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 August 31, 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
October 12, 2009, 6,633,112 shares of Global Entertainment Corporation common
stock were outstanding.
  
  GLOBAL
ENTERTAINMENT CORPORATION
 INDEX
 REPORT
ON FORM 10-Q
 FOR
THE QUARTER ENDED AUGUST 31, 2009
 
  PART I. FINANCIAL
      INFORMATIONItem 1. Financial Statements
              3Condensed
      Consolidated Balance Sheets – As of August 31, 2009 (Unaudited) and May
      31, 2009
              3Condensed
      Consolidated Statements of Operations (Unaudited) – Three Months
      EndedAugust
      31, 2009 and 2008
              4Condensed
      Consolidated Statements of Changes in Equity – Year Ended May 31,
      2009and
      Three Months Ended August 31, 2009 (Unaudited)
              5Condensed
      Consolidated Statements of Cash Flows (Unaudited) – Three Months
      EndedAugust
      31, 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
              23Item 4T. Controls and Procedures
              23PART
      II. OTHER INFORMATIONItem 1. Legal Proceedings
              24Item 1A. Risk Factors
              24Item 2. Unregistered Sales of Equity Securities and Use of
      Proceeds
              24Item 3. Defaults upon Senior Securities
              24Item 4. Submission of Matters to a Vote of Security
      Holders
              24Item 5. Other Information
              24Item 6. Exhibits
              24
  2
 
 PART
I – FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 
 GLOBAL
ENTERTAINMENT CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 As
of August 31, 2009 (Unaudited) and May 31, 2009
 (in
thousands, except share and per share amounts)
 
 
 August
      31,
              
              
              May
      31,2009
              
              
              2009ASSETSCurrent
      Assets:Cash
      and cash equivalents
              
              $
              756
              
              
              $
              1,111Accounts
      receivable, net of $5 allowance at May 31, 2009
              
              
              3,359
              
              
              
              2,220Prepaid
      expenses and other assets
              
              
              252
              
              
              
              281Property
      held for sale - food service equipment
              
              
              577
              
              
              
              —Total
      Current Assets
              
              
              4,944
              
              
              
              3,612Property
      and equipment, net
              
              
              138
              
              
              
              708Goodwill
              
              
              519
              
              
              
              519Other
      assets
              
              
              295
              
              
              
              329Total
      Assets
              
              $
              5,896
              
              
              $
              5,168LIABILITIES
      AND EQUITYCurrent
      Liabilities:Accounts
      payable
              
              $
              1,817
              
              
              $
              1,132Accrued
      liabilities
              
              
              487
              
              
              
              588Deferred
      revenues
              
              
              458
              
              
              
              64Note
      payable - current portion
              
              
              113
              
              
              
              111Total
      Current Liabilities
              
              
              2,875
              
              
              
              1,895Deferred
      income tax liability, net
              
              
              5
              
              
              
              5Note
      payable - long-term portion
              
              
              40
              
              
              
              69Total
      Liabilities
              
              
              2,920
              
              
              
              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;6,633,112  shares
      issued and outstanding as of August 31, 2009and
      May 31, 2009
              
              
              7
              
              
              
              7Paid-in
      capital
              
              
              10,970
              
              
              
              10,961Retained
      deficit
              
              
              (8,037
              )
              
              
              (7,788
              )Total
      Global Entertainment Corporation Equity
              
              
              2,940
              
              
              
              3,180Noncontrolling
      interest
              
              
              36
              
              
              
              19Total
      Equity
              
              
              2,976
              
              
              
              3,199Total
      Liabilities and Equity
              
              $
              5,896
              
              
              $
              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 Months Ended August 31, 2009 and 2008
 (Unaudited)
(in thousands, except share and per share amounts)
 
 
 2009
              
              
              2008Revenues:Project
      development fees
              
              $
              50
              
              
              $
              209Project
      management fees
              
              
              446
              
              
              
              465Facility
      management fees
              
              
              904
              
              
              
              445Ticket
      service fees
              
              
              199
              
              
              
