- Quarterly Report (10-Q)

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 1934

For the quarterly period ended November 30, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For 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 (I.R.S. Employer
 incorporation or organization) 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 [ ]

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 [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)

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

At December 31, 2008, 6,627,112 shares of Global Entertainment Corporation
common stock were outstanding.

GLOBAL ENTERTAINMENT CORPORATION
INDEX

 REPORT ON FORM 10-Q
 FOR THE QUARTER ENDED NOVEMBER 30, 2008

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements 3

 Condensed Consolidated Balance Sheets - As of November 30, 2008
 (Unaudited) and May 31, 2008 3

 Condensed Consolidated Statements of Operations (Unaudited) -
 Three and Six Months Ended November 30, 2008 and 2007 4

Condensed Consolidated Statements of Changes in Stockholders' Equity - Year Ended May 31, 2008 and Six Months Ended November 30, 2008 (Unaudited) 5

Condensed Consolidated Statements of Cash Flows (Unaudited) - Six Months Ended November 30, 2008 and 2007 6

Notes to Condensed Consolidated Financial Statements 7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 18

Item 3. Quantitative and Qualitative Disclosures about Market Risk 25

Item 4T. Controls and Procedures 26

PART II. OTHER INFORMATION

Item 1. Legal Proceedings 26

Item 1A. Risk Factors 27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27

Item 3. Defaults upon Senior Securities 27

Item 4. Submission of Matters to a Vote of Security Holders 27

Item 5. Other Information 27

Item 6. Exhibits 27

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30, 2008 (UNAUDITED) AND MAY 31, 2008
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 November 30, May 31,
 2008 2008
 -------- --------
 ASSETS
CURRENT ASSETS:
 Cash and cash equivalents $ 664 $ 443
 Restricted cash 1,250 --
 Accounts receivable, net of $49 and $2 allowance
 November 30, 2008 and May 31, 2008 1,135 1,111
 Prepaid expenses and other assets 259 239
 Investment in Wenatchee project 52,399 34,473
 Assets to be disposed -- 2,167
 -------- --------
 TOTAL CURRENT ASSETS 55,707 38,433

Property and equipment, net 863 266
Goodwill 519 519
Deferred income tax asset 112 --
Other assets 323 108
Minority interests 43 38
 -------- --------
 TOTAL ASSETS $ 57,567 $ 39,364
 ======== ========

 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable $ 4,018 $ 7,718
 Accrued liabilities 1,140 750
 Deferred revenues 470 24
 Notes payable - current portion 48,975 27,220
 Liabilities related to assets to be disposed -- 233
 -------- --------
 TOTAL CURRENT LIABILITIES 54,603 35,945

Deferred income tax liability 117 117
Notes payable - long-term portion 125 180
 -------- --------
 TOTAL LIABILITIES 54,845 36,242
 -------- --------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' 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;
 6,627,112 and 6,625,114 shares issued and outstanding as of
 as of November 30, 2008 and May 31, 2008 7 7
 Paid-in capital 10,946 10,930
 Accumulated deficit (8,231) (7,815)
 -------- --------
 TOTAL STOCKHOLDERS' EQUITY 2,722 3,122
 -------- --------
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 57,567 $ 39,364
 ======== ========

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

GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2008 AND 2007
(UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 Three Months Ended Six Months Ended
 November 30, November 30,
 --------------------------- ---------------------------
 2008 2007 2008 2007
 ---------- ---------- ---------- ----------
REVENUES:
 Project management fees $ 761 $ 119 $ 1,226 $ 244
 Facility management fees 728 735 1,173 1,699
 License fees 515 535 890 1,452
 Ticket service fees 695 1,175 1,315 1,954
 Project development fees 269 25 478 206
 Advertising sales commissions 133 224 378 479
 Concession revenue 130 -- 130 --
 Other revenue -- 12 -- 15
 ---------- ---------- ---------- ----------
 TOTAL REVENUES 3,231 2,825 5,590 6,049
 ---------- ---------- ---------- ----------
OPERATING COSTS:
 Cost of revenues 1,419 1,572 2,398 3,272
 General and administrative costs 1,720 1,777 3,216 4,790
 ---------- ---------- ---------- ----------
 TOTAL OPERATING COSTS 3,139 3,349 5,614 8,062
 ---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS 92 (524) (24) (2,013)

OTHER INCOME (EXPENSE):
 Interest income 9 31 12 76
 Interest expense (354) -- (361) (8)
 Minority interests (3) (22) 5 (20)
 ---------- ---------- ---------- ----------
 TOTAL OTHER INCOME (EXPENSE) (348) 9 (344) 48
 ---------- ---------- ---------- ----------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (256) (515) (368) (1,965)
INCOME TAX BENEFIT -- -- -- --
 ---------- ---------- ---------- ----------
LOSS FROM CONTINUING OPERATIONS (256) (515) (368) (1,965)
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES -- (78) (48) (146)
 ---------- ---------- ---------- ----------
NET LOSS $ (256) $ (593) $ (416) $ (2,111)
 ========== ========== ========== ==========
LOSS PER SHARE:
 Basic-
 Loss from continuing operations $ (0.04) $ (0.08) $ (0.06) $ (0.30)
 Loss from discontinued operations -- (0.01) -- (0.02)
 ---------- ---------- ---------- ----------
 Net loss $ (0.04) $ (0.09) $ (0.06) $ (0.32)
 ========== ========== ========== ==========
 Diluted-
 Loss from continuing operations $ (0.04) $ (0.08) $ (0.06) $ (0.30)
 Loss from discontinued operations -- (0.01) -- (0.02)
 ---------- ---------- ---------- ----------
 Net loss $ (0.04) $ (0.09) $ (0.06) $ (0.32)
 ========== ========== ========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING:
 Basic 6,626,015 6,521,117 6,625,562 6,518,604
 ========== ========== ========== ==========
 Diluted 6,626,015 6,521,117 6,625,562 6,518,604
 ========== ========== ========== ==========

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

GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED MAY 31, 2008 AND THE SIX MONTHS ENDED NOVEMBER 30, 2008
(UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

 Common Stock
 ------------------- Paid-in Accumulated
 Shares Amount Capital Deficit Total
 ------ ------ ------- ------- -----
BALANCE AT MAY 31, 2007 6,508,173 $ 7 $ 10,731 $ (3,784) $ 6,954

Exercise of options 13,941 -- -- -- --

Issuance of restricted stock 3,000 -- 36 -- 36

Issuance of stock 100,000 -- 163 -- 163

Net loss for the fiscal year
 ended May 31, 2008 -- -- -- (4,031) (4,031)
 --------- ----- -------- -------- -------

