Annual Report for Fiscal Year Ending December 31, 2024 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes to those financial statements that are included elsewhere in this annual report on Form 10-K.

FORWARD-LOOKING STATEMENTS

There are statements in this annual report on Form 10-K that are not historical facts. These "forward-looking statements" can be identified by use of terminology such as "believe", "hope", "may", "anticipate", "should", "intend", "plan", "will", "expect", "estimate", "project", "positioned", "strategy", and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire annual report on Form 10-K document carefully. Although management believes that the assumptions underlying the forward-looking statements are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward-looking statements. The assumptions used for the purposes for the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in the economy, legislative changes, changes in the industry, technological developments and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward- looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this annual report on Form 10-K will in fact transpire. You are cautioned not to place reliance on these forward-looking statements, which speak only as of their dates. We do not undertake any obligation to update or revise any forward-looking statements.

OVERVIEW

Global AI was organized as Mycatalogsonline.com, Inc. in the state of Nevada on January 6, 2009. In April 2009, the Company changed its name to My Catalogs Online, Inc. In November 2012, the Company changed its name to Bright Mountain Holdings, Inc. In August 2013, the Company changed its name to Wall Street Media Co, Inc. and in October 2023 the Company changed its name to Global AI, Inc.

The Company expects to develop artificial intelligence ("AI") applications, acquire, integrate and develop AI-based technology companies and assets (the "Acquisitions"). The Company intends to focus its Acquisitions on machine and deep learning, generative AI, computer vision, natural language processing, and other AI technologies. The Company focuses on Acquisitions that are scalable and have revenue models that provide for tangible growth. Once acquired, the Company plans to integrate and further develop the companies and assets acquired in the Acquisitions to increase their existing customer base and further develop their existing products and services. The Company also plans to "cross-pollinate" knowledge and strategies derived from each of its Acquisitions with other Acquisitions for the benefit of the Company's network as a whole. In addition, the Company plans to centralize back office administrative functions and take advantage of cost and revenue synergies across the Acquisitions' platforms.

On September 12, 2023, Ingenious Investment AG purchased, from their own funds, from existing shareholders of the Company, in a series of private transactions, a total of 24,944,466 shares of common stock, $0.001 per share of Global AI, Inc., representing 92.7% of the outstanding shares of the Company's common stock at such time (the "Ingenious Acquisition").

Recent Events

On January 29, 2024, the Company filed a Certificate of Amendment of the Amended and Restated Certificate of Incorporation with the Secretary of State of Nevada to effect a 4-for-1 forward stock split of the shares of the Company's Class A common stock, par value $0.001 per share (the "Class A Common Stock"), and Class B common stock, par value $0.001 per share (the "Class B Common Stock"), either issued and outstanding or held by the Company as treasury stock. Holders of capital stock of the Company representing a majority of the voting power of all the then-outstanding shares of capital stock of the Company approved a resolution to affect the Forward Stock Split.

The Forward Stock Split increased the number of shares of Class A Common Stock outstanding from 28,587,006 shares to approximately 114,348,024 shares, subject to adjustment for the rounding up of fractional shares. The Forward Stock Split increased the number of shares of Class B Common Stock outstanding from 10,000,000 shares to approximately 40,000,000 shares, subject to adjustment for the rounding up of fractional shares. The total number of Class A Common Stock and Class B Common Stock combined after the Forward Stock Split was 154,348,024.

In December 2024, the Company formed a dedicated R&D and Innovation Lab which is tasked with developing a suite of AI products and solutions designed to tackle complex challenges and automate processes across industries, leveraging an Agentic-AI approach. Our focus is on building AI applications and solutions are secure, scalable, and privacy-centric. The Company hired 14 senior AI specialists and software engineers to lead our newly formed R&D and Innovation Lab. This team will drive the development of groundbreaking AI technologies, positioning Global AI at the forefront of enterprise AI innovation.

On December 14, 2024, the Company established a subsidiary in Israel named GL AI Ltd. Further, in December 2024, the Company signed its first commercial contract with an enterprise customer in Israel.

