GLTK 10-K & 10-Q changes, risk factors and insider trading
GlobalTech Corp (also GLTKD) · OTC · Telephone Communications (No Radiotelephone) · CIK 1938338 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Relating to Our Liquidity and Need for Capital”
New heading “Risks Relating to Our Operations and Industry”
New heading “Risks Relating to Our Operations and Industry”
New heading “Risks Related to Management, Governance and Ownership”
New heading “Regulatory, Compliance and Legal Risks”
New heading “Risks Related to Our Operations in Pakistan”
New heading “Risks Related to Our Securities”
New heading “Risks Relating to Our Planned Reverse Stock Split”
New heading “Risks Related to Management, Employees and Directors”
New heading “Risks Associated with Our Governing Documents and Nevada Law”
New heading “Regulatory, Compliance and Legal Risks”
New heading “Risks Related to Our Operation in Pakistan”
New heading “Risks Related to Our Securities and its Offering”
New heading “Risks Relating to Our Planned Reverse Stock Split”
New heading “Shares of WorldCALL Public are pledged by WorldCall Private to secure various obligations, and in the event WorldCall Private defaults in such obligations, our ownership of WorldCALL Public may decrease below 50%.”
New heading “Our involvement in numerous legal proceedings exposes us to significant costs, potential judgments, damages, and other liabilities that could adversely affect our business, financial condition, and results of operations.”
New heading “Risks Related to the Exchange”
New heading “We will be required to issue additional shares of Series A Preferred Stock or common stock to the shareholders of Moda in Pelle, which could result in significant dilution to our existing stockholders and are required to pay $1 million to the shareholders of Moda in Pelle.”
New heading “The exercise of the put option by the shareholders of Moda in Pelle could require us to issue a significant number of shares of common stock or otherwise impact our capital resources.”
New heading “We may be required to use significant cash resources or provide collateral in connection with the Credit Facility for Moda in Pelle, which could adversely affect our liquidity and financial flexibility.”
New heading “Our obligation to provide the Credit Facility exposes us to credit risk and operational risk associated with the performance of Moda in Pelle.”
New heading “The buyout and put option mechanics could result in significant and unpredictable cash or equity obligations.”
New heading “We may face integration, governance and operational risks associated with our majority ownership, but not full ownership, of Moda in Pelle.”
New heading “Restrictions, management fee arrangements and related-party dynamics may adversely affect the financial performance of Moda in Pelle.”
New heading “The complex contractual arrangements related to the Exchange may increase the risk of disputes and litigation.”
New heading “Risks Related to our Series A Preferred Stock”
New heading “The liquidation preference of the Series A Preferred Stock could significantly reduce the amount of assets available for distribution to holders of our common stock upon a liquidation, dissolution or winding-up of the Company.”
New heading “The conversion features of the Series A Preferred Stock may result in significant dilution to existing stockholders, particularly upon an uplisting or following the expiration of the optional conversion period.”
New heading “The automatic conversion of the Series A Preferred Stock could increase volatility in the trading price of our common stock following an uplisting.”
New heading “Holders of Series A Preferred Stock have protective provisions that may limit our operational and strategic flexibility and could adversely affect holders of common stock.”
New heading “The absence of dividend and redemption rights for the Series A Preferred Stock may affect investor incentives and the timing of conversion or sales of common stock.”
New heading “Risk Factors Related to Moda in Pelle”
New heading “Moda in Pelle will require additional capital to fund its operations and grow, and its inability to obtain such capital, or to adequately manage its existing capital resources, could materially adversely affect its business, financial condition and operating results.”
New heading “The business of Moda in Pelle, including its costs and supply chain, is subject to risks associated with sourcing, manufacturing and warehousing.”
New heading “Moda in Pelle’s ability to source merchandise could be negatively impacted if new trade restrictions are imposed or existing trade restrictions become more burdensome.”
New heading “Moda in Pelle’s financial results are subject to quarterly fluctuations.”
New heading “Changes in bag, accessories and footwear costs and availability could materially adversely affect Moda in Pelle’s businesses.”
New heading “Economic uncertainty has in the past affected, and may in the future effect, consumer purchases of discretionary items, which has affected demand for Moda in Pelle’s products and may continue to adversely affect demand for its products in the future.”
New heading “Economic uncertainty may affect Moda in Pelle’s access to capital and/or increase the costs of such capital.”
New heading “Adverse macro-economic conditions, including inflation, could adversely impact Moda in Pelle’s operating results.”
New heading “Moda in Pelle’s business and global supply chain and as a result, its results of operations, could be adversely affected by natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events.”
New heading “If the use of “cookie” tracking technologies is further restricted, regulated or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of internet user information Moda in Pelle collects would decrease, which could harm Moda in Pelle’s business and operating results.”
New heading “System interruptions that impair client access to Moda in Pelle’s websites or other performance failures in Moda in Pelle’s technology infrastructure could damage Moda in Pelle’s business.”
New heading “Increased competition presents an ongoing threat to the success of Moda in Pelle’s business.”
New heading “Moda in Pelle’s business depends on Moda in Pelle’s brands, and any failure to maintain, protect or enhance Moda in Pelle’s brands, including as a result of events outside Moda in Pelle’s control, could materially adversely affect Moda in Pelle’s business.”
New heading “Changes in consumer tastes and preferences or in consumer spending and other economic or financial market conditions could materially adversely affect Moda in Pelle’s business and Moda in Pelle’s inability to develop and introduce new merchandise offerings in a timely and cost-effective manner may damage Moda in Pelle’s business, financial condition and operating results.”
New heading “Changes in footwear costs and raw material availability could materially adversely affect Moda in Pelle’s business.”
New heading “Moda in Pelle may be unable to scale its operations fast enough to bring down their cost of sales and generate revenues sufficient to support their operations.”
New heading “Moda in Pelle’s acquisition, sales and shipping operations require it to manage and communicate with vendors, partners and third parties all over the world.”
New heading “Disruptions in Moda in Pelle’s warehouse operations could adversely affect sales and customer satisfaction.”
New heading “High levels of product returns, particularly from online sales, could increase costs, reduce net revenue, and adversely affect Moda in Pelle’s margins.”
New heading “Sustainability expectations and evolving regulatory requirements may increase costs and compliance burdens.”
New heading “Moda in Pelle relies upon independent third-party transportation providers for substantially all of Moda in Pelle’s e-commerce direct to consumer sales and is subject to increased shipping costs as well as the potential inability of Moda in Pelle’s third-party transportation providers to deliver on a timely basis.”
New heading “The continued shift toward digital and omnichannel retail increases competitive and execution risks.”
New heading “Seasonality and weather-related volatility could adversely affect Moda in Pelle’s operating results.”
New heading “Moda in Pelle’s gross margins could be adversely affected if it is unable to manage its inventory effectively.”
New heading “Moda in Pelle is exposed to the risk of write-downs on the value of its inventory and other assets.”
New heading “Moda in Pelle’s business is highly dependent upon its ability to identify and respond to new and changing fashion trends, customer preferences, and other related factors. Moda in Pelle’s inability to identify and respond to these new trends may lead to inventory markdowns and write-offs, which could adversely affect Moda in Pelle’s brand image.”
New heading “Shifts in fashion trends and consumer preferences may reduce demand for Moda in Pelle’s products.”
New heading “Moda in Pelle’s business may in the future be subject to data security risks, including security breaches.”
New heading “Moda in Pelle’s websites may in the future encounter technical problems and service interruptions.”
New heading “Disruptions to Moda in Pelle’s product delivery systems and failure to effectively manage inventory based on business trends across various distribution channels could have a material adverse effect on Moda in Pelle’s business, financial condition, results of operations, and liquidity.”
New heading “Moda in Pelle’s reliance on foreign manufacturers to provide materials, or produce its goods in a timely manner, or to meet its quality standards could cause problems if Moda in Pelle experiences a supply chain disruption and Moda in Pelle is unable to secure an alternative source of raw materials or end products.”
New heading “Changes in trade policies and tariffs imposed by the UK government and the governments of other nations could have a material adverse effect on Moda in Pelle’s business and results of operations.”
New heading “Moda in Pelle’s business is exposed to foreign exchange rate fluctuations.”
New heading “Disruption of its information technology systems and websites could adversely affect Moda in Pelle’s financial results and its business reputation.”
New heading “Moda in Pelle’s business and reputation could be adversely affected if its computer systems, or the systems of its business partners, or service providers, become subject to a data security, or privacy breach, or other disruption from a third party.”
New heading “If its manufacturers fail to use acceptable labor practices or to otherwise comply with local laws and other standards, Moda in Pelle’s business reputation could suffer.”
New heading “Moda in Pelle’s business is exposed to risks associated with credit card and other online payment chargebacks and fraud.”
New heading “There may be losses or unauthorized access to or releases of confidential information, including personally identifiable information, that could subject Moda in Pelle to significant reputational, financial, legal and operational consequences.”
New heading “Moda in Pelle’s business is subject to a wide variety of UK and foreign government laws and regulations. These laws and regulations, as well as any new or changed laws or regulations, could disrupt Moda in Pelle’s operations or increase Moda in Pelle’s compliance costs. Failure to comply with such laws and regulations could have a further adverse impact on Moda in Pelle’s business.”
New heading “Government regulation of the internet and e-commerce is evolving, and unfavorable changes or failure by Moda in Pelle to comply with these regulations could substantially harm Moda in Pelle’s business and results of operations.”
New heading “Moda in Pelle may experience fluctuations in its tax obligations and effective tax rate, which could adversely affect its business, results of operations, and financial condition.”
New heading “Moda in Pelle’s historical reliance on overseas manufacturing, including vendors located in jurisdictions presenting an increased risk of bribery and corruption, exposes it to legal, reputational and supply chain risk through the potential for violations of federal and international anti-corruption law.”
New heading “Moda in Pelle does not currently have any employment agreements in place with management.”
New heading “Moda in Pelle may be unable to protect Moda in Pelle’s proprietary information and intellectual property, and as a result, Moda in Pelle’s business could be adversely affected.”