BALANCE AT MAY 31, 2008 6,625,114 7 10,930 (7,815) 3,122

Issuance of restricted stock 1,998 -- 16 -- 16

Net loss for the six months
 ended November 30, 2008 -- -- -- (416) (416)
 --------- ----- -------- -------- -------

BALANCE AT NOVEMBER 30, 2008 6,627,112 $ 7 $ 10,946 $ (8,231) $ 2,722
 ========= ===== ======== ======== =======

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

GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2008 AND 2007
(UNAUDITED) (IN THOUSANDS)

 Six Months Ended
 November 30,
 ---------------------------
 2008 2007
 -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss $ (416) $ (2,111)
 Adjustments to reconcile net loss to net cash provided
 by (used in) operating activities-
 Depreciation 81 67
 Unbilled earnings on Wenatchee project (639) (291)
 Other non-cash items 36 60
 Discontinued operations and related impairment charges 5 (82)
 Changes in assets and liabilities, net of businesses
 acquired and disposed-
 Accounts receivable (19) 1,084
 Prepaid expenses and other assets (235) (41)
 Accounts payable 355 (871)
 Accrued liabilities 390 72
 Deferred revenues 446 449
 -------- --------
 Net cash (used in) provided by operating activities 4 (1,664)
 -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of property and equipment (681) (90)
 Investment in Wenatchee project (21,342) (12,985)
 Deposit of restricted cash (1,250) --
 Proceeds from disposition of Cragar, net of expenses 1,790 --
 -------- --------
 Net cash used in investing activites (21,483) (13,075)
 -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Notes payable proceeds 21,992 12,184
 Notes payable payments (292) --
 -------- --------
 Net cash provided by financing activities 21,700 12,184
 -------- --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 221 (2,555)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 443 4,252
 -------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 664 $ 1,697
 ======== ========

SUPPLEMENTAL DISCLOSURES:
 Interest paid $ 11 $ 8
 ======== ========
 Income taxes paid (received) $ -- $ --
 ======== ========

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

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,", "Company" or "GEC") is an integrated event and entertainment company that is engaged, through its wholly owned subsidiaries, in sports management, multipurpose events center and related real estate development, facility and venue management and marketing, and venue ticketing. We are primarily focused on projects located in mid-size communities in the United States.

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, and Encore Facility Management.

We, through our wholly owned subsidiary, Western Professional Hockey League, Inc., are the operator of the Western Professional Hockey League (WPHL), 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 is a structured licensed sports league, which includes competing teams located in various states, including Texas, Colorado, Kansas, Louisiana, Mississippi, South Dakota, New Mexico, Oklahoma, and Arizona. There are 17 teams in the 2008-09 season and there were 17 teams in the 2007-08 season. In each season 13 teams were licensed by WPHL. In each season, 4 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 and surrounding multi-use real estate development.

GPI, along with International Coliseums Company, Inc. (ICC), develops multipurpose events centers in mid-market communities. ICC'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. The inter-relationship between GPI, ICC and WPHL is a key factor in the viability of a managed multipurpose entertainment facility.

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, club seat license sales, and facility sponsorship agreements.

Global Entertainment Ticketing (GetTix) provides ticketing services for the multipurpose event centers developed by GPI and ICC, 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, 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.

bookings, and food and beverage. Encore is currently involved with facility management of multipurpose events centers developed by GPI and ICC. Facility management operations are conducted under separate limited liability companies.

On August 1, 2008, we closed a transaction pursuant to which we sold substantially all of the assets of our subsidiary Cragar Industries, Inc. (Cragar), a licensor of an automotive aftermarket wheel trademark and brand - CRAGAR(R). The assets consisted primarily of intangible property, including trademarks, service marks and domain names. The purchase price was approximately $1.9 million in cash. Of the cash proceeds, $0.1 million was used for transaction-related costs and $1.25 million has been set aside in a restricted account as security for a letter of credit. The remainder of the funds was made available for working capital and general corporate purposes.

BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of Global Entertainment Corporation and its wholly owned subsidiaries, WPHL, GPI, ICC, GEMS, Encore, GetTix and Cragar, as well as the limited liability companies formed for facility management. Intercompany balances and transactions have been eliminated in consolidation.

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

Operating results for the three and six month periods ended November 30, 2008, are not necessarily indicative of the results that may be expected for the year ending May 31, 2009, or for any other period.

For further information, refer to the financial statements and footnotes included in our report on Form 10-K for the year ended May 31, 2008.

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

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.

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, 2008. We believe our critical accounting policies and material estimates include, but are not limited to, revenue recognition, the allowance for doubtful accounts, arena guarantees, the carrying value of goodwill, the realization of deferred income tax assets, the fair value of liability related to the secondary guarantee related to a worker's compensation program, and the allocation of expenses, division of profit or loss relating to the joint operating agreement, and the application of the percentage-of-completion method. 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.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2006, the FASB issued FASB Interpretation No. 48 (FIN No. 48), "An Interpretation of FASB Statement No. 109," which clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements in accordance with FASB Statement No. 109, "Accounting for Income Taxes". This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It reflects the benefit recognition

approach, where a tax benefit is recognized when it is more likely than not to be sustained based on the technical merits of the position. We adopted the interpretation on June 1, 2007, and there was no impact on our financial position or results of operations. We have not been examined by any major tax jurisdictions.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". The statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. We adopted this statement prospectively effective June 1, 2008, and there was no impact on our financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities". This statement permits entities to choose to measure many financial instruments and certain other items at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. We adopted this statement prospectively effective June 1, 2008 and there was no impact on our financial position or results of operations. We have not elected the fair value option for any eligible items.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51". This statement establishes accounting and reporting standards for noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. The statement also provides consolidated income statement presentation guidance and requires expanded disclosures. This statement is effective for our fiscal year beginning June 1, 2009, and interim periods within that year. The statement will be applied prospectively, except for the presentation and disclosure requirements, which will be applied retrospectively for all periods presented. We have not yet evaluated the effect this statement will have on our financial position or results of operations.

In November 2007 the EITF issued EITF 07-01 "Accounting for Collaborative Agreements". This consensus prohibits 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 the income statement based on the nature of the arrangement, whether the payments are within the scope of other accounting literature, and certain other criteria. The consensus is required for our fiscal year beginning June 1, 2009. We have not yet evaluated the effect this statement will have on our financial position or results of operations.

EARNINGS (LOSS) PER SHARE (EPS)

Basic earnings (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are not included in the weighted average number of shares when inclusion would increase the income per share or decrease the loss per share. The computation of diluted EPS equals the basic calculation in each period presented because common stock equivalents were antidilutive due to losses from continuing operations for each of the periods presented.

