UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-KSB

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

For the fiscal year ended:December 31, 2007

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

For the transition period from: _____________ to _____________

Global Entertainment Holdings, Inc. (f/k/a LitFunding Corp.)

(Name of small business issuer in its charter)

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|                             |              |                    
|---------------------------- | ------------ | -------------------
|Delaware                     | 000-49679    | 93-1221399         
|(State or Other Jurisdiction | (Commission  | (I.R.S. Employer   
|of Incorporation)            | File Number) | Identification No.)

1516 E. Tropicana Ave., Suite 245 Las Vegas, Nevada  89119

(Address of Principal Executive Office) (Zip Code)

(702) 333-0440

(Registrants telephone number, including area code)

N/A

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



Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value

(Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.   ̈

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  ̈

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will 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-KSB or any amendment to this Form 10-KSB.   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ̈ No x

The issuer’s revenues for its most recent fiscal year ended December 31, 2007- $216,089.

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and ask price as of March 31, 2008, was approximately $325,750 based on a share value of $0.09.

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.  Yes x   No  ̈

The number of shares of Common Stock, $0.001 par value, outstanding on March 31, 2008, was 9,429,511.

Transitional Small Business Disclosure Format (check one):  Yes  ̈ No x













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GLOBAL ENTERTAINMENT HOLDINGS, INC.

For the Fiscal Year Ended

December 31, 2007



Index to Report

on Form 10-KSB



|         |                                                                                                                      |      | 
|-------- | -------------------------------------------------------------------------------------------------------------------- | ---- | 
|PART I   |                                                                                                                      | Page
|         |                                                                                                                      |     
|Item 1.  | Description of Business                                                                                              | 2   
|Item 2.  | Description of Property                                                                                              | 10  
|Item 3.  | Legal Proceedings                                                                                                    | 10  
|Item 4.  | Submission of Matters to a Vote of Security Holders                                                                  | 10  
|         |                                                                                                                      |     
|PART II  |                                                                                                                      |     
|         |                                                                                                                      |     
|Item 5.  | Market for Common Equity and Related Stockholder Matters                                                             | 11  
|Item 6.  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                | 12  
|Item 7.  | Financial Statements                                                                                                 | 18  
|Item 8.  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                                 | 18  
|Item 8A. | Controls and Procedures                                                                                              | 19  
|Item 8B. | Other Information                                                                                                    | 19  
|         |                                                                                                                      |     
|PART III |                                                                                                                      |     
|         |                                                                                                                      |     
|Item 9.  | Directors and Executive Officers, Promoters, and Control Persons; Compliance with Section 16(a) of the Exchange Act. | 20  
|Item 10. | Executive Compensation                                                                                               | 24  
|Item 11. | Security Ownership of Certain Beneficial Owners and Management                                                       | 27  
|Item 12. | Certain Relationships and Related Transactions                                                                       | 28  
|Item 13. | Exhibits                                                                                                             | 28  
|Item 14  | Principal Accountant Fees and Services                                                                               | 30  









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FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words may, could, estimate, intend, continue, believe, expect or anticipate or other similar words.  These forward-looking statements present our estimates and assumptions only as of the date of this report.  Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements.  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.  The factors impacting these risks and uncertainties include, but are not limited to:

·

increased competitive pressures from existing competitors and new entrants;

·

increases in interest rates or our cost of borrowing or a default under any material debt agreements;

·

deterioration in general or regional economic conditions;

·

adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

·

loss of customers or sales weakness;

·

inability to achieve future sales levels or other operating results;

·

the unavailability of funds for capital expenditures and/or general working capital; and

·

operational inefficiencies in distribution or other systems.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Factors That May Affect Our Plan of Operation in this document.

Throughout this Annual Report references to we, our, us, Global Entertainment, the Company, and similar terms refer to Global Entertainment Holdings Corp.



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PART I



ITEM 1.

DESCRIPTION OF BUSINESS

(a)

General Business Development

In December of 2007, the Company effected a one-for-ten reverse split of the outstanding common stock and changed the Company name to Global Entertainment Holdings, Inc. (GBHL), to better reflect the new direction of the Company from LitFunding Corp. The Company intends to conduct business through Global Universal Film Group, Inc., a wholly-owned subsidiary. Another subsidiary, Easy Money Express, is currently not active and has no operations.

LitFunding Corp. was incorporated in the State of Nevada on July 11, 1996 as RP Entertainment, Inc. and changed its name to LitFunding Corp. in February 2003, as the result of a reverse merger with California LitFunding, a private company. On March 22, 2004, LitFunding USA was formed to serve as the operating entity and carry on the business previously conducted through California LitFunding.

Prior to December, 2007, the Company was in the business of investing in litigation recoveries and pursuing other profitable financial business models. The Company raised and advanced capital to various law firms pursuant to Settlement Agreements.  These Settlement Agreements provide that the funds advanced were to be repaid to the Company, plus a fee, when the lawsuits referenced in the agreement ultimately settle. The amount of the fee payable on the funds advanced depended upon the length of time the funds were outstanding up to a fixed limit.  Pursuant to the terms of the Settlement Agreements, the contractual right to payment was limited to the funds ultimately paid to the law firm from the specified lawsuit, or lawsuits, in which the funds were invested.  This business was conducted through the wholly-owned subsidiary, LitFunding USA and its six, wholly-owned limited liability companies. LitFunding USA resumed the business of California LitFunding (our subsidiary which the Company acquired by reverse merger in February 2003 that had operated the business since 2000) subsequent to June 17, 2004, after the United States Bankruptcy Court entered an order confirming the Company and California LitFundings joint plans of reorganization.

In the first quarter of 2006, the Company acquired two wholly-owned subsidiaries, Easy Money Express, a recently formed entity that planned to develop an internet-based, loan company, and Global Universal Film Group, Inc. (Global Universal), an early stage developer, producer and distributor of niche films, related books, and music rights. Both of these entities are at a nascent stage in their development and have not yet produced revenues.

The former management of the Company had planned to develop Easy Money Express as its core business, and to spin-off Global Universal as a separately traded, public corporation, for which the Company would have earned a $200,000 management fee and retained 10% of the shares of Global Universal upon completing the spin-off transaction. However, none of these plans came to fruition.

In March 2007, the Company entered into an agreement with Rochester Capital Partners, LP. (RCP), a limited partnership controlled by Gary Rasmussen (our current CEO) as its General Partner, whereby the Company issued forty million (40,000,000) shares of treasury stock for consideration of $250,000. In addition, RCP purchased eleven million (11,000,000) shares directly from Morton Reed, our former Chief Executive Officer, at a price of $65,000. This Transaction was unanimously approved by the Board of Directors at a meeting held on February 22, 2007.  Further information on this transaction is available in the Company report on Form 8-K, filed with the SEC on March 7, 2008.

On August 31, 2007, Morton Reed,  CEO, President and Chairman of the Board resigned for health reasons. He was replaced by Gary Rasmussen, who is taking an active role in restructuring the Company and developing the core business conducted through Global Universal.

For the years ended December 31, 2007 and December 31, 2006, the Company incurred net losses before extraordinary gain, of $99,034 and $1,027,947, respectively.  The Company accumulated deficit at the end of December 31, 2007 was $11,324,300.

(b)

Our Primary Business

Global Entertainment Holdings, through its wholly owned subsidiary Global Universal, plans to develop the business of producing low-budget genre pictures with recognizable, name talent.  Global Universal management believes investment risk can be significantly reduced by utilizing Canadian and other major countries Government tax incentives to cover up to 50% of each films budget. Additional coverage of 20% to 25% of a films budget can be derived from pre-selling either foreign or U.S. rights to the film.  The remaining balance (25% to 30%) will be obtained from private investment of debt, equity or combination of both.  Management intends to retain revenues generated from one or more



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territories of each film to provide cash flow for operating expenses to assure long-term profitability for the Company and its shareholders.

OVERVIEW

Global Universal is in negotiations with an international film distribution company to produce and distribute a proprietary slate of 6 to 8 feature-length films. Under the proposed agreement with the distribution company, the Company will provide 100% of the budget required to produce each film. The distribution company will charge a fee of 7.5% for foreign distribution, and 10% for U.S. distribution.  The distribution company will try to utilize a pre-arranged output deal with a major studio to affect a U.S. theatrical release, if the film warrants such investment.

Because of the financing incentives noted previously, profitability can be realized even for a direct-to-video release, followed by pay, cable, satellite, free and syndicated television exhibition.  The Company is confident that at least two of the films will warrant and receive a theatrical release prior to their video distribution.  There is, of course, no guarantee of a theatrical release for any film that may be produced by the Company, although the distribution company will use best efforts to obtain U.S. theatrical release through an out put and first look arrangement with a major film studio.

Should a major studio distribute one or more of the Global Universal films in the U.S., the distribution company will allocate their 10% fee out of the major studio distribution fee.

In addition, Global Universal has been offered a development project from the Canadian distribution company, and its Executive Producers, Image In Media, to produce a film titled UNWOUND, tentatively starring Heather Graham.  Image In Media has a production agreement, or an output deal, with Starz Media, and Regent Releasing.  Image In Media has offered Global Universal an opportunity to participate in the production of up to three additional films for Starz Media, contingent upon cast and budget, in addition to the film project, UNWOUND.

Starz Media, LLC., is owned by Liberty Media, which also owns Starz Entertainment, LLC. Starz is a premium movie service provider that offers 16 movie channels, including the Starz® and Encore® brands, with approximately 16.3 million and 30.7 million subscribers, respectively.

The first four films planned for production, either through the distribution company or Image In Medias output deal with Starz and Regent Releasing, will be co-production treaty films, meaning the film is produced with government incentives from Canada and one or more additional countries such as France or the U.K.  For example, a Canadian-France or Canadian-U.K. co-production would entail both Canada, France or the U.K. investing Government monies or tax incentives totaling approximately 50% plus of each films budget.  For making this investment, Canada, France or the U.K. would retain ownership rights to the film in their respective countries; however, they never participate in revenues via any sales in the rest of the world, including the U.S.  The contracts issued from each Country are endorsed by the Government and fully bankable. Therefore, Global Universal has the option of discounting the contract at the bank and utilizing each sale for production funds, or hold onto the contract to be paid 100% of the 50% of the budget at the completion of each film.  With 50% plus of the budget expenses underwritten by such incentives, the producer and investor are more likely to realize a profit.

The genre of the initial film will likely be a thriller. However, Global Universal will subsequently produce specialty pictures if estimated sales or pre-sales are high enough to prove that the specialty piece can obtain its entire budget back via the Foreign Distribution Market.

A specialty picture currently in joint pre-production with Global Universal and Image In Media, is titled FRAIL. Academy Award nominee Tom Wilkinson (Michael Clayton and The Full Monty) has expressed an interest. The British international distribution company, Velvet Octopus, has provided estimated foreign sales for FRAIL, ranging from $6 million to a minimum of $3 million (U.S.).  Using these estimated sales, combined with the Canadian and U.K. Government Tax incentives, it is likely that FRAIL will be in profit before the film is completed.

Global Universals per film budget will average between $3 million (if no advertising and delivery items are included) and $5 million (U.S.), with approximately 50% of each budget underwritten by the respective countrys investment (e.g., Canada, U.K, France, Germany, Ireland, etc.). All financing fees, marketing and advertising costs, completion bond fees and a contingency reserve will be included in the average film budget.

On a straight to video release, Global Universal estimates that the net bottom-line from worldwide television will be $700,000 to $2 million, which is substantial since $2.5 million of each films budget will be recouped through the respective countrys investment. The Companys investment in each film will be structured to provide strong downside



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risk protection while simultaneously offering an uncapped upside potential, either thru video releases that over perform or through theatrically released titles.

Recent examples of such pictures utilizing these incentives include CABIN FEVER, HOSTEL, SAW, OPEN WATER, WRONG TURN, and SWIMFAN. (Lions Gate released the first 4 films; Twentieth Century Fox released the last 2 films).

FINANCING STRATEGY

In the opportunity Global Universal is currently negotiating with the foreign distribution company, Global Universal will endeavor to form a strategic alliance with a financial partner that will provide a credit facility of up to $20 million. These funds will be released as needed to produce up to four films, with sales and distribution of each film agreed to in advance by the foreign distribution company.

The proposed financial structure:

·

First, the distribution company will recoup sales fees of 7-1⁄2% for foreign distribution and 10% for U.S. distribution.  All marketing fees and expenses have been incorporated into the budget of each film.

·

Second, our financial partner will receive 140% of the amount of their investment.

·

Third, Global Universal will retain 50% of the sales receipts.

·

Fourth, all remaining net profits are divided equally between Global Universal and any financial partner.

·

Global Universals overhead and production costs are recovered from a production fee included in the budget of each film.

·

At the end of the license term, all film rights revert to Global Universal.

Our Agreement with Image In Media:

In the distribution/production partnership recently negotiated between Image In Media and Global Universal, the Company has structured a bankable finance strategy to fund the production of films with budgets of $3 million and under using a long term Letter of Credit. The financing mechanism incorporates the foreign government tax incentive certificates, foreign sales estimates while using a letter of credit as collateral to handle any shortfalls that occur during production.

LOW BUDGET GENRE PRODUCTION & DISTRIBUTION

Genre pictures allow for production at low budget levels for two basic reasons. First, these types of pictures are sold and marketed on the basis of concept rather than cast. Costs associated with named stars are not required. Second, these genres allow for inexpensive settings, shorter filming schedules with less expensive casts in more controlled environments, significantly lowering production costs.



Since consumers of this genre are a well-defined and accessible group (specifically, men and women under 25 years old), marketing costs are reduced by concentrating advertising and publicity efforts on a definable demographic.



These film productions will utilize completion bonds. The bonds are a form of insurance against unanticipated and unapproved cost overruns, as well as unforeseen events such as illness, natural disasters, etc. This insurance will protect our investors against over-budget costs.



Most major video distribution companies have unused capacity and a desire to distribute third party films to add to their own internally produced product. Third party product can often be distributed less expensively since it does not have to incorporate a studios overhead or involve using studio facilities. Such product also requires less studio management oversight during production. The worldwide home video market, plus cable television continues to show strong performance, particularly in Global Universals targeted genres, which include edgy thrillers and specialty pictures.



Global Universal already owns the rights in house to all four of the screenplays that it intends to produce as films. The Company is able to by-pass the script optioning process. Development of screenplays can be a costly and time-consuming process.  Such proprietary ownership significantly reduces development costs and the time necessary to move from development to production.



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The first four films Global Universal will produce will eventually become part of the Global Universal film library. A film library, over time, will build asset value for our publicly traded Company.  Following the license term of each picture (7 years for direct-to-video releases and 20 years for theatrical releases), the film distribution rights and eventual ownership will become part of Global Universals assets. Therefore, the Company can build a significant film library that may be re-licensed on either an ad-hoc or packaged basis, or sold to a 3rd party. Film libraries are typically valued by estimating future revenues from future sale cycles and then calculating a net present valuation. Pay, free and syndication broadcasters are continually re-licensing titles. Future revenues will also be derived from new sources such as cell phones, iPods, video on demand, Internet broadcasts etc.



MOTION PICTURE INDUSTRY OVERVIEW

Background

The motion picture industry consists of two principal activities: production, which involves the development and production of motion pictures; and distribution, which involves the promotion and exploitation of feature-length motion pictures in a variety of media, including theatrical exhibition, home video, television and other ancillary markets, including airlines, cruise ships and new technology platforms such as video-on-demand, both in the U.S. and internationally.

Motion Picture Production

The production of motion pictures occur in four distinct stages prior to initial release: development, pre-production, principal photography and post-production. The creation of a motion picture begins with the development of an original screenplay by a writer, the screenplay adaptation of a novel, other literary or dramatic work. Once the screenplay material is identified, the production process begins.

The development stage includes acquiring the material in question, writing the screenplay and obtaining commitments from key talent such as the director, principal cast members and other creative personnel.

The pre-production stage includes securing the necessary production facilities and personnel, finalizing the motion picture budget and production schedule, selecting filming locations and the building, if necessary, of required sets. The production stage essentially is the period of principal photography.

The post-production stage includes the picture editing, the creation of special visual and optical effects, if necessary, the composition and recording of the musical score, the sound editing, and synchronization of dialogue, sound effects, the musical score and the final cut of the picture. The final cut then results in the production of a negative from which release prints and/or a video master are created.

Motion Picture Distribution

The distribution of a motion picture involves the licensing of the motion picture for exploitation in various markets both domestically and internationally. Timing patterns of distribution, commonly referred to as windows, are calculated to ensure that a film is released during what are believed to be optimal market conditions.

Distribution of a motion picture involves commercial exploitation in the U.S. and international markets including theatrical exhibition, home video distribution (DVDs, videocassettes, etc.), television exhibition (including pay-per-view, pay, network, syndication and basic cable), merchandising and other ancillary rights in the motion picture (such as books, soundtracks, and video games) and non-theatrical exhibition (such as airlines, cruise ships, hotels and armed forces facilities).

Films may be released initially into the theatrical exhibition market or, as has become more prominent recently, initially into the video distribution market. Following these releases, films are then released into the pay television market, and then followed by the free television market (CBS, NBC, ABC, FOX etc.).

The initial theatrical, home video, pay-per-view, pay television, and free television, including network, syndication and basic cable, comprise what is typically referred to as the first distribution cycle.  While a substantial portion of a motion pictures total revenues are generated during the first cycle, significant revenues can be generating in succeeding cycles. For example, re-pricing and re-packaging of video releases and re-licensing of television exhibitions.  Some motion pictures may generate revenues from the creation of derivative works such as remakes, sequels, and spin-offs.



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Theatrical Exhibition Market

The theatrical exhibition of motion pictures entails the promotion and release of the film in theatres. The theatrical distribution of a motion picture, both in the U.S. and internationally, involves the licensing and booking of the film to theatrical exhibitors (movie theatres), the advertising and publicity campaigns to support the release and the manufacture of release prints from the film negative. The distributor and the exhibitor typically enter into an agreement to determine the payment arrangements from the box-office to the distributor, generally as a percentage of gross box office receipts. This percentage is referred to as the rental rate, which is typically within the range of 35% to 60%. These rental rates vary among countries.

Releasing costs include advertising campaigns, trailers, publicity campaigns, print advertising, and other forms of promotional media, including the Internet.

Home Video Distribution

The films distributor sells, in most cases, DVDs and cassettes to local, regional and national video wholesalers and retailers, which then sell and/or rent these DVDs and cassettes to consumers. There remain some revenue sharing agreements, though this business has been declining, whereby the wholesaler or retailer purchases the DVDs and cassettes at reduced prices in return for which the distributor shares in the rental income. Certain mass merchants, including Wal-Mart and Target, occupy a significant and important retail position in the DVD and cassette sale market.

Television Distribution

Television rights to motion pictures are generally licensed first to pay-per-view television following initial video release, then to pay television, and thereafter to free television such as network, syndication and basic cable for an exhibition period, and then, in many cases, back to pay television again. In addition, many films are licensed for subsequent cycles of pay and free television exhibitions.

Pay-per-view allows subscribers to pay for individual programs. Pay television allows cable and satellite subscribers to view such services as HBO, Showtime, Starz/Encore, Canal+, BSkyB, Premiere, JSB and other services for a monthly subscription fee.

Basic cable networks and local broadcast stations may purchase exhibition rights for a specified number of telecasts over a specific license period.

Non-Theatrical And Ancillary Rights Distribution

Motion pictures may be licensed for non-theatrical use by outlets such as airlines, ships, oilrigs, schools, public libraries and government groups such as the armed forces.

We anticipate incurring operating losses over the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving technology markets. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, implement and successfully execute our business and marketing strategy, continue to develop and upgrade technology and products, respond to competitive developments, and continue to attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

(c)

Other Business

LitFunding USA, Inc.

LitFunding USA is a wholly-owned subsidiary of Global Entertainment Holdings, and is engaged in the business of investing in litigation recoveries.

Through LitFunding USA, we provide funding to qualifying plaintiffs and plaintiffs attorneys for the payment of costs and expenses of litigation, principally in the areas of personal injury, medical malpractice, product liability, toxic torts and employment. These costs generally include costs such as court filing fees, expert witnesses, private investigators (i.e. if the litigant is injured or otherwise incapacitated and unable to work) and other expenses of a law office in filing



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and maintaining a civil lawsuit. We generated revenues by raising capital and advancing this capital to various law firms pursuant to Settlement Agreements. These Settlement Agreements provide that the funds advanced were to be repaid to us, plus a fee, when the lawsuits referenced in the agreement ultimately settle. The amount of the fee payable on the funds advanced depended upon the length of the time the funds were outstanding, up to a fixed limit.  Pursuant to the terms of the Settlement Agreements, our contractual right to payment was limited to the funds ultimately paid to the law firm from the specified lawsuit, or lawsuits, in which the funds were invested.

