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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
[X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1997

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

For the transition period from ______________ to _____________;

                         Commission file Number: 0-26684
                             GLOBAL INTELLICOM, INC.
             (Exact name of registrant as specified in its charter)

            Nevada                                           13-3797104
  (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                      Identification Number)

        747 Third Avenue,                                      10017
        New York, New York                                  (Zip Code)
(Address of principal executive offices)

Registrant's telephone number, including area code: (212) 750-3772

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, 
$.01 par value

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No ___

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K. Yes ___   No ___

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of April 19, 1998 was approximately $11,003,750 (based on the
average between the closing bid and asked prices of Common Stock on such date),
which value, solely for the purposes of this calculation, excludes shares held
by Registrant's officers and directors. Such exclusion should not be deemed a
determination by Registrant that all such individuals are, in fact, affiliates
of the Registrant.

     As of April 10, 1998 there were outstanding 7,952,345 shares of the
Registrant's common stock, par value $.01 per share (the "Common Stock").

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<PAGE>

                                     PART I

Item 1. Business

General

     Global Intellicom, Inc. (together with its subsidiaries, "Global" or the
"Company") provides system integration and information technology services and
assembles and supplies build-to-suit computer equipment for a wide range of
customers, including corporate clients, governmental entities, institutions,
professional users and resellers.

     The Company's subsidiaries and operations have been organized into two
distinct groups, a systems integration division consolidated under the Company's
Vircom Technologies Group, Inc. subsidiary ("Vircom TG"), and a production
division which assembles and markets custom-built servers, workstations and
personal computers.

     Vircom TG is a value-added reseller which provides a range of information
technology consulting services, including cabling, systems integration, internal
and external linking of networks, installation of new applications, assistance
with non-compatible operating systems and architectures, and design and support
services for enterprise-wide client server computer systems. The Company's
production division ("Global-lnSync") assembles, supplies and supports
state-of-the-art, custom-built network products, including servers, workstations
and personal computers, and markets them primarily to U.S. government, state
educational and school system customers and to value-added resellers.

     Company History

     Global was incorporated in September, 1994, and became a publicly-owned
company through a distribution of its shares under a registration statement
declared effective by the Securities and Exchange Commission on September 1,
1995. The Company's shares were listed for trading on the Nasdaq SmallCap Market
in May, 1996.

     The Company has grown both through acquisitions, including Nevcor (1994),
Natcom (1995), Global In-Sync and Speech Solutions (1996) and ASDI (1997), and
through internal expansion. The aggregator operations of the Company's Nevcor
subsidiary were discontinued in 1997, but the Company's distribution of
brand-name products as a value-added reseller continues in Vircom TG. The
consolidation of Global's operations into two divisions recognizes that a
narrower focus in products, services and markets is a necessary basis for an
increase in sales and profit margins, and is expected to prove more beneficial
to the Company in the long term than pursuing the wholesale distribution of
computer products at every market level.

     Vircom TG

     Vircom TG offers a wide range of systems integration services, including
state-of-the-art cabling installation for both local and wide area networks.
Vircom TG provides analysis of needs, system configuration, installation of
fiber optic, wireless or conventional network circuitry, network integration,
software loading, testing of system components, training of network personnel
and system maintenance. As a value-added reseller, Vircom TG also supplies
computer hardware and software and other peripheral equipment to basic computer
system components furnished for the corporate, government, education, and
professional end-user, and can offer products from major brand-name suppliers
such as Compaq, IBM, Digital, Hewlett Packard, NCR, Sun MicroSystems, Microsoft
and Novell under distributor or reseller agreements.

                                      2
<PAGE>

     By furnishing such a range of services, the Company believes it can combine
the elements needed to offer a complete system or, in the Company's view, a
"total solution" to meet client needs. Global's management believes that selling
complete systems rather than separate components can generate repeat business
and more loyal customers, and is more likely to yield higher margins. Moreover,
the ability to provide cabling installation and diversified systems integration
services is expected to position the Company to meet additional information
system needs of larger multi-divisional organizations.

     Vircom TG has a professional service placement bureau that has developed,
from its client base and various professional contacts, a database of potential
information technology candidates for full and part-time placement. The Company
intends to offer its clients fee-based access to this database.

     Vircom TG's information technology, systems integration and cabling
services are sold to a diversified customer base which includes large corporate
and governmental users of such services, such as Lockheed Martin, Lucent
Technologies, PNC Bank, Smith Barney, Westinghouse, IKEA, Saturn, Widener
University, Avis and the U.S. Coast Guard.

