UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





———————


FORM 10-K


———————





þANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended:December 31, 2010





 ̈TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from: _____________ to _____________





Commission File Number:  000-57169





GLOBALPAYNET HOLDINGS, INC.(Exact name of registrant as specified in its charter)





Nevada

98-0458087(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)





Columbia Tower, 701 Fifth Ave., Suite 4200, Seattle, WA 98104


(Address of Principal Executive Office) (Zip Code)





(206) 262-7533


(Registrant’s telephone number, including area code)





N/A


(Former name or former address, if changed since last report)


———————





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





Title of each class

Name of each exchange on which registeredNone

None





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


None
 (Title of Class)





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





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





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





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





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





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





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





As of March 25, there were 41,645,748 shares of the Registrant’s common stock outstanding.





DOCUMENTS INCORPORATED BY REFERENCE: NONE













GLOBALPAYNET HOLDINGS INC.





TABLE OF CONTENTS





Form 10-K Index





PAGEFORWARD LOOKING STATEMENTPART IItem 1.
Business


3Item 1A.
Risk Factors


8Item 1B.
Unresolved Staff Comments


8Item 2.
Properties


8Item 3.
Legal Proceedings


8Item 4.
(Removed and Reserved)


8PART IIItem 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities


9Item 6.
Selected Financial Data


10Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations


10Item 7A.
Quantitative and Qualitative Disclosures About Market Risk


14Item 8.
Financial Statements and Supplementary Data


15Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


16Item 9AT.
Controls and Procedures


16Item 9B.
Other Information


17PART IIIItem 10.
Directors, Executive Officers and Corporate Governance


18Item 11.
Executive Compensation


19Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


21Item 13.
Certain Relationships and Related Transactions, and Director Independence


22Item 14.
Principal Accounting Fees and Services


22PART IVItem 15.
Exhibits and Financial Statement Schedules


23Signatures



24Index to Consolidated Financial Statements


F-1





2




PART I





Forward-Looking Statements





Our disclosure and analysis in this Annual Report on Form 10-K (this “Report”), in other reports that we file with the Securities and Exchange Commission, in our press releases and in public statements of our officers contain forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. Forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many factors mentioned in this Report, for example governmental regulation and competition in our industry, will be important in determining future results. No forward-looking statement can be guaranteed, and actual results may vary materially from those anticipated in any forward-looking statement.





You can identify forward-looking statements by the fact that they do not relate strictly to historical or current events. They use words such as “anticipate,” “estimate,” “expect” “will,” “may,” “intent,” “plan,” “believe,” and similar expressions in connection with discussion of future operating or financial performance. These include statements relating to future actions, prospective products or product approvals, future performance or results of anticipated products, expenses, financial results or contingencies.





Although we believe that our plans, intentions and expectations reflected in these forward-looking statements are reasonable, we may not achieve these plans or expectations. Forward-looking statements in this Report will be affected by the following factors: the ability of the Company to raise sufficient capital to finance its planned activities, the ability of the Company to satisfy its outstanding convertible debt obligations, the ability of the Company to successfully prosecute and protect its intellectual property, and the Company’s ability to hire, manage and retain qualified personnel. The aforementioned factors do not represent an all inclusive list. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this Report. In particular, this Report sets forth important factors that could cause actual results to differ materially from our forward-looking statements. These and other factors, including general economic factors, business strategies, the state of capital markets, regulatory conditions, and other factors not currently known to us, may be significant, now or in the future, and the factors set forth in this Report may affect us to a greater extent than indicated. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this Report and in other documents that we file from time to time with the Securities and Exchange Commission including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Except as required by law, we do not undertake any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.





ITEM 1.  BUSINESS





DESCRIPTION OF THE BUSINESS





Background





Globalpaynet Holdings Inc. (“Globalpaynet” or “GPN”) was incorporated under the laws of the State of Nevada on December 30, 2004. In May of 2007, we changed our name to Globalpaynet Holdings, Inc., and have offices in Seattle, WA.  Our wholly owned subsidiary, Globus Payments Ltd., is based in Vancouver, Canada.




Globalpaynet is an information technology company that intends to be active in the management of electronic data, particularly in the areas of ePayments.




We are still in the development stage, have not generated any significant revenue, and have incurred losses of approximately $23.0 million since inception.  Approximately $5.6 million was spent on the development of Paystream, and $2.1 million was spent on general and administrative expenses, including cash compensation to our CEO.  Additionally, we recognized stock compensation expense totaling approximately $14.1 million pursuant to stock options granted to our CEO.  Other components of the $23.0 million loss include approximately $1.2 million in losses realized in marketable securities, and interest and depreciation expenses.    Based on our financial history since inception, our auditors have expressed substantial doubt about our ability to continue as a going concern.




During the fourth quarter of 2010, we completed the final development and testing of Paystream, our electronic payment gateway software application.  We began marketing Paystream services through our partner and reseller relationships, but to date, we have not generated significant revenues.




We must obtain clients who will contract to use Paystream in order to be successful.  While management believes that its marketing plans will result in market acceptance of Paystream, management does not believe significant revenue will be generated during 2011, and there is no assurance that significant revenue will ever be generated.  We believe that we have sufficient cash and marketable securities on hand as of the date of this filing in order to fund our operating expenses and meet our obligations for six months.  If we are unable to generate material revenues, we will be forced to attempt to raise additional funds on terms which may not be favorable to GPN, if we are able to raise funds at all.




3




Paystream – Electronic Payment Processing Application




PayStream is designed to be an electronic payment gateway integrated both for European and US based businesses and merchants.  It is an SAP certified solution. Paystream will enable merchants to authorize, settle and manage credit card and electronic check transactions via websites, mobile devices and mail order/telephone order call centers.  All businesses wanting to use a payment gateway need to be underwritten by a local national bank, as this is the norm in the merchant underwriting industry.  Typically, banks located in the United States will require businesses based in the United States to have an authorized officer with a social security number sign the merchant application.  European banks require each company to have an authorized officer of European nationality to sign the underwriting documents as well.  Banks in the United States only underwrite risks of businesses based nationally, and European banks only underwrite the risks of businesses based in Europe.




Paystream will offer a convenience to both businesses based in the United States and Europe. As an SAP certified software solution, other users of an SAP certified solution can easily integrate with Paystream payment application.  This opens our market to all SAP users and SAP certified solutions providers in Europe and in the United States.




Upon the completion of the final quality and testing phase, Paystream is intended to operate as a payment gateway. A payment gateway is an e-commerce application service provider service that authorizes payments for e-business, online retailers, brick and click, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor.




How Paystream is Intended to Work




A payment gateway facilitates the transfer of information between a payment portal (such as a website or mobile phone) and an acquiring bank. When a customer orders a product from a payment gateway-enabled merchant, the payment gateway performs a variety of tasks to process the transaction:




▪
A customer places an order on a particular portal by pressing the 'Submit Order' or equivalent button, or perhaps enters their card details using an automatic phone answering service.




▪
If the order is via a website, the customer's web browser encrypts the information to be sent between the browser and the merchant's web server.  This is done via Secure Socket Layer (“SSL”) encryption.




▪
The merchant then forwards the transaction details to their payment gateway. This is another SSL encrypted connection to the payment server hosted by the payment gateway.




▪
The payment gateway forwards the transaction information to the payment processor used by the merchant's acquiring bank.




▪
The payment processor forwards the transaction information to the card association (i.e., Visa/MasterCard).




▪
If an American Express or Discover Card was used, then the processor acts as the issuing bank and directly provides a response of approved or declined to the payment gateway.




▪
Otherwise, the card association routes the transaction to the correct card issuing bank.




▪
The credit card issuing bank receives the authorization request and sends a response back to the processor (via the same process as the request for authorization) with a response code. In addition to determining the fate of the payment, (i.e. approved or declined) the response code is used to define the reason why the transaction failed (such as insufficient funds, or bank link not available).




▪
The processor forwards the response to the payment gateway.




▪
The payment gateway receives the response, and forwards it on to the website (or whatever interface was used to process the payment) where it is interpreted as a relevant response then relayed back to the cardholder and the merchant.




▪
The entire process typically takes 2–3 seconds.




▪
The merchant submits all their approved authorizations, in a "batch", to their acquiring bank for settlement.




▪
The acquiring bank deposits the total of the approved funds in to the merchant's nominated account. This could be an account with the acquiring bank if the merchant does their banking with the same bank, or an account with another bank.




▪
The entire process from authorization to settlement to funding typically takes 3 days.




SAP certification of PayStream




Paystream is certified by SAP AG as a global payment gateway certified on SAP’s NetWeaver Platform. This certification was achieved in July 2009 and confirms that Paystream is compatible to run on SAP’s NetWeaver platform described above.  SAP AG, together with its subsidiaries, develops, markets, and sells enterprise application software products for corporations, government agencies, and educational institutions in Europe, the Middle East, Africa, North America, Latin America, and the Asia Pacific Japan region. Globalpaynet is part of the Software Solution Partners in the SAP Partner Edge Program and, through this program, has access to over 100,000 SAP enterprise partners who could use Paystream services.  Being a Software Solutions Partner of SAP enhances our branding and credibility of Paystream, as SAP is a globally recognized enterprise software.




4




The Data Center




Through our partnership with GlobeX, we have access to a Swiss data center located in Geneva, Switzerland.  This facility features multiple physical and electronic security systems, including biometric authentication, 24/7 manned surveillance, automated surveillance systems, multiple checkpoints, highly secure rooms, restricted passageways and multi-person access controls. Additional monitoring equipment is installed within Globalpaynet’s servers’ racks in order to provide real time notification (e-mail, SMS) of any physical access to the facility. The servers are hosted in an ISO 9001:2000 certified building providing a complete data center infrastructure service: a secure, reliable and cost-effective way to ensure the continuous availability of business systems and applications.   This facility will be used to store Paystream transactions processed in the international market.  There is no extra cost billed to Globalpaynet to store Paystream transactions in this data center.




As this facility is used to host Securus and EHRmedi services which we plan to sell pursuant to our licensing agreement with Globex, we will pay to Globex the cost of operations for those services associated with this data center facility. Such costs include standard memory storage costs which will vary from time-to-time depending on the cost of servers used and the amount of storage used to store Globalpaynet’s clients in the USA and Canada.  Pursuant to the licensing agreement, which was amended in February 2011 to include Canada.  As of January 2011, we will also remit to Globex a licensing fee of 20% of gross sales from the sale of Securus and EHRmedi services.