New heading “Moda in Pelle may be subject to claims that it violated intellectual property rights of others, which are extremely costly to defend and could require it to pay significant damages and limit Moda in Pelle’s ability to operate.”
New heading “Failure to adequately grow Moda in Pelle’s operations may harm Moda in Pelle’s business or increase its risk of failure.”
New heading “Claims, litigation, government investigations, and other proceedings may adversely affect Moda in Pelle’s business and results of operations.”
New heading “Moda in Pelle may be adversely affected by climate change or by legal, regulatory or market responses to such change.”
New heading “If Moda in Pelle fails to adequately continue to connect with Moda in Pelle’s consumer base, it could have a material adverse effect on Moda in Pelle’s business, results of operations and financial condition.”
New heading “Moda in Pelle’s finance costs are significant, and reliance on short-term borrowings exposes Moda in Pelle to interest rate and refinancing risks.”
New heading “Inaccurate demand forecasting or ineffective inventory management could result in excess stock, increased markdowns, and working capital strain.”
New heading “Moda in Pelle faces liquidity and capital availability risks, including obligations related to deferred VAT and other UK tax liabilities.”
New heading “Moda in Pelle’s international expansion strategy involves execution, regulatory, and partner risks and may not deliver expected returns.”
New heading “Margin pressure and constrained liquidity may require balance sheet strengthening and could limit Moda in Pelle’s ability to pursue growth opportunities.”
New heading “Moda in Pelle’s brick-and-mortar stores subject Moda in Pelle to significant fixed costs, and any inability to generate sufficient store-level sales could adversely affect Moda in Pelle’s profitability.”
New heading “Moda in Pelle’s lease portfolio may limit operational flexibility and expose Moda in Pelle to renewal, relocation, and occupancy cost risks.”
New heading “Physical damage, store closures, or operational disruptions at Moda in Pelle’s retail locations could negatively impact sales and increase costs.”
New heading “Moda in Pelle’s ability to manage and operate multiple retail locations effectively is critical to Moda in Pelle’s success, and failures in execution could adversely affect Moda in Pelle’s business.”
New heading “Disruptions to logistics and store-level inventory replenishment could adversely affect sales and customer experience.”
New heading “Labor availability, wage inflation, and compliance obligations at Moda in Pelle’s retail locations may increase operating costs and affect store performance.”
New heading “Changes in consumer shopping behavior may reduce the long-term profitability of physical retail locations.”
New heading “Failure to protect Moda in Pelle’s inventory from loss and theft may adversely affect Moda in Pelle’s results of operations.”
New heading “Sustained promotional activity and discounting in the footwear and apparel industry could adversely affect our gross margins and operating results”
New heading “Moda in Pelle’s sales through third-party websites, wholesalers, and concession arrangements reduce the prices it receives for its products and may adversely affect its margins.”
New heading “Concession arrangements expose Moda in Pelle to operational, financial, and liability risks beyond our control.”
New heading “Products held by third parties may not be fully insured, which could result in material losses.”
New heading “Moda in Pelle’s reliance on third-party platforms and retailers increases its exposure to counterparty and concentration risks.”
New heading “Third-party sales channels may limit Moda in Pelle’s control over customer experience and brand presentation.”
New heading “We use “open source” software, which could negatively impact our AI software offerings.”
New heading “We face Geopolitical Risks Arising from the Recent Iran Conflict”
New heading “Restrictions on our ability to transfer cash from foreign jurisdictions into the United States could have a material adverse effect on our operations.”
New heading “The issuance of common stock upon conversion of our Convertible Notes will cause immediate and substantial dilution to existing shareholders.”
New heading “Babar Ali Syed, Director of WorldCALL Public, Director of Worldcall Private and FZC, beneficially owns greater than 50% of our outstanding shares of common stock.”
New heading “Our common stock price may be volatile.”
New heading “The Reverse Stock Split may decrease the liquidity of the shares of our common stock.”
New heading “Our Reverse Stock Split may not result in a proportional increase in the per share price of our common stock.”
Removed heading “Stockholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities.”
Largest changes
“The future success of Moda in Pelle’s business depends in part on its ability to anticipate and react to changes in bag, accessories and footwear costs and availability and to anticipate and respond to changes in the cost, quality and availability of leather and other materials used in the manufacture of its footwear. …”see in full comparison
“The future success of Moda in Pelle’s business depends in part on its ability to anticipate and react to changes in footwear costs and availability of raw materials. …”see in full comparison
“For example, Moda in Pelle may experience a security breach impacting its information technology systems that compromises the confidentiality, integrity or availability of confidential information. Such an incident could, among other things, impair Moda in Pelle’s ability to attract and retain customers for its products, materially damage supplier relationships, and expose Moda in Pelle to litigation or government investigations, which could result in penalties, fines or judgments against Moda in Pelle.”see in full comparison
“Other factors unrelated to our performance that may affect the price of the Company’s securities include the following: (i) the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow the Company; (ii) lessening in trading volume and general market interest in the Company’s securities may affect an investor’s ability to trade significant numbers of the Company’s securities; (iii) the size of our public float may limit the ability of some institutions to invest in the Company’s securities; …”see in full comparison
“Some of the agreements under which we borrow funds contain covenants or provisions that impose certain operating and financial restrictions on us, including balance sheet solvency, such as levels or ratios of earnings, debt, equity, and assets and may prevent us or our subsidiaries from incurring additional debt. …”see in full comparison
“Notwithstanding Moda in Pelle’s efforts to conduct its operations in material compliance with applicable anti-corruption and sanctions laws, Moda in Pelle’s international suppliers, manufacturers, logistics providers and other third-party vendors may be deemed to be “associated persons” under the UKBA or “representatives” under the FCPA, which could expose Moda in Pelle and in some cases, the Company to liability for their actions even where it/we did not authorize or have direct knowledge of the misconduct. …”see in full comparison
Full comparison: every changed paragraph (323)
Investing in our common stock involves a high degree of risk. You should carefully consider each of the following risks including the financial statements and the related notes, before making a decision to buy our common stock. If any of the following risks actually occurs, our business could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Summary RiskRisks FactorsAssociated with Our Company
Our business is subject to numerous risks and uncertainties, including those below and elsewhere in this report. These risks include, but are not limited to, the following:
Risks Relating to Our Liquidity and Need for Capital
Risks Relating to Our Operations and Industry
Risks Relating to Our Operations and Industry
Risks Related to Management, Governance and Ownership
Regulatory, Compliance and Legal Risks
Risks Related to Our Operations in Pakistan
Risks Related to Our Securities
Risks Relating to Our Planned Reverse Stock Split
Risks Related to Management, Employees and Directors
Risks Associated with Our Governing Documents and Nevada Law
Regulatory, Compliance and Legal Risks
Risks Related to Our Operation in Pakistan
Risks Related to Our Securities and its Offering
Risks Relating to Our Planned Reverse Stock Split
Our business is subject to varying degrees of risk and uncertainty. Investors should consider the risks and uncertainties summarized below, as well as the risks and uncertainties immediately following this summary. Our business operations could also be affected by factors that we currently consider to be immaterial or that are unknown to us at the present time. If any of these risks occur, our business, financial condition, and results of operations could be materially and adversely affected, and the trading price of our common stock could decline or our common stock could become worthless:
We need additional capital to support our operations and to undertake our business plan. We may also require additional funding in the future to support our operations or complete acquisitions. The most likely source of future funds presently available to us will be through the sale of equity capital or debt. Any sale of share capital will result in dilution to existing stockholders. As of December 31, 2025, the outstanding principal amount of our external debt for bank loans, and other borrowings amounted to approximately $8.61 million of which $4.88 million is currently in default, provided that none of the lenders have served us notice of default of such amounts to date. In addition to these borrowings, we also have lease liabilities amounting to $150 million. Furthermore, we may incur additional debt in the future, and may not have sufficient funds to repay our future indebtedness or may default on our future debts,indebtedness, jeopardizing our business viability. We also borrowed $1.625 million from certain investors and issued those investors Convertible Promissory Notes (“Convertible Notes”) (discussed below).
The Convertible Notes do not accrue interest unless and until an event of default occurs. Upon the occurrence of an event of default, the amount due under the Convertible Notes bears interest at five percent (5%) per annum, until repaid in full. Any accrued interest, if applicable, is payable on the maturity date or upon conversion of the Convertible Notes, as discussed below. The Convertible Notes are due and payable, unless earlier converted into common stock as discussed below, on September 2, 2027.
The Convertible Notes provide for the automatic conversion of the outstanding principal balance thereof, together with any accrued and unpaid interest, into shares of the Company’s common stock immediately prior to the consummation by the Company of an initial public offering which results in the Company’s common stock being traded on a recognized U.S. securities trading market or exchange, including, but not limited to the Nasdaq Capital Market, Nasdaq Global Market or NYSE American (the “IPO”). The conversion price per share will equal 85% of the per share price to the public in the IPO offering (or, if applicable, 85% of the deemed price of a unit including common stock). The Convertible Notes include customary provisions related to stock splits, combinations, or similar events that proportionately adjust the conversion price.
The Convertible Notes are expressly subordinated to all current and future indebtedness of the Company owed to financial institutions and may be prepaid, in whole or in part, at any time without premium or penalty.
Events of default under the Convertible Notes include, among other things, (i) the Company’s failure to pay principal, interest, or other amounts when due, subject to a ten-day cure period; (ii) the Company’s insolvency, bankruptcy, reorganization, dissolution, or similar proceedings, including the appointment of a custodian, receiver, or trustee for the Company or its assets; or (iii) any action by the Company authorizing or in furtherance of the foregoing. Upon an event of default, unless cured or waived, any holder may declare its Convertible Notes immediately due and payable, and all amounts owed will accrue interest at the default rate described above.
