U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 2003.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from ____________ to _____________.
Commission file number: 0-27637
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Global Entertainment Holdings/Equities, Inc.
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(Name of small business issuer in its charter)
Colorado 47-0811483
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 Brickell Key Drive, Suite 603, Miami, Florida 33131
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (305) 374-2036
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [X] No [ ]
As of May 9, 2003, there were 10,435,296 outstanding shares of the issuer's
common stock, par value $0.001.
INDEX
Page No.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - March 31, 2003 (Unaudited)
And December 31, 2002...............................................3
Consolidated Unaudited Statements of Operations - For the
Three Months Ended March 31, 2003 and March 31, 2002................4
Consolidated Unaudited Statements of Cash Flows - For the
Three Months Ended March 31, 2003 and March 31, 2002................5
Notes to Consolidated Unaudited Financial Statements..................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............8
ITEM 3. CONTROLS AND PROCEDURES..............................................11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS....................................................13
ITEM 2. CHANGES IN SECURITIES................................................13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES......................................13
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS....................13
ITEM 5. OTHER INFORMATION....................................................13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.....................................13
ITEM 7. SIGNATURES...........................................................14
CERTIFICATIONS.......................................................15
2
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
Consolidated Balance Sheets
As of March 31, As of December 31
2003 2002
(unaudited) (see Note 1)
--------------- ----------------
A S S E T S
Current Assets:
Cash 123,671 $ 260,494
Accounts receivable net of
allowance for doubtful accounts 651,459 749,486
Notes receivable 813,188 1,019,343
Other receivables 24,828 16,031
Prepaid expenses 76,628 84,588
--------------- -----------------
Total Current Assets 1,689,774 2,129,942
Property & Equipment
Office Improvements 38,833 33,297
Computer Equipment 1,923,058 1,846,739
Furniture & Fixtures 230,683 226,480
Other 215,458 201,799
--------------- -----------------
2,408,032 2,308,315
Less accumulated depreciation (1,430,765) (1,324,234)
--------------- -----------------
Total Property & Equipment 977,267 984,081
Other Assets
Software developed for licensing, net 1,081,085 1,148,063
Other assets 86,412 60,866
--------------- -----------------
Total Other Assets 1,167,497 1,208,929
--------------- -----------------
Total Assets $ 3,834,538 $ 4,322,952
=============== =================
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable accrued expenses 608,485 692,515
Current Portion - Notes Payable 357,716 479,515
Deferred revenue 74,492 129,242
Income Taxes Payable 84,803 84,802
--------------- -----------------
Total Current Liabilities $ 1,125,496 $ 1,386,074
--------------- -----------------
Contingencies - -
Stockholders' Equity
Preferred Stock, 25,000,000 Shares Authorized,
None Issued - -
Common Stock, 100,000,000 Shares Authorized 10,435 10,376
Par Value of $.001; 10,435,296 &
10,375,776 Shares Issued and
Outstanding Respectively
Paid in Capital 3,241,946 3,228,899
Retained Earnings(Deficit) (96,039) 144,903
Treasury Stock, at Cost (447,300) (447,300)
--------------- -----------------
Net Stockholders' Equity 2,709,042 2,936,878
--------------- -----------------
Total Liabilities and
Stockholders' Equity $ 3,834,538 $ 4,322,952
=============== =================
See accompanying summary of accounting principles and notes to consolidated
financial statements.
3
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
March 31
--------------------------
2003 2002
------------ -----------
Total Revenues $ 1,338,185 $ 1,432,235
Cost of Sales 815,293 801,332
------------ ------------
Gross Profit 522,892 630,903
Expenses
Uncollectible Fees Written Off - 35,805
Depreciation & Amortization 112,442 185,363
Rents 41,709 41,993
Professional Fees 146,131 49,340
Financial & Investor Relations 22,357 21,110
Administrative Expenses 99,215 96,080
Advertising 67,462 38,890
Wages and Salaries 280,130 126,836
------------ ------------
Total Expenses $ 769,446 $ 595,417
------------ ------------
Income (Loss) from Operations (246,554) 35,486
Other Income(Expenses)
Interest(Expense) (13,070) (31,009)
Interest Income 18,684 820
Other Income(Expense) - (11,758)
------------ ------------
Total Other Income (Expenses) 5,614 (41,947)
------------ ------------
Income Before Taxes (240,940) (6,461)
Provisions for Income Tax - (9,019)
------------ ------------
Net Loss $ (240,940) $ (15,480)
============ ============
Basic and Diluted Earnings Per Share $ (0.02) $ (0.001)
Weighted Average Shares 10,400,163 10,415,722
See accompanying summary of accounting principles and notes to consolidated
financial statements.
