10-Q: Global Arena Holding Faces Going Concern Amid Rising Losses

Global Arena Holding reported increased losses and a going concern warning despite revenue growth, while pursuing an asset sale of its election services subsidiary.

Summary

• Global Arena Holding, Inc. (GAHI) reported a net loss of $288,123 for the three months ended March 31, 2025, a 120% increase from $131,018 in the same period of 2024.
• Revenues from services increased by 72% to $399,263 for the three months ended March 31, 2025, up from $232,123 in the prior year, primarily due to more elections held.
• Total operating expenses surged by 166% to $476,752, driven by significant increases in salaries and benefits (266.6%), professional fees (271.7%), and printing costs (357.8%).
• The company continues to operate with an accumulated deficit of $33,794,993 and a working capital deficit of $11,085,709 as of March 31, 2025.
• GAHI's ability to continue as a going concern is in substantial doubt due to recurring losses, cash flow deficits, and certain debt defaults.
• The company is pursuing an asset sale of its Global Election Services, Inc. (GES) subsidiary to GES Acquisition Corp. under a new 2026 Easterly Asset Purchase Agreement, following the termination of a prior 2025 agreement.
• The 2026 Easterly APA involves $2.4 million in cash to GES, 2,571,428 shares of GES Acquisition common stock to GAHI, and forgiveness of $1.92 million in debt owed to Easterly.
• GAHI's disclosure controls and procedures were deemed ineffective as of March 31, 2025, with material weaknesses identified in segregation of duties and U.S. GAAP expertise.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing with a very negative sentiment due to the explicit 'going concern' warning, significant increase in net losses, and persistent working capital deficit, despite some revenue growth. The ongoing reliance on debt and equity raises, coupled with internal control weaknesses, indicates severe financial instability.

Positives

• Revenues from services increased by 72% to $399,263 for the three months ended March 31, 2025, compared to $232,123 in the prior year, indicating growth in election services activity.
• The company is actively pursuing an asset sale of its primary operating subsidiary, Global Election Services, Inc. (GES), which could provide significant cash and debt relief, with $2.4 million in cash and $1.92 million in debt forgiveness outlined in the 2026 Easterly APA.
• GAHI has made strategic investments in blockchain technology for voting systems through its 30% ownership in TrueVote Inc., which is developing a decentralized, digital voting system.

Negatives

• Net loss increased by 120% to $288,123 for the three months ended March 31, 2025, compared to $131,018 in the prior year, indicating worsening profitability.
• Total operating expenses rose sharply by 166% to $476,752, significantly outpacing revenue growth.
• The company has an accumulated deficit of $33,794,993 and a working capital deficit of $11,085,709 as of March 31, 2025, highlighting severe financial distress.
• Certain company debt is in default as of March 31, 2025, further exacerbating financial instability.
• Disclosure controls and procedures were not effective as of March 31, 2025, and material weaknesses in internal control over financial reporting persist, including a lack of segregation of duties and U.S. GAAP expertise within the financial staff.

Risks

• The company's ability to continue as a going concern is in substantial doubt due to recurring losses, cash flow deficits, and reliance on continuous borrowing.
• Failure to raise additional capital or obtain further financing could force the company to curtail or cease operations.
• The asset sale of GES is subject to closing conditions, including stockholder approvals and repayment/settlement of all GES debt, and there is no assurance it will materialize or be successful.
• The company faces ongoing legal proceedings and settlements, which require significant cash outlays and create financial uncertainty.
• Material weaknesses in internal control over financial reporting increase the risk of financial misstatements not being prevented or detected on a timely basis.
• The company's business is subject to cybersecurity risks related to the integrity and privacy of election data, despite efforts to use secure platforms and encryption.

Future Outlook

Management believes it will be successful in obtaining additional financing to fund operations and advance acquisition plans, aiming to create a self-sustaining business. However, no assurances are given regarding the success or availability of such financing. The company is also pursuing the sale of its GES business, which is expected to provide significant cash and debt relief, and is developing blockchain voting technology through its investment in TrueVote Inc. The company plans to address internal control weaknesses by hiring more financial reporting employees and establishing an audit committee upon receiving adequate financing.

Management Comments

• Management is hopeful that with their ability to raise additional funds that the Company should be able to continue as a going concern.
• Management believes that the Company will be able to continue its operations and further advance its acquisition plans.
• Management cannot give assurances that such plans will materialize and be successful in the near term or on terms advantageous to us, or at all.
• Should we not be successful in our business plans or obtain additional financing, we would need to curtail certain or all of our operating activities.