Throughout our fiscal year 2007, we had contracts with attorney clients located in California (with an emphasis in Los Angeles, Orange, Ventura and San Diego counties), Georgia, Illinois, Minnesota, Mississippi, New York and South Carolina. Our internal guidelines limit non-recourse investment in any given case can be no more than 7% of what our retained legal experts estimate to be the value of the case to us.  In exchange for our financial support, we receive a contingent contractual interest secured by a security interest in the monetary settlement or judgment in the lawsuit.  If a case is lost or abandoned, we receive nothing in exchange for our investment.  We are not a law firm and take no role in the filing or handling of the litigation.  However, if the case is settled or a judgment is obtained against the defendant, we are paid according to the formula in the contract.  Generally, we receive a return of our investment, plus a 45% fixed fee, due upon return on the funds we provided, for each 90-day period that the principal is outstanding.  This return is sometimes capped, depending upon the circumstances involved in the underlying litigation.  Excluding cases that are lost and do not pay any return, our statistics show that we receive a return of our investments and fees on cases we invest within an average of 12 to 36 months from the date of our investment.  Most of our current, remaining portfolio consists of cases that are more than 36 months from the date of advance.

During the fiscal year ending December 31, 2007, we had no new cases or lending activity associated with this business entity, and had an aggregate investment of $354,000 in cash advances on approximately 22 cases. During 2007, we collected $74,500 in principle and fees, lost $30,000 of principle, and have an ongoing interest in open and unresolved cases whose advances and fees total approximately $1,545,433.

In March of 2008, our Board of Directors elected to divest its interest in LitFunding USA in exchange for an ongoing interest in the revenues generated from collection of the amounts advanced to attorneys. This decision to sell LitFunding USA was primarily a result of the Companys change in focus to the motion picture production industry, as well as our efforts to reorganize the Company and reduce liabilities. On March 31, 2008, the Company sold its interest in LitFunding USA to a private company, Iscom, Inc., in a transaction that will divest the Company of its former core operating business assets and associated liabilities. Further information on this transaction is available in our report on Form 8-K, filed with the SEC on April 8, 2008.

Easy Money Express, Inc.

In March, 2006, we acquired 100% of the issued and outstanding shares of the common stock of Easy Money Express, Inc., a Nevada Corporation from its two stockholders. Easy Money continues as a wholly-owned subsidiary of the Company.  There has been no activity nor have operations taken place since its acquisition.

(d)

Risk Factors

Risk Factors That May Affect Our Results of Operation

We have a limited operating history and lack of profitability.

We still have limited operating history having begun business in the year 2000.  During that time, we have incurred losses in every quarter since inception except for the extraordinary gain realized in December 2004 and we remain subject to the risks and uncertainties usually encountered by early stage companies. Our new focus on Motion Picture production will change the way which we will reach profitability.

We will require additional funds to achieve our current business strategy of producing films and our inability to obtain additional financing could cause us to cease our business operations.

We will need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy with respect to the production of feature-length films. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our capital requirements to implement our business strategy will be significant. However, at this time, we can not determine the amount of additional funding necessary to implement such plan. We intend to assess such amount at the time we will implement our business plan. Furthermore, we intend to effect future acquisitions with cash and the issuance of debt and equity securities. The cost of anticipated acquisitions may require us to seek additional financing. We anticipate requiring additional funds in order to



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fully implement our business plan to significantly expand our operations. We may not be able to obtain financing if and when it is needed on terms we deem acceptable. Our inability to obtain financing would have a material negative effect on our ability to implement our acquisition strategy, and as a result, could require us to diminish or suspend our acquisition strategy.

If we are unable to obtain financing on reasonable terms, we could be forced to delay, scale back or eliminate certain film projects. In addition, such inability to obtain financing on reasonable terms could have a material negative effect on our business, operating results, or financial condition to such extent that we are forced to restructure, file for bankruptcy, sell assets or cease operations, any of which could put an investment in our Company at significant risk.

Our business of funding plaintiffs and plaintiff attorneys may be in potential conflict with Champerty Laws.

Champerty, as defined by Blacks Law Dictionary, is a bargain to divide the proceeds of litigation between the owner of the liquidated claim and a party supporting or enforcing the litigation.  Different states impose rules on the champerty process.  We research state champerty laws prior to advancing capital to plaintiffs and plaintiff attorneys, however, if we were to be found in violation of states Champerty laws it could have a material adverse effect on us and our results of operations.

Our cash flow from the financing of litigation depends on a lengthy collection cycle and factors beyond our control that may require us to obtain interim financing.

Our procedures and underwriting process have been changed in past years to try and lessen our risk and to shorten our collection cycle with respect to our business of financing litigation recoveries. Nevertheless, our collection cycle on advances made will remain lengthy compared to other similar industries.  We believe that cases we advance funds to attorneys on may take between 18 months and 36 months to reach resolution.  Larger cases may take longer to reach resolution.  Once we advance the money, the collection cycle is out of our control and this may force us to seek other sources of capital to fund our overhead expenses.  There can be no assurance that in such an event we could find such financing or that, if we could, the financing would be available on satisfactory terms. Additionally, our film production business is not likely to produce any significant cash flow until completion of our first film.  Although there can be no guarantee that we will ever complete any of our intended films, we anticipate completion of our first film in the fourth quarter of 2008.

We have historically had losses from operations and losses may continue in the future, which may cause us to curtail operations.

Since our inception we have not been profitable and have lost money on both a cash and non-cash basis.  For the year ended December 31, 2007, we incurred net losses of $99,034 Our accumulated deficit at the end of December 31, 2007 was $11,324,300. Future losses are likely to occur, as we are dependent on spending money to pay for our operations. No assurances can be given that we will be successful in reaching or maintaining profitable operations.  Accordingly, we may experience liquidity and cash flow problems.  If our losses continue, our ability to operate may be severely impacted or alternatively we may be forced to terminate our operations.

We could fail to attract or retain key personnel, which could be detrimental to our operations.

Our success largely depends on the efforts and abilities of our Officers and Directors. The loss of their services at this point in our development could materially harm our business because of the cost and time necessary to find successors. Additionally, we are dependant upon the services of the officers of our subsidiary, Global Universal Film Group.  We do not have other key employees who could manage Global Universals film operations. Such a loss would also divert management attention away from operational issues. To the extent that we are smaller than our competitors and have fewer resources, we may not be able to attract a sufficient number and quality of personnel, when required.

Because our common stock is deemed a low-priced Penny stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a substantial and liquid market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

·

Deliver to the customer, and obtain a written receipt for, a disclosure document;



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·

Disclose certain price information about the stock;

·

Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

·

Send monthly statements to customers with market and price information about the penny stock; and

·

In some circumstances, approve the purchasers account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

It is likely that additional shares of our stock will be issued in the normal course of our business development, which will result in a dilutive effect on our existing shareholders

We will issue additional stock as required to raise additional working capital in order to undertake Company acquisitions, recruit and retain an effective management team, compensate our officers and directors, engage industry consultants and for other business development activities.

If we acquire, invest in, or make alliances with other businesses we face risks inherent in such transactions

We cannot make assurances that alliances or ventures will be consummated in a timely manner.  That they will be structured or financed in a way that will enhance our credit worthiness.  That they will meet our objectives or be successful.  Failure to meet such objectives could have a negative effect on revenues.

Shareholders controlled by current management own a controlling interest in the Companys voting stock and investors may not have any voice in the management of the Company.

In connection with the acquisition of our stock by Rochester Capital Partners (RCP), RCP holds over 51% of our outstanding shares of common stock, plus an additional, estimated 6% that may be acquired by conversion of our Series B preferred stock. Gary Rasmussen, our CEO, is the General Partner of RCP and exercises sole voting control over its shares. In addition, Mr. Rasmussen and Ms. Giroux, as holders of our Series B preferred stock, have the right to acquire an estimated 30% of our common stock upon conversion of their Series B preferred stock  Thus, these stockholders, acting together, will have the absolute ability to control substantially all matters submitted to our stockholders for approval, including:

·

election of our board of directors;

·

removal of any of our directors;

·

amendment of our certificate of incorporation or bylaws; and

·

adoption of measures that could delay or prevent a change in control or impede a merger, takeover or any other business combination involving the Company and its subsidiaries.

Risk Factors Associated with the Film Production Industry

Competition from providers of similar products and services could materially adversely affect our revenues and financial condition.

The industry in which we intend to compete is a rapidly evolving, highly competitive and fragmented market, which is based on consumer preferences and requires substantial human and capital resources. We expect competition to intensify in the future. There can be no assurance that we will be able to compete effectively.  We believe that the main competitive factors in the film industry includes access to capital, efficient distribution channels and effective marketing and sales of the film, and its ancillary rights. Many of our competitors are well established, profitable and have strong management and access to capital. We may be perceived as relatively too small or untested to be awarded capital and other business resources relative to the competition. Failure to compete successfully against current or future competitors could have a material adverse effect on the Companys business, operating results and financial condition.



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The speculative nature of the film production industry may result in our inability to produce film content or services that receive sufficient market acceptance for us to be successful.

Certain aspects of the film production industry are highly speculative and historically have involved a substantial degree of risk. For example, the success of a particular film depends largely upon unpredictable and changing factors, including the publics acceptance or appreciation, the success of marketing efforts, the availability of competing films, general economic conditions and other tangible and intangible factors, many of which are beyond our control.

ITEM 2.

PROPERTY

Our corporate headquarters are located at 1516 E. Tropicana Avenue, Suite 245, Las Vegas, Nevada 89119. We occupy approximately 600 square feet of office space at a rental rate of $750 per month.

Additionally, our wholly-owned subsidiary, Global Universal Film Group, maintains offices at the Raleigh Studios lot, consisting of approximately 500 square feet in size and leased on a monthly basis at a rate of $900.00, per month. The offices are located at 650 N. Bronson Avenue, Suite B-116, Los Angeles, California  90004.

ITEM 3.

LEGAL PROCEEDINGS

We are a defendant in several matters in litigation, many of which are in the normal course of business, including litigation for refunds of funds invested. We believe these suits are without merit and intends to defend these litigations in courts of law.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On August 30, 2007, our largest stockholder, Rochester Capital Partners, acted by majority written consent to vote and approve the following matters: (1) to change our corporate name from LitFunding Corp. to Global Entertainment Holdings, Inc., and (2) to authorize our board of directors to effect a reverse split of our outstanding shares of common stock on a basis ranging from not greater than one-for-ten and not less than one-for-three. Rochester Capital Partners cast its vote on 49,600,300 shares, or 58.7% of our outstanding common stock, in favor of the foregoing matters.  On November 21, 2007, our board of directors voted unanimously to effect a reverse split of our outstanding shares of common stock on a basis of one-for-ten.

On December 7, 2007, the holders of our Series B Convertible Preferred stock voted unanimously to: (1) delete section 5(c), thereby removing the automatic conversion feature (whereby the Series B Preferred stock would automatically convert to common stock one year after issuance), and (2) amend section 8 and delete section 9 in order to clarify the effect of a stock split. Votes for: 1,500,00, or 100% of the class.



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PART II



ITEM 5.

MARKET FOR COMMON EQUITY & RELATED STOCKHOLDER MATTERS

(a)

Market Information

Our common stock is quoted under the symbol GBHL.OB on the OTC Bulletin Board, which is sponsored by the Financial Industry Regulatory Authority (FINRA).  The OTC Bulletin Board is a network of security dealers who buy and sell stock.  The dealers are connected by a computer network which provides information on current bids and asks as well as volume information.  The OTC Bulletin Board is not considered a national exchange.  Our common shares commenced trading on the OTC Bulletin Board on July 11, 2002.  The following table sets forth the quarterly high and low closing sale prices for our common stock during our last two fiscal years as reported by the National Quotations Bureau.  These quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions. The table has been adjusted to reflect a one-for-ten reverse split of our common stock on December 17, 2007.

|            |      |      |      |      |     
|----------- | ---- | ---- | ---- | ---- | ----
|            | 2007 |      | 2006
|            | High | Low  |      | High | Low 
|1st Quarter | 1.50 | 0.60 |      | 3.80 | 1.20
|2nd Quarter | 1.90 | 0.70 |      | 2.75 | 0.60
|3rd Quarter | 1.20 | 0.50 |      | 1.40 | 0.40
|4th Quarter | 1.00 | 0.11 |      | 0.70 | 0.30



(b)

Holders of Common Stock

As of December 31, 2007, we had approximately 215 stockholders of record of the 9,258,511 shares issued and outstanding.

(c)

Dividends

The Company has never declared or paid any cash dividends on its common stock. For the foreseeable future, the Company intends to retain any earnings to finance the development and expansion of its business, and the Company does not anticipate paying any cash dividends on its common stock. Any future determination to pay dividends will be at the discretion of the Companys Board of Directors.

(d)

Securities Authorized for Issuance under Equity Compensation Plans

2002 Employee Stock Compensation Plan

Effective August 15, 2002, we adopted a 2002 Employee Stock Compensation Plan, as amended, with a maximum number of 1,500,000 shares that may be issued.  As of December 31, 2006, 537,500 options and 960,000 warrants have been issued under this plan, which leaves 2,500 shares available for issuance.  No Plan shares may be issued after July 14, 2008.

2004 Stock Option Plan

Effective March 9, 2004, we adopted a 2004 Stock Option Plan.  The total number of shares of our common stock which may be purchased pursuant to the exercise of options shall not exceed, in the aggregate, 30% of the issued and outstanding shares of the Companys common stock.  As of December 31, 2006, 2,320,000 options have been granted under this plan.

2006 Non-Qualified Stock Compensation Plans

Effective February 22, 2006, we adopted the 2006 Non-Qualified Stock Compensation Plan. The maximum number of shares that may be issued pursuant to the plan is 6,000,000 shares.  As of December 31, 2007, a total of 4,000,000 shares have been issued under this plan.

Effective September 29, 2006, we adopted the 2006-B Non-Qualified Stock Compensation Plan. The maximum number of shares that may be issued pursuant to the plan is 6,000,000 shares.  As of December 31, 2007, a total of 4,545,412,000 shares have been issued under this plan.





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Officers (including officers who are members of the board of directors), directors (other than members of the stock option committee to be established to administer the stock option plans) and other employees and consultants and its subsidiaries (if established) will be eligible to receive options under the stock option plans.  The committee will administer the stock option plans and will determine those persons to whom options will be granted, the number of options to be granted, the provisions applicable to each grant and the time periods during which the options may be exercised.  No options may be granted more than ten years after the date of the adoption of the stock option plans.

Non-qualified stock options will be granted by the committee with an option price equal to the fair market value of the shares of common stock to which the non-qualified stock option relates on the date of grant.  The committee may, in its discretion, determine to price the non-qualified option at a different price.  In no event may the option price with respect to an incentive stock option granted under the stock option plans be less than the fair market value of such common stock to which the incentive stock option relates on the date the incentive stock option is granted.

Each option granted under the stock option plans will be exercisable for a term of not more than ten years after the date of grant.  Certain other restrictions will apply in connection with the plans when some awards may be exercised.  In the event of a change of control (as defined in the stock option plans), the date on which all options outstanding under the stock option plans may first be exercised will be accelerated.  Generally, all options terminate 90 days after a change of control.

The table below sets forth information as of December 31, 2007 regarding outstanding options granted under the plans, warrants issued to consultants and options reserved for future grant under the plan.



|                                                        |  |                                                                                             |  |                                                                                 |  |                                                                                                                                        
|------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|Plan Category                                           |  | Number
of shares 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 shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a))
(c)
|                                                        |  |                                                                                             |  |                                                                                 |  |                                                                                                                                        
|Equity compensation plans approved by stockholders      |  | -                                                                                           |  | $-                                                                              |  | -                                                                                                                                      
|                                                        |  |                                                                                             |  |                                                                                 |  |                                                                                                                                        
|Equity compensation plans not approved  by stockholders |  | 4,727,500                                                                                   |  | $0.284                                                                          |  | 2,500 (1)                                                                                                                              
|                                                        |  |                                                                                             |  |                                                                                 |  |                                                                                                                                        
|Total                                                   |  | 4,727,500                                                                                   |  | $0.284                                                                          |  | 2,500 (1)                                                                                                                              
|                                                        |  |                                                                                             |  |                                                                                 |  |                                                                                                                                        



(1) 2,500 shares are available for issuance under our 2002 Employee Stock Compensation Plan.  Under the 2004 Stock Option Plan, we are allowed to issue a total number of shares of our common stock that may be purchased pursuant to the exercise of options and shall not exceed, in the aggregate, 30% of the issued and outstanding shares of the Companys common stock.

These plans are intended to encourage directors, officers, employees and consultants to acquire ownership of common stock.  The opportunity so provided is intended to foster in participants a strong incentive to put forth maximum effort for its continued success and growth, to aid in retaining individuals who put forth such effort, and to assist in attracting the best available individuals to the Company in the future.  As of December 31, 2007, 2,500 shares remained available for issuance under the 2002 employee stock compensation plan.  As of December 31, 2007 1,454,588 shares remained available under the 2006 non-qualified stock compensation plan.

ITEM 6.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements.  Actual results and events could differ materially from those projected, anticipated, or implicit, in the forward-looking statements as a result of the risk factors set forth below and elsewhere in this report.





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With the exception of historical matters, the matters discussed herein are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning anticipated trends in revenues and net income, the date of introduction or completion of our products, projections concerning operations and available cash flow. Our actual results could differ materially from the results discussed in such forward-looking statements. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto appearing elsewhere herein.

OVERVIEW AND OUTLOOK

During 2007, we were in the business of investing in litigation recoveries. This business was conducted through our subsidiary, LitFunding USA, and its six, wholly-owned limited liability companies.  LitFunding USA resumed the business of California LitFunding (our subsidiary who has been in the business since 2000) subsequent to June 17, 2004, after the United States Bankruptcy Court entered an order confirming us and California LitFunding joint plans of reorganization.  We raise and advance capital to various law firms pursuant to Settlement Agreements.  These Settlement Agreements provide that the funds advanced shall be repaid to us, plus a fee, when the lawsuits referenced in the agreement ultimately settle.  The amount of the fee payable on the funds advanced depends upon the length of the time the funds are outstanding, up to a fixed limit.  Pursuant to the terms of the Settlement Agreements, the Companys contractual right to payment is limited to the funds ultimately paid to the law firm from the specified lawsuit, or lawsuits, in which the funds are invested or expended.

In June, 2006, we announced the receipt of an order of final decree closing our bankruptcy proceedings on the grounds that the bankruptcy case has been fully administered.

During the fiscal year 2007, we had no new cases or lending activity associated with this business entity.  For the year ended December 31, 2007, we had $354,000 in funds invested in approximately 22 cases. We collected $74,500 in principle and fees, lost $30,000 of principle, and currently have open and unresolved cases totaling approximately $1,545,433. We estimate that the principle and fees expected on the open and unresolved cases is approximately $1,545,433.

However, most of these cases are well over 36 months old and there has been very little or no contact or follow up with most of the attorneys representing these remaining cases.  Our present management surveyed most of the attorneys and is of the opinion that our chances of recovering all or a significant portion of our advances and fees is doubtful. Therefore, in late 2007, our management decided to sell our interest in LitFunding USA upon terms that would provide us with a 50% interest in the operations of this entity, after allowances for all liabilities, overhead and collection expenses. This sale was completed on March 31, 2008.  Accordingly, we are no longer actively in this business and will focus our efforts and resources going forward on the film production business.

Results of Operations

The following overview provides a summary of key information concerning our financial results for the years ended December 31, 2007 and 2006.

Revenues



|            |  |                         |  |                     |         |  |   |           |  |      
|----------- |  | ----------------------- |  | ------------------- | ------- |  | - | --------- |  | -----
|            |  | Year Ended December 31, |  | Increase (Decrease)
|            |  | 2007                    |  |                     | 2006    |  |   | $         |  | %    
|Net Revenue |  | 216,089                 |  | $                   | 644,040 |  | $ | (427,951) |  | (66%)



Revenue: Total revenue was $216,089 and $644,040 for the fiscal years ended December 31, 2007 and 2006, respectively. Our decrease in revenue of $427,951 is due to the declining condition of our litigation funding business and our shifting of business operations into the entertainment industry. We cannot guarantee with certainty when we will generate revenue sufficient to fund ongoing operations. Our future revenues will be reliant on the ability to produce and market film and entertainment products.





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Operating expenses



|                                                |  |                         |  |                     |           |  |   |             |  |      
|----------------------------------------------- |  | ----------------------- |  | ------------------- | --------- |  | - | ----------- |  | -----
|                                                |  | Year Ended December 31, |  | Increase (Decrease)
|                                                |  | 2007                    |  |                     | 2006      |  |   | $           |  | %    
|Reserve for unsuccessful resolution of lawsuits |  |                         |  |                     |           |  | $ | 35,200      |  |      
|General and administrative expenses             |  | 543,051                 |  |                     | 1,659,845 |  |   | (1,116,794) |  | (65%)
|Consulting fees  related party                 |  |                         |  |                     |           |  |   | 8,301       |  | -    
|Financing expense                               |  | 70,000                  |  |                     | 45,906    |  |   | 24,094      |  | 52%  
|Depreciation and amortization                   |  | 26,001                  |  |                     | 23,558    |  |   | 2,443       |  | 10%  
|Preferred stock dividend                        |  |                         |  |                     | 19,993    |  |   |             |  | -    
|Total operating expenses                        |  | 639,052                 |  | $                   | 1,749,302 |  | $ | (1,110,250) |  | (63%)



Total operating expenses for the year ended December 31, 2007 decreased by $1,116,794 from the year ended December 31, 2006 because of the cost cutting procedures that have been implemented.