Reconciliations of the numerators and denominators in the EPS computations for loss from continuing operations follow:

 Three Months Ended Six Months Ended
 November 30, November 30,
 ------------------------ ------------------------
 2008 2007 2008 2007
 ---------- ---------- ---------- ----------
NUMERATOR (in thousands):
Basic and diluted - loss from continuing operations $ (256) $ (515) $ (368) $ (1,965)
 ========== ========== ========== ==========
DENOMINATOR:
Basic EPS - weighted average shares outstanding 6,626,015 6,521,117 6,625,562 6,518,604
Effect of dilutive securities -- -- -- --
 ---------- ---------- ---------- ----------
Diluted EPS - weighted average shares outstanding 6,626,015 6,521,117 6,625,562 6,518,604
 ========== ========== ========== ==========

Number of shares of common stock which could be purchased
 with average outstanding securities not included in diluted
 EPS because effect would be antidilutive-
 Stock options (average price of $4.97 and $4.93 for 338,304 502,217 364,368 535,015
 for the three and six months ended November 30, 2008)
 Warrants (average price of $6.63 and $6.47 for 248,095 275,760 262,003 275,760
 for the three and six months ended November 30, 2008)
 Restricted stock 25,511 12,577 22,992 12,757

The impacts of all outstanding options, warrants and restricted stock outstanding at November 30, 2008, were not included in the calculation of diluted EPS for the three and six months ended November 30, 2008, because to do so would be antidilutive. Outstanding options, warrants and restricted stock could potentially dilute EPS in the future.

INVESTMENT IN WENATCHEE PROJECT

We provided construction management services under an agreement with the City of Wenatchee, Washington, related to a multi-purpose events center in that city. Investment in Wenatchee project of $52.4 million on the condensed consolidated balance sheets represents costs and estimated earnings in excess of billings on this construction project, which we owned until the facility was sold to the Greater Wenatchee Regional Events Center Public Facilities District (PFD) in December 2008. Costs associated with the project, including all direct and indirect costs, including contract supervision and interest during the construction period, were being recorded as investment in Wenatchee project until the facility was completed in the first week of October 2008. Accumulated capitalized interest as of November 30, 2008, totals $1.6 million.

Revenues earned on this project were recorded based on the ratio of costs incurred to the total costs expected to be incurred. For this purpose, only costs related to performance under the contract were considered. This cost-to-cost method was used because management believed costs were the best available measure of our progress on the fixed-price contract, which could have been modified by incentive and penalty provisions. As of November 30, 2008, investment in Wenatchee project consisted of costs incurred of $50.6 million and estimated earnings of $1.8 million. Estimated earnings of $1.6 million have been included in project management fees and $0.2 million in project development fees in the condensed consolidated statements of operations from the start of the project through November 30, 2008. Under the terms of our construction management agreement, we were not able to bill the City for our services and received our revenue out of the proceeds from the sale of the facility.

Although construction of the facility was substantially completed in the first week of October 2008, we have not yet made final payment to certain construction vendors. We are negotiating final payment of certain constructions costs. Resolution of these negotiations may result in a revision of the revenue on this project in the second half of fiscal 2009.

At November 30, 2008 and May 31, 2008, approximately $2.7 million and $5.9 million of payables related to expenditures on the project were included in accounts payable.

NOTES PAYABLE

In August 2007, we entered into an agreement with Marshall Financial Group, LLC (Marshall) to borrow up to $52.0 million for the construction of a multi-purpose events center in Wenatchee, Washington. The outstanding principal balance of the note bore interest at a rate of prime plus 0.25% (4.25% at November 30, 2008). The note was paid in full when the PFD purchased the facility in December 2008. Financial covenants of the Marshall note required that we maintain a level of stockholders' equity of not less than $9.0 million and unrestricted cash, cash equivalents, time deposits and marketable securities of not less than $3.5 million. As of November 30, 2008, we were not in compliance with these financial covenants, however the note was subsequently paid in full. As of November 30, 2008, the $48.9 million outstanding balance on the construction loan was classified as short-term notes payable in the condensed consolidated balance sheet. Interest on the Marshall note accumulated monthly and increased both notes payable and investment in Wenatchee project in the condensed consolidated balance sheet until construction concluded in October 2008. After construction, during the quarter ended November 30, 2008, we expensed $0.3 million of interest on the note.

We had a $1.75 million line of credit that matured on November 1, 2008. The line of credit was amended and now matures October 1, 2009. The line of credit bears interest at a daily adjusting LIBOR rate plus 2%, subject to certain adjustments. As of November 30, 2008, and through the date of this filing, we have received no cash advances on this credit facility. Effective June 2008, we are required to deposit cash in the amount of any requested cash advances. At November 30, 2008, we had a maximum borrowing capacity of $0.5 million, as a result of a $1.25 million letter of credit in favor of Marshall, which reduced our available line of credit. We deposited $1.25 million of the proceeds from the disposition of Cragar with the bank in August 2008, as additional security for the letter of credit. These funds were restricted, and unavailable to us, while the letter of credit was outstanding. The letter of credit was surrendered by Marshall when we repaid our construction loan with proceeds from the sale of the events center in Wenatchee, Washington in December 2008. As amended, the line of credit is available to support up to $1.25 million in letters of credit.

The credit facility has been secured by substantially all of our tangible and intangible assets. In order to borrow, we must 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 the date of the amendment, November 1, 2008, and an increase in tangible net worth of at least 75% of consolidated net income plus 100% of all increases of equity (including the amount of any stock offering or issuance) on each anniversary date after May 31, 2009. We must maintain a zero balance for a consecutive 30 day period during the term of the facility. As of November 30, 2008, we were not in compliance with the minimum current ratio covenant, but the bank has waived this violation.

COMMITMENTS AND CONTINGENCIES

PURCHASE COMMITMENTS

We have open purchase commitments for services, furniture and fixtures totaling less than $0.1 million at November 30, 2008, primarily related to construction projects under management.

LITIGATION

As with all entertainment facilities there exists a degree of risk that the general public may be accidentally injured. As of November 30, 2008, there were various claims outstanding in this regard that management does not believe will have a material effect on our financial condition or results of operations. To

mitigate this risk, we maintain insurance coverage, which we believe effectively covers any reasonably foreseeable potential liability. There is no assurance that our insurance coverage will adequately cover all liabilities to which we may be exposed.

We are a plaintiff and a counter-defendant in a lawsuit involving our franchisee, Blue Line Hockey, LLC (Blue Line), which operates the Youngstown Steelhounds. Our claim is for approximately $0.1 million in unpaid franchise and assessment fees owed by Blue Line, plus our attorneys' fees. Blue Line's counterclaim alleges that the WPHL fraudulently induced Blue Line's principal to enter the license agreement by failing to comply with franchise disclosure requirements, and that the WPHL made fraudulent representations to induce Blue Line into signing the franchise agreement. Blue Line seeks rescission of the license agreement, reimbursement of its franchise fee, $0.5 million of lease payments, and reimbursement of travel expenses for the 2005-2006 season. Although the outcome of this matter cannot be predicted with certainty, we believe that we have both valid claims and valid defenses to the counterclaims. Thus, we intend to vigorously prosecute our claims and defend the counterclaims. No liability has been established at November 30, 2008, related to this matter.