4
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
Statements of Cash Flows
(Unaudited)
For the Three Months Ended
March 31
-----------------------------
2003 2002
-------------- -------------
Cash Flows from Operating Activities
Net Loss $ (240,940) $ (15,480)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities;
Depreciation and Amortization 279,030 293,560
Uncollectible Fees Written Off - 35,805
Stock Issued for Services 13,105 -
Change in Operating Assets & Liabilities
(Increase) Decrease in Fees Receivable 98,027 473,331
(Increase) Decrease in Prepaid Expenses 7,960 (18,916)
(Increase) Decrease in Other Receivables (8,797) 18,342
(Increase) Decrease in Notes Receivable 206,155 152,594
Increase (Decrease) in Accounts Payable (84,029) (148,680)
Increase in Accrued Expenses - 2,989
Decrease in Deferred Revenues (54,750) -
Other (281) 5,300
-------------- -------------
Net Cash Provided (Used) in
Operating Activities $ 215,480 $ 798,845
-------------- -------------
Cash Flows from Investing Activities
Purchase of equipment and software (99,436) (116,101)
Development of software (106,663) (146,722)
Increase in security deposits (24,405) -
-------------- -------------
Net Cash (Used) in Investing Activities $ (230,504) $ (262,823)
-------------- -------------
Cash Flows from Financing Activities
Payment on Current Notes Payable (121,799) -
Payment on Long-Term Debt - (77,748)
-------------- -------------
Net Cash (Used) by Financing Activities $ (121,799) $ (77,748)
-------------- -------------
Increase (Decrease) in Cash & Cash Equivalents (136,823) 458,274
Cash & Cash Equivalents at Beginning of Period 260,494 189,092
-------------- -------------
Cash & Cash Equivalents at End of Period $ 123,671 $ 647,366
============== =============
Disclosures from Operating Activities:
Interest Expense $ 13,070 $ 31,009
Taxes $ - $ -
See accompanying summary of accounting principles and notes to consolidated
financial statements.
5
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2003 and 2002
(Unaudited)
NOTE 1 - GENERAL
The Company was incorporated on July 10, 1997, in Colorado as Masadi Resources,
Inc. On February 10, 1998, the name was changed to International Beverage
Corporation. On August 27, 1998, International Beverage Corporation merged with
Global Entertainment Holdings/Equities, Inc., and subsequently the surviving
corporation became known as Global Entertainment Holdings/Equities, Inc.
Principles of Consolidation
The Company currently has two wholly owned subsidiaries; Interactive Gaming and
Wagering NV, (IGW), a Netherlands Antilles Corporation in Curacao, Netherlands
Antilles, and Prevail Online, Inc., (Prevail), a Colorado Corporation. IGW, is
engaged in the conception and creation of computer software programs for the
gaming and wagering industry. Prevail, was purchased in August of 1999 and it is
engaged in the creation and operation of websites and derives its revenues from
banner advertising. The accompanying consolidated financial statements include
the accounts of the company and its wholly-owned subsidiaries. Inter-company
transactions and balances have been eliminated in consolidation.
NOTE 2 - BASIS OF PRESENTATION
The unaudited financial statements included herein have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 2003 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2003. The December 31, 2002 balance sheet was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles. Certain information and note
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations relating to interim consolidated
financial statements. For further information, the statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's financial statements and notes thereto included in the Form 10KSB, as
amended, for the year ended December 31, 2002.
