000 shares of our common stock. We also extended~~services provided.

On February 23, 2016, we amended the agreement ~~through September 2014~~to provide for an additional payment of ~~$2,500. For accounting purposes,~~$100,000 in February 2016 for continued service.

On December 1, 2015, we entered into a Consulting Agreement with Alicia Xie Geiser (“Consultant”), an individual with extensive contacts and business relationships in Asia. Under the agreement, which has a term of 6 months, Consultant agreed to provide various business and market development services for our direct-selling business. The agreement requires us to pay Consultant $10,000 per month. During 2016 and 2015, we recorded general and administrative expenses of $40,000 and $10,000, respectively, in connection with this agreement.

On September 21, 2016, we entered into another Consulting Agreement with Consultant under which Consultant agreed to provide advice and assistance with respect to our capital market positioning. Consultant also agreed to help us broaden the market support for our securities and introduce us to prospective investors. Under the agreement, which had a one-month term, we agreed to issue Consultant 25,000 shares of our restricted common stock which we valued at $29,750, the ~~common stock as of July 21, 2014,~~fair market value at the date of ~~issuance, and~~issuance. In 2016, we recorded a general and administrative expense of ~~$20,000 ($7,500 cash and $12,500~~the same amount in ~~stock) during 2014.~~connection with this agreement.

On ~~January 5, 2013,~~February 26, 2016, we entered into a Consulting Agreement with ~~Andrew Loza, an individual with significant experience in product representation and strategic alliances. The agreement called for Mr. Loza~~Private Consulting Group (“Consultant”) under which Consultant agreed to provide business and financial consulting services ~~in the areas of corporate strategies~~including advice and ~~retail distribution networks.~~assistance with our capital market positioning and identifying prospective institutional purchasers for our equity securities. The agreement has a term of 127 months and ~~is cancelable~~requires that we pay Consultant $10,000 per month and issue Consultant 50,000 restricted shares of our common stock. Because of Consultant’s inability to completely perform the services, we paid only $30,000 and issued only 25,000 shares. The shares were valued at $65,250, their fair market value on ~~180 days’ notice.~~the date of issuance. In connection with ~~the~~this agreement, we agreed to make monthly payments to Mr. Loza of $5,000 and to issue him 426,599 shares of common stock. The common stock, which was fully vested on January 5, 2013, the date of issuance, was valued at the estimated fair market value of our stock of $0.01 per share. For the year ended December 31, 2013 we recorded a general and administrative ~~expenses~~expense in 2016 totaling ~~$67,500 ($60,000 in cash and $7,500 in stock) as a result of this transaction.~~

On ~~March 12, 2013,~~February 17, 2016, we entered into a Consulting Agreement with ~~Anna Rawson, an individual with extensive experience~~iMatrix Software, Inc. (“Consultant”) under which Consultant agreed to provide services to assist in ~~the area of product representation, including product endorsement in radio~~developing and ~~television interviews as well as public appearances at corporate events.~~expanding our direct-selling business. The agreement ~~called for Ms. Rawson to provide~~has a ~~variety~~minimum term of ~~services including a photo~~3 months and ~~video shoot, a social media campaign, a media interview campaign~~requires that we pay Consultant $18,000 per month and ~~public appearances. In connection with the agreement, we issued Ms. Rawson 100,000~~issue Consultant 3,000 registered and free-trading shares of our common stock. The ~~common stock, which was fully vested~~shares were valued at $8,070, their fair market value on ~~March 12, 2013,~~ the date of ~~issuance,~~issuance. In connection with this agreement, we recorded a general and administrative expense in 2016 totaling $116,070.

On April 1, 2016, we entered into a Consulting Agreement with Mitchell Morrison (“Consultant”) under which Consultant agreed to provide business and financial consulting services including advice and assistance with our capital market positioning and identifying prospective institutional purchasers for our equity securities. The agreement has no stated term, is cancellable by either party on 30 days’ notice, and requires that we pay Consultant $15,000 on execution of the agreement and $10,000 per month. During 2016, we recorded a general and administrative expense totaling $15,000 in connection with this agreement as it was cancelled shortly after its inception.

On December 8, 2016, we entered into a Consulting Agreement with Juan Lopez (“Consultant”) under which Consultant agreed to assist us in developing a marketing plan for the promotion and sale of our products outside the direct-selling area. The agreement has a term of 4 months and requires that we issue Consultant 150,000 restricted shares, all of which were vested as of the date of the agreement. We have valued at the ~~estimated~~shares based on their fair market value on the date of ~~our stock of $0.20 per share. For the year ended December 31, 2013 we~~issue and recorded a selling and marketing expense ~~totaling $20,000 as a result~~in the amount of ~~this transaction.~~$76,500.

Subsequent to December 31, 2014, we entered into consulting agreements with five (5) individuals under which the consultants agreed to provide, among other services, business development, executive recruitment, and brand development services for us. As consideration for their services,On January 27, 2016, we issued a ~~total~~promissory note to an individual with a face value of ~~300,000 common~~$50,000. The note has the same terms as the notes described in Note 10 under the captionPromissory Notes including the issuance of 25,000 shares ~~to the consultants, which shares were vested immediately on issuance. During the three months ended March 31, 2015, we will value the shares at the market price~~ of our ~~stock on the dates of issuance and record the appropriate expense.~~

On March 27, 2015, the Company purchased Powerdyne Regional Center LLC, a designated EB-5 Regional Center approved by the U.S. Citizen and Immigration Service (“USCIS”). The aggregate purchase price for 100% of the membership interest of Powerdyne Regional Center is $250,000.00, of which $125,000.00 was funded on March 27, 2015. The balance will be paid in five quarterly installments of $25,000.00 with the payments due on April 1, 2015, July 1, 2015, October 1, 2015, January 1, 2016 and April 1, 2016. The Company filed a Current Report on Form 8-K with the Securities and Exchange Commission (“SEC”) on March 30, 2015 which describes the acquisition in detail.restricted common stock.