WorldCALLThe PublicCompany incurred a net loss of $4.87$3.15 million during the year ended December 31, 20242025 (20232024: $7.1$2.95 million). As of December 31, 2024,2025, the accumulated loss of WorldCALL Public stands at $67.30$67.77 million (December 31, 20232024: $62.05$67.30 million) and its current liabilities exceed its current assets by $29.65$29.42 million (December 31, 20232024: $25.92$29.65 million). These conditions, along with other factors like declining revenueconditions and contingencies and commitments, indicate the existence of material uncertainties that cast significant doubt about WorldCALL Public’s ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business.
WeWe, WorldCALL Public and 123 Investments Limited may not be able to borrow or raise additional capital in the future to meet our or their needs or to otherwise provide the capital necessary to expand our or their operations and business, which might result in the value of our securities decreasing in value or becoming worthless. Additional financing may not be available to us or WorldCALL Public or 123 Investments Limited on terms that are acceptable. Consequently, we and WorldCALL Public and 123 Investments Limited may not be able to proceed with our/their intended business plans. Obtaining additional financing contains risks, including:
Additionally, we may have difficulty obtaining additional funding, and we may have to accept terms that would adversely affect our stockholders. For example, the terms of WorldCALL Public’s current outstanding Term Finance Certificates (TFCs) currently impose, and any future financings may impose restrictions on our right to declare dividends (provided that none are currently planned) or on the manner in which we conduct our business. Additionally, lending institutions or private investors may impose restrictions on a future decision by us to make capital expenditures, acquisitions, or significant asset sales. If we are unable to raise additional funds, we may be forced to curtail or even abandon our business plan.
Our substantial amounts of indebtednessindebtedness, a significant portion of which is in default, and debt service obligations could materially decrease our cash flow, which could adversely affect our business and financial condition.
We have substantial amounts of indebtedness and debt service obligations. As of December 31, 2024,2025, the outstanding principal amount of our external debt for bank loans, and other borrowings amounted to approximately US$6.29$8.61 million.million of which $4.88 million is currently in default, provided that none of the lenders have served us notice of default of such amounts to date. In addition to these borrowings, we also have lease liabilities amounting to US$1.31$1.50 million. ForFurthermore, morewe informationmay regardingincur additional debt in the future, and may not have sufficient funds to repay our outstandingindebtedness, indebtednessjeopardizing our business viability. We also borrowed $1.625 million from certain investors and debtissued agreements,those Seeinvestors Itemthe 7.Convertible Management’s Discussion and Analysis.Notes.
Some of the agreements under which we borrow funds contain covenants or provisions that impose certain operating and financial restrictions on us, including balance sheet solvency, such as levels or ratios of earnings, debt, equity, and assets and may prevent us or our subsidiaries from incurring additional debt. In addition, capital controls and other restrictions, asset freezes, including limitations on the payment of dividends or international funds transfers, may be imposed in Pakistan, along with punitive taxes and penalties targeted at certain foreign entities which may also impact our liquidity or ability to comply with certain ratios. For example the Third Supplemental Trust Deed entered into by and between WorldCALL Public and trustee named therein, dated September 27, 2018 (the “Third Supplemental Trust Deed”), includes a restriction on the payment of dividends, which prohibits WorldCALL Public from declaring any dividends until all Term Finance Certificates have been paid in full, without the prior written consent of the trustee, and subject to certain other requirements, including WorldCALL Public continuing to meet certain debt service ratios and no event of default having occurred under the Third Supplemental Trust Deed.
Some of the agreements under which we borrow funds contain covenants or provisions that impose certain operating and financial restrictions on us, including balance sheet solvency, such as levels or ratios of earnings, debt, equity, and assets and may prevent us or our subsidiaries from incurring additional debt. In addition, capital controls and other restrictions, asset freezes, including limitations on the payment of dividends or international funds transfers, may be imposed in Pakistan, along with punitive taxes and penalties targeted at certain foreign entities which may also impact our liquidity or ability to comply with certain of the above-mentioned ratios. Involuntary deconsolidation of our Pakistan operations or both would also make it more difficult or impossible to comply with certain of these ratios. Failure to comply with these covenants or provisionsprovisions, certain of which are already in default, may result in a default,default or continued defaults, which could increase the cost of securing additional capital, lead to accelerated repayment of our indebtedness (provided that no such indebtedness has been accelerated to date) or result in the loss of any assets that secure the defaulted indebtedness or to which our creditors otherwise have recourse. Such a default oran acceleration of the obligations under one or more of these agreements (including as a result of cross-default or cross-acceleration) could have a material adverse effect on our business, financial condition, results of operations or prospects, and in particular on our liquidity and our shareholders’ equity. In addition, covenants in certain of our debt agreements could restrict our liquidity and our ability to expand or finance our future operations. AsideAdditionally, from the riskbecause of default, given our substantial amounts of indebtedness and the limits imposed by our debt obligations, our business could suffer significant negative consequences, such as the need to dedicate a substantial portion of our cash flows from operations to the repayment of our debt, thereby reducing funds available for paying dividends, working capital, capital expenditures, acquisitions, joint ventures and other purposes necessary for us to maintain our competitive position, flexibility, and resiliency in the face of general adverse economic or industry conditions.
Our debtdebt, a significant portion of which is in default, is secured by security interests.
We have significant amounts of debt. The principal amount of our debt as of December 31, 2024,2025, was $6.29$8.61 million, consisting of $4.26$4.14 million of Term Finance Certificates (TFC), and,and long termlong-term and short-term borrowings of $2.03$4.47 million.million, which included short term loan of $2.06 million of 123 Investments. A total of $4.88 million of such debts, including all of the TFC are in default, and the lender has not served any notice of default to date. We also borrowed $1.625 million from certain investors and issued those investors the Convertible Notes. Certain of these debt facilities are secured by substantially all of our assets and a pledge of the securities of our subsidiaries, and require significant cash to fund principal and interest payments. In the past we have not paid certain amounts of our debt, including under certain term finance certificates. As a result of the above, our creditors, in the event of the occurrence of a default under our secured debt,debt a significant portion of which is already in default, may enforce their security interests over our assets and/or our subsidiaries which secure such obligations, may take control of our assets and operations, force us to seek bankruptcy protection, or force us to curtail or abandon our current business plans and operations. If that were to happen, any investment in the Company (including, but not limited to any investment in our common stock) could become worthless.
If for any reason we are unable to meet our current or future potential debt service and repayment obligations, certain of which are already in default, we may be in default under the terms of the agreements governing such indebtedness, which could allow our creditors at that time to declare such outstanding indebtedness to be due and payable. Under these circumstances, our lenders could compel us to apply all of our available cash to repay our borrowings. In addition, the lenders under our credit facilities or other secured indebtedness could seek to foreclose on any of our assets that are their collateral. If the amounts outstanding under such indebtedness were to be accelerated, or were the subject of foreclosure actions, our assets may not be sufficient to repay in full the money owed to the lenders or to our other debt holders.
Our businesses operatesoperate in highly competitive and dynamic industries, and our businesses and results of operations could be adversely affected if we do not compete effectively.
Many of these competitors offer competitive pricing, packaging and/or bundling of services to customers, which further increases competition. For a more detailed description of the competition facing our businesses, see Item 1: Business and refer to the “Competitive Business Conditions” discussion within that section.
If WorldCALL Public or 123 Investments Limited issues more shares, our ownership of such entities could go below 50%.
As a public listed company in Pakistan, WorldCALL Public may issue more rights shares, which we may not be able to exerciseexercise, including as part of the settlement of outstanding claims, thus diluting our ownership in WorldCALL Public. WorldCALL Public is required to obtain consent of shareholders in order to issue additional shares, and as a majority shareholder we can vote against the issuance of additional shares. However, we may allow the issuance of additional shares to manage local financing for WorldCALL Public. Additionally, although 123 Investments Limited is prohibited from issuing more ordinary shares, subject to the terms of a Shareholders Agreement, 123 Investments Limited could potentially issue more ordinary shares in the future. In the event that WorldCALL Public and/or 123 Investments Limited issues more shares in the future, our ownership of such entities could fall below 50%, which could mean we would lose control of such entities and it is possible that we would no longer consolidate such entities’ financial statements and operations into the Company.
Shares of WorldCALL Public are pledged by WorldCall Private to secure various obligations, and in the event WorldCall Private defaults in such obligations, our ownership of WorldCALL Public may decrease below 50%.
A total of 301.8 million ordinary shares of WorldCALL Public (3% of WorldCALL Public’s outstanding shares on a fully diluted basis) have been pledged by WorldCall Private to secured various loan and debt facilities. In the past, certain installment payments due in connection with those secured obligations have not been paid when due, and the debt holders have sold pledged shares to settle amounts due. If those loans and debts are not timely paid in the future by WorldCALL Public and WorldCALL Private, the debt holders may foreclose on additional pledged shares, and liquidate those shares in the public market, resulting in a decrease of the ownership of WorldCALL Public held by WorldCall Private, and consequently a decrease in our ownership of WorldCALL Public, to up to 3%. As a result, WorldCALL Public’s and WorldCALL Private’s failure to pay amounts due on its outstanding debts could result in our ownership of WorldCALL Public declining below 50%, which may require us to deconsolidate WorldCALL Public and could result in the Company being deemed an investment company (see also the risk factor below entitled, “We are subject to the risk of becoming an investment company.”
Our involvement in numerous legal proceedings exposes us to significant costs, potential judgments, damages, and other liabilities that could adversely affect our business, financial condition, and results of operations.
As discussed in greater detail under or incorporated by reference into “Item 3. Legal Proceedings”, we are involved in numerous legal proceedings, and may in the future become involved in additional legal proceedings, and/or become subject to claims, disputes, investigations, and litigation arising in the ordinary course of our business and otherwise. These matters may include, among other things, contractual disputes, employment-related claims, intellectual property matters, securities-related claims, regulatory inquiries and lawsuits, and other commercial or civil actions. Some of these proceedings currently seek and may in the future seek, substantial monetary damages, penalties, or other forms of relief, and certain matters may result in judgments or settlements requiring us to pay significant sums or being required to cease certain of our business activities.