PCI DSS compliance




Introduction to the PCI DSS compliance





Beginning in the late 1990’s when credit fraud became rampant, the major credit cards industries combined their efforts to provide guidelines on how to handle sensible personal data related to credit card payments. In 2004, these efforts resulted in the first version of the Payment Card Industry Data Security Standard (“PCI DSS”), which is now becoming mandatory for all entities involved in the processing of credit card data during a payment. The standards apply to all organizations that store, process or transmit cardholder data – with guidance for software developers and manufacturers of applications and devices used in those transactions. Prior to October 2008, the PCI Council (composed by American Express, Discover Financial Services, JCB International, MasterCard Worldwide and Visa Inc.) monitored the conformance to the standard only in North America, but since the updated rules of PCI DSS became effective on October 30 2008, the PCI council along with PCI Europe are pushing global banks and all companies processing, storing, or transmitting cardholder data to be PCI DSS compliant.





We have engaged SecurityMetrics to certify our platform and perform PCI Scans (ASV), PCI audits (QSA), PA-DSS audits, penetration tests and forensic analysis.  SecurityMetrics is a Qualified Payment Application Security Company (QPASC) and offers a security appliance with vulnerability assessment, intrusion detection and intrusion prevention functionality.





Competition




The payment processing industry is highly competitive. We will compete with many small and large companies compete to provide payment processing services and related services to a wide range of merchants. There are a number of large transaction processors, including First Data Merchant Services Corporation, Cybersource, Chase Paymentech and Global Payments, Inc., who serve a broad market spectrum from large to small merchants and provide banking, automatic teller machine, and other payment-related services and systems in addition to card-based payment processing. There are also a large number of smaller transaction processors that provide various services to small and medium-sized merchants.




Our largest competitor in the United States is Authorize.net. Since 1996, Authorize.Net has been a leading provider of payment gateway services, managing the submission of billions of transactions to the processing networks on behalf of merchant customers. Authorize.Net is a solution offered by CyberSource Corporation, a wholly owned subsidiary of Visa.  Our largest competitor in Canada is Chase Paymentech.




Marketing strategy




We plan to market Paystream mainly through online search engine optimization, online marketing, including an email marketing campaign, and through the SAP network of companies and partners.  We also plan to build a network of resellers and form various partnerships in order to sell our proprietary and licensed web-based applications for electronic data management, Paystream, Securus and EHRmedi.  Our short term marketing strategy will be to develop a partner strategy and program by type of partner such as:




●
Technology partners (e.g. SAP)




●
Implementation and solution partners (e.g. local IT integrators)




●
Managed services partners (e.g. ISPs, web sites creators)




5





SOURCES AND AVAILABILITY OF RAW MATERIALS AND PRINCIPAL SUPPLIERS




Our payment gateway services are not dependent on the availability of raw materials. As such, we do not need to purchase raw materials nor do we use or rely on outside suppliers or vendors to make our credit card processing gateway services available to merchants.




CUSTOMERS




We are a development stage company, and as such, we have not generated any significant revenue.  The revenue that we have generated is minimal and was transacted with only a few customers. Accordingly, we acknowledge that we face substantial risk and recognize that the challenges relevant to building a broader, larger clientele are formidable. We have begun developing a partner and reseller program designed to build our client base and alleviate our dependence on a small base of customers.




INTELLECTUAL PROPERTY




Our intellectual property consists of our internally-developed proprietary technology that underlies our core platform, Paystream. We rely on agreements with contractors and other parties with whom we do business in order to limit access to and disclosure of our proprietary information, as well as to clarify rights to intellectual property associated with our business.  To date we have not registered for statutory copyright protection.  A logomark application for Paystream has been filed by Renovatio Media Group S.A., and such logomark rights, if approved will be transferred automatically to Globalpaynet Holdings Inc.





GOVERNMENT APPROVAL & GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES





— REGULATORY BACKGROUND.





We are not currently subject to direct federal, state or local regulation other than regulations applicable to businesses generally and directly applicable to online commerce. We are not currently subject to direct regulation by any governmental agency other than laws and regulations generally applicable to businesses. Notably, Globalpaynet promotes best practices and ethical business conduct in relation to our corporate culture and its day-to-day operations.





As Internet use gains popularity, it is possible that a number of laws and regulations may be adopted with respect to the Internet. These laws may cover issues such as user privacy, freedom of expression, pricing, content and quality of products and services, taxation, advertising, intellectual property rights and information security. Furthermore, the growth of online commerce may prompt calls for more stringent consumer protection laws. Several states have proposed legislation to limit the uses of personal user information gathered online or require online services to establish privacy policies. The Federal Trade Commission has also initiated action against at least one online service regarding the manner in which personal information is collected from users and provided to third parties. Management does not contemplate providing personal information regarding our customers to third parties. However, the adoption of additional consumer protection laws could create uncertainty in Web usage and reduce the demand for our products and services.





Governments have and may continue to enact legislation applicable to us in areas such as content distribution, performance and copying, other copyright issues, network security, encryption, the use of key escrow data, privacy protection, caching of content by server products, electronic authentication or "digital" signatures, illegal or obscene content, access charges and retransmission activities. The applicability to the Internet of existing laws governing issues such as property ownership, content, taxation, defamation and personal privacy is also uncertain. Export or import restrictions, new legislation or regulation or governmental enforcement of existing regulations may limit the growth of the Internet, increase our cost of doing business or increase it legal exposure.





In addition, because our services are intended to be made available over the Internet in multiple states and foreign countries, other jurisdictions may claim that we are required to qualify to do business in that state or foreign country. Our failure to qualify in a jurisdiction where it is required to do so could subject it to taxes and penalties. It could also hamper our ability to enforce contracts in these jurisdictions. The application of laws or regulations from jurisdictions whose laws do not currently apply to the business could have a material adverse effect on the business, results of operations and financial condition.





Management is not certain how our business may be affected by the application of existing laws governing issues such as property ownership, copyrights, encryption and other intellectual property issues, taxation, libel, and export or import matters. The vast majority of these laws were adopted prior to the advent of the Internet. As a result, they do not contemplate or address the unique issues of the Internet and related technologies. Changes in laws that are intended to address these issues could create uncertainty in the Internet market place.




6





COSTS OF RESEARCH AND DEVELOPMENT ACTIVITIES




Since inception, approximately $5.5 million has been spent on the development of our proprietary software platform, Paystream, including costs for payments for engineering services, PCI DSS audit fees, and platform maintenance fees.




COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS





As a credit card transaction processing gateway, Globalpaynet is not impacted by the costs and effects of compliance with environmental laws, other than the laws and regulations generally applicable to businesses. Globalpaynet operates with a high level of respect for and promotes the protection of the environment, and is not aware of circumstances that would create any significant financial responsibility for environmental matters.





EMPLOYEES





Globalpaynet does not employ salaried full-time or part time staff.  Our subsidiary, Globus Payments, employs one person, who is an affiliate of our Chairman and Chief Executive Officer.  All other individuals that work for the Company are independent contractors who are compensated on a commission basis or on a contract payment basis. Alain Ghiai, our Chairman and Chief Executive Officer and the sole member of our board of directors, has no employment or other agreement with us, but our wholly-owned subsidiary, Globus Payments Ltd., has entered into a consulting agreement with Mr. Ghiai. For more information on the consulting agreement, please refer to “Certain Relationships and Related-Party Transactions” in Item 13 of this Report on Form 10-K.





AVAILABLE INFORMATION





We file electronically with the Securities and Exchange Commission our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. You may obtain a free copy of our reports and amendments to those reports on the day of filing with the SEC by going to http://www.sec.gov.





7


ITEM 1A.  RISK FACTORS




Not applicable (Globalpaynet Holdings is a smaller reporting company).





ITEM 1B.  UNRESOLVED STAFF COMMENTS




Not applicable (Globalpaynet Holdings is a smaller reporting company).





ITEM 2.  PROPERTIES




Globalpaynet leases office space at Columbia Tower, 701 Fifth Avenue Suite 4200, Seattle WA, 98104, USA, as well as two offices in Vancouver, BC and Kamloops BC, Canada on a month to month basis. The Company believes its existing facilities will be adequate to meet its anticipated needs for the foreseeable future.





Substantially all of our development hardware and software and certain of our computer hardware operations are located at Radiant Communications, at 1600 - 1050 West Pender Street, in Vancouver, B.C., Postal Code: V6E 4T3, Canada.





ITEM 3.  LEGAL PROCEEDINGS




There are no material legal proceedings currently pending or threatened against Globalpaynet.





ITEM 4.  (REMOVED AND RESERVED)





8





PART II





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





There is presently no public market for our shares of common stock. Our common stock has never traded in a public market. We anticipate applying for trading of our common stock on the Over the Counter Bulletin Board (“OTCBB”). If and when our common stock is traded on the OTCBB, most likely the shares will be subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.





The Commission generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be a penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the Commission; authorized for quotation on The NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the issuer’s net tangible assets; or exempted from the definition by the SEC. If the Company’s shares are deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors, generally persons with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse.





For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and must have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, the monthly statements must be sent disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker dealers to trade and/or maintain a market in the Company’s common stock and may affect the ability of shareholders to sell their shares.





Holders. As of March 25, 2011, our common stock was held by 61 holders of record.





Dividends.We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.





There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:





1.  we would not be able to pay our debts as they become due in the usual course of business; or





2.  our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.





9





Securities authorized for issuance under equity compensation plans.We have no equity compensation plans, either approved or not approved by our shareholders. However, our board of directors may, at its discretion, make option or other equity compensation grants to employees or consultants as needed. On January 17, 2008, we issued an option to purchase 200,000,000 shares of our common stock to Alain Ghiai, our sole director, Chairman and Chief Executive Officer, at an exercise price of $2.00 per share.





Equity Compensation Plan InformationPlan category

Number of securities to

be issued upon exercise

of outstanding options,

warrants and rights

(a)


Weighted-average

exercise price of

outstanding options,

warrants and rights

(b)


Number of securities remaining available

for future issuance

under equity compensation

plans (excluding securities

reflected in column (a))

(c)Equity compensation plans approved by security holders


-



-



-Equity compensation plans not approved by security holders


200,000,000


$
2.00



-Total


200,000,000


$
2.00



-





ITEM 6.  SELECTED FINANCIAL DATA





Not applicable.





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





The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those statements included elsewhere in this report. In addition to the historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.





