UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended November 30, 2009o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from ______________ to
  _____________





Commission
File Number  000-50643







GLOBAL
ENTERTAINMENT CORPORATION


(Exact
name of registrant as specified in its charter)





Nevada
            86-0933274(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)1600
      N Desert Drive, Suite 301, Tempe, AZ
            85281(Address
      of principal executive offices)
            (Zip
      Code)





(480)
994-0772


(Registrant’s
telephone number, including area code )






(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark if the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities 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 o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes o No o





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




Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer o(Do
      not check if a smaller reporting company)
            Smaller
      reporting company x





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


At
January 11, 2010, 6,646,062 shares of Global Entertainment Corporation common
stock were outstanding.





GLOBAL
ENTERTAINMENT CORPORATION


INDEX


REPORT
ON FORM 10-Q


FOR
THE QUARTER ENDED NOVEMBER 30, 2009







PART I. FINANCIAL
      INFORMATIONItem 1. Financial Statements
            3Condensed
      Consolidated Balance Sheets – As of November 30, 2009 (Unaudited) and May
      31, 2009
            3Condensed
      Consolidated Statements of Operations (Unaudited) – Three and Six Months
      EndedNovember
      30, 2009 and 2008
            4Condensed
      Consolidated Statements of Changes in Equity – Year Ended May 31,
      2009and
      Six Months Ended November 30, 2009 (Unaudited)
            5Condensed
      Consolidated Statements of Cash Flows (Unaudited) – Six Months
      EndedNovember
      30, 2009 and 2008
            6Notes
      to Condensed Consolidated Financial Statements
            7Item 2. Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
            18Item 3. Quantitative and Qualitative Disclosures about Market
      Risk
            25Item 4T. Controls and Procedures
            25PART
      II. OTHER INFORMATIONItem 1. Legal Proceedings
            26Item 1A. Risk Factors
            26Item 2. Unregistered Sales of Equity Securities and Use of
      Proceeds
            26Item 3. Defaults upon Senior Securities
            26Item 4. Submission of Matters to a Vote of Security
      Holders
            26Item 5. Other Information
            27Item 6. Exhibits
            27


2





PART
I – FINANCIAL INFORMATION





Item 1.  Financial Statements





GLOBAL
ENTERTAINMENT CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS


As
of November 30, 2009 (Unaudited) and May 31, 2009


(in
thousands, except share and per share amounts)








November
      30,
            
            
            May
      31,2009
            
            
            2009ASSETSCurrent
      Assets:Cash
      and cash equivalents
            
            $
            2,561
            
            
            $
            1,111Accounts
      receivable, net of $5 allowance at May 31, 2009
            
            
            3,163
            
            
            
            2,220Prepaid
      expenses and other assets
            
            
            457
            
            
            
            281Total
      Current Assets
            
            
            6,181
            
            
            
            3,612Property
      and equipment, net
            
            
            127
            
            
            
            708Accounts
      receivable
            
            
            640
            
            
            
            215Goodwill
            
            
            519
            
            
            
            519Other
      assets
            
            
            119
            
            
            
            114Total
      Assets
            
            $
            7,586
            
            
            $
            5,168LIABILITIES
      AND EQUITYCurrent
      Liabilities:Accounts
      payable
            
            $
            3,546
            
            
            $
            1,132Accrued
      liabilities
            
            
            506
            
            
            
            588Deferred
      revenues
            
            
            392
            
            
            
            64Note
      payable - current portion
            
            
            115
            
            
            
            111Total
      Current Liabilities
            
            
            4,559
            
            
            
            1,895Deferred
      income tax liability, net
            
            
            5
            
            
            
            5Note
      payable - long-term portion
            
            
            10
            
            
            
            69Total
      Liabilities
            
            
            4,574
            
            
            
            1,969Commitments
      and ContingenciesEquity:Global
      Entertainment Corporation Equity -Preferred
      stock - $.001 par value; 10,000,000 shares authorized;no
      shares issued or outstanding
            
            
            —
            
            
            
            —Common
      stock - $.001 par value; 50,000,000 shares authorized;6,646,062
      and 6,633,112 shares issued and outstanding as ofNovember
      30, 2009 and May 31, 2009
            
            
            7
            
            
            
            7Paid-in
      capital
            
            
            10,980
            
            
            
            10,961Retained
      deficit
            
            
            (8,011
            )
            
            
            (7,788
            )Total
      Global Entertainment Corporation Equity
            
            
            2,976
            
            
            
            3,180Noncontrolling
      interest
            
            
            36
            
            
            
            19Total
      Equity
            
            
            3,012
            
            
            
            3,199Total
      Liabilities and Equity
            
            $
            7,586
            
            
            $
            5,168














The
accompanying notes are an integral part of the condensed consolidated financial
statements.


3


GLOBAL
ENTERTAINMENT CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


For
the Three and Six Months Ended November 30, 2009 and 2008


(Unaudited)
(in thousands, except share and per share amounts)






Three
      Months Ended
              
              
              Six
      Months EndedNovember
      30,
              
              
              November
      30,2009
              
              
              2008
              
              
              2009
              
              
              2008Revenues:Project
      development fees
              
              $
              102
              
              
              $
              269
              
              
              $
              152
              
              
              $
              478Project
      management fees
              
              
              533
              
              
              
              761
              
              
              
              979
              
              
              
              1,226Facility
      management fees
              
              
              1,534
              
              
              
              728
              
              
              
              2,438
              
              
              
              1,173Ticket
      service fees
              
              
              314
              
              
              
              695
              
              
              
              513
              
              
              
              1,315Food
      service revenue
              
              
              252
              
              
              
              130
              
              
              
              324
              
              
              
              130Advertising
      sales commissions
              
              
              120
              
              
              
              133
              
              
              
              191
              
              
              
              378License
      fees - league dues and other
              
              
              474
              
              
              
              515
              
              
              
              848
              
              
              
              789License
      fees - initial and transfer
              
              
              —
              
              
              
              —
              
              
              
              100
              
              
              
              —Other
      revenue
              
              
              5
              
              
              
              —
              
              
              
              159
              
              
              
              101Total
      Revenues
              
              
              3,334
              
              
              
              3,231
              
              
              
              5,704
              
              
              
              5,590Operating
      Costs:Cost
      of revenues
              
              
              1,943
              
              
              
              1,419
              
              
              
              3,079
              
              
              
              2,398General
      and administrative costs
              
              
              1,363
              
              
              
              1,720
              
              
              
              2,827
              
              
              
              3,216Total
      Operating Costs
              
              
              3,306
              
              
              
              3,139
              
              
              
              5,906
              
              
              
              5,614Operating
      Income (Loss)
              
              
              28
              
              
              
              92
              
              
              
              (202
              )
              
              
              (24
              )Other
      Income (Expense):Interest
      income
              
              
              —
              
              
              
              9
              
              
              
              1
              
              
              
              12Interest
      expense
              
              
              (2
              )
              
              
              (354
              )
              
              
              (5
              )
              
              
              (361
              )Total
      Other Expense
              
              
              (2
              )
              
              
              (345
              )
              
              
              (4
              )
              
              
              (349
              )Income
      (Loss) from Continuing Operations, before tax
              
              
              26
              
              
              
              (253
              )
              
              
              (206
              )
              
              
              (373
              )Income
      Tax Benefit
              
              
              -
              
              
              
              —
              
              
              
              —
              
              
              
              —Income
      (Loss) from Continuing Operations, net of tax
              
              
              26
              
              
              
              (253
              )
              
              
              (206
              )
              
              
              (373
              )Loss
      from Discontinued Operations, net of tax
              
              
              -
              
              
              
              —
              
              
              
              —
              
              
              
              (48
              )Net
      Income (Loss)
              
              
              26
              
              
              
              (253
              )
              
              
              (206
              )
              
              
              (421
              )Net
      Income (Loss), attributable to noncontrolling interest
              
              
              —
              
              
              
              3
              
              
              
              17
              
              
              
              (5
              )Net
      Income (Loss), attributable to Global
              
              $
              26
              
              
              $
              (256
              )
              
              $
              (223
              )
              
              $
              (416
              )Earnings
      (Loss) Per Share - basic and diluted:Income
      (loss) from continuing operations, attributable to Global
      commonshareholders
              
              $
              —
              
              
              $
              (0.04
              )
              
              $
              (0.03
              )
              
              $
              (0.06
              )Loss
      from discontinued operations, attributable to Global
commonshareholders
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Net
      income (loss), attributable to Global common shareholders
              
              $
              —
              
              
              $
              (0.04
              )
              
              $
              (0.03
              )
              
              $
              (0.06
              )Weighted
      Average Number of Shares Outstanding - basic and diluted
              
              
              6,639,150
              
              
              
              6,626,015
              
              
              
              6,636,115
              
              
              
              6,625,562Amounts
      attributable to Global common shareholdersIncome
      (loss) from continuing operations, net of tax, attributable to
      Globalcommon
      shareholders
              
              $
              26
              
              
              $
              (256
              )
              
              $
              (223
              )
              
              $
              (368
              )Loss
      from discontinued operations, net of tax, attributable toGlobal
      common shareholders
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (48
              )Net
      income (loss), attributable to Global common shareholders
              
              $
              26
              
              
              $
              (256
              )
              
              $
              (223
              )
              
              $
              (416
              )
 
 
 
 
 The
accompanying notes are an integral part of the condensed consolidated financial
statements.
  4
  GLOBAL
ENTERTAINMENT CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 For
the Year Ended May 31, 2009 and the Six Months Ended November 30,
2009
 (Unaudited)
 (in
thousands, except share amounts)
 
 
 Global
      Entertainment Corporation
              
              
              Non-Common
      Stock
              
              
              Paid-in
              
              
              Retained
              
              
              
              
              
              Controlling
              
              
              TotalShares
              
              
              Amount
              
              
              Capital
              
              
              Deficit
              
              
              Total
              
              
              Interest
              
              
              EquityBalance
      at May 31, 2008
              
              
              6,625,114
              
              
              $
              7
              
              
              $
              10,930
              
              
              $
              (7,815
              )
              