Other income (expense)



|                              |   |                         |  |                     |          |  |   |        |  |       
|----------------------------- | - | ----------------------- |  | ------------------- | -------- |  | - | ------ |  | ------
|                              |   | Year Ended December 31, |  | Increase (Decrease)
|                              |   | 2007                    |  |                     | 2006     |  |   | $      |  | %     
|Other income                  | $ | 53,947                  |  | $                   | 10,000   |  | $ | 43,947 |  | 439%  
|Interest (expense)            |   | (94,099)                |  |                     | (62,685) |  |   | 31,414 |  | 50%   
|Rental income                 |   | -                       |  |                     | 0        |  |   |        |  | -     
|Amortization of debt
discount |   |                         |  |                     | 130,000  |  |   |        |  | -     
|Total other income
(expense)  |   | (40,099)                |  |                     | 77,315   |  |   | 37,216 |  | 3,552%



Our interest expense was $37,216 higher in 2007 than in 2006 because we used short term financing to cover operating costs.



Net (loss)



|                                     |   |                         |  |                     |             |  |   |         |  |      
|------------------------------------ | - | ----------------------- |  | ------------------- | ----------- |  | - | ------- |  | -----
|                                     |   | Year Ended December 31, |  | Increase (Decrease)
|                                     |   | 2007                    |  |                     | 2006        |  |   | $       |  | %    
|Net (loss) before
extraordinary gain | $ | (99,034)                |  | $                   | (1,027,947) |  | $ | 928,913 |  | (90)%



Our net loss before extraordinary gain was approximately 90% lower in the year ended December 31, 2007 as compared to the year ended December 31, 2006 because we realized gains on debt conversion restructuring and negotiations on expense liabilities.



Operation Plan



Global Entertainment Holdings, through its wholly owned subsidiary Global Universal, plans to develop the business of producing low-budget genre pictures with recognizable, name talent.  Global Universal management believes investment risk can be significantly reduced by utilizing Canadian and other major countries Government tax incentives to cover up to 50% of each films budget. Additional coverage of 20% to 25% of a films budget can be derived from pre-selling either foreign or U.S. rights to the film.  The remaining balance (25% to 30%) will be obtained from private investment of debt, equity or combination of both.  Management intends to retain revenues generated from one or more territories of each film to provide cash flow for operating expenses to assure long-term profitability for the Company and its shareholders.



We have cash of approximately $2,558 as of December 31, 2007. In the opinion of management, available funds will not satisfy our working capital requirements for the next twelve months. Nevertheless, our reorganization plan does provide for sufficient revenue to sustain operations.





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We will also need to raise funds to continue to implement our business plan. We plan to raise these funds through private and institution or other equity offerings including interest bearing debentures.  We may also rely on our Investment Agreement with Imperial Capital by exercising a put to have them purchase up to $3 million of our common stock at a price equal to 93% of market value at the time we elect to issue such put.  We may attempt to secure other loans from lending institutions or other sources. We will also consider establishing relationships with selected business partners whose contributions include necessary cash. There is no guarantee that we will be able to raise additional funds through offerings or other sources. If we are unable to raise funds, our ability to continue with operations will be materially hindered.

Liquidity and Capital Resources

Liquidity is a measure of a companys ability to meet potential cash requirements.  We have historically met our capital requirements through the issuance of stock and by borrowings.  In the future we believe we will be able to provide the necessary liquidity we need by the revenues generated from our operations.

Promissory Notes

On November 9, 2005, we entered into a Promissory Note with Imperial Capital Holdings, LLC. for the principal amount of $10,000.  Pursuant to the note we promised to pay to the order of Imperial Capital Holdings the sum of $10,000 together with accrued interest thereon at 12% per annum on any unpaid balance and a one-time processing fee of $500, all due and payable on the maturity date of December 9, 2005.  The note plus processing fee was paid on February 16, 2006.

On December 21, 2005, we entered into a Promissory Note with Global Universal Film Group, Inc. for the principal amount of $50,000.  Pursuant to the note, Global promised to pay us the sum of $50,000, together with interest at the rate of 6% per annum on any unpaid balance.  The $50,000 is to pay for the costs and expenses incurred in connection with a potential spin-off of Global Universal and was due upon completion of such transaction.  Global Universal shareholders have elected to forego a spin-off transaction and the note was cancelled in connection with our restructuring.

On December 31, 2005, we entered into a Promissory Note with Herbert Stein for the principal amount of $25,000.  Pursuant to the note we promised to pay to the order of Herbert Stein $25,000 together with accrued interest thereon at 10% in sixty (60) days.  The note was verbally extended and on May 5, 2006, we paid the principal amount plus interest to Herbert Stein.

On February 1, 2006, we entered into a Promissory Note with Davric Corp. for the principal amount of $25,000. Pursuant to the note we promised to pay to the order of Davric Corp. the sum of $25,000 together with accrued interest thereon at 12% in sixty (60) days.  The note was verbally extended and on May 9, 2006, we paid the principal amount plus interest to Davric Corp.

Pursuant to our outstanding indebtedness to the law firm of Callahan & Blaine for legal services in connection with our Bankruptcy proceedings, our subsidiary California LitFunding and Michael A. Marcelli entered into a Promissory Note with Daniel J. Callahan for the principal amount of $36,881 on March 1, 2006.  Pursuant to the note California LitFunding and Michael A. Marcelli, jointly promised to pay to the order of Daniel J. Callahan the sum of $36,881 with interest thereon at the rate of 8% per annum.  Monthly installments commenced on April 1, 2006, in the amount of $7,524 and will continue thereafter on the first day of each month until August 1, 2006, at which time all unpaid principal and accrued interest shall be due and payable.  Each monthly payment shall be credited first on the interest then due, and the remainder, if any, on the principal sum; interest shall thereupon cease to accrue on the amount so credited on the principal sum.  Should default be made in the payment of any installment due under the note, Mr. Callahan will be entitled to payment of all amounts due plus $8,305 previously waived in consideration for the note and the whole sum of principal and interest shall become immediately due and payable at the option of Mr. Callahan. On November 7, 2007 545,412 shares of common stock was issued to Callahan & Blaine as conversion of the accrued interest and remaining balance of the note.

On May 10, 2006, Easy Money, our wholly owned subsidiary, entered into a Promissory Note with Davric Corp. for the principal amount of $100,000.  Pursuant to the note Easy Money promised to pay to the order of Davric Corp. the sum of $100,000 together with accrued interest thereon at 24% per annum.  The principal amount of the note or any part thereof, along with all interest accrued and unpaid thereon, shall be payable to Davric Corp. on or before one year from the date of May 10, 2006. On October 24, 2007, we issued 1,000,000 shares of our common stock to Daveric Corp. in exchange for their conversion of the principle of the note and forgiveness of the accrued interest.



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On March 5, 2007, a promissory note in the principal amount of $250,000 was issued by Rochester capital Partners as consideration for the purchase of 40 million shares from the Company. The note was fully paid off on August  9, 2007.

On July 10, 2007 the Company issued a promissory note in the amount of $5,000 to Stanley Weiner, a director of the Company, with interest accruing at 6% per annum. Mr. Weiner has elected to convert this note into common stock.

On  September 28, 2007, the Company issued 5,000,000 shares of common stock for the conversion of its promissory note dated December 9, 2004, in the principle amount of $500,000. The note had been assumed by Stanley Weiner, our Vice President of Finance and a director. The accrued interest was forgiven by the note holder.

On  September 28, 2007 the Company issued 1,250,000 shares of common stock to J-Bear Investment, LLC., for the conversion of three stock subscription notes issued in 2007 by our subsidiary, Global Universal, with varying dates totaling a principle amount of $100,000. Any accrued interest was waived.

On September 28, 2007, the Company issued 243,750 shares of common stock to Peter Liapis for the conversion of a stock subscription note dated May, 23, 2007, the principle amount of $15,000, accrued interest was waived.

On December 28, 2007, several promissory notes held by Rochester Capital Partners, LP, totaling $64,940, with accrued interest of $5,595, were converted into 641,225 shares of the Companys Series B, Convertible Preferred Stock. Mr. Rasmussen, our CEO, is the General Partner of this partnership.

On December 28, 2007, several promissory notes held by Gary Rasmussen totaling $32,000, with  accrued interest of $5,735, were converted into 343,227 shares of the Companys Series B, Convertible Preferred Stock. Mr. Rasmussen is the CEO of Global Entertainment Holdings, Inc. and a board member.

On December 28, 2007, several promissory notes held by Jackelyn Giroux, totaling $148,000, with  accrued interest of $17,625, were converted into 1,505,682 shares of the Companys Series B, Convertible Preferred Stock. Jackelyn  Giroux is the President and CEO of our subsidiary Global Universal Film Group Inc.  Mr. Rasmussen is the Chairman of Global Universal and a board member.

Agreements with Imperial Capital Holdings

On January 16, 2006, we entered into an Equity Investment Agreement (Investment Agreement), which is an equity line of credit ("ELoC"), with Imperial Capital Holdings ("Imperial"). On that same date, we entered into a Registration Rights Agreement (Registration Agreement) with Imperial, which called for us to file a registration statement relating to the ELoC within sixty days.  Further, we were in default of our promise to register the common stock underlying the shares of our Series A convertible preferred stock, which Imperial acquired in August, 2005, and, in July, 2006, we were also in default on the payment of a $30,000 promissory note due Imperial on July 12, 2006. On July 28, 2006, we reached an understanding with Imperial to cure our defaults in exchange for the issuance of 800,000 shares of common stock. Concurrently, we entered into a new Investment Agreement and a new Registration Rights Agreement with Imperial with substantially similar terms as the original agreements dated January 16, 2006.  In October, 2006, we agreed to issue 200,000 shares to Imperial to cover interest on the $30,000 note. In January, 2007, we agreed to issue an additional 300,000 shares to cover dividends due on the Series A 12% preferred stock and to grant an additional 60-day extension on the $30,000 note.  On November 12, 2007, we borrowed an additional sum of $12,500 from Imperial and renewed our previous $30,000 note, combine in a new note in the principal amount of $45,000, with interest at 12%, and a maturity date of April 15, 2008. This note is secured by advances against our ELoC. On December 14, 2007, we borrowed an additional $6,000 from Imperial with interest at 12%, due April 15, 2008. This note is convertible into common stock at $.05 per share.

The ELoC terminates 24 months after the registration statement has been declared effective. On June 5, 2007, our registration statement was declared effective by the SEC. The maximum amount of money that the ELoC may provide to us over the 24-month period of time is $3,000,000. During these 24 months, commencing June 5, 2007, we may periodically deliver newly issued, registered shares of our common stock to Imperial who will then deliver to us the purchase price, in cash, in amounts based on a fluctuating price per share of our common stock. We are not obligated to request any portion of the $3,000,000. The actual aggregate number of shares that we may issue pursuant to the Investment Agreement is not determinable as it is based on the market price of our common stock from time to time and how much funding we desire from time to time. We have reserved 9 million shares for issuance under the ELoC. However, Imperial is not obligated to purchase such amount of shares that would cause it to own more than 9.9% of our total number of outstanding shares at any given time.  From time to time, we may, in our sole discretion, deliver a put notice to Imperial which states the dollar amount which we intend to sell to Imperial which will be, at our choice, either:



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(A) 200% of the average daily volume (as quoted on the U.S. markets only) of our common stock for the 10 trading days prior to the applicable put notice date, multiplied by the average of the 3 lowest daily closing bid prices immediately preceding the put date, or, (B) a minimum put amount of $10,000. The maximum amount of any put notice cannot exceed $250,000. The purchase price for the common stock identified in the put notice will be equal to 93% of the lowest closing bid price of the common stock during the pricing period. The pricing period is the period beginning on a put notice date and ending on and including the date that is five (5) trading days after the put notice date. Imperial is required to purchase from us during the related pricing period that number of shares having an aggregate purchase price equal to the Put Amount set forth in the Put Notice. Imperial is deemed to be an underwriter within the meaning of the Securities Act of 1933, as amended, in connection with the resale of our common stock under the Investment Agreement.

As we draw down on the ELoC, more shares will be sold into the market by Imperial. This new supply of shares may cause our stock price to drop. In turn, as the stock price drops and as we make more draw downs on the ELoC, even more stock will come into the market which may cause yet a further drop in stock price. You should be aware that there is an inverse relationship between our stock price and the number of shares to be issued pursuant to the ELoC. If our stock price declines, we will be required to issue a greater number of shares under the ELoC. We are not required to draw down or use the full amount available of the ELoC.

Auditors Going Concern Opinion

The Independent Auditors Report issued in connection with the audited financial statements of the Company for the calendar years ending December 31, 2007 and 2006, expresses substantial doubt about [our] ability to continue as a going concern, due to the Companys lack of profitable operations, our working capital deficit, and our retained earnings deficit.

The Company has not had a profitable operating history, and we have no current sources of revenue. We cannot guarantee that we will become profitable.

Current Working Capital.

We are subject to a working capital deficit, which means that our current assets on December 31, 2007, were not sufficient to satisfy our current liabilities and, therefore, our ability to continue operations is at risk.  We had a working capital deficit for the year ended December 31, 2007 which means that our current liabilities exceeded our current assets on December 31, 2007 by $605,022.  Current assets are assets that are expected to be converted to cash within one year and, therefore, may be used to pay current liabilities as they become due. Our working capital deficit means that our current assets on December 31, 2007, were not sufficient to satisfy all of our current liabilities on December 31, 2007.  If our ongoing operations do not begin to provide sufficient profitability to offset the working capital deficit, we may have to raise capital or debt to fund the deficit or curtail future operations.

Summary of Product and Research & Development That We Will Perform for the Term of Our Plan.

We do not anticipate performing any significant product research and development under our plan of operation until such time as we complete a merger or acquisition that may require it.

Expected Purchase or Sale of Plant and Significant Equipment.

We do not anticipate the purchase or sale of any plant or significant equipment, as such items are not required by us at this time, nor are they anticipated to be needed within the next twelve months.

Significant Changes in the Number of Employees.

We currently employ 4 full time employees.  Because of the legal proceedings previously discussed in our prior reports, we experienced a deleterious and damaging loss of both financial resources and key personnel associated with our former business model of investing in litigation recoveries.  In the event that we are successful in generating significant revenues and expanding our present operations in the film production business, we will need to hire additional employees or independent contractors in the future.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.



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Critical Accounting Policies and Estimates

Our Management's Discussion and Analysis of Financial Condition and Results of Operations 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. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources, primarily allowance for doubtful accounts receivables, accruals for other costs, and the classification of net operating loss and tax credit carry forwards between current and long-term assets. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in this report.

ITEM 7.

FINANCIAL STATEMENTS

See Index to Financial Statements and Financial Statement Schedules appearing on page F-1 through F-20 of this Form 10-KSB.

ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have appointed Lawrence Scharfman & Co., CPA, P.C., as the Company's independent accountants for the years ended December 31, 2007, and 2006. This is a change in accountants recommended by the Company's Executive Management and approved by the Company's Board of Directors.  We dismissed Epstein Weber & Conover, PLC and engaged Lawrence Scharfman & Co., CPA, P.C. on April 28, 2006.  During the most recent two fiscal years and during the portion of 2006 preceding the Boards decision, neither the Company, nor anyone engaged on its behalf, has consulted with Lawrence Scharfman & Co., CPA, P.C., regarding: (i) either the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Companys financial statements; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

The report of Epstein Weber & Conover, PLC on the Companys consolidated financial statements for the fiscal years ended December 31, 2004 and 2003 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except for Epstein Weber & Conover, PLC issuance of going concern opinions on the financial statements for the fiscal years ended December 31, 2004 and 2003. From March 26, 2004, the date when Epstein Weber & Conover, PLC was appointed as the Companys independent accountant, and for the most recent fiscal year and the subsequent interim period ending on April 27, 2006, when Epstein Weber & Conover, PLC was dismissed as the Companys independent accountant, there were no disagreements between the Company and Epstein Weber & Conover, PLC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Epstein Weber & Conover, PLC would have caused it to make a reference to the subject matter of the disagreement in connection with its audit reports.

The change in accountants does not result from any dissatisfaction with the quality of professional services rendered by Epstein Weber & Conover, PLC, as the independent accountants of the Company.

Epstein Weber & Conover, PLC, in their letter filed as Exhibit 16 to Form 8-K filed on May 15, 2006, states in part that during the past two fiscal years, we have informed management of LitFunding Corp. of significant deficiencies in internal controls which we believe is a reportable event under 304(a)(1)(iv)(B)(1) of Regulation SB.

The Company does not disagree with Epstein Weber & Conovers statement, in that in the first quarter of 2005 the Companys audit committee was informed of Epstein Weber & Conovers inability to rely on the competency of the Companys prior Chief Financial Officer which resulted in a lack of internal controls necessary to develop reliable financial statements.  The communication from Epstein Weber & Conover to the Companys audit committee resulted in the termination of the services of its prior CFO in June of 2005.  In an attempt to prevent future significant



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deficiencies, the Company has retained the services of an outside consulting firm, Opus Pointe, to assist in curing deficiencies in its internal controls.



ITEM 8A.

CONTROLS AND PROCEDURES

We conducted an evaluation, with the participation of Morton Reed, our President & Chief Executive Officer (through August 31, 2007), Gary Rasmussen, our current Chief Executive Officer, and Terry Gabby, our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of December 31, 2007, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commissions rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, Messrs. Rasmussen and Gabby have concluded that as of December 31, 2007, our disclosure controls and procedures were not effective at the reasonable assurance level, primarily due to our inability to timely file this report on Form 10-KSB within the time frame prescribed by the Securities and Exchange Commission.

In light of our inability to timely file this report, we performed additional analysis and other post-closing procedures to ensure our consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

Other than the deficiency and weakness described above, Mr. Rasmussen, our Chief Executive Officer and Mr. Gabby, our Chief Financial Officer concluded that our disclosure controls and procedures are generally effective.

In an attempt to prevent further breakdowns in our internal control over financial and disclosure reporting, we intend to engage the services of an independent financial consultant to assist us in the preparation of our financial statements in accordance with GAAP and assist in the evaluation of our financial statement disclosures. This was our only change in our internal control over financial reporting for the most recent quarter ended December 31, 2007.

ITEM 8B.

OTHER INFORMATION

None.



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PART III



ITEM 9.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT



The members of the board of directors serve for one year terms and are elected at the next annual meeting of stockholders, or until their successors have been elected.  The officers serve at the pleasure of the board of directors.

Resignations and Appointments of Officers and Directors

Effective February 22, 2007, our Board of Directors appointed Dennis H. Johnston as a director.  However, effective June 27, 2007, the Board of Directors dismissed Mr. Johnston for cause.

Effective August 31, 2007, Morton Reed resigned as our President, CEO and Chairman of the Board of Directors.  Mr. Reeds resignation was for health reasons and was not a result of any disagreements with the Company.

Effective September 1, 2007, the board of directors appointed Gary Rasmussen as interim CEO and a Director of the Company.

Effective September 26, 2007, the board of directors appointed Virginia Perfili as a Director of the Company.

Information as to our current directors and executive officers is as follows:

|                 |  |     |  |                           
|---------------- |  | --- |  | --------------------------
|Name             |  | Age |  | Title                     
|Gary Rasmussen   |  | 55  |  | CEO and Director          
|Terry Gabby      |  | 63  |  | CFO and Treasurer         
|Stanley Weiner   |  | 64  |  | Director and VP of Finance
|Virginia Perfili |  | 48  |  | Director                  



Duties, Responsibilities and Experience of Director & Officers

Gary Rasmussen.  Mr. Rasmussen will serve as our Chairman and will guide the Company through its transition to a public-traded entity, as well as oversee our ongoing business development, acquisitions and financing. Mr. Rasmussen has an extensive background spanning over 30 years as an entrepreneur with vast experience in all phases of business development, having been a founder, chief executive officer or director of numerous private and publicly-held corporations engaged in the areas of cable television, investment banking, mortgage banking and motion pictures.  He has extensive experience in raising debt and equity capital for both public and private enterprises, implementing short and long term business planning and strategic concepts, acquisitions and divestitures, and has played a leading role in spearheading several publicly held corporations from their inception through the capital raising stages. Mr. Rasmussen is a graduate of Western Michigan University.