Forward Looking Statements





This portion of this prospectus includes statements that constitute “forward-looking statements.” Forward-looking statements give our current expectations or forecasts of future events. Forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many factors mentioned in this prospectus, for example governmental regulation and competition in our industry, will be important in determining future results. No forward-looking statement can be guaranteed, and actual results may vary materially from those anticipated in any forward-looking statement.





You can identify forward-looking statements by the fact that they do not relate strictly to historical or current events. They use words such as “anticipate,” “estimate,” “expect” “will,” “may,” “intent,” “plan,” “believe,” and similar expressions in connection with discussion of future operating or financial performance. These include statements relating to future actions, prospective products or product approvals, future performance or results of anticipated products, expenses, financial results or contingencies.





Although we believe that our plans, intentions and expectations reflected in these forward-looking statements are reasonable, we may not achieve these plans or expectations. Forward-looking statements in this Report will be affected by the following factors: our ability to raise sufficient capital to finance our planned activities, our ability to successfully prosecute and protect our intellectual property, and our ability to hire, manage and retain qualified personnel. The aforementioned factors do not represent an all inclusive list. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this prospectus. In particular, this prospectus sets forth important factors that could cause actual results to differ materially from our forward-looking statements. These and other factors, including general economic factors, business strategies, the state of capital markets, regulatory conditions, and other factors not currently known to us, may be significant, now or in the future, and the factors set forth in this prospectus may affect us to a greater extent than indicated.  All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this prospectus and in other documents that we file from time to time with the Securities and Exchange Commission. Except as required by law, we do not undertake any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.





10




In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.





Critical Accounting Policies and Estimates





Our Management’s Discussion and Analysis section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.





Off-Balance Sheet Arrangements





The Company has no material transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have or are reasonably likely to have a material current or future impact on its financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.





Market Risk





In the normal course of business, the Company is exposed to foreign currency exchange rate and interest rate risks that could impact its results of operations.





Revenue Recognition





Codification Topic 605 requires that four basic criteria be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Should changes in conditions cause management to determine that these criteria are not met for certain future transactions, revenue recognized for a reporting period could be adversely affected.





Accounting for Income Taxes





The Company accounts for income taxes under the asset and liability method. Under this method, deferred assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be recoverable against future taxable income.





Reporting Currency





A majority of the Company’s transactions are denominated in US currency so the Company has adopted the US dollar as its functional and reporting currency.





Discussion of Operations





Since inception, we have been building our core product, Paystream, an Internet Protocol (“IP”)-based secure payment gateway designed to provide services that enables online merchants to authorize, settle, manage risk, and manage credit card or electronic check transactions via websites and mobile devices. The portal was completed in July 2010 and is in the final quality control and testing stage.




We incurred losses of approximately $1.4 and $7.4 million in the years ending December 31, 2010 and 2009, respectively, and approximately $23.0 million since inception.  Approximately $5.6 million was spent on the development of Paystream, and $2.1 million was spent on general and administrative expenses, including cash compensation to our CEO.  Additionally, we recognized stock compensation expense totaling approximately $14.1 million pursuant to stock options granted to our CEO.  Other components of the $23 million loss include approximately $1.2 million in losses realized in marketable securities, plus interest and depreciation expenses.




11




We are developing a partner and reseller network to market  Paystream services and solutions. We also plan to market additional complementary services that can be bundled with Paystream. On August 23, 2010, we formalized our relationship with GlobeXPayNet S.A., (renamed GlobeX Data S.A. in 2008) (“GlobeX”) by signing a ten-year exclusive distribution agreement (licensing agreement?) to market and distribute GlobeX’s two web-based software application suites Securus and EHRmedi in the United States.  The agreement was amended in March 2011 to include Canada.  Securus is a digital asset management tool, and EHRmedi is an electronic health records management system. We began marketing Securus to the US market in September 2010 but have not and do not expect to generate significant revenues for at least six months.  Should the marketing of Securus be successful, we plan to market EHRmedi in the second half of 2011 in the US market.  Both Securus and EHRmedi are SAP certified.




We believe that online electronic payment (the payment for goods and services via the Internet) continues to improve the business landscape by providing increasing volumes of information exchange across international borders and fields of business.  We believe E-Commerce is a necessity for businesses that desire to expand markets globally, and provides a relatively low-cost means of distributing goods and services, increasing efficiencies, and providing better, more personalized customer services. Secure credit card transaction processing has become a vital aspect of electronic payment transactions because the use of credit cards and card-not-present transactions, in particular, has played a significant role in the growth of e-Commerce over the Internet. We further believe that the growth trend for electronic data transaction will continue to grow for years to come as more and more consumers and business utilize the Internet and feel more comfortable in purchasing goods and services from online stores.




Our network is tested regularly for security breaches and failures by a third party quality security assessor, Security Metrics Inc.  Our network is certified by the quality security assessor as a Payment Card Industry Data Security Standard (“PCI DSS”) certified gateway and as a secure gateway for credit card transaction processing.




International Operations





In August 2007, we established a relationship and entered into a Marketing Agreement with GlobeX and placed it in charge of all international sales and developments for the Paystream electronic payment gateway application in non-US and Canadian markets.  In exchange for GlobeX’s sales and development activities, we paid a one-time fee equal to 500,000 Euros.  Over the term of the 10-year agreement, no further payments will be made to GlobeX for these services, and GlobeX will pay Globalpaynet 20% of the gross sales generated from GlobeX’s sale and distribution of services provided through Paystream.  GlobeX plans to market the Paystream electronic payment gateway product internationally through its integration partners such as SAP A.G., its sales force and network in western and eastern Europe. We do not expect to generate revenues from this venture until the latter part of 2011.  Our subsidiary, Globus Payments Ltd., has also contracted with GlobeX to perform all of  its PCI compliance work.




In July 2008, GlobeX obtained a certification from SAP A.G. for Globalpaynet’s Paystream payment gateway application, thereby achieving for Paystream global Ecohub partner status.  This certification and status can assist GlobeX and Globalpaynet in the marketing of Paystream potentially to all of SAP’s Ecohub partners.  Ecohub is an online marketplace for certified solutions by SAP Partners.




GlobeX established a reselling partnership with DataCash Ltd., a payment integrator to banks in the United Kingdom and plans to use all its tools to promote our services internationally. Datacash was acquired by Mastercard in October 2010, and we anticipate that any benefit from this relationship, if any, will be delayed until at least the end of 2011.  GlobeX has offices in Geneva, Switzerland and a subsidiary in London, United Kingdom.





On August 23, 2010, we formalized our licensing arrangement with GlobeX Data by signing a Licensing Agreement to sell and distribute GlobeX’s Securus®, SecurusVault, MediVault, LexVault, FinVault and EHRmedi® lines of services.  These services allow individuals and businesses to manage their digital assets by storing them offsite in data centers in Switzerland or Canada. Securus is a digital asset management tool that combines online backup, cloud computing and other services into one robust solution with a set of innovative features.  These features include real-time online backup, file versions history, multi-device synchronization, web remote access and file sharing, email and multi-accounts user management. EHRmedi is an electronic health records management tool modeled after Securus but tailored to the medical industry. Pursuant to the terms of the agreement, as amended in February 2011, we have the exclusive rights to sell Securus and EHRmedi and use all logomarks associated with Securus and EHRmedi to the US and Canadian markets until December 31, 2020.  We will pay a licensing fee of 20% of gross sales from the sale of Securus and EHRmedi to GlobeX Data.   We will also pay to Globex the cost of memory storage and platform maintenance related to any of these services which we sell or distribute.





12




Limited Operating History; Need for Additional Capital





There is little historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and have not generated significant revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the development of our properties, and possible cost overruns due to price and cost increases in services.





RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010 COMPARED TO THE YEAR ENDED DECEMBER 31, 2009.





Revenue





Net revenue totaled $1,038 for the year ended December 31, 2010 compared to $3,167 for the year ended December 31, 2009.  2010 revenue was generated by the sale of Securus, and 2009 revenue was generated from transaction processing fees.   As a development stage company, we have not yet begun generating a sustainable revenue stream, and we believe the variance from year to year is not significant to the overall business strategy.





Officer’s compensation





Officer’s compensation consists of an annual fee of approximately $100,000 to our Chief Executive Officer and stock based compensation. Stock based compensation expenses, which were a result of a stock option issued to our Chief Executive Officer, and which vested over a two year service period from January 2008 to January 2010, totaled $256,117 in 2010 as compared to $5,499,094 in 2008.  Fiscal 2010 expenses included only one month of amortization expense as compared to a full year in fiscal 2009.





General and administrative expenses





General and administrative expenses are comprised of professional fees, occupancy expenses, travel expenses, supplies, maintenance and other engineering fees related to Paystream upon completion of the development phase, maintenance expenses related to Securus, and other overhead expenses.  General and administrative expenses totaled $616,006 for the year ended December 31, 2010, which was an increase of 121.7% as compared to $277,816 for the year ended December 31, 2009.  The higher level of expense is principally a result of maintenance expenses for Paystream and Securus.





Research and development expenses





Research and development expenses consist of costs to develop our proprietary software platform.  Costs include payments for engineering services, PCI DSS audit fees, and platform maintenance fees through the third quarter of 2010, when the platform was fully developed and tested.  Research and development costs decreased 67.8%, or $565,324, from $834,046 for the year ended December 31, 2009 to $268,722 for the year ended December 31, 2010.  The decrease was a result of fewer requirements for engineering services and related expenses as our research and development efforts progressed toward and reached final completion in July 2010.  A portion of the decrease was related to the decrease in the fair value of common stock issued for these services in 2010 which totaled approximately $90,900, as compared to approximately $205,172 in 2009.





Depreciation and amortization expenses





Depreciation and amortization expenses increased slightly to 30,756, during the year ended December 31, 2010, as compared to expenses totaling $23,430 for the year ended December 31, 2009.  The increase was a result of a full year of depreciation expense in 2010 of property and equipment that was placed into service in 2009.  The property and equipment is a component of our infrastructure supporting our current research and development efforts and ultimately for the support of our future operations.





Loss on marketable securities and foreign currency translation





We recognized a $16,190 loss on our investment in marketable securities for the year ended December 31, 2010, as compared to $656,733 for the year ended December 31, 2009.  Principally all of the 2009 loss was incurred but not realized during fiscal 2008 during a particularly volatile period of the financial market.  A portion of these losses were offset by an unrealized gain in the translation of foreign currency.