              $
              3,122
              
              
              $
              (38
              )
              
              $
              3,084Issuance
      of restricted stock
              
              
              8,000
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Stock-based
      compensation - restricted stock
              
              
              —
              
              
              
              —
              
              
              
              31
              
              
              
              —
              
              
              
              31
              
              
              
              —
              
              
              
              31Other
              
              
              (2
              )
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Net
      income
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              27
              
              
              
              27
              
              
              
              57
              
              
              
              84Balance
      at May 31, 2009
              
              
              6,633,112
              
              
              
              7
              
              
              
              10,961
              
              
              
              (7,788
              )
              
              
              3,180
              
              
              
              19
              
              
              
              3,199Stock-based
      compensation - restricted stock
              
              
              —
              
              
              
              —
              
              
              
              19
              
              
              
              —
              
              
              
              19
              
              
              
              —
              
              
              
              19Issuance
      of restricted stock
              
              
              12,950
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Net
      income (loss)
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (223
              )
              
              
              (223
              )
              
              
              17
              
              
              
              (206
              )Balance
      at November 30, 2009
              
              
              6,646,062
              
              
              $
              7
              
              
              $
              10,980
              
              
              $
              (8,011
              )
              
              $
              2,976
              
              
              $
              36
              
              
              $
              3,012
 
 
 
 
 The
accompanying notes are an integral part of the condensed consolidated financial
statements.
  5
  GLOBAL
ENTERTAINMENT CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For
the Six Months Ended November 30, 2009 and 2008
 (Unaudited)
(in thousands)
 
 
 2009
              
              
              2008Cash
      flows from operating activities:Net
      loss, attributable to Global
              
              $
              (223
              )
              
              $
              (416
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities-Depreciation
              
              
              49
              
              
              
              81Provision
      for doubtful accounts
              
              
              20
              
              
              
              25Noncontrolling
      interest
              
              
              17
              
              
              
              (5
              )Stock-based
      compensation - restricted stock
              
              
              19
              
              
              
              16Gain
      on sale of property and equipment
              
              
              (10
              )
              
              
              —Unbilled
      earnings on Wenatchee project
              
              
              —
              
              
              
              (639
              )Discontinued
      operations and related impairment charges
              
              
              —
              
              
              
              5Changes
      in assets and liabilities, net of businesses disposed-Accounts
      receivable
              
              
              (1,388
              )
              
              
              (19
              )Prepaid
      expenses and other assets
              
              
              (183
              )
              
              
              (235
              )Accounts
      payable
              
              
              2,483
              
              
              
              355Accrued
      liabilities
              
              
              (82
              )
              
              
              390Deferred
      revenues
              
              
              328
              
              
              
              446Net
      cash provided by operating activities
              
              
              1,030
              
              
              
              4Cash
      flows from investing activities:Proceeds
      from sale of property and equipment
              
              
              586
              
              
              
              —Purchase
      of property and equipment
              
              
              (111
              )
              
              
              (681
              )Investment
      in Wenatchee project
              
              
              —
              
              
              
              (21,342
              )Deposit
      of restricted cash
              
              
              —
              
              
              
              (1,250
              )Proceeds
      from disposition of Our Old Car Company assets, net of
      expenses
              
              
              —
              
              
              
              1,790Net
      cash provided by (used in) investing activities
              
              
              475
              
              
              
              (21,483
              )Cash
      flows from financing activities:Notes
      payable proceeds
              
              
              —
              
              
              
              21,992Notes
      payable payments
              
              
              (55
              )
              
              
              (292
              )Net
      cash provided by (used in) financing activities
              
              
              (55
              )
              
              
              21,700Net
      increase in cash and cash equivalents
              
              
              1,450
              
              
              
              221Cash
      and cash equivalents, beginning of period
              
              
              1,111
              
              
              
              443Cash
      and cash equivalents, end of period
              
              $
              2,561
              
              
              $
              664Supplemental
      Disclosures:Interest  paid
              
              $
              5
              
              
              $
              11Income
      taxes paid (received)
              
              $
              —
              
              
              $
              —
 
 
 
 
 
 The
accompanying notes are an integral part of the condensed consolidated financial
statements.


6


GLOBAL
ENTERTAINMENT CORPORATION AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS











Basis
of Presentation and Use of Estimates





Description
of the Company





Global
Entertainment Corporation (referred to in this report as “we,” “us,” “Global”)
is an integrated event and entertainment company that is engaged, through its
wholly owned subsidiaries, in sports management, multipurpose events center
development, facility and venue management and marketing, and venue
ticketing.  We are primarily focused on projects located in mid-size
communities.





Our
current principal operating subsidiaries are Western Professional Hockey League,
Inc., Global Properties I, International Coliseums Company, Inc., Global
Entertainment Marketing Systems, Inc., Global Entertainment Ticketing, Encore
Facility Management and GEC Food Service, LLC.





We,
through our wholly owned subsidiary, Western Professional Hockey League, Inc.
(WPHL), operate the Western Professional Hockey League, a minor league
professional hockey organization, and are the licensor of the independently
owned hockey teams which participate in the league.  WPHL has entered
into a joint operating agreement with the Central Hockey League, Inc. (CHL,
Inc.).  The effect of the joint operating agreement is that the two
leagues had their respective teams join together and operate under the “Central
Hockey League” name (as the League).  The terms of the joint operating
agreement define how the League will operate.





The
League currently consists of seventeen (17) teams, (fifteen (15) participating
in the 2009-2010 season) located in mid-market communities throughout the
Central, Western and Southern regions of the United States. Three teams,
each of which was an original CHL, Inc. team, continue to operate under a
sanction agreement that requires direct payments to the League pursuant to the
terms and conditions of the original CHL, Inc. agreements.





Global
Properties I (GPI) provides services in targeted mid-sized communities across
the United States related to the development of multipurpose events
centers.  GPI's development of multipurpose events centers promotes
the development of the League by assisting potential licensees in securing
quality venues in which to play minor professional hockey league
games.





International
Coliseums Company, Inc. (ICC) manages the construction of multipurpose events
centers in mid-market communities.





Global
Entertainment Marketing Systems, Inc. (GEMS), promotes, markets, and sells
various services related to multipurpose entertainment facilities, including all
contractually obligated income (COI) sources such as facility naming rights,
luxury suite sales, premium seat license sales, and facility sponsorship
agreements.





Global
Entertainment Ticketing (GetTix) provides ticketing services for the
multipurpose events centers developed by GPI, existing League licensees, and
various other entertainment venues, theaters, concert halls, and other
facilities and event coordinators.  GetTix provides a full ticketing
solution by way of box office, outlet, phone, internet and print-at-home service
that utilizes distribution outlets in each market.  GetTix uses
third-party, state-of-the-art software to deliver ticketing capabilities that
include database flexibility, easy season and group options, financial reporting
and marketing resources.





Encore
Facility Management (Encore) provides a full complement of multipurpose events
center operational services.  These services include providing
administrative oversight in the areas of facility/property management and
finance, event bookings, and food and beverage.  Encore is currently
involved with facility management of multipurpose events centers developed by
GPI.  Facility management operations are conducted under separate
limited liability companies.


7


GEC Food
Service, LLC (formerly Global Food Service, LLC) (Food Service), formed in
fiscal 2009, manages facility food service operations.





On August
1, 2008, we sold substantially all of the assets of Our Old Car Company
(formerly known as Cragar Industries, Inc.).





Basis
of Presentation





The
accompanying condensed consolidated financial statements include the accounts of
Global Entertainment Corporation and its wholly owned subsidiaries, WPHL, GPI,
ICC, GEMS, GetTix, Encore, Food Service and Our Old Car Company (formerly known
as Cragar Industries, Inc.), as well as the limited liability companies formed
for facility management.  Intercompany balances and transactions have
been eliminated in consolidation.





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form
10-Q.  Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for fair
presentation have been included.





Operating
results for the three and six month periods ended November 30, 2009, are not
necessarily indicative of the results that may be expected for the year ending
May 31, 2010, or for any other period.





For
further information, refer to the consolidated financial statements and
footnotes included in our report on Form 10-K for the year ended May 31,
2009.





Certain
reclassifications are reflected in prior periods for the purpose of consistent
presentation.





Subsequent
events have been evaluated and disclosed through the date of this filing, which
is the date these consolidated financial statements were issued.





Use
of Estimates





Management
uses estimates and assumptions in preparing financial statements in accordance
with accounting principles generally accepted in the United
States.  Those estimates and assumptions affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses.  Actual results may vary from
the estimates that were assumed in preparing the condensed consolidated
financial statements.





We
believe our critical accounting policies and material estimates include, but are
not limited to, revenue recognition, the allowance for doubtful accounts, arena
guarantees and other contingencies, the carrying value of goodwill, the
realization of deferred income tax assets, the fair value of a liability related
to the secondary guarantee related to a worker’s compensation program, and the
allocation of expenses and division of profit or loss relating to the joint
operating agreement.  Due to the uncertainties inherent in the
estimation process and the significance of these items, it is at least
reasonably possible that the estimates in connection with these items could be
materially revised within the next year.





Accounting
Developments





In
November 2007, the EITF modified GAAP to prohibit application of the equity
method of accounting to activities performed outside of a separate legal entity
and requires revenues and costs incurred with third parties in connection with
collaborative agreements be presented gross or net based on other applicable
accounting literature.  Payments to or from collaborators should be
presented in an income statement based on the nature of the arrangement, whether
the payments are within the scope of other accounting literature, and certain
other criteria.  We adopted these standards effective June 1, 2009,
and applied the standards to our accounting for CHL, Inc.’s interest in the
League effective June 1, 2009.  Based on the nature of our arrangement
with CHL, Inc., its interest is accounted for by analogy to the standards for
the accounting and reporting of noncontrolling interests.