Terry Gabby.  Mr. Gabby has served as Chief Financial Officer and Treasurer of the Company since July 1, 2005.  Mr. Gabby has over 30 years experience in executive management, auditing and finance. As the senior auditor for a regional audit firm, Seidman & Seidman CPA's, he was the senior in charge of audits for several publicly held companies in the casino and manufacturing industries. From 1981 to 1991, Mr. Gabby was the corporate director of internal audit for Sahara Resorts, Inc., a publicly traded company with several gaming subsidiaries and time-share properties. As a consultant for various clients, Mr. Gabby has developed and implemented financial accounting systems, internal control systems and participated in establishing review procedures for compliance testing as required under the Sarbanes-Oxley Act. The past seven years, Mr. Gabby has held the executive positions of Chief Financial Officer and Controller for several large tribal gaming enterprises located in several state jurisdictions. These enterprises were business start-ups requiring loan acquisitions, funding distributions, construction cost control and the development of financial reporting systems. Mr. Gabby earned his Bachelor of Science degree in accounting from the University of Nevada, Las Vegas College of Business Administration in 1973. Mr. Gabby will receive a salary of $55,000 annually, and will receive a signing bonus of 10,000 options to purchase shares of the Registrant's common stock at $0.41 per share. Mr. Gabby is not an officer or director of any other reporting company.

Stanley B. Weiner.  Mr. Weiner has served as a Director of the Company since October 2003 and Vice President of Finance of the Company since December 2000.  Mr. Weiner has more than 35 years experience creating and running businesses.  Mr. Weiner was the founding officer of Gemini Financial Corporation, a NASD Broker/Dealer from 1970 through 1975, President of APA, Real Estate Syndication Company from 1975 through 1978, Managing Partner of Agri-World Partnership from 1978 through 1983, an agricultural project syndication company with offices throughout



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Europe and the Middle East.  Mr. Weiner was a Founding Officer/President of Regent Properties from 1985 through 1990, and Chief Executive Officer of Wise Industries from 1990 through 1993, a company specializing in pollution control devices.  In 1978, Mr. Weiner founded Western Pacific Investment Corporation, centers and agricultural properties in addition to packaging many tax-sheltered investments.  As a result of the foregoing activities, Mr. Weiner has extensive experience in marketing, acquiring, financing and developing commercial and agricultural property, negotiating agreements and packaging transactions.  Mr. Weiner received his Bachelor of Arts degrees in both Psychology and Economics from California State University at Long Beach in 1966.  He also did graduate work in both fields at UCLA.  Mr. Weiner has in the past held a National Association of Securities Dealers Principals license and is a licensed Real Estate Broker.  Mr. Weiner is not an officer or director of any other reporting company.

Virginia Perfili. Ms. Perfili has been involved in the entertainment industry for the past 25 years, having served as the President of a public company, Orphan, Inc., and as a writer, director, producer and executive producer of several feature-length films, many music videos, and a TV show pilot.

In 1984, Ms. Perfili was a co-founder and served as President of Orphan, Inc., a publicly held, entertainment company that started as a small Detroit-based, independent record label. Under her leadership, Orphan acquired marketed five recording artists, all of which began charting on the Billboard charts, negotiated several distribution deals, obtained an artist contract with Atlantic, as well as contracts to produce videos for Atlantic and Sony.

In 1990, Orphan ventured into producing feature films.  Orphan joined forces with Gary Rasmussen (currently CEO of Litfunding), who was instrumental in raising capital for several films that were produced by Orphan.  Ms. Perfili was both producer and executive producer for the feature films, Mirror Mirror and Mirror Mirror 2: Raven Dance, and spearheaded their marketing and distribution.  Both of these independent feature films enjoyed theatrical, cable,  Pay-Per-View, TV broadcast, VHS, DVD, and Laser Disc releases, domestically.  In 1995, she directed another sequel, Mirror, Mirror III: The Voyeur.  Ms Perfili has always had a keen eye for recognizing fresh, new talent as demonstrated by the fact that she cast a then unknown young actor, Mark Ruffallo, as the male lead in both Mirror, Mirror 2 and Mirror, Mirror III, his very first leading roles in a feature film.

From 2000 through present, Ms. Perfili has been actively involved as a producer and consultant in the entertainment industry, and was also a director and consultant for a publicly-held, Voice Over Internet company.  In 2006, Virginia Perfili organized Freelance Filmworks, LLC., and served as the Executive Producer of its current feature film, tentatively entitled ROUNDS, which is presently in post production.

Ms. Perfili graduated from Wayne State University in Detroit, Michigan, with a B.A. degree in Humanities with a pre-law curriculum.

Dennis H. Johnston.  Mr. Johnston served as a director from February 22, 2007, until his dismissal on June 27, 2007.  He was formerly a practicing attorney in the State of California with over twenty-eight years experience in representing financial institutions, public and privately traded corporations and has successfully completed in excess of three billion dollars worth of acquisitions during his practice.

For the past 12 years, Mr. Johnston has maintained his own law practice specializing in public companies and related securities transactions. He has negotiated and implemented many public company mergers, acquisitions and changes in control for companies ranging from financial institutions, to manufacturing companies to the highly publicized Internet related entities. In addition to advising clients on corporate restructuring and securities matters, his particular expertise is in representing clients before governmental regulatory agencies including the Securities and Exchange Commission, the Department of Corporations, the National Association of Securities Dealers and other administrative and governmental agencies.

Mr. Johnston graduated with honors from UCLA in 1975, with a Bachelor of Administration in business and economics and received his Juris Doctor degree with Dean's List Honors from Loyola University of Los Angeles where he was a Note and Comment Editor of The Loyola Law Review, a Founding Member of the Loyola International and Comparative Law Journal and the author of a published article entitled "Vicarious Liability Of Controlling Persons Under The Securities Act Of 1934", (1977) 11 Loyola L.A. L. Review 131.

Morton Reed, Ph.D.,  served as our President, CEO and a Director of the Company from December 2000 through August 2007.  Dr. Reed served in the United States Marine Corps during the Korean War.  After returning from overseas he attended UCLA for his undergraduate studies in English and Philosophy.  From 1960 through 1980 he served as an executive in several business ventures:  CEO of Cathay Studios, from 1960 to 1968; CEO of Orient Limited of Nevada from 1968 to 1972; President and Chairman of AAlpha Mortgage Company from 1970 to 1982.  During this time he continued with his education earning a Masters Degree in Psychology form Antioch University in



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1973 and a Doctorate in philosophy in Clinical Psychology from California Graduate Institute in 1975.  In 1996 Dr. Reed joined Magnolia Studios a post production facility in Burbank, CA and helped effect a rate of that company to Millennium Studios which appointed him interim CEO.  He left Millennium in 1999 and joined Case Financial, a litigation funding company where he served as VP of Sales.  In November 2000, Dr. Reed left Case Financial to for LitFunding Corp. where he remains as President.  Dr. Reed is not an officer or director of any other reporting company.

Management Biographies for Global Universal Film Group, Inc.

Jackelyn Giroux.Jackelyn Giroux is the CEO and President of Global Universal Film Group, a film production and distribution company that she founded in 1997. In March, 2006, Global Universal became a wholly-owned subsidiary of Global Entertainment Holdings (OTCBB: GBHL), in a merger transaction whereby the original stock holders of Global Universal received 1,500,000 shares of GBHL Series B, convertible preferred stock.  Prior to Global Universals merger with GBHL, Ms. Giroux was a co-founder, director and President of FoneFriend, Inc. (OTCBB: FFRD), also a publicly-traded company engaged in Internet Telephony (VoIP communications). Ms. Giroux is expected to join Global Entertainment in a similar capacity upon completion of restructuring and initial financing (anticipated to occur in the second quarter of 2008), due to her prior experience with public companies and her expertise in film financing and worldwide business relationships. Ms. Giroux is also a writer, producer and director of feature films, and has been awarded keys to numerous Cities for her lecturing and fund raising for charity organizations in the United States.

Ms. Giroux won a scholarship to the New York American Academy of Dramatic Arts, and has appeared in many off Broadway and Broadway plays.  Her career in films was launched with a lead role in The Cross and the Switch Blade, starring Pat Boone and Eric Estrada.  She has appeared in fifteen feature films and several TV series; her last film as an actress was in To Live and Die in LA, directed by Billy Friedkin for MGM in 1985.  Since then, she has written and produced ten feature films, two Movies of the Week, two reality series, and most recently Head Heart & Balls a television pilot starring Adam Corolla.

Ms. Giroux has extensive experience in structuring financing and co-production deals, having successfully arranged for co-productions between Canada, France and Germany, as well as Canada, France and Australia.  In 2000, she wrote and directed Coo Coo Café, a satire on the media networks, which prominently featured the FoneFriend product being used by the main characters.  Coo Coo Café the first film produced in New Brunswick Canada, was invited to the Sundance Film Festival, as well as received an invitation by the American Film Institute to be considered as one of the Best Screenplays of the year 2000.

Recently, Ms. Giroux acquired $20 million worth of Pre-Certification Tax Credits from the State of Louisiana, which Global Universal intends to utilize as part of its financing structure on future films that are produced in that state. These credits may be pledged in connection with a film production loan from a bank in Louisiana.

Ms. Giroux was instrumental in securing the spokeswoman services of bi-lingual actress/artist Barbara Carrera, to the FoneFriend product and produced the television commercials entitled, Nobody Takes My FoneFriend.  Recently, she wrote and directed the television reality pilot Youve Got the Part! which Global Universal Film Group Inc. has created an online casting website, which will be utilized to find and cast talent worldwide: www.youvegotthepart.com.

Ms. Giroux is a bondable producer with the well-known Completion Bond Company, Film Finances.  She is a past nominee of The New York Film and Video Festival, and The Cannes Film Festivals Out of Competition series. She has been profiled in several books, and appeared on The Tonight Show, The Merv Griffin Show, and The Geraldo Rivera Show, Now It Can Be Told.

Peter Liapis.Mr. Liapis serves as Global Universals Senior Vice President of Development.  Peter received his Bachelor of Arts degree from California State University at Fullerton in 1973, and attended law school the following year.  Shortly thereafter he moved to Los Angeles where he began his acting career starring opposite the legendary Mae West in her last, but very controversial, motion picture, Sextette.  Over the next several years Mr. Liapis starred in numerous feature films including Ghoulies, Ghoulies IV, and Ghost Warrior. By the early 1990's Mr. Liapis moved behind the camera to co write and executive produce "Sins of Desire" starring Tanya Roberts and Nick Cassavetes for Cinetel Films.  He continue to write and direct such pictures as Alone With A Stranger, The Step Daughter and Captured for The Image Organization and WIN International Pictures.

Mr. Liapis was a founding member of Gotham Metro Studios, a production / distribution company based in Santa Monica.  In mid 2006 he joined Global Universal Film Group Inc. to assist and assemble a screenplay library and to build Global Universal into a publicly traded company.  Mr. Liapis was instrumental in Global Universal's acquisition of $21 MUSD in Pre Certified Tax Credits issued by the State of Louisiana and in the post- production joint venture agreement between Global Universal and Third Coast Digital, a post-production facility in Baton Rouge, Louisiana. Mr.



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Liapis has developed a close working relationship with many successful independent film and distribution companies in Hollywood.  Those relationships, along with his prolific writing ability, have provided Global Universal Film Group Inc. a tremendous advantage in creating and developing future in-house projects.

Virginia Perfili  Vice President of Production. (See biography above)

Gary Rasmussen  Chairman.  (See biography above)

Election of Directors and Officers.

Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the Board of Directors following the next annual meeting of stockholders and until their successors have been elected and qualified.

No Executive Officer or Director of the Company has been the subject of any Order, Judgment, or Decree of any Court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.

No Executive Officer or Director of the Company has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding which is currently pending.

No Executive Officer or Director of the Company is the subject of any pending legal proceedings.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires our executive officers and directors, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based upon a review of the copies of such forms furnished to us and representations from our executive officers and directors, we have found that, as of the date of this filing, some of the required filings have not been timely filed. We are processing the appropriate documents to bring this reporting requirement current.

Audit Committee and Financial Expert

We do not have an Audit Committee.  Our directors perform some of the same functions of an Audit Committee such as: recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditors, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. The Company does not currently have a written audit committee charter or similar document.

We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our start-up operations, we believe the services of a financial expert are not warranted.

Code of Ethics

A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:

(1)

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(2)

Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;

(3)

Compliance with applicable governmental laws, rules and regulations;

(4)

The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

(5)

Accountability for adherence to the code.



We have not adopted a corporate code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.





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The decision to refrain from adopting a code of ethics resulted from having only three officers and three directors operating the Company.  Possible ethics code violations would be reported directly to the party generating the violation.





Nominating Committee

We do not have a Nominating Committee or Nominating Committee Charter. Our board of directors performs the functions associated with a Nominating Committee. We have elected not to have a Nominating Committee in that we are a development stage company with limited operations and resources.

ITEM 10.

EXECUTIVE COMPENSATION

The following table sets forth the compensation of the Companys executive officers during the last three fiscal years of the Company.  The remuneration described in the table does not include the cost of the Company of benefits furnished to the named executive officers, including premiums for health insurance and other benefits provided to such individuals that are extended in connection with the conduct of the Companys business.

Morton Reed voluntarily stopped taking salary in mid-2003 to assist the company in the financing of on going litigation.  He received $175,845 out of his salary of $252,000, and accrued the remaining $76,155 in 2003. He resumed taking salary in 2004, but took only $150,000 of the $252,000 and accrued the remaining $102,000. In 2005, he received $118,750 out of his salary of $252,000 and accrued the remaining $133,250. In 2006, he received $64,927 out of the $252,000 and accrued the remaining $187,073. In 2007, Mr. Reed did not receive a salary.

In 2004, Mr. Reed received 700,000 options of common stock, these options vested at date of grant.  The options were issued for services.  During 2005 Mr. Reed was issued 1,000,000 options for common stock, these options vested at the date of grant.

Mr. Reed received $16,716 as reimbursement for his rent, telephone, utilities and automobile expenses in 2004.  In 2005 he received $26,019 as reimbursement for these expenses. In 2006 he received $24,880 as reimbursement for these expenses.

In 2005 Mr. Reed received $80,750 as a board member, $24,500 in fees and $56,250 in warrants.  The warrants 112,500 issued for common stock were granted on January 20, 2005 with immediate vesting.  The warrants authorized the purchase of common stock at $0.20 per share and expire on dates beginning on August 6, 2009 through May 6, 2010. In 2006 Mr. Reed accrued $31,500 as a board member.

In 2007, Mr. Reed received common stock valued at $525,000 in lieu of his accrued salary. Mr. Reed also received $24,000 in common stock for prior board member fees.

Mr. Gabby entered in to an employment agreement effective June 29, 2005 to serve as the companies Chief Financial Officer with an annual salary of $55,000.  Mr. Gabby received 10,000 options at $0.41 per share expiring on July 1, 2007.  These options were vested at the date of grant.  Mr. Gabby received 50,000 options in November 2006 exercisable at $0.04 per share and will expire on November 21, 2009. In November 2006 Mr. Gabby received 50,000 warrants exercisable at $0.04 per share and will expire on November 27, 2009. The fair value of these options and warrants is calculated to be $4,425.  In August 2007 Mr. Gabby received 250,000 options exercisable at $0.08 per share and will expire on August 30, 2009. The fair value of these options is calculated to be $19,500.

Summary Compensation Table

For Fiscal Year- Ended 2007and 2006





24





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|                                      |           |                 |               |                      |                        |                                                |                                                                               |                                |                  
|------------------------------------- | --------- | --------------- | ------------- | -------------------- | ---------------------- | ---------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------ | -----------------
|Name and Principal Position
(a)       | Year
(b)  | Salary
($)
(c)  | Bonus
($)
(d) | Stock Awards
($)
(e) | Options Awards
($)
(f) | Non-Equity Incentive Plan Compensation
($)
(g) | Change in Pension Value & Nonqualified Deferred Compensation Earnings
($)
(h) | All Other Compensation
($)
(i) | Total
($)
(j)    
|Morton Reed
President,
CEO & Director | 2007
2006 | 252,000
252,000 | NONE
NONE     | NONE
NONE            | NONE
NONE              | NONE
NONE                                      | NONE
NONE                                                                     | 0
$56,380                      | $252,000
$308,380
|Gary Rasmussen
CEO & Director         | 2007      | 252,000         | NONE          | NONE                 | NONE                   | NONE                                           | NONE                                                                          | 0                              | $252,000         
|Terry Gabby
CFO                       | 2007
2006 | 55,000
55,000   | NONE
NONE     | 16,500
NONE          | $19,500
$4,425         | NONE
NONE                                      | NONE
NONE                                                                     | NONE
NONE                      | $75,000
$59,425  





25





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OUTSTANDING EQUITY AWARDS

AT FISCAL YEAR- END AS OF 12/31/2007



|                                             |                                                                          |                                                                            |                                                                                                     |                                                        |                                                                     |                                                                  |                                                                        |                                                                                                              |                                                                                                                             
|-------------------------------------------- | ------------------------------------------------------------------------ | -------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------
|Name

(a)                                    | Number of Securities Underlying Unexercised Options (#) Exercisable

(b) | Number of Securities Underlying Unexercised Options (#) Unexercisable

(c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)

(d) | Option Exercise Price
($)

(e)                         | Options Expiration Date

(f)                                        | Number of Shares or Units of Stock That Have Not Vested (#)

(g) | Market Value of Shares or Units of Stock That Have Not Vested
($)

(h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)

(i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)

(j)
|Morton Reed, Ph.D. President, CEO & Director | 32,550
25,000
50,000
50,000
3,750
1,875
1,875
1,875
1,875                | NONE                                                                       | NONE                                                                                                | $10.00
$3.00
$5.30
$9.90
$2.00
$2.00
$2.00
$2.00
$2.00 | 2/3/07
12/21/14
1/20/15
9/6/08
1/20/10
8/6/09
11/6/09
2/6/10
5/6/10 | NONE                                                             | NONE                                                                   | NONE                                                                                                         | NONE                                                                                                                        
|Gary Rasmussen CEO & Director                | NONE                                                                     | NONE                                                                       | NONE                                                                                                | NONE                                                   | NONE                                                                | NONE                                                             | NONE                                                                   | NONE                                                                                                         | NONE                                                                                                                        
|Terry
Gabby, CFO                             | 25,000
5,000
5,000                                                       | NONE
NONE                                                                  | NONE
NONE                                                                                           | $0.80
$0.40
$0.40                                      | 8/30/09
11/21/09
11/27/09                                           | NONE
NONE                                                        | NONE
NONE                                                              | NONE
NONE                                                                                                    | NONE
NONE                                                                                                                   
|Stanley
Weiner, Board Member                 | 3,750
1,875
1,875
1,875
1,875                                            | NONE                                                                       | NONE                                                                                                | $2.00
$2.00
$2.00
$2.00
$2.00                          | 1/20/10
8/6/09
11/6/09
2/6/10
5/6/10                                | NONE                                                             | NONE                                                                   | NONE                                                                                                         | NONE                                                                                                                        
|David Wallace, Board Member                  | 3,750
1,875
1,875
500
250
250                                            | NONE                                                                       | NONE                                                                                                | $2.00
$2.00
$2.00
$2.00
$2.00
$2.00                    | 1/20/10
1/20/10
1/20/10
1/20/10
1/20/10
1/20/10                     | NONE                                                             | NONE                                                                   | NONE                                                                                                         | NONE                                                                                                                        
|Howard Appel,
Board Member                   | 3,750
1,875
1,875
500
250
250                                            | NONE                                                                       | NONE                                                                                                | $2.00
$2.00
$2.00
$2.00
$2.00
$2.00                    | 1/20/10
1/20/10
1/20/10
1/20/10
1/20/10
1/20/10                     | NONE                                                             | NONE                                                                   | NONE                                                                                                         | NONE                                                                                                                        
|Andrew Scherr, Board Member                  | 3,750
1,875
1,875
500
250
250                                            | NONE                                                                       | NONE                                                                                                | $2.00
$2.00
$2.00
$2.00
$2.00
$2.00                    | 1/20/10
1/20/10
1/20/10
1/20/10
1/20/10
1/20/10                     | NONE                                                             | NONE                                                                   | NONE                                                                                                         | NONE                                                                                                                        



All options and warrants have been authorized by the Board of Directors.  All options and warrants issued were for services rendered.





26





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DIRECTOR COMPENSATION

For Fiscal Year- Ending 12/31/2007

The amounts in all Other Compensation columns for the Board members are the fair value of warrants that were issued to the Board members for their past services.  All of the warrants were vested on the grant date.  None have been exercised.

EMPLOYMENT AGREEMENTS

Morton Reed

Effective September 5, 2002, the Company entered into an employment agreement with Morton Reed wherein Mr. Reed agreed to serve as the Companys Chief Executive Officer and President.  The term of employment was for four (4) years.  The Company agreed to pay Mr. Reed annual compensation of $252,000. In addition to the cash compensation, Mr. Reed is entitled to the use of a Company vehicle.  Mr. Reed voluntarily stopped taking his full salary in mid-2003 to assist the Company in the financing of ongoing litigation.  Mr. Reed resumed taking a salary in 2004, but took only $150,000. Mr. Reed has agreed to accrue such portions of his salary ($355,915 as of December 31, 2005, and $543,000 as of December 31, 2006) as deemed relevant by the board of directors until such time as the Company is adequately capitalized and able to pay such salary. In 2007, Mr. Reed was issued stock valued at $525,000 for his accrued salary.

Gary Rasmussen

Mr. Rasmussen has not yet entered into a written employment agreement with the Company. However, the Board of Directors authorized compensation and benefits for him that are commensurate with his predecessor, Morton Reed. Therefore, the Company has accrued a salary base of $252,000 per annum. Mr. Rasmussen elected to waive any salary, or accrual therof, for the fiscal year ending December 31, 2007.

Terry Gabby

Mr. Gabby entered in to an employment agreement effective June 29, 2005 to serve as the companies Chief Financial Officer with an annual salary of $55,000.  Mr. Gabby received 10,000 options at $0.41 per share expiring on July 1, 2007.  These options were vested at the date of grant.  Mr. Gabby received 50,000 options in November 2006 exercisable at $0.04 per share and will expire on November 21, 2009. In November 2006 Mr. Gabby received 50,000 warrants exercisable at $0.04 per share and will expire on November 27, 2009. The fair value of these options and warrants is calculated to be $4,425.  In August 2007 Mr. Gabby received 250,000 options exercisable at $0.08 per share and will expire on August 30, 2009. The fair value of these options is calculated to be $19,500.

Director Compensation and Other Arrangements

All directors will be reimbursed for expenses incurred in attending Board or committee meetings.  From time to time, certain directors, who are not employees, may receive shares of common stock.

Compensation Committee

The Company does not have a compensation committee of the Board of Directors.  Until a formal committee is established, the Board of Directors will review all forms of compensation provided to our executive officers, directors, consultants and employees, including stock compensation.

Option Grants in Last Fiscal Year

On August 30, 2007, the Board awarded Terry Gabby, the Companys Chief Financial Officer, an unregistered stock option to acquire a total of 250,000 shares of the Companys common stock at an exercise price of $0.08 per share.  The option expires two years from the date of grant. We believe that the grant of the option was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2).



27





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ITEM 11.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table presents information, to the best of our knowledge, about the beneficial ownership of our common stock on December 31, 2007, held by those persons known to beneficially own more than 5% of our capital stock and by our directors and executive officers.

The percentage of beneficial ownership for the following table is based on 9,258,511 shares of common stock outstanding as of December 31, 2007, and 3,990,134 shares of Series B Preferred. Each share of Series B Preferred stock is convertible into one share of common stock. The far rights column of the Percentage of Beneficial Ownership table assumes the conversion of the Series B Preferred shares into 3,990,134 shares of common stock with a total of 13,248,645 shares of common stock then outstanding.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes (unless footnoted) shares of common stock that the stockholder has a right to acquire within 60 days after December 31, 2007, pursuant to options, warrants, conversions privileges or other rights.  The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of our common stock.

Beneficial Ownership of Securities



|                                                                 |  |                                               |  |                                         |  |                                                     |  |                                                         
|---------------------------------------------------------------- |  | --------------------------------------------- |  | --------------------------------------- |  | --------------------------------------------------- |  | --------------------------------------------------------
|Name of Beneficial Owner
And Position  (1)                       |  | Number
of Shares of Common Beneficially Owned |  | Percent of
Class Beneficially Owned (2) |  | Number
of shares of Series B Beneficially Owned (3) |  | Percent of
Class Assuming Conversion of Series B Pfd (2)
|Gary Rasmussen (4)
Chairman & CEO                                |  | 4,938,500                                     |  | 53.2%                                   |  | 1,734,452                                           |  | 42.0%                                                   
|Terry Gabby (5)
CFO & Treasurer                                  |  | 15,000                                        |  | 0.26%                                   |  | -                                                   |  | 0.1%                                                    
|Stanley Weiner
VP of Finance and a Director                      |  | 612,383                                       |  | 6.6%                                    |  | -                                                   |  | 4.6%                                                    
|Virginia Perfili
Director                                        |  | 14,450                                        |  | 0.2%                                    |  | -                                                   |  | 0.1%                                                    
|Jackelyn Giroux, President (6)
Global Universal Film Group, Inc. |  | 59,855                                        |  | 0.6%                                    |  | 2,255,682                                           |  | 17.5%                                                   
|Morton Reed, Ph.D. (7)
Former President, CEO, Chairman           |  | 169,895                                       |  | 1.8%                                    |  | -                                                   |  | 1.3%                                                    
|Directors and Officers as a Group                                |  | 5,810,083                                     |  | 62.7%                                   |  | 3,990,134                                           |  | 74.0%                                                   
|James Paul Gietz
3603 Aberdeen Way
Houston, TX 77025             |  | 500,000                                       |  | 5.4%                                    |  | -                                                   |  | 3.8%                                                    



Footnotes:

1.

As used in this table, beneficial ownership means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., thepower to dispose of, or to direct the disposition of, a security).  It also includes shares of common stock that the stockholder has the right to acquire within 60 days of December 31, 2007, which are treated as outstanding for the purpose of determining the percent of class by such stockholder. Unless otherwise indicated, the address for each of these stockholders is c/o Global Entertainment Holdings, 1516 E. Tropicana Avenue, Suite 245, Las Vegas, Nevada 89119.



28





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2.

Figures are rounded to the nearest tenth of a percent.

3.

Each share of Series B Preferred stock is convertible into one share of common stock by the holder at anytime.

4.

Mr. Rasmussen holds 13,500 shares of common stock and 1,093,227 shares of Series B Preferred stock directly in his name. The amount of shares indicated includes 4,925,000 shares of common stock and 641,225 shares of Series B Preferred stock owned by Rochester Capital Partners, LP. (RCP), a Nevada limited partnership. Gary Rasmussen, CEO of the Company, is the General Partner of RCP and owns a majority equity interest therein. As General Partner, Mr. Rasmussen has voting, investment and dispositive power over the shares of stock owned by the partnership..

5.

Mr. Gabby holds an option to purchase 50.000 and 250,000 shares of our common stock at a price of $.04 and $ .08per share respectively.

6.

Jackelyn Giroux holds 59,855 shares of common stock and 2,255,682 shares of Series B Preferred stock directly in her name. Ms. Giroux is the President and CEO of Global Universal Film Group, our wholly-owned subsidiary, and is not an officer or director of Global Entertainment Holdings.

ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Gary Rasmussen, our CEO and Chairman, also serves as the Chairman of our subsidiary, Global Universal. As a result, Mr. Rasmussen received shares of our Series B Preferred stock, both directly and indirectly through Rochester Capital Partners (RCP), in connection with our acquisition of Global Universal, and in consideration of the cancellation of notes payable from Global Universal. Additionally, Mr. Rasmussen is the General Partner of Rochester Capital Partners, our controlling and largest shareholder.

ITEM 13.

EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the Commission.

|               |                                                                                                                                                                                                                    
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number | Description                                                                                                                                                                                                        
|2.1            | Plan and agreement of merger between RP Entertainment Inc., RP Acquisition Corp. and LitFunding Corp. dated February 21, 2003 (Incorporated by reference to the exhibits to Form 8-K filed on March 11, 2003)      
|2.2            | U.S. Bankruptcy Court Stipulation between LitFunding Corporation and Petitioning Creditors dated November 14, 2003 (Incorporated by reference to the exhibits to Form 8-K filed on December 4, 2003)               
|2.3            | U. S. Bankruptcy Court Notice of Entry of Judgment (Incorporated by reference to the exhibits to Form 8-K filed on December 4, 2003)                                                                               
|2.4            | U.S. Bankruptcy Court Chapter 11 Plan of Reorganization dated April 7, 2004 (Incorporated by reference to the exhibits to Form 8-K filed on July 6, 2004)                                                          
|2.5            | Agreement and Plan of Merger between LitFunding Inc., LFDG Subsidiary Corp. and Easy Money Express Inc. dated February 7th, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 13, 2006)
|3(i).1         | Articles of Incorporation dated July 2, 1996 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                       
|3(i).2         | Certificate of Amendment to Articles of Incorporation dated September 4, 1996 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                      
|3(ii).1        | By-Laws dated September 2, 1996 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                                    
|3(ii).2        | Amendment of By-laws dated March 5, 1997 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                           
|3.3            | Certificate of Amendment to Designation of Series B Convertible Preferred Stock, dated December 6, 2007 (10)                                                                                                       
|4.1            | Common Stock Certificate Form (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                                      
|10.1           | Agreement between RP Entertainment Inc. and Brutus Productions dated May 1, 1999 (Incorporated by reference to the exhibits to Form SB-2A filed on August 3, 2001)                                                 





29





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|      |                                                                                                                                                                                                                      
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2  | Amended 2002 Employee Stock Compensation Plan Prospectus dated September 2, 2003 (Incorporated by reference to the exhibits to Form S-8 filed on September 10, 2003)                                                 
|10.3  | Amended 2002 Employee Stock Compensation Plan Certification of Plan Adoption dated September 2, 2003 (Incorporated by reference to the exhibits to Form S-8 filed on September 10, 2003)                             
|10.4  | 2004 Stock Option Plan dated March 9, 2004 (Incorporated by reference to the exhibits to Form DEF 14A filed on July 13, 2004)                                                                                        
|10.5  | Employment Agreement between LitFunding USA and Stephen D. King dated October 2004 (Incorporated by reference to the exhibits to Form S-8 filed on October 28, 2004)                                                 
|10.6  | Investment Agreement between LitFunding Corp. and Dutchess Private Equities Fund, L.P. dated January 14, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 21, 2005)                      
|10.7  | Registration Rights Agreement between LitFunding Corp. and Dutchess Private Equities Fund, L.P. dated January 14, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 21, 2005)             
|10.8  | Option Agreement between Silver Dollar Productions Inc. and Morton Reed dated January 31, 2005 (Incorporated by reference to the exhibits to Form PRE 14C filed on March 21, 2005)                                   
|10.9  | Certificate of Designation dated July 25, 2005 (Incorporated by reference to the exhibits to Form S-8 filed on July 28, 2005)                                                                                        
|10.10 | Binding letter of intent of merger between LitFunding Corp. and Cashwize Inc. dated September 15, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on September 19, 2005)                           
|10.11 | Letter of intent of merger between LitFunding Corp. and Easy Money Express Inc. dated December 14, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 3, 2006)                             
|10.12 | Binding Letter of Intent between Silver Dollar Productions, Inc. and Global Universal Film, Group Ent. Inc. dated December 21, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 12, 2006)
|10.13 | Investment Agreement with Imperial Capital Holdings, dated January 16, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 1, 2006)                                                        
|10.14 | Registration Rights Agreement with Imperial Capital Holdings, dated January 19, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 1, 2006)                                               
|10.15 | Placement Agent Agreement with Brewer Financial Services, LLC., dated January 16, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 1, 2006)                                             
|10.16 | 2006 Non-QualifiedStock Compensation Plan (Incorporated by reference to the exhibits to Form S-8 filed on February 28, 2006)                                                                                         
|10.19 | Share Exchange Agreement with Easy Money Express, Inc., dated March 31, 2006                                                                                                                                         
|10.20 | Service Agreement between Easy Money Express and M2 Internet, dated June 16, 2006 (1)                                                                                                                                
|10.21 | Restated Investment Agreement between the Registrant and Imperial Capital Holdings, dated July 28, 2006 (2)                                                                                                          
|10.22 | Restated Registration Rights Agreement between the Registrant and Imperial Capital Holdings, dated July 28, 2006 (2)                                                                                                 
|10.23 | Restated Placement Agent Agreement between the Registrant and Brewer Financial Services, dated July 28, 2006 (2)                                                                                                     
|10.24 | Letter of Intent between the Registrant and CardMart Plus, dated November 17, 2006 (3)                                                                                                                               
|10.25 | Termination of Letter of Intent with CardMart Plus, dated February 20, 2007 (4)                                                                                                                                      
|10.26 | Letter Agreement to Acquire Shares between the Registrant and Rochester Capital Partners, dated March 5, 2007 (6)                                                                                                    
|20    | Letter to Shareholders dated March 11, 2003 (Incorporated by reference to the exhibits to Form 8-K filed on March 11, 2003)                                                                                          
|21    | List of Subsidiaries : California LitFunding, E.Evolution Expeditions and LitFunding USA (Incorporated by reference to the exhibits to Form 10-KSB filed on March 21, 2005)                                          
|23.1* | Consent of Independent Registered Public Accounting Firm                                                                                                                                                             
|31.1* | Certification of Gary Rasmussen pursuant to Section 302 of the Sarbanes-Oxley Act                                                                                                                                    
|31.2* | Certification of Terry Gabby pursuant to Section 302 of the Sarbanes-Oxley Act                                                                                                                                       
|32.1* | Certification of Gary Rasmussen pursuant to Section 906 of the Sarbanes-Oxley Act                                                                                                                                    
|32.2* | Certification of Terry Gabby pursuant to Section 906 of the Sarbanes-Oxley Act                                                                                                                                       

______

*

Filed herewith.



(b)

Reports on Form 8-K

The following reports on Form 8-K were filed by the Company in 2007, and are incorporated herein by this reference:



30





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(1)  Form 8-K, filed 07-20-2006, Service Agreement between Easy Money Express, a subsidiary of Registrant, and M2 Internet.

(2)  Form 8-K, filed 08-04-2006, regarding Investment Agreement, and related documents, to acquire shares of the Registrant by Imperial Capital Holdings.

(3)  Form 8-K, filed 11-21-2006, regarding a Letter of Intent to effect a merger between the Registrant and CardMart Plus.

(4)  Form 8-K, filed 2-23-2007, regarding the termination of a merger agreement between the Registrant and CardMart Plus.

(5)  Form 8-K, filed 02-26-2007, appointment of Dennis H. Johnston as director.

(6)  Form 8-K, filed 03-07-2007, regarding the issuance of 40 million shares pursuant to a Letter Agreement between the Registrant and Rochester Capital Partners.

(7)  Form 8-K, filed 07-02-2007, dismissal of Dennis H. Johnston as director for cause.

(8)  Form 8-K, filed 09-19-2007, regarding a change in control of Registrant by Rochester Capital Partners.

(9)  Form 8-K, filed 11-05, 2007, appointment of Virginia Perfili as director.

(10) Form 8-K, filed 12-12-2007, regarding amendment to the designation of rights and preferences of the Series B, Convertible Preferred Stock.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

(1)

AUDIT FEES

The aggregate fees billed for professional services rendered by Epstein Weber & Conover, PLC, for the audit of our annual financial statements and review of the financial statements included in our Form 10-QSB or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal year 2005 was $50,346 and the aggregate fees billed for the review of the financial statements included in our Form 10-QSB or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal year 2006 was $25,035.

The aggregate fee billed for professional services rendered by Lawrence Scharfman & Co., CPA, P.C., for the audit of our annual financial statements for fiscal year 2006 was $25,000, plus an additional $7,500 for review of our unaudited quarterly reports..

The Company has signed an Engagement Letter With Lawrence Scharfman & Co., for the annual audit of the Financial Statements and related documents for the year 2007. The fee is $35,000.

(2)

AUDIT-RELATED FEES

Not applicable.

(3)

TAX FEES

Not applicable.

(4)

ALL OTHER FEES

Not applicable.

(5)

AUDIT COMMITTEE POLICIES AND PROCEDURES

We do not have an audit committee.

(6)

If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.

Not applicable.



31





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SIGNATURES

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

Date: April 15, 2008



| |                                     |                   
| | ----------------------------------- | ------------------
| | GLOBAL ENTERTAINMENT HOLDINGS, INC.
| |                                     |                   
| |                                     |                   
| | By:                                 | /s/ Gary Rasmussen
| |                                     | Gary Rasmussen    
| |                                     | CEO               



In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|                    |  |                         |  |               
|------------------- |  | ----------------------- |  | --------------
|Signature           |  | Title                   |  | Date          
|                    |  |                         |  |               
|                    |  |                         |  |               
|/s/ Gary Rasmussen  |  | CEO & Chairman          |  | April 15, 2008
|Gary Rasmussen      |  |                         |  |               
|                    |  |                         |  |               
|/s/ Terry Gabby     |  | Chief Financial Officer |  | April 15, 2008
|Terry Gabby         |  |                         |  |               
|                    |  |                         |  |               
|/s/ Stanley Weiner  |  | VP Finance, Director    |  | April 15, 2008
|Stanley Weiner      |  |                         |  |               
|                    |  |                         |  |               
|/s/Virginia Perfili |  | Director                |  | April 15, 2008
|Virginia Perfili    |  |                         |  |               





32





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TABLE OF CONTENTS



PAGES



|                                                        |           
|------------------------------------------------------- | ----------
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-1       
|                                                        |           
|CONSOLIDATED BALANCE SHEET                              | F-2       
|                                                        |           
|CONSOLIDATED STATEMENT OF OPERATIONS                    | F-3       
|                                                        |           
|CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY          | F-4       
|                                                        |           
|CONSOLIDATED STATEMENT OF CASH FLOWS                    | F-5       
|                                                        |           
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              | F-6  F-18













1





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Lawrence Scharfman & Co., CPA, P.C.

Certified Public Accountants



|                           |                          
|-------------------------- | -------------------------
|18 E SUNRISE HIGHWAY,#201  | 9608 HONEY BELL CIRCLE   
|FREEPORT, NY11520          | BOYNTON BEACH FL,33437   
|TELEPHONE:(516) 771-5900   | TELEPHONE:(561) 733-0296 
|FACSIMILE:   (516 771-2598 | FACSIMILE: (561) 470-0613



Board of Directors & Audit Committee

Global Entertainment Holdings, Inc.

1516 East Tropicana Ave. Ste 245

Las Vegas Nevada 89119





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



We  have audited the accompanying balance sheet of Global Entertainment Holdings, Inc., and subsidiaries as of December 31,2007 and the related consolidated statements of operations, stockholders equity and cash flows for the years then ended. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 presentation. We believe that our audit provided a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Global Entertainment Holdings as of December 31,2007 and the consolidated results of its operations and its cash flows for the year ended December31,2007, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As disclosed in the consolidated financial statements and notes to the consolidated financial statements, the Company will need additional working capital for its planned activity and to service its debt. This raises substantial doubt about the Company's ability to continue as a going concern. Managements plans regarding these matters are described in the notes to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

|                 |                            | 
|---------------- | -------------------------- | 
|                 | Yours Truly,               | 
|                 |                            | 
|Boynton Beach FL | /s/ Lawrence Scharfman CPA | 
|4/15/2008        | Lawrence Scharfman         | 





- LICENSED IN FLORIDA & NEW YORK -



F-1





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Global Entertainment holdings Inc.

Consolidated Balance Sheets



|                                                                                                                                                                                                   |  |                   |             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------------
|                                                                                                                                                                                                   |  | December 31,
2007
|                                                                                                                                                                                                   |  |                   |             
|Assets                                                                                                                                                                                             |  |                   |             
|Current assets:                                                                                                                                                                                    |  |                   |             
|Cash and cash equivalents                                                                                                                                                                          |  | $                 | 2,558       
|Accounts receivable, net                                                                                                                                                                           |  |                   | 159,838     
|Contingent advances less reserves for unsuccessful resolution of lawsuits                                                                                                                          |  |                   | 373,025     
|Employee Advances                                                                                                                                                                                  |  |                   | 25,315      
|Note receivable                                                                                                                                                                                    |  |                   | 900         
|Total current assets                                                                                                                                                                               |  |                   | 561,636     
|Fixed assets, net                                                                                                                                                                                  |  |                   | 23,479      
|Total fixed assets                                                                                                                                                                                 |  |                   | 23,479      
|Other assets                                                                                                                                                                                       |  |                   |             
|Other assets                                                                                                                                                                                       |  |                   | 202,325     
|Total other assets                                                                                                                                                                                 |  |                   | 202,325     
|Total assets                                                                                                                                                                                       |  | $                 | 787,440     
|                                                                                                                                                                                                   |  |                   |             
|Liabilities and Stockholders' Equity                                                                                                                                                               |  |                   |             
|Liabilities not subject to compromise                                                                                                                                                              |  |                   |             
|Accounts payable                                                                                                                                                                                   |  | $                 | 178,312     
|Accrued expenses                                                                                                                                                                                   |  |                   | 121,842     
|Deferred revenue                                                                                                                                                                                   |  |                   |             
|Notes payable                                                                                                                                                                                      |  |                   | 167,004     
|Investor participation obligations                                                                                                                                                                 |  |                   | 699,500     
|Interest payable                                                                                                                                                                                   |  |                   |             
|Total current liabilities not subject to compromise                                                                                                                                                |  |                   | 1,166,658   
|Liabilities subject to compromise                                                                                                                                                                  |  |                   |             
|Trade and miscellaneous claims                                                                                                                                                                     |  |                   |             
|Debentures                                                                                                                                                                                         |  |                   | 40,000      
|Total  liabilities subject to compromise                                                                                                                                                           |  |                   | 40,000      
|Total liabilities                                                                                                                                                                                  |  |                   | 1,206,658   
|Stockholders' Equity:                                                                                                                                                                              |  |                   |             
|Series A Convertible preferred Stock, par value $0.001, 2,000,000 shares authorized, 800,000 shares issued and2,000,000 shares authorized, 800,000 shares issued and shares issued and outstanding |  |                   |             
|Series B Convertible preferred Stock, par value $0.001, 4.000,000 shares authorized, 3,990,314 shares issued and outstanding                                                                       |  |                   | 3,990       
|Common stock, $0.001 par value, 230,000,000 shares authorized, 92,584,590 and 28,988,902 shares issued and outstanding at December 31, 2007 and 2006, respectively                                 |  |                   | 91,728      
|Shares authorized & unissued                                                                                                                                                                       |  |                   | 17,500      
|Subscription Payable                                                                                                                                                                               |  |                   | (171,000)   
|Subscription Receivable                                                                                                                                                                            |  |                   |             
|Additional paid-in capital                                                                                                                                                                         |  |                   | 10,744,965  
|Additional paid-in capital Preferred A                                                                                                                                                             |  |                   |             
|Additional paid-in capital Preferred                                                                                                                                                               |  |                   | 271,425     
|Prior period adjustment                                                                                                                                                                            |  |                   |             
|Accumulated(deficit)                                                                                                                                                                               |  |                   | (11,324,300)
|                                                                                                                                                                                                   |  |                   | (419,218)   
|                                                                                                                                                                                                   |  | $                 | 787,440     





F-2





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Global Entertainment Holdings, Inc.