Global-InSync

     Through Global-lnSync, the Company assembles and markets its own
state-of-the art, Pentium(R)-class, customized servers, workstations and
personal computers, built to individual customer specifications in the Company's
facilities in Springfield, Virginia. Custom-built Global-InSync products are
particularly suited for situations where standard models of name-brand equipment
are either not cost-effective, are not flexible enough to fill a particular
client need, or are not available in quantity on an agreed delivery schedule.

     The Company's workstations are configured on either Pentium(R) or
Pentium-Pro(R) processors, and file servers are based on both Pentium Pro and
multi-processor components. InSync product offerings include ISA, EISA and PCI
architecture, desk-top, mid-tower or full-tower cases, enhanced IDE and SCSI
hard drive platforms, CD-Rom drives, RAID array subsystems and Energy Star
compliant monitors. Global-InSync's workstations and file-servers are certified
for use with Novell network software, Windows 95 and Windows NT, and
Global-InSync is a certified build-to-order supplier of workstation products for
the General Services Administration.

   
     Global-lnSync products and associated warranty and repair services are
distributed primarily through third-party value-added resellers and systems
integrators who, in turn, sell the products and various services to commercial
enterprises and governmental users. Sales to government resellers (particularly
Lockheed Martin) are generally on a per order basis. Once the order is placed,
such order is generally not subject to renegotiation or termination. While the
Company believes its relationships with its resellers are good, there can be no
assurance that they will continue to place substantial orders with Global
Intellicom.
    

     In connection with consolidating operations of its various units and
seeking to increase overall profit margins, the Company is considering various
alternatives for expanding production capacity and improving operating margins
at Global-InSync, including the possible outsourcing and subcontracting of
certain production runs where cost-effectiveness is established.

     Marketing, Sales and Customers

     Global markets products and services to approximately 1,000 customers,
including corporations, government agencies, educational and other institutions,
professional users, value-added resellers 

                                      3
<PAGE>

and value-added dealers. Although products and services are marketed
nationwide, the majority of sales are to customers located in the eastern half
of the United States.

   
     A major customer of the Company, particularly of its Global-InSync
division, is Lockheed Martin, sales to which accounted for more than 20.8% of
the Company's revenues in 1996 and 22.0% of revenues from continuing operations
in 1997. A significant reduction in sales to Lockheed Martin or a loss of the
customer account would have a materially adverse effect on the Company's
business and results of operations, unless the Company were able to replace such
sales and account, as to which there can be no assurance.
    

     At the end of 1997, the Company had a purchase order backlog, reasonably
believed to be firm, of approximately $1.7 million.

     The Company's marketing and sales staff consisted of approximately 75
employees as of March 31, 1998. Marketing and sales efforts emphasize product
quality and diversity, prompt delivery, competitive pricing and a high level of
product support, for which Global's technical support staff is utilized.
Training of sales personnel includes product seminars conducted by manufacturers
and certification by certain manufacturers of individual sales representatives
as being qualified to market specific equipment.

     In addition to servicing and furnishing post-sale support to existing
customers, the Company's sales force solicits new business by pursuing leads
from manufacturers with whom Global has distribution relationships, by
contacting prospects identified through other industry sources, by direct mail,
by telephone campaigns, by participation in trade shows, and by advertising in
trade publications.

     Supply of Products of Other Manufacturers

     Except for equipment produced by the Company's Global-InSync division, the
Company purchases products directly from distributors or manufacturers. In
seeking suppliers, the Company considers product demand, availability and
performance, technical sophistication and profit margin potential.

   
     Until the Company discontinued its aggregator business in the summer of
1997, the Company purchased, and carried in inventory, a substantial amount of
computer products and accessories directly from various manufacturers such as
NEC and NCR, under a number of vendor agreements containing customary industry
terms and conditions, such as minimum purchase requirements, stock rotation,
price protection and product updating and obsolescence provisions. Since
discontinuing the aggregator business, the Company has purchased much of its
product inventory from distributors, although it continues to have reduced
vendor relationships with certain manufacturers.
    

     While computer information system equipment is generally available on a
continuous basis, the demand for certain products sold by the Company
occasionally exceeds the supply available from a specific distributor or
manufacturer. In such cases, the distributor or manufacturer may attempt to
allocate the affected product equitably among their customers, including the
Company. Global's management is aware that the Company's ability to compete
effectively has been and may be periodically affected by such occasional product
shortages, and management accordingly seeks constantly to expand the base of
distributors and other vendors from whom it obtains products.

     The Company receives quarterly credits on the purchase of certain vendors'
products. The amount of each vendor's credits depends upon the quantity of
products purchased or the Company's cost of products shipped. Such credits are
reflected in the Company's financial statements as a 

                                      4
<PAGE>

reduction of product inventory cost when earned.