              620Food
      service revenue
              
              
              72
              
              
              
              —Advertising
      sales commissions
              
              
              71
              
              
              
              245License
      fees - league dues and other
              
              
              374
              
              
              
              274License
      fees - initial and transfer
              
              
              100
              
              
              
              —Other
      revenue
              
              
              154
              
              
              
              101Total
      Revenues
              
              
              2,370
              
              
              
              2,359Operating
      Costs:Cost
      of revenues
              
              
              1,136
              
              
              
              979General
      and administrative costs
              
              
              1,464
              
              
              
              1,496Total
      Operating Costs
              
              
              2,600
              
              
              
              2,475Operating
      Loss
              
              
              (230
              )
              
              
              (116
              )Other
      Income (Expense):Interest
      income
              
              
              1
              
              
              
              3Interest
      expense
              
              
              (3
              )
              
              
              (7
              )Total
      Other Expense
              
              
              (2
              )
              
              
              (4
              )Loss
      from Continuing Operations Before Tax
              
              
              (232
              )
              
              
              (120
              )Income
      Tax Benefit
              
              
              —
              
              
              
              —Loss
      from Continuing Operations, net of tax
              
              
              (232
              )
              
              
              (120
              )Loss
      from Discontinued Operations, net of tax
              
              
              —
              
              
              
              (48
              )Net
      Loss
              
              
              (232
              )
              
              
              (168
              )Net
      Income (Loss), attributable to noncontrolling interest
              
              
              17
              
              
              
              (8
              )Net
      Loss, attributable to Global
              
              $
              (249
              )
              
              $
              (160
              )Loss
      Per Share - basic and diluted:Loss
      from continuing operations, attributable to Global common
      shareholders
              
              $
              (0.04
              )
              
              $
              (0.02
              )Loss
      from discontinued operations, attributable to Global common
      shareholders
              
              
              —
              
              
              
              —Net
      loss, attributable to Global common shareholders
              
              $
              (0.04
              )
              
              $
              (0.02
              )Weighted
      Average Number of Shares Outstanding - basic and diluted
              
              
              6,633,112
              
              
              
              6,625,114Amounts
      attributable to Global common shareholdersLoss
      from continuing operations, net of tax, attributable to Global common
      shareholders
              
              $
              (249
              )
              
              $
              (112
              )Loss
      from discontinued operations, net of tax, attributable to Global common
      shareholders
              
              
              —
              
              
              
              (48
              )Net
      loss, attributable to Global common shareholders
              
              $
              (249
              )
              
              $
              (160
              )
 
 
 
 
 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 Three Months Ended August 31,
2009
 (Unaudited)
 (in
thousands, except share amounts)
 
 
 Global
      Entertainment CorporationCommon
      Stock
              
              
              Paid-in
              
              
              Retained
              
              
              
              
              
              Non-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
              
              
              —
              
              
              
              —
              
              
              
              9
              
              
              
              —
              
              
              
              9
              
              
              
              —
              
              
              
              9Net
      income (loss)
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (249
              )
              
              
              (249
              )
              
              
              17
              
              
              
              (232
              )Balance
      at August 31, 2009
              
              
              6,633,112
              
              
              $
              7
              
              
              $
              10,970
              
              
              $
              (8,037
              )
              
              $
              2,940
              
              
              $
              36
              
              
              $
              2,976
 
 
 
 
 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 Three Months Ended August 31, 2009 and 2008
 (Unaudited)
(in thousands)
 
 
 2009
              
              
              2008Cash
      flows from operating activities:Net
      loss, attributable to Global
              
              $
              (249
              )
              
              $
              (160
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities-Depreciation
              
              
              42
              
              
              
              34Unbilled
      earnings on Wenatchee project
              
              
              —
              
              
              
              (174
              )Provision
      for doubtful accounts
              
              
              18
              
              
              
              8Noncontrolling
      interest
              
              
              17
              
              
              
              (8
              )Stock-based
      compensation - restricted stock
              
              
              9
              
              
              