Statements of Operations



|                                                      |                                   |            |      |   |            
|----------------------------------------------------- | --------------------------------- | ---------- | ---- | - | -----------
|                                                      | For the years ending
December 31,
|                                                      | 2007                              |            | 2007
|Net Revenue                                           | $                                 | 216,089    |      | $ | 644,040    
|Expenses:                                             |                                   |            |      |   |            
|Reserve for unsuccessful resolution of lawsuits       | $                                 |            |      | $ |            
|General and administrative expenses                   |                                   | 543,051    |      |   | 1,659,845  
|Consulting fees - related party                       |                                   |            |      |   |            
|Financing expense                                     |                                   | 70,000     |      |   | 45,906     
|Depreciation & Amortization                           |                                   | 26,001     |      |   | 23,558     
|Preferred stock dividend                              |                                   |            |      |   | 19,993     
|Total operating expenses                              |                                   | 639,052    |      |   | 1,749,302  
|                                                      |                                   |            |      |   |            
|Net operating (loss)                                  |                                   | (422,963)  |      |   | -1,105,262 
|Other income (expenses):                              |                                   |            |      |   |            
|Other income                                          |                                   | 53,947     |      |   | 10,000     
|Interest expense                                      |                                   |            |      |   | (62,685)   
|Rental Income                                         |                                   | (94,099)   |      |   |            
|Amortization of debt discount                         |                                   |            |      |   | 130,000    
|Total other income (expenses)                         |                                   | (40,152)   |      |   | 77,315     
|Gain on debt restructure                              |                                   | 323,929    |      |   |            
|Income (Loss) before Income taxes                     |                                   | (99,034)   |      |   | (1,027,947)
|                                                      |                                   |            |      |   |            
|Income tax (benefit) provision                        |                                   | (99,034)   |      |   | (1,027,947)
|Net Income (loss)                                     |                                   |            |      |   |            
|                                                      |                                   |            |      |   |            
|Basic Earnings (loss) per share:                      |                                   |            |      |   |            
|Before Extraordinary item                             |                                   |            |      |   |            
|Extraordinary item                                    |                                   |            |      |   |            
|Total                                                 |                                   | (99,034)   |      |   | (1,027,947)
|                                                      |                                   |            |      |   |            
|Diluted Earnings (loss) per share                     |                                   |            |      |   |            
|Before Extraordinary item                             |                                   |            |      |   |            
|Extraordinary item                                    |                                   |            |      |   |            
|Total                                                 |                                   | (0.002)    |      |   | (0.05)     
|                                                      |                                   |            |      |   |            
|Weighted average number of common shares outstanding: |                                   |            |      |   |            
|Basic                                                 |                                   | 40,052,515 |      |   | 19,099,652 
|Diluted                                               |                                   | 40,052,515 |      |   | 19,099,652 

























F-3





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Global Entertainment holdings Inc.

Statements of Changes in Stockholders' Equity



|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |            |            |  |  |  | 
|-------------------------------------------------------------------------------- | ------------------------- | ------------ | --------------- | --------------- | - | -------- | --------- |  | ------ | ---------- | ------- | -------- | ------------ | ------------ | --------- | ----------- | ------------- | ---------- | ---------- |  |  |  | 
|Global Entertainment Holdings Inc. Statements of Changes in Stockholders' Equity |                           |              |                
|                                                                                 |                           | Common Stock | Preferred Stock | Preferred Stock |   |          | Total    
|                                                                                 |                           |              |                 |                 |   | A        |           |  | B      |            | paid in | paid in  | Subscription |              | Deferred  | Accumulated | Stockholders'
|                                                                                 |                           | Shares       | Amount          | Shares          |   | Amount   | Shares    |  | Amount | Capital    | Capital | Payable  |              | Compensation | (Deficit) | Equity     
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |            |           
|Balance, December 31, 2004                                                       | 11,220,063                |              | 11,221          | -               |   | -        |           |  |        | 4,611,310  |         | -        |              | -            |           | -6,225,276  |               | -1,602,745
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|shares issued for cash                                                           | 2,291,951                 |              | 2,292           | 800,000         |   | 800      |           |  |        | 1,136,608  |         | -        |              | -            |           | -           |               | 1,139,700 
|Shares authorized & unissued                                                     |                           |              |                 |                 |   |          |           |  |        | 327,139    |         | -        |              | -            |           | -           |               | 327,139   
|Shares issued for services                                                       | 757,500                   |              | 757             | -               |   | -        |           |  |        | 415,705    |         | -        |              | -            |           | -           |               | 416,462   
|Shares issued in settlement                                                      | 157,888                   |              | 157             | -               |   | -        |           |  |        | 67,236     |         | -        |              | -            |           | -           |               | 67,394    
|Shares issued in settlement of notes                                             | 600,000                   |              | 600             | -               |   | -        |           |  |        | 647,891    |         | -        |              | -            |           | -           |               | 648,491   
|Shares issued in lieu of interest                                                | 75,000                    |              | 75              | -               |   | -        |           |  |        | 38,675     |         | -        |              | -            |           | -           |               | 38,750    
|Warrants and Options issued                                                      | -                         |              | -               | -               |   | -        |           |  |        | 739,979    |         | -        |              | -            |           | -           |               | 739,979   
|Warrants and Options exercised                                                   | 665,000                   |              | 665             | -               |   | -        |           |  |        | 32,335     |         | -        |              | -            |           | -           |               | 33,000    
|Options exercised  - related party                                               | 450,000                   |              | 450             | -               |   | -        |           |  |        | 44,550     |         | -        |              | -            |           | -           |               | 45,000    
|Subscription payable                                                             | -                         |              | -               | -               |   | -        |           |  |        | -          |         | 327,139  |              | -            |           | -           |               | 327,139   
|Net (loss) for the year ended                                                    |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           | (2,511,673) |               |           
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             | -3,972,043    |            | -3,972,043
|Balance, December 31, 2005                                                       | 16,217,402                | $            | 16,217          | 800,000         | $ | 800      |           |  | $      | 8,061,428  |         | 327,139  | $            | -            | $         | -10,197,319 | $             | -1,791,735
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|Shares issued for cash                                                           | 1,265,334                 |              | 1,265           |                 |   |          |           |  |        | 145,268    |         |          |              |              |           |             |               | 147,333   
|Shares issued for investment                                                     | 15,000                    |              | 15              |                 |   |          |           |  |        | 3,580      |         |          |              |              |           |             |               | 3,595     
|Shares authorized & unissued                                                     |                           |              |                 |                 |   |          |           |  |        | 327,139    |         |          |              |              |           |             |               | 327,817   
|Shares issued for services                                                       | 7,349,892                 |              | 7,350           |                 |   |          |           |  |        | 378,826    |         |          |              |              |           |             |               | 378,826   
|Shares issued in settlement of debt                                              | 1,406,608                 |              | 1,407           |                 |   |          |           |  |        | 256,997    |         |          |              |              |           |             |               | 258,404   
|Shares issued for preferred dividend                                             | 96,000                    |              | 96              |                 |   |          |           |  |        | 9,024      |         |          |              |              |           |             |               | 9,120     
|Shares issued in settlement of notes                                             | 2,000,000                 |              | 2,000           |                 |   |          |           |  |        | 198,000    |         |          |              |              |           |             |               | 200,000   
|Shares issued for financing                                                      | 704,000                   |              | 704             |                 |   |          |           |  |        | 65,176     |         |          |              |              |           |             |               | 65,880    
|Shares issued in lieu of interest                                                | 14,666                    |              | 15              |                 |   |          |           |  |        | 1,452      |         |          |              |              |           |             |               | 1,487     
|Share issued in exchange of preferred                                            | 800,000                   |              | 800             | -400,000        |   |          |           |  |        | 99,200     |         |          |              |              |           |             |               | 100,000   
|Warrants and options issued                                                      | 320,000                   |              | 320             |                 |   |          |           |  |        | 35,207     |         |          |              |              |           |             |               | 35,527    
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|Warrants and Options exercised                                                   | 650,000                   |              | 650             |                 |   |          |           |  |        | 3,600      |         |          |              |              |           |             |               | 4,250     
|Shares Cancelled                                                                 | -1,850,000                |              | -1,850          | 400,000         |   | (4000    |           |  |        | -933,918   |         |          |              |              |           |             |               | -935,768  
|Options exercised  related party                                                |                           |              |                 |                 |   |          |           |  |        | 4,425      |         |          |              |              |           |             |               | 4,425     
|Subscription payable                                                             |                           |              |                 |                 |   |          |           |  |        |            |         | -322,139 |              |              |           |             |               |           
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|Net (Loss)                                                                       |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           | -1,027,947  |               | -1,027,947
|For the year ended                                                               |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|December 31,2006                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|Balance, December 31,2006                                                        | 28,988,902                |              | 28,988          |                 |   |          |           |  |        | 8,655,403  |         | 322,139  |              |              |           | -1,027,947  |               | -2,511,673
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|Shares authorized & unissued                                                     |                           |              |                 |                 |   |          |           |  |        | 188,500    |         | 188,500  |              |              |           |             |               | 17,500    
|Shares issued for services                                                       | 11,256,579                |              | 11,257          |                 |   |          |           |  |        | 771,793    |         |          |              |              |           |             |               | 771,793   
|Shares issued in settlement of debt                                              | 11,039,162                |              | 11,039          |                 |   |          | 2,490,136 |  | 2,490  | 883,071    | 271,425 |          |              |              |           |             |               | 883,071   
|Shares issued for Note Receivable                                                | 40,000,000                |              | 40,000          |                 |   |          |           |  |        | 210,000    |         |          |              |              |           |             |               | 210,000   
|Shares issued for financing                                                      | 500,000                   |              | 500             |                 |   |          |           |  |        | 54,500     |         |          |              |              |           |             |               | 54,500    
|Share issued in exchange of preferred                                            | 800,000                   |              | 800             | -400,000        |   |          |           |  |        | 99,200     |         |          |              |              |           |             |               | 99,200    
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               | 0         
|Net (Loss)                                                                       |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           | -99,032     |               | -99,023   
|For the year ended                                                               |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|December 31,2007                                                                 | 47                        |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|Balance, December 31,2007                                                        | *92,584,690               |              | 92,584          | -400,000        |   | -400,000 | 2,490,136 |  | 2,490  | 10,744,965 | 271,425 | 188.500  |              | -11,324,300  |           | (99,032)    |               | -575,845  
|                                                                                 |                           |              |                 |                 |   |          |           |  |        |            |         |          |              |              |           |             |               |           
|                                                                                 | * 10 to 1 Split 9,258,459 |              |                 |                 |   |          |           |  |       





F-4





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Global Entertainment Holdings Inc.

Consolidated Statements of Cash Flow



|                                                    |                                   |            |  |   |           
|--------------------------------------------------- | --------------------------------- | ---------- |  | - | ----------
|                                                    | For the years ending
December 31,
|                                                    |                                   | 2007       |  |   | 2006      
|Cash flows from operating activities                |                                   |            |  |   |           
|Net income (loss)                                   | $                                 | -99,032    |  | $ | -1,027,947
|Adjustments to reconcile net income to net cash     |                                   |            |  |   |           
|provided by (used in operating activities)          |                                   |            |  |   |           
|Extraordinary gain on settlement with IEP creditors |                                   |            |  |   |           
|Gain on forgiveness of capital lease obligation     |                                   |            |  |   |           
|Gain on Discount of pre-petition debt               |                                   |            |  |   |           
|Depreciation and amortization                       |                                   | 26,001     |  |   | 23,558    
|Reserve for unsuccessful resolution of lawsuits     |                                   |            |  |   |           
|Reserve for Doubtful Receivables                    |                                   |            |  |   |           
|Loss on disposal of asset                           |                                   |            |  |   |           
|Share-based compensation                            |                                   | 765,616    |  |   | 414,353   
|Common stock issued in settlements                  |                                   | -1,389,878 |  |   | 493,885   
|Share-based interest payments                       |                                   |            |  |   | 1,467     
|Shares cancelled                                    |                                   | 4176       |  |   | -935,768  
|Gain on participation obligation                    |                                   | 940        |  |   |           
|Debt discount amortization                          |                                   |            |  |   | -1,300,000
|Changes in assets and liabilities:                  |                                   |            |  |   |           
|Trade and other accounts receivable                 |                                   | 129,078    |  |   | -2,790    
|Other assets                                        |                                   | 136,245    |  |   | -138,982  
|Contingent advances                                 |                                   |            |  |   | -572,825  
|Accounts payable and accrued expenses               |                                   | -25,000    |  |   | 123,945   
|Trade and other claims subject to compromise        |                                   |            |  |   |           
|Note receivable                                     |                                   | 173,100    |  |   | -73,819   
|Deferred revenue                                    |                                   |            |  |   | 75,004    
|Net cash (used in) operating activities             |                                   | -283,870   |  |   | -2,438,471
|Cash flows from investing activities:               |                                   |            |  |   |           
|Purchases of property and equipment                 |                                   |            |  |   |           
|Net cash (used in) investing activities             |                                   |            |  |   |           
|Cash flows from financing activities:               |                                   |            |  |   |           
|Cash from issuance of common stock                  |                                   | 242,500    |  |   | 75,004    
|Cash from exercise of options & warrants            |                                   |            |  |   | 4,250     
|Cash from issuance of preferred stock               |                                   |            |  |   |           
|Proceeds from notes payable                         |                                   |            |  |   | 1,106,806 
|Subscription Payable                                |                                   |            |  |   |           
|Proceeds from investor participation borrowings     |                                   |            |  |   |           
|Proceeds from investor obligations                  |                                   | 22,210     |  |   | 450,500   
|Principal repayments on capital lease obligations   |                                   |            |  |   |           
|Value of Warrants issued                            |                                   | -150,900   |  |   | 35,527    
|Net cash provided by financing activities           |                                   | 284,810    |  |   | 1,744,416 
|Increase  (decrease) in cash                        |                                   | 940        |  |   | -5,503    
|Cash - beginning of period                          |                                   | 1618       |  |   | 7,121     
|Cash - ending of period                             | $                                 | 2258       |  | $ | 1,618     
|Supplemental disclosures:                           |                                   |            |  |   |           
|Interest paid                                       |                                   |            |  |   | 62,685    
|Income taxes paid                                   | $                                 | -          |  | $ | -         
|Shares issued for services                          | $                                 | 593,000    |  | $ | 378,826   
|Number of shares issued for services                |                                   | *112,568   |  | $ | 7,349,892 
|Shares issued for debt                              | $                                 | 1,111,865  |  | $ | 458,404   
|Number of shares issued for debt                    |                                   | *840,660   |  |   | 3,406,608 
|Imputed value of warrants issued with debt          |                                   | -          |  |   |           
|                                                    |                                   |            |  |   |           
|* after 10 to 1 reverse split                       |                                   |            |  |  



F-5





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Note 1 - Summary of Accounting Policies

LitFunding Corp. ("The Company") was incorporated in the state of Nevada. The Company serves as a holding company for its wholly owned subsidiaries, California LitFunding and LitFunding USA ("The Companies"), both incorporated in the State of Nevada. California LitFunding was the entity that conducted substantially all operations during 2004, and owned substantially all of the operating assets, employed all the personnel, and paid the obligations of all the corporations. LitFunding USA began assuming some operations in the last quarter of 2004 and in 2005 assumed responsibility for substantially all the operations of all the corporations.

California LitFunding is the successor-in-interest by merger to the "original" company in the three primary entity corporate structure that now exists. It has been in the business of investing in litigation recoveries since 2000. In summary, California LitFunding raised capital and advanced this capital to various law firms pursuant to "Settlement Agreements". LitFunding USA resumed the business of litigation funding subsequent to June 17th, 2004, after the United States Bankruptcy Court entered an order confirming the LitFunding Corp. and California LitFunding joint plans of reorganization. LitFunding USA pursues this business by itself and through several wholly owned limited liability companies ("LLC's"). Settlement Agreements provide that the funds advanced shall be repaid to the Companies, plus a fee, when the lawsuits referenced in the agreement ultimately settle. The exact amount of the fee payable on the funds advanced depends upon the length of time the funds are outstanding, up to a fixed limit. Pursuant to the terms of the Settlement Agreements, the Companies' contractual right to payment is limited to the funds ultimately paid to the law firm from the specified lawsuit, or lawsuits, in which the funds are invested or expended.

On January 23, 2003, the Company completed a merger with RP Entertainment, Inc., a publicly held Nevada corporation, through a newly formed entity, RP Acquisition Corp., a Nevada corporation, as a wholly owned subsidiary of RP Entertainment. On February 25, 2003, the Company entered into an Agreement of Merger with California LitFunding, formerly LitFunding Corp. (LFC) a California corporation. LFC became a subsidiary when the Articles of Merger between RP Acquisition Corp., the Registrant's wholly owned subsidiary that was formed to facilitate the merger and LFC were filed with the Nevada Secretary of State. The charter documents of the Company are the charter documents of the surviving corporation. Pursuant to the Merger Agreement, 7,592,250 shares of common stock were to be issued to the LFC shareholders in exchange for all the issued and outstanding shares of LFC common stock. LitFunding Corp, a California corporation changed its name to California LitFunding on May 30, 2003. RP Entertainment had no material operations, assets or liabilities prior to the merger.

As a result of the merger transaction with RP Entertainment, the former California LitFunding stockholders obtained control of the Company's voting stock. For financial accounting purposes, the acquisition was a reverse acquisition of the Company by California LitFunding, under the purchase method of accounting, and was treated as a recapitalization with California LitFunding as the acquirer. Accordingly, the historical financial statements have been restated after giving effect to the January 23, 2003, acquisition of the Company. The financial statements have been prepared to give retroactive effect to January 1, 2002, of the reverse acquisition completed on January 23, 2003, and represent the operations of California LitFunding. Consistent with reverse acquisition accounting: (i) all of California LitFunding's assets, liabilities, and accumulated deficit, are reflected at their combined historical cost (as the accounting acquirer) and (ii) the preexisting outstanding shares of the Company (the accounting acquiree) are reflected at their net asset value as if issued on January 23, 2003.

On April 2, 2003 certain individuals and entities filed an involuntary bankruptcy petition against the Company in the United States Bankruptcy Court, Central District of California. After numerous legal proceedings, in November 2003, the Company filed its voluntary Chapter 11 bankruptcy petition. In January 2004, the Company's wholly owned operating subsidiary, California LitFunding, filed a voluntary Chapter 11 bankruptcy petition. The Company received confirmation of its plan of reorganization from the United States Bankruptcy Court on June 17th, 2004 (see Note 3).

As discussed in Note 2, the Company has entered into a Chapter 11 Plan of Reorganization under the United States Bankruptcy Code. In June, 2006 the Company received its discharge from the Bankruptcy Court. Liabilities exceed assets by $620,218 at December 31, 2007. The Company's net loss for the year ended December 31, 2007 is $99,034. The ability of the Company to continue as a going concern remains dependent upon successful operation as it comes out from the bankruptcy plan, obtaining additional capital and financing, and generating positive cash flow from operations. The Company intends to seek additional capital either through debt or equity offerings and believes that increased volume and reduction in its lead time to finance and collect on funded cases will ultimately lead to profitability and positive cash flows. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.



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Cash and cash equivalents

Cash includes all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. At times cash deposits may exceed government insured limits. At December 31, 2007 there were no cash deposits that exceeded those insured limits.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, California LitFunding, LitFunding USA Easy Money Express, Inc., Global Universal Film Group, Inc. and its wholly owned LLC's and a dormant company, E. Evolution Expeditions whose name was changed to Silver Dollar Productions on January 21, 2005. All significant inter-company accounts and transactions are eliminated.