Our telecom revenue performance can be unpredictable by nature, as a large majority of our customers have not entered into long-term fixed contracts with us.
Our primary source of telecom revenue comes from prepaid customers, who are not required to enter into long-term fixed contracts, and we cannot be certain that these customers will continue to use our services and at the usage levels we expect. Prepaid customers are individual households who subscribe to the Company’s data and cable TV services, without entering into long-term fixed contracts. Invoices for these customers are issued at the beginning of each month, and the arrangements are short-term in nature. A significant portion of our telecom revenue, approximately 79% as of the date of this report, comes from telecom operators and significant corporate clients that are provided connectivity services by WorldCALL Public on its fiber optic network, which are required to enter into long-term fixed contracts. WorldCALL Public enters into maintenance service contracts with customers which provide for quarterly maintenance payments to be paid to WorldCALL Public to maintain fiber optic cables. Services to these telecom operators and significant corporate clients are on a postpaid basis, where services are delivered first, and the customers are then invoiced in accordance with the agreed billing cycles stipulated in their respective contracts. Such contracts establish a longer-term relationship and recurring revenue stream for the Company, as compared to the relatively short-term arrangements with prepaid customers who have no fixed contracts. These contracts typically have a term of 20 years, provide for the customer to pay quarterly maintenance payments, provides for the right of either party to terminate the agreement with 60 days’ notice upon a breach of the agreement, if not cured in such period, allows for termination if the counterparty becomes insolvent, goes into liquidation (other than for restructuring), has a receiver or administrator appointed, makes arrangements with creditors, has assets seized, or stops business in a way that affects the other party’s rights. In addition, the customer can end the agreement at any time by giving 90 days’ written notice for any reason or no reason. In that case, WorldCALL Public must refund any unused advance payments made by the customer within 30 days after the notice period ends.
Our primary source of revenue comes from prepaid customers, who are not required to enter into long-term fixed contracts, and we cannot be certain that these customers will continue to use our services and at the usage levels we expect. Revenue from postpaid customers represents a small percentage of our total operating revenue, and such customers can cancel our postpaid contracts with limited advance notice and without significant penalty. Furthermore, as we incur costs based on our expectations of future revenue, the sudden loss of a large number of customers or a failure to accurately predict revenue in a given market could harm our business, financial condition, results of operations, cash flows, or prospects.
We may be unable to develop additional revenue market share in markets where the potential for additional growth of our customer base is limited, and we may incur significant capital expenditures as our customers’customers demand new services, technologies and increased access.
As a holding company with operating subsidiaries, we depend on the performance of WorldCALL Public,Public and 123 Investments Limited, our majority owned subsidiary, and its ability to pay dividends or make other transfers to us as well as the ability to make certain intercompany payments and transfers.
We are a holding company and do not conduct any revenue-generating business operations of our own. Our principal assets are the direct and indirect equity interests we own in our operating subsidiaries, and as a result, we depend on cash dividends, distributions, loans, or other transfers received from our subsidiaries to make dividend payments to its shareholders, and service interest and principal payments on the indebtedness incurred, and to meet other obligations. The ability of our subsidiaries to pay dividends and make other transfers to us is not guaranteed, as it depends on the success of their businesses and may be restricted by applicable corporate, tax, and other laws and regulations. Such restrictions include restrictions on dividends, limitations on repatriation of cash and earnings and on the making of loans and repayment of debts, monetary transfer restrictions, covenants in our financing agreements, and foreign currency exchange controls and related restrictions in certain agreements or Pakistan where WorldCALL Public operates or both.the UK where 123 Investments Limited operates, or all of those jurisdictions. Capital controls and other restrictions, asset freezes, including limitations on the payment of dividends or international funds transfers, may be imposed in Pakistan,Pakistan or the UK, along with punitive taxes and penalties targeted at certain foreign entities, which may impact our ability to receive loan repayments, dividends and distributions from Pakistan.Pakistan or the UK.
Additionally, the Third Supplemental Trust Deed entered into by and between WorldCALL Public and trustee named therein, dated September 27, 2018, includes a restriction on the payment of dividends, which prohibits WorldCALL Public from declaring any dividends until all Term Finance Certificates have been paid in full, without the prior written consent of the trustee, and subject to certain other requirements, including WorldCALL Public continuing to meet certain debt service ratios and no event of default having occurred under the Third Supplemental Trust Deed.
The inability to make payments and/or transfer funds couldand/or limitthe orrestrictions under the Third Supplemental Trust Deed which prohibit the payment of cash dividends, and/or which limit distributions, the repayment of indebtedness, or payment of debt servicing obligations and thusobligations, could result in a default under any such instruments.
Furthermore, our ability to withdraw funds and dividends from our subsidiaries and operating companies may depend on the consent of our strategic partners, where applicable, as well as the tax regimes and treaties between the U.S. and Pakistan.Pakistan and the UK.
Our technology, media, broadband and telecom operations are conducted through our 55% owned subsidiary, WorldCALL Public,Public and its 100% owned subsidiaries, WorldcallWorldCall Private and FZC. Each is responsible for managing its own cybersecurity risks and putting in place all operational preventive, detective and response capabilities; our operations and business continuity are dependent on how it protects and maintains its network equipment, IT systems and other assets. Although we devote significant resources to the development and improvement of our IT and security systems, we are and will continue to remain vulnerable to cyber-attacks and other cybersecurity threats that could lead to compromised or inaccessible telecommunications, digital and financial services, and/or leaks or unauthorized processing of confidential information, including customer information. Our systems are vulnerable to harmful viruses and the spread of malicious software that could compromise the confidentiality, integrity or availability of our technology assets. In addition, unauthorized users or hackers may access and process the customer and business information we hold, or authorized users may improperly process such data. Such risks are inherent in our business operations, and we will never be able to fully insulate ourselves from these risks. Our systems will remain vulnerable to attacks by third parties who are able to thwart the safeguards we have in place with tactics that are unforeseen or prove to be too sophisticated.
For additional risks regarding the intellectual property of Moda in Pelle, see below under “Risks Related to Moda in Pelle”.
All rollouts are subject to the timely and adequate availability of equipment at the operational site. Any supply chain issue on account of any of the multiple factors will have a direct impact on project completion and business operations. During the year 2024, we were subject to supply chain issues as it took longer to receive equipment and supplies due to shortages and as we have seen delays for deployment of our fiber networks. Future supply chain issues could have a material adverse effect on our business and our results of operations.
Risks Related to the Exchange
We will be required to issue additional shares of Series A Preferred Stock or common stock to the shareholders of Moda in Pelle, which could result in significant dilution to our existing stockholders and are required to pay $1 million to the shareholders of Moda in Pelle.
Pursuant to the Exchange Agreement, we have agreed to issue up to an additional 9,200 shares of Series A Preferred Stock as holdback shares and up to $1.0 million of additional consideration, if specified earnout conditions are satisfied, which require that both (a) the total EBITDA of Moda in Pelle in the fiscal year ended December 31, 2026 is equal to or greater than £2.5 million Pound Sterling (GBP); and (b) the total net profit of Moda in Pelle in the fiscal year ended December 31, 2026 is equal to or greater than 1.0 million GBP, based on the financial statements of Moda in Pelle provided to the Company by February 28, 2027, provided that because we did not uplist our common stock to a securities exchange by December 31, 2025, the earnout consideration requirement is deemed automatically met and the Earnout Consideration will be due and payable regardless of the financial results of Moda in Pelle. The earnout consideration may, at our option, be paid in cash or in shares of our common stock. If we elect, or are economically incentivized, to satisfy the earnout in equity we may be required to issue a substantial number of additional shares of common stock, particularly if the market price of our common stock is low at the applicable measurement date. Any such issuances would dilute the ownership interests of our existing stockholders, may adversely affect the market price of our common stock and could make it more difficult for us to raise additional capital on favorable terms.
The exercise of the put option by the shareholders of Moda in Pelle could require us to issue a significant number of shares of common stock or otherwise impact our capital resources.
The Shareholders Agreement grants the shareholders of Moda in Pelle a put option that, if exercised, would require us to issue shares of our common stock in exchange for up to 10% of the remaining equity of Moda in Pelle held by such shareholders. The number of shares issuable upon exercise of the put option is based on a formula tied to the valuation of Moda in Pelle and the trading price of our common stock, subject to a floor price, as discussed. If our stock price is depressed at the time of exercise, we may be required to issue a large number of shares, resulting in significant dilution to our existing stockholders.
We may be required to use significant cash resources or provide collateral in connection with the Credit Facility for Moda in Pelle, which could adversely affect our liquidity and financial flexibility.
We have agreed to make available to Moda in Pelle a three-year revolving Credit Facility of up to $3.0 million. Providing this facility may require us to commit substantial cash resources that could otherwise be used for our own operations, growth initiatives or debt service. If we are unable to provide the Credit Facility by the applicable deadline, we may be required to provide sufficient collateral or security to enable Moda in Pelle to obtain third-party financing. Any such collateralization could restrict our ability to incur additional indebtedness, reduce our financial flexibility and expose us to additional risk if the collateral is enforced by lenders.
Management's Discussion & Analysis (MD&A)
Largest changes
We have contractual obligations under our financing arrangements. We also maintain operating leases for office premises. We were insee in full comparisoncompliancedefault withallTFC debt;covenantshowever,inthe2024.Company has not received any notice of default from the Trustee.
“Non-GAAP operating loss is defined as GAAP operating loss plus other income.”see in full comparison
see in full comparisonWeNon-GAAPhavelossincludedfrom operations and Adjusted EBITDAin this Report as a supplement to GAAP measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third partieshaveindicated are useful in assessing the Company and its results of operations. Adjusted EBITDA is presented because we believe it provides additional useful information to investors due to the various noncash items during the period. Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Adjusted EBITDA haslimitations as an analytical tool, and you should not consideritthem in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: Adjusted EBITDA does not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; and Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements. We believe non-GAAP loss from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric includes the effect of other income. Additionally, other companies in our industry may calculate non-GAAP operating loss and Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. You should not consider non-GAAP operating loss and Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s presentation ofthisthesemeasuremeasures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation ofthisthese non-GAAPmeasuremeasures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to viewthisthese non-GAAPmeasuremeasures in conjunction with the most directly comparable GAAP financial measure.