~~The Company~~Due to Mr. Liu’s legal challenges in the PRC, as described in Note 1, the following actions were taken.

On March 20, 2017, we entered into a Stock ~~Purchase~~Issuance Cancellation Agreement with, Master Power Holdings Group and Big Name Group Co. Ltd., a British Virgin Islands corporation controlled by Mr. Ning (Sam) Liu (“Mr. Liu”), the Company’s former Chief Executive Officer, (collectively the “Shareholders”). Pursuant to the Agreement, the Shareholders agreed to cancel and return to treasury an aggregate 8,349,906 shares of common stock (representing 17.12% of the current issued and outstanding common stock) as consideration for the significant hardship suffered by the Company as a result of Mr. Liu’s legal challenges.

Upon the closing of the Agreement, which took place on March ~~30, 2015 to purchase 6,000,000~~20 2017 (the “Closing”), the Shareholders surrendered their stock certificates representing an aggregate 8,349,906 shares of common stock with all necessary documentation to the Company’s ~~common stock at~~transfer agent for cancellation.

Additionally, Mr. Liu entered into an agreement to cancel his share ownership in Great Coin, a ~~price~~company that provides the platform and cryptocurrency (GX-COIN) used by our wholly-owned subsidiary, GX-Life Global, Inc. (“GX-Life”). Prior to the cancellation, Mr. Liu owned 50.0% of ~~$0.50 per share for a total capital investment~~Great Coin and Michael Dunn, our Chief Executive Officer and member of ~~$3,000,000.~~our Board of Directors, owned the other 50.0% of Great Coin. After the cancellation, Mr. Dunn owns 100% of Great Coin.

ITEM 9.9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Our President and Chief Financial Officer (the “Certifying Officer”) has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of period covered by this report. Based upon such evaluation, the Certifying Officer concluded that our disclosure controls and procedures were effective as of December 31, ~~2014.~~2016.

Our management, including the Certifying Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipt and expenditures are being made only in accordance with authorizations of management and our ~~Board of Directors;~~Board; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations. A system of internal control may become inadequate over time because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal control over financial reporting as December 31, ~~2014~~2016 using the criteria set forth by the Commission of Sponsoring Organizations of the Treadway Commission (COSO) inInternal Control-Integrated Framework. Based on this assessment, our management concluded that our internal control over financial reporting disclosure controls and procedures were effective as of December 31, ~~2014.~~2016.

There have been no changes in our internal control over financial reporting in the fiscal year ended December 31, 2016, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

~~None.~~On October 21, 2016, Ning Liu resigned as the Company’s Chief Executive Officer, President, and Chairman of the Board. On August 17, 2015, the following individuals resigned from their respective positions with our Company: Lei Pei, our former CEO, former CFO, and former Chairman; Junfei Ren, our former Secretary and former Director; and Xiang Ling Yun, a former Director. Concurrent with the resignations, Ning Liu, who was our President, was appointed to the positions of Chairman and CEO, and Michael R. Dunn, who was the Executive Vice President of Finance, was appointed to the positions of Chief Financial Officer, Chief Operating Officer, and Secretary and Treasurer.

There are no family relationships among our Company’s directors and executive officers.

Number of Directors. Our board of directors currently consists of two individuals.

Director Qualifications. While the selection of directors is a complex and subjective process that requires consideration of many intangible factors, we believe that candidates should generally meet the following criteria:

The Board believes that our current directors meet these criteria above. In addition, as outlined below, the directors bring a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a wide variety of areas. We believe that the Board as a whole and our directors possess the necessary qualifications and skills to effectively advise management on strategy, monitor our performance, and serve our best interests and the best interests of our shareholders.

A brief description of the background and business experience of our Company’s management, executive officers, and directors is set forth below:

Michael R. Dunn, our current Executive Vice President of Finance, Chief ~~Executive~~Financial Officer, Chief ~~Financial~~Operating Officer, Secretary and Treasurer and member of our Board of ~~Directors. He joined us on~~Directors, previously served as Chief Executive Officer and Chairman of our Board of Directors from May 28, 2008 ~~at a time when~~until April 17, 2015. He joined our Company, which was considered a turn-around project, ~~required a significant~~in order to work on the reduction of ~~our~~significant Company debt, aobtain major capital infusion, provide a rationalization of our product line, and establish a more effective product distribution.

Mr. Dunn has recently spearheaded the search for a merger partner and has managed our relationship with Sky Rover and if and when it closes the following are some of the important aspects of the negotiated transaction:

From December 1995 through 2010, Mr. Dunn was the Chief Executive Officer of Bankers Integration Group, Inc., an e-commerce company serving the automotive finance and insurance industry. In mid-1995 through 2006, Mr. Dunn started a company that generated a $60 million auto portfolio that was sold to a subsidiary of General Motors. Mr. Dunn interfaced with the top CEOs of automotive companies, including Harold Poling, the former CEO and Chairman of Ford Motor Company, and Bob Eaton, the former Chairman and CEO of Daimler Chrysler. Mr. Dunn secured $22.2 million in equity financing for Bankers Integration Group, plus an additional $20.8 million and $1.9 million in debt and lease financing, respectively. Bankers Integration Group, Inc. filed for Chapter 11 bankruptcy protection in October of 2007, and Mr. Dunn acted as the Trustee and coordinated the sale of the assets. The case was closed on November 17, 2010. Mr. Dunn also served as Chairman and Chief Executive Officer of Mountaineer Gaming, a ~~Russell 2000~~ gaming and ~~Entertainment Company, as well~~entertainment company, where he coordinated the design and implementation of a $10 million renovation of the racetrack, and put into service over 700 new video lottery machines. The park had over 450 employees while Mr. Dunn was Chairman and CEO of the public company. He was instrumental in raising investor capital of approximately $17 million, plus an additional $17 million in construction loan and equipment lease financing. Mr. Dunn has vast experience as being the owner, manager, orand director of various businesses, both large and small. Mr. Dunn attended La Crosse State University, Wisconsin, in business and has extensive training in business management and leadership.