8


In
December 2007, the FASB modified GAAP by establishing accounting and reporting
standards for noncontrolling interests in a subsidiary and for the
deconsolidation of a subsidiary.  The standards also provide income
statement presentation guidance and require expanded
disclosures.  We adopted these standards effective June 1, 2009,
prospectively, except for the presentation and disclosure requirements which
have been applied retrospectively for all periods presented.  We
account for CHL, Inc.’s interest in the League in accordance with these new
standards effective June 1, 2009.  The impact on our financial
position and results of operations was as follows:





·
            CHL,
      Inc.’s share of the results of League operations is reflected separately
      on the face of the consolidated statements of operations below net income
      (loss) rather than in other income
(expense).





·
            CHL,
      Inc.’s undistributed earnings (loss) in the League is presented as
      noncontrolling interest in the equity section of the consolidated balance
      sheets, for all periods presented.  Prior to adoption of these
      standards, CHL, Inc.’s undistributed earnings (loss) in the League had
      been presented in the consolidated balance sheets as a liability as of May
      31, 2009, and an asset as of November
  30, 2008.





In
September 2009, the EITF issued a consensus which revises the standards for
recognizing revenue on arrangements with multiple
deliverables.  Before evaluating how to recognize revenue for
transactions with multiple revenue generating activities, an entity should
identify all the deliverables in the arrangement and, if there are multiple
deliverables, evaluate each deliverable to determine the unit of accounting and
whether it should be treated separately or in combination.  The
consensus removes certain thresholds for separation, provides criteria for
allocation of revenue amongst deliverables and expands disclosure
requirements.  The standards will be effective June 1, 2011, for our
fiscal year 2012, unless we elect to early adopt the standards effective June 1,
2009.  We have not yet evaluated the impact these standards will have
on our financial position or results of operations.  We have not
determined if we will early adopt the standards.





In June
2009, the FASB changed the consolidation rules as they relate to variable
interest entities.  The standards change the model for determining who
should consolidate a variable interest entity, and require ongoing reassessment
of whether we should consolidate a variable interest entity.  The
standards will be effective June 1, 2010, for our fiscal year
2011.  We have not yet evaluated the impact these standards will have
on our financial position or results of operations.








Earnings
(Loss) Per Share (EPS)





Basic EPS
is computed by dividing the applicable numerator for earnings (loss) by the
weighted average number of shares of common stock outstanding during the
period.  Diluted EPS is computed by dividing the applicable numerator
for earnings (loss) by the total of the weighted average number of shares of
common stock securities outstanding during the period and the effect of dilutive
securities outstanding during the period.  The effect of dilutive
securities is not included in the weighted average number of shares outstanding
when inclusion would increase the earnings per share or decrease the loss per
share for income (loss) from continuing operations, net of tax.





Reconciliations
of the numerators and denominators in the EPS computations for income (loss)
from continuing operations, net of tax, for the three and six months ended
November 30, 2009 and 2008, follow:


9





Three
      Months Ended
            
            
            Six
      Months EndedNovember
      30,
            
            
            November
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008NUMERATOR-
      basic and diluted (in thousands):Income
      (loss) from continuing operations, net of tax,attributable
      to Global common shareholders
            
            $
            26
            
            
            $
            (256
            )
            
            $
            (223
            )
            
            $
            (368
            )DENOMINATOR:Basic
      EPS - weighted average shares outstanding
            
            
            6,639,150
            
            
            
            6,626,015
            
            
            
            6,636,115
            
            
            
            6,625,562Effect
      of dilutive securities
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Diluted
      EPS - weighted average shares outstanding
            
            
            6,639,150
            
            
            
            6,625,114
            
            
            
            6,636,115
            
            
            
            6,625,114Number
      of shares of common stock which could have beenpurchased
      with average outstanding securities not included indiluted
      EPS because effect would be antidilutive-Stock
      options (average price of $4.99 for the three and six
    months
            
            
            293,500
            
            
            
            338,304
            
            
            
            294,134
            
            
            
            364,368ended
      November 30, 2009)Warrants
      (average price of $7.10 for the three and six months
            
            
            215,800
            
            
            
            248,095
            
            
            
            215,800
            
            
            
            262,003ended
      November 30, 2009)Restricted
      stock
            
            
            26,059
            
            
            
            25,511
            
            
            
            25,979
            
            
            
            22,992





The
impacts of all outstanding options, warrants and restricted stock outstanding at
November 30, 2009, were not included in the calculation of diluted EPS for the
three and six months ended November 30, 2009, because to do so would be
antidilutive.  Outstanding options, warrants and restricted stock
could potentially dilute EPS in the future.





Property
and Equipment





The City
of Wenatchee, Washington purchased our food service equipment, in its entirety
for $0.6 million.  We discontinued depreciation of the equipment in
July 2009 and received the $0.6 million cash purchase price in October
2009.  The gain on the sale was $10 thousand.  As of
November 30, 2009 and May 31, 2009, property and equipment was comprised of the
following (in thousands):








November
      30,
            
            
            May
      31,2009
            
            
            2009
            
            Range
      of initial useful livesOffice
      furniture and equipment
            
            $
            315
            
            
            $
            276
            
            5
      to 7 yearsComputer
      equipment
            
            
            394
            
            
            
            390
            
            2
      to 7 yearsFood
      service equipment
            
            
            -
            
            
            
            636
            
            5
      to 20 years709
            
            
            
            1,302Less:
      accumulated depreciation
            
            
            (582
            )
            
            
            (594
            )$
            127
            
            
            $
            708








Note
Payable





As of
November 30, 2009, note payable consists entirely of a note payable we entered
into in fiscal year 2008 in connection with settlement of a legal
matter.  The note calls for 36 payments of $10 thousand monthly
through December 2010.  We recorded the present value of the payments,
discounted at 7.0%, as notes payable and general and administrative costs. The
note had an initial present value of $0.3 million.


10


We had a
$1.75 million line of credit that expired October 1, 2009.  The line
of credit bore interest at a daily adjusting LIBOR rate plus 2%, subject to
certain adjustments.  We had received no cash advances on this credit
facility prior to its expiration.





PVEC,
LLC Joint Venture





During
fiscal year 2006, we entered into an agreement with Prescott Valley Signature
Entertainment, LLC (PVSE, LLC) to form Prescott Valley Events Center, LLC
(PVEC, LLC) to engage in the business of developing, managing, and leasing the
Prescott Valley Events Center in Prescott Valley, Arizona (the
Town).  We are the managing member of
PVEC, LLC.  Construction of the center, which opened in November
2006, was funded by proceeds from the issuance of $35 million in Industrial
Development Authority of the County of Yavapai Convention Center Facilities
Excise Tax Revenue Bonds, Series 2005 (the Bonds).





We
account for our investment in PVEC, LLC under the equity method.  Our
interest in this entity is not a controlling one, as we do not own a majority
voting interest and our ability to affect the business operations is
significantly limited by the PVEC, LLC operating agreement.  The
operating agreement also provides that a majority-in-interest of the members may
replace the managing member, or if the managing member is in default, a
majority-in-interest of the remaining members may replace the managing
member.





In
addition to a $1 thousand initial capital contribution, we contributed $250
thousand as an initial preferred capital contribution and PVSE, LLC contributed
land with an approximate value of $1.5 million as an initial preferred capital
contribution.  Payment of the $250 thousand was made to PVEC, LLC in
December 2008.  We recorded losses on our investment in fiscal 2008,
in the amount of $251 thousand, to bring our investment to zero.  Our
investment was zero at May 31, 2009, and remains zero at November
30, 2009.





PVEC, LLC
lease payments on the facility are equal to debt service payments on the
Bonds.  In the event of any shortfalls in debt service payments,
amounts will be paid by the Town from transaction privilege tax (TPT) collected
from the surrounding project area.





Operating
revenues of the center, as defined, are first used to pay operating expenses, as
defined, second to pay our base management fee (4% of the center’s operating
revenue), third to pay debt service, then to fund other items.  As a
result, we may be required to defer receipt of our management fees should
operating revenues, as defined, be insufficient to pay operating expenses, as
defined.  Through November 30, 2009, no management fees had been
deferred.





Cash
distributions and distributions in liquidation are to be made to each member in
the following priority: 1) to the extent needed to pay taxes, 2) to each member
to the extent of loans in the form of our unpaid management fees and PVSE, LLC’s
unpaid parking fees, and 3) to PVSE, LLC, until their preferred account equals
ours (including preferred returns of 5% thereon) and then
50/50.  Therefore, in fiscal 2008 we recognized 100% of PVEC, LLC’s
losses to the extent of our funding commitment ($251 thousand).  We
will recognize additional losses to the extent of any loans to PVEC, LLC, should
they accumulate, in the form of deferred management fees.





PVEC,
LLC’s unaudited financial information for the three and six months ended
November 30, 2009 and 2008, follows (in thousands):








Three
      Months Ended
            
            
            Six
      Months EndedNovember
      30,
            
            
            November
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008Operating
      revenue
            
            $
            566
            
            
            $
            1,112
            
            
            $
            909
            
            
            $
            1,727Operating
      profit (loss)
            
            
            (212
            )
            
            
            63
            
            
            
            (521
            )
            
            
            (166
            )Net
      income (loss)
            
            
            (229
            )
            
            
            53
            
            
            
            (548
            )
            
            
            (188
            )


11





Selected
PVEC, LLC unaudited financial information as of November 30, 2009 and May 31,
2009, follows (in thousands):





November
      30,
            
            
            May
      31,2009
            
            
            2009Property
      and equipment, net
            
            $
            28,488
            
            
            $
            29,251Receivable
      from Town
            
            
            7,533
            
            
            
            6,558Total
      assets
            
            
            39,838
            
            
            
            38,758Debt
      payable
            
            
            35,000
            
            
            
            35,000Retained
      deficit
            
            
            1,605
            
            
            
            1,054Members'
      equity
            
            
            135
            
            
            
            685





Effective
September 1, 2009, we ceased recognizing PVEC, LLC advertising sales commissions
and facility management fees, exclusive of payroll costs and reimbursed
expenses, as collections are deemed no longer reasonably assured.  As
of November 30, 2009, our receivables from PVEC, LLC are classified as long-term
as collections are not expected within the next twelve months.  Our
consolidated financial statements reflect the following related to transactions
between us and PVEC, LLC (in thousands).








