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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------
FORM 10-QSB
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[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2007
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
Commission File Number: None
---------------
GLOBAL ENTERTAINMENT HOLDINGS / EQUITIES, INC.
(Exact name of small business issuer as specified in its charter)
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Colorado 47-0811483
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
23760 Oakfield Road
Hidden Hills, CA 91302
(Address of principal executive offices)
(818) 884-2777
(Issuer's Telephone Number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
15 or 15 (d) or 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 [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-25 of the Exchange Act):
Yes [ ] No [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding at August 20, 2007
Common Stock 262,605,273
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
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GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE, 30 DECEMBER, 31
2007 2006
------------ ------------
(UNAUDITED) (AUDITED)
ASSETS
Current Assets
Cash and cash equivalents $ 17,197 $ 152,013
Cash in escrow 1,344,781 902,750
Accounts receivable 66,475 395,014
Inventory - film assets 59,800,000 59,800,000
Prepaid expenses and others 4,801 6,601
------------ ------------
Total Current Assets 61,233,254 61,256,378
Property and Equipment,
net of accumulated depreciation of $234,713 and
$231,989 for 2007 and 2006, respectively 153,080 122,113
Deposits 57,527 12,735
------------ ------------
TOTAL ASSETS 61,443,861 61,391,226
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 807,446 320,232
Accrued liabilities 1,758,789 1,069,192
Income tax payable 296,700 296,700
Officers' loan 490,376 190,808
Notes payable, current portion 56,358 56,358
------------ ------------
Total Current Liabilities 3,409,669 1,933,290
------------ ------------
Long Term Liabilities
Notes payable 19,846 33,286
------------ ------------
Total Long Term Liabilities 19,846 33,286
------------ ------------
TOTAL LIABILITIES 3,429,515 1,966,576
------------ ------------
Stockholders' Equity
Preferred stock, authorized 250,000,000 shares; none issued -- --
Common stock, par value $0.001, authorized 500,000,000 shares; and
197,804,273 shares issued and outstanding for 2007 and 2006 197,804 197,804
Paid-in capital 61,087,629 61,087,629
Accumulated deficit (3,271,087) (1,860,783)
------------ ------------
Total Stockholders' Equity 58,014,346 59,424,650
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 61,443,861 $ 61,391,226
============ ============
See notes to interim unaudited consolidated financial statements
2
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THREE MONTHS ENDED FOR SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------- -------------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Selling , General and Administrative expenses 822,142 507 1,425,082 1,498
----------- ----------- ----------- -----------
Operating Loss (822,142) (507) (1,425,082) (1,498)
Other Income (Expenses)
Interest and Other Income 14,616 -- 28,058 --
Rental Income -- -- -- --
Interest Expenses (4,650) -- (8,311) --
----------- ----------- ----------- -----------
Total Other Income (Expenses) 9,966 -- 19,747 --
----------- ----------- ----------- -----------
Net loss before Income Taxes (812,176) (507) (1,405,335) (1,498)
Provision for Taxes -- -- 800 --
----------- ----------- ----------- -----------
Net Loss $ (812,176) $ (507) $(1,406,135) $ (1,498)
=========== =========== =========== ===========
Net loss per share, Basic and Diluted NIL NIL $ (0.01) NIL
Weighted Average Number of common Shares 197,804,273 95,225,000 197,804,273 95,225,000
See notes to interim unaudited consolidated financial statements
3
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR SIX MONTHS ENDED
JUNE 30,
-------------------------------
2007 2006
----------- -----------
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $(1,410,304) $ (1,498)
Adjustments to Reconcile Net Loss to Net Cash Used in Operations:
Depreciation 2,724 --
(Increase) Decrease in:
Accounts receivable 328,539 --
Prepaid and others 1,800 --
Deposits (44,792)
Increase (Decrease) in:
Accounts payable 487,214 --
Accrued expenses 680,936 --
Accrued interest 8,661 --
----------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 54,778 (1,498)
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment (33,691) --
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (33,691) --
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Bank overdraft -- 3
Net proceeds from notes payable to related parties 286,128 --
Payments to notes payable to relates parties -- (99,000)
----------- -----------
NET CASH FLOW PROVIDED BY (USED IN) FINANCING ACTIVITIES 286,128 (98,997)
----------- -----------
NET INCREASE (DECREASE) IN CASH 307,215 (100,495)
Cash Balance at Beginning of Period 1,054,763 100,495
----------- -----------
CASH BALANCE AT END OF PERIOD $ 1,361,978 $ --
=========== ===========
Supplemental Disclosures of Cash Flow Information
Interest Paid $ 3,480 $ 7,883
Non Cash investing and financiag activities:
Assets acquired and liabilities assumed in reverse merger:
Tangible assets acquired $ -- $ 3,890,043
Liabilities assumed $ -- (2,742,794)
----------- -----------
Net assets acquired in reverse merger $ -- $ 1,147,249
See notes to interim unaudited consolidated financial statements
4
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Bayshore Media Group ("the Company") was incorporated in StateplaceNevada on
November 22, 2004. The Company is engaged in management and production of motion
pictures.