     Competition

     Competition in the integration of computer systems and the supply of
computer system equipment remains intense. The Company's competitors in systems
integration services include national, regional and local distributors,
resellers and integrators, most of which are privately held, and, accordingly,
information on their size and business is not readily available although the
Company believes there are a significant number of competitors having
substantially greater resources than Global. Competitors of Global-InSync in the
production of custom-built servers, workstations and personal computers include
Compaq, Comp USA, Dell, Gateway and Hewlett Packard, all of which are vastly
larger than the Company in revenues and in financial, sales and other resources.

     Key competitive factors in the supply of systems integration services and
computer network workstations and accessories include availability of technical
support personnel, competence in and familiarity with a variety of computer
equipment and software, prompt response times, product selection and price.
While a number of national and regional integrators and suppliers of computer
systems have substantially greater financial resources and larger staffs than
the Company, the Company views its emphasis on service and technical support,
and its offering of total systems and total solutions for customers, as a
competitive strength.

     Floorplan Financing Arrangements

     In addition to selling products against immediate payment, Global extends
payment terms to customers with approved credit, based upon their financial
profile and credit history, and to purchasers who have qualified for certain
floorplan financing when available. During 1997, to facilitate sales to certain
customers, the Company had floorplanning agreements with certain financial
institutions. Such floorplanning agreements transfer responsibility for payment
from a Global customer to the floorplan finance company, which pays Global,
generally within 3 to 15 days of shipment. The Company is typically required to
pay the finance company a range of floorplan "points" based on the invoice price
of the products purchased.

     Until September, 1997, the Company had an active floorplan financing
arrangement with an industry floorplanner, which was used primarily for
purchasing inventory for the Company's aggregator operations. As previously
reported, the Company has discontinued such operations and has not been using
the floorplanning facility. Balances owed to the floorplanner are being reduced
on a periodic basis.

     Financing of Accounts Receivable; Customer Credit

     The Company has a factoring facility with a financial institution (the
"Lender"), under which the Lender purchases receivables from the Company on a
recourse basis. Global views its relationship with the Lender to be important
and beneficial, and the loss of such relationship, if not replaced, could have a
materially adverse effect on the Company's business, financial condition and
results of operations. While the Company believes it could obtain a replacement
factoring facility if necessary, there is no assurance it will be able to do so
within a specific time period or on terms which would be satisfactory.

     The Company uses a Credit Committee composed of Global officers and
employees to monitor and control its credit exposure on customer receivables.
The Credit Committee undertakes 

                                      5
<PAGE>

background credit checks for all proposed customers. Assuming credit is
acceptable, the Credit Committee establishes limits on the amount of
outstanding receivables which a customer can incur. Orders in excess of this
limit may only be authorized by the Credit Committee. Customers who fail to
adhere to agreed credit terms are contacted, and the Company ordinarily
discontinues shipments until acceptable credit standing is reestablished.

     Recent Equity Financing

     As of February 20, 1998, the Company had completed the sale of 2,200 shares
of Series 6 Convertible Preferred Stock of which 1,200 shares were sold in 1997
and 1,425 shares of Series 7 Convertible Preferred Stock to investors in private
placement transactions, receiving aggregate net proceeds of $3,255,500 from the
financing. Such financing proceeds have been used for the carrying of inventory
and receivables and for reduction of accounts payable, increasing the Company's
working capital base.

     As provided in the Certificates of Designation for the Series 6 and Series
7 Convertible Preferred Stock, such shares have a liquidation preference of
$1,000 each, are non-voting, and carry a dividend of $50.00 per year, payable
semi-annually. At the election of the Company, dividends may be paid in shares
of Common Stock, priced at the five-day average closing bid price of Common
Stock prior to the dividend record date. Shares of Series 6 and Series 7
Preferred Stock are convertible into Common Stock at a conversion price equal to
75% of the five-day average closing bid price per share of Common Stock
immediately prior to conversion. The Company may call such shares for redemption
at a price equal to 133% of the liquidation preference of the shares. The
Company is obligated to register for public sale the shares of Common Stock
issuable to holders of Series 6 and Series 7 Convertible Preferred Stock, and
has filed with the Securities and Exchange Commission a pending registration
statement in which such shares, along with other securities, are included.

     The Company has filed a Certificate of Designation authorizing the future
private sale of up to 1,500 shares of Series 8 Convertible Preferred Stock,
which, at a price of $1,000 per share, could generate gross proceeds of up to
$1,500,000 for the Company. To date, the Company has received subscriptions for
the purchase of 325 shares.