Three
      Months Ended
            
            
            Six
      Months EndedNovember
      30,
            
            
            November
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008Facility
      management fees, exclusive of payroll costsand
      reimbursed expenses (Encore)
            
            $
            (2
            )
            
            $
            12
            
            
            $
            —
            
            
            $
            29Facility
      management fees, payroll costs (Encore)
            
            
            175
            
            
            
            171
            
            
            
            309
            
            
            
            326Facility
      management fees, reimbursed expenses (Encore)
            
            
            10
            
            
            
            29
            
            
            
            21
            
            
            
            48Advertising
      sales commission (GEMS)
            
            
            —
            
            
            
            19
            
            
            
            40
            
            
            
            86Ticket
      service fees (GetTix)
            
            
            18
            
            
            
            31
            
            
            
            38
            
            
            
            72Cost
      of revenues, facility payroll (Encore)
            
            
            175
            
            
            
            171
            
            
            
            309
            
            
            
            326Cost
      of revenues, reimbursed expenses (Encore)
            
            
            10
            
            
            
            29
            
            
            
            21
            
            
            
            48





November
      30,
              
              
              May
      31,2009
              
              
              2009Accounts
      receivable, short -term
              
              $
              —
              
              
              $
              100Accounts
      receivable, long-term
              
              
              378
              
              
              
              —


Subsequent
to November 30, 2009, we have advanced $85 thousand of cash to PVEC,
LLC.  These advances are being expensed as equity method losses and
bring our investment in PVEC, LLC below zero as of the date of this
filing.








Commitments
and Contingencies





Operating
Leases





We lease
10,392 square feet of office space for our Tempe, Arizona headquarters pursuant
to a lease with a sixty-six month initial term beginning January
2008.  The lease is renewable for an additional sixty-month
period.  Leasehold improvements at the location are depreciated over
the initial lease term.  Non-level rents are recognized on a
straight-line basis over the initial lease term.  Liabilities related
to non-level rents of $88 thousand and $96 thousand were included in accrued
liabilities at November 30, 2009 and May 31, 2009.





In
addition we are committed under an equipment and maintenance contract to pay $1
thousand monthly through December 2010.


12


Litigation





As with
all entertainment facilities there exists a degree of risk that the general
public may be accidentally injured.  As of November 30, 2009, there
were various claims outstanding in this regard that management does not believe
will have a material effect on our financial condition or results of
operations.  To mitigate this risk, we maintain insurance coverage,
which we believe effectively covers any reasonably foreseeable potential
liability.  There is no assurance that our insurance coverage will
adequately cover all liabilities to which we may be exposed.





We are a
plaintiff and a counter-defendant in a lawsuit involving the City of Rio Rancho,
New Mexico filed in the New Mexico 13th Judicial District, Sandoval County, Case
No. 01329 CV091504.  Our claim seeks resolution of matters stemming
from the time during which we managed the events center in Rio Rancho, New
Mexico.  Specifically, our claim is based on breach of contract and
other matters.  The complaint seeks payment of monies due in excess of
$0.3 million and declaratory judgment that we have no liability to third-party
creditors of the center.  The city’s counterclaim alleges breach of
contract, among other claims, and seeks judgment in excess of $0.2
million.  We believe the counterclaim is without merit.





Global
Entertainment Corporation, PVEC, LLC and two of our directors (James Treliving
and Richard Kozuback) are four of sixteen defendants in Allstate Life Insurance
Company (Allstate) v. Global Entertainment Corporation
et. al.  This suit, Case No. CV1962-JWS, was filed in United
States District Court, District of Arizona.  The litigation relates to
the offering for the Bonds, issued to support the construction of the events
center in Prescott Valley, Arizona.  Allstate is a bond holder and the
complaint alleges the bond offering failed to properly disclose certain facts,
that the underwriters and certain law firms acted with deliberate recklessness
and that the bond documents are defective.  Allstate seeks unspecified
damages and/or reimbursement of its investment, in excess of $26
million.  We believe the claims against Global Entertainment
Corporation, PVEC, LLC and the two directors are without merit.  Our
insurance carrier has been notified.Our insurance
carrier has indicated an intention to decline coverage of Global Entertainment
Corporation in this matter.  Defense costs allocated to Global
Entertainment Corporation are being expensed as incurred and defense costs
allocated to the directors are being expensed as incurred up to the amount of
the applicable deductible ($75 thousand or $100 thousand, depending on how the
claim is ultimately classified).





All
litigation settlement expenses are included in general and administrative
costs.  The following summarizes litigation settlement activity for
the three and six months ended November 30, 2009 and 2008, and the balance sheet
classification of litigation settlement liabilities at November 30, 2009 and May
31, 2009 (in thousands).








Three
      Months Ended
            
            
            Six
      Months EndedNovember
      30,
            
            
            November
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008Litigation
      settlement liabilities, beginning of period
            
            $
            203
            
            
            $
            258
            
            
            $
            330
            
            
            $
            283Cash
      payments
            
            
            (53
            )
            
            
            (26
            )
            
            
            (180
            )
            
            
            (51
            )Litigation
      settlement liabilities, end of period
            
            $
            150
            
            
            $
            232
            
            
            $
            150
            
            
            $
            232





November
      30,
              
              
              May
      31,2009
              
              
              2009Accounts
      payable
              
              
              25
              
              
              $
              125Accrued
      liabilities
              
              $
              —
              
              
              
              25Note
      payable - current portion
              
              
              115
              
              
              
              111Note
      payable - long-term portion
              
              
              10
              
              
              
              69$
              150
              
              
              $
              330


Legal
services costs are expensed as incurred.  At November 30, 2009 and May
31, 2009, accounts payable included $111 thousand and $176 thousand in legal
services costs.  At November 30, 2009 and May 31, 2009, accrued
liabilities included $14 thousand and $21 thousand in legal services
costs.


13


Contingencies





We enter
into indemnification provisions under our agreements with other companies in the
ordinary course of business, typically with business partners and
customers.  Under these provisions we generally indemnify and hold
harmless the indemnified party for losses suffered or incurred by the
indemnified party as a result of our activities.  The maximum
potential amount of future payments we could be required to make under these
indemnification provisions is unlimited.  We have not incurred
material costs to defend lawsuits or settle claims related to these
indemnification agreements.  As a result, we believe the estimated
fair value of these agreements is minimal.  Accordingly, we have no
liabilities recorded for these agreements as of November 30, 2009.





As of
November 30, 2009, we have entered into various employment contracts with key
employees.  Under certain circumstances we may be liable to pay
amounts based on the related contract terms.  We also have initiated
legal actions against certain individuals which could result in awards in our
favor.





Guarantees





In
February 2008, we entered into an agreement to manage a multi-purpose events
center to be constructed in Texas.  The initial term of this agreement
is fifteen years, with an option by the city to renew for an additional five
years under certain conditions.  This agreement includes a guarantee
that the events center will operate at a break-even point and without cost to
the city, not including any capital reserves and any other off-sets described in
the agreement.  This guarantee requires that all amounts reasonably
required for the operation and maintenance of the events center will be
generated by the operation of the events center, or otherwise paid by
us.  The agreement includes a provision that within thirty days of
opening, the city will fund an operating account with three months of operating
revenue, as defined.  The monies in that operating account may be used
to fund operations of the events center, but if used, must be repaid by us
within thirty days after the first operating year, as defined.  Should
we be obligated to fund any operational shortfalls, the agreement provides for
reimbursement to us from future profits from the events center.  The
maximum amount of future payments we could be required to make under this
operational guarantee is theoretical due to various unknown
factors.  However, the guarantee would be limited to the operational
loss from the facility for each year of the guarantee, less any reimbursements
from the facility.  Although no assurance can be made, we do not
believe, that any potential guarantee payments would be material based on the
operating results of similar facilities.  The facility opened in
November 2009.





In April
2009, we entered into an agreement with the city in Texas to fund a performance
reserve related to having a hockey team play in the facility.  Under
the agreement we delay receipt of advertising sales commissions otherwise
payable to us to fund a performance reserve.  To the extent the
performance reserve falls below the required reserve, we must fund
cash.  The required performance reserve levels are as
follows:





·
            November
      1, 2009 - $200,000, reduced to $150,000 when a hockey team plays the
      2009-2010 season opener





·
            November
      1, 2010 - $150,000, reduced to $100,000 when a hockey team plays the
      2010-2011 season opener





·
            November
      1, 2011 - $100,000, reduced to $50,000 when a hockey team plays the
      2011-2012 season opener





·
            November
      1, 2012 - $50,000, reduced to zero when a hockey team plays 2012-2013
      season opener.





If no
hockey team plays a season opener through the 2018-2019 season opener, the
amount then in the reserve account is forfeited and future advertising sales
commission are forfeited until either a hockey team plays in a season opener or
a total of $300 thousand is forfeited.  In no event is the amount
forfeited to exceed $300 thousand.  A hockey team played the 2009-2010
season opener and we believe the likelihood we will forfeit anything under this
guarantee is remote.  As of November 30, 2009, $150 thousand is in the
performance reserve - $100 thousand is included in other assets and $50 thousand
is included in prepaid and other assets in the accompanying balance
sheets.