CONTINGENCIES

We enter into indemnification provisions under our agreements with other companies in our ordinary course of business, typically with business partners and customers. Under these provisions we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated fair value of these agreements is minimal. Accordingly, we have no liabilities recorded for these agreements as of November 30, 2008.

As of November 30, 2008, 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.

GUARANTEES

We have entered into a contract with the entertainment facility in Rio Rancho, New Mexico which guarantees certain economic performance standards. The term of this contract is for a period of 10 years and expires in December 2014. In the event these economic performance standards are not reached, we are obligated to subsidize the difference between the actual performance and the guaranteed performance. There are no recourse provisions under this agreement. The maximum amount of future payments we could be required to make under the performance guarantee is theoretical due to various unknown factors. However, the subsidy would be limited to the cumulative operating losses of the facility for each year of the guarantee. We have never made a material subsidy from this guarantee and do not believe that any potential subsidy would be material.

In February 2008, we entered into a management agreement with the City of Allen, Texas relative to a multi-purpose event center to be constructed in that city. 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 event 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 event center will be generated by the operation of the event 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 event 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 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 May 2008, we entered into a management agreement with the City of Independence, Missouri relative to a multi-purpose event center to be constructed in that city. The initial term of this agreement ends fifteen years from facility opening. 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 and has an operating year ended June 30. 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 Encore and GEMS fees. 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 with the City of Independence, 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.

As of November 30, 2008, 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 a third party and our secondary guarantee of this letter of credit does not affect our borrowing capacity under our line of credit. No amounts have been drawn on this letter of credit as of November 30, 2008. We believe the amount of payments under this guarantee is negligible, and as such, have assigned no value to this guarantee at November 30, 2008.

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

PVEC, LLC JOINT VENTURE

During fiscal year 2006, we entered into a joint venture partnership agreement with Prescott Valley Signature Entertainment, 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. 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 partnership operating agreement. The PVEC, LLC 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. Each member must contribute $1 thousand for a 50% interest in the joint venture. We contributed $250 thousand as preferred capital while Prescott Valley Signature Entertainment, LLC contributed land with an approximate value of $1.5 million as preferred capital. Because we had committed to pay our initial capital contributions, these amounts were recorded in accounts payable in our condensed consolidated balance sheets as of May 31, 2008 and November 30, 2008. Payment was made in December 2008. Further, because PVEC, LLC is sustaining losses, and profitable future operation is not assured, we recorded losses on our investment, in the amount of $251 thousand, to bring our investment to zero. Our investment was zero at May 31, 2008, and remains zero at November 30, 2008.

Each member will receive a 5% return on preferred capital contributions and will share equally in the gain or loss of PVEC, LLC. If funds available to PVEC, LLC are insufficient to fund operations, the members agree to contribute 100% of the cash needed until each member's preferred capital account balances are equal and 50% of the cash needed if its preferred capital contribution balances are equal.

PVEC, LLC is obligated to make lease payments equal to debt service payments on the Bonds. In the event of any shortfalls in debt service payments, amounts will first be paid by escrow accounts funded by 2% of the transaction privilege tax (TPT) collected from the surrounding project area and from a lockbox account containing 1) our initial contribution to PVEC of $250 thousand, 2) $100 thousand per year (increasing annually by inflation) from the Town of Prescott Valley and 3) earnings from the events center.

We have a limited guarantee of the cash flow of PVEC, LLC as cash flows from operations of the center are used to pay first operating expenses, second our base management fee (4% of the center's operating revenue), third debt service and then other items. The maximum losses under this guarantee are limited to our management fee. We do not believe any potential payments under this guarantee would be material.

Our consolidated financial statements reflect the following related to transactions between us and PVEC, LLC (in thousands).

 Three Months Ended Six Months Ended
 November 30, November 30,
 ------------------ ------------------
 2008 2007 2008 2007
 ---- ---- ---- ----
Facility management fees, exclusive of payroll (Encore) $ 12 $ 1 $ 29 $ 2
Facility management fees, payroll related (Encore) 171 208 326 462
Advertising sales commission (GEMS) 19 62 86 130
Ticket service fees (GetTix) 31 56 72 103
Cost of revenues, facility payroll (Encore) 171 208 326 462

 November 30, May 31,
 2008 2008
 ---- ----
Accounts payable $532 $502
Accrued liabilities 2 --
Accounts receivable -- 101

DISCONTINUED OPERATIONS

On August 1, 2008, we closed a transaction under which we sold substantially all of the assets of Cragar Industries, Inc. (Cragar), a licensor of an automotive aftermarket wheel trademark and brand name - CRAGAR(R). The assets consisted primarily of intangibles, including trademarks, service marks and domain names. The net cash purchase price of $1.8 million was allocated primarily to the trademarks, with the remainder to tooling, inventory and other assets.

The assets and liabilities of Cragar, included in our condensed consolidated balance sheets in assets to be disposed and liabilities related to assets to be disposed are as follows (in thousands):

 May 31,
 2008
 ------
Receivables $ 116
Prepaid expenses and other assets 154
Deferred income tax asset 134
Trademarks 1,763
 ------
Assets to be disposed $2,167
 ======

Accounts payable $ 37
Accrued liabilities 120
Deferred income tax liabiliy 22
Deferred revenues 54
 ------
Liabilities related to assets to be disposed $ 233
 ======

We expect other cash flows from Cragar in fiscal 2009 to consist primarily of the collection of receivables and payment of liabilities existing as of the August 1, 2008, date of sale, which were largely unchanged from those existing at May 31, 2008.

The following table presents selected operating data for Cragar (in thousands):

 Three Months Ended Six Months Ended
 November 30, November 30,
 --------------- ---------------
 2008 2007 2008 2007
 ---- ---- ---- ----
Revenues $ -- $ 219 $ 60 $ 466
Loss on disposal -- -- (51) --
Loss before income taxes -- (78) (48) (146)
Loss from discontinued operations, net
 of income tax -- (78) (48) (146)

CREDIT RISK

The current general unfavorable economic environment may have a significant impact on our operating results.

The League operates primarily in mid-sized communities in the Central, Western and Southern regions of the United States, including Texas, Colorado, Kansas, Mississippi, Louisiana, New Mexico, Oklahoma, South Dakota and Arizona. Our facility management fees are derived from events centers operating in Arizona, New Mexico and Washington. These geographic areas are generally in an economic downturn that could have a significant negative impact on our operating results.

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 raise capital in the current economic environment and may have less interest in developing new multipurpose facilities. Our revenues, project development and project management revenue in particular, could be negatively impacted.

Purchasing a 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 November 30, 2008 and May 31, 2008, goodwill relates to our ICC segment.

 Six Months Ended
 ---------------------------
 Income (Loss)
 Gross Before Income Identifiable
 Revenues Taxes Assets
 -------- ----- ------
NOVEMBER 30, 2008
Global Entertainment Corporate Operations $ 101 $(1,178) $55,387 (a)
Global Entertainment Concessions 131 (d) (103) (d) 698 (d)
Central Hockey League/WPHL 788 42 503
Global Properties I 478 131 199
International Coliseums 1,226 (e) 890 74
Encore Facility Management 1,173 (b) (78) 180
Global Entertainment Marketing Systems 378 116 178
Global Entertainment Ticketing 1,315 (188) 348
Discontinued Operations -- (48) --
 ------- ------- -------
Global Entertainment Coporation Consolidated $ 5,590 $ (416) $57,567
 ======= ======= =======

NOVEMBER 30, 2007
Global Entertainment Corporate Operations $ 166 $(1,949) $ 17,631 (a)
Central Hockey League/WPHL 1,300 (c) 503 795
Global Properties I 56 (321) 365
International Coliseums 395 (121) 667
Encore Facility Management 1,699 (b) (453) 289
Global Entertainment Marketing Systems 479 -- 105
Global Entertainment Ticketing 1,954 376 687
Discontinued Operations -- (146) 3,082
 ------- ------- -------
Global Entertainment Coporation Consolidated $ 6,049 $(2,111) $23,621
 ======= ======= =======

(a) Global Entertainment Corporate Operations assets include the investment in Wenatchee project of $52.4 million at November 30, 2008 and $14.9 million at November 30, 2007. Global Entertainment Corporate Operations assets include cash and cash equivalents and restricted cash of $1.9 million at November 30, 2008, and $1.7 million at November 30, 2007.
(b) Encore facility management fees for the six months ended November 30, 2008, include $0.3 million in revenues from the contract to manage the Town Toyota Center in Wenatchee, Washington, opened in October 2008. Encore facility management fees for the six months ended November 30, 2007, include $0.5 million in revenues from the management contract with the Chevrolet Center in Youngstown, Ohio, cancelled in September 2007.
(c) Central Hockey League/WPHL operations for the six months ended November 30, 2007 include $0.4 million in franchise transfer fees.
(d) Global Entertainment Concessions began operations October 2008 in Wenatchee, Washington.
(e) International Coliseums revenues for the six months ended November 30, 2008, includes $0.6 million of fees on the project in Independence, Missouri, which began in February 2008 and the project in Allen, Texas, which began in June 2008. Each project is anticipated to have a twenty-month duration. In addition to the projects in Independence, Missouri and Allen, Texas, ICC was also managing the construction project in Wenatchee, Washington until completion in October 2008. Revenues related to Wenatchee were $0.3 million higher for the six months ended November 30, 2008, than the prior year period.

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, 2008, under the section entitled "Risk Factors." 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

The League is a structured licensed sports league, which includes competing teams located in various states, including Texas, Colorado, Kansas, Louisiana, Mississippi, New Mexico, South Dakota, Oklahoma, and Arizona. There are 17 teams in the 2008-2009 season and there were 17 teams in the 2007-08 season. In each season 13 teams were licensed by WPHL. In each season, 4 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.

potential licensees in securing quality venues in which to play minor professional hockey league games. The inter-relationship between GPI, ICC and WPHL is a key factor in the viability of a managed multipurpose entertainment facility.

Encore Facility Management (Encore) provides a full complement of multipurpose events center operational services. These services provide 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 and ICC. Facility management operations are conducted under separate limited liability companies.

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, 2008. We believe our most critical accounting policies and estimates relate to revenue recognition, the allowance for doubtful accounts, arena guarantees, the carrying value of goodwill, the realization of deferred income tax assets, the fair value of liability related to the secondary guarantee related to a worker's compensation program, and the allocation of expenses, division of profit or loss relating to the joint operating agreement, and the application of the percentage-of-completion method. 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 Cragar. As a result, the operations of Cragar have been classified as loss from discontinued operations in the condensed consolidated statements of operations for all periods presented. Revenues and operating costs in the condensed consolidated statements of operations now exclude all accounts of Cragar.

THREE MONTHS ENDED NOVEMBER 30, 2008, COMPARED TO THREE MONTHS ENDED NOVEMBER
30, 2007

REVENUES (in thousands):

 Three Months Ended November 30,
 ----------------------------------------
 % of % of %
 2008 Revenue 2007 Revenue Change Change
 ---- ------- ---- ------- ------ ------
Project management fees $ 761 23.6 $ 119 4.2 $ 642 539.5
Facility management fees 728 22.5 735 26.0 (7) (1.0)
License fees 515 15.9 535 18.9 (20) (3.7)
Ticket service fees 695 21.5 1,175 41.6 (480) (40.9)
Project development fees 269 8.3 25 0.9 244 976.0
Advertising sales commissions 133 4.1 224 7.9 (91) (40.6)
Concession revenue 130 4.0 -- -- 130 NM
Other revenue -- -- 12 0.4 (12) (100.0)
 ------ ----- ------ ----- ------ -----
Gross Revenues $3,231 100.0 $2,825 100.0 $ 406 14.4
 ====== ===== ====== ===== ====== =====

Total revenues increased $0.4 million, or 14.4%, to $3.2 million for the three months ended November 30, 2008 compared to $2.8 million for the three months ended November 30, 2007. The project management fees increase of $0.6 million and project development fee increase of $0.2 million and concession revenue increase of $0.1 were offset by the decrease in ticket service fees of $0.5 million and decrease in advertising sales commissions of $0.1 million.

Project management revenues increased $0.6 million to $0.8 million for the quarter ended November 30, 2008, from $0.1 million in the prior year quarter. Project management fees for the quarter ended November 30, 2008, includes $0.3 million of fees on the project in Independence, Missouri, which began in February 2008, and the project in Allen, Texas, which began in June 2008. Each project is anticipated to have a twenty-month duration. In addition to the projects in Independence, Missouri and Allen, Texas, ICC also managed the construction project in Wenatchee, Washington through the first week of October 2008. Project management fees related to Wenatchee, recognized on a percentage of completion basis, were $0.3 million higher for the quarter ended November 30, 2008 than the prior year quarter.

Facility management fees were $0.7 million for the three months ended November 30, 2008 and 2007. Encore's current facility management contracts include the facilities in Rio Rancho, New Mexico, Prescott Valley, Arizona, and Wenatchee, Washington, which opened in October 2008. The $0.2 million year-over-year increase in fees resulting from the opening of the Wenatchee, Washington facility in October 2008, was offset by a decline in fees from management of the Rio Rancho, New Mexico and Prescott Valley, Arizona centers, which were under management in both quarters. The facilities in Rio Rancho, New Mexico and Prescott Valley, Arizona, each experienced a decline in the number of events held and a decline in attendance. Encore manages employees under each of its current facility management contracts and, therefore, payroll costs from such employees are recognized by Encore as facility management fee revenue and are also included in cost of revenues.

License fees remained largely unchanged at $0.5 million for the quarters ended November 30, 2008 and 2007.

Ticket service fees decreased $0.5 million, or 40.9%, to $0.7 million for the three months ended November 30, 2008, from $1.2 million for the prior year quarter. This decrease in ticket service fees reflects 1) the $0.3 million reduction in fees due to the discontinuance of services to the Chevrolet Center in Youngstown, Ohio, in the spring of 2008 and 2) decreased sales with the decline in the number of events held, attendance at events and venues under contract.

Project development fees increased $0.2 million to $0.3 million in the quarter ended November 30, 2008. Project development fees in the quarter ended November 30, 2008, include the final fee installment from the project development agreement with the City of Independence, signed in 2008.

Advertising sales commissions decreased $0.1 million, or 40.6%, to $0.1 million for the three months ended November 30, 2008, from $0.2 million for the three months ended November 30, 2007. The decrease is the result of decreased sales of contractually obligated income in all facilities under contract throughout both quarters in the current unfavorable economic environment. The increase in commissions from the opening of the facility in Wenatchee, Washington in October 2008 offset the decrease in commissions from cancellation of the GEMS contract with the facility in Youngstown, Ohio in October 2007.

Concession revenue was $0.1 million for the quarter ended November 30, 2008. We derive revenue from concession operations at the Wenatchee, Washington facility which opened in October 2008.

OPERATING COSTS (in thousands):

 Three Months Ended November 30,
 ----------------------------------------
 % of % of %
 2008 Revenue 2007 Revenue Change Change
 ---- ------- ---- ------- ------ ------
Cost of revenues $1,419 43.9 $1,572 55.7 $ (153) (9.7)
General and administrative costs 1,720 53.2 1,777 62.9 (57) (3.2)
 ------ ---- ------ ----- ------ -----
Total Operating Costs $3,139 97.2 $3,349 118.6 $ (210) (6.3)
 ====== ==== ====== ===== ====== =====

Total operating costs decreased by $0.2 million, or 6.3%, to $3.1 million for the quarter ended November 30, 2008, from $3.3 million in the prior year quarter.

Cost of revenues decreased by $0.2 million, or 9.7%, to $1.4 million for the quarter ended November 30, 2008, from $1.6 million for the prior year quarter. The $0.1 million decrease in facility management payroll associated with the decline in the number of events held and attendance in facilities in Rio Rancho, New Mexico and Prescott Valley, Arizona and $0.1 million decrease in ticket service costs associated with the decline in ticket service revenue were offset by an increase in costs of $0.2 million related to concession services.

General and administrative expenses decreased $0.1 million, or 3.2%, to $1.7 million for the quarter ended November 30, 2008, from $1.8 million in the prior year quarter. Commission expense decreased $0.1 million between quarters.

LOSS FROM CONTINUING OPERATIONS (in thousands):

 Three Months Ended November 30,
 ----------------------------------------
 % of % of %
 2008 Revenue 2007 Revenue Change Change
 ---- ------- ---- ------- ------ ------
Loss from Continuing Operations $(256) (7.9) $(515) (18.2) $259 (50.3)
 ===== ==== ===== ===== ==== =====

Loss from continuing operations was $0.3 million for the three months ended November 30, 2008, compared to a loss from continuing operations of $0.5 million for the three months ended November 30, 2007. Income from operations of 0.1 million in the quarter ended November 30, 2008 was an improvement from the $0.5 million loss from operations in the prior year quarter. The quarter ended November 30, 2008, however, includes $0.4 million of interest expense incurred on the construction note after construction of the Wenatchee, Washington facility concluded in October 2008.

SIX MONTHS ENDED NOVEMBER 30, 2008, COMPARED TO SIX MONTHS ENDED NOVEMBER 30,
2007

REVENUES (in thousands):

 Six Months Ended November 30,
 ----------------------------------------
 % of % of %
 2008 Revenue 2007 Revenue Change Change
 ---- ------- ---- ------- ------ ------
Project management fees $1,226 21.9 $ 244 4.0 $ 982 402.5
Facility management fees 1,173 21.0 1,699 28.1 (526) (31.0)
License fees 890 15.9 1,452 24.0 (562) (38.7)
Ticket service fees 1,315 23.5 1,954 32.3 (639) (32.7)
Project development fees 478 8.6 206 3.4 272 132.0
Advertising sales commissions 378 6.8 479 7.9 (101) (21.1)
Concession revenue 130 2.3 -- -- 130 NM
Other revenue -- -- 15 0.3 (15) (100.0)
 ------ ----- ------ ----- ------ -----
Gross Revenues $5,590 100.0 $6,049 100.0 $ (459) (7.6)
 ====== ===== ====== ===== ====== =====

Total revenues decreased $0.5 million, or 7.6%, to $5.6 million for the six months ended November 30, 2008, from $6.0 million for the six months ended November 30, 2007. The project management fees increase of $1.0 million and project development fee increase of $0.3 million were offset by the decrease in facility management revenues of $0.5 million, the decrease in license fees of $0.6 million and the decrease in ticket service fees of $0.6 million.

ICC project management revenues increased $1.0 million to $1.2 million for the six months ended November 30, 2008, from $0.2 million in the prior year six months. Project management fees for the six months ended November 30, 2008, includes $0.6 million of fees on the project in Independence, Missouri, which began in February 2008 and the project in Allen, Texas, which began in June 2008. Each project is anticipated to have a twenty-month duration. In addition to the projects in Independence, Missouri and Allen, Texas, ICC was also managing the construction project in Wenatchee, Washington until completion in October 2008. Project management fees related to Wenatchee were $0.3 million higher for the six months ended November 30, 2008 than the prior year period.