On September 18, 2006, Bayshore Media Group entered into a Stock Purchase
Agreement with Global Entertainment Holdings/Equities, Inc. ("GAMT"). It is
agreed that GAMT will issue to the shareholders of Bayshore Media Group
195,041,008 shares of common stock of GAMT in exchange of 100% of the registered
and fully paid up capital of Bayshore Media Group. The closing date of this
exchange transaction was October 3, 2006.
As a result of the acquisition, the former shareholders of Bayshore Media Group
holds a majority interest (99%) in the combined entity ("the Company").
Generally accepted accounting principles require in certain circumstances that a
company whose stockholders retain the majority voting interest in the combined
business to be treated as the acquirer for financial reporting purposes.
Accordingly, the acquisition has been accounted for as a "reverse acquisition"
whereby Bayshore Media Group is deemed to have purchased GAMT. However, GAMT
remains the legal entity and the Registrant for Securities and Exchange
Commission reporting purposes. The historical financial statements prior to
October 3, 2006 are those of Bayshore Media Group. All shares and per share data
prior to the acquisition have been restated to reflect the stock issuance as a
recapitalization of Bayshore Media Group. After acquiring, the Company changed
its name to Global Entertainment Holdings/Equities, Inc.
Presentation of Interim Information: The accompanying consolidated financial
statements as of June 30, 2007 and for the three and six months ended June 30,
2007, and 2006 have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in consolidated financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. However,
the Company believes that the disclosures are adequate to make the information
presented not misleading. These consolidated financial statements should be read
in conjunction with the financial statements and the notes thereto included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2006.
The balance sheet as of December 31, 2006 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by U.S. GAAP for complete financial statements.
In the opinion of Management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows as of June 30, 2007 and for the three and
six months ended June 30, 2007, and 2006 have been made. The results of
operations for the six months ended June 30, 2007 are not necessarily indicative
of the operating results for the full year.
Principle of Consolidation and Presentation: The accompanying consolidated
financial statements include the accounts of Global Entertainment
Holdings/Equities, Inc. and its subsidiaries after elimination of all
intercompany accounts and transactions. Certain prior period balances have been
reclassified to conform to the current period presentation.
Use of estimates: The preparation of the accompanying consolidated financial
statements in conformity with accounting principles generally accepted in the
United States (U.S. GAAP) requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Net Loss Per Share Basic net loss per share includes no dilution and is computed
by dividing net loss available to common stockholders by the weighted average
number of common stock outstanding for the period. Diluted net loss per share
does not differ from basic net loss per share since the Company is lacking any
dilutive items.
5
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
New Accounting Pronouncements: In May 2007, the FASB issued FASB Staff Position
No. FIN 48-1 ("FSP 48-1"), Definition of Settlement in FASB Interpretation No.
48. FSP 48-1 amended FIN 48 to provide guidance on how an enterprise should
determine whether a tax position is effectively settled for the purpose of
recognizing previously unrecognized tax benefits. FSP 48-1 required application
upon the initial adoption of FIN 48. The adoption of FSP 48-1 did not affect the
Company's condensed consolidated financial statements.
In February 2007, the Financial Accounting Standards Board ("FASB') issued
Financial Accounting Standards ("FAS") No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities - Including an amendment of FASB
Statement No. 115, which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. FAS No.159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
In September 2006, the FASB issued FAS No. 157, Fair Value Measurements. FAS No.
157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. This statement addresses how to calculate fair value
measurements required or permitted under other accounting pronouncements.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of the statement will change current
practice. FAS No. 157 is effective for the Company beginning January 1, 2008.
The Company is currently evaluating the impact of this standard.
In September 2006, the Securities and Exchange Commission ("SEC") staff issued
Staff Accounting Bulletin No. 108 ("SAB 108"), Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements. The stated purpose of SAB 108 is to provide consistency between how
registrants quantify financial statement misstatements.
Prior to the issuance of SAB 108, there have been two widely-used methods, known
as the "roll-over" and "iron curtain" methods, of quantifying the effects of
financial statement misstatements. The roll-over method quantifies the amount by
which the current year income statement is misstated while the iron curtain
method quantifies the error as the cumulative amount by which the current year
balance sheet is misstated. Neither of these methods considers the impact of
misstatements on the financial statements as a whole.