     Series 8 Preferred shares are non-voting, have a liquidation preference of
$1,000 each, and will carry a 5% dividend payable in cash or in shares of Common
Stock at the election of the Company. Shares of Series 8 Preferred Stock are
convertible into Common Stock at a 25% discount to the five-day average closing
bid price per share. Series 8 shares are callable at the option of the Company
at a redemption price equal to 133% of their liquidation preference. Holders of
Series 8 Preferred shares will have registration rights similar to those granted
to holders of Series 6 and Series 7 Convertible Preferred Stock.

     Employees

     As of December 31, 1997, the Company had 204 full-time employees, including
75 persons employed in sales and marketing functions, 66 persons in production
and assembly, nine persons involved in technical support roles, ten persons
involved in purchasing and warehouse functions, and 44 persons involved in
executive, administrative, and finance functions. Global considers its relations
with its employees to be good.

     CERTAIN TRANSACTIONS

     In January, 1998, the Company's Board of Directors voted $676,382.80
additional compensation to the Company's Chairman and Chief Executive Officer N.
Norman Muller attributable to 1997. Of 

                                      6
<PAGE>

that additional compensation, $359,216.03 was in consideration for Mr. Muller
extending his personal guarantee for some of the Company's indebtedness. The
additional compensation was offset against loans owed by Mr. Muller to the
Company.

     The Company's  Executive  Vice-President,  Howard Maidenbaum,  has also 
extended personal  guarantees of all the same indebtedness of the Company as
that  guaranteed by Mr.  Muller.  Both Mr. Muller and Mr.  Maidenbaum are also
directors of the Company.  Another of the Company's  directors,  Thomas W.
Smith,  has personally  guaranteed one of the obligations also guaranteed by
Mr. Muller and Mr.  Maidenbaum.  The Company's Board of Directors has not as
yet determined what consideration, if any, will be given to Mr. Maidenbaum and
Mr. Smith for their guarantees.

     Additionally, Mr. Muller has informed the Company that he has become the
Manager of a limited liability corporation (the "LLC") formed for the purpose of
acquiring control of a public corporation other than the Company. The target of
the LLC's efforts is in an industry different from and unrelated to the
Company's business. The LLC has acquired greater than 5% of the voting stock of
its target, and has commenced litigation against the management of its target.

Item 2. Properties

Company Facilities

     The Company's facility for the assembly of the network products of
Global-InSync consists of a 52,000 square foot plant in Springfield, Virginia,
and is occupied under a lease expiring in 2001. As a result of a change to
just-in-time inventory, management of the InSync subsidiary is considering
replacing its current premises with a smaller facility. InSync is currently in
arrears on its rental payments and has commenced negotiations to resolve these
lease issues. Vircom TG's principal office and warehouse is located in Exton,
Pennsylvania, under a lease expiring in 2004, and the Company also maintains
office facilities in Florida, Indiana, New Jersey and New York. The Company's
corporate and executive offices are at 747 Third Avenue, New York, New York
10017, and are occupied under a lease expiring in 2005.

Item 3. Legal Proceedings.

     The Company is involved in the following legal proceedings:

   
     1. An action pending in the Supreme Court of the State of New York,
entitled Suncoast Capital Corp. v. Global Intellicom, Inc., et al., commenced on
or about September 18, 1997 against the Company and three of its officers and
directors by a holder of a warrant issued by the Company for claimed damages of
$1,000,000, alleging that the Company breached the terms of the warrant by
failing to register for public sale shares of Common Stock issuable on exercise
of the warrant. The Company has included these shares in its presently pending
registration statement on Form S-3, has asserted as an affirmative defense that
the transaction in connection with which the warrant was issued was void under
New York's usury law, and has counterclaimed for $29,666.57. The Company has
moved for summary judgment dismissing the complaint and intends to continue to
defend the action vigorously. Although there can be no guarantee thereof, the
Company believes the SunCoast claim is overstated and does not anticipate a
significant loss in this matter.
    

     2. An action pending in the Pennsylvania Court of Common Pleas, Delaware
County, entitled Scott Arch and Ellen Arch v. AmCom Business Centers Corp., et
al., commenced on or about October 30, 1996 by the former owners of the
Company's Nevcor subsidiary against the subsidiary and two of the Company's
directors as guarantors, claiming $93,449 in tax reimbursements alleged to be
due under the Nevcor acquisition agreement and a subsequent modification
thereof. The 

                                      7
<PAGE>

   
Company believes that Plaintiffs' calculations are in error and
that Plaintiffs have been paid in full. The Company has provided Plaintiffs with
accounting computations supporting the Company's position and is awaiting
Plaintiffs' response thereto. Although there can be no guarantee thereof, the
Company does not anticipate a loss in this matter.