14


In May
2008, we entered into an agreement to manage a multi-purpose events center to be
constructed in Missouri.  The initial term of this agreement ends
fifteen years from facility opening, and the city may renew the agreement for an
additional five years under the same terms.  The facility opened in
November 2009.  Our compensation under the agreement may only come
from the facility operating account, which is to be funded by facility
operations, as defined in the agreement.  The management agreement
includes a guarantee that we will subsidize the operations of the facility to
the extent that funds in the facility operating account and a temporary
operating account are not adequate.  Under the terms of the agreement
the city shall advance $0.5 million to fund a temporary operating reserve
account, which may be used to fund shortfalls in the facility operations
account.  Excess funds in the facility operating account each
operating year, after paying operating expenses, our base Encore fee and GEMS
commission, are to be used in the following priority: 1) to reimburse us for any
subsidy payments we have made, 2) to replenish the temporary operating reserve
account, 3) to fund the capital reserve account and 4) to pay on a co-equal
basis our incentive fee and deposits to three additional reserve
accounts.  The maximum amount of future payments we could be required
to make under the guarantee is theoretical due to various unknown
factors.  However, once the temporary operating reserve account is
depleted, the guarantee subsidy payments would be limited to the operational
loss each operating year, plus the amount of our facility management fees and
advertising sales commissions.  We do not expect to make guarantee
subsidy payments based on operating results of similar facilities, however, no
assurance can be made that a payment pursuant to this guarantee would not be
paid in the future and that such payment would not be material.





In
addition, under the terms of the management agreement, an amount not to exceed
$0.50 per ticket, and excess operating funds, are to be used to fund a capital
reserve account up to $150 thousand in each of the first five operating years
and up to $250 thousand thereafter.  Should the capital reserve
account not be fully funded for two consecutive years, the management agreement
terminates, unless the city elects to renew the agreement.





We
provide a secondary guarantee on a standby letter of credit in favor of Ace
American Insurance Company for $0.6 million related to a guarantee under a
workers compensation program.  This letter of credit is fully
collateralized by third parties.  No amounts have been drawn on this
letter of credit as of November 30, 2009.  We believe the amount
of payments under this guarantee will be negligible, and as such, have assigned
no value to this guarantee at November 30, 2009.





We have
guaranteed payment of a lease for equipment used by PVEC, LLC.  As of
November 30, 2009, twenty-four payments averaging $12 thousand per month,
including principal and interest were outstanding.  The fair value of
the lease obligation at November 30, 2009, was approximately $270
thousand.  The lease is secured by the equipment.  We
believe the amount of payments under this guarantee will be negligible, and as
such, have assigned no value to this guarantee at November 30,
2009.





In
addition to our commitments and guarantees described above we also have the
commitments and guarantees described in the PVEC, LLC Joint Venture
Note.





Discontinued
Operations





On August
1, 2008, we sold substantially all of the assets of Our Old Car Company
(formerly known as Cragar Industries, Inc).  The assets consisted
primarily of intangibles, including trademarks, service marks and domain
names.  The cash from the transaction of approximately $1.8 million,
net of transaction costs, was allocated primarily to the intangibles, with the
remainder to tooling, inventory and other assets.





The
following table presents selected operating data for Our Old Car Company for the
six months ended November 30, 2008 (in thousands):




2008Revenues
            
            $
            60Loss
      on disposal
            
            
            (51
            )Loss
      before income taxes
            
            
            (48
            )Loss
      from discontinued operations, net of income tax
            
            
            (48
            )




15





Credit
Risk





Our
business activities and accounts receivable are with customers in various
industries located throughout the United States.  We perform ongoing
credit evaluations of our customers and maintain allowances for potential credit
losses.





As of
November 30, 2009, approximately $640 thousand of trade receivables is
classified as long-term assets.  This classification was done in
contemplation of the current economic conditions and the anticipated timing of
collections.  Management, after careful review and analysis, believes
these receivables to be fully collectible and as such, no allowance for doubtful
accounts has been established against these receivables.





The
League operates primarily in mid-sized communities in the Central, Western and
Southern regions of the United States, including Arizona, Colorado, Kansas,
Louisiana, Mississippi, Missouri, Oklahoma, South Dakota, and Texas in fiscal
2010.  Our facility management fees and project management fees are
derived from events centers currently operating in, or being constructed in,
Arizona, Missouri, Texas and Washington in fiscal 2010.  The economic
downturn which has affected these markets has negatively impacted our operating
results and will most likely continue to do so until an economic recovery is
complete.





We depend
on contracts with cities or related governmental entities to design, develop,
and manage new multipurpose facilities and adjacent real
estate.  Typically we must expend 20-30 months of effort to obtain
such contracts.  We depend on these contracts for the revenue they
generate and the facilities resulting from these contracts are potential
facilities in which our licensees may operate.  Failure to timely
secure these contracts may negatively impact our results.  Many
governments are struggling to maintain tax revenue and raise capital in the
current economic environment and may have less interest in developing new
multipurpose facilities or less ability to finance construction of new
multipurpose facilities.  Our revenues, project development fees and
project management fees in particular, could be negatively
impacted.





Purchasing
a League license requires significant capital and commencing operation is a
significant expense which limits the pool of potential licensees.  We
depend on a critical mass of licensees to capture the economies of scale
inherent in the League’s operations and to facilitate intra-league
play.  There can be no assurance that we will be able to attract
qualified candidates for licenses.  We anticipate that expansion of
the League will be difficult because of the high capital costs of licenses,
competitive pressures from sports leagues and entertainment providers both
within and outside of the markets where we currently operate, and the lack of
arenas for new licensees.





The minor
league hockey industry in which we conduct business is subject to significant
competition from other sports and entertainment alternatives as well as both the
National Hockey League and its minor league hockey system, the American Hockey
League, and other independent minor hockey leagues.  Even teams of the
National Hockey League, which is the largest professional hockey league with the
greatest attendance, have struggled to remain financially viable.  A
significant portion of our revenues result from payments made by our
licensees.  There can be no assurance that licensees will not default
under their license agreements.





The
League may be unable to attract new licensees and existing licensees may not be
able to make the continuing payments required by their license agreements in the
current economic environment.  There can be no assurance that any
payments will be made by new or current licensees.





Segment
Information





Each of
our subsidiaries is a separate legal entity with a separate management
structure.  Our corporate operations exist solely to support our
subsidiary segments.  As such, certain corporate overhead costs are
allocated to the operating segments.  There are no differences in
accounting principles between the operations.


16


In all
periods presents, goodwill relates to our International Coliseums
segment.





The Food
Service segment began operations in fiscal 2009.





No
interest expense was allocated to discontinued operations in fiscal 2009 or
fiscal 2008.




Gross
      Revenues
            
            
            Income
      (Loss) from Continuing Operations, Before Tax
            
            
            Identifiable
      AssetsNovember 30, 2009Global
      Entertainment Corporate Operations
            
            $
            121
            
            
            $
            (618
            )
            
            $
            2,920
            
            (a)GEC
      Food Service (b)
            
            
            335
            
            
            
            (11
            )
            
            
            85Central
      Hockey League/WPHL
            
            
            948
            
            
            
            224
            
            
            
            713Global
      Properties I
            
            
            152
            
            
            
            (101
            )
            
            
            223International
      Coliseums
            
            
            979
            
            
            
            610
            
            
            
            2,171
            
            (c)Encore
      Facility Management
            
            
            2,438
            
            
            
            (21
            )
            
            
            1,007Global
      Entertainment Marketing Systems
            
            
            218
            
            
            
            22
            
            
            
            252Global
      Entertainment Ticketing
            
            
            513
            
            
            
            (311
            )
            
            
            215Global
      Entertainment Coporation Consolidated
            
            $
            5,704
            
            
            $
            (206
            )
            
            $
            7,586November 30, 2008Global
      Entertainment Corporate Operations
            
            $
            101
            
            
            $
            (1,178
            )
            
            $
            54,869
            
            (a)GEC Food
      Service (b)
            
            
            131
            
            
            
            (103
            )
            
            
            698Central
      Hockey League/WPHL
            
            
            788
            
            
            
            37
            
            
            
            503Global
      Properties I
            
            
            478
            
            
            
            131
            
            
            
            199International
      Coliseums
            
            
            1,226
            
            
            
            890
            
            
            
            592Encore
      Facility Management
            
            
            1,173
            
            
            
            (78
            )
            
            
            180Global
      Entertainment Marketing Systems
            
            
            378
            
            
            
            116
            
            
            
            178Global
      Entertainment Ticketing
            
            
            1,315
            
            
            
            (188
            )
            
            
            348Global
      Entertainment Coporation Consolidated
            
            $
            5,590
            
            
            $
            (373
            )
            
            $
            57,567







(a)
            Global
      Entertainment Corporate Operations assets include the investment in
      Wenatchee project of $52.4 million at November 30, 2008.  The
      investment was sold in December 2008.  Global Entertainment
      Corporate Operations assets include cash and cash equivalents and
      restricted cash of $2.6 million and $1.9 million at November 30, 2009 and
      2008.





(b)
            The
      GEC Food Service segment began operations October 2008 in Wenatchee,
      Washington.  The Wenatchee food service contract ended effective
      August 2009.  We sold our food service equipment in October
      2009. In November 2009 GEC Food Service began food service operations in
      Independence, Missouri using equipment owned by the
  city.





(c)
            The
      International Coliseums segment assets at November 30, 2009, include $0.9
      million in accounts receivable from a city to fund furniture, fixture and
      equipment purchases made as agent for the city.  November 30,
      2008 assets included no comparable
amounts.


17


Item 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations





Forward-Looking
Disclosure





This
Quarterly Report on Form 10-Q contains forward-looking statements within the
meaning of the Safe Harbor provision of the Private Securities Litigation Reform
Act of 1995 regarding future events, including statements concerning our future
operating results and financial condition and our future capital needs and
sources.  These statements are based on current expectations,
estimates, forecasts, and projections as well as our beliefs and
assumptions.  Words such as “outlook”, “believes”, “expects”,
“appears”, “may”, “will”, “should”, “anticipates” or the negatives thereof or
comparable terminology, are intended to identify such forward-looking
statements.  These forward-looking statements are only predictions and
are subject to risks, uncertainties and assumptions that are difficult to
predict.  Therefore, actual results may differ materially and
adversely from those expressed in any forward-looking
statements.  Factors that might cause or contribute to such
differences include, but are not limited to those discussed in our report on
Form 10-K for the fiscal year ended May 31, 2009.  You should not
place undue reliance on these forward-looking statements, which speak only as of
the date of this Quarterly Report.  We undertake no obligation to
revise or update publicly any forward-looking statements for any reason, unless
otherwise required by law.