              8Discontinued
      operations and related impairment charges
              
              
              —
              
              
              
              5Changes
      in assets and liabilities, net of businesses disposed-Accounts
      receivable
              
              
              (1,157
              )
              
              
              (64
              )Prepaid
      expenses and other assets
              
              
              63
              
              
              
              (217
              )Accounts
      payable
              
              
              685
              
              
              
              (443
              )Accrued
      liabilities
              
              
              (101
              )
              
              
              240Deferred
      revenues
              
              
              394
              
              
              
              503Net cash used
      in operating activities
              
              
              (279
              )
              
              
              (268
              )Cash
      flows from investing activities:Investment
      in Wenatchee project
              
              
              —
              
              
              
              (12,556
              )Deposit
      of restricted cash
              
              
              —
              
              
              
              (1,250
              )Purchase
      of fixed assets
              
              
              (49
              )
              
              
              —Proceeds
      from disposition of Our Old Car Company assets, net of
      expenses
              
              
              —
              
              
              
              1,790Net cash used
      in investing activities
              
              
              (49
              )
              
              
              (12,016
              )Cash
      flows from financing activities:Notes
      payable proceeds
              
              
              —
              
              
              
              12,679Notes
      payable payments
              
              
              (27
              )
              
              
              (275
              )Net cash
      provided by (used in) financing activities
              
              
              (27
              )
              
              
              12,404Net
      increase (decrease) in cash and cash equivalents
              
              
              (355
              )
              
              
              120Cash
      and cash equivalents, beginning of period
              
              
              1,111
              
              
              
              443Cash
      and cash equivalents, end of period
              
              $
              756
              
              
              $
              563Supplemental
      Disclosures:Interest  paid
              
              $
              3
              
              
              $
              7Income
      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) expected to
play 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, Encore, GetTix, 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 month period ended August 31, 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
  August 31, 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, 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.
 
 
 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.  The
computation of diluted EPS equals the basic calculation in the three months
ended August 31, 2009 and 2008, because common stock equivalents were
antiduilutive due to the loss from continuing operations, net of tax, in those
periods.
 
 Reconciliations
of the numerators and denominators in the EPS computations for loss from
continuing operations, net of tax, for the three months ended August 31, 2009
and 2008, follow:
  9
  
 2009
              
              
              2008NUMERATOR-
      basic and diluted (in thousands):Loss
      from continuing operations, net of tax, attributable to
    Globalcommon
      shareholders
              
              $
              (249
              )
              
              $
              (112
              )DENOMINATOR:Basic
      EPS - weighted average shares outstanding
              
              
              6,633,112
              
              
              
              6,625,114Effect
      of dilutive securities
              
              
              —
              
              
              
              —Diluted
      EPS - weighted average shares outstanding
              
              
              6,633,112
              
              
              
              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 and $4.89 for the three
              
              
              294,761
              
              
              
              390,148months
      ended August 31, 2009 and 2008)Warrants
      (average price of $7.10 and $6.32 for the three months
              
              
              215,800
              
              
              
              275,760ended
      August 31, 2009 and 2008)Restricted
      stock
              
              
              25,900
              
              
              
              20,500
 
 The
impacts of all outstanding options, warrants and restricted stock outstanding at
August 31, 2009, were not included in the calculation of diluted EPS for the
three months ended August 31, 2009, because to do so would be
antidilutive.  Outstanding options, warrants and restricted stock
could potentially dilute EPS in the future.
 
 
 Note
Payable
 As of
August 31, 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.
 
 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.  As of August 31, 2009, and through the date of
this filing, we had received no cash advances on this credit
facility.
 
 The
credit facility had been secured by substantially all of our tangible and
intangible assets.  In order to borrow, we had to meet certain
financial covenants, including maintaining a minimum current ratio (current
assets compared to current liabilities) of 1.05 as of the end of each fiscal
quarter, a minimum consolidated tangible net worth of $1.75 million as of May
31, 2009, increasing by 75% of consolidated net income and 100% of all other
increases of equity (including the amount of any stock offering or issuance) on
each anniversary date after May 31, 2009.  We were required to
maintain a zero balance for a consecutive 30 day period during the term of the
facility.  As of August 31, 2009, we were in compliance with
the covenants.
  10
  
 
 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
August 31, 2009.
 