On August 30, 2016, we reported on Form 8-K that our former Chief Executive Officer (“CEO”), President, and Chairman of the Board of Directors, Ning Liu, was detained in the People’s Republic of China (“PRC”). On October 21, 2016, because of his ongoing legal challenges in the PRC, Mr. Liu resigned from all his positions in our Company. Mr. Liu continues to be detained in the PRC. The charges against Mr. Liu are personal to him and our Company is in no way named as a defendant or subject to the charges. We have been informed by Mr. Liu’s attorney in the PRC that, on ~~April 26, 2005.~~March 2, 2017, he was convicted in Hunan province for violations of the PRC’s multi-level marketing regulations and sentenced to 10 years in prison. We have likewise been informed by Mr. ~~Jones is a consultant and telecommunications analyst. Since 2003,~~Liu’s attorney that he has ~~served as~~an appeal hearing scheduled in Hunan Province in the near future and, if he is unsuccessful in that hearing, he can appeal to a ~~Director~~national court in Beijing, China.

Other than the foregoing, none of ~~Native American Studies and Fund Raising Division~~our directors, executive officers, promoters or control persons has been involved in any of the ~~Rio Grande Foundation, a New Mexico free market research and educational organization dedicated to~~following events during the study of public policy. Along with his background in Business Administration, Mr. Jones brings to us his knowledge and 35 years’ experience in the area of corporate development and finance as well as his background in the areas of International Finance and business affairs.past ten years:

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, officers and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

We believe that the following filings were either made late or not filed pursuant to Section 16(a) of the Exchange Act:

We do not have a separately designated audit, compensation, or nominating committee of our Board and the function customarily delegated to these committees are performed by our full Board. We are not a “listed company” under SEC rules, and are therefore not required to have separate committees comprised of independent directors.

The Board does not have a nominations committee because the Board does not believe that a defined policy with regard to the consideration of candidates recommended by stockholders is necessary at this time because the functions of such committee are adequately performed by our Board. There are no specific minimum qualifications that the Board believes must be met by a candidate recommended by the Board. Currently, the entire Board decides on nominees, on the recommendation of any member of the Board, followed by the Board’s review of the candidates’ resumes and interviews of candidates. Based on the information gathered, the Board then makes a decision on whether to recommend the candidates as nominees for director. We do not pay any fee to any third party, or parties, to identify or evaluate or assist in identifying or evaluating potential nominees.

The Board does not have an audit committee. However, for certain purposes of the rules and regulations of the SEC and in accordance with the Sarbanes-Oxley Act of 2002, our Board is deemed to be its audit committee and as such functions as an audit committee and performs some of the same functions as an audit committee including: (i) selection and oversight of our independent accountant; (ii) establishing procedures for the receipt, retention, and treatment of complaints regarding accounting, internal controls, and auditing matters; and (iii) engaging outside advisors. Our Board has determined that its members do not include a person who is an “audit committee financial expert” within the meaning of the rules and regulations of the SEC. Our Board has determined that each of its members is able to read and understand fundamental financial statements and has substantial business experience that results in that member’s financial sophistication. Accordingly, our Board believes that each of its members has sufficient knowledge and experience to fulfill the duties and obligations of an audit committee. Furthermore, our Board has determined that the cost of hiring a financial expert to act as one of our directors and to be a member of an audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on an audit committee.

The Board does not have a compensation committee because the Board believes that it is not necessary to have a compensation committee at this time because the functions of such committee are adequately performed by our Board.

Our Board conducts business through meetings or by unanimous written consents of the Board. Such actions by written consent of all directors are, according to Nevada corporate law and our bylaws, valid and effective as if they had been passed at a meeting of the directors duly called and held. The Board of Directors as of December 31, 2016, consisted of a sole Director - Michael Dunn. Mr. Dunn does not qualify as an “independent director” pursuant to the rules and regulations of the SEC. During the fiscal year ended December 31, 2016, the Board held no formal meetings, and the Board acted by unanimous written consent on multipleoccasions.

We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, and principal accounting officer. Our Code of Ethics was an exhibit to our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and filed with the SEC on April 16, 2007.

Set forth below is a summary of compensation for our principal executive officer and our two most highly compensated officers other than our principal executive officer (collectively, the “named executive officers”) for our last two fiscal years. There have been no annuity, pension or retirement benefits ever paid to our officers, directors or employees.

With the exception of reimbursement of expenses incurred by our named executive officers during the scope of their employment and unless expressly stated otherwise in a footnote below, none of the named executive officers received other compensation, perquisites and/or personal benefits in excess of $10,000.

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-equity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)		Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-equity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)
Michael R. Dunn, CEO, CFO (1)	2014	$	180,913	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	180,913
Ning Liu, former CEO (1)																	2016	$	90,000	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	90,000
	2013	$	229,731	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	229,731		2015	$	24,000	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	24,000
Michael R. Dunn, CEO, COO, CFO (2)																	2016	$	145,000	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	145,000
																	2015	$	20,000	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	20,000

On August 24, 2009, we entered into an Employment Agreement with Michael R. Dunn (the “Dunn Agreement”) to serve as our Chief Executive Officer (“CEO”) and Chairman of the Board of Directors (“Chairman”). Mr. Dunn has been serving as our CEO and Chairman since May 28, 2008. The Dunn Agreement supersedes and replaces any prior employment agreement or arrangement between our company and Mr. Dunn. The Dunn Agreement has a term of two years (the “Initial Term”). Unless sooner terminated pursuant to the terms thereof, Mr. Dunn’s employment will automatically renew for additional one-year terms (each a “Renewal Term”). Mr. Dunn will receive an initial annual salary of $189,000 per year, which will be increased by 5 percent on January 1st of each year. He will also receive a monthly home office expense allowance of $2,000 and a monthly car allowance of $750. If we fail to make any regularly scheduled payment of salary amounts owed to Mr. Dunn under the Dunn Agreement within fifteen (15) days of their due date, in lieu of such payment and subject to applicable securities laws, we shall issue, at Mr. Dunn’s option, shares of our common stock with a value of 150% of the payment owing to Mr. Dunn, such shares valued at the price per share in the last reported trade of our common stock on the date such payment should have been made. Mr. Dunn has not exercised this option to date. The Dunn Agreement also states that Mr. Dunn will also be eligible to receive a bonus of $110,000, dependent on certain capital being raised. To date, no bonus has been approved for Mr. Dunn. Mr. Dunn was also granted 233,333 shares of our common stock, vesting immediately, with a minimum of 216,667 shares restricted and subject to a lock-up provision that prohibits Mr. Dunn from selling, transferring or otherwise encumbering the shares for a period of six (6) months. In addition, the shares are subject to forfeiture under certain circumstances in the first 6 months of the Dunn Agreement. Mr. Dunn also is entitled to additional benefits commensurate with the position of Chief Executive Officer, including paid vacation, reimbursement of reasonable and necessary business expenses incurred in the performance of his duties, and eligibility to participate in our employee benefit plans.