Net loss





We incurred a net loss totaling $1,372,142 for the year ended December 31, 2010, compared to a net loss of $7,413,608 for the year ended December 31, 2009, The decrease was primarily due to the decrease in both stock compensation expense and losses from the sale of marketable securities in fiscal 2010.




13





Liquidity





At December 31, 2010, we had cash reserves totaling $22,031 and short-term securities with a fair value of $827,811.  We have invested a portion of our cash reserves in marketable securities, including various stocks and liquid securities that are traded on national exchanges in the United States and Canada.  The securities are highly liquid and are subject to risk and all fluctuations in the financial markets. In certain periods prior to December 31, 2010, some of these investments served as security for short term bank borrowings, which could be liquidated upon repayment via sale of the securities.  Upon acquisition, these investments are recorded at cost, and at each balance sheet date, are reported at fair value in accordance with paragraph 825-10-50-10 of the FASB Accounting Standards Codification Unrealized gains and losses reported as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity.  Realized gains and losses and permanent declines in value, if any, on available-for-sale securities are reported in other income or expense as incurred





Since inception, we have used our common stock to raise money for business development and corporate expenses. The total amount we have raised since inception is $7,899,595. As of December 31, 2010, we have used approximately $7.5 million of these funds to fund our operations which have been devoted to the development of our infrastructure and portal.  We believe this development is nearing completion stages, and we have reduced both our general and administrative expenses and research and development expenses during the past year.  Cash used in operations totaled $1,021,116 and $886,991 during the years ending December 31, 2010 and 2009, respectively.  .  There is no assurance that we will begin generating cash flow from operations sufficient to fund our operations in the foreseeable future.  . We believe that our cash reserves including our marketable securities as of December 31, 2010, will sustain our operations for the next six to nine months.





We have sustained substantial losses and are still in the development stage. We have not attained profitable operations and may be dependent upon obtaining financing. For these reasons there is a risk that we will be unable to continue as a going concern.  The financial statements accompanying this report on Form 10-K contemplate our continuation as a going concern.





ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable.





14


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





GLOBALPAYNET HOLDINGS, INC.


(A DEVELOPMENT STAGE COMPANY)


December 31, 2010 and 2009


INDEX TO THE FINANCIAL STATEMENTS





TABLE OF CONTENTS





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-1CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2010 and 2009

F-2CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2010 and 2009 AND FOR THE PERIOD FROM DECEMBER 30, 2004 (INCEPTION) THROUGH DECEMBER 31, 2010

F-3STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM DECEMBER 30, 2004 (INCEPTION) THROUGH DECEMBER 31, 2010

F-4CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2010 and 2009 AND FOR THE PERIOD FROM DECEMBER 30, 2004 (INCEPTION) THROUGH DECEMBER 31, 2010

F-5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

F-6





15





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Board of Directors and Stockholders of


Globalpaynet Holdings, Inc.


(A development stage company)


Seattle, Washington





We have audited the accompanying consolidated balance sheets of Globalpaynet Holdings, Inc., a development stage company, (the “Company”) as of December 31, 2010 and 2009 and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended and for the period from December 30, 2004, (inception) through December 31, 2010. 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 the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended and for the period from December 30, 2004 (inception) through December 31, 2010 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 3 to the consolidated financial statements, the Company had a deficit accumulated during the development stage at December 31, 2010, and had a net loss and net cashed used in operating activities for the year then ended, respectively, with minimal revenues since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 3.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.







/s/ Li & Company, PC


Li & Company, PC





Skillman, New Jersey







F-1




GLOBALPAYNET HOLDINGS, INC.


(A Development Stage Company)


CONSOLIDATED BALANCE SHEETS





December 312010


2009ASSETSCURRENT ASSETSCash and cash equivalents

$
22,031


$
628,291Prepaid expenses


19,705



955Marketable securities


827,811



676,381Total current assets


869,547



1,305,627Property and EquipmentFurniture and fixtures (net of accumulated depreciation of $5,180 and $3,568, respectively)


6,879



8,491Computers and software (net of accumulated depreciation of $68,707 and $39,528, respectively)


74,453



102,572Total property and equipment


81,332



111,063TOTAL ASSETS

$
950,879


$
1,416,690LIABILITIES AND STOCKHOLDERS’ EQUITYCURRENT LIABILITIESAccounts payable

$
30,328


$
20,257Accrued liabilities, related party


65,742



100,000TOTAL LIABILITIES


96,070



120,257Commitments and contingenciesSTOCKHOLDERS' EQUITY:Preferred stock: $0.001 par value, 5,000,000 shares authorized:  1,000,000 shares designatedSeries A Preferred stock: $0.001 par value, 1,000,000 shares designated:  1,000,000 shares issued and outstanding


1,000



1,000Common stock: $0.001 par value, 300,000,000 shares authorized: 41,645,748 and 40,443,748 shares issued and outstanding, respectively


41,645



40,443Additional paid-in capital


23,584,273



22,788,458Deficit accumulated during the development stage


(22,967,015
)


(21,594,873
)Accumulated other comprehensive income


194,906



61,405TOTAL STOCKHOLDERS' EQUITY


854,809



1,296,433TOTAL LIABILITIES &STOCKHOLDERS’ EQUITY

$
950,879


$
1,416,690





See accompanying notes to the consolidated financial statements





F-2





GLOBALPAYNET HOLDINGS, INC.


(A Development Stage Company)


CONSOLIDATED STATEMENTS OF OPERATIONS





For the year ended December 31,


From December 30, 2004 (Inception) through

December 31,2010


2009


2010Revenues realized during the development stage

$
1,038


$
3,167


$
6,238Operating expensesResearch and development


268,722



834,046



5,472,912Sales and marketing


89,032



-



89,032Officer's compensation


356,522



5,609,511



14,466,143General and administrative expenses


616,006



277,816



1,677,481Depreciation and amortization


30,756



23,430



72,451Total operating expenses


1,361,038



6,744,803



21,778,019Loss from operations


(1,360,000
)


(6,741,636
)


(21,771,781
)Other (income) expense:Interest (income) expense, net


(1,356
)


22,690



78,647(Gain) loss on marketable securities, net


16,190



656,733



1,112,944Foreign exchange transaction (gain) loss


(2,692
)


(7,451
)


3,643Total other income (expense)


12,142



671,972



1,195,234Loss before taxes


(1,372,142
)


(7,413,608
)


(22,967,015
)Provision for income taxes


-



-



-Net loss

$
(1,372,142
)

$
(7,413,608
)

$
(22,967,015
)Net loss per common share – basic and diluted

$
(0.03
)

$
(0.19
)Weighted average common shares outstanding –basic and diluted


40,931,501



38,400,538





See accompanying notes to the consolidated financial statements





F-3





GLOBALPAYNET HOLDINGS, INC.


(A Development Stage Company)


CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


For the Period from December 30, 2004 (Inception) through December 31, 2010


Preferred Stock


Common Stock


Additional

Paid in

Capital


Accumulated

Other

Comprehensive

Income (Loss)


Deficit

Accumulated

During the

Development Stage


Total

Stockholders’

EquityShares


Amount


Shares


AmountBalance, December 31, 2006








20,000,000


$
20,000


$
39,325





$
(40,824
)

$
18,501Shares issued for cash at $0.50 per share, net of $699,925 expenses








13,300,000



13,300



4,887,775










4,901,075Shares issued as placement fee








2,100,000



2,100



1,047,900










1,050,000Shares issued for cash at $0.75 per share








133,333



133



99,867










100,000Shares issued for services at $0.50 per share








1,000,000



1,000



499,000










500,000Preferred shares issued for services - related party


1,000,000



1,000











3,117,000










3,118,000Comprehensive income (loss)Foreign currency translation gain






















228,081







228,081Unrealized gain on marketable securities






















11,326







11,326Net loss


























(5,520,548
)


(5,520,548
)Total comprehensive income (loss)






























(5,281,141
)Balance, December 31, 2007


1,000,000



1,000



36,533,333



36,533



9,690,867



239,407



(5,561,372
)


4,406,435Shares issued for cash at $0.80 per share, net of $32,615 expenses










540,000



540



398,845











399,385Shares issued for services at $0.80 per share










1,000,000



1,000



799,000











800,000Shares issued for cash at $2.00 per share










11,625



12



23,238











23,250Options issued as compensation


















5,258,040











5,258,040Comprehensive income (loss)Foreign currency translation gain






















222,287







222,287Unrealized loss on marketable securities






















(615,991
)






(615,991
)Net loss


























(8,619,893
)


(8,619,893
)Total comprehensive income (loss)






























(9,013,597
)Balance, December 31, 2008


1,000,000



1,000



38,084,958



38,085



16,169,990



(154,297
)


(14,181,265
)


1,873,513Shares issued for services at $0.80 per share










228,190



228



182,324











182,552Shares issued for services at $0.30 per share










75,400



75



22,545











22,620Shares issued for cash at $0.30 per share










55,200



55



16,505











16,560Shares issued for cash at $0.45 per share










2,000,000



2,000



898,000











900,000Options issued as compensation


















5,499,094











5,499,094Comprehensive income (loss)Foreign currency translation loss






















(414,949
)






(414,949
)Unrealized gain on marketable securities






















630,651







630,651Net loss


























(7,413,608
)


(7,413,608Total comprehensive income (loss)






























(7,197,906
)Balance, December 31, 2009


1,000,000



1,000



40,443,748



40,443



22,788,458



61,405



(21,594,873
)


1,296,433Shares issued for services at $0.45 per share










202,000



202



90,698











90,900Shares issued for cash at $0.45 per share










1,000,000



1,000



449,000











450,000Options issued as compensation


















256,117











256,117Comprehensive income (loss)Foreign currency translation gain






















7,629







7,629Unrealized gain on marketable securities






















125,872







125,872Net loss


























(1,372,142
)


(1,372,142
)Total comprehensive income (loss)






























(1,238,641
)Balance, December 31, 2010


1,000,000


$
1,000



41,645,748


$
41,645


$
23,584,273


$
194,906


$
(22,967,015
)

$
854,809








See accompanying notes to the consolidated financial statements.





F-4





GLOBALPAYNET HOLDINGS, INC.