SAB 108 established an approach that requires quantification of financial
statement misstatements based on the effects of the misstatement on each of the
Company's financial statements and the related financial statement disclosures.
This approach is referred to as the "dual approach" as it requires
quantification of errors under both the roll-over and iron curtain methods.
SAB 108 allows registrants to initially apply the dual approach by either
retroactively adjusting prior financial statements as if the dual approach had
always been used, or by recording the cumulative effect of initially applying
the dual approach as adjustments to the carrying values of assets and
liabilities as of January 1, 2006 with an offsetting adjustment recorded to the
opening balance of retained earnings.
The Company will initially apply SAB 108 using the cumulative effect transition
method in connection with the preparation of the annual financial statements for
the year ending December 31, 2006. The Company does not believe the adoption of
SAB 108 will have a significant effect on its consolidated financial statements.
6
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - GOING CONCERN
The Company has incurred substantial losses, and has no revenue. Those matters
raise substantial doubt about the Company's ability to continue as a going
concern. The Company's consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business. As a
result, the Company expects to continue to incur operating losses and may have
insufficient funds to grow its business in the future. The Company can give no
assurance that it will achieve profitability. As a result, operations in the
near future are expected to continue to use working capital.
The ability of the Company to continue as a going concern is dependent on
management's success of its future operations and successful capital infusion.
The management is actively marketing efforts to produce revenue. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
NOTE 3 - ACQUISITION
Pursuant to terms of a Stock Purchase Agreement dated September 18, 2006, GMAT
purchased all of the issued and outstanding shares of Bayshore Media Group in
consideration for the issuance of 195,041,008 shares of the GMAT's common stock
to the shareholder of Bayshore Media Group.
The acquisition is a reverse takeover transaction whereby Bayshore Media Group
is identified as the acquirer (accounting parent) of Global Entertainment
Holdings/Equities, Inc. The purchase price of Bayshore Media Group is assumed to
be equal to its book value and no goodwill is recorded on the transaction. The
amount ascribed to the shares issued to the shareholder of Bayshore Media Group
represents the net book value of Global Entertainment Holdings/Equities, Inc. at
date of closing October 3, 2006.
Details of the net assets acquired at book value at the acquisition dates are as
follows:
Net tangible assets $3,890,043
Less: Liabilities assumed 2,742,794
----------
$1,147,249
==========
Supplemental Information for Global Entertainment Holdings/Equities, Inc.:
Summary Balance Sheets
OCTOBER 3, 2006 DECEMBER 31, 2005
--------------- -----------------
Assets $ 3,890,042 $ 2,358,050
Liabilities (2,742,793) (1,478,794)
----------- -----------
Net Assets $ 1,147,249 $ 879,256
=========== ===========
Stockholders' Equity
Stockholders' Equity: OCTOBER 3, 2006 DECEMBER 31, 2005
--------------- -----------------
Preferred stock, 25,000,000 shares
authorized; none issued and outstanding $ -- $ --
Common stock, $0.001 par value; 500,000,000 shares authorized;
2,763,265 and 2,511,752 shares issued and outstanding 2,763 2,512
Additional paid-in capital 1,144,486 2,247,042
Accumulated deficit -- (1,370,298)
----------- -----------
Total stockholders' equity $ 1,147,249 $ 879,256
=========== ===========
7
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - ACQUISITION (CONTINUED)
Summary Statements of Operations
FOR THE PERIOD ENDED FOR THE YEAR ENDED
OCTOBER 3, 2006 DECEMBER 31, 2005
-------------------- ------------------
Revenue $ -- $ 4,235,977
Cost of sale and proprietary software write off 1,610,685
General and administrative expenses -- 1,826,486
Total Other income (expenses) (17,940) (85,985)
Income from discountinued operations, net of tax 2,384,378 --
----------- -----------
Net income $ 2,366,438 $ 712,821
=========== ===========
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows:
JUNE 30, DECEMBER 31,
2007 2006
----------- ------------
(UNAUDITED) (AUDITED)
Automobiles $ 147,823 $ 147,823
Computer equipment 65,791 65,791
Furniture and fixtures 95,145 95,145
Leasehold improvements 56,672 22,981
Purchased software 22,362 22,362
--------- ---------
387,793 354,102
Less accumulated depreciation (234,713) (231,989)
--------- ---------
Property and Equipment, net $ 153,080 $ 122,113
========= =========