     3. An action pending in the Pennsylvania Court of Common Pleas, Delaware
County, entitled Grove Avenue Corp. f/k/a AmCom Business Centers Corp. v. Global
Intellicom, et al., commenced on or about September 30, 1997 by the corporate
entity which sold the assets from which the Nevcor and Vircom subsidiaries were
created, against the Company and certain of its subsidiaries for unspecified
damages claimed to be in excess of $50,000, for payments alleged to be due
pursuant to the acquisition agreement and a subsequent modification thereof.
Required payments were to be calculated as a percentage of the gross sales of
AmCom and Vircom. The complaint alleges that payments based on actual AmCom and
Vircom sales are due and owing, and that the Company diverted sales from AmCom
and Vircom to other subsidiaries to avoid payment. The Company vigorously
disputes that any sales were diverted, and, although conceding that some
payments are due, disputes the amounts claimed by Plaintiff. While there can be
no assurance thereof, the Company estimates its exposure to be in the range of
$100,000, for which it has accrued, and it is actively attempting to resolve
this dispute.

     4. An action pending in the Pennsylvania Court of Common Pleas, Montgomery
County, entitled Lawrence Fox v. Global lntellicom, Inc., et al., commenced on
or about August 21, 1997 for unspecified damages in excess of $50,000 for
alleged breach of a brokerage contract for a corporate acquisition, as well as
claims for unspecified further actual and punitive damages for fraud and other
allegedly tortious conduct. The Company filed preliminary objections to all
except the breach of contract claims, and the Company's preliminary objections
were sustained so that all claims except for the alleged breach of contract were
dismissed. The Company contends that the corporate acquisition in question was
never consummated so that no brokerage commission is owed. Although there can be
no assurance thereof, the Company does not anticipate a loss in this matter and
it is vigorously defending the action.

     5. An action pending in the United States District Court for the District
of New Jersey, entitled Green Tree Vendor v. Global Intellicom, Inc. et al.,
commenced on or about April 14, 1998, alleging payments due in the amount of
approximately $260,000 for leased equipment. Company counsel has not yet
reviewed the complaint in this action, but has been advised by Global that the
claimed amount is not due and that Global's records reflect that the amount
owed, if any, is far less than the amount demanded. Although there can be no
assurance thereof, the Company does not expect a loss in excess of $50,000,
which is reflected in the Company's accounts payable balance. The Company
intends to defend this action vigorously.

     6. An action pending in the Supreme Court of the State of New York, County
of New York, entitled Fawcette Technical Publications Co. d/b/a Visual Basic
Programmer's Journal v. Global lntellicom Inc., et al., claiming $48,599.90 due
for printing services rendered for one of the Company's subsidiaries which has
discontinued its operations. The debt to Fawcette, if any, was incurred by the
Company's former subsidiary, Speech Solutions. The Company denies that any 
amount is due from the Company. The Company is vigorously defending this 
action.

     7. On or about April 15, 1998, Bell Micro Products, a supplier of the
Company's Global-InSync subsidiary, commenced an action in the United States
District Court for the Eastern District of Virginia against the Company and
Global-InSync, alleging payments due to Bell Micro in the amount of $784,556.43.
While the Company has not yet had the opportunity to evaluate the merits of Bell
Micro's claim, it believes that the true amount owed is at least $150,000 less
and, while there 
    

                                      8
<PAGE>

   
can be no assurance thereof, it anticipates a favorable settlement. The full 
amount due is reflected in the Company's accounts payable balance

     In addition to the foregoing, the Company's Board of Directors previously
voted to indemnify certain of the Company's officers and directors ("the
Indemnitees") who were former officers and/or directors of Global's former
parent company, Communications and Entertainment Corp. ("ComEnt"), for claims
against the Indemnitees arising out of their prior service on behalf of ComEnt,
in the event that ComEnt failed to honor an obligation it previously undertook
to indemnify the Indemnitees with respect to any such claims. Two claims within
the scope of ComEnt's indemnification obligation have been asserted against
certain of the Indemnitees, but ComEnt has declined to honor its obligations
under its indemnification. Pursuant to the action of the Company's directors in
authorizing such indemnification, the Company has paid certain legal fees and
related expenses in connection with the defense of such claims. The pending
claims against certain of the Indemnitees, and the status thereof, are:
    

              A.  An action in the United States District Court for the Central
                  District of California entitled Diana Pfannebecker,
                  Individually and on behalