10-Q: Global Arena Holding, Inc. Reports Increased Revenue in Q2 2024, Faces Ongoing Financial Challenges

Sentiment:

Quarterly Report 3 October 2024 4:58 PM

📋All filings for Global Arena Holding, INC

Global Arena Holding, Inc.'s Q2 2024 shows increased revenue compared to Q2 2023, but the company continues to grapple with significant financial challenges and debt.

Delay expectedManagement anticipates the closing of the Election Services Solutions acquisition will occur in the third quarter of 2024.The Company plans to close Tidewater Energy Group Inc. in the third quarter of 2024.

Capital raiseThe continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations.The Company continues to raise funds from the issuance of additional convertible promissory note.

Worse than expectedThe company has a significant accumulated deficit and working capital deficit.The company's auditors have raised substantial doubt about its ability to continue as a going concern.The company is heavily reliant on raising additional capital and obtaining financing to sustain operations.

Summary

Global Arena Holding, Inc. reported increased revenue for the three and six months ended June 30, 2024, compared to the same periods in 2023.
Revenue for the three months ended June 30, 2024, was $348,190, compared to $237,972 for the three months ended June 30, 2023.
Revenue for the six months ended June 30, 2024, was $580,313, compared to $344,164 for the six months ended June 30, 2023.
The company's net loss for the three months ended June 30, 2024, was $156,979, and for the six months ended June 30, 2024, was $287,997.
The company has a working capital deficit of $9,881,535 as of June 30, 2024.
The company's auditors have raised substantial doubt about its ability to continue as a going concern.
The company is dependent on raising additional capital and obtaining financing to continue operations.
The company is involved in several legal proceedings.
Management anticipates the closing of the Election Services Solutions acquisition in the third quarter of 2024.
The company plans to close Tidewater Energy Group Inc. in the third quarter of 2024.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While revenue increased, the company faces significant financial challenges, including a large accumulated deficit, working capital deficit, and going concern uncertainty. The reliance on external financing and involvement in legal proceedings further dampen the outlook.

Positives

Revenue increased for both the three and six months ended June 30, 2024, compared to the same periods in 2023, indicating potential growth in the company's services.
Salaries and benefits decreased due to amended employment compensation for John Matthews and Kathryn Weisbeck.
Professional fees decreased for both the three and six months ended June 30, 2024, compared to the same periods in 2023.

Negatives

The company has a significant accumulated deficit of $32,786,305 as of June 30, 2024.
The company has a substantial working capital deficit of $9,881,535 as of June 30, 2024.
The company's auditors have raised substantial doubt about its ability to continue as a going concern.
The company is heavily reliant on raising additional capital and obtaining financing to sustain operations.
The company is involved in multiple legal proceedings, which could result in significant financial liabilities.
Certain of the company's debt is in default as of June 30, 2024.

Risks

The company's ability to continue as a going concern is uncertain due to recurring losses and cash flow deficits.
The company's dependence on external financing makes it vulnerable to changes in market conditions and investor sentiment.
Legal proceedings could result in significant financial liabilities and reputational damage.
Failure to close the Election Services Solutions acquisition could negatively impact the company's revenue stream.
The company's internal controls over financial reporting are not effective, which could lead to errors or fraud.
The company has a history of issuing convertible promissory notes, which can dilute existing shareholders' equity.

Future Outlook

The company's future operations are dependent on its ability to raise additional capital, obtain additional financing, and/or acquire or develop a business that generates sufficient positive cash flows from operations.

Management Comments

Management anticipates the closing of the Election Services Solutions acquisition will occur in the third quarter of 2024.
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 it will be successful in obtaining additional financing, from which the proceeds will be primarily used to execute its new operating plans.

Industry Context

The company operates in the election services industry, which is subject to increasing scrutiny regarding data integrity and cybersecurity. The company is working with multiple vendors and has made investments in companies who are developing Blockchain Technology for a data storage and retrieval registration system; tabulation of paper Absentee/Mail Ballots; and internet voting.

Comparison to Industry Standards

It is difficult to compare Global Arena Holding's results to industry standards due to its unique business model and focus on smaller elections.
Larger companies in the election services industry, such as Dominion Voting Systems and Election Systems & Software (ES&S), have significantly higher revenue and resources.
However, these larger companies also face greater regulatory scrutiny and public attention.
Global Arena Holding's focus on blockchain technology for election security could provide a competitive advantage in the future, but it is still in the early stages of development.

Legal Proceedings

The Company may be involved in legal proceedings in the ordinary course of business.
On December 26, 2017, the Company entered into a settlement agreement with a prior attorney with regards to outstanding legal fees owed.
On October 16, 2020, the Company's subsidiary, Tidewater Energy Group Corp. was named as a defendant in a lawsuit filed in District Court in and For Tulsa County, State of Oklahoma, CJ-2020-3172.
On June 30, 2022, the Company was named as a defendant in a lawsuit filed in the Supreme Court of the State of New York, Index No. 651531/2002.
On May 1, 2023, Brett Pezzuto and Christian Pezzuto filed a complaint in the United States District Court for the Southern District of New York (Civil Action No. 1:23-cv-03591) against the Company and GES for breach of contract.
On May 22, 2023, Lim Chap Huat filed a Memorandum of Law in Support of Plaintiffs Motion for Summary Judgment in Lieu of Complaint Pursuant to CPLR 3213 in the Supreme Court of the State of New York (Index No. 652474/2023) against the Company.

Stakeholder Impact

Shareholders face significant risk due to the company's financial instability and potential dilution from convertible notes.
Employees' job security is uncertain due to the company's going concern risk.
Customers may be concerned about the company's ability to provide reliable services due to its financial challenges.
Creditors face increased risk of default due to the company's high debt levels.

Next Steps

Close the acquisition of Election Services Solutions.
Close Tidewater Energy Group Inc.
Continue to seek additional financing to fund operations.
Resolve ongoing legal proceedings.
Improve internal controls over financial reporting.

Key Dates

Date	Description
2009-02	Global Arena Holding, Inc. (formerly, Global Arena Holding Subsidiary Corp.) (GAHI), was formed in February 2009, in the state of Delaware.
2015-02-25	Global Election Services, Inc. (GES) formed on February 25, 2015.
2015-03-25	The Company entered into a second amended purchase agreement (APA) with Election Services Solutions.
2015-05-20	The Company incorporated a new wholly owned entity in the State of Delaware called GAHI Acquisition Corp.
2015-10-20	The parties agreed to extend the closing date of the merger to December 15, 2015.
2016-04-28	The stockholders approved an amendment to the Company's articles of incorporation to increase the number of authorized common shares from 100,000,000 to 1,000,000,000.
2017-03-28	The United States Patent Office issued patents to BTC covering Election Intellectual Property, US Patent #9,608,829, Issued March 28, 2017.
2017-12-26	The Company entered into a settlement agreement with a prior attorney with regards to outstanding legal fees owed.
2019-05-13	The Company entered into a joint venture agreement with Voting Portals, LLC (VP).
2019-06-15	GES entered into a Term Sheet, and Common Stock Purchase Agreement to create a joint venture with TrueVote, Inc.
2019-11-19	The Company incorporated a new wholly owned entity in the State of Delaware called Tidewater Energy Group Inc.
2020-10-16	The Company's subsidiary, Tidewater Energy Group Corp. was named as a defendant in a lawsuit filed in District Court in and For Tulsa County, State of Oklahoma, CJ-2020-3172.
2021-03-25	The Company entered into a second amended purchase agreement (APA) with Election Services Solutions.
2022-06-30	The Company was named as a defendant in a lawsuit filed in the Supreme Court of the State of New York, Index No. 651531/2002.
2022-07-27	Pursuant to Board of Director minutes dated July 27, 2022, the Company filed a Certificate of Designation with the State of Delaware authorizing the creation of 750,000 Series C Preferred Stock.
2022-10-05	The company announced that the Financial Industry Regulatory Association (FINRA) confirmed the below listed corporate actions requested by the Company: 1 for 12 Reverse Split.
2023-05-01	Brett Pezzuto and Christian Pezzuto filed a complaint in the United States District Court for the Southern District of New York (Civil Action No. 1:23-cv-03591) against the Company and GES for breach of contract.
2023-05-22	Lim Chap Huat filed a Memorandum of Law in Support of Plaintiffs Motion for Summary Judgment in Lieu of Complaint Pursuant to CPLR 3213 in the Supreme Court of the State of New York (Index No. 652474/2023) against the Company.
2024-02-12	The case was settled on February 12, 2024, with an amendment to the settlement agreement signed by the parties on April 19, 2024.
2024-06-30	End of the quarterly period.
2024-10-03	As of October 3, 2024, the registrant had 1,695,351,226 outstanding shares of common stock.

Keywords

financial statements, revenue, net loss, convertible notes, legal proceedings, going concern, election services, Global Arena Holding, GAHI

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