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods. Basic earnings per share are computed on the
basis of the weighted average number of common shares outstanding during each
year. Diluted earnings per share are computed on the basis of the weighted
average number of common shares and dilutive securities outstanding. Dilutive
securities having an anti-dilutive effect on diluted earnings per share are
excluded from the calculation.
Certain reclassifications were made to the quarter ended March 31, 2002,
financial statements in order to conform to the 2003 presentation.
6
NOTE 3 - COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries are not directly involved in internet gaming.
However, the Company has entered into royalty agreements with licensees who are
involved in internet gaming. Some governmental jurisdictions have adopted or are
in the process of reviewing legislation to regulate or prohibit internet gaming.
The uncertainty surrounding the regulation or prohibition of internet gaming
could have a material adverse effect on the Company's business, revenues,
operating results and financial condition.
NOTE 4 - ECONOMIC DEPENDENCE
Two licensees accounted for 81.7% of consolidated net revenues for the three
month period ending March 31, 2003. In the corresponding period of fiscal year
2002, 89.7% of consolidated revenues were accounted for by these two licensees.
The loss of one or both of these licensees would have a detrimental effect on
operating results.
NOTE 5 - SEGMENT INFORMATION
The Company groups its business into two geographic segments; The United States
of America and Curacao, Netherlands Antilles.
Software
Management Development
and Marketing (Netherlands
Services (USA) Antilles) Total
-------------- ------------ -----------
March 31, 2003
Revenues $ - $ 1,338,185 $ 1,338,185
Operating Income(Loss) (475,809) 229,255 (246,554)
Total Assets 212,440 3,622,098 3,834,538
Depreciation and Amortization 10,160 268,870 279,030
March 31, 2002
Revenues $ 9,700 $ 1,422,535 $ 1,432,235
Operating Income(Loss) (307,114) 300,653 (6,461)
Total Assets 193,154 3,920,315 4,113,469
Depreciation and Amortization 11,536 282,024 293,560
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
As used herein, the term "Company," "we," "our," and "us" refers to Global
Entertainment Holdings/Equities, Inc., and its subsidiaries and predecessors,
unless otherwise indicated.
Forward-Looking Information
This report contains a number of forward-looking statements, which reflect the
Company's current views with respect to future events and financial performance
including statements regarding the Company's projections, and the interactive
gaming industry. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
historical results or those anticipated. In this report, the words
"anticipates", "believes", "expects", "intends", "future", "plans", "targets"
and similar expressions identify forward-looking statements. Readers are
cautioned to not place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof. The Company makes no
obligation to publicly revise these forward-looking statements, to reflect
events or circumstances that may arise after the date hereof.
Additionally, these statements are based on certain assumptions that may prove
to be erroneous and are subject to certain risks including, but not limited to,
the Company's dependence on limited cash resources, and its dependence on
certain key personnel within the Company. Accordingly, actual results may
differ, possibly materially, from the predictions contained herein.
Business Overview
- -----------------
We are in the business of providing entertainment based software and services.
Our licensees depend upon our software to improve their success in the online
gaming industry through effective management of the activities on their websites
and player ease of use and enjoyment. Our services are technology based only. We
do not engage in any gaming or wagering activity.
We generate our operating revenues exclusively from Interactive Gaming and
Wagering, N.V., ("IGW") our wholly owned subsidiary, a Netherlands Antilles
corporation. IGW is engaged in the development, licensing and hosting of
proprietary Internet and telephony based gaming software. Other services offered
to licensees include custom software development and professional services. IGW
derives its revenues from licensing fees, software royalties and consulting
services.
Prevail Online, Inc., ("Prevail") our wholly owned subsidiary, a Colorado
corporation, provides information about the online gaming industry through four
website locations. During the three months ended March 31, 2003, Prevail had no
revenues. Subsequent to March 31, 2003, we reached a tentative agreement with a
third party to sell the websites owned by Prevail in exchange for that party's
release of Prevail's debt. It is anticipated that following the sale of those
websites, management will re-evaluate Prevail's activities.