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over a period of the shorter of the related applicable lease term or the estimated useful lives of the assets ranging from 3 to 5 years. Depreciation expense for the years ended December 31, 2007 and 2006 was $26,001 and $23,558 respectively.

Revenue recognition

The Company recognizes revenues earned for the fees charged on the contingent advances upon successful resolution of the funded lawsuit. In accordance with the guidelines of Staff Accounting Bulletin (SAB) 104 and Statement of Financial Accounting Concepts (SFAC) No. 5, upon successful resolution of the lawsuit, including appeals, the fees become realizable and earned. At this time the fee is determinable and the collection ensured. Fees are determined as set forth in the individual contracts. Fees are generally progressive the longer the time period for which the advances are outstanding. Fees are not earned until there is successful resolution to the related legal matter. The Company has begun to make contingent advances on so called post settlement lawsuit matters. In these instances all appeals have been exhausted and the fee is both determinable and collection ensured at the time the advances are made.

Income taxes

The Company provides for income taxes based on the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which, among other things, requires that recognition of deferred income taxes be measured by the provisions of enacted tax laws in effect at the date of financial statements. The company is a cash basis taxpayer.

Financial Instruments

Financial instruments consist primarily of cash, accounts receivable, contingent advances, and obligations under accounts payable, accrued expenses, debentures, notes payable and investor participation obligations. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of those instruments. The carrying value of the Company's contingent advances approximate fair value because the Company provides allowances for any estimated uncollectible amounts. The carrying value of debentures and notes payable approximate fair value because they contain market value interest rates and have specified repayment terms. The participation obligations at December 31, 2007 are carried at the expected repayment amounts as determined by the individual notes.  The Company has applied certain assumptions in estimating these fair values. The use of different assumptions or methodologies may have a material effect on the estimates of fair values.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in connection with the preparation of the accompanying financial statements include the carrying value of accounts receivable and contingent advances.

Stock-based compensation

In December 2004, the FASB issued SFAS No. 123 (revised 2004).  Share-Based Payment which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.  The Company adopted SFAS No. 123(R) as of December 31, 2005.   Stock issued for services totaled $783,018 and $414,353  for the years ended December 31, 2007 and 2006, respectively.



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In 2005, the Company accounted for its employee stock-based compensation arrangements in accordance with provision of Accounting Principles Board (APB) Opinion No. 25, Accounting for stock Issued to Employees, and related interpretations. As such, compensation expense under fixed plans is recorded only if the market value of the underlying stock at the date of grant exceeds the exercise price. The Company recognized compensation expense for stock options, common stock and other equity instruments issued to non-employees for services received based upon the fair value of the equity instruments issued as the services are provided and the securities earned.

The Company accounted for stock-based compensation associated with the re-pricing of employee stock options in accordance with the provision of FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation(FIN 44). For accounting purposes, the repricing of existing stock options requires variable accounting for the new options granted from the date of modification. Variable accounting requires that the intrinsic value, being the excess of the current market price at the end of each reporting period in excess of the exercise price of the repriced options, be expensed as non-cash stock-based compensation expense until such time as the repriced options are exercised, expire or are otherwise forfeited. Any increase in the intrinsic value of the repriced options will decrease reported earnings, and any subsequent decreases in value will increase reported earnings.

SFAS No. 123, Accounting for Stock-Based Compensation, requires the continued application of APB Opinion No. 25 for transactions with employees to provide pro forma net earnings (loss) and pro forma earnings (loss) per share disclosures for employee stock option grants as if the fair value based method defined in SFAS 123 has been applied to these transactions.

The following table represents the effect on net (loss) and (loss) per share if the Company had applied the fair value based method and recognition provisions of SFAS No. 123:

|                                                                                            |                                     |   |         |         |      |   |             |        |  | 
|------------------------------------------------------------------------------------------- | ----------------------------------- | - | ------- | ------- | ---- | - | ----------- | ------ |  | 
|                                                                                            |                                     |   | 2007    |         | 2006
|Net (loss), as reported                                                                     |                                     | $ | (99,034 | )       |      | $ | (1,027,947) |       
|Add:   Employee stock-based compensation
Expense, as reported                               |                                     |   | 19,500  |         |      |   | 4,425       |       
|Deduct:  Total stock-based employee compensation
expense determined under fair value method |                                     |   | (19,500 | )       |      |   | (4,425)     |       
|Pro forma net (loss)                                                                        |                                     | $ | (99,034 | )       |      | $ | (1,027,9470 |       
|Net (loss) per common share                                                                 |                                     |   |         |         |      |   |             |       
|                                                                                            | Basic (loss) per share, as reported |   | $       | (0.002  | )    |   | $           | (0.05) | 
|                                                                                            | Basic per share, pro forma          |   | $       | (0.0002 | )    |   | $           | (0.05) | 

As required, the pro forma disclosures above include options granted during each fiscal year. Consequently, the effects of applying SFAS No. 123 for providing pro forma disclosures may not be representative of the effects on reported net income for future years until all options outstanding are included in the pro forma disclosures.

Impairment of long-lived assets

The Company assesses impairment of long-lived assets whenever there is an indication that the carrying amount of the asset may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows generated by those assets to the assets' net carrying value. The amount of impairment loss, if any, is measured as the difference between the net book value of the assets and the estimated fair value of the related assets.

Net Loss Per Share

Net loss per share is calculated using the weighted average number of shares of common stock outstanding during the year. The Company has adopted the provisions of SFAS No. 128, Earnings Per Share.

Recently Issued Accounting Pronouncements

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS No. 154) which supersedes APB Opinion No. 20, Accounting Changes and SFAS No. 3 Reporting Accounting Changes in Interim Financial Statements. SFAS No. 154 changes the requirements for accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change.



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SFAS No. 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not believe SFAS No. 154 will have a significant impact on its financial position or results of operations.

Note 2 - Bankruptcy Petition and Reorganization

On April 2, 2003, certain creditors filed an involuntary bankruptcy petition under Chapter 7 of the United States Bankruptcy Code against LitFunding Corp, a Nevada corporation. In the Petition, the Petitioning Creditors alleged that LitFunding Corp was generally not paying its debts as they became due. The debtors disputed this allegation. For approximately eleven months the debtors and the petitioning creditors engaged in litigation regarding the merits of the involuntary petition, and the Petitioning Creditors rights under disputed contracts.

As a result of the foregoing litigation, LitFunding Corp was placed into a protective Chapter 11 proceeding effective November 19, 2003. The costs of litigating the merits of the involuntary petition, and the financial impact of the pending involuntary, so materially damaged both the LitFunding Corp and California LitFunding that it ultimately became necessary for both companies to enter into Chapter 11. Accordingly, California LitFunding entered into a Chapter 11 proceeding on January 26, 2004.

In February of 2004, this litigation was settled. The settlement reached by and among the Company and the petitioning creditors has been incorporated into a reorganization plan confirmed by the United States Bankruptcy Courts on June 17th, 2004.

During 2004 and 2003, California LitFunding, as the operating entity, held title to substantially all of the assets of The Company. The core assets within California LitFunding, and those with most of the value, were the Settlement Agreements, which were the primary subject of the litigation indicated with the filing of the involuntary bankruptcy petition on April 2, 2003. A total of approximately $18.6 million dollars was invested through those Settlement Agreements.

Pursuant to the plan of reorganization, LitFunding Corp and California LitFunding had the option to voluntarily transfer the control and the collection of the settlement agreements ("the Contract Pool") to an IEP distribution agent (the `Contract Agent') for the benefit of the IEP claimants who comprise class 6 under the terms of the reorganization plan.

LitFunding Corp, California LitFunding and the IEP claimants stipulated and agreed to do this in December 2004. In that stipulation, the Contract Agent would assume full control and administration over the `Contract Pool' and have full authority over the enforcement of the obligations set forth in the settlement agreements that comprise the Contract Pool.

Per the agreement signed on November 30th, 2004, LitFunding Corp and California LitFunding transferred all of the original records and files to the Contract Agent on December 16th, 2004, and sent written notice to all parties subject to the settlement agreement notifying them of the transfer of control of the Contract Pool and settlement agreements to the Contract Agent including the assignment of LitFunding Corp and California LitFunding's legal rights and that all payments are now payable to the Contract Agent.

As a result of the transfer, the Company was effectively relieved of the obligation due to the IEP claimants of IEP Note of approximately $26,662,000 including related accrued interest. The carrying value of receivables and advances at the time of the transfer was approximately $12,331,000 resulting in a gain on the transfer of $14,131,000 for the year ended December 31, 2004. The original value of the IEP Note was determined based on the stipulations within the bankruptcy plan. In the transfer, the Company transferred all of its rights to the contingent advances and any potential earnings thereon. Because payments on the IEP Note were only to come from collections and earnings on the contingent advances, the Company is no longer responsible for that obligation.

In consideration for the cooperation and support provided by LitFunding Corp. and California LitFunding making the transition seamless and effective, the IEP claimants waived and released LitFunding Corp and California LitFunding from all liability arising under the "Contingent Recourse Note" of approximately $1,560,000, which would have become effective in 2005.

Moreover, by effecting this transfer of the Contract Pool, the two other classes of creditors (Class 4 and 5) affected by this transition will continue to receive the benefit of the unsecured creditors' allocation as defined in the plan of reorganization. The contingency administrative charge allowed by the plan of reorganization to be paid to LitFunding Corp and California LitFunding has ceased as a result of this transfer.

As a result of the transfer of the contract pool to the IEP claimants effective in December 2004, the Company recorded an extraordinary gain for the removal the associated obligation and assets.



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The Company's primary liabilities are summarized in the following paragraphs:

A. Administrative and Priority Claims. The claims within this class total approximately $287,000 through December 31, 2005. Most of this amount represents the fees and costs payable to the Debtors general insolvency counsel, Winthrop Couchot, P.C. who accepted 200,000 shares of common stock from the company in April 2005 and an additional 100,000 shares in 2005 in part or full payment for the amount. The balance represents sums owed of approximately $9,300 in priority wages owed to two officers of the Debtors. These amounts are not subject to compromise and are included in accounts payable and accrued expenses in the accompanying balance sheet at December 31, 2006.

B. Gap Claims. During the period between the filing of the involuntary petition and the date on which LitFunding Nevada's stipulated to the entry of an order for relief, certain claims accrued. Substantially all of these claims accrued in favor of two law firms that were defending LitFunding Nevada against the involuntary filing. The Debtors reached an agreement with these claimants to pay $314,000 over twelve months.  The remaining balance owed at December 31, 2005 is approximately 40,557.  These amounts are subject to compromise and are included in trade and miscellaneous claims in the accompanying balance sheet at December 31, 2005; During the three months ending March 31, 2006 the debtor elected to covert $3,676 to 26,250 shares of the Companies $0.001 par value common stock and  $36,881 to a promissory note bearing interest at 8 % per annum with a maturity date of August 1, 2006. The Company is in default on this note and owes $29,357 and accrued interest.

C. Debenture Claims. In calendar years 2002 and 2003 California LitFunding issued debentures to seven individuals, creating approximately two hundred thousand dollars ($200,000) in debt obligations. Included is a $10,000 debenture payable to a related party. These claims are unsecured and they are undisputed. In November 2006 the Company won a Judgment against Alan Schuchman for fees owed, a stipulation in the Judgment was that Mr. Schuchman forfeits the $ 10,000 debenture he was holding. On December 28, 2007, the Company converted $150,000 principal amount of the debentures, plus approximately 21,000 in accrued interest, into 171,000 shares of Common Stock. The balance of debentures at December 31,2007 is $40,000. The Company has not made the December 15, 2006 or the semi annual interest payments in the year 2007 with respect to the $40,000 remaining amount of debentures. The accrued interest is $5,363, as of December 31, 2007.

D. Unsecured Claims Other Than Debenture Claims and IEP Claims. The Debtors have approximately $339,653 in allowed unsecured claims. These amounts are subject to compromise and are included in trade and miscellaneous claims in the accompanying balance sheet at December 31, 2005. During the months ended March 31, 2006 , the debtors elected to convert $244,169 to 1,454,108 shares of the Companies $0.001 par value common stock and $ 157,258 to notes payable with a maturity date of June 15, 2006. The remaining balance due as of December 31, 2007 is $47,265.00.

E. IEP Claims. Pursuant to the Settlement Agreement entered into by and between The Company and the IEP petitioning creditors, each and every claim held by the IEP petitioning creditors has been fixed in them Plan. The totality of all claims held by the IEP petitioning creditors has been incorporated into the non-recourse Plan Note. The Plan Note had an opening balance of $26,111,763. This obligation was relieved in connection with the transfer of the Contract Pool to the IEP Creditors in December 31, 2004;

F. The Plan presented for confirmation incorporates both a business plan, and a legal framework for the payment of claims. The business plan sets forth how The Company intends to generate the funds necessary to meet the monetary obligations fixed in the Plan. The legal framework details what each class of creditors will receive under the terms of the Plan

G. The business plan incorporated into the Plan is designed to accomplish two core objectives. The first core objective is to maximize the funds collected to be collected. The second core objective is to essentially restart The Company's business model by raising and investing additional capital in new lawsuits;

H. Interest Holders. Interest holders are the parties who hold ownership interest (i.e., equity interest) in The Company. The Plan creates two classes of interests. Class 7, which is comprised of LitFunding Nevada, as the holder of all of the common stock of California LitFunding, and Class 8, which is comprised of all of the holders of common stock interests in LitFunding Nevada. These classes are not impaired under the terms of the Plan.



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Note 3  Note Receivable

On October 16, 2006, the Company issued a demand promissory note in the amount of $174,000 bearing interest at 6% per annum to Global Universal Film Group Inc. The principal and interest are due 180 days after the Spin-off transaction described in the Merger Agreement, if the Spin-off does not occur on or before June 30, 2007 no payment shall be due. The Spin-off transaction has not been consummated causing the promissory note to be cancelled.

Note 4  Income taxes

The Company recognizes deferred income taxes for the difference between financial accounting and tax bases of assets and liabilities. Income taxes for the years ended December 31, 2005 and 2004 consisted of the following:

|                                |  |                    |   |      |   |  
|------------------------------- |  | ------------------ | - | ---- | - | -
|                                |  | As of December 31,
|                                |  | 2007               |   | 2006
|                                |  |                    |   |      |   |  
|Current tax benefit (provision) |  | $                  | 0 |      | $ | 0
|Deferred (benefit) provision    |  |                    | 0 |      |   | 0
|                                |  |                    |   |      |   |  
|Total income tax provision      |  | $                  | 0 |      | $ | 0

Net deferred income tax assets of $,3,467,088 are fully offset by a valuation allowance of $3,467,088. The valuation allowance was increased by $370,088 in the year ended December 31, 2005. The increase in the valuation allowance in the year ended December 31, 2005, primarily is the result of the increased of net operating loss for the year ended December 31, 2005.

Net operating loss carry forwards of approximately $10,197,319 expire from 2020 through 2025. Due to the change in control of the Company as discussed in Note 1, future utilization of net operating losses may be restricted.

The differences between the statutory and effective tax rates are as follows for the year ended December 31, 2007:

|                                                      |  |              |          |       |  |   |             |    
|----------------------------------------------------- |  | ------------ | -------- | ----- |  | - | ----------- | ---
|                                                      |  | December 31,
|                                                      |  | 2007         |          | 2006 
|Federal statutory rates                               |  | $            | (99,034) | (34%) |  | $ | (1,027,947) | 34%
|State income taxes                                    |  |              | 0        |       |  |   | 0           |    
|Valuation allowance for operating loss carry forwards |  |              | (99,034) | 34%   |  |   | (1,027,947) | 34%
|Permanent difference for discharge of debt            |  |              | 0        | 0%    |  |   | 0           | 0% 
|Other                                                 |  |              | 0        | 0%    |  |   | 0           | 0% 
|Effective rate                                        |  | $            | 0        | 0%    |  | $ | -0-         | 0% 

Note 5 - Contingent Advances

Contingent advances occur when the Company enters into agreements with lawyers and law firms whereby the Company advances funds for litigation costs on selected cases. Generally, the Company will be repaid those amounts plus negotiated fees when and if a case is settled. These agreements are non-recourse but are secured by a lien against any awards in the case. Fees are generally based on the length of time the advances are outstanding. If the fee is less than the award or settlement, the fees are reduced to the amount of the recovery.

Management estimates the net realizable value of contingent advances by periodically reviewing the progress of the cases with the attorneys trying them and past experience with similar cases. Management believes that the Company has historically achieved a success rate of approximately 85% on cases that it has funded. Post reorganization procedures and policies have been implemented and management believes that it will achieve a success rate of no less than 90% on new fundings. Management monitors all cases and provides an allowance if it believes that any advances have been impaired. At December 31, 2007, there were contingent advances outstanding of $373,025 and a corresponding impairment allowance of $37,302.

Note 6 - Participation Agreements

Prior to the filing of the involuntary petition on April 2, 2003, the Company raised capital to enable it to engage in the practice of funding the contingent advances by entering into so called IEP agreements. These are considered to be investment/equity participation agreements the nature of which has been redefined and fixed as part of plan of reorganization and the totality of all claims held by the IEP petitioning creditors has been incorporated into the non-



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recourse Plan Note. The non-recourse Plan Note had an opening balance of $26,111,763 as of May 1, 2004 and as of May 1, 2004 included an approximate $2,000,000 from the cancelled sale of stock and a predetermined retroactive return. As discussed in note 3 above, the Contract Pool was transferred on December 16, 2004, to the Contract Manager designated by the IEP Claimants. Accordingly, this non-recourse plan note was removed from the balance sheet at December 31, 2004, to reflect the economic reality of that transaction.  As of December 31, 2007, the Company had participation obligations of $699,500.

Note 7 - Debentures

During the years ended December 31, 2002, the Company issued 5-year 9% convertible debentures amounting to $200,000, due January 1, 2007. Included is one debenture due to a related party for $10,000. Interest is due semi-annually on the first day of June and December of each year, commencing June 1, 2003 until fully paid. As part of the plan of reorganization, these debentures have an amended maturity to June 2008. In December 2007, the Company converted $150,000 principal amount of the debentures, plus approximately 21,000 in accrued interest, into 171,000 shares of Common Stock.  At December 31, 2007, the Company had accrued interest totaling $5,362.

The registered holders of the debentures have the right, after one year prior to maturity, to convert the principal at the original conversion price of $10 for one Common share or at the adjusted conversion price. If and whenever on or after the date of this debenture, the Company issues or sells any share of common stock for a consideration per share less than the initial conversion rate, then upon such issue or sale, the initial conversion rate shall be reduced to the lowest net price per share at which such share of common stock have been issued. The debentures are subordinated to all the senior indebtedness, including debts under equity participation agreements.

Note 8 - Debt

In 2005, certain of the note holders elected to convert unsecured notes totaling $700,000 to 1,091,000 common shares. At December 31, 2005 the Company has issued 600,000 shares and recorded subscription of $250,606 and they were issued at September 30, 2006.

During the three months ended March 31, 2006, certain debtors in (note 2) above elected to convert $64,684 to promissory notes with a maturity date of June 15, 2006. These notes have been verbally extended.

|                                                                                                                                                                                              |       |              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | -------------
|Notes payable at December 31, 2007, are comprised of the following:                                                                                                                          
|                                                                                                                                                                                              |       |              
|Note payable to entity, original balance of $19,181
Principal and interest due June 15, 2006. The Note is unsecured.
Note payable to entity, original balance $32,187. This note is unsecured | $     | 9,591        
|                                                                                                                                                                                              |      
|                                                                                                                                                                                              |      
|                                                                                                                                                                                              |      
|$                                                                                                                                                                                             | 6,094
|Note payable to entity, original balance of $15,000 due in three monthly installments of $5,000 beginning April 15, 2006. The Note is unsecured                                               |       | 10,000       
|                                                                                                                                                                                              |      
|                                                                                                                                                                                              |      
|                                                                                                                                                                                              |      
|Note payable to entity, original balance of $30,502 due in two monthly installments of $15,251 beginning April 15, 2006. The Note is unsecured                                                |       | 10,820       
|                                                                                                                                                                                              |      
|                                                                                                                                                                                              |      
|                                                                                                                                                                                              |      
|Notes payable with no specified due dates.  Face amount of $19,500 and $15,000, interest at 10% per annum, the note is unsecured.                                                             |       | 34,500       
|                                                                                                                                                                                              |      
|Note payable Face amount $6,000, interest at 12% due April 15, 2008.

Note payable face amount $42,500, interest at 18%                                                                       |       | 6,000

42,500
|Global Notes with no specified due dates and varying interest rates.                                                                                                                          |       | 47,500       
|Total                                                                                                                                                                                         | $     | 167,004      





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Note 9  Stockholders Equity

Common Stock

As discussed in Note 1, the Company entered into a merger agreement in January 2003, whereby 7,592,250 shares of its common stock were issued in exchange for all the issued and outstanding shares of the common stock of California LitFunding. The acquisition was a reverse acquisition of the Company by California LitFunding, under the purchase method of accounting, and was treated as a recapitalization with California LitFunding as the acquirer. Accordingly, the historical financial statements have been restated after giving effect to the January 23, 2003, acquisition of the Company.