On December 31, 2024, the Company, Tectu Biz Ltd., a company organized under the laws of the State of Israel ("Tectu"), and certain shareholders of Tectu as identified on Exhibit A thereto (the "Sellers"), entered into that certain Share Purchase Agreement (the "Agreement") in respect of the purchase by the Company and sale by the Sellers of the entire share capital of Tectu compromising of 4,000,000 ordinary shares of Tectu ("Tectu Shares"), each having a nominal value of 0.01 New Israel Shekels, free and clear from any and all encumbrances (the "Share Purchase"). Immediately following the consummation of the closing of the Share Purchase, the Company shall hold one hundred percent (100%) of the issued and outstanding share capital of Tectu on a fully-diluted basis. As consideration for the Share Purchase, the Company shall pay the Sellers at closing a total combined amount (or value) of (i) $490,000 in cash (subject to certain provisions in respect of identified loan payments); and (ii) $510,000 in either cash or 255,000 shares of common stock of the Company, par value $0.001, with each share having an agreed upon fixed value of $2.00 (or a combination thereof, as determined by the Company at its sole discretion); totaling to $1,000,000, which constitutes the equity value of the Company on a cash-free/debt-free basis as of December 31, 2024. The Agreement provides for certain representations, covenants and indemnification obligations that are customary for these types of transactions. Further, the closing of the Share Purchase is subject to certain conditions to closing, including but not limited to the delivery by Tectu to the Company of certain audited financial statements of Tectu for the fiscal years ending December 31, 2023 and December 31, 2024 by a Public Company Accounting Oversight Board ("PCAOB") qualified auditor (which is reasonably acceptable to the Company) in accordance with PCAOB standards. In connection with the Closing of the Share Purchase, the Company expects to enter two additional agreements: (i) certain employment agreements with the Sellers; and (ii) certain option agreements as part of the Company's equity incentive plan in respect of the receipt of options or other restricted securities by certain holders of options to purchase Global AI Inc Shares (amounting together to an aggregate number of 5,745,000 options to purchase shares of common stock of the Company under terms to be agreed).

CRITICAL ACCOUNTING POLICIES

In response to the Securities and Exchange Commission's (the "SEC") financial reporting release, FR-60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies, the Company has selected its more subjective accounting estimation processes for purposes of explaining the methodology used in calculating the estimate, in addition to the inherent uncertainties pertaining to the estimate and the possible effects on the Company's financial condition. These accounting estimates are discussed below. These estimates involve certain assumptions that if incorrect could create a material adverse impact on the Company's results of operations and financial condition

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC 606"). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

The Company recognizes revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), as issued by the Financial Accounting Standards Board ("FASB"). Under ASC 606, revenue is recognized when control of a promised good or service is transferred to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The Company applies the following five-step model to recognize revenue from contracts with customers:

	1.	Identify the contract(s) with a customer.
	2.	Identify the performance obligations in the contract.
	3.	Determine the transaction price.
	4.	Allocate the transaction price to the performance obligations in the contract; and
	5.	Recognize revenue when (or as) the performance obligation is satisfied.

RESULTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2024 COMPARED TO THE YEAR ENDED DECEMBER 31, 2023

Revenue: For the twelve months ended December 31, 2024, the Company generated revenue of $24,896, compared to $34,000 for the twelve months ended December 31, 2023, representing a decrease of 27%. This decline was primarily due to a decrease in consulting services provided.

Operating Expenses: Operating expenses increased to $1,010,649 for the year ended December 31, 2024, from $669,554 for the year ended December 31, 2023 - a 51% increase. The primary reason for the increase in operating expenses were increases in both general and administrative and professional fees of $178,776 or 123%, and $120,352 or 23%, respectively and research and developing expenses of $44,307 for the year ended December, 2024 and $0 for the year ended December 31, 2023.

Loss from Operations: The Company reported a loss from operations of $1,001,096 for the year ended December 31, 2024, compared to a loss of $635,554 for the year ended December 31, 2023, an increase of 58%. The primary reason for this was due to the increase in operating expenses during the period.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $927,368 for the year ended December 31, 2024, as compared to net cash used in operating activities of $325,110 for the year ended December 31, 2023, this increase is due to the increase in net loss during the period.

Net cash provided by financing activities was $753,333 for the year ended December 31, 2024, as compared to the net cash provided by investing activities of $500,000 for the year ended December 31, 2023. This increase is due to $753,333 in proceeds from subscription receivable.

As of December 31, 2024, the Company had cash on hand of $9,929 and a working capital deficit of $299,893, compared to cash of $183,964and a working capital deficit of $52,130 at December 31, 2023. The increase in the deficit was largely due to cash operating losses and expanded operations. Management is actively seeking investor funding and pursuing strategic alternatives, including a potential merger or combination with another operating company, to improve liquidity and financial position. On January 28, 2025, the Company issued 550,000 shares of common stock to an investor of the Company for $1,100,000, which provided additional liquidity to support operations (Note 8).

RELATED PERSON TRANSACTIONS

For information on related party transactions and their financial impact, see Note 4 to the financial statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued ASU 2023-09-Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily by amending disclosure requirements for the effective tax rate reconciliation and income taxes paid. ASU 2023-09 should be applied on a prospective basis, and retrospective application is permitted. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its disclosures.

In 2024, the FASB issued guidance, ASU 2024-03, which requires the disaggregated disclosure of certain costs and expenses on an interim and annual basis. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that is material to investors.