“We have included non-GAAP loss from operations and Adjusted EBITDA in this Report as a supplement to Generally Accepted Accounting Principles (GAAP) measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. …”see in full comparison
Net Revenue: Revenue is derived from telecom services broadband services, technology services andsee in full comparisonbroadbandretailservices.footwear. Telecom services-related revenue stood at$16.067$17.45 million for the year ended2024,2025, compared to$9.643$16.07 million for the year ended2023.2024. This increase of approximately$6.424$1.38 million was primarily due to an increase in the volume of our international termination business. The volume of 846 million minutes was in 2025, whereas in 2024 the minutes were 661 million were recorded. Broadband services generated revenue of$1.856$1.49 million in2024,2025, compared to$0.997$1.14 million in2023.2024. This increase of$0.859$0.35 millioniswas mainly due to 57,000 additional internet service connection sales in2024.2025. Technology Revenue was$0.40$2.52 million in2024,2025 compared to $1.11 million, whichiswasaduenewtostreamdelivery ofincomesome IT projects. Retail footwear revenue recorded was $0.64 million, whichtook place duringwas thecurrentresult of acquisition of 123 Investments Limited on December 15, 2025 and associated revenue through the end of the year.
“Gross Margin: In 2024, the Company recorded a gross margin of $1.46 million for the year ended 2024, a significant increase compared to $0.60 million for the year ended 2023. This improvement was primarily driven by the growth in Telecom service revenues, which amounted to $6.42 million, the rise in broadband revenue, which was $0.86 million and an increase in technology service revenue of $0.40 million. These revenue streams contributed positively to the overall increase in gross margin. …”see in full comparison
Full comparison: every changed paragraph (42)
This management’s discussion and analysis providesprovide a review of the results of operations, financial condition and liquidity, and capital resources of GlobalTech Corporation on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings. This section generally discusses fiscal 20242025, compared to fiscal 2023.2024.
ManagementManagement’s discussion and analysis included in this section reflects management’s views on the business operations and have not been subjected to a third-party audit. However, effort has been made to keep it precise and reflective of the current status.operations. Management is committed to the operational and business well-being of the Company and is reflected in its belief and analysis related to its interpretation of the market conditions and way forward.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains references to the Company’s fiscal year ended December 31, 2025 and 2024 and should be read together with the audited financial statements and footnotes thereto included herein.
Reference is made to Item 1A. Risk FactorsFactors, depictwhich depicts important factors that could cause actual results to differ from expectations. In addition, the following discussion should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto of GlobalTech Corporation included herein.
We are a technology holding company. As a technology holding companycompany, we have infrastructure assets that form the backbone of our Telecom, Cable TV and Broadband service offering. The Company is also engaged in development of software products and solutions that are offered as standalone service offering to clients.
Video revenue decreased in 20242025 primarily due to a decline in the number of residential video customers, partially offset by an increase in average rates. We expect that the number of residential video customers will continue to decline as viewers are using streaming services and dropping cable television bundled services. We expect this trend to continue. Additionally, the decrease in Cable TV customers is mostly on account of disengagement and conversion of Cable TV connectivity to broadband reseller bandwidth offered to the same customers. There was minimal to no impact on the service revenue from this transition.
The Company has the following significant productproducts and services in its technology offerings:
Our Thrivo.AIThrivo. AI platform is being developed by the Company to integrate retail centric ERP with AI enabled e-commerce offerings. We believe that current e-commerce offerings provide limited data insight to business owners related to actual decision matrices that can translate into sales on their storefront. The Company is developing an e-commerce platform offering that would capture additional data points related to sales maturity and deliver actionable insight to business owners for improved sales conversion. AI tools are being used for creating the data-management solution and BI dashboard development. We believe that it offers unique competitive advantages for small to midsized retail operations that require additional actionable insights in the changing landscape of business operations. Thrivo.AI directly contributes towards enhanced efficiency, agility and business resilience of its clients. Thrivi.AI is being packaged in a modular architecture to ensure a smooth on-boarding of clients in least cumbersome manner with additional cost efficiency as it deliver all-in-one integration. It is targeted to replace disparate offerings that functionally deliver ERP, retail management and e-commerce in standalone architecture.
Service 1a is charged at bulk monthly rates with unlimited volumes of traffic. The origination operator is able to generate additional volumes by offering discounted calling rates for Pakistan and local Pakistani operators connected to the Company’s LDI networks which benefits from additional income by utilization of vacant capacity on the interconnect. The Company’s margin is fixed irrespective of the volume of traffic.
Service 1b is charged on per minute of traffic (on per second incremental basis) to the originating party along with a corresponding termination rate charged by the terminating party connected to Company’s LDI network.
Services 2a and 3a is direct fiber connectivity to the end user through Fiber to the Home (FTTH) architecture. Service is charged as per subscription opted by the end user, and includes cable TV and broadband data. Cable TV offerings further includes the option for analogue, digital or both services.
Services 2b and 3b is direct hybrid fiber coaxial (HFC) connectivity to the end user. Service is charged as per subscription opted by the end user and includes cable TV and broadband data. Cable TV offerings further include options to have analogue, digital or both services. Compared to FTTH, HFC offers a lower capacity broadband connectivity for the end-user.
Service 2c is connecting local resellers to the Company’s backbone where service offerings and packaging is done by the Company and local loop operators only manage subscriber services for connectivity and network maintenance. The Company charges individual packages on a pre-paid top-up basis.
Service 2d provides backhaul and core network connectivity for telecom operators along with P2P links for corporate data connectivity. Telecom operator’s charges are on a long-term lease basis with O&M charged on an annual basis for a specific length of fiber optic network deployment. For corporate clients, this includes one-time charges for network deployment with monthly O&M.
Service 3c connects and provides local cable operators and local loop operators with the Company’s Cable TV services (Analogue and Digital). The connection is made on fiber optic cable to end-user premises and further distribution is handled by local loop operators through their own resources.
Service 1 is monitored for volume of traffic and applicable rates. Services 2a, 2b, 2c, 3a and 3b are monitored on subscriber connected basis. Services 2d and 3c are monitored for new sales and a Service Level Agreement (SLA) is delivered for existing customers.
Service 4a, for our software development services, the Company charges on a delivery basis with prices for services and products. as per negotiated contract terms with clients.
Service 4b, for software products, the charges are on annual and /or monthly subscription basis along with options for charging on per query and /or usage basis.
Net Revenue: Revenue is derived from telecom services broadband services, technology services and broadbandretail services.footwear. Telecom services-related revenue stood at $16.067$17.45 million for the year ended 2024,2025, compared to $9.643$16.07 million for the year ended 2023.2024. This increase of approximately $6.424$1.38 million was primarily due to an increase in the volume of our international termination business. The volume of 846 million minutes was in 2025, whereas in 2024 the minutes were 661 million were recorded. Broadband services generated revenue of $1.856$1.49 million in 2024,2025, compared to $0.997$1.14 million in 2023.2024. This increase of $0.859$0.35 million iswas mainly due to 57,000 additional internet service connection sales in 2024.2025. Technology Revenue was $0.40$2.52 million in 2024,2025 compared to $1.11 million, which iswas adue newto streamdelivery of incomesome IT projects. Retail footwear revenue recorded was $0.64 million, which took place duringwas the currentresult of acquisition of 123 Investments Limited on December 15, 2025 and associated revenue through the end of the year.
AdjustedNon-GAAP (loss) profit from operations (operating loss plus other income) (a non-Generally Accepted Accounting Principles (GAAP) financial measure, see “Non-GAAP Financial Measures”, below) for the year ended 2025 was $1.46 million, and net loss for the year ended 2024 was $0.40 million, and net loss for the year 2023 ended was $6.019$0.40 million. Adjusted EBITDA (a non-Generally Accepted Accounting Principles (GAAP) financial measure, see “Non-GAAP Financial Measures”, below) for the year ended 20242025 is $2.47$0.89 million, whereas Adjusted EBITDA for the year ended 20232024 is $2.93$2.47 million.
We have included non-GAAP loss from operations and Adjusted EBITDA in this Report as a supplement to Generally Accepted Accounting Principles (GAAP) measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. Non-GAAP loss from operations and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in our industry.
WeNon-GAAP haveloss includedfrom operations and Adjusted EBITDA in this Report as a supplement to GAAP measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. Adjusted EBITDA is presented because we believe it provides additional useful information to investors due to the various noncash items during the period. Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Adjusted EBITDA has limitations as an analytical tool, and you should not consider itthem in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: Adjusted EBITDA does not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; and Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements. We believe non-GAAP loss from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric includes the effect of other income. Additionally, other companies in our industry may calculate non-GAAP operating loss and Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. You should not consider non-GAAP operating loss and Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s presentation of thisthese measuremeasures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of thisthese non-GAAP measuremeasures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view thisthese non-GAAP measuremeasures in conjunction with the most directly comparable GAAP financial measure.
We realized revenue, Adjusted EBITDA and incomenon-GAAP loss from operations during the periods presented below as follows (all percentages are calculated using whole numbers. Minor differences may exist due to rounding).:
Non-GAAP operating loss is defined as GAAP operating loss plus other income.
Adjusted EBITDA and non-GAAP operating loss from operations for 20242025 were impacted by the increase in revenue, mainly by the increase in revenue of international termination, broadbandbroadband, technology services and technologyretail services,footwear, whereas Adjusted EBITDA and non-GAAP operating loss from operations in 20232024 were mainly impacted by the decline in in broadband revenue and exchange loss due to devaluation of currency.