In the year ended December 31, 2004, the Company declared and issued an 11 for 10 stock dividend. As a result, a total of 1,042,501 shares were issued. The trading value of the shares on the declaration date of November 1, 2004, was $0.70. The aggregate value of the new shares issued of $729,751 was reclassified from the accumulated deficit to additional paid-in capital.

During the year ended December 31, 2005, the Company issued 991,951 shares of its $.001 par value common stock for cash totaling $406,700.  Additionally, the Company issued 1,300,000 shares of its common stock to certain unrelated qualified investors in exchange for $533,000 of stock subscriptions. These subscriptions were due on or before December 31, 2005. The Company does not have reasonable expectation that these notes will be paid. At of December 31, 2005, $35,000 had been paid, and the Company wrote off $498,000 to bad debt.

During the year ended December 31, 2005, the Company issued 757,500 shares for services valued at $416,462 the fair market value of the underlying shares.

During the year ended December 31, 2005, the Company issued 157,888 shares in settlements valued at $67,394.

During the year ended December 31, 2005, certain of the note holders elected to convert their unsecured notes totaling $500,000 together with $38,750 in interest to 675,000 shares of common stock.

During the year ended December 31, 2005, the Company allowed one of its officers to exercise the right to purchase 450,000 shares of common stock in exchange for a corresponding offset to the officer's deferred salary of $45,000.

During the year ended December 31, 2005, certain employees, consultants and debtors exercised their right to convert 665,000 warrants and options.  The Company received cash in the amount of $33,000.

During the year ended December 31, 2005, the Company accepted a subscription to purchase 186,667 shares of its $.001 par value to an accredited investor at $0.41 per share.  The Company recorded a subscription payable of $76,533 at December 31, 2005.

On March 21, 2006 the Company issued 250,000 shares of its $.001 par value common stock to two accredited investors at $.20 per share for cash totaling $50,000.

During the three months ended March 31, 2006, certain consultants and debtors exercised their warrant rights to purchase 650,000 shares of the Companys par value common stock for cash totaling $4,250.

In March 2006, the Company issued 2,737,318 shares of its $.001 par value common stock for services valued at $271,426 the fair value of the underlying shares.

During the months ended March 31, 2006, certain unsecured creditors elected to convert $244,169 to 1,454,108 shares of the Companys $.001 par value common stock.  At March 31, 2006 the Company had issued 281,132 and the remaining1, 172,976 shares were issued on April 18, 2006 the Company recorded a subscription payable of $ 190,687 at March 31, 2006

On April 18, 2006, the company issued 831,481 shares of its common stock to Morton Reed, CEO of the Company, in exchange for accrued debt valued at $130,000.  The shares were unrestricted pursuant to the S-8 Registration filed on February 28, 2006.

On April 18, 2006, the Company issued 50,000 shares of its restricted common stock to Anthony Longo as a sign-on bonus.

On April 18, 2006, the Company issued 15,000 shares of its restricted common stock to Rochester Capital Partners, LP and 5,000 shares of our common stock to Joseph Weaver in exchange for all of the issued and outstanding shares of Easy Money Express, Inc. (200,000 shares).



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On April 18, 2006, the Company issued 100,000 shares of its common stock to Marc Lieberman for services rendered to the Company.  The shares were unrestricted pursuant to the S-8 Registration filed with the SEC on February 28, 2006.

On April 18, 2006, the Company issued 10,700 shares of its common stock to Michael Marcelli for services rendered to the Company.  The shares were unrestricted pursuant to the S-8 Registration filed with the SEC on February 28, 2006.

On April 18, 2006, the Company issued 20,000 shares of its common stock to Kathleen Saur for services rendered to the Company.  The shares were unrestricted pursuant to the S-8 Registration filed with the SEC on February 28, 2006.

On April 18, 2006, the Company issued 163,295 shares of its common stock to Jon M. Leader for services rendered to the Company.  The shares were unrestricted pursuant to the S-8 Registration filed with the SEC on February 28, 2006.

On April 20, 2006, the Company issued 25,000 shares of its restricted common stock to Baldev Singh Grewal of Navin Enterprises, Inc. pursuant to its consulting agreement dated March 1, 2006.

On May 23, 2006, the Company issued 1,000,000 shares of its restricted common stock to Stoecklein Law Group for services rendered to the Company.

On May 23, 2006, the Company issued 500,000 shares of its restricted common stock to Opus Pointe for services rendered to the Company.

On June 2, 2006, the Company issued 100,000 shares of its common stock to Marc J. Winthrop for legal services provided to the Company.  The shares issued were unrestricted pursuant to the S-8 Registration filed with SEC on February 28, 2006.

Apex Investment Fund Ltd. converted 400,000 shares of Series A 12% Convertible Preferred Stock into 800,000 shares of our restricted common stock.  The 800,000 shares of common stock were issued on June 2, 2006.

On June 23, 2006, the Company issued 1,000,000 shares of its restricted common stock to CLX & Associates, Inc. pursuant to its consulting agreement dated March 1, 2006.

On August 7, 2006, the Company issued 125,000 shares of restricted common stock to Howard Joffe for $10,000 cash.

On August 7, 2006, the Company issued 125,000 shares of restricted common stock to Robert Heitner for $10,000 cash.

On August 7, 2006 the Company issued 1,250,000 shares of restricted common stock to Morton Reed, CEO of the Company, in exchange for accrued debt valued at $250,000.

On August 14, 2006 the Company voided the 1,000,000 shares of its restricted common stock issued on June 23, 2006 to CLX & Associates, Inc pursuant to the cancellation agreement dated March 1, 2006.

On August 28, 2006, the Company issued 1,000,000 shares of its restricted common stock to CLX & Associates, Inc. pursuant to its consulting agreement dated March 1, 2006 that was reinstated.

On August 28, 2006, the Company issued 1,600,000 shares of restricted common stocks to Imperial Capital Holdings LLC as follows; 96,000 shares for preferred shares dividend, 200,000 shares for the extension of the $30,000 note executed April 12, 2006 and 504,000 shares for inducement to execute an equity line of $3,000,000.

Imperial Capital Holdings LLC converted 400,000 shares of Series A 12% Convertible Preferred Stock into 800,000 shares of our restricted common stock.  The 800,000 shares of common stock were issued on August 28, 2006.

On August 28, 2006, the Company issued 2,780,000 shares of restricted common stock to Davric Corporation as follows; 14.666 shares for interest accrued on $200,000 note, 765,334 shares for cash and 2,000,000 in settlement of $200,000 note.

On October 4, 2006, the Company issued 900,000 shares of common stock to Hans George Huetter for consulting services rendered to the Company. The shares issued were unrestricted pursuant to the S-8 Registration filed with SEC on September 29, 2006.

On October 4, 2006, the Company issued 275,000 shares of common stock to Dennis H. Johnston for legal services rendered to the Company.  The shares issued were unrestricted pursuant to the S-8 Registration filed with SEC on September 29, 2006.

On November 17, 2006 the Company voided the 1,000,000 shares of its restricted common stock issued on August 28, 2006 to CLX & Associates, Inc pursuant to the cancellation agreement dated March 1, 2006.



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On November 22, 2006, the Company issued 500,000 shares of its common stock to Gary Rasmussen for consulting services provided to the Company.  The shares issued were unrestricted pursuant to the S-8 Registration filed with SEC on September 29, 2006.

On December 6, 2006, the Company issued 100,000 shares of its common stock to Charles Shamash for consulting services provided to the Company.  The shares issued were unrestricted pursuant to the S-8 Registration filed with SEC on September 29, 2006.

On December 11, 2006 the Company rescinded the issuance of 1,250,000 shares of restricted common stock to Morton Reed, CEO of the Company, in exchange for accrued debt valued at $125,000.

Series A Preferred Stock

On July 20 2005, the Board of Directors authorized the company to amend its Article of Incorporation to allow the issuance of up to 10,000,000 shares of preferred stock, par value $0.001 per share.  Further, the Board authorized the initial issuance of up to 2,000,000 shares of Series A 12% Convertible Preferred Stock (Series A Preferred).  The Series A Preferred provides for a conversion rate 2 shares of common for each share of Series A Preferred, and such conversion rights shall commence six months from the date of purchase.  During 2005, the Company issued 800,000 shares of Series A Preferred at $0.25 per share to two individual investors for cash totaling $200,000. During 2007, all 800,000 shares were converted into common stock. As of December 31, 2007, the Company has no issued and outstanding shares of its Series A Preferred Stock.

Series B Convertible Preferred Stock

Dividend Provisions.  The holders of the Series B Convertible Preferred Stock will not be entitled to any dividends on the Preferred Stock.

Liquidation Preference.  In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, subject to the rights of series of preferred stock that may from time to time come into existence, the holders of Series B Convertible Preferred Stock shall be entitled to receive, prior to and in preference to any distribution of any of the assets of the Company to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the sum of (i) $0.001 for each outstanding share of Series B Preferred Stock (Original Series B Issue Price) and (ii) an amount equal to the Original Series B Issue Price for each twelve (12) months that has passed since the date of issuance of any Series B Preferred Stock.

Spin-off Rights.  At the election of a majority in interest of the Series B Preferred Stock, Global Universal Film Group shall be spun off to the holders of the Series B Preferred Stock, with 90% of such shares in Global Universal Film Group being issued, pro rata to the holders of the Series B Preferred Stock, and 10% being issued and distributed to the shareholders of the Company Common Stock on a pro-rata basis. This provision was eliminated entirely with the filing of an amendment to the designation of rights and preferences of our Series B Preferred with the State of Nevada on December 6, 2007.

Conversion.  Each share of Series B Convertible Preferred Stock shall be convertible, at the election of the holder, into one (1) share of the Companys common stock on such date as the majority shareholders of all Series B have elected to effect the Spin-Off transaction; however, the Series B Convertible Preferred Stock shall automatically convert into shares of Common Stock of the Company after twelve (12) months from the date of LitFundings acquisition of Global Universal Film Group, regardless of whether or not an election has been made to spin-off Global Universal Film Group. This provision was amended with the filing of an amendment to the designation of rights and preferences of our Series B Preferred with the State of Nevada on December 6, 2007. The conversion into common stock may be made at anytime, without conditions, by the holders of the Series B Preferred stock.



Voting Rights.  The shares of the Series B Preferred Stock shall not have any voting rights.

Pursuant to the reverse tri-party merger with Global Universal Film Group, Inc., we issued a total of 1,500,000 shares of Series B Convertible Preferred Stock to the stockholders of Global Universal. Mr. Rasmussen owned 50% of the shares of Global Universal and received 750,000 shares in the merger. Ms. Jackelyn Giroux, President of Global Universal, received 750,000 shares.  In December 2007, we issued an additional 2,490,134 shares of Series B Preferred stock in exchange for the cancellation of $273,915 in debt of Global Universal.  Mr. Rasmussen received 343,227 shares directly in his name, and Rochester Capital Partners received 641,225 shares. Ms. Giroux received 1,505,682 shares directly in her name. The total 3,990,314 shares of our Series B Preferred stock outstanding are convertible into 3,990,134 shares of common stock at anytime.



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Note 10 Commitments and Contingencies

Commitments

In October 2004, the Company rescinded its long-term property lease as allowed in Chapter 11 bankruptcy proceedings of the Federal Bankruptcy code and moved its offices to Las Vegas, Nevada where it occupied space on a month-to-month lease until March 1, 2005.  On March 1, 2005 the company entered into three-year lease agreement expiring February 29, 2008 at $5,000 per month in 2005, $6,000 per month in 2006 and $6,180 for the remaining lease year. Rent expense for the years ended December 31, 2005 and 2004 was $78,837 and $127,310, respectively.

We currently maintain an executive office at 1516 E. Tropicana, Suite 245, Las Vegas, Nevada 89119.  The space consists of approximately 600 square feet.  The monthly rental for the space is $750 per month. Additionally, our wholly-owned subsidiary, Global Universal Film Group, maintains offices at Raleigh Studios, which are approximately 500 square feet in size and are leased on a monthly basis at a rate of $900.00, per month. The offices are located at 650 N. Bronson Avenue, Suite B-116, Los Angeles, California  90004.

Contingencies & Litigation

The company is a defendant in several matters in litigation, many of which are in the normal course of business, including litigation for refunds of funds invested and collection matters. The company believes these suits are without merit, not of a significant amount or nature, and intends to defend these actions in courts of law.

The Company is involved in suits for breach of contract, fraud, conspiracy and defamation with the same claimants in the United States Bankruptcy Court and California State Court. The claimants allege that there was a finder's fee agreement between them and the founding officers / shareholders of the company. The Company's position is that there was a negotiated agreement with the claimants, which was complied with. The claimants allege damages of $16 million.

In May 2004, the United States Bankruptcy Court upheld the company's objections to all monetary claims. The claimants appealed this decision. Additionally, they filed an adversary proceeding raising most of the issues already raised in the first claims. In February 2005, the United States Bankruptcy Court partially dismissed the claimant's adversary complaint and told the claimants to amend the complaint to give them the opportunity to clarify their claims. The claimants filed that amended complaint. In March 2005, the company filed a motion to dismiss with prejudice the entire amended complaint on the grounds that the claims therein were previously denied by the court in the bankruptcy proceeding.

The State Court action has been stayed pending resolution of the issues in the United States Bankruptcy Court. The Federal Court's decisions in the company's favor will preclude proceedings against the company in the state court action.

Note 11- Net Income (Loss) Per Share

Net income per share is calculated using the weighted average number of shares of common stock outstanding during the year. Options/Warrants to purchase 481,675 to purchase common shares were not considered in the calculation for diluted earnings per share for the years ended December 31, 2007. In accordance with SFAS No. 128, the control number used in determining the dilutive effect of warrants and options is based on operating income, therefore, because the Company experienced a net operating loss as of December 31, 2007 the effect of their inclusion based would be anti-dilutive and hence, were not included.



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|                                                 |   |               |  |            |      |   |           |  |   |               |  |            |  |   |          
|------------------------------------------------ | - | ------------- |  | ---------- | ---- | - | --------- |  | - | ------------- |  | ---------- |  | - | ---------
|                                                 |   | 2007          |  |            | 2006
|                                                 |   | Income (Loss) |  | Shares     |      |   | Per Share |  |   | Income (Loss) |  | Shares     |  |   | Per Share
|Net  income (loss) before extraordinary item     | $ | (99,034)      |  |            |      |   |           |  | $ | (1,027,947)   |  |            |  |   |          
|Extraordinary item                               |   | -             |  |            |      |   |           |  |   |               |  |            |  |   |          
|Total                                            | $ | (99,034)      |  |            |      |   |           |  |   | (1,027,947)   |  |            |  |   |          
|                                                 |   |               |  |            |      |   |           |  |   |               |  |            |  |   |          
|Preferred dividends                              |   | 4,294         |  |            |      |   |           |  |   | 19,993        |  |            |  |   |          
|Income (loss) available to common shares holders | $ | (103,328)     |  |            |      |   |           |  | $ | (1,047,940)   |  |            |  |   |          
|                                                 |   |               |  |            |      |   |           |  |   |               |  |            |  |   |          
|Basic earnings (loss) Per Share:                 |   |               |  |            |      |   |           |  |   |               |  |            |  |   |          
|Before extraordinary item                        | $ | (103,328)     |  | 40,052,515 |      | $ | (0.002)   |  | $ | (1,047,940)   |  | 19,099,652 |  | $ | (0.05)   
|Extraordinary item                               |   | -             |  | 40,052,515 |      | $ | (0.002)   |  |   |               |  | 19,099,652 |  | $ | (0.05)   
|                                                 |   |               |  |            |      |   |           |  |   |               |  |            |  |   |          
|Total                                            | $ | (103,328)     |  | 40,052,515 |      | $ | (0.002)   |  | $ | (1,047,940)   |  | 19,099,652 |  | $ | (005)    

Note 12  Related Party

Gary Rasmussen, our CEO and Chairman, also serves as the Chairman of our subsidiary, Global Universal. As a result, Mr. Rasmussen received shares of our Series B Preferred stock, both directly and indirectly through Rochester Capital Partners (RCP), in connection with our acquisition of Global Universal, and in consideration of the cancellation of notes payable from Global Universal. Additionally, Mr. Rasmussen is the General Partner of Rochester Capital Partners, our controlling and largest shareholder.

Note 13  Warrants and Options

On January 5, 2006, we granted 300,000 options to purchase shares of our common stock at $0.15 per share to Baldev Singh Grewal for services rendered to the Company.  The options are exercisable for one year.

On March 15, 2006, we issued a two (2) year warrant to purchase 10,000 shares of our common stock at $0.25 per share to David Ciolino for services rendered to the Company.

We granted the CFO of the Company Terry Gabby 5,000 options in November 2006, exercisable at $0.40 per share and expiring on November 21, 2009. We granted Terry Gabby 5,000 warrants in November 2006, exercisable at $0.40 per share and expiring on November 27, 2009.

We believe that the issuance and grant of the warrants and options was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule 506.  The shares issued were directly from us and did not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports.  We reasonably believed that the recipients, immediately prior to issuing the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment.  The recipients had the opportunity to speak with our management on several occasions prior to their investment decision.

Options and Warrants Exercised

During the year ended December 31, 2007, no options or warrants were exercised. The warrants and options were issued to both non-employees for services and to Directors of the Company and creditors. The and options issued to Directors of the Company were part of the compensation package promised to Directors in August 2004 and are priced accordingly.

The summary of activity for the Company's stock options and warrants is presented below and takes into effect the reverse split of 1-for-10:



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|                                                                 |  |                           |                                 |                           |                                
|---------------------------------------------------------------- |  | ------------------------- | ------------------------------- | ------------------------- | -------------------------------
|                                                                 |  | Year ended
December, 2007 | Weighted Average
Exercise Price | Year ended
December, 2006 | Weighted Average
Exercise Price
|Options/Warrants  outstanding at beginning of Period             |  | 601,075                   | $4.20                           | 625,075                   | $3.00                          
|Granted                                                          |  | 25,000                    | $0.80                           | 16,000                    | $0.90                          
|Exercised                                                        |  |                           |                                 | (40,000)                  | $0.10                          
|Terminated/Expired                                               |  | (144,400)                 |                                 | -                         |                                
|Options /warrants outstanding at end of period                   |  | 481,675                   | $3.20                           | 601,075                   | $4.20                          
|Options/warrants exercisable at end of period                    |  | 481,675                   | $3.20                           | 601,075                   | $4.20                          
|                                                                 |  |                           |                                 |                           |                                
|Price per share of options outstanding                           |  | $0.10-$70.00              |                                 | $0.01-$7.00               |                                
|                                                                 |  |                           |                                 |                           |                                
|Weighted average remaining contractual lives                     |  | 1.75 years                |                                 | 2.08 years                |                                
|                                                                 |  |                           |                                 |                           |                                
|Weighted average fair value of options granted during the period |  | $0.79                     |                                 | $4.90                     |                                

Note 14 - Subsequent Events

Divestiture of LitFunding USA

On March 28, 2008, Global Entertainment Holdings (the "Registrant") entered into Stock Purchase Agreement with Iscorn, Inc., whereby, effective on March 31, 2008, we divested ourselves of LitFunding USA, Inc., a Nevada corporation, and all of its assets and liabilities. LitFunding USA was a wholly-owned subsidiary of the Registrant and, through its six, wholly-owned subsidiary LLC companies, was engaged in the business of advancing funds to Plaintiffs attorneys on various legal actions, for which it anticipated earning a fee along with the return of such advances upon a favorable outcome of the litigation. The business operations of LitFunding USA, and corresponding liabilities, represented the bulk of the Registrant's former core business operations. As a wholly-owned subsidiary of the Registrant, LitFunding USA's substantial liabilities were required to be reported on the Registrant's balance sheet, while the assets, consisting primarily of advances and fees due, contingent upon the successful outcome of litigation, could not be booked due to their uncertainty of collection. Therefore, the Board of Directors elected to divest this subsidiary and its substantial liabilities in a manner that will preserve an upside potential in the event that any such advances and related fees are eventually collected.

Under the terms of the Stock Purchase Agreement, we received consideration of $500 plus a fifty percent (50%) interest in the net revenues collected from advances and fees conditionally due from various Plaintiffs attorneys, less any and all expenses associated with the collection of such advances, less the amount of the liabilities of LitFunding USA, and less a deduction of fifteen percent (15%) of the gross revenues collected as a reasonable fee for the services of the purchaser, or its agents, for managing the business of LitFunding USA.

The foregoing description of the terms and conditions of the Stock Purchase Agreement is qualified in its entirety by, and made subject to, the more complete information set forth in the entire Stock Purchase Agreement, a copy of which was filed as an exhibit to our Form 8-K, dated March 28, 2008, and filed on April 8, 2008.





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