(A Development Stage Company)


CONSOLIDATED STATEMENTS OF CASH FLOWS




For the year ended December 31,


From December 30, 2004 (Inception) through2010


2009


December 31, 2010OPERATING ACTIVITIESNet loss

$
(1,372,142
)

$
(7,413,608
)

$
(22,967,015
)Adjustments to reconcile net lossto net cash used in operations:Depreciation and amortization


30,756



23,430



72,453Stock compensation


256,117



5,499,094



14,131,251Fair value of shares issued for services


90,900



205,172



1,596,072Realized loss on sale of marketable securities


16,190



763,992



1,249,554Changes in operating assets and liabilities:Prepaid expenses


(18,750
)


(955
)


(19,705
)Accounts payable


10,071



17,543



30,328Accrued liabilities - related party


(34,258
)


18,341



65,742Net cash  used in operating activities


(1,021,116
)


(886,991
)


(5,841,320
)INVESTING ACTIVITIESPurchase of property and equipment


(1,059
)


(65,412
)


(153,818
)Purchase of marketable securities


(41,748
)


(650,395
)


(7,403,481
)Proceeds from sale of marketable securities


-



999,124



4,873,308Net cash provided by (used in) investing activities


(42,807
)


283,317



(2,683,991
)FINANCING ACTIVITIESProceeds from sale of common stock


450,000



916,560



7,949,595Proceeds from short term borrowings


-



-



527,763Repayment of short term borrowings


-



(527,763
)


(527,763
)Net cash provided by financing activities


450,000



388,797



7,899,595EFFECT OF EXCHANGE RATE CHANGES ON CASH


7,663



189,716



647,747NET CHANGE IN CASH AND CASH EQUIVALENTS


(606,260
)


(25,161
)


22,031CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


628,291



653,452



-CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
22,031


$
628,291


$
22,031Supplemental disclosuresCash paid forInterest

$
169


$
26,801


$
88,233Income taxes

$
-


$
-


$
-Non-cash activitiesShares issued for services

$
90,900


$
205,172


$
4,758,900





See accompanying notes to the consolidated financial statements.




F-5




GLOBALPAYNET HOLDINGS, INC.
 (A Development Stage Company)
 December 31, 2010 and 2009
 Notes to the Consolidated Financial Statements
 
 NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
 
 The Company was incorporated under the laws of the State of Nevada on December 30, 2004.
 
 In May of 2007 the Company filed a name change with the Nevada Secretary of State to Globalpaynet Holdings, Inc.
 
 Globalpaynet Holdings Inc. (“Globalpaynet” or the “Company”) is a Nevada Financial Services Technology company specialized in the secure electronic payment sector. The Company and its wholly owned Canadian subsidiary, along with its European partner have been providers of services and solutions enabling merchants to authorize, settle and manage credit card and electronic check transactions from a Web site, retail store, mail order/telephone order (MOTO) call center or mobile device since 2004. These solutions transmit transaction data over the Internet and manage submission of payment information to the credit card and Automated Clearing House processing networks. The Company offers payment processing, through its Internet Protocol (IP) based secure payment gateway services that enable online and other merchants to authorize, settle, manage risk, and manage credit card or electronic check transactions via Physical Card Swipe Terminals, Web sites and mobile devices.
 
 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of Presentation
 
 The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
 
 The consolidated financial statements include all of the accounts of Globalpaynet and its wholly owned subsidiary Globus Payments LTD (“Globus”). All inter-company balances and transactions have been eliminated.
 
 Development Stage Company
 
 The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. Although the Company realized certain amount of the nominal amount of revenue it is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
 
 Use of Estimates
 
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
 Cash Equivalents
 
 The Company considers all highly liquid debt instruments and other short-term investments with a maturity of three months or less, when purchased, to be cash equivalents.
 
 Marketable Securities
 
 Marketable securities are classified as available-for-sale as of the balance sheet date and are reported at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and permanent declines in value, if any, on available-for-sale securities are reported in other income or expense as incurred.
 
 At December 31, 2010 and 2009, the fair value of the Company’s available for sale marketable securities totaled $827,811 and $676,381, respectively.
  F-6
 
 Property and Equipment
 
 Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred. The Company’s property and equipment is comprised of computers, software and office furniture. .  Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years to ten (10) years.  Upon sale or retirement of property, plant and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.  Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter.  Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.
 
 Depreciation expense for the years ended December 31, 2010 and 2009 totaled $30,756 and $23,040, respectively.
 
 Impairment of Long-Lived Assets
 
 The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
 
 The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
 
 The Company determined that there were no impairments of long-lived assets as of December 31, 2010 or 2009.
 
 Fair value of financial instruments
 
 The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.  To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
 
 Level 1

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.Level 2

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.Level 3

Pricing inputs that are generally observable inputs and not corroborated by market data.
 
 The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalent, prepaid expenses and accounts payable, approximate their fair values because of the short maturity of these instruments.
 
 The Company revalues its marketable securities at every reporting period and recognizes the unrealized gains or losses in the consolidated balance sheets under comprehensive income (loss) that are attributable to the change in the fair value of the marketable securities.  The Company has no other assets or liabilities measured at fair value on a recurring basis.
 
 Revenue Recognition
 
 The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company recognizes revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
  F-7
 
 Foreign Currency Transactions
 
 The Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”) for foreign currency transactions.  Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency transactions are transactions denominated in currencies other than the U.S. Dollar, the Company’s reporting currency or the Canadian Dollar, the Company’s operating subsidiary's functional currency.  Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid.  A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected functional currency cash flows is a foreign currency transaction gain or lossthat generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction dateor the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments and foreign currency commitments.  Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange rate.
 
 Stock-based compensation for obtaining employee services and equity instruments issued to parties other than employees for acquiring goods or services
 
 The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification and accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur.
 
 Income Taxes
 
 The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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 the statements of operations in the period that includes the enactment date.
 
 The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
 
 Comprehensive Income
 
 The Company has applied section 220-10-45 of the FASB Accounting Standards Codification. This statement establishes rules for the reporting of comprehensive income and its components.  Comprehensive income, for the Company, consists of net income and foreign currency translation adjustments and is presented in the Company’s Consolidated Statements of Income and Comprehensive Income and Stockholders’ Equity.
 
 Net Loss per Common Share
 
 Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. There were 200,000,000 options outstanding as of December 31, 2010 and 2009, which were excluded from the calculation because their effect would be anti-dilutive.
  F-8
 
 Commitments and Contingencies
 
 The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
 
 Cash Flows Reporting
 
 The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
 
 Subsequent Events
 
 The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
 
 Recently Issued Accounting Pronouncements
 
 In August 2010, the FASB issued ASU 2010-21, “Accounting for Technical Amendments to Various SEC Rules and Schedules: Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies” (“ASU 2010-21”),was issued to conform the SEC’s reporting requirements to the terminology and provisions in ASC 805, Business Combinations, and in ASC 810-10, Consolidation. ASU No. 2010-21 was issued to reflect SEC Release No. 33-9026, “Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies,” which was effective April 23, 2009. The ASU also proposes additions or modifications to the XBRL taxonomy as a result of the amendments in the update.
 
 In August 2010, the FASB issued ASU 2010-22, “Accounting for Various Topics: Technical Corrections to SEC Paragraphs” (“ASU 2010-22”), which amends various SEC paragraphs based on external comments received and the issuance of SEC Staff Accounting Bulletin (SAB) No. 112, which amends or rescinds portions of certain SAB topics.  The topics affected include reporting of inventories in condensed financial statements for Form 10-Q, debt issue costs in conjunction with a business combination, sales of  stock by subsidiary, gain recognition on sales of business, business combinations prior to an initial public offering, loss contingent and liability assumed in business combination, divestitures, and oil and gas exchange offers.
 
 In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-28 “Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (“ASU 2010-28”).Under ASU 2010-28, if the carrying amount of a reporting unit is zero or negative, an entity must assess whether it is more likely than not that goodwill impairment exists. To make that determination, an entity should consider whether there are adverse qualitative factors that could impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a result of the new guidance, an entity can no longer assert that a reporting unit is not required to perform the second step of the goodwill impairment test because the carrying amount of the reporting unit is zero or negative, despite the existence of qualitative factors that indicate goodwill is more likely than not impaired. ASU 2010-28 is effective for public entities for fiscal years, and for interim periods within those years, beginning after December 15, 2010, with early adoption prohibited.
 
 In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-29 “Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.
 
 Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
  F-9
 
 NOTE 3 – GOING CONCERN
 
 The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
 
 As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage of $22,967,015 at December 31, 2010, and had a net loss and net cash used in operating activities of $1,372,142 and $1,021,116, respectively, for the year then ended, with minimal revenues since inception.
 
 While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
 
 The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
 NOTE 4 - STOCKHOLDERS’ EQUITY
 
 The Company’s authorized capital stock consists of 300,000,000 shares of common stock at a par value of $0.001 per share (“Common Stock”), and 5,000,000 shares of preferred stock at a par value of $0.001 per share (“Preferred Stock”).  Of the 5,000,000 shares of authorized preferred stock, 1,000,000 shares are designated “Series A Preferred” stock.
 
 Preferred Stock
 
 As of December 31, 2010 and 2009, all 1,000,000 shares of Series A Preferred stock were issued and outstanding and held by Alain Ghiai, the Chief Executive Officer.
 
 The shares were issued to Alain Ghiai, the Company’s President, Chief Executive Officer and Director for services rendered in September 2007.  The Company received no cash proceeds from the issuance of the shares to Mr. Ghiai.
 
 Holders of Series A Preferred Stock are entitled to vote on all matters submitted to a stockholder vote.  For example, if a particular matter requires the approval of a simple majority of the holders of the Company’s outstanding stock, holders of the Series A Preferred Stock would control 51% of the vote, and if a particular matter before the shareholders requires the approval of a supermajority of the holders of the Company’s outstanding stock, holders of the Series A Preferred Stock would control 76% of the vote, in each case automatically and without any further action required by either the holders of the Series A Preferred Stock or by the Board of Directors.
 
 The Preferred Series A do not contain any rights to dividends; have no liquidation preference; are not to be amended without the holders approval; are not convertible; are senior to all other securities; and primarily control all voting.  The Preferred Series A were valued at $3,118,000 based upon industry specific control premiums and the Company’s market cap at the time of the transaction.
 
 Common Stock
 
 On April 15, 2007, the Company issued 7,980,000 common shares at $0.50 per share pursuant to a non-U.S. Share Private Placement and Subscription Agreement with Andorra Banc Agricol Reig, SA for an aggregate purchase price of $3,999,000.  The Company also issued 1,600,000 common shares as a placement fee.  Cash proceeds, net of placement costs, totaled $3,690,075.
 