NOTE 5 - ACCRUED LIABILITIES
Accrued expenses consist of:
JUNE 30, DECEMBER 31,
2007 2006
----------- ------------
(UNAUDITED) (AUDITED)
Officer compensation $1,346,250 $ 925,000
Employee compensation 310,000 --
Accrued interest 25,646 18,324
Credit card liability 70,141 74,915
Other accrued expenses 6,752 50,953
---------- ----------
Property and Equipment, net $1,758,789 $1,069,192
========== ==========
8
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - LONG-TERM DEBT
Long-term debt consists of the following:
JUNE 30, DECEMBER 31,
2007 2006
----------- ------------
(UNAUDITED) (AUDITED)
Note payable to a bank for two automobiles,
due in monthly installments of $1,378 and
$1,450 including interest at 8.25% and 8.50%,
respectively. Secured by two automobiles $ 76,204 $ 89,644
Less: current portion (56,358) (56,358)
-------- --------
Long-term debt $ 19,846 $ 33,286
======== ========
NOTE 7 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net loss per
share:
FOR THREE MONTHS ENDED FOR SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------------- -----------------------------------
NUMERATOR: 2007 2006 2007 2006
------------- ------------- ------------- -------------
Net Loss $ (812,176) $ (507) $ (1,405,335) $ (1,498)
------------- ------------- ------------- -------------
Denominator:
Weighted Average of Common Shares 197,804,273 95,225,000 197,804,273 95,225,000
------------- ------------- ------------- -------------
Basic and Diluted Net Loss per Share NIL NIL $ (0.01) NIL
============= ============= ============= =============
NOTE 8 - RELATED PARTIES TRANSACTIONS
The Company had a note payable to a related party in the amounts of $490,376 and
$190,808 as of June 30, 2007 and December 31, 2006, respectively. The note bears
interest at 7.5% per annum, is unsecured and due on demand. The accrued interest
related to note payable was $25,646 and $18,324 as of June 30, 2007 and December
31, 2006, respectively.
NOTE 9 - SEGMENT INFORMATION
The Company is currently managed and operated as one business. The entire
business is managed by a single management team that reports to the Company's
President. The Company does not operate separate lines of business or separate
business entities with respect to any of its product candidates. Accordingly,
the Company does not prepare discrete financial information with respect to
separate product areas or by location and dose not have separately reportable
segments as defined by SFAS No. 131 "Disclosures about Segments of an
CityplaceEnterprise and Related Information".
9
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - GUARANTEES
The Company from time to time enters into certain types of contracts that
contingently require the Company to indemnify parties against third-party
claims. These contracts primarily relate to: (i) divestiture agreements, under
which the Company may provide customary indemnifications to purchasers of the
Company's businesses or assets; and (ii) certain agreements with the Company's
officers, directors and employees, under which the Company may be required to
indemnify such persons for liabilities arising our of their employment
relationship.
The terms of such obligations vary. Generally, a maximum obligation is not
explicitly stated. Because the obligated amounts of these types of agreements
often are not explicitly stated, the overall maximum amount of the obligation
cannot be reasonably estimated. Historically, the Company has not been obligated
to make significant payments for these obligations, and no liabilities have been
recorded for these obligations on its consolidated balance sheets as of June 30,
2007 and December 31, 2006.
NOTE 11 - LEGAL PROCEEDINGS
On November 11, 2006, Bryan Abboud caused a complaint to be filed in the circuit
court of the eleventh judicial circuit in and for CityplaceMiami-Dade County,
StateFlorida against Bayshore Media Group, Jacob Dadon, CEO and David Dadon,
Chairman, alleging breach of contract, rescission, fraudulent inducement,
conversion, civil theft, and civil conspiracy. Mr. Abboud seeks a declaratory
judgment, a constructive trust, an accounting, and a temporary injunction. As of
June 30, 2007, this matter remains in motion.
On March 12, 2007, the Company filed a lawsuit in the State of Florida against
Bryan Abboud, Clinton H. Snyder former officers, Corporate Stock Transfer, Inc.,
former stock transfer agent, Merrill Lynch, Inc., Northern Trust Bank, Alvin F.
Lindsey, Esq., and Hogan & Hartson, LLP alleging securities fraud under federal
securities laws and civil theft, breach of fiduciary duty, intentional
interference with advantageous business relationships, replevin, conversion,
conspiracy, and negligent representation under Florida state law. The Company
seeks damages and equitable relief. The lawsuit was withdrawn on May 1, 2007.