General





The
following is management’s discussion and analysis of certain significant factors
affecting our financial position and operating results during the periods
included in the accompanying condensed consolidated financial
statements.





Description
of the Company





Our
current operating subsidiaries are Western Professional Hockey League, Inc.,
Global Properties I, International Coliseums Company, Inc., Global Entertainment
Marketing Systems, Inc., Global Entertainment Ticketing, Encore Facility
Management and GEC Food Service, LLC.





Pursuant
to a joint operating agreement between us and Central Hockey League Inc. (CHL,
Inc.), WPHL operates and manages a minor professional hockey league known as the
Central Hockey League (the League), which currently consists of seventeen teams
(fifteen participating in the 2009-2010 season) located in mid-market
communities throughout the Central, Western and Southern regions of the United
States.





Global
Properties I (GPI) provides services in targeted mid-sized communities across
the United States related to the development of multipurpose events
centers.  GPI's development of multipurpose events centers promotes
the development of the League by assisting potential licensees in securing
quality venues in which to play minor professional hockey league
games.





International
Coliseums Company, Inc. (ICC) manages the construction of multipurpose events
centers in mid-market communities.





Global
Entertainment Marketing Systems, Inc. (GEMS), promotes, markets, and sells
various services related to multipurpose entertainment facilities, including all
contractually obligated income (COI) sources such as facility naming rights,
luxury suite sales, premium seat license sales, and facility sponsorship
agreements.





Global
Entertainment Ticketing (GetTix) provides ticketing services for the
multipurpose events centers developed by GPI, existing League licensees, and
various other entertainment venues, theaters, concert halls, and other
facilities and event coordinators.  GetTix provides a full ticketing
solution by way of box office, outlet, phone, internet and print-at-home service
that utilizes distribution outlets in each market.  GetTix uses
third-party, state-of-the-art software to deliver ticketing capabilities that
include database flexibility, easy season and group options, financial reporting
and marketing resources.


18


Encore
Facility Management (Encore) provides a full complement of multipurpose events
center operational services.  These services include providing
administrative oversight in the areas of facility/property management and
finance, event bookings, and food and beverage.  Encore is currently
involved with facility management of multipurpose events centers developed by
GPI.  Facility management operations are conducted under separate
limited liability companies.





GEC Food
Service, LLC (formerly Global Food Service, LLC) (Food Service), formed in
fiscal 2009, manages facility food service operations.





On August
1, 2008, we sold substantially all of the assets of Our Old Car Company
(formerly known as Cragar Industries, Inc.).





Critical
Accounting Policies, Estimates and Judgments





Significant
accounting policies are described in the audited consolidated financial
statements and notes thereto included in our Report on Form 10-K for the year
ended May 31, 2009.  We believe our most critical accounting policies
and estimates relate to revenue recognition, the allowance for doubtful
accounts, arena guarantees and other contingencies, the carrying value of
goodwill, the realization of deferred income tax assets, the fair value of a
liability related to the secondary guarantee related to a worker’s compensation
program, and the allocation of expenses and division of profit or loss relating
to the joint operating agreement.  Due to the uncertainties inherent
in the estimation process and the significance of these items, it is at least
reasonably possible that the estimates in connection with these items could be
materially revised within the next year.





Overview
and Forward Looking Information





During
fiscal year 2008 we decided to divest of Our Old Car Company (formerly Cragar
Industries, Inc.).  As a result, the operations of Our Old Car Company
have been classified as loss from discontinued operations in the consolidated
statements of operations for all periods presented.  Revenues and
operating costs in the consolidated statements of operations now exclude all
accounts of Our Old Car Company.





Total
revenue in the six months and quarter ended November 30, 2009, included $0.3
million in facility management fees, ticket service fees, and food service
revenues from contracts with the facility in Wenatchee, Washington, which opened
in October 2008.  The contracts related to that facility were
terminated effective August 31, 2009.





We
managed construction projects for facilities in Allen, Texas and Independence,
Missouri until the facilities opened in November 2009.  We have
contracted to provide facility management service, ticket service and
advertising sales at those facilities.  We earned advertising sales
commissions and certain pre-opening related facility management fees from both
facilities prior to opening, and expect to continue to earn advertising sales
commissions and facility management fees from both facilities after the openings
under our multi-year contracts.  We began recognizing food service
revenues from the Independence facility beginning in November 2009.





Ground
breaking on the facility in Dodge City, Kansas occurred in October
2009.  Under our agreements related to the facility we earned the last
of the contractual project development fees in our second quarter ended
November 30, 2009.  We began earning project management fees
related to this project in the fourth quarter of fiscal 2009 and fees are
expected to be earned over a total of twenty-two months.  As of
November 30, 2009, we have no active contracts providing for project development
fees.





Our
multi-year contracts with PVEC, LLC to provide facility management services,
ticket services and advertising sales were active in the three and six months
ended November 30, 2009, and remain active through the date of this filing.
However, we have ceased recognizing advertising sales commissions and facility
management fees, exclusive of payroll and reimbursed expense, as collections are
deemed no longer reasonably assured.


19


We
believe high unemployment levels and continued economic weakness have impacted
our revenues and, in particular, contributed to 1) a decline in our ticket
service fees and advertising sales commissions in the second quarter ended
November 30, 2009, compared to the prior year quarter and 2) our inability to
enter into arrangements to generate additional project development
fees.





Three
Months Ended November 30, 2009, Compared to Three Months Ended November 30,
2008





Revenues(in thousands):




Three
      Months EndedNovember
      30, 2009
            
            
            %
      of Revenue
            
            
            November
      30, 2008
            
            
            %
      of Revenue
            
            
            Change
            
            
            %
      ChangeProject
      development fees
            
            $
            102
            
            
            
            3.1
            
            
            $
            269
            
            
            
            8.3
            
            
            $
            (167
            )
            
            
            (62.1
            )Project
      management fees
            
            
            533
            
            
            
            16.0
            
            
            
            761
            
            
            
            23.6
            
            
            
            (228
            )
            
            
            (30.0
            )Facility
      management fees
            
            
            1,534
            
            
            
            46.0
            
            
            
            728
            
            
            
            22.5
            
            
            
            806
            
            
            
            110.7Ticket
      service fees
            
            
            314
            
            
            
            9.4
            
            
            
            695
            
            
            
            21.5
            
            
            
            (381
            )
            
            
            (54.8
            )Food
      service revenue
            
            
            252
            
            
            
            7.6
            
            
            
            130
            
            
            
            4.0
            
            
            
            122
            
            
            
            93.8Advertising
      sales commissions
            
            
            120
            
            
            
            3.6
            
            
            
            133
            
            
            
            4.1
            
            
            
            (13
            )
            
            
            (9.8
            )License
      fees - league dues and other
            
            
            474
            
            
            
            14.2
            
            
            
            515
            
            
            
            15.9
            
            
            
            (41
            )
            
            
            (8.0
            )Other
            
            
            5
            
            
            
            0.1
            
            
            
            —
            
            
            
            —
            
            
            
            5
            
            
            NMTotal
      Revenues
            
            $
            3,334
            
            
            
            100.0
            
            
            $
            3,231
            
            
            
            100.0
            
            
            $
            103
            
            
            
            3.2





At $3.3
million, total revenues were 3.2% higher in the quarter ended November 30, 2009,
than the quarter ended November 30, 2008.





Project
development fees for the quarter ended November 30, 2009, relate to the project
for the facility in Dodge City, Kansas, signed in fiscal 2009, and the project
for the facility in Allen, Texas.  No further development fees are
expected on these projects.  Project development fees in the prior
year quarter related to the project for the facility in Independence,
Missouri.





Project
management fees of $0.5 million were 30.0% lower for the quarter ended November
30, 2009, than the prior year quarter.  Project management fees
related to the Independence, Missouri, Allen, Texas and Dodge City, Kansas
projects for the quarter ended November 30, 2009.  The Independence,
Missouri and Allen, Texas fees ceased with the opening of the facilities in
November 2009.  Project management fees in the quarter ended November
30, 2008, related to the Allen, Texas and Independence, Missouri
projects.





Facility
management fees were $1.5 million for the quarter ended November 30, 2009,
compared to $0.7 million in the quarter ended November 30,
2008.  Facility management fees include both recurring fees for
management of facilities and fees for preopening services.  The $0.8
million increase includes a $0.8 million increase in facility management fees
for preopening services, primarily on the Allen, Texas and Independence,
Missouri projects.  The year-over-year increase in recurring fees from
the Allen, Texas and Independence, Missouri facilities, which opened in November
2009, was offset by a decline in monthly management fees from the Rio Rancho,
New Mexico facility, which ended in January 2009, and the Wenatchee, Washington
facility, which ended in August 2009.





Ticket
service fees decreased $0.4 million, to $0.3 million for the quarter ended
November 30, 2009, from $0.7 million in the prior year quarter.  This
decrease in ticket service fees reflects decreases from a continued decline in
the number of events held, attendance at events and venues under
contract.





Food
service revenues increased $0.1 million in the quarter ended November 30, 2009,
to $0.3 million, compared to $0.1 million in the prior year
quarter.  The current year quarter included revenues from the initial
twenty-three days of operations at the Independence, Missouri
facility.


20


Advertising
sales commissions were $0.1 million for the quarters ended November 30, 2009 and
2008.  Sales commissions from the Allen, Texas and Independence,
Missouri projects in the quarter ended November 30, 2009, offset the decrease
from the loss of sales commissions from the Rio Rancho, New Mexico facility, no
longer under contract,  the Wenatchee, Washington facility, no longer
under contract, and the Prescott Valley, Arizona facility.





License
fees – league dues and other remained largely unchanged at $0.5 million for the
quarters ended November 30, 2009 and 2008.