During this period, the Company was also transforming its business operations and moving towards a service-centric operation that does not require heavy investments in infrastructure. Current business operations are being maintained at the optimal operating level and new investments were principally utilized for solutions development more suited for future needs. The Company is focused on the development of products and services that would be better suited for its future roadmap as a technology-centric solutions Company. On December 15, 2025, the Company acquired 51% of 123 Investments Limited as a result of growth in revenue from such acquisition was observed.
Gross Margin: In 2024, the Company recorded a gross margin of $1.46 million for the year ended 2024, a significant increase compared to $0.60 million for the year ended 2023. This improvement was primarily driven by the growth in Telecom service revenues, which amounted to $6.42 million, the rise in broadband revenue, which was $0.86 million and an increase in technology service revenue of $0.40 million. These revenue streams contributed positively to the overall increase in gross margin. The increase in telecom service revenues was largely attributed to a rise in international termination services, which involve the processing of international calls.
Other operating costs: Other operating costs stood at $3.27 million for the year ended 2025, compared to $2.51 million for the year ended 2024, compared to $1.97 million for the year ended 2023.2024. The increase in operating costs was mainly due to increases in legal and professional and directors’business meeting and remunerationpromotion expenses.
Depreciation and amortization: Depreciation and amortization for the year ended December 31, 2025 was $2.13 million, compared to $2.80 million for the year ended December 31, 2024. The decrease of $0.67 million was mainly due to the full amortization of one of the intangible assets which was still being amortized in the prior period.
Other income and expenses: TheOther Companyexpenses recordedstood otherat income of $3.66$0.33 million forduring the year ended 2024,December 31, 2025 compared to $4.46$0.20 million forduring the year ended 2023,December and31, this2024. decreaseThe isincrease mainlyof $0.13 million was due to gain on disposaldevaluation of investmentscurrency lastand year.recording of expected credit loss in 2024.
Other income and expenses: The Company recorded other income of $2.27 million for the year ended 2025, compared to $3.66 million for the year ended 2024, and this decrease is mainly due to gain on disposal of investments last year.
Finance cost: The finance cost during the year ended December 31, 2025 was $1.40 million compared to $2.37 million during the year ended December 31, 2024, a decrease of $0.97 million. The decrease was due to the decrease in the rate of interest of our debt, which is based on KIBOR, and the resulting decrease in interest payments due thereon.
The Company has developed an impressive portfolio of technology products for its global offerings. The Company has also established a robust eco-system within the organization for managing sales and product support services for its products. Moving forward, the Company plans to focus on products that have significant and established market size with expected good growth potential.
We hold cash in the United States, United Arab Emirates and in Pakistan, as shown in the table below as of December 31, 2025 and December 31, 2024:
We have significant amounts of debt. The principal amount of our debt as of December 31, 2024,2025, was $6.29$8.61 million, consisting of $4.26$4.14 million of Term Finance Certificates (TFC), and, long termlong-term and short-term borrowings of $2.03$4.47 million including 123 Investments Limited short-term loan of $2.06 million. These debt facilities are secured and require significant cash to fund principal and interest payments. We are required to make debt repayments of US$5.12US$7.95 million in the coming twelve months and we believe that sufficient funds will be generated through our operations to pay such amounts; however, we may need to raise funding in the future. The receptiveness of the capital markets to an offering of debt or equities cannot be assured and may be negatively impacted by, among other things, debt maturities, current market conditions, and potential stockholder dilution. The sale of additional securities, if undertaken by us and if accomplished, may result in significant dilution to our shareholders. However, such future financing may not be available in amounts or on terms acceptable to us, or at all. We also borrowed $1.625 million from certain investors and issued those investors the Convertible Notes.
We had a working capital deficit of $29.43 million as of December 31, 2025, compared to a working capital deficit of $23.10 million as of December 31, 2024. The Company believes its cash and cash equivalents, which totaled $3,455,270$3,249,747 as of December 31, 2024,2025, along with cash generated by ongoing operations and continued access to debt/capital markets, will be sufficient to satisfy its cash requirements over the next 12 months and beyond. However, this includes restricted cash of $2,633,019$2,721,030 that is not available for immediate ordinary business use. We believe that our existing staffing levels are sufficient to service additional customers.
Additional information regarding our outstanding debt and payables obligations are described in greater detail under Notes 1013 (Trade and Other Payables), 1114 (Current Portion of Non-Current Liabilities), 1316 (Short Term Borrowings), 1417 (Term Finance Certificates (TFCS)), 1518 (Long Term Financing – Secured), 1619 (Convertible loan), 20 (License Fee Payable), 1721 (Post-Employment Benefits), and 1822 (OtherDue Payablesto related parties), in the notes to audited financial statements for the years ended December 31, 20242025 and 20232024 included herein beginning after the signature page hereof.
Cash and Cash Equivalents: We held $3,455,270$3,249,747 and $3,261,539$3,455,270 of cash and cash equivalents as of December 31, 2024,2025, and 2023,2024, respectively.respectively, Whichwhich includes restricted cash of $2,633,019$2,721,030 and $2,353,442,$2,633,019, that is not available for immediate ordinary business use.
Operating Activities: Net cash generated from operating activities increaseddecreased during the 2024year yearended 2025 by $3.16$1.74 million, primarily due to an increase in internationaltrade termination, FTTH salesdebts and incomestock fromin deposits and saving accounts.trade. Net cash generated from and used in operating activities for the years ended December 31, 2024,2025, and 20232024 was $ 0.23(1.51) million and $(2.94)$0.23 million, respectively.
Investing Activities: Net cash used in investing activities for the years ended December 31, 2024,2025, and 2023,2024, was $315$3.73 million and $0.13 million,$(0.10), respectively. The decrease in cash used was primarily due to a decrease in net purchasespurchase of propertyassets and equipment.advances extended to a director of 123 Investments Limited against purchase of a building.
Financing Activities: Net cash usedgenerated infrom financing activities was $0.51$3.25 million during the year ended December 31, 2024,2025, compared to $0.28cash used of $0.33 million for the year ended December 31, 2023,2024. whichThis increase was mainly due to an increase in repaymentsissuance of debt.a convertible loan note and receipt against short term borrowing.
We have contractual obligations under our financing arrangements. We also maintain operating leases for office premises. We were in compliancedefault with allTFC debt; covenantshowever, inthe 2024.Company has not received any notice of default from the Trustee.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I— Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 31, 2026, which includes risk factors that could materially affect our business, financial condition and/or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, cash flows and/or future results.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Three months ended June 30, 2026, compared to the Three Months ended June 30, 2025”
New heading “Six months ended June 30, 2026, compared to the Six Months ended June 30, 2025”
Largest changes
“Three months ended June 30, 2026, compared to the Three Months ended June 30, 2025”see in full comparison
“Six months ended June 30, 2026, compared to the Six Months ended June 30, 2025”see in full comparison
We have significant amounts of debt. The principal amount of our debt as ofsee in full comparisonMarchJune31,30, 2026, was$9.31$8.72 million, consisting of $4.15 million of Term Finance Certificates (TFC)(which were in default), and long-term and short-term borrowings of$5.16$4.57 million including 123 Investments Limited’s short-term loan of$2.76$1.07 million. These debt facilities are secured and require significant cash to fund principal and interest payments. We are required to make debt repayments ofUS$9.09US$4.74 million in the coming twelve months and we believe that sufficient funds will be generated through our operations to pay such amounts; however, we may need to raise funding in the future. Such funding, if required, may come from debt borrowing or the sale of equity securities. The receptiveness of the capital markets to an offering of debt or equities cannot be assured and may be negatively impacted by, among other things, debt maturities, current market conditions, and potential stockholder dilution. The sale of additional securities, if undertaken by us and if accomplished, may result in significant dilution to our shareholders. However, such future financing may not be available in amounts or on terms acceptable to us, or at all. We also borrowed $1.625 million from certain investors and issued those investors the Convertible Notes.
“Adjusted EBITDA of Company is defined as net income attributable to the Company’s shareholders plus net income attributable to non-controlling interest, net interest expense, income taxes, depreciation and amortization, and other operating (income) expenses, net, such as exchange loss/(gain).”see in full comparison
“GlobalTech Corporation is a Nevada holding company with operations in telecommunications, technology, and retail. Through our majority-owned subsidiary WorldCall Telecom Limited, we provide wireless, long distance, cable, broadband, and fiber services in Pakistan; we also offer technology and consultancy services, including AI and big data solutions; and through 123 Investments Limited, acquired in December 2025, we operate a UK-based premium footwear business across retail, wholesale, and e-commerce channels. …”see in full comparison
“Adjusted EBITDA is defined as net loss attributable to GlobalTech Corporation shareholders plus depreciation and amortization, finance cost, income taxes and exchange (gain)/loss.”see in full comparison
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All dollar amounts provided herein which are designated by a “$” are reported in U.S. dollars. References to “GBP” refer to British Pounds Sterling and references to “Rs” or “PAK Rupee” mean the Pakistan Rupee.
This management’s discussion and analysis provideprovides a review of the results of operations, financial condition and liquidity, and capital resources of GlobalTech Corporation on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings. This section discusses the quarterthree and six months ended MarchJune 31,30, 2026, compared to the quarterthree and six months ended MarchJune 31,30, 2025.
The following is a discussion of our consolidated financial condition and results of operations for the three and six months ended MarchJune 31,30, 20262026, and 2025, and other factors that are expected to affect our prospective financial condition. The following discussion and analysis should be read together with our Condensed Consolidated Financial Statements and related notes of this Quarterly Report on Form 10-Q above and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 31, 2026. Some of the statements set forth in this section are forward-looking statements relating to our future results of operations. Our actual results may vary from the results anticipated by these statements. Please see “Cautionary Note Regarding Forward-Looking Statements” above.
Certain capitalized terms used below but not otherwise defined, are defined in, and shall be read along with the meanings given to such terms in, the notes to the unaudited financial statements of the Company for the three and six months ended MarchJune 31,30, 2026, above.