On dateYear2007Day26Month2February 26, 2007, the Teachers Insurance and Annuity
Association of America caused a complaint to be filed in the county court in and
for CityMiami-Dade County, StateFlorida against the Company for an action for
possession of non-residential property pursuant to applicable StateplaceFlorida
law. The court entered final judgment on dateYear2007Day9Month3March 9, 2007,
restoring possession of the premises to the Plaintiff. The Plaintiff then
initiated a second action against the Company on April 9, 2007 seeking monetary
damages in connection with the breach of the lease in the approximate amount of
$145,017.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
We were incorporated in 1997 as a Colorado Corporation under the name Masadi
Resources, Inc. In 1998 we changed our name to Global Entertainment
Holdings/Equities, Inc.
Prior to October 2006 we were involved in a variety of businesses, including
providing software for digital entertainment and online gaming companies.
In October 2006, we acquired all of the outstanding common stock of Bayshore
Media Group in exchange for 195,041,008 shares of our common stock. Bayshore was
incorporated in Nevada on November 22, 2004 and since its formation has been
engaged in the distribution of motion pictures.
Since the acquisition of Bayshore our business is now that of Bayshore's and all
references to us, unless otherwise indicated, include the operations of
Bayshore.
We plan to be an independent distributor of motion pictures. Our film library
consists of 14 films which encompass a diverse range of interest covering
several genres: action, comedy, drama, horror and romance.
A number of the films have established actors, which we believe will generate
more lucrative distribution agreements. In the short term, our primary focus
will be on executing distribution agreements for these films. Independently
produced films typically have a combination of distribution deals throughout the
life of the project. Negotiations for these deals are usually facilitated
through a combination of foreign sales agents and domestic producers'
representatives. Licensing arrangements in various territories may be entered
into with major studios, mini-major studios or independents, or a combination of
all three.
The marketing and promotion of films is an expensive endeavor (the cost of
marketing and promotion alone for a film requires a minimum of $2 million in the
United States), often requiring sources of external financing. In the event we
do not raise the capital which we need we will not be able to market and promote
our films.
Although we have owned our motion pictures for over two and a half years we have
never generated any revenue from the distribution of our films. We do not know
if or when we will ever earn revenue from the distribution or sale of our films.
We have incurred substantial losses, have an accumulated deficit and need
additional working capital. These matters raise substantial doubt about our
ability to continue as a going concern. Our management is attempting to develop
sales to cover expenses and obtain an infusion of capital from private
investors. Our ability to continue as a going concern is dependent upon raising
additional capital.
Although short-term loans from management may be sufficient to fund our
short-term capital needs we will need to sell equity or debt securities, obtain
credit from third parties, or sell or distribute our films to meet our
longer-term capital requirements. There is no assurance that we will be able to
obtain additional capital in amounts or on acceptable terms, if at all or on a
timely basis.
11
We recently filed a registration statement on Form S-8 which allows our
directors, without shareholder approval, to issue up to 35,000,000 shares of
common stock upon the exercise of options, and to issue up to 100,000,000 shares
for payment of salaries or consulting fees. On July 20, 2007 our directors
authorized the issuance of 28,300,000 shares of our common stock to twenty-seven
persons in payment of salaries and consulting fees. Jacob and David Dadon, both
officers and directors of the Company, and Lydia Dadon, a former officer and
director of the Company, were each issued 3,000,000 of these shares. All of
these shares were registered by means of the S-8 registration statement and may
be sold in the public market.
Future sales of our common stock, registered by means of the S-8
registration statement or otherwise, in the public market, or the perception
that such sales could occur, could put downward selling pressure on our shares,
and adversely affect the market price of our common stock.
ITEM 3. CONTROLS AND PROCEDURES
Jacob Dadon, our President and Chief Executive Officer and David Dadon, our
Chief Financial Officer, have evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report and
in their opinion, our disclosure controls and procedures ensure that material
information relating to Global is made known to them by others within those
entities, particularly during the period in which this report is being prepared,
so as to allow timely decisions regarding required disclosure. To the knowledge
of Jacob Dadon and David Dadon there has not been any change in our internal
controls over financial reporting during the quarter ended June 30, 2007 that
has materially affected, or is reasonably likely to materially affect, our
controls.
12
PART III
ITEM 6. EXHIBITS
Number Title
------ -----
31.1 Rule 13a-14(a) Certifications
31.2 Rule 13a-14(a) Certifications
32 Section 1350 Certifications
13
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GLOBAL ENTERTAINMENT HOLDINGS /
EQUITIES, INC.
August 20, 2007 /s/ Jacob Dadon
----------------------------------------
Jacob Dadon
President, Chief Executive Officer
/s/ David Dadon
----------------------------------------
David Dadon
Principal Financial and Accounting Officer
14