Operating Costs(in thousands):




Three
      Months EndedNovember
      30, 2009
            
            
            %
      of Revenue
            
            
            November
      30, 2008
            
            
            %
      of Revenue
            
            
            Change
            
            
            %
      ChangeCost
      of revenues
            
            $
            1,943
            
            
            
            58.3
            
            
            $
            1,419
            
            
            
            43.9
            
            
            $
            524
            
            
            
            36.9General
      and administrative costs
            
            
            1,363
            
            
            
            40.9
            
            
            
            1,720
            
            
            
            53.2
            
            
            
            (357
            )
            
            
            (20.8
            )Total
      Operating Costs
            
            $
            3,306
            
            
            
            99.2
            
            
            $
            3,139
            
            
            
            97.2
            
            
            $
            167
            
            
            
            5.3





Total
operating costs increased $0.2 million to $3.3 million for the quarter ended
November 30, 2009, from $3.1 million in the prior year quarter.  The
quarter ended November 30, 2009, included $0.7 million of additional preopening
costs, primarily related to the Allen, Texas and Independence, Missouri
projects.  That increase in cost of revenues was offset by a $0.3
million decrease in ticket servicing costs related to the decline in ticket
service fees.  General and administrative costs decreased
year-over-year in most expense categories as a result of cost reduction
initiatives.





Income (Loss)
from Continuing Operations(in thousands):




Three
      Months EndedNovember
      30, 2009
            
            
            %
      of Revenue
            
            
            November
      30, 2008
            
            
            %
      of Revenue
            
            
            Change
            
            
            %
      ChangeIncome
      (loss) from continuing operations, before tax
            
            $
            26
            
            
            
            0.8
            
            
            $
            (253
            )
            
            
            (7.8
            )
            
            $
            279
            
            
            
            (110.3
            )





Income
from continuing operations, before tax, was $26 thousand for the quarter ended
November 30, 2009, compared to a loss from continuing operations, before tax, of
$0.3 million for the quarter ended November 30, 2008.  Interest
expense in the quarter ended November 30, 2009, was $0.3 million lower then in
the prior year quarter, since the loan related to the Wenatchee project was
repaid in December 2008.


21


Six
Months Ended November 30, 2009, Compared to Six Months Ended November 30,
2008





Revenues(in thousands):




Six
      Months EndedNovember
      30, 2009
            
            
            %
      of Revenue
            
            
            November
      30, 2008
            
            
            %
      of Revenue
            
            
            Change
            
            
            %
      ChangeProject
      development fees
            
            $
            152
            
            
            
            2.7
            
            
            $
            478
            
            
            
            8.6
            
            
            $
            (326
            )
            
            
            (68.2
            )Project
      management fees
            
            
            979
            
            
            
            17.2
            
            
            
            1,226
            
            
            
            21.9
            
            
            
            (247
            )
            
            
            (20.1
            )Facility
      management fees
            
            
            2,438
            
            
            
            42.7
            
            
            
            1,173
            
            
            
            21.0
            
            
            
            1,265
            
            
            
            107.8Ticket
      service fees
            
            
            513
            
            
            
            9.0
            
            
            
            1,315
            
            
            
            23.5
            
            
            
            (802
            )
            
            
            (61.0
            )Food
      service revenue
            
            
            324
            
            
            
            5.7
            
            
            
            130
            
            
            
            2.3
            
            
            
            194
            
            
            
            149.2Advertising
      sales commissions
            
            
            191
            
            
            
            3.4
            
            
            
            378
            
            
            
            6.8
            
            
            
            (187
            )
            
            
            (49.5
            )License
      fees - league dues and other
            
            
            848
            
            
            
            14.9
            
            
            
            789
            
            
            
            14.1
            
            
            
            59
            
            
            
            7.5License
      fees - initial and transfer
            
            
            100
            
            
            
            1.8
            
            
            
            —
            
            
            
            —
            
            
            
            100
            
            
            NMOther
            
            
            159
            
            
            
            2.8
            
            
            
            101
            
            
            
            1.8
            
            
            
            58
            
            
            
            57.4Total
      Revenues
            
            $
            5,704
            
            
            
            100.0
            
            
            $
            5,590
            
            
            
            100.0
            
            
            $
            114
            
            
            
            2.0





At $5.7
million, total revenues were 2.0% higher in the six months ended November 30,
2009, than in the six months ended November 30, 2008.





Project
development fees for the six months ended November 30, 2009 relate to the
project for the facility in Dodge City, Kansas, signed in fiscal 2009, and the
project for the facility in Allen, Texas.  No further development fees
are expected on these projects.  Project development fees in the prior
year period related to the projects in Independence, Missouri, Dodge City,
Kansas and Allen, Texas.





Project
management fees of $1.0 million were 20.1% lower for the six months ended
November 30, 2009, than in the prior year six months.  Project
management fees related to the Allen, Texas and Independence, Missouri projects,
for the six months ended November 30, 2009, were lower on those projects,
because fees ceased when those facilities opened in November
2009.  The Dodge City, Kansas project management fees for the six
months ended November 30, 2009, were insufficient to offset the Wenatchee,
Washington project management fees in the prior year period.





Facility
management fees were $2.4 million for the six months ended November 30, 2009,
compared to $1.2 million in the six months ended November 30,
2008.  Facility management fees include both recurring fees for
management of facilities and fees for preopening services.  The $1.3
million increase in facility management fees is primarily the result of the $1.2
million increase in fees for preopening services, primarily on the Allen, Texas
and Independence, Missouri projects.  The year-over-year increase in
recurring fees from the Wenatchee, Washington facility, which opened in October
2008, was largely offset by a decline in monthly management fees from the Rio
Rancho, New Mexico facility, which ended in January 2009, and the Wenatchee,
Washington facility, which ended in August 2009.





Ticket
service fees decreased $0.8 million, to $0.5 million for the six months ended
November 30, 2009, from $1.3 million in the prior year period.  This
decrease in ticket service fees reflects decreases from a continued decline in
the number of events held, attendance at events and venues under
contract.





Food
service revenues increased $0.2 million in the six months ended November 30,
2009, to $0.3 million, compared to $0.1 million in the prior year
period.  The current year period included revenues from the initial
twenty-three days of operations at the Independence, Missouri facility and the
last three months of operations at the Wenatchee, Washington
facility.


22


Advertising
sales commissions were $0.2 million for the six months ended November 30, 2009,
and $0.4 million for the six months ended November 30, 2008.  Sales
commissions from the Allen, Texas and Independence, Missouri projects in the
period ended November 30, 2009, were not sufficient to offset the loss of sales
commissions from the Rio Rancho, New Mexico facility, no longer under contract,
the Wenatchee, Washington facility, no longer under contract, and the Prescott,
Valley, Arizona facility.





License
fees – league dues and other remained largely unchanged at $0.8 million for the
six months ended November 30, 2009 and 2008.





License
fees – initial and transfer, include fees from a transfer in the quarter ended
August 31, 2009.  Since initial and transfer fees are not regularly
recurring and are difficult to predict, there is no assurance that we will be
able to increase or sustain our operating capital through this
source.





Operating Costs(in thousands):




Six
      Months EndedNovember
      30, 2009
            
            
            %
      of Revenue
            
            
            November
      30, 2008
            
            
            %
      of Revenue
            
            
            Change
            
            
            %
      ChangeCost
      of revenues
            
            $
            3,079
            
            
            
            54.0
            
            
            $
            2,398
            
            
            
            42.9
            
            
            $
            681
            
            
            
            28.4General
      and administrative costs
            
            
            2,827
            
            
            
            49.6
            
            
            
            3,216
            
            
            
            57.5
            
            
            
            (389
            )
            
            
            (12.1
            )Total
      Operating Costs
            
            $
            5,906
            
            
            
            103.5
            
            
            $
            5,614
            
            
            
            100.4
            
            
            $
            292
            
            
            
            5.2





Total
operating costs increased $0.3 million to $5.9 million for the six months ended
November 30, 2009, from $5.6 million in the prior year period.  The
six months ended November 30, 2009, included $1.1 million of additional
preopening costs, primarily for the Allen, Texas and Independence, Missouri
projects.  That increase in cost of revenues was offset by a $0.5
million decrease in ticket servicing costs related to the decline in ticket
service fees.  General and administrative costs decreased
year-over-year in most expense categories as a result of cost reduction
initiatives.





Loss from
Continuing Operations(in thousands):




Six
      Months EndedNovember
      30, 2009
            
            
            %
      of Revenue
            
            
            November
      30, 2008
            
            
            %
      of Revenue
            
            
            Change
            
            
            %
      ChangeLoss
      from continuing operations, before tax
            
            $
            (206
            )
            
            
            (3.6
            )
            
            $
            (373
            )
            
            
            (6.7
            )
            
            $
            167
            
            
            
            (44.8
            )





Loss from
continuing operations, before tax, was $0.2 million for the six
months ended November 30, 2009, compared to a loss from continuing
operations, before tax, of $0.4 million for the six months ended November
30, 2008.  Interest expense in the six months ended November 30, 2009,
was $0.3 million lower then in the prior year period due to the repayment of the
Wenatchee project loan in December 2008.





Liquidity
and Capital Resources





As of
November 30, 2009, we had $2.6 million in cash and cash equivalents, including
cash collected for GetTix tickets of less than $0.1 million for events scheduled
to occur in the future.





Under our
performance guarantee related to the hockey team in Texas, $150 thousand of
working capital, included in prepaid and other assets is currently unavailable
to us.  We expect this working capital will be unavailable to us from
November 2009 until November 2010, when we expect $50 thousand will be
released.  In addition, accounts receivable for advertising sales
commissions from the Texas facility, $30 thousand at November 30, 2009, are not
being paid to us under normal terms.  We expect to receive payment of
the advertising sales commission receivables earned through October 2010 at this
facility, in November 2010.