 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 defer receipt of our management fees should operating revenues,
as defined, be insufficient to pay operating expenses, as
defined.  Through May 31, 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 months ended August 31, 2009
and 2008, follows (in thousands):
 
 
 2009
              
              
              2008Operating
      revenue
              
              $
              343
              
              
              $
              615Operating
      loss
              
              
              309
              
              
              
              228Net
      loss
              
              
              319
              
              
              
              241
  11
  Selected
PVEC, LLC unaudited financial information as of August 31, 2009 and May 31,
2009, follows (In thousands):
 
 August
      31,
              
              
              May
      31,2009
              
              
              2009Property
      and equipment,net
              
              $
              28,870
              
              
              $
              29,251Receivable
      from Town
              
              
              7,227
              
              
              
              6,558Total
      assets
              
              
              39,292
              
              
              
              38,758Debt
      payable
              
              
              35,000
              
              
              
              35,000Retained
      deficit
              
              
              1,375
              
              
              
              1,054Members'
      equity
              
              
              366
              
              
              
              685
 
 Our
consolidated financial statements reflect the following related to transactions
between us and PVEC, LLC (in thousands).
  Three
      Months EndedAugust
      31,
              
              
              August
      31,2009
              
              
              2008Facility
      management fees, exclusive of payroll costs (Encore)
              
              $
              2
              
              
              $
              17Facility
      management fees, payroll costs (Encore)
              
              
              134
              
              
              
              155Facility
      management fees, reimbursed expenses (Encore)
              
              
              10
              
              
              
              19Advertising
      sales commission (GEMS)
              
              
              40
              
              
              
              67Ticket
      service fees (GetTix)
              
              
              20
              
              
              
              41Cost
      of revenues, facility payroll (Encore)
              
              
              134
              
              
              
              155Cost
      of revenues, reimbursed expenses (Encore)
              
              
              10
              
              
              
              19
 
 August
      31,
                
                
                May
      31,2009
                
                
                2009Accounts
      receivable
                
                $
                298
                
                
                $
                100
 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 $92 thousand and $96 thousand were included in accrued
liabilities at August 31, 2009 and May 31, 2009.
 
 In
addition we are committed under an equipment and maintenance contract to pay $1
thousand monthly through December 2010.
 
 Litigation
 
 As with
all entertainment facilities there exists a degree of risk that the general
public may be accidentally injured.  As of August 31, 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.
  12
  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
and we believe defense costs will be limited to the amount of our insurance
deductible, $100 thousand or less.
 
 All
litigation settlement expenses are included in general and administrative
costs.  The following summarizes litigation settlement activity for
the three months ended August 31, 2009 and 2008, and the balance sheet
classification of litigation settlement liabilities at August 31, 2009 and May
31, 2009 (in thousands).
  2009
                
                
                2008Litigation
      settlement liabilities, beginning of period
                
                $
                330
                
                
                $
                283Cash
      payments
                
                
                (127
                )
                
                
                (25
                )Litigation
      settlement liabilities, end of period
                
                $
                203
                
                
                $
                258
  August
      31,
                
                
                May
      31,2009
                
                
                2009Accounts
      payable
                
                $
                50
                
                
                $
                125Accrued
      liabilities
                
                
                —
                
                
                
                25Note
      payable - current portion
                
                
                113
                
                
                
                111Note
      payable - long-term portion
                
                
                40
                
                
                
                69$
                203
                
                
                $
                330
 
 Legal
services costs are expensed as incurred.  At August 31, 2009 and May
31, 2009, accounts payable included $195 thousand and $176 thousand in legal
services costs.  At August 31, 2009 and May 31, 2009, accrued
liabilities included $23 thousand and $21 thousand in legal services
costs.
 
 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 August 31, 2009.
 