If we terminate Mr. Dunn’s employment for any reason other than just cause, Mr. Dunn will be entitled to payment of his annual salary, as in effect on the date of his termination, for either twelve (12) months or through the Initial Term or any applicable Renewal Term, whichever period of time is longer. In addition we will continue to pay for coverage for Mr. Dunn and his dependents under our group insurance plans for a period of twelve (12) months from the effective date of termination. The Dunn Agreement also contains customary non-disclosure/non-solicitation and non-competition provisions.

On November 25, 2009 we entered into Amendment #1 to the Dunn Agreement under which the sections of the Dunn Agreement relating to Prohibited Behavior and Business Opportunities were amended to allow Mr. Dunn to have an interest in and participate in FITT.

On August 24, 2009, we entered into an Employment Agreement with Robert E. Crowson, Jr. (the “Crowson Agreement”) to serve as our Controller, a non-officer position. The Crowson Agreement has a term of two years (the “Initial Term”). Unless sooner terminated pursuant to the terms thereof, Mr. Crowson’s employment will automatically renew for additional one-year terms (each a “Renewal Term”). Mr. Crowson will receive an initial annual salary of $120,000 per year, which will be increased by 5 percent on January 1st of each year. If we fail to make any regularly scheduled payment of salary amounts owed to Mr. Crowson under the Crowson Agreement within fifteen (15) days of their due date, in lieu of such payment and subject to applicable securities laws, we shall issue, at Mr. Crowson’s option, shares of our common stock with a value of 150% of the payment owing to Mr. Crowson, such shares valued at the price per share in the last reported trade of our common stock on the date such payment should have been made. Mr. Crowson has not exercised this option to date. Mr. Crowson was also granted 50,000 shares of our common stock, vesting immediately, with a minimum of 40,000 shares restricted and subject to a lock-up provision that prohibits Mr. Crowson from selling, transferring or otherwise encumbering the shares for a period of six (6) months. In addition, the shares are subject to forfeiture under certain circumstances in the first 6 months of the Crowson Agreement. Mr. Crowson also is entitled to additional benefits commensurate with the position of Controller including paid vacation, reimbursement of reasonable and necessary business expenses incurred in the performance of his duties, and eligibility to participate in our employee benefit plans.

If we terminate Mr. Crowson’s employment for any reason other than just cause, Mr. Crowson will be entitled to payment of his annual salary, as in effect on the date of his termination, for either twelve (12) months or through the Initial Term or any applicable Renewal Term, whichever period of time is longer. In addition we will continue to pay for coverage for Mr. Crowson and his dependents under our group insurance plans for a period of twelve (12) months from the effective date of termination.

On November 25, 2009 we entered into Amendment #1 to the Crowson Agreement under which the sections of the Crowson Agreement relating to Prohibited Behavior and Business Opportunities were amended to allow Mr. Crowson to have an interest in and participate in FITT.

During the fourth quarter of 2014, the employee terminated employment with the Company and settled outstanding balances due him without any additional liability to the Company. See Note 7 to the consolidated financial statements.None.

On October 15, 2009 the Board of Directors approved a program to compensate our outside directors at the rate of $3,000 per calendar quarter in cash or in equivalent value of shares of our common stock. All directors are entitled to reimbursement of expenses incurred in the performance of their duties as directors, including their attendance at Board of Directors meetings.

During ~~2014~~2016 and ~~2013, we accrued~~2015, there were no outside directors and therefore not director’s fees ~~for Derek Jones in the amount of $12,000 and $2,000, respectively.~~were paid or accrued.

As previously discussed, on October 29, 2013, we issued 33,000,000 shares of our common stock to FITT for further distribution to the FITT shareholders, all as set out in the Merger Agreement. As of the date of this report, we are working on finalizing certain ownership and debt mitigation issues which could affect the ownership of certain of our common shares.

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

The following table sets forth certain information concerning our best estimate of the beneficial stock ownership of our common stock as of the date of this report pending the resolution of the issues note above. The information is presented with respect to: (i) each person who is known to us to beneficially own more than 5% of our common stock; (ii) each officer and director; and (iii) all directors and officers as a group; based upon ~~38,063,410~~40,431,680 shares of outstanding common stock.

(1) c/o our address, ~~P.O. Box 4709, Mission Viejo,~~2 Park Plaza, Suite 400, Irvine, CA ~~92690,~~92614, unless otherwise noted.

(2) Except as otherwise indicated, we believe that the beneficial owners of common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.

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

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of common stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

According to the NASDAQ definition, Mr. Dunn is not an independent director because he is also an executive officer of the Company. According to the NASDAQ definition, we have no independent directors.

As detailed in our Notes to Financial Statements, the following relating party transactions have occurred.

