Global AI Inc (GLAI) Risk Analysis

The market price of our Class A common stock has been volatile in the past. The market price of our Class A common stock is likely to be highly volatile in the future, as well. You may not be able to resell shares of our Class A common stock following periods of volatility because of the market's adverse reaction to volatility. Other factors that could cause such volatility may include, among other things: - actual or anticipated fluctuations in our operating results;         - the absence of securities analysts covering us and distributing research and recommendations about us;         - we may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held;         - overall stock market fluctuations;         - announcements concerning our business or those of our competitors;         - actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms;- conditions or trends in the industry;         - litigation;         - changes in market valuations of other similar companies;         - future sales of Class A common stock;         - departure of key personnel or failure to hire key personnel; and         - general market conditions. Any of these factors could have a significant and adverse impact on the market price of our Class A common stock. In addition, the stock market in general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Class A common stock, regardless of our actual operating performance.

Our Class A common stock is a "penny stock" under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00). Unless we obtain a per-share price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as "established customers" or "accredited investors." For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer's account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser's written agreement to the transaction. Legal remedies available to an investor in "penny stocks" may include the following: - If a "penny stock" is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.         - If a "penny stock" is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages. However, investors who have signed arbitration agreements may have to pursue their claims through arbitration. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our Class A common stock and may affect your ability to resell our Class A common stock. Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments. For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance that our Class A common stock will not remain classified as a "penny stock" in the future.

The Company's Class A common stock is currently quoted on the OTCQB under the symbol, "GLAI." An active trading market for our Class A common stock has not developed, and may not develop, on the OTCQB. A limited trading volume may prevent our shareholders from selling shares at such times or in such amounts as they may otherwise desire.

Our stock ownership is highly concentrated. Through ownership of shares of our Class A common stock and Class B common stock, one shareholder, Darko Horvat, our Chief Executive Officer and Chairman of the Board, beneficially owns approximately 53% of our total outstanding shares of Class A common stock. In addition to Mr. Horvat's ownership of a substantial amount of our Class A common stock, Mr. Horvat holds 40,000,000 shares of our Class B common stock. Each share of Class B common stock has 50 votes per share and is convertible into one share of Class A common stock at the option of the holder. Accordingly, as a result of Mr. Horvat's Class B common stock ownership, Mr. Horvat, acting alone, is able to control all matters requiring stockholder approval, including the election of directors and approval of mergers and other significant corporate transactions. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of our Company. It could also deprive our stockholders of an opportunity to receive a premium for their shares as part of a sale of our Company and it may affect the market price of our Class A common stock.

The Company's ability to become a profitable operating company is dependent upon its ability to generate revenues and/or obtain financing adequate to support our cost structure. There can be no assurance that we will generate revenues or obtain financing. These factors have raised substantial doubts about our ability to continue as a going concern. We plan to attempt to raise additional equity capital by selling shares through one or more private placement or public offerings. However, the doubts raised, relating to our ability to continue as a going concern, may make our shares an unattractive investment for potential investors. These factors, among others, may make it difficult to raise any additional capital.

If, in the future, we issue additional shares of capital stock, the future issuance may result in substantial dilution in the percentage of our Class A common stock held by our then existing shareholders. We may value any equity issued in the future on an arbitrary basis. Many of our acquisitions will require the issuance of our capital stock as part of the consideration provided. The issuance of capital stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our Class A common stock.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Class A common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non- affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. Given the limited trading of our Class A common stock, resale of even a small number of shares of our Class A common stock pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our Class A common stock.