GlobalTech Corporation is a Nevada holding company with operations in telecommunications, technology, and retail. Through our majority-owned subsidiary WorldCall Telecom Limited, we provide wireless, long distance, cable, broadband, and fiber services in Pakistan; we also offer technology and consultancy services, including AI and big data solutions; and through 123 Investments Limited, acquired in December 2025, we operate a UK-based premium footwear business across retail, wholesale, and e-commerce channels. We manage and report these operations on a consolidated basis as a single reportable segment.
We are engaged in Telecom, Media and Broadband operations through our subsidiary in Pakistan. We are a leading cable and broadband operator in Pakistan and a prominent broadband communication services company providing video and broadband internet services in major cities of Pakistan through Hybrid Fiber Coaxial (HFC) and state-of-the-art fiber optic networks. We also provide fiber optic network connectivity services to corporatescorporations including telecom operators. For corporate and consumers’ segments, we also provide Fiber to the Home (FTTH) connectivity for broadband and cable TV services. We also offer international voice/data interconnect services with a principal focus on the termination of international voice traffic into Pakistan.
International voice termination into Pakistan is a major revenue stream for the Company and it increased by $0.15 million for the six months ended June 30, 2026 compared to the same period in 2025. The increase in volume of traffic facilitated by additional capacity offering to our middle east client contributed to this revenue growth.
Broadband customers increased as of June 30, 2026, compared to June 30, 2025 through our offering of more affordable broadband only service on FTTH and additional broadband and cable revenues of $0.36 million were recorded during the six months ended June 30, 2026, compared to the prior year’s period. It is expected that growth in subscribers will continue with additional investments in subscriber acquisitions. Additionally, we migrated part of our subscriber base on Hybrid Fiber Coaxial (HFC) network to a more robust Fiber to the Home (FTTH) offering.
Video revenue decreased in six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to a decline in the number of residential video customers, partially offset by an increase in average rates. We expect that the number of residential video customers will continue to decline as viewers are using streaming services and dropping cable television bundled services. We expect this trend to continue. Additionally, the decrease in Cable TV customers is mostly on account of disengagement and conversion of Cable TV connectivity to broadband reseller bandwidth offered to the same customers. There was minimal to no impact on the service revenue from this transition.
Under our technology development initiative, we have also developed and matured software products and services, targeting emergent opportunities in AI & Big data.
International voice termination into Pakistan is a major revenue stream for the Company and it increased by $1.38 million for the three months ended March 31, 2026 compared to the same period in 2025. The increase in volume of traffic facilitated by additional capacity offering to our middle east client contributed to this revenue growth.
Broadband customers increased as of March 31, 2026 compared to March 31, 2025 through our offering of more affordable broadband only service on FTTH and additional broadband and cable revenues of $0.26 million were recorded during the quarter ended March 31, 2026, compared to the prior year’s period. It is expected that growth in subscribers will continue with additional investments in subscriber acquisitions. Additionally, we migrated part of our subscriber base on Hybrid Fiber Coaxial (HFC) network to a more robust Fiber to the Home (FTTH) offering.
Video revenue decreased in three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to a decline in the number of residential video customers, partially offset by an increase in average rates. We expect that the number of residential video customers will continue to decline as viewers are using streaming services and dropping cable television bundled services. We expect this trend to continue. Additionally, the decrease in Cable TV customers is mostly on account of disengagement and conversion of Cable TV connectivity to broadband reseller bandwidth offered to the same customers. There was minimal to no impact on the service revenue from this transition.
Our revenues for software development and solution sales increased during the year. The Company delivered software based on Hyperledger® platform for a UK based client. The Company delivered a custom platform for the client. It entailed development of a hybrid solution that enabled the Hyperledger based platform to deliver permissioned connectivity with automated KYC integration. Features for service management that were not available in the Hyperledger® framework were developed for this purpose. The segment recorded additional revenues of $0.01$0.65 million for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025. Additional growth is expected as more products are maturing into commercial offerings and additional sales are being targeted in this segment of operations. The Company has also upgraded its internal software for commercial offering across various segments. Billcare (www.billcare.io) has been developed, focusing on subscriber billing for the cable industry and is being launched in the US market.
Our Thrivo. AI platform is being developed by the Company to integrate retail centric ERP with AI enabled e-commerce offerings. We believe that current e-commerce offerings provide limited data insight to business owners related to actual decision matrices that can translate into sales on their storefront. The Company is developing an e-commerce platform offering that would capture additional data points related to sales maturity and deliver actionable insight to business owners for improved sales conversion. AI tools are being used for creating the data-management solution and BI dashboard development. We believe that it offers unique competitive advantages for small to midsized retail operations that require additional actionable insights in the changing landscape of business operations. Thrivo.AI directly contributes towards enhanced efficiency, agility and business resilience of its clients. Thrivo.AI is being packaged in a modular architecture to ensure a smooth on-boarding of clients in the least cumbersome manner with additional cost efficiency as it delivers all-in-one integration. It is targeted to replace disparate offerings that functionally deliver ERP, retail management and e-commerce in standalone architecture.
Our 51% owned subsidiary 123 Investments Limited operates a British women’s footwear and accessories business under the Moda in Pelle brand (“Moda in Pelle”), which has grown over nearly five decades from a single independent shoe store into a national, omnichannel retailer. Founded in 1975 in Leeds, England, the business differentiated itself early through design-led collections and premium leather materials, and has since navigated multiple retail cycles by prioritizing brand integrity and customer loyalty over rapid, debt-driven expansion. Today, sales are roughly evenly split between physical stores and concessions and digital and partner channels, reflecting Moda in Pelle’s transition into a digitally enabled omnichannel retailer.
Moda in Pelle offers a diversified footwear and accessories portfolio designed to reduce reliance on any single category and support repeat purchasing. Core categories include short boots, the largest single category with year-round demand; trainers, a core growth category reflecting the shift toward casualization; sandals, a key seasonal spring/summer category; shoes, including loafers and heels; long boots, which carry higher average selling prices; and bags and accessories, which support cross-selling. The overall range skews toward casual footwear, representing approximately 65% of the assortment, with the remaining 35% classified as smart or occasion-driven styles.
Rather than serving all customers under a single label, Moda in Pelle has built a multi-brand portfolio to capture different customer segments, price points, and life stages. The flagship Moda in Pelle brand remains the primary revenue and brand equity driver, generating approximately 70% of annual revenues. Complementary brands include Shoon (comfort-led, classic footwear for older demographics), M by Moda (an accessible entry-point brand launched in 2018 for younger consumers), French Dressing (versatile, elegant daytime-to-evening styles), Bsoleful (sustainability-focused fashion footwear), Emma Somerset (a heritage brand acquired in 2008), and Moda Footwear (a distinctive, contemporary design line).
Moda in Pelle sells through multiple channels, including brand-operated retail stores, department store concessions, wholesale partnerships, QVC television and internet shopping, and its own e-commerce platform. The company employs a test-and-repeat buying model and disciplined inventory planning intended to reduce markdown exposure and protect gross margins, with different product categories performing better across different channels (for example, trainers and short boots online versus long boots and smart shoes in physical stores).
Management’s stated priorities for Moda in Pelle include expanding digital reach and personalization, pursuing selective store and concession growth in high-quality locations, exploring international expansion through capital-light channels, and using proprietary retail technology and customer data to deepen customer relationships.
123 Investments Limited is engaged in the women footwear business through retail and e-commerce operations. It posted a loss of $2.48$0.58 million for the threesix months ended MarchJune 31,30, 2026, which is temporary and seasonal. Performance in the coming period is expected to improve as the Company moves through the year.
We have included Adjusted EBITDA in this Report as a supplement to Generally Accepted Accounting Principles (GAAP) measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. The most directly comparable GAAP measure to Adjusted EBITDA is net loss. Adjusted EBITDA is presented because we believe it provides additional useful information to investors by excluding the impact of non-operating, non-recurring, and certain non-cash items, as well as items such as interest, taxes, and depreciation and amortization, thereby facilitating comparisons of operating performance across periods. Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in our industry.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: Adjusted EBITDA does not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; and Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.
Additionally, other companies in our industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. You should not consider Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure. The Company presents the most directly comparable GAAP financial measure with equal or greater prominence than the non-GAAP measures.
Adjusted EBITDA of Company is defined as net income attributable to the Company’s shareholders plus net income attributable to non-controlling interest, net interest expense, income taxes, depreciation and amortization, and other operating (income) expenses, net, such as exchange loss/(gain).
We realized revenue and net loss (each prepared in accordance with U.S. GAAP), as well as Adjusted EBITDA, a non-GAAP financial measure, during the periods presented below as follows:
Set forth below is a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, for the periods disclosed below:
Adjusted EBITDA for the three and six months ended June 30, 2026, was impacted by the increase in revenue, mainly by the increase in revenue of international termination, broadband, technology services and retail footwear, whereas Adjusted EBITDA for the three and six months ended June 30, 2025, were mainly impacted by exchange loss due to devaluation of currency.
Net Revenue:
Three months ended June 30, 2026, compared to the Three Months ended June 30, 2025
Net Revenue: Revenue is derived from telecom services broadband services, technology services and retail footwear.
Total net revenue was $10.4$11.12 million for the three months ended MarchJune 31,30, 2026, compared to $4.3$5.63 million for the three months ended MarchJune 31,30, 2025, as discussed in further detail below.
Telecom services-related revenue stood at $3.91$4.57 million for the three months ended MarchJune 31,30, 2026, compared to $3.65$4.68 million for the three months ended MarchJune 31,30, 2025. This increasedecrease of approximately $0.27$0.12 million was primarily due to ana increasedecrease in thetraffic volume of our international termination business.volume. Broadband services generated revenue of $0.55$0.56 million for the three months ended MarchJune 31,30, 2026, compared to $0.34$0.42 million for the three months ended MarchJune 31,30, 2025. The increase was mainly due to additional internet service connection sales in 2026. Technology revenue was $0.74$0.80 million for the three months ended MarchJune 31,30, 2026, compared to $0.35$0.53 million for the three months ended MarchJune 31,30, 2025, which was increased due to the delivery of someadditional IT projects.projects during the period. Retail footwear revenue recorded was $6.30$6.23 million infor the firstthree quartermonths ended June 30, of 2026 against which there was no comparable information because the retail footwear business was acquired on December 15, 2025.