InOn September 19, 2014, in order to facilitate the investment by Sky Rover discussed in Note 1, ~~on September 19, 2014~~ we entered into ~~a Settlement Agreement~~settlement agreements with Michael Dunn, our former CEO, ~~who is also a Director,~~under which will become effective once all closing conditions for the Sky Rover SPA have become effective as more fully described in Note 14 to the accompanying consolidated financial statements. Under the Settlement Agreement, our CEO and Directorhe agreed to forgive all accrued but unpaid salary ~~which amounted to $1,053,187 and any additional accrued salary though the~~once all closing ~~date~~conditions of the ~~Stock Purchase Agreement. We did not accrue any compensation for our CEO during the fourth quarter of 2014 based on mutual agreement of the CEO and~~ Sky ~~Rover.~~Rover SPA had been met. In addition, ~~our CEO~~Mr. Dunn gave up his right to any severance payment which would be due him under his employment agreement upon the closing of the ~~Stock Purchase Agreement. For our part, we agreed to issue our CEO a promissory note for the amount of unpaid advances made to us by him in the amount of $142,203.~~Sky Rover SPA. The ~~note will bear interest at 8% per annum and becomes due and payable one year from its effective date. Finally, the CEO will~~settlement agreement stipulated that Mr. Dunn would be allowed to retain no less than 2,000,000 of his ~~currently held~~then-held common shares. ~~The terms of~~During the ~~Settlement Agreement with our CEO will only be effective and recorded once~~three months ended March 31, 2015, when all closing conditions toof the Sky Rover SPA ~~have been met.~~became effective, the terms of the settlement agreement became effective.

~~Prior~~In connection with the Sky Rover SPA, and subsequently in connection with the Share Exchange Agreement with GX-Life, certain parties may have formed a “group” under Section 13(d)(3) of the Exchange Act, and certain current and former executive officers and directors have varying degrees of affiliation which may have resulted in related party transactions. These affiliations are as follows:

In connection with the Sky Rover SPA, the following parties acquired a total of 30,400,000 shares of our common stock:

Future Continental Limited, Discover Future Limited, Global Future Development Limited, and Master Power Holdings Group collectively acquired 30,400,000 shares in our Company in connection with the Sky Rover SPA. By virtue of the manner in which these acquiring shareholders acquired the shares, they may be deemed to have formed a “group” within the ~~Merger, FITT made advances to~~meaning of Section 13(d)(3) of the Exchange Act. However, each of these acquiring shareholders disclaims beneficial ownership of the shares beneficially owned by each other party.

In addition, a few of our ~~CEO, either personally or to~~former executive officers and directors had affiliations with the acquiring shareholders which may be classified as related party transactions. Namely, 1) Junfei Ren, our former Secretary and director, is the sole officer of Global Future Development Limited, but has no voting control over the entity, and 2) our former officer and director Lei Pei is the COO and a ~~company he owns,~~director of ~~$691,805, including annual interest~~Sky Rover as well as a minority shareholder.

However, on October 2, 2015, our Company via its former EGD Subsidiary, entered into a Share Exchange Agreement with GX-Life whereby we spun-off 100% of ~~6%. During~~its then ownership interests in the ~~fourth quarter~~EGD Subsidiary and 4,000,000 EGD in exchange for 100% of ~~2013, our CEO repaid~~ the ~~advances through an agreement to surrender 668,386 shares of~~outstanding common stock of GX-Life. In a related transaction, on October 2, 2015, the former shareholders of GX-Life Global sold all of their interests in the EGD Subsidiary to the acquiring shareholders in the Sky Rover SPA in exchange for 21,280,000 shares of our ~~post-merged company which~~Company previously acquired in the Sky Rover SPA.

Michael Dunn and Ning Liu were ~~beneficially owned by him~~shareholders in GX-Life, and acquired shares in our Company as ~~part~~a result of the ~~Merger. The~~series of transactions discussed in the preceding paragraphs. In addition, Masuya Tomoe, an affiliate shareholder, was also a shareholder in GX-Life which acquired Company shares ~~were valued at approximately $1.04, the volume weighted adjusted price~~as a result of the ~~common stock for~~foregoing transactions.

Other than the ~~20 trading days prior~~foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to ~~his agreement to surrender~~own beneficially more than 5% of the ~~shares. While the advances were formally relieved~~Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in ~~fiscal 2013, the shares were surrendered~~any transaction that has occurred during the ~~first quarter 2014.~~past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.

With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

dbbmckennon(the (the “Independent Auditors”) were our ~~Independent Auditors~~independent auditors and examined our consolidated financial statements for the years ended December 31, ~~2014~~2016 and ~~2013,~~2015, respectively. The Independent Auditors performed the services listed below and ~~were paid~~billed us, or are expected to bill us, the aggregate fees listed below for the years ended December 31, ~~2014~~2016 and ~~2013.~~2015.

The Independent Auditors billed us, or are expected to bill us, aggregate fees of approximately ~~$48,000~~$76,413 for the fiscal year ended December 31, ~~2014~~2016 and approximately ~~$38,000~~$75,065 for the fiscal year ended December 31, ~~2013~~2015 for professional services rendered for their audit of our annual financial statements and their reviews of our financial statements included in our quarterly reports on Form 10-Q during these periods.

The Independent Auditors ~~did not bill~~billed us ~~any~~aggregate fees of approximately $9,965 and $0 for ~~either of~~ the fiscal years ended December 31, ~~2014 or 2013~~2016 and 2015, respectively, for ~~any~~ audit- related professional services.

The Independent Auditors ~~did not bill~~billed us ~~any~~aggregate fees of approximately $5,700 and $0 for ~~either of~~ the fiscal years ended December 31, ~~2014 or 2013~~2016 and 2015, respectively, for ~~any~~ professional services for tax compliance, tax advice and tax planning during this fiscal year period.

The Independent Auditors billed us aggregate fees of approximately $15,000 for the fiscal year ended December 31, 2013 for professional services related to their reviews of Form 8-K in connection with our Merger with FITT. The Independent Auditors did not bill us any fees for either of the ~~year~~years ended December 31, ~~2014~~2016 or 2015 for any other professional services.

Our Board of Directors has policies and procedures that require the pre-approval by the Board of all fees paid to, and all services performed by, our independent accounting firms. The fees and services provided as noted above were authorized and approved by the Board in compliance with the pre-approval policies and procedures described herein.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with the Exchange Act, this report has been signed below by the following person(s) on behalf of the registrant and in the capacities and on the date(s) indicated.

Nevada		98-0360989
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

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

		Page
PART I		1

ITEM 1	BUSINESS	1

ITEM 1A	RISK FACTORS	49

ITEM 1B	UNRESOLVED STAFF COMMENTS	49

ITEM 2	PROPERTIES	59

ITEM 3	LEGAL PROCEEDINGS	59

ITEM 4	~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~MINE SAFETY DISCLOSURES	510

PART II		11

ITEM 5	MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	511

ITEM 6	SELECTED FINANCIAL DATA	612

ITEM 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	612

ITEM 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	1017

ITEM 8	CONSOLIDATED FINANCIAL STATEMENTS	1118

ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	3140

ITEM 9A	CONTROLS AND PROCEDURES	3140

ITEM 9A(T)	CONTROLS AND PROCEDURES	3140

ITEM 9B	OTHER INFORMATION	3140

PART III		41

ITEM 10	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	3241

ITEM 11	EXECUTIVE COMPENSATION	3344

ITEM 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	3545

ITEM 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	3545

ITEM 14	PRINCIPAL ACCOUNTING FEES AND SERVICES	3646

PART IV		47

ITEM 15	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	3747

SIGNATURES			3849

Category	Description
Beauty	Fruit Enzyme Foaming Cleanser 100mL (Tube)
Beauty	Moisture-Boosting Night Repair Cream 30mL (Jar)
Beauty	Line-Diffusing Diamond Eye Cream 15mL (Airless Pump)
Beauty	Regenerative Multi-Action Concentrate 30mL (Airless Pump)
Beauty	Skin-Brightening Diamond Illuminator 30mL (Airless Pump)
Nutrition/Supplements	GX-Life Slim Down 60 CT Caplets (Bottle)
Nutrition/Supplements	GX-Life Super Berry Shake 9.4oz Powder (Canister)
Nutrition/Supplements	GX-Life Multi-Vitamin 60 CT Softgels (Bottle)
Nutrition/Supplements	GX-Life Joint Support 60 CT Tablets (Bottle)
Nutrition/Supplements	GX-Life DetoxMax 60 CT Softgels (Bottle)
Nutrition/Supplements	GX-Life Enzymax 60 CT Capsules (Bottle)
Nutrition/Supplements	GX-Life Advanced Probiotics 60 CT Vegetarian Capsules (Bottle)
Energy Drink	GX-Life Sustain 1 oz. Gel Packet (30 CT) (Box)
Energy Drink	GX-Life F.I.T.T. Extreme 12 CT 30 mL Gel Packs (Box)
Energy Drink	GX-Life F.I.T.T. Rx Gel 30 CT 30 mL Gel Packs (Box)
Tea	Herbal Soul Super Clearance 30 Ct 1.0mL Sachets (Jar)
Tea	Herbal Soul Mag Health 30 CT 1.0mL Sachets (Jar)
Tea	Herbal Soul NuDibe 30 CT 1.0mL Sachets (Jar)
Tea	Authentea Assortment Pack 30 CT 0.6mL Sachets (Tin Box)
Tea	Authentea Jasmine 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Apple Iced Green 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Peach Iced Green 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Blueberry Black 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Organic Black 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Organic Green 30 CT 0.6mL Sachets (Jar)
Teaware	10 Piece Tea Set
Teaware	8 Piece Tea Set
Teaware	7 Piece Tea Set

QUARTER ENDED		HIGH		LOW
March 31, 2014	$	1.20	$	0.15
June 30, 2014	$	0.25	$	0.06
September 30, 2014	$	1.10	$	0.15
December 31, 2014	$	1.10	$	0.20

QUARTER ENDED	HIGH		LOW
March 31, 2016	$	3.64	$	2.20
June 30, 2016	$	3.15	$	2.50
September 30, 2016	$	2.59	$	1.02
December 31, 2016	$	1.35	$	0.51

QUARTER ENDED		HIGH		LOW
March 31, 2013	$	0.40	$	0.18
June 30, 2013	$	0.51	$	0.06
September 30, 2013	$	1.19	$	0.07
December 31, 2013	$	1.35	$	0.85

QUARTER ENDED	HIGH		LOW
March 31, 2015	$	0.99	$	0.20
June 30, 2015	$	2.62	$	0.69
September 30, 2015	$	3.45	$	2.48
December 31, 2015	$	3.00	$	0.90

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)

Equity compensation plans approved by security holders	0	$0.00		13,889
TOTAL	0		$0.00	13,889

		Page No.
Audited Consolidated Financial Statements for Global Future City Holding Inc.~~, formerly FITT Highway Products, Inc.~~

Report of Independent Registered Public Accounting Firm		1219

Consolidated Balance Sheets as of December 31, ~~2014~~2016 and ~~2013~~2015		1320

Consolidated Statements of Operations for the Years Ended December 31, ~~2014~~2016 and ~~2013~~2015		1421

Consolidated Statements of Shareholders’ Deficit for the Years Ended December 31, ~~2014~~2016 and ~~2013~~2015		1522

Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2014~~2016 and ~~2013~~2015		1623

Notes to Consolidated Financial Statements		1724

/s/ dbbmckennon

Newport Beach, California
April ~~1, 2015~~17, 2017

	Preferred Stock				Common Stock						Additional Paid-in			Advances to			Accumulated Other Comprehensive			Accumulated
	Shares		Amount		Shares			Amount			Capital			Shareholder			Loss			Deficit			Total
Balance at December 31, 2012		–	$	–		32,231,661		$	32,232		$	1,829,329		$	(544,667	)	$	(111,000	)	$	(2,188,759	)	$	(982,865	)
Stock issued to non-employees for services and operating expenses		–		–		526,599			527			26,973			–			–			–			27,500
Stock issued for compensation		–		–		213,300			213			83,037			–			–			–			83,250
Capital contributions		–		–		–			–			64,500			–			–			–			64,500
Fair value of contributed services		–		–		–			–			233,616			–			–			–			233,616
Stock issued in connection with the issuance of notes payable		–		–		28,440			29			4,971			–			–			–			5,000
Unrealized gain on available for sales securities		–		–		–			–			–			–			28,292			–			28,292
Shares retained in Merger		–		–		4,155,372			4,155			(2,934,232	)		544,667			82,708			(867,519	)		(3,170,221	)
Stock issued for extinguishment of debt		–		–		863,376			863			905,682			–			–			–			906,545
Net loss		–		–		–			–			–			–			–			(1,666,458	)		(1,666,458	)

