Global Arena Holdings (OTC BB:CSOFD)

In early November 2010, the board of directors of the registrant changed its business plan to pursue global wealth strategy and asset management for high net-worth individuals, families and institutional clients. The registrant intends to offer services including separately-managed accounts, sub-advisory relationships, structured products, mutual funds, and other investment vehicles to unaffiliated corporate and public employee pension funds, endowment funds, domestic and foreign institutions, and governments and affiliates around the world. The registrant will also offer in-depth portfolio strategy, trading and brokerage services to institutional and individual investors.

Prior to the change in its business plan, China Stationery's primary business, through Ningbo Binbin Stationery Co., Ltd., its then operating subsidiary based in China, was to develop, manufacture and market office supplies including stationery, hole punchers, staplers, pens and pencils, rubber stamps, felt markers and numerous other items, which are sold through a worldwide network of distributors in China.

Global Arena and the Company are obligated to complete the Merger under the terms of the Merger Agreement subject to the conditions set forth therein, all of which we expect to be satisfied by May 18, 2011.

As of March 31, 2010, we had a working capital deficit of $9,355,231, which was $17,820 worse that our deficit at December 31, 2009. However, a reduction in our accounts receivablesl allowed the Company to reserve more cash for the future operations.

The primary reason for the magnitude of our working capital deficit is the customary Chinese banking practice of funding business clients through short-term debt.  Because of that policy, our entire bank debt ($16.1 million at March 31, 2010) is categorized as a short-term liability.  Our expectation is that we will be permitted by the bank to roll over as much of the debt as we require.  So this arrangement provides us with considerable flexibility in molding our debt structure to our immediate need.

Our liquidity is affected by certain financing arrangements that we have made, involving certain suppliers of our raw materials and other companies with which we have mutual assistance relationships. These relationships manifest themselves in two ways, both of which are common practice in the Chinese business environment.   First, we have on our balance sheet "advances to suppliers” totaling $2,250,073 representing funds that we deposit with our suppliers in order to assure ourselves of on-time supplies of raw materials.

 
                In addition, as of March 31, 2010, the Company is contingently liable as a guarantor with respect to approximately $1,317,600 of indebtedness of non-related entities. Should any one of the entities default on its debt payments, the Company will be obligated to perform under that guarantee by making the required payments. The maximum potential amount of future payments that the Company is required to make under the guarantee was $1,317,600 as of March 31, 2010.
 
We believe that our banking relationships provide us adequate liquidity to fund our ongoing operations and modest growth. Nevertheless we are currently exploring opportunities for increased funding in order to implement certain special projects that we hope will enhance our product offerings and the efficiency of our operations. We have not, however, entered into any new financing commitments.