 On June 15, 2007, the Company issued 5,320,000 common shares at $0.50 per share pursuant to a non-U.S. Share Private Placement and Subscription Agreement with Andorra Banc Agricol Reig, SA for an aggregate purchase price of $2,704,000.  The Company also issued 500,000 common shares as a placement fee.  Cash proceeds, net of placement costs, totaled $2,261,000.
  F-10
 
 On June 18, 2007, the Company completed a private placement of 133,333 common shares at $0.75 per share for an aggregate of $100,000 in cash.
 
 In July 2007, the Company issued 1,000,000 as part of the acquisition by the Company of E-Shopping Technologies, Inc. The shares were recorded at fair market value on the date of grant, or $0.50, or an aggregate of $500,000. See also Item 13 of this Annual Report on Form 10-K.
 
 On March 31, 2008, The Company completed a private placement of 540,000 common shares at $0.80 per share.  Cash proceeds, net of $32,615 placement costs, totaled $398,845.
 
 On July 7, 2008 the Company issued 1,000,000 common shares in payment for services.  The shares were recorded at fair market value on the date of grant, or $0.80, or an aggregate of $800,000.
 
 In October 2008 the Company completed a private placement of 11,625 common shares at $2.00 per share for an aggregate purchase price and cash proceeds of $23,250.
 
 In February 2009, the Company issued 128,190 common shares in payment for services.  The shares were recorded at fair market value on the date of grant, or $0.80, or an aggregate of $102,252.
 
 In February 2009, the Company issued 100,000 common shares in payment for services.  The shares were recorded at fair market value on the date of grant, or $0.80, or an aggregate of $80,000.
 
 In July 2009, the Company issued 50,000 common shares in payment for services.  The shares were valued at $0.30 per share, or an aggregate of $15,000, which was the fair market value of the shares on the date of issuance.
 
 In July 2009 the Company issued 58,493 common shares at $0.30 per share for an aggregate purchase price and cash proceeds of $16,505.
 
 In December 2009, the Company issued 25,400 common shares in payment for services.  The shares were valued at $0.30 per share, or an aggregate of $7,620, which was the fair market value of the shares on the date of issuance.
 
 On December 23, 2009, the Company issued 2,000,000 shares of its common stock pursuant to non-U.S. Share Private Placement Subscription Agreement with Pictet Private Equity Investors SA, a Switzerland entity, at $0.45 per share, for an aggregate purchase price and cash proceeds of $900,000.  The shares securities sold in this transaction have not been registered under the Securities Act of 1933, as amended (the “Act”) and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements under the Act. This sale is exempt under Regulation S of the Securities Act of 1933 as no offers or sales were made to United States persons.
 
 In April 2010, the Company issued 200,000 common shares in payment for services.  The shares were recorded at fair market value on the date of grant, or $0.45, or an aggregate of $90,000.
 
 In August 2010, the Company issued 1,000,000 shares of its common stock pursuant to non-U.S. Share Private Placement Subscription Agreement with Henry Edvard Sjoman, a Switzerland resident, at $0.45 per share, for an aggregate purchase price and cash proceeds of $900,000.  The shares securities sold in this transaction have not been registered under the Securities Act of 1933, as amended (the “Act”) and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements under the Act. This sale is exempt under Regulation S of the Securities Act of 1933 as no offers or sales were made to United States persons.
 
 In December 2010, the Company issued 2,000 common shares in payment for services.  The shares were recorded at fair market value on the date of grant, or $0.45, or an aggregate of $900.
 
 Stock Options
 
 On January 17, 2008 the Company awarded stock options to Alain Ghiai for 200,000,000 shares in Common Stock.   The shares vest on January 17, 2010 (“vesting date”) and expire 52 years from issue date.  Provided that the Participant is employed with the Company on the vesting date, the Options may be exercised at a $2.00 price.  The options were valued at $11,013,251 using a lattice model with the following assumptions: 1% annual attrition rate, stock annual volatility of 121%, and a risk free interest rate of 4.27%.
 
 The Company has recognized stock-based compensation expense pursuant to the two-year service period from January 17, 2008 through January 17, 2010.  Stock-based compensation expense for the years ended December 31, 2010, and 2009 totaled $256,117 and $5,499,093, respectively.
  F-11
 
 NOTE 5 – INCOME TAXES
 
 Globalpaynet is a non-operating holding company.  Globus, the Company’s Canadian subsidiary is subject to Canadian income taxes.
 
 United States Income Tax
 
 Globalpaynet is incorporated in the State of Nevada and is subjected to United States of America tax law.
 
 Canadian Income Tax
 
 Our wholly owned subsidiary, Globus Payments, is subject to the tax laws of the Canada at the prevailing statutory rate of corporate income tax of 19.7%, but no provision for income taxes was made for the years ended December 31, 2010 and 2009 as Globus Payments did not have reportable taxable income for the period.
 
 Deferred Tax Assets
 
 At December 31, 2010, the Company has available for income tax purposes net operating loss (“NOL”) carry-forwards of $347,437 that may be used to offset future taxable income through the year ending December 31, 2030.  No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying consolidated financial statements since the Company believes that the realization of its net deferred tax assets of approximately $118,129 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $118,129.
 
 Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.  The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.  The valuation allowance increased approximately $15,449 and $10,563 for the year ended December 31, 2010 and 2009, respectively.
 
 Components of net deferred tax assets, including a valuation allowance, are as follows at December 31:
 
 For the year ended December 31,2010


2009Deferred tax assets:Net operating loss carryforward

$
118,129


$
102,680Total deferred tax assets


118,129



102,680Less: valuation allowance


(118,129
)


(102,680
)Net deferred tax assets

$
-


$
-
 
 Reconciliation between the statutory rate and the effective tax rate is as follows at December 31:
 
 2010


2009Federal statutory tax rate


34.0
%


34.0
%Utilization of net operating loss carryforward


(34.0
) %


(34.0
) %Effective tax rate


0.0
%


0.0
%
 
 NOTE 6 – RELATED PARTY TRANSACTIONS
 
 On January 18, 2008, Globus Payments Ltd., the Company’s wholly-owned subsidiary entered into a consulting agreement with Mr. Ghiai, the Company’s Chairman and Chief Executive Officer and sole director, whereby GPY agreed to pay Mr. Ghiai annual compensation of US$100,000 in cash for services rendered by Mr. Ghiai to GPY.  GPY will also reimburse Mr. Ghiai for any out-of-pocket expenses incurred in connection with the performance of his duties pursuant to the consulting agreement.  The consulting agreement has a five-year term, which will automatically renew for successive five-year periods unless notice is given by either party.  At December 31, 2010, $65,742 remained outstanding pursuant to the agreement.
 
 Transactions with GlobeXPayNet S.A.  In August 2007, the Company established a relationship with GlobeXPayNet S.A. (“GBX”), in Switzerland and placed it in charge of all international sales and developments for Globalpaynet Holdings Inc. and its Canadian subsidiary Globus Payments Ltd.  GBX contracts with the Company’s subsidiary Globus Payments Ltd. to perform all of its PCI compliance work.  During fiscal 2010 and since the death of a director of GBX in 2009, GBX’s sole director is Alain Ghiai, who is also a director, president and majority stockholder of the Company.  On February 5, 2011, a second director was elected to the board of GBX.  Payments to GBX for the years ending December 31, 2010 and 2009 totaled $276,003 and $256,294, respectively.
  NOTE 7 – SUBSEQUENT EVENTS
 
 The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.  The Management of the Company determined that there were no reportable subsequent events to be disclosed.
  F-12
 
 ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
 None
 
 ITEM 9AT.   CONTROLS AND PROCEDURES
 
 Evaluation of Disclosure Controls and Procedures
 
 We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, to allow timely decisions regarding required disclosure. Our CEO performed an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2010.
 
 Based on that evaluation and as described below under “Management’s Report on Internal Control over Financial Reporting,” we have identified a material weakness in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)). This weakness involves our limited staff which is insufficient to implement segregation of duties or a division of responsibilities between the performance of accounting procedures or control activities and those who handle assets, or to maintain an appropriate system of checks and balances. This weakness is described in more detail in the next section. As a result of this material weakness, our management concluded that our disclosure controls and procedures were not effective as of December 31, 2010.
 
 Management’s Report on Internal Control over Financial Reporting
 
 Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles. 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 the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the interim or annual Consolidated Financial Statements.
 
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
 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 Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
 
 As of the end of the period covered by this report (December 31, 2010), the Company’s Chief Executive Officer performed an evaluation of the effectiveness the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010.  His assessment of internal control over financial reporting was conducted using the criteria in Internal Control over Financial  Reporting - Guidance for Smaller Public  Companies issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
 
 Based upon this evaluation, the Company’s Chief Executive Officer concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2010.  This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
 
   16
 
 The company’s management and sole board member is our CEO.  The Company had one active full-time employee as of December 31, 2010, who is an affiliate of the CEO by marriage.  The Company uses a consultant that has a sufficient level of accounting knowledge, experience and training in the selection, application and implementation of generally acceptable accounting principles as it relates to complex transactions and financial reporting requirements.  This constitutes a material weakness in financial reporting. At this time, management has decided that considering the employees involved and the control procedures in place, there are risks associated with the above, but the potential benefits of adding additional employees to mitigate these weaknesses, does not justify the expenses associated with such increases. Management will continue to evaluate the above weaknesses.
  Inadequate controls over purchases and disbursements.We had inadequate controls over the segregation of duties and authorization of purchases, and the disbursement of funds. These weaknesses increase the likelihood that misappropriation of assets and/or unauthorized purchases and disbursements could occur and not be detected in a timely manner. These deficiencies resulted in errors in the financial statements and in more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected. Specifically,
  •
We had inadequate procedures and controls to ensure proper segregation of duties within our purchasing and disbursements processes and accounting systems;•
We had inadequate approvals for payment of invoices and wire transfers.
  This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
  Management’s Remediation Initiatives
  As of March 25, 2011, we had not completed the remediation of any of these material weaknesses.
  In prior periods, as of October 31, 2009, the Company identified the following  material  weaknesses  in our  internal  control over financial reporting:
 
 1.
Due to the nature of the size and early stage of the Company, it had insufficient professional staff to adequately prepare and review its financial statements, and as a result, it has been unable to timely file reports with the Securities and Exchange Commission.
 2.
The limited size of the staff resulted in inadequate segregation of duties consistent with control objective and ineffective controls over period end financial disclosure and reporting processes.
 3.
Additionally, the lack of a functioning audit committee resulted in ineffective oversight in the establishment and monitoring of required internal controls and procedures;
 
 Subsequent to December 31, 2009, the Company took steps to improve its internal controls over financial reporting by engaging additional professional accounting staff to perform a thorough analysis of our financial transactions and to establish additional procedures to ensure proper recording of all transactions, thereby segregating duties consistent with control objectives. Management believes such staff is also qualified to oversee our financial reporting in the absence of a functioning audit committee.  We believe these steps have improved our internal control over financial reporting.  We continue to seek qualified individuals to serve on our Board of Directors and in the capacity of an audit committee, though we anticipate that such addition will be after we are no longer a development stage company.  Pursuant to our CEO’s evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2010, he determined that these steps have been effective.
 