We have created a suite of gaming software products to offer our licensees
better risk management, ease of use and a back office product that simplifies
player and gaming oversight. Our software offers a fully automated online
entertainment experience for the licensee's player. Our online Sportsbook,
Horsebook and Casino software systems are complemented by the player Loyalty
software, the Webmaster Affiliate software and the Call Center software. All
software products are integrated, enabling players to access all of an
operator's affiliated websites seamlessly, using a single account. This
integrated feature results in higher revenues for our licensees, as a result of
giving players easier access to a larger variety of activities.
8
During this reporting period, we have placed greater emphasis on enhancing the
reliability of our existing product suite, primarily addressing concerns and
requested modifications to our products by our licensees. New development has
taken a back seat to the above focus until management feels that our licensees'
expectations and needs are met. It is anticipated that in the third quarter of
this fiscal year we will resume development of new products. This
re-prioritization resulted in reduced resources employed in new products and
version releases and shifted to maintenance and enhancement of our existing
software products. Costs incurred in maintenance and enhancements are expensed
as incurred, whereas new products and releases are capitalized and amortized
over three years. The reduced capitalization has contributed to higher current
period expenses which significantly impacted our loss from operations.
Outlook
- -------
Revenues for 2003 are expected to be lower than 2002 levels, particularly for
the second and third quarters of this fiscal year. The anticipated decline in
revenue is attributable to various factors. The primary reason results from the
discontinuation of our Marketing Services activities and the transfer of the
four websites out of our Prevail subsidiary. Neither Marketing Services nor
Prevail were not profitable in 2002. Additionally, our revenues are seasonal.
Historically, the second and third quarters have been lower revenue periods in
comparison to the first and fourth quarters. The market conditions for our
licensee's in the online gaming industry are not as attractive as they have been
historically. Specifically, online gamers who seek entertainment at our
licensees' websites have a more difficult situation in depositing funds today.
This voluntary constriction on Ecommerce invariably decreases the amount of
revenue produced by our licensees and is a significant factor in our diminished
growth for 2003; moreover, there is a possibility that anti-online gaming
Ecommerce legislation may pass in 2003 in the US Congress which could further
curtail revenue. Finally, under an agreement negotiated in January, 2002, with
one of our major licensees, our royalty rate is subject to a reduction which
will occur in 2003. Management has taken steps to reduce costs, consolidate
operations and adjust activities to coincide with anticipated revenue levels. It
is not anticipated that these factors will influence our long term liquidity.
On February 19, 2003, we executed a lease for 7,074 square feet of office space
in Miami, Florida. We anticipate occupying this space as our corporate
headquarters in July, 2003. We have made arrangements to sublease our current
executive offices in Miami, Florida. The new offices will house our executive
and administrative personnel, client support services and software development
activities. We anticipate considerable long term cost savings by consolidating
these activities into the Miami offices. In the short-term however, wages and
salaries should be higher than normal given the required redundancies in the
anticipated moves.
9
Results of Operations
- ---------------------
Revenues for the three months ending March 31, 2003 and 2002 were composed of
the following elements:
2003 2002
---------- ----------
Royalty Income $1,203,343 $1,115,111
License Fees 33,250 7,500
Bandwidth Services 66,711 88,364
Other Revenue 35,220 221,260
---------- ----------
Total $1,338,524 $1,432,235
Royalty income increased eight percent to $1,203,343 from $1,115,111 for the
three months ending March 31, 2003 compared to 2002. The decrease in Other
Revenue represents the discontinuation of Marketing Services.
Cost of sales increased from 56 percent of sales for the three months ended
March 31, 2002, to 61 percent for the three months ended March 31, 2003. The
increase was primarily due to higher amortization of proprietary software costs
and greater software maintenance expense. Marketing Services were discontinued
in the current reporting period, which accounts for the decrease in this cost.