23


Cash
provided by operating activities was $1.0 million in the six months ended
November 30, 2009.  During the period ended November 30, 2009, we
began receiving furniture, fixture and equipment on the project in Allen,
Texas.  We generally pay the vendors for these items after obtaining
funds from the city.  This furniture, fixture and equipment activity
increased accounts receivable $0.9 million between May 31, 2009, and
November 30, 2009, and increased accounts payable $2.3 million between May 31,
2009 and November 30, 2009.





Cash
provided by investing activities in the six months ended November 30, 2009, was
limited to fixed asset purchases, net of proceeds from disposal of our food
service equipment.  We received $0.6 million when we sold our food
service equipment to the City of Wenatchee, Washington in October
2009.  We use the city’s equipment to conduct food service operations
in Independence, Missouri, beginning in November 2009, and do not expect to make
any material capital expenditures in the remainder of fiscal 2010.





Cash used
in financing activities for the six months ended November 30, 2009, consisted
entirely of scheduled payments on our note payable.  We do not
currently have any intentions of entering into any additional financing
arrangements.





We had a
$1.75 million line of credit that expired October 1, 2009.  We did not
renew the facility.





As of
November 30, 2009, approximately $640 thousand of trade receivables is
classified as long-term assets.  This classification was done in
contemplation of the current economic conditions and the anticipated timing of
collections.  Management, after careful review and analysis, believes
these receivables to be fully collectible and as such, no allowance
for doubtful accounts has been established against these
receivables.





We
continue to evaluate the profitability of, and synergies among, our various
subsidiaries and may determine to dispose of one or more of them, as we move
forward with our business plan.  Based on our current forecast and
historical results, we expect to have adequate cash flow from available sources
to fund our operating needs through November 30, 2010.  If our
business or profitability deteriorates or we incur unexpected expenses or asset
impairments, it could have a material adverse effect on our liquidity and
financial resources.  We cannot guarantee that we would be able to
obtain financing, if needed, on terms acceptable to us, if at all.





Accounting
Developments





In
November 2007, the EITF modified GAAP to prohibit application of the equity
method of accounting to activities performed outside of a separate legal entity
and requires revenues and costs incurred with third parties in connection with
collaborative agreements be presented gross or net based on other applicable
accounting literature.  Payments to or from collaborators should be
presented in an income statement based on the nature of the arrangement, whether
the payments are within the scope of other accounting literature, and certain
other criteria.  We adopted these standards effective June 1, 2009,
and applied the standards to our accounting for CHL, Inc.’s interest in the
League effective June 1, 2009.  Based on the nature of our arrangement
with CHL, Inc., its interest is accounted for by analogy to the standards for
the accounting and reporting of noncontrolling interests.





In
December 2007, the FASB modified GAAP by establishing accounting and reporting
standards for noncontrolling interests in a subsidiary and for the
deconsolidation of a subsidiary.  The standards also provide income
statement presentation guidance and require expanded
disclosures.  We adopted these standards effective June 1, 2009,
prospectively, except for the presentation and disclosure requirements, which
have been applied retrospectively for all periods presented.  We
account for CHL, Inc.’s interest in the League in accordance with these new
standards effective June 1, 2009.  The impact on our financial
position and results of operations was as follows:





·
            CHL,
      Inc.’s share of the results of League operations is reflected separately
      on the face of the consolidated statements of operations below net income
      (loss) rather than in other income
(expense).





·
            CHL,
      Inc.’s undistributed earnings (loss) in the League is presented as
      noncontrolling interest in the equity section of the consolidated balance
      sheets, for all periods presented.  Prior to adoption of these
      standard CHL, Inc.’s undistributed earnings (loss) in the League had been
      presented in the consolidated balance sheets as a liability as of May 31,
      2009, and as an asset as of November
  30 2008.


24


In
September 2009, the EITF issued a consensus which revises the standards for
recognizing revenue on arrangements with multiple
deliverables.  Before evaluating how to recognize revenue for
transactions with multiple revenue generating activities, an entity should
identify all the deliverables in the arrangement and, if there are multiple
deliverables, evaluate each deliverable to determine the unit of accounting and
whether it should be treated separately or in combination.  The
consensus removes certain thresholds for separation, provides criteria for
allocation of revenue amongst deliverables and expands disclosure
requirements.  The standards will be effective June 1, 2010, for our
fiscal year 2011, unless we elect to early adopt the standards effective June 1,
2009.  We have not yet evaluated the impact these standards will have
on our financial position or results of operations.  We have not
determined if we will early adopt the standards.





In June
2009, the FASB changed the consolidation rules as they relate to variable
interest entities.  The standards change the model for determining who
should consolidate a variable interest entity, and require ongoing reassessment
of whether we should consolidate a variable interest entity.  The
standards will be effective June 1, 2010, for our fiscal year
2011.  We have not yet evaluated the impact these standards will have
on our financial position or results of operations.





Item3. Quantitative and Qualitative Disclosures about Market
Risk.





Not
applicable.





Item4T. Controls and Procedures





Evaluation of Disclosure
Controls and Procedures.





Under the
supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15 as of November 30,
2009.  Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that these disclosure controls and procedures
are effective.  There were no changes in our internal control over
financial reporting during the period covered by this report that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.





Our
management, including its principal executive officer and the principal
financial officer, do not expect that our disclosure controls and procedures
will prevent all error and all fraud.  A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their
costs.  Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been
detected.  These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake.  Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future
conditions.  Over time, controls may become inadequate because of
changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate.  Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
may not be detected.  We monitor our disclosure controls and
procedures and internal controls and make modifications as necessary; our intent
in this regard is that the disclosure controls and procedures will be maintained
as dynamic systems that change (including with improvements and corrections) as
conditions warrant.





Changes in Internal Control
over Financial Reporting.





There
have not been changes in our internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during
the second quarter of fiscal 2010 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.


25


PART
II – OTHER INFORMATION





Item1. Legal Proceedings





We are a
plaintiff and a counter-defendant in a lawsuit involving the City of Rio Rancho,
New Mexico filed in the New Mexico 13th Judicial District, Sandoval County, Case
No. 01329 CV091504.  Our claim seeks resolution of matters stemming
from the time during which we managed the events center in Rio Rancho, New
Mexico.  Specifically, our claim is based on breach of contract and
other matters.  The complaint seeks payment of monies due in excess of
$0.3 million and declaratory judgment that we have no liability to third-party
creditors of the center.  The city’s counterclaim alleges breach of
contract, among other claims, and seeks judgment in excess of $0.2
million.  We believe the counterclaim is without merit.





Global
Entertainment Corporation, PVEC, LLC and two of our directors (James Treliving
and Richard Kozuback) are four of sixteen defendants in Allstate Life Insurance
Company (Allstate) v. Global Entertainment Corporation
et. al.  This suit, Case No. CV1962-JWS, was filed in United
States District Court, District of Arizona.  The litigation relates to
the offering for the Bonds, issued to support the construction of the events
center in Prescott Valley, Arizona.  Allstate is a bond holder and the
complaint alleges the bond offering failed to properly disclose certain facts,
that the underwriters and certain law firms acted with deliberate recklessness
and that the bond documents are defective.  Allstate seeks unspecified
damages and/or reimbursement of its investment, in excess of $26
million.  We believe the claims against Global Entertainment
Corporation, PVEC, LLC and the two directors are without
merit.  Our insurance carrier has been notified.Our insurance
carrier has indicated an intention to decline coverage of Global Entertainment
Corporation in this matter.  Defense costs allocated to Global
Entertainment Corporation are being expensed as incurred and defense costs
allocated to the directors are being expensed as incurred up to the amount of
the applicable deductible ($75 thousand or $100 thousand, depending on how the
claim is ultimately classified).





Item 1A. Risk Factors





Not
applicable.





Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds





None.





Item 3. Defaults upon Senior Securities





None.





Item4. Submission of Matters to a Vote of Security
Holders





The
annual meeting of shareholders was held October 15, 2009.  The
following nominees were elected to the board of directors to serve as directors
until their successors are elected and qualified: W. James Treliving, Richard
Kozuback, Michael L. Bowlin, Terry S. Jacobs, Stephen A McConnell, George
Melville, Mark Schwartz. Each director was elected by the following
vote:





For
            
            
            WithheldW.
      James Treliving
            
            
            5,162,588
            
            
            
            8,342Richard
      Kozuback
            
            
            5,162,623
            
            
            
            8,307Michael
      L. Bowlin
            
            
            5,162,623
            
            
            
            8,307Terry
      S. Jacobs
            
            
            5,162,623
            
            
            
            8,307Stephen
      A McConnell
            
            
            5,162,623
            
            
            
            8,307George
      Melville
            
            
            5,162,623
            
            
            
            8,307Mark
      Schwartz
            
            
            5,162,665
            
            
            
            8,265





The
shareholders also ratified the appointment of Semple, Marchal & Cooper, LLP
as our independent registered public accounting firm for fiscal 2010, by the
following vote: 5,150,346 for, 20,500 against and 84
abstaining.


26


Item 5.  Other Information





None.





Item 6.  Exhibits





See
Exhibit Index attached.


27


SIGNATURES





Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.




GLOBAL
      ENTERTAINMENT CORPORATION(Registrant)January
      14, 2010
              By
              /s/Richard
      KozubackRichard
      KozubackPresident
      & Chief Executive OfficerJanuary
      14, 2010
              By
              s/James
      YeagerJames
      YeagerSenior
      Vice President & Chief Financial
Officer


28


Exhibit
Index




The
following exhibits are filed herewith or incorporated herein pursuant to
Regulation S-K, Item 601:




Exhibit31.1
            Certifications Pursuant to 18 U.S.C. Section
      1350-Section 302, signed by Richard Kozuback, Chief Executive
      Officer.*31.2
            Certifications Pursuant to 18 U.S.C. Section
      1350-Section 302, signed by James Yeager, Chief Financial
      Officer.*32
            Certification Pursuant to 18 U.S.C. Section 1350-Section
      906, signed by Richard Kozuback, Chief Executive Officer and James Yeager,
      Chief Financial Officer.*










*
      Filed herewith.