 Changes in internal controls over financial reporting
 
   ITEM 9B.      OTHER INFORMATION
 
 None.
  17
 
 PART III
 
 ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
 Our sole director will serve until the next annual meeting of stockholders. Our officers and key employees and consultants are appointed by our Board of Directors and serve at its discretion.
 
 Current Directors and Executive Officers
 
 Our board of directors currently consists of one member. There are no arrangements or understandings between our director or any other persons pursuant to which he has been selected as director, other than as described below. Mr. Ghiai owns 1,000,000 shares of our Class A Preferred Stock. The Class A Preferred Stock owned by Mr. Ghiai insures that he will have effective voting control regarding the election of additional directors or his removal as director. There are no “family relationships” among the directors, as that term is defined by the Securities and Exchange Commission. Set forth below is our current Board of Directors, including each member’s age and position with Globalpaynet.
 
 Name

Age

PositionAlain Ghiai

43

Chief Executive Officer, Chief Accounting Officer, President, Secretary, Treasurer, Chairman of the Board
 
 Our Articles of Incorporation provide for a Board of Directors ranging from 1 to 10 members, with the exact number to be specified by resolution of the board. All Directors hold office until the next annual meeting of the shareholders following their election and until their successors have been elected and qualified. The Board of Directors appoints Officers. Officers hold office until the next annual meeting of our Board of Directors following their appointment and until their successors have been appointed and qualified.
 
 Alain Ghiai
 
 Executive Chairman, Founder, CEO
 
 Alain Ghiai has served as CEO and Chairman of Globalpaynet since 2004 when he founded GPN and Globus Payments Ltd, our wholly owned subsidiary.  As such, Mr. Ghiai is responsible for the funding, development and commercial deployment of our technology.
    Mr. Ghiai also has served as Chairman of GlobeX Data S.A. which was incorporated in Switzerland in 2007, and GlobeX Data Ltd, its wholly owned subsidiary in the United Kingdom.  GlobeX is our European partner with whom the Company has contracted to develop Paystream and to market and distribute Paystream in non-U.S and Canadian markets.  Globex has also licensed the Company to sell and distribute its products, Securus and EHRmedi, in the US.  As Chairman, Mr. Ghiai oversees all compliance issues relating to PCI-DSS and HIPAA certifications, as well as large partnerships and certifications.
  Mr. Ghiai holds a BofARCH from California College of the Arts in San Francisco California.   Mr. Ghiai is a citizen of Belgium and a resident of Switzerland.
 
 Significant Employees
 
 The Company uses independent contractors who are compensated on a commission or contract basis, and does not currently have any employees.
 
 Section 16(a) Beneficial Ownership Reporting Compliance
 
 Because our securities are not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our officers, directors and greater than 10% holders are not subject to Section 16(a) of the Exchange Act (which requires officers, directors and greater than 10% holders to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of equity securities of a company).
  18
 
 Code of Ethics
 
 Globalpaynet has not adopted a code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, mainly because currently all of these positions and functions are carried out by one individual, Alain Ghiai, and the Company believes that adopting a code of ethics applicable to only one individual would be unnecessary. However, as the Company expands and additional executive officers are appointed, the Company intends to adopt a code of ethics.
 
 Nominating Committee; Nominating Procedures
 
 Globalpaynet currently does not have a nominating committee and does not presently plan to establish a nominating committee. The Company has not implemented any formal procedures pursuant to which securityholders may recommend nominees to the Company’s board of directors.
 
 Audit Committee
 
 Globalpaynet currently does not have an audit committee and has not made a determination of whether there it has a financial expert. The Company does not presently plan to establish an audit committee. However, if an audit committee is established, the Registrant will make the proper disclosures on Form 8-K.
 
 ITEM 11.  EXECUTIVE COMPENSATION
 
 The following table sets forth all compensation awarded to, earned by or paid to the Company’s Named Executive Officer for all services rendered to us during the fiscal years ended December 31, 2010, 2009, 2008, and 2007:
 SUMMARY COMPENSATION TABLEName and principal position

Year

Salary ($)(4)


Bonus ($)


Stock Awards

($)(1)(2)


Option Awards

($)(1)(3)


Non-Equity Incentive Plan Compensation ($)


Nonqualified Deferred Compensation Earnings

($)


All Other Compensation

($)


Total

($)Alain Ghiai, Chairman and CEO

2010


100,404



-



-



256,117



-



-



-



356,5212009


110,417



-



-



5,499,094



-



-



-



5,609,5112008


90,000



-



-



5,258,040



-



-



-



5,348,0402007


-



-



3,118,000



-



-



-



-



3,118,000
 ———————
 (1)  Assumptions used in the calculation of these amounts are included in footnote 5 to our audited financial statements included in this Annual Report on Form 10-K.
 (2)  Represents the fair value of the stock on the date of grant.  On September 28, 2007, the Company granted Mr. Ghiai 1,000,000 shares of the Company’s Class A Preferred Stock.  Pursuant to the terms of the Class A Preferred, Mr. Ghiai effectively will retain total voting control of the Company regardless of the number of shares of common stock issued.  The grant was authorized by the Board of Directors for the purpose of providing voting control to Mr. Ghiai and enable him to take actions to facilitate the Company’s growth.
 (3)  On January 17, 2008, the Company granted Mr. Ghiai an option to purchase 200,000,000 shares of the Company’s common stock with an exercise price of $2.00 per share. The option became exercisable in full on January 17, 2010 and expires on January 17, 2060 unless Mr. Ghiai’s service to the Company is earlier terminated, in which case the option will expire three months after Mr. Ghiai’s termination date.  The amount of the grant was determined by the Board of Directors who considered the following metrics: the number of shares underlying the grant was approximately 5.5 times the then outstanding shares and the equivalent of an annual allotment of 4 million shares its 50 year term, which annual amount is approximately 10% of the then-outstanding shares of the Company; as well as an exercise price of approximately 4 times of the sales price of recent placements of the Company’s Common Stock.  The Board further considered that the grant would be subject to dilution in future equity transactions and that the lengthy term and above market exercise price provides incentive to Mr. Ghiai to increase the value of the Company by similar metrics.
 (4)  Reflects amounts accrued as payable to or paid pursuant to the consulting agreement between Globus Payments, Ltd. and Mr. Ghiai.  No payments were made to Mr. Ghiai in fiscal 2008.  In April 2010, partial payment for the 2008 obligation was made, and at December 31, 2010, approximately $65,742 remained payable to Mr. Ghiai for services he performed in 2008.
  19
 
 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 
 The table below summarizes the awards under the Corporation's equity incentive plans for the Company’s named executive officer outstanding as of December 31, 2010.
  Option Awards



Stock AwardsNumber of Securities Underlying Unexercised Options

(#)


Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options


Option

Exercise

Price

Option

Expiration

Option

Vesting

Number

of Shares

or Units

of Stock

That

Have Not

Vested


Market

Value

of Shares

or Units

of Stock

That

Have Not

Vested


Equity

Incentive

Plan

Awards:

Number of

Unearned

Shares,

Units

or Other

Rights

That

Have Not

Vested


Equity

Incentive

Plan

Awards:

Market

or Payout

Value of

Unearned

Shares,

Units

or Other

Rights

That

Have Not

VestedName

Exercisable


Unexercisable


(#)


($)

Date

Date

(#)


($)(1)


(#)


($)Alain Ghiai


—



200,000,000



—



2.00

1/17/2060

1/17/2010


—



—



200,000,000



—
 
 The option to purchase 200,000,000 shares of the Company’s common stock granted to Mr. Ghiai on January 17, 2008 at an exercise price of $2.00 per share is our only outstanding equity award as of December 31, 2010. The option became exercisable in full on January 17, 2010 and expires on January 17, 2060 unless Mr. Ghiai’s service to the Company is earlier terminated, in which case the option will expire three months after Mr. Ghiai’s termination date.
 
 Director Compensation.
 
 Our directors are not compensated for their service as members of our board of directors.
 
 Employment Agreements.Currently, we do not have any written employment or consulting agreements. On January 18, 2008, our wholly-owned subsidiary, Globus Payments Ltd., entered into a consulting agreement with Alain Ghiai, our Chairman and Chief Executive Officer, whereby Globus Payments Ltd. agreed to pay Mr. Ghiai yearly compensation of US$100,000 in cash for services rendered by Mr. Ghiai to Globus Payments Ltd. The agreement can be terminated with 15 days notice with no penalties, carries a five year term, and is automatically renewed for an additional term unless terminated with thirty days’ written notice.  The agreement includes customary confidentiality and ownership of work product by the Company terms.  As of December 31, 2010 and 2009, approximately $65,742 and $100,000, respectively, pursuant to this consulting agreement remained unpaid.
 
 COMPENSATION DISCUSSION AND ANALYSIS
 
 Currently, we do not pay a salary to our sole employee, Alain Ghiai, our Chairman and Chief Executive Officer. We believe that Mr. Ghiai is best compensated with equity awards because such compensation will enable Globalpaynet to conserve its cash position while providing Mr. Ghiai an incentive to grow Globalpaynet and create a sustainable revenue stream, in order to increase the value of his options, which have an exercise price of $2.00 per share, well above market price of approximately $0.50 per share on the grant date. The grant was issued to provide additional incentive for Mr. Ghiai to remain in the employment of Globalpaynet and to facilitate an increase in the Company’s market value.  The option became exercisable after he completed two years of service to the Company on January 17, 2010, with a term of 50 years, or three months after Mr. Ghiai ceases to be employed by the Company.
  20
 
 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
 The following table sets forth the amount and nature of beneficial ownership of any class of Globalpaynet’s voting securities of any person known to Globalpaynet to be the beneficial owner of more than five percent of Company’s the outstanding shares, as of the close of business on March __, 2011.  Alain Ghiai is currently the only member of our management team, therefore no separate table has been provided solely for management ownership.
 