The following amounts composed cost of sales for each period:
03/31/03 03/31/02
-------- ----
Amortization of Proprietary Software $ 166,588 $ 108,197
Bandwidth 117,548 93,461
Software support and maintenance 186,498 99,292
Salaries 328,633 325,978
Marketing Services 468 171,948
Sponsorship Projects 15,558 2,456
---------- ----------
Total $ 815,293 $ 801,332
Expenses increased $174,029 from $595,417 for the three months ended March 31,
2002, to $769,446 for the three months ended March 31, 2003. This increase was
generated from the increased costs in Professional fees, Advertising and Wage
expenses. Professional fees increased as a result of legal and accounting
services connected with the complaint we have filed against a former officer and
shareholder, as further described in Part II, Item 1, Legal Proceedings.
Advertising increased $28,572 primarily as the cost of producing a television ad
for promotion in Europe of our software products. Wages and Salaries increased
$153,294 as a result of increased employment levels in the three months ended
March 31, 2003 as compared to the same period ending March 31, 2002. The
following table represents the number of personnel employed in all departments,
for the respective periods:
2003 2002
---- ----
January 47 36
February 47 38
March 45 41
Interest expense decreased $17,939 to $13,070 from $31,009 for the three months
ending March 31, 2003 compared to 2002. The lower interest expense is due to the
principal payments made on notes payable during the year 2002.
Interest income increased from $820 to $18,684 for the three months ended March
31, 2003 compared to 2002. The interest income was earned on the conversion of
an account receivable to an interest bearing note receivable during 2002.
The net loss incurred for the three months ending March 31, 2003 of $240,940
compared to the net loss for the three months ending March 31, 2002 of $15,480
can be summarized as attributable to the increased Professional Fees of $96,791
and increased wages of $153,294.
Liquidity and Capital Resources
- -------------------------------
We do not have any material commitments for capital expenditures. However, we
are planning to move our corporate headquarters and our data center during the
second and third quarter of this fiscal year. These moves will incur
expenditures in capital assets and costs of relocation of about $250,000. We
anticipate funding these costs through a combination of current operating cash
flow and external financing, possibly including debt and/or equity.
10
Our principal source of short term liquidity is from operating cash flow. A
substantial decrease in revenues could impact the funds from operating cash flow
and jeopardize our ability to meet current obligations. We do not have a credit
line or any alternative means of short term funding. Management is taking steps
to correct this situation.
During the current fiscal year ending December 31, 2003, $479,515 of notes
payable will be due for payment. Of this amount, we have already paid $121,799
in the quarter ended March 31, 2003. We anticipate satisfying the balance of
this debt from collections on the notes receivable of $813,188.
Our cash position at March 31, 2003 was substantially lower than our position at
March 31, 2002. The cash position at March 31, 2002, of $647f,366 compared to
$123,671 at March 31, 2003, represented the collection of several months of
receivables due from a licensee.
Net cash provided from operating activities was $798,845 for the three months
ended March 31, 2002 as compared to $215,480 for the three months ended March
31, 2003. The primary source of cash from operations in the current period was
derived from collections on notes receivable, whereas for the same period in
2002 the primary source was from collections on fees receivable as previously
discussed.
Net cash used in investing activities in the amount of $230,504 and $262,823 for
the three months ended March 31, 2003 and 2002, respectively, represented
primarily the purchase of fixed assets and the capitalization of software
development costs in both periods.
The following table summarizes the Company's contractual payments and
obligations by period (amounts in thousands):
Contractual Obligations Payment Due by Period
Less Than After
Total 1 year 1-3 years 4 - 5 years 5 years
----- ------ --------- ----------- -------
Operating Leases 873 246 341 286 -
Total Contractual Cash Obligations $ 873 $ 246 $ 341 $ 286 $ -
Amounts presented represent real estate leases without offset for anticipated
sub lease of the executive offices located in Miami, Florida.
Critical Accounting Policies and Estimates
- ------------------------------------------
Our significant accounting policies are described in Note 1 to the consolidated
financial statements included in our annual report filed in form 10-KSB for the
year ended December 31, 2002. The accounting policies used in preparing our
interim 2003 consolidated financial statements are the same as those described
in our annual report.
We believe the critical accounting policies listed below affect significant
judgments and estimates used in the preparation of our consolidated financial
statements, although they are not all inclusive.