 As of
August 31, 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.
  13
  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.  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.  We do not believe, however no assurance can be
made, that any potential guarantee payments would be material based on the
operating results of similar facilities.  The facility is expected to
open in the fall of 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 is currently
scheduled to play the 2009-2010 season and we believe the likelihood we will
forfeit anything under this guarantee is remote.
 
 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 is expected
to open in the fall of 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.
  14
  We
provide a secondary guarantee on a standby letter of credit in favor of Ace
American Insurance Company for $1.5 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 August 31, 2009.  We believe the
amount of payments under this guarantee will be negligible, and as such, have
assigned no value to this guarantee at August 31, 2009.
 
 We have
guaranteed payment of a lease for equipment used by PVEC, LLC.  As of
August 31, 2009, twenty-nine payments averaging $13 thousand per month,
including principal and interest were outstanding.  The fair value of
the lease obligation at August 31, 2009, was approximately $340
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 August 31, 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
three months ended August 31, 2009 and 2008 (in thousands):
 
 2009
              
              
              2008Revenues
              
              $
              3⁄4
              
              
              $
              60Loss
      on disposal
              
              
              3⁄4
              
              
              
              (51
              )Loss
      before income taxes
              
              
              3⁄4
              
              
              
              (48
              )Loss
      from discontinued operations, net of income tax
              
              
              3⁄4
              
              
              
              (48
              )
 
 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.
 
 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.
  15
  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.
 
 At August
31, 2009 and 2008, and at May 31, 2009, 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.
  16
  
 Three
      Months EndedGross
      Revenues
              
              
              Income
      (Loss) from Continuing Operations Before Tax
              
              
              Identifiable
      AssetsAugust 31, 2009Global
      Entertainment Corporate Operations
              
              $
              154
              
              
              $
              (342
              )
              
              $
              1,628
              
              (a)Global
      Food Service (b)
              
              
              72
              
              
              
              (26
              )
              
              
              598Central
      Hockey League/WPHL
              
              
              474
              
              
              
              192
              
              
              
              846Global
      Properties I
              
              
              50
              
              
              
              (72
              )
              
              
              150International
      Coliseums
              
              
              446
              
              
              
              271
              
              
              
              1,808
              
              (c)Encore
      Facility Management
              
              
              904
              
              
              
              (22
              )
              
              
              484Global
      Entertainment Marketing Systems
              
              
              71
              
              
              
              (30
              )
              
              
              212Global
      Entertainment Ticketing
              
              
              199
              
              
              
              (203
              )
              
              
              170Global
      Entertainment Coporation Consolidated
              
              $
              2,370
              
              
              $
              (232
              )
              
              $
              5,896August 31, 2008Global
      Entertainment Corporate Operations
              
              $
              101
              
              
              $
              (445
              )
              
              $
              49,426
              
              (a)Central
      Hockey League/WPHL
              
              
              274
              
              
              
              (5
              )
              
              
              445Global
      Properties I
              
              
              209
              
              
              
              27
              
              
              
              408International
      Coliseums
              
              
              463
              
              
              
              337
              
              
              
              662Encore
      Facility Management
              
              
              445
              
              
              
              (51
              )
              
              
              91Global
      Entertainment Marketing Systems
              
              
              245
              
              
              
              150
              
              
              
              144Global
      Entertainment Ticketing
              
              
              622
              
              
              
              (133
              )
              
              
              467Global
      Entertainment Coporation Consolidated
              
              $
              2,359
              
              
              $
              (120
              )
              
              $
              51,643
  
 (a)
              Global
      Entertainment Corporate Operations assets include the investment in
      Wenatchee project of $47.2 million at August 31, 2008.  The
      investment was sold in December 2008.  Global Entertainment
      Corporate Operations assets include cash and cash equivalents and
      restricted cash of $0.8 million and $0.6 million at August 31, 2009 and
      2008.
 (b)
              The
      Global Food Service segment began operations October 2008 in Wenatchee,
      Washington.  The Wenatchee food service contract ended effective
      August 31, 2009.  We have contracted to manage food service
      operations in the Allen, Texas and Independence, Missouri facilities,
      which are scheduled to open in November 2009, using equipment owned by the
      cities.
 (c)
              The
      International Coliseums segment assets at August 31, 2009, include $1.0
      million in accounts receivable from a city to fund furniture, fixture and
      equipment purchases made as agent for the city.  August 31, 2008
      assets included no comparable
amounts.
 