Six months ended June 30, 2026, compared to the Six Months ended June 30, 2025
Non-GAAP (loss) profit from operations (operating loss plus other income) (a non-Generally Accepted Accounting Principles (GAAP) financial measure, see “Non-GAAP Financial Measures”, below) for the three months ended March 31, 2026 was $(3.16) million. Adjusted EBITDA (a non-Generally Accepted Accounting Principles (GAAP) financial measure, see “Non-GAAP Financial Measures”, below) for the three months ended March 31, 2026 is $(1.32) million.
We have included non-GAAP profit/(loss) from operations and Adjusted EBITDA in this Report as a supplement to Generally Accepted Accounting Principles (GAAP) measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. The most directly comparable GAAP measures are net loss with respect to Adjusted EBITDA and loss from operations with respect to non-GAAP profit/(loss) from operations. Non-GAAP profit/(loss) from operations and Adjusted EBITDA are presented because we believe they provide additional useful information to investors by excluding the impact of non-operating, non-recurring, and certain non-cash items, as well as items such as interest, taxes, and depreciation and amortization, thereby facilitating comparisons of operating performance across periods. Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in our industry.
Non-GAAP profit/(loss) from operations and Adjusted EBITDA have limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: Adjusted EBITDA does not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; and Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.
We believe non-GAAP profit/(loss) from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric includes the effect of other income. Additionally, other companies in our industry may calculate non-GAAP operating profit/(loss) and Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. You should not consider non-GAAP operating profit/(loss) and Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure. The Company presents the most directly comparable GAAP financial measures with equal or greater prominence than the non-GAAP measures.
We realized revenue, net loss and loss from operations (each prepared in accordance with U.S. GAAP), as well as certain non-GAAP financial measures, including Adjusted EBITDA and non-GAAP loss from operations, during the periods presented below as follows (all percentages are calculated using whole numbers. Minor differences may exist due to rounding):
Set forth below is a presentation and reconciliation of our Adjusted EBITDA and non-GAAP loss from operations for the three months ended March 31, 2026 and 2025 to GAAP loss from operations and GAAP net loss, respectively:
Non-GAAP loss from operations is defined as GAAP operating loss plus other income.
Adjusted EBITDA is defined as net loss attributable to GlobalTech Corporation shareholders plus depreciation and amortization, finance cost, income taxes and exchange (gain)/loss.
Adjusted EBITDA and non-GAAP operating loss for the three months ended March 31, 2026, were impacted by the increase in revenue, mainly by the increase in revenue of international termination, broadband, technology services and retail footwear, whereas Adjusted EBITDA and non-GAAP loss from operations for the three months ended March 31, 2025, were mainly impacted by exchange loss due to devaluation of currency.
Direct operating costs: Direct operating costs stood at USD $7.5 million during the three months ended March 31, 2026, compared to $3.9 million in the comparative period. The increase of $3.6 million in direct operating cost was mainly due to an increase in interconnect, settlement and other charges, salaries and benefits and inventory consumed. The increase in interconnect charges was in line with an increase in international termination revenue. In addition, the increase in salaries and benefits and inventory consumed mainly relates to the inclusion of our 51% ownership of the retail footwear business acquired on December 15, 2025, the results of which were not part of the corresponding period of the prior year. Accordingly, no comparable operating costs relating to 123 Investments were available.
Other operating costs Other operating costs stood at USD $4.2 million during the three months ended March 31, 2026, compared to $0.64 million in the comparative period. The increase of $3.6 million in operating costs was mainly due to consultancy charges, increases in salaries and benefits and legal and professional fees. A significant portion of this increase relates to the acquisition of the retail footwear business in the current period, the results of which are now reflected in the current period. Our 51% interest in the retail footwear business was acquired on December 15, 2025, the results of which were not part of the corresponding period of the prior year. Accordingly, no comparable operating costs relating to 123 Investments were recognized in the prior comparative period.
Depreciation and amortization: Depreciation and amortization was USD $1.9 million for the three months ended March 31, 2026, compared to $0.5 million in the comparative period. The increase of $1.4 million was mainly due to the inclusion of the retail footwear business in the current period, as discussed above.
Other expenses: Other expenses were USD $0.02 million during the three months ended March 31, 2026, compared to $0.20 in the comparative period. The decrease of $0.18 million was mainly due to the appreciation of currency in the current quarter as compared to the corresponding year’s period, and the loss on disposal of assets recorded in the prior year’s period.
Other income: The Company recorded other income, net of USD $0.08 million during the three months ended March 31, 2026, compared to $0.22 million in the comparative period. The decrease of $0.14 million was mainly due to a write back of liabilities amounting to $0.13 million in the comparative period.
Finance cost: The finance cost during the three months ended March 31, 2026 was $0.80 million compared to $0.35 million during the period ended March 31, 2025, an increase of $0.45 million. The increase in finance costs was primarily attributable to additional borrowing costs, lease-related financing charges, and other funding expenses arising from the acquisition of 51% of the retail business on December 15, 2025. Since the retail business was not part of the Company during the comparative period, there were no corresponding finance costs associated with this segment in the prior year. Accordingly, the current period reflects the incremental financing impact of the acquired operations.
Taxation:Total Thenet Companyrevenue recordedwas taxation expense of USD $0.06$21.54 million duringfor the threesix months ended MarchJune 31,30, 2026, compared to $0.05$9.97 million infor the comparativesix period.months Theended increaseJune was30, mainly2025, dueas to the increasediscussed in revenue.further detail below.
Telecom services-related revenue stood at $8.48 million for the six months ended June 30, 2026, compared to $8.33 million for the six months ended June 30, 2025. This increase of approximately $0.15 million was due to an increase in international traffic in the first quarter of 2026. Broadband services generated revenue of $1.12 million for the six months ended June 30, 2026, compared to $0.76 million for the six months ended June 30, 2025. The increase of $0.36 million is mainly due to an increase in internet service sales in the six month ended June 30, 2026, compared to the six months ended June 2025.
Technology and other services revenue was $1.54 million for the six months ended June 30, 2026, compared to $0.90 million for the six months ended June 30, 2025. The increase was due to the delivery of additional IT projects during the period.
Retail footwear revenue of 123 Investments Limited stood at $12.53 million for the three months ended June 30, of 2026 against which there was no comparable information because the retail footwear business was acquired on December 15, 2025.
Direct operating costs (exclusive of depreciation and amortization): Direct operating costs (exclusive of depreciation and amortization) stood at USD $7.24 million during the three months ended June 30, 2026, compared to $5.11 million in the comparative period. The increase of $2.13 million in direct operating cost was mainly due to an increase of inventory consumed. The inventory consumed mainly relates to the inclusion of our 51% ownership of the retail footwear business acquired on December 15, 2025, the results of which were not part of the corresponding period of the prior year. Accordingly, no comparable operating costs relating to 123 Investments were available.
Direct operating costs (exclusive of depreciation and amortization) during the six months ended June 30, 2026, stood at $14.75 million compared to $9.04 million during the six months ended June 30, 2025. The increase in direct costs is mainly due to interconnect costs, which are aligned with international termination revenue, salaries and benefits and inventory consumed. The inventory consumed mainly relates to the inclusion of our 51% ownership of the retail footwear business acquired on December 15, 2025, the results of which were not part of the corresponding period of the prior year. Accordingly, no comparable operating costs relating to 123 Investments were available.
Other operating costs Other operating costs stood at $7.08 million during the three months ended June 30, 2026, compared to $0.66 million in the comparative period. The increase of $6.42 million in other operating costs was mainly due to consultancy charges, increases in salaries and benefits and legal and professional fees. A significant portion of this increase relates to the acquisition of the retail footwear business in the current period, the results of which are now reflected in the current period. Our 51% interest in the retail footwear business was acquired on December 15, 2025, the results of which were not part of the corresponding period of the prior year. Accordingly, no comparable operating costs relating to 123 Investments were recognized in the prior comparative period.
Other operating costs during the six months ended June 30, 2026, stood at $11.30 million, compared to $1.30 million during the six months ended June 30, 2025. The increase in operating costs is mainly due to legal and professional charges and salaries and benefits. A significant portion of this increase relates to the acquisition of the retail footwear business in the current period, the results of which are now reflected in the current period. Our 51% interest in the retail footwear business was acquired on December 15, 2025, the results of which were not part of the corresponding period of the prior year. Accordingly, no comparable operating costs relating to 123 Investments were recognized in the prior comparative period.
NetDepreciation Lossand amortization: TheDepreciation Companyand hadamortization awas net loss of $4.0$0.63 million for the three months ended MarchJune 31,30, 2026, compared to $1.1$0.57 million forin the threecomparative monthsperiod. ended March 31, 2025, whichThe increase inof net$0.06 lossmillion was mainly due to the increaseinclusion of the retail footwear business in direct operating costs, other operating costs, depreciation and amortization, offset by the increasecurrent in revenues, eachperiod, as discussed in greater detail above.
Depreciation and amortization for the six months ended June 30, 2026, was $2.54 million, compared to $1.08 million for the six months ended June 30, 2025. The increase of $1.46 million was mainly due to the inclusion of the retail footwear business in the current period, as discussed above.
Other expenses: Other expenses were $0.01 million during the three months ended June 30, 2026, compared to $0.24 in the comparative period. The decrease of $0.23 million was mainly due to the appreciation of currency in the current quarter as compared to the corresponding year’s period, and the loss on disposal of assets recorded in the prior year’s period.
GLTK insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2025-12-15 | Syed Babar Ali |
Other | 750,000 | — | — |
| 2025-12-15 | Saeed Muhammad Azhar |
Other | 750,000 | — | — |
Well-known investors holding GLTK (13F)
None of the 59 investors we track reported a position in their latest 13F.