Balance at December 31, 2013		–		–		38,018,748			38,019			213,876			–			–			(4,722,736	)		(4,470,841	)
Stock issued to non-employees for services		–		–		50,000			50			12,450			–			–			–			12,500
Stock returned for repayment of advances		–		–		(695,736	)		(696	)		(26,855	)		–			–			–			(27,551	)
Stock issued for extinguishment of debt		–		–		390,398			390			235,569			–			–			–			235,959
Net income		–		–		–			–			–			–			–			190,620			190,620
Balance at December 31, 2014		–	$	–		37,763,410		$	37,763		$	435,040		$	–		$	–		$	(4,532,116	)		(4,059,313	)

Assets:
Cash	$	100
Deposits for inventory		491,988
Other deposits		5,700
Total assets		497,788
Liabilities:
Accounts payable		19,298
Due to related parties		495,737
Total liabilities		515,035
Net liabilities in excess of assets	$	17,247

	2014		2013
Finished goods	$	3,426	$	51,905
Raw materials – boxes and labels		–		591
	$	3,426	$	52,496

	2016			2015
Beginning balance	$	10,020		$	–
Member deposits		5,399,812			10,000
Less: deposits repaid		(240,400	)		–
Accrued member benefits		94,920			20
Less: member conversions to GX Coins		(4,713,544	)		–
Ending balance	$	550,808		$	10,020

	2016
Repayments requested by members	$	115,580
Conversion paperwork signed – verifying appropriate state of residency		165,219
Conversion paperwork signed – no GX Coin account established		270,009
Ending balance	$	550,808

	2016			2015
Acquisition note - Powerdyne	$	–		$	50,000
Promissory notes - principal		300,000			–
Promissory notes – unamortized debt discount		(73,547	)		–
Settled and restructured notes payable:
Convertible promissory notes – debt acquisition		95,000			100,000
Notes payable – original bridge		120,000			120,000
Notes payable – bridge loan #1		230,000			355,000
Notes payable – bridge loan #2		85,000			175,000
Notes payable – bridge loan #3		250,000			250,000
Subtotal		1,006,453			1,050,000
Less current portion		(1,006,453	)		(1,050,000	)
Long-term portion	$	–		$	–

	2014		2013
Advances from our CEO	$	142,203	$	144,074
Advances from Shareholder		15,000		15,000
	$	157,203	$	159,074

Payments made by a former CEO, Lei Pei, for Powerdyne acquisition	$	175,000
Advances in connection with Sky Rover SPA for expenses incurred due to late closing of the Sky Rover SPA		139,885
Net receipts in connection with all outstanding issues with Mr. Lei Pei		40,540
	$	355,425

	2014			2013
Notes payable settlement agreements	$	952,400		$	–
Conversions of notes payable		(33,594	)		(382,976	)
Assignment of Asher note payable		(9,948	)		–
Settlement of accounts payable to legal counsel		142,876			–
	$	1,051,734		$	(382,976	)

	·	~~New interest rates of no greater than 10% per annum~~
	·	~~New maturity dates no earlier than August 1,~~November 24, 2015
	·	A forced conversion into free-trading shares of our common stock at any time our common stock has a closing bid price per share of $1.00 or more for 20 consecutive trading days after the closing as defined in the SPA

Name	Age	Position(s) and Office(s)
Michael R. Dunn	6265	Current Chief ~~Executive~~Operating Officer, Chief Financial Officer, Secretary, ~~Director~~
~~Derek Jones~~	76	~~Director~~Treasurer, Executive VP of Finance, Director. Former Chief Executive Officer.

·	Broad training, experience and a successful track record at senior policy-making levels in business, government, technology, accounting, law, consulting and/or administration;
·	The highest personal and professional ethics, integrity and values;
·	Commitment to representing the long-term interests of our Company and all of its shareholders;
·	An analytical and objective perspective, strength of character, and the mature judgment essential to effective decision-making;
·	Expertise that is useful to our Company and complementary to the background and experience of other Board members; and
·	Sufficient time to devote to Board activities and to enhance their knowledge of our business, operations, and industry.

	·	any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

	·	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	·	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

	·	being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

	Common Stock		Preferred Stock
Name and Address of Beneficial Owners(1)	Amount and Nature of Beneficial Ownership	Percent Ownership of Class(2)	Amount and Nature of Beneficial Ownership	Percent Ownership of Class
Michael R. Dunn, CEO, CFO, Secretary, and Director	12,109,716	31.8%	-0-	0.0%
Derek Jones, Director	1,667	*	-0-	0.0%
All executive officers and directors as a group (two persons)	12,111,383	31.8%	-0-	0.0%
Sky Rover Holdings Ltd	13,572,088	35.7%	-0-	0.0%
Rand Scott, MD	2,506,561	6.6%	-0-	0.0%

	Common Stock				Preferred Stock
Name and Address of Beneficial Owners(1)	Amount and Nature of Beneficial Ownership		Percent Ownership of Class(2)		Amount and Nature of Beneficial Ownership		Percent Ownership of Class
Michael R. Dunn, CEO, COO, CFO and Director		11,443,111		28.3%		-0-		0.0%
All executive officers and directors as a group (three persons)		11,443,111		28.3%		-0-		0.0%
Masuya Tomoe		15,647,047		38.7%		-0-		0.0%