Facility management fees decreased $0.5 million, or 31.0%, to $1.2 million for the six months ended November 30, 2008, from $1.7 million in the prior year six months. The cancellation of the management contract with the Chevrolet Center in Youngstown, Ohio, effective September 2007 contributed $0.5 million of the decrease. The $0.2 million year-over-year increase in fees resulting from the opening of the Wenatchee, Washington facility in October 2008, was offset by a decline in fees from management of the Rio Rancho, New Mexico and Prescott Valley, Arizona centers, which were under management in both periods. The facilities in Rio Rancho, New Mexico and Prescott Valley, Arizona, each experienced a decline in the number of events held and a decline in attendance. Encore manages employees under each of its current facility management contracts and, therefore, payroll costs from such employees are recognized by Encore as facility management fee revenue and are also included in cost of revenues.

License fees decreased $0.6 million, or 38.7%, to $0.9 million for the six months ended November 30, 2008, from $1.5 million for the six months ended November 30, 2007. The prior year period included $0.4 million of license transfer fees. Since license 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. In addition, corporate sponsorship revenue decreased $0.1 million.

Ticket service fees decreased $0.6 million, or 32.7%, to $1.3 million for the six months ended November 30, 2008, from $2.0 million for the prior year six months. This decrease in ticket service fees reflects 1) the $0.3 million reduction in fees due to the discontinuance of services to Chevrolet Center in Youngstown, Ohio, in the spring of 2008 and 2) decreased sales due to the decline in the number of events held, attendance at events and venues under contract.

Project development fees increased $0.3 million, to $0.5 million in the six months ended November 30, 2008, from $0.2 million in the six months ended November 30, 2007. Project development fees in the six months ended November 30, 2008, include the final development fee installments from the project development agreements with the City of Allen, Texas and the City of Independence, Missouri, signed in 2008. Project development fees in the six months ended November 30, 2007 related to the project in Wenatchee, Washington.

Advertising sales commissions decreased $0.1 million, or 21.1%, to $0.4 million for the six months ended November 30, 2008, from $0.5 million for the six months ended November 30, 2007. Contractually obligated income was flat or lower in all facilities under contract throughout both periods as a result of the current unfavorable economic environment. The increase in commissions from the opening of the facility in Wenatchee, Washington in October 2008 offset the decrease in commissions from cancellation of the GEMS contact with the facility in Youngstown, Ohio in October 2007.

Concession revenue was $0.1 million for the six months ended November 30, 2008. We derive revenue from concession operations at the Wenatchee, Washington facility which opened in October 2008.

OPERATING COSTS (in thousands):

 Six Months Ended November 30,
 ----------------------------------------
 % of % of %
 2008 Revenue 2007 Revenue Change Change
 ---- ------- ---- ------- ------ ------
Cost of revenues $2,398 42.9 $3,272 54.1 $ (874) (26.7)
General and administrative costs 3,216 57.5 4,790 79.2 (1,574) (32.9)
 ------ ----- ------ ----- ------- ----
Total Operating Costs $5,614 100.4 $8,062 133.3 $(2,448) (30.4)
 ====== ===== ====== ===== ======= ====

Total operating costs decreased by $2.4 million, or 30.4%, to $5.6 million for the six months ended November 30, 2008, from $8.1 million in the prior year six months.

Cost of revenues decreased by $0.9 million, or 26.7%, to $2.4 million for the six months ended November 30, 2008, from $3.3 million for the prior year six months. This decrease resulted primarily from 1) a $0.3 million decrease in facility management payroll associated with the decline in the number of events held and attendance at facilities in Rio Rancho, New Mexico and Prescott Valley, Arizona and 2) a $0.5 million decrease in facility management payroll associated with the facility in Youngstown, Ohio, due to cancellation of the management agreement.

General and administrative expenses decreased $1.6 million, or 32.9%, to $3.2 million for the six months ended November 30, 2008, from $4.8 million in the prior year six months. The decrease in general and administrative expenses is comprised of 1) a $1.3 million decrease in legal and settlement costs due to a reduction in legal defense costs with the settlement of several matters since November 30, 2007, 2) a $0.2 million reduction in severance expenses and 3) a $0.1 million reduction in commission expenses.

LOSS FROM CONTINUING OPERATIONS (in thousands):

 Six Months Ended November 30,
 ----------------------------------------
 % of % of %
 2008 Revenue 2007 Revenue Change Change
 ---- ------- ---- ------- ------ ------
Loss from Continuing Operations $(368) (6.6) $(1,965) (32.5) $1,597 (81.3)
 ===== ==== ======= ===== ====== =====

Loss from continuing operations was $0.4 million for the six months ended November 30, 2008, compared to a loss from continuing operations of $2.0 million for the six months ended November 30, 2007. Operating losses improved to approximately zero in the six months ended November 30, 2008 from $2.0 million in the prior year six months. The six months ended November 30, 2008, however, includes $0.4 million of interest expense incurred on the construction note after construction of the Wenatchee, Washington concluded in October 2008. The

improvement in operating losses of $2.0 million is primarily attributable to the $1.2 million decrease in legal and settlement costs and the $0.2 million reduction in severance expense.

LIQUIDITY AND CAPITAL RESOURCES

As of November 30, 2008, we have $0.7 million in cash and cash equivalents, including cash collected for GetTix tickets of approximately $0.2 million for events scheduled to occur in the future, and we have $1.25 million in restricted cash.

On August 1, 2008, we closed a transaction under which we sold substantially all of the assets of Cragar. The assets consisted primarily of intangible property, including trademarks, service marks and domain names. The purchase price was approximately $1.8 million net of transaction-related costs and, as discussed in greater detail below, $1.25 million of the cash received was set aside in a restricted account as security for a letter of credit until December 2008. The remainder of the funds was available for working capital and general corporate purposes.

Cash provided by operating activities in the first half of fiscal 2009, was approximately zero, an improvement over cash used by operating activities of $1.7 million in the first half of fiscal 2008, as operating losses decreased.

Cash used in investing activities was $21.5 million in the first half of fiscal 2009 compared to cash used in investing activities of $13.1 million in first half of fiscal 2008. Construction costs for the events center in Wenatchee, Washington increased $8.4 million. The construction costs were funded primarily with a construction loan with Marshall, as reflected as a source of funds in the financing section. In addition, during the first half of fiscal 2009, we invested $0.7 million in concession equipment for the Wenatchee, Washington facility. The concession operation began when the facility opened in October 2008. Offsetting the increased construction costs and concession equipment purchases were the $1.8 million proceeds from the disposition of Cragar, net of transaction-related costs. We were also required to set aside $1.25 million in a restricted account as security for a letter of credit in the favor of Marshall, which was subsequently surrendered, in December 2008 when we repaid the Marshall note.

Cash provided by financing activities totaled $21.7 million for the first half of fiscal 2009, compared to cash provided by financing activities of $12.2 million in the first half of fiscal 2008. During the first half of 2009 we received $22.0 million in proceeds from the construction loan with Marshall Financial Group, LLC.