Industry Context

StockSavvy.ai notes that Global Arena Holding's focus on election services, particularly with investments in blockchain technology through TrueVote Inc., positions it within a niche but evolving sector. The industry is increasingly scrutinizing election integrity and security, making GAHI's proprietary software for voter authentication, tabulation, and online voting platforms relevant. However, the company's significant financial challenges and reliance on continuous capital raises contrast sharply with the stability typically expected from established players in critical infrastructure sectors like election services. The pursuit of an asset sale for GES suggests a strategic pivot or an attempt to stabilize finances, which could be a common theme for smaller, struggling companies in capital-intensive tech development.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess GAHI's performance against global industry benchmarks. Therefore, a direct comparison is not feasible based on the provided information.

Management Changes

Corporate Governance

Legal Proceedings

• A settlement agreement with a prior attorney from December 26, 2017, for $219,576 in outstanding legal fees, with $75,000 paid as of March 30, 2026, leaving a remaining balance.
• The Pezzuto complaint (filed May 1, 2023) for nonpayment of promissory notes and failure to provide conversion opportunities was settled on February 12, 2024. The company acknowledged $234,000 collateralized by confessions of judgment for each of Brett and Christian Pezzuto, and granted each 75,000,000 warrants. Payments of $234,000 were made to Brett on April 22, 2025, and to Christian on July 1, 2025. Settlement negotiations are ongoing as of November 14, 2025.
• The Lim Chap Huat complaint (filed May 22, 2023) to collect on a $200,000 promissory note was settled on October 29, 2024, for a total of $275,000. Payments of $250,000 and $25,000 were completed on December 20, 2024, and January 6, 2025, respectively.
• The Jason Old complaint (filed October 14, 2025) for breach of contract was settled on February 5, 2026, with the company agreeing to pay Mr. Old $311,050.

Related Party Transactions

• John S. Matthews, the Company's CEO, CFO, and Chairman, and Kathryn Weisbeck, an executive officer, are significant stockholders and are expected to enter into employment agreements with GES Acquisition Corp. upon the closing of the 2026 Easterly APA. John Matthews will also be appointed as CEO and a director of GES Acquisition, indicating a continued relationship and potential influence over the divested entity.

Stakeholder Impact

• Shareholders face significant dilution risk from ongoing convertible debt issuances and warrants, as well as potential loss of investment due to the 'going concern' warning and accumulated deficit.
• Creditors are impacted by the company's debt defaults and the need for continuous refinancing, although some legal settlements have been paid or are being negotiated.
• Employees of Global Election Services (GES) may transition to GES Acquisition Corp. upon the closing of the 2026 Easterly APA, with employment agreements for key executives John Matthews and Kathryn Weisbeck.
• Customers of GES may experience continuity of service under the new ownership structure of GES Acquisition Corp. following the asset sale.

Next Steps

• Management plans to raise additional capital and obtain further financing to fund operations and advance acquisition plans.
• The company aims to acquire or develop a business that generates sufficient positive cash flows from operations.
• Upon receiving adequate financing, the company plans to hire more employees in financial reporting and establish an audit committee to address internal control weaknesses.
• The closing of the 2026 Easterly APA for the sale of GES assets is contingent on standard closing conditions, including stockholder approvals, and is expected to close by April 30, 2026.
• John Matthews and Kathryn Weisbeck are expected to enter employment agreements with GES Acquisition upon the closing of the 2026 Easterly APA, with John Matthews also appointed as a director and CEO of GES Acquisition.
• Settlement negotiations are ongoing in the Pezzuto legal proceedings following a motion for summary judgment filed on November 14, 2025.

Key Dates

Recommendation

The company's explicit 'going concern' warning, coupled with a substantial increase in net losses, a growing accumulated deficit, and persistent working capital deficit, indicates severe financial distress. While revenue growth is positive, it is significantly outpaced by rising operating expenses. The ongoing reliance on continuous debt and equity financing, along with material weaknesses in internal controls, presents an extremely high-risk profile. Despite the potential asset sale of GES, the overall financial health and operational stability remain highly precarious, making the stock a 'strong sell' for seasoned investors.

Keywords

Global Arena Holding, GAHI, Global Election Services, GES, 10-Q, Quarterly Report, Financial Results, Net Loss, Revenue Growth, Going Concern, Asset Sale, Election Services, Blockchain Voting, TrueVote, Convertible Notes, Promissory Notes, Debt Default, Internal Controls, Legal Settlements, Corporate Governance