 Property
Held for Sale
 
 The City
of Wenatchee, Washington has agreed to purchase our food service equipment, in
its entirety for $0.6 million.  We discontinued depreciation of the
equipment in July 2009 and the net book value of the equipment is classified as
property held for sale in the accompanying consolidated balance
sheets.  We expect to receive the purchase price in October
2009.  We have contracted to provide food service operations for the
facilities in Allen, Texas and Independence, Missouri, using those cities’ food
service equipment.
  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 expected to play 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 quarter ended August 31, 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 are
currently managing construction projects for facilities in Allen, Texas and
Independence, Missouri.  We have contracted to provide facility
management service, food service, ticket service and advertising sales at those
facilities.  The facilities in Allen, Texas and Independence, Missouri
are scheduled to open in November 2009.  We expect to obtain food
service revenues from those facilities beginning in November.  We
earned advertising sales commissions and certain pre-opening related facility
management fees from the facilities in the quarter ended August 31, 2009, and
expect to earn advertising sales commissions and facility management fees after
the openings under our multi-year contracts.
 
 Ground
breaking on the facility in Dodge City, Kansas is scheduled for October
2009.  Under our agreements related to the facility we expect to earn
$50 thousand in 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.
 
 Our
multi-year contracts with PVEC, LLC to provide facility management services,
ticket services and advertising sales were active in the quarter ended August
31, 2009, and remain active through the date of this filing.
 
 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 first quarter ended August
31, 2009, compared to the prior year quarter and 2) our inability to enter into
arrangements to generate additional project development fees.
  19
 
 Three
Months Ended August 31, 2009, Compared to Three Months Ended August 31,
2008
 
 Revenues(in thousands):
 
 Three
      Months EndedAugust
      31, 2009
              
              
              %
      of Revenue
              
              
              August
      31, 2008
              
              
              %
      of Revenue
              
              
              Change
              
              
              %
      ChangeProject
      development fees
              
              $
              50
              
              
              
              2.1
              
              
              $
              209
              
              
              
              8.9
              
              
              $
              (159
              )
              
              
              (76.1
              )Project
      management fees
              
              
              446
              
              
              
              18.8
              
              
              
              465
              
              
              
              19.7
              
              
              
              (19
              )
              
              
              (4.1
              )Facility
      management fees
              
              
              904
              
              
              
              38.1
              
              
              
              445
              
              
              
              18.9
              
              
              
              459
              
              
              
              103.1Ticket
      service fees
              
              
              199
              
              
              
              8.4
              
              
              
              620
              
              
              
              26.3
              
              
              
              (421
              )
              
              
              (67.9
              )Food
      service revenue
              
              
              72
              
              
              
              3.0
              
              
              
              —
              
              
              
              —
              
              
              
              72
              
              
              NMAdvertising
      sales commissions
              
              
              71
              
              
              
              3.0
              
              
              
              245
              
              
              
              10.4
              
              
              
              (174
              )
              
              
              (71.0
              )License
      fees - league dues and other
              
              
              374
              
              
              
              15.8
              
              
              
              274
              
              
              
              11.6
              
              
              
              100
              
              
              
              36.5License
      fees - initial and transfer
              
              
              100
              
              
              
              4.2
              
              
              
              —
              
              
              
              —
              
              
              
              100
              
              
              NMOther
              
              
              154
              
              
              
              6.5
              
              
              
              101
              
              
              
              4.3
              
              
              
              53
              
              
              
              52.5Total
      Revenues
              
              $
              2,370
              
              
              
              100.0
              
              
              $
              2,359
              
              
              
              100.0
              
              
              $
              11
              
              
              
              0.5
 
 At $2.4
million, total revenues were 0.5% higher in the quarter ended August 31, 2009,
compared to the quarter ended August 31, 2008.
 