We had a $1.75 million line of credit that matured on November 1, 2008. The line of credit was amended and now matures October 1, 2009. The line of credit bears interest at a daily adjusting LIBOR rate plus 2%, subject to certain adjustments. As of November 30, 2008, and through the date of this filing, we have received no cash advances on this credit facility. Effective June 2008, we are required to deposit cash in the amount of any requested cash advances. At November 30, 2008, and as of the date of this filing, we had a maximum borrowing capacity of $0.5 million, as a result of a $1.25 million letter of credit in favor of Marshall, which reduced our available line of credit. We deposited $1.25 million of the proceeds from the disposition of Cragar with the bank in August 2008, as additional security for the letter of credit. These funds were restricted, and unavailable to us, as long as the letter of credit was outstanding. The letter of credit was surrendered by Marshall when we repaid our construction loan with proceeds from the sale of the events center in Wenatchee, Washington in December 2008. As amended, the line of credit is available to support up to $1.25 million in letters of credit.

amendment, November 1, 2008, and an increase in tangible net worth of at least 75% of consolidated net income plus 100% of all increases of equity (including the amount of any stock offering or issuance) on each anniversary after May 31, 2009. We must maintain a zero balance for a consecutive 30 day period during the term of the facility.

We continue to evaluate the profitability of, and synergies among, our various subsidiaries and may determine to dispose of one or more of them, as we move forward with our business plan. Based on our current forecast and historical results, we expect to have adequate cash flow from available sources to fund our operating needs through November 30, 2009. We do not expect to borrow under the line of credit, since any advances will require us to deposit cash in the amount of the requested advance. If we continue to not comply with contractually obligated financial covenants, 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 may be required to refinance all or part of our existing debt. We cannot guarantee that we would be able to do so on terms acceptable to us, if at all.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2006, the FASB issued FASB Interpretation No. 48, "An Interpretation of FASB Statement No. 109," which clarifies the accounting for uncertainty in income taxes. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation reflects the benefit recognition approach, where a tax benefit is recognized when it is more likely than not to be sustained based on the technical merits of the position. We adopted this interpretation effective June 1, 2007, and there was no impact on our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157 "Fair Value Measurements". The statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. We adopted this statement prospectively effective June 1, 2008, and there was no impact on our financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities". This statement permits entities to choose to measure many financial instruments and certain other items at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. We adopted this statement prospectively effective June 1, 2008, and there was no impact on our financial position or results of operations. We have not elected the fair value option for any eligible items.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51". This statement establishes accounting and reporting standards for noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. The statement also provides consolidated income statement presentation guidance and requires expanded disclosures. This statement is effective for our fiscal year beginning June 1, 2009, and interim periods within that year. The statement will be applied prospectively, except for the presentation and disclosure requirements, which will be applied retrospectively for all periods presented. We have not yet evaluated the effect the statement will have on our financial position or results of operations.

In November 2007 the EITF issued EITF 07-01 "Accounting for Collaborative Agreements". This consensus prohibits 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 the income statement based on the nature of the arrangement, whether the payments are within the scope of other accounting literature, and certain other criteria. The consensus is required for our fiscal year beginning July 1, 2009. We have not yet evaluated the effect this statement will have on our financial position or results of operations.

ITEM 3. 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 November 30, 2008. 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 makes modifications as necessary; our intent in this regard is that the disclosure controls and procedures will be maintained as dynamic systems that change (including with improvements and corrections) as conditions warrant.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.

There have not been changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the second quarter of fiscal 2009 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

As with all entertainment facilities there exists a degree of risk that the general public may be accidentally injured at one of the facilities we develop, design or manage. As of November 30, 2008, 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, however, that our insurance coverage will adequately cover all liabilities to which we may be exposed.

We are a plaintiff and a counter-defendant in a lawsuit involving a former licensee, Blue Line Hockey, LLC (Blue Line), which operates the Youngstown Steelhounds. This suit was filed in Maricopa County Superior Court of Arizona on November 7, 2006. Our claim is for approximately $0.1 million in unpaid license and assessment fees owed by Blue Line, plus our attorneys' fees. Blue Line's counterclaim alleges that WPHL fraudulently induced Blue Line's principal to enter the license agreement by failing to comply with franchise disclosure requirements, and that WPHL made fraudulent representations to induce Blue Line into signing the license agreement. Blue Line seeks rescission of the license agreement, $0.5 million of lease payments, reimbursement of its franchise fee, and reimbursement of travel expenses for the 2005-2006 season. Although the outcome of this matter cannot be predicted with certainty, we believe that we

have both valid claims and valid defenses to the counterclaims. Thus, we intend to vigorously prosecute our claims and defend the counterclaims. No liability has been established at November 30, 2008, related to this matter.

We were a defendant in a lawsuit filed by Nustadia Developments Inc. and PBK Architects. The suit arose out of certain contracts between us and the plaintiffs, pursuant to which we agreed to use architectural design and development management services of the plaintiffs with respect to certain arena development projects. The suit sought direct damages of $4.5 million and other unspecified damages for alleged breach of contract, tortious interference with business expectancy, and breach of implied covenant of good faith and fair dealing. This suit was filed in December 2005, in the Maricopa County Superior Court of Arizona. We settled the matter in the third quarter of fiscal year 2008 and the case has been dismissed.

ITEM 1A. RISK FACTORS

Refer to our report on Form 10-K for the fiscal year ended May 31, 2008, under Item 1A. "Risk Factors."

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of shareholders was held October 17, 2008. The following nominees were elected to the board of directors to serve as directors until their successors are elected and qualified: W. James Treliving, Richard Kozuback, Michael L. Bowlin, Terry S. Jacobs, Stephen A McConnell, George Melville, Mark Schwartz. Each director was elected by the following vote:

 For Withheld
 --------- --------
W. James Treliving 5,066,384 4,076
Richard Kozuback 5,066,342 4,118
Michael L. Bowlin 5,066,418 4,042
Terry S. Jacobs 5,017,939 52,521
Stephen A McConnell 5,066,418 4,042
George Melville 5,017,939 52,521
Mark Schwartz 5,066,418 4,042

The shareholders also ratified the appointment of Semple, Marchal & Cooper, LLP as our independent registered public accounting firm for fiscal 2009, by the following vote: 5,067,295 for, 739 against and 2,430 abstaining.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

See Exhibit Index attached.

SIGNATURES

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

Global Entertainment Corporation
(Registrant)

January 14, 2009 By /s/ Richard Kozuback
 -----------------------------------------------
 Richard Kozuback
 President & Chief Executive Officer


January 14, 2009 By /s/ James Yeager
 -----------------------------------------------
 James Yeager
 Senior Vice President & Chief Financial Officer

EXHIBIT INDEX

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

Exhibit
-------

 31.1 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.

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