2.1		Agreement and Plan of Merger by and among Snocone Systems Inc., WYD Acquisition Corp. and Who’s Your Daddy, Inc., dated April 1, 2005 (1)
~~3.1~~2.2	Merger and Reorganization Agreement, dated June 18, 2013, by and between FITT Highway Products, Inc. and F.I.T.T. Energy Products, Inc. (2)
2.3	Merger Agreement and Articles of Merger, with an effective date of October 29, 2014, by and between FITT Highway Products, Inc. and Global Future City Holding Inc. (3)
3.1	Amended and Restated Articles of Incorporation, dated December 4, 2001 ~~(2)~~(4)
3.2		Amended and Restated Bylaws, dated December 4, 2001 ~~(2)~~(4)
3.3		Amended and Restated Articles of Incorporation, dated April 27, 2005 ~~(3)~~(5)
3.4		Amended and Restated Articles of Incorporation, dated June 1, 2010 ~~(4) (5)~~(6) (7)
10.1		Employment Agreement with Michael R. Dunn dated August 24, 2009 ~~(6)~~(8)
10.2		Employment Agreement with Robert E. Crowson, Jr. dated August 24, 2009 ~~(6)~~(8)
10.3	Share Exchange Agreement, dated May 6, 2014, by and between FITT Highway Products, Inc. and Greenome Development Group, Inc. (9)
10.4	Stock Purchase Agreement, dated September 19, 2014, by and between FITT Highway Products, Inc. and Sky Rover Holdings, Ltd. (10)
10.5	Financing Agreement, dated September 19, 2014, by and between FITT Highway Products, Inc. and Greenome Development Group, Inc. (10)
10.6	First Amendment to Stock Purchase Agreement between Global Future City Holding Inc. and Sky Rover Holdings, Ltd., dated February 17, 2015 (11)
10.7	Membership Interest Purchase and Sale Agreement by and between Global Future City Holding Inc. and Powerdyne, Inc., dated March 26, 2015 (12)
10.8	Second Amendment to Stock Purchase Agreement executed by and between Global Future City Holding Inc. and Sky Rover Holdings, Ltd., dated April 17, 2015 (13)
10.9	Resignation Agreement by and between Global Future City Holding Inc. and Lei Pei, dated August 17, 2015 (14)
10.10	Resignation Agreement by and between Global Future City Holding Inc. and Xiang Ling Yun, dated August 17, 2015 (14)
10.11	Resignation Agreement by and between Global Future City Holding Inc. and Junfei Ren, dated August 17, 2015 (14)
10.12	Share Exchange Agreement by and between GX-Life Global, Inc., GX-Life Global Shareholders, Global Modern Enterprise Limited and Global Future City Holding Inc., dated October 2, 2015 (15)
10.13	Private Stock Purchase Agreement between Exchange Agreement between Future Continental Limited, Discover Future Limited, Global Future Development Limited and the shareholders of Global Modern Enterprise Limited, dated October 2, 2015 (15)
10.14	Software License and Services Agreement by and between GX-Life Global, Inc. and Great Coin, Inc., dated February 17, 2016 (16)
10.15	Amendment and Restatement to Software License and Services Agreement (Access and Services Agreement) by and between GX-Life Global, Inc. and Great Coin, Inc., dated September 30, 2016(17)
10.16	Stock Issuance Cancellation Agreement, between Big Name Group, Master Power Holdings Group and the Company, dated as of March 20, 2017 (19)
14.1	Amended and Restated Code of Conduct and Ethics, dated November 11, 2015 (18)
21.1	List of Subsidiaries (17)
99.1	Audit Committee Charter, dated November 11, 2015 (18)
99.2	Nominations and Governance Committee Charter, dated November 11, 2015 (18)
99.3	Compensation Committee Charter, dated November 11, 2015 (18)
99.4	Insider Trading Policy, dated November 11, 2015 (1)

99.5	Principles of Corporate Governance, dated November 11, 2015 (18)
31.1		Certification of Chief Executive Officer Pursuant to the Securities Exchange Act of 1934, Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	32.1	Certifications Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~101.INS~~32.2	Certifications Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
~~101.SCH~~	101.SCH*	XBRL Schema Document
~~101.CAL~~	101.CAL*	XBRL Calculation Linkbase Document
~~101.DEF~~	101.DEF*	XBRL Definition Linkbase Document
~~101.LAB~~	101.LAB*	XBRL Label Linkbase Document
~~101.PRE~~	101.PRE*	XBRL Presentation Linkbase Document

	(2)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on June 19, 2013.
	(3)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on October 29, 2014.
	(4)	Incorporated by reference from our Registration Statement on Form 10SB filed with the Commission on January 18, 2002.

	~~(6)~~(8)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on August 26, 2009.
	(9)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on May 9, 2014.
	(10)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on September 23, 2014.
	(11)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on February 20, 2015.
	(12)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 30, 2015.
	(13)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on April 20, 2015.
	(14)	Incorporated by reference form our Quarterly Report on Form 10-Q filed with the Commission on September 9, 2015.
	(15)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on October 8, 2015.
	(16)	Incorporated by reference from our Annual Report on Form 10-K filed with the Commission on April 13, 2016
	(17)	Incorporated by reference from our Amendment No. 1 to Post-Effective Amendment No. 3 on July 22, 2016
	(18)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on November 17, 2015
	(19)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 20, 2017

	~~FITT HIGHWAY PRODUCTS,~~GLOBAL FUTURE CITY HOLDING INC.


DATED: April ~~1, 2015~~17, 2017	/s/ Michael R. Dunn
	By: Michael R. Dunn
	Its: Chief Executive Officer ~~and Chief Financial Officer~~(Principal Executive Officer)
	~~(Principal Executive~~
	/s/ Michael R. Dunn
	By: Michael R. Dunn
	Its: Chief Financial Officer ~~Principal~~(Principal Financial Officer and Principal Accounting Officer)

DATED: April 17, 2017	/s/ Michael R. Dunn
	By: Michael R. Dunn
	Its: Chief Executive Officer, Chief Financial Officer and sole director