 Project
development fees for the quarter ended August 31, 2009, relate to the project
for the facility in Dodge City, Kansas, signed in fiscal
2009.  Project development fees in the prior year quarter related to
the project for the facility in Allen, Texas.  The Dodge City related
agreement is currently the only active contract providing for development
fees.
 
 Project
management fees of $0.4 million were 4.1% lower for the quarter ended August 31,
2009, than the prior year quarter.  Project management fees related to
the Allen, Texas and Independence, Missouri projects for the quarter ended
August 31, 2009, approximated the fees on those projects in the prior year
quarter.  The Dodge City, Kansas project management fees in the
quarter ended August 31, 2009, approximated the Wenatchee, Washington project
management fees in the prior year quarter.
 
 Facility
management fees were $0.9 million for the quarter ended August 31, 2009,
compared to $0.4 million in the quarter ended August 31,
2008.  Facility management fees include both recurring fees for
management of facilities and fees for preopening services.  The $0.5
million increase in facility management fees is the result of fees for
preopening services on the Allen, Texas and Independence, Missouri projects in
the quarter ended August 31, 2009.  There were no comparable fees in
the prior year quarter.  The year-over-year increase in recurring fees
from the Wenatchee, Washington facility, which opened in October 2008, was
offset by a decline in monthly management fees from the Rio Rancho, New Mexico
facility, which ended in January 2009.
 
 Ticket
service fees decreased $0.4 million, to $0.2 million for the quarter ended
August 31, 2009, from $0.6 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,
offset by an increase in fees from services to the facility in Wenatchee,
Washington.
 
 Advertising
sales commissions were $0.1 million for the quarter ended August 31, 2009, and
$0.2 million for the quarter ended August 31, 2008.  Sales commissions
decreased at all facilities which were under management in both
periods.  Sales commissions from the Allen, Texas and Independence,
Missouri projects in the quarter ended August 31, 2009, were not sufficient
to offset the decrease from the loss of sales commissions from the Rio Rancho,
New Mexico and Hidalgo, Texas facilities, no longer under
contract.
  20
 
 License
fees – league dues and other increased $0.1 million to $0.4 million for the
quarter ended August 31, 2009, from $0.3 million for the quarter ended August
31, 2008.  Other license fees include an additional $0.1 million of
sponsorship revenue in the quarter ended August 31, 2009, than in the prior year
quarter.
 
 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):
 
 Three
      Months EndedAugust
      31, 2009
              
              
              %
      of Revenue
              
              
              August
      31, 2008
              
              
              %
      of Revenue
              
              
              Change
              
              
              %
      ChangeCost
      of revenues
              
              $
              1,136
              
              
              
              47.9
              
              
              $
              979
              
              
              
              41.5
              
              
              $
              157
              
              
              
              16.0General
      and administrative costs
              
              
              1,464
              
              
              
              61.8
              
              
              
              1,496
              
              
              
              63.4
              
              
              
              (32
              )
              
              
              (2.1
              )Total
      Operating Costs
              
              $
              2,600
              
              
              
              109.7
              
              
              $
              2,475
              
              
              
              104.9
              
              
              $
              125
              
              
              
              5.1
 
 Total
operating costs increased $0.1 million to $2.6 million for the quarter ended
August 31, 2009, from $2.5 million in the prior year quarter.  The
quarter ended August 31, 2009, included $0.4 million of preopening costs for the
Allen, Texas and Independence, Missouri projects.  There were no
comparable costs in the prior year quarter.  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.
 
 Loss from
Continuing Operations(in thousands):
  Three
      Months EndedAugust
      31, 2009
                
                
                %
      of Revenue
                
                
                August
      31, 2008
                
                
                %
      of Revenue
                
                
                Change
                
                
                %
      ChangeLoss
      from continuing operations, before tax
                
                $
                (232)
                
                
                
                (9.8)
                
                
                $
                (120)
                
                
                
                (5.1)
                
                
                $
                (112)
                
                
                $
                93.3
 Loss from
continuing operations, before tax was $0.2 million for the quarter ended August
31, 2009, compared to a loss from continuing operations, before tax of $0.1
million for the quarter ended August 31, 2008.  The increased loss was
primarily a result of the change in mix of revenues: a higher percentage of
revenues was derived from facility management fees in the quarter ended August
31, 2009, than in the prior year quarter and a lower percentage of revenues was
derived from ticket service fees in the quarter ended August 31, 2009, than in
the prior year quarter.  Operating costs as a percentage of revenues
are higher on facility management fees than on ticket service
fees.
 
 Liquidity
and Capital Resources
 
 As of
August 31, 2009, we had $0.8 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.
 
 On
September 1, 2009, we collected $625 thousand on an account receivable included
in our August 31, 2009, balance sheet, which was in payment of the final
installment of an initial license fee, included in revenue in the fourth quarter
of fiscal 2009.
 
 Under our
performance guarantee related to the hockey team in Texas, we expect $150
thousand of working capital, in the form of cash and accounts receivable, will
be unavailable to us from November 2009 until November 2010, when we expect $50
thousand will be released.
  21
 
 Cash used
in operating activities was $0.3 million in the quarter ended August 31,
2009.  During the quarter ended August 31, 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 $1.0 million between May 31, 2009, and August 31, 2009,
and increased accounts payable $0.9 million between May 31, 2009 and August 31,
2009.
 
 Cash used
in investing activities in the quarter ended August 31, 2009, was limited to
fixed asset purchases.  We expect to receive $0.6 million when we sell
our food service equipment to the City of Wenatchee, Washington in October
2009.  Food service operations in the cities of Allen, Texas and
Independence, Missouri are scheduled to begin in November 2009.  We
will use the cities’ equipment to conduct those food service operations and thus
do not expect to make any material capital expenditures in the remainder of
fiscal 2010.
 
 Cash used
in financing activities for the quarter ended August 31, 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.  The line
of credit bore interest at a daily adjusting LIBOR rate plus 2%, subject to
certain adjustments.  As of August 31, 2009, and through the date of
this filing, we had received no cash advances on this credit
facility.  We did not renew the facility.
 
 The
credit facility had been secured by substantially all of our tangible and
intangible assets.  In order to borrow, we had to meet certain
financial covenants, including maintaining a minimum current ratio (current
assets compared to current liabilities) of 1.05 as of the end of each fiscal
quarter, a minimum consolidated tangible net worth of $1.75 million as of May
31, 2009, increasing by 75% of consolidated net income and 100% of all other
increases of equity (including the amount of any stock offering or issuance) on
each anniversary after May 31, 2009.  We were required to maintain a
zero balance for a consecutive 30 day period during the term of the
facility.  As of August 31, 2009, we were in compliance with these
covenants.
 
 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 August 31, 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).
  22
  ·
              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 August,
  31 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, 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.
 
 Item 4T.  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 August 31,
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.
  23
 
 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 first quarter of fiscal 2010 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
 
 PART
II – OTHER INFORMATION
 
 Item 1.  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
and we believe defense costs will be limited to the amount of our insurance
deductible, $100 thousand or less.
 
 Item 1A.  Risk Factors
 
 Not
applicable.
 
 Item 2.  Unregistered Sales of Equity Securities and Use
of Proceeds
 
 None.
 
 Item3.  Defaults upon Senior Securities
 
 None.
 
 Item 4.  Submission of Matters to a Vote of Security
Holders
 
 None.
 
 Item 5.  Other Information
 
 None.
 
 Item6.  Exhibits
 
 See
Exhibit Index attached.
  24
  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)October
      15, 2009
              By
              /s/Richard
      KozubackRichard
      KozubackPresident
      & Chief Executive OfficerOctober
      15, 2009
              By
              s/James
      YeagerJames
      YeagerSenior
      Vice President & Chief Financial
Officer
  25
  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.