Revenue Recognition. We recognize revenues in accordance with the provisions of
the American Institute of Certified Public Accountants' Statement of Position
(SOP) 97-2, "Software Revenue Recognition," as amended by SOP 98-4 and SOP 98-9,
as well as Technical Practice Aids issued from time to time by the American
Institute of Certified Public Accountants, and in accordance with the
11
Securities and Exchange Commission Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements." We license software under non-cancelable
royalty agreements and provide related professional services, including
consulting, training, and implementation services, as well as ongoing customer
support and maintenance. Consulting and training services are not essential to
the functionality of our software products.
Software Development Costs. Software development costs are expensed as incurred
until technological feasibility is established. Software development costs
incurred subsequent to establishing technological feasibility are capitalized
and amortized over their three year estimated useful lives. Management is
required to use professional judgment in determining whether development costs
meet the criteria for immediate expense or capitalization.
Allowance for Doubtful Accounts. We maintain allowances for doubtful accounts
for estimated losses resulting from the inability of our licensees to make
required payments. If the financial condition of our licensees were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required or revenue could be deferred until
collectibility becomes probable.
Contingencies. We are subject to the possibility of various loss contingencies
in the normal course of business. We accrue for loss contingencies when a loss
is estimable and probable.
ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Within 90 days prior to the filing of this quarterly report, the Company's Chief
Executive Officer and its Chief Financial Officer evaluated the Company's
disclosure controls and procedures as required pursuant to Rule 13a-14 under the
Securities and Exchange Act of 1934, as amended. Under rules promulgated by the
SEC, disclosure controls and procedures are defined as those "controls or other
procedures of an issuer that are designed to ensure that information required to
be disclosed by the issuer in the reports filed or submitted by it under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms." Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer determined
that such controls and procedures are effective in timely alerting them to
material information relating to the Company required to be included in the
Company's periodic SEC filings. There were no significant changes in internal
controls that could significantly affect the disclosure controls and procedures
since the date of the evaluation.
12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
See Item 3 of Part II of Form 10-KSB for the year ended December 31, 2002. There
are no new developments related to this previously reported item.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. Exhibit Index on page following Certifications Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
(b) The Company filed the following reports on Form 8-K during the quarter for
which this form is filed:
Form 8-K dated March 7, 2003 reporting:
Item 5, Other Events -
Disclosure of a letter mailed to all of the Company's
Shareholders of record outlining the history and background of
the Company along with a memorandum addressing the issues
relating to a dispute with Steven Abboud, shareholder and
former officer.
There were no financial statements filed with this Form 8-K
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this Quarterly Report on
Form 10-QSB to be executed on its behalf by the undersigned, hereunto duly
authorized.
Date: May 14, 2003
Global Entertainment Holdings/Equities, Inc.
/s/ Bryan P. Abboud
- --------------------
Bryan P. Abboud
President, Chief Executive Officer
and Director (Principal Executive Officer)
/s/ Clinton H. Snyder
- ---------------------
Clinton H. Snyder
Chief Financial Officer
(Principal Financial and Accounting Officer)
14
CERTIFICATIONS
I, Bryan P. Abboud, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Global Entertainment
Holdings/Equities, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 14, 2003
/s/ Bryan P. Abboud
- --------------------
Bryan P. Abboud
President, Chief Executive Officer
15
CERTIFICATIONS
I, Clinton H. Snyder, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Global Entertainment
Holdings/Equities, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 14, 2003
/s/ Clinton H. Snyder
- ---------------------
Clinton H. Snyder
Chief Financial Officer
16
INDEX TO EXHIBITS
Exhibits marked with an asterisk have been filed previously with the Commission
and are incorporated herein by reference.
EXHIBIT PAGE
NO. NO. DESCRIPTION
3.1 * Articles of Incorporation
3.2 * Bylaws
99.1 Certification of CEO Pursuant to Section 906 of
Sarbanes-Oxley Act of 2002
99.2 Certification of CFO Pursuant to Section 906 of
Sarbanes-Oxley Act of 2002