 Title of Class

Name and Address of Beneficial Owner

Amount & Nature of Beneficial Ownership

Percent of

Class (1)Common Stock

Alain Ghiai

14 Rue du Rhone

Geneve 1204 Switzerland

211,816,940 (2)

87.66
%Common Stock

Andorra Banc Agricol Reig

SACalle Manuel Cerqueda 1

AD700 Escaldes Engordany

13,300,000

31.94
%Common Stock

Renovatio Media Group SA

14 Rue du Rhone

Geneve 1204 Switzerland

6,153,190

14.78
%Common Stock

Catalyst Capital Holdings Ltd

Foresight Capital Holdings, Ltd

Griffin Capital Holdings Ltd.

Edelweiss Capital Holdings Ltd. (3)

2,980,000

7.16
%Class A Preferred Stock

Alain Ghiai

1,000,000 (3)

100
%
 
 (1) Percentages are calculated based on 41,645,748 shares of common stock and 1,000,000 shares of Class A Preferred Stock issued and outstanding as of March _, 2011, unless otherwise noted.
 
 (2) Percentage is calculated based on 241,645,748, which includes vested options to purchase 200,000,000 shares of common stock. Mr. Ghiai’s common stock ownership includes the following:
 
 ●
3,978,750 shares owned directly by Mr. Ghiai,
 
 ●
6,153,190 shares owned directly by Renovatio Media Group S.A. (“Renovatio”), of which Mr. Ghiai is the sole director.  Includes shares held in its former name, Maisonette Group SA;
 ●
990,000 shares owned directly by Globus Communications, a division of Renovatio; and
 
 ●
695,000 shares owned directly by Globus Media Ltd., which is a wholly-owned subsidiary of Renovatio and of which Mr. Ghiai is the sole director.
 
 ●
Options to purchase 200,000,000 shares of common stock at a per share exercise price of $2.00.
 
 (3) Pursuant to the terms of the Class A Preferred Stock, the owner of the Class A Preferred Stock will effectively retain total voting control of Globalpaynet regardless of the number of shares of common stock issued. No other person is the beneficial owner of more than five percent of any class of Globalpaynet’s voting securities.
 
 Change of Control.
 
 To Globalpaynet’s knowledge, there are no arrangements, which may result in a change of control of Globalpaynet.
 
 21
 
 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
 E E-Shopping Technologies Purchase.  On July 31, 2007, a wholly-owned subsidiary of the Registrant, Globus Payments Ltd., entered into an agreement to purchase E-Shopping Technologies Ltd. from Renovatio Media Group S.A. (“Renovatio”).  As consideration for the sale, Globalpaynet Holdings Inc. (“we” or the “Company”) paid Renovatio US$350,000 in cash and issued 1,000,000 shares of its common stock to Renovatio.  Alain Ghiai, our Chairman and Chief Executive Officer and our sole director, is the sole director of Renovatio.  As of the date of the purchase and sale of E-Shopping Technologies Ltd., Mr. Ghiai was one of two members of the Board of Renovatio. The other board member also approved the terms of the sale.
 
 Grant of Class A Preferred Stock.  On September 28, 2007, Globalpaynet issued 1,000,000 shares of its Class A Preferred Stock to Mr. Ghiai, our Chairman and Chief Executive Officer and our sole director.  Pursuant to the terms of the Class A Preferred, Mr. Ghiai effectively will retain total voting control of Globalpaynet regardless of the number of shares of common stock issued.
 
 Option Grant.  On January 17, 2008, Globalpaynet granted Mr. Ghiai, our Chairman and Chief Executive Officer and our sole director, an option to purchase 200,000,000 shares of Globalpaynet’s common stock with an exercise price of $2.00 per share.  The option is exercisable in full beginning on January 17, 2010 and expires on January 17, 2060 unless Mr. Ghiai’s service to Globalpaynet is earlier terminated, in which case the option will expire three months after Mr. Ghiai’s termination date.
 
 Share Transfer.  On February 20, 2008, the Board of Directors of Maisonette International Enterprises, Inc., a Nevada corporation (“Maisonette”), authorized the transfer of 2,500,000 of Globalpaynet’s shares held by Maisonette to Mr. Ghiai, our Chairman, Chief Executive Officer and sole director, as compensation to Mr. Ghiai for having secured a loan on behalf of Maisonette with Mr. Ghiai’s personal assets.  At the time of the transfer, Mr. Ghiai was the sole director and chairman of Maisonette, a position which he has since resigned.
 
 Consulting Agreement.  On January 18, 2008, Globus Payments Ltd., a wholly-owned subsidiary of Globalpaynet (“GPY”), entered into a consulting agreement with Mr. Ghiai, our Chairman and Chief Executive Officer and our sole director, whereby GPY agreed to pay Mr. Ghiai yearly compensation of US$100,000 in cash for services rendered by Mr. Ghiai to GPY.  GPY will also reimburse Mr. Ghiai for any out-of-pocket expenses incurred in connection with the performance of his duties pursuant to the consulting agreement.  The consulting agreement has a five-year term, which will automatically renew for successive five-year periods unless notice is given by either party.
 
 Transactions with GlobeX Data S.A. In August 2007, we entered into a Market Agreement with GlobeXPayNet S.A., now GlobeX Data, S.A. (“GlobeX” and “GBX”), in Switzerland and placed it in charge of all international sales and developments for Globus Payments Ltd.  We paid GlobeX a one-time fee of EUR500, 000 in exchange for GlobeX’s services to secure a global marketing partner in the payment and to actively promote and distribute Paystream offerings in Europe, the Middle East, and Africa.  During the ten year term of the agreement, no further payments will be made to GlobeX for such activities, and GlobeX will pay to Globalpaynet 20% of the gross revenue it generates from the sale of Paystream offerings.  Our subsidiary, Globus Payments, Ltd, has also contracted with GlobeX to perform all its PCI compliance work and to maintain its systems. Payments to GlobeX for this compliance and maintenance work for the years ending December 31, 2010 and 2009 totaled $276,003 and $256,294, respectively.  We will also use GlobeX’s data centre to store Paystream transaction data, and we plan to market and distribute GlobeX’s Securus and EHRmedi offerings.  Alain Ghiai is a member of GlobeX Data S.A.’s board of directors; Mr. Alain Ghiai is also our sole director, president and majority stockholder.
  We currently have no policies or procedures for the review, approval or ratification of related-party transactions.
 
 ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.
 
 Audit Fees
 
 For the fiscal year ended December 31, 2010, our principal accountant, Li and Company, PC, (“Li”) billed approximately $15.000 for the audit of our annual financial statements for the year ended December 31, 2010.  For the fiscal year ended December 31, 2009, Li billed approximately $16,250 for the audit of our annual financial statements for the years ended December 31, 2009 and 2008 and for the period from December 30, 2004 (inception) through December 31, 2009.
 
 Audit-Related Fees
 
 None.
 
 Tax Fees
 
 None.
 
 All Other Fees
 
 None.
  22
 
 ITEM 15  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  EXHIBIT NUMBER

DESCRIPTION

LOCATION3.1 - 3.2

Articles of Incorporation and Bylaws

Incorporated by reference to the Form 10SB12G filed on January 31, 2006.3.3

Certificate of Amendment to Articles of Incorporation filed June 18, 2007

Incorporated by reference to the Form 8-K filed August 6, 20073.4

Articles of Amendment to Articles of Incorporation filed April 4, 2007

Incorporated by reference to the Form 8-K filed August 6, 20073.5

Certificate of Designation of Class A Preferred Stock

Incorporated by reference to the Form 8-K filed October 4, 200710.1

Globalpaynet Holdings Inc. stock option agreement dated January 17, 2008 by and among the Registrant and Alain Ghiai

Incorporated by reference to the Form 8-K filed January 23, 200810.2

Globus Payments Ltd. consulting agreement with Alain Ghiai, dated January 18, 2008

Incorporated by reference to the Form 8-K filed January 23, 200810.3

Acquisition agreement by and among Globus Payments Ltd., E-Shopping Technologies Ltd. and Renovatio Media Group S.A., dated July 31, 2007

Incorporated by reference to the Form 8-K/A filed August 15, 200710.4

Non-US Share Private Placement Agreement with Andorra Banc Agricol Reig, S.A., dated April 15, 2007

Incorporated by reference to the Form 8-K/A filed April 25, 200710.5

Non-US Share Private Placement Agreement with Andorra Banc Agricol Reig, S.A., dated June 18, 2007

Incorporated by reference to the Form 8-K filed June 21, 200710.6

Non-US Share Private Placement Agreement with Woodrush Ltd., dated June 18, 2007

Incorporated by reference to the Form 8-K filed June 21, 200710.7

Non-US Share Private Placement Agreement with Pictet Private Equity Investors, S.A. ,dated December 23, 2009

Incorporated by reference to the Form 8-K filed December 30, 200910.8

Non-US Share Private Placement Subscription Agreement with Henry Edvard Sjoman dated August 18, 2010

Incorporated by reference to the Form 8-K filed August 24, 2010
 10.9

Marketing Agreement between GlobeXPaynet S.A. and Globalpaynet Holdings, Inc. dated August 2, 2007

Incorporated by reference to the Form S-1/A  filed September 13, 201010.10

License Agreement between GlobeX Datat S.A. and Globalpaynet Holdings, Inc. dated August 23, 2010

Incorporated by reference to the Form S-1/A  filed September 13, 2010
 10.11

Amended License Agreement between GlobeX Datat S.A. and Globalpaynet Holdings, Inc. dated February 24, 2011

Filed herewith21.1

Subsidiaries of the Registrant

Filed herewith31.1

Rule 13a-14(a)/15d-14(a) Certification (CEO)

Filed herewith31.2

Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer)

Filed herewith32.1

Section 1350 Certification (CEO)

Filed herewith32.2

Section 1350 Certification (Principal Financial Officer)

Filed herewith
  23
  SIGNATURES
 
 In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the __th day of March, 2011.
 
 GLOBALPAYNET HOLDINGS INC.,

a Nevada CorporationBy:
/s/ ALAIN GHIAIAlain Ghiai

Chief Executive Officer, Chief Financial Officer and Chairman

of the Board
 
 In accordance with the requirements of the Exchange Act, this report has been signed by the following persons in the capacities with Globalpaynet Holdings Inc. and on the dates indicated.
 
 Signature

Title

Date/s/ ALAIN GHIAI

Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer & Chairman of the Board

March 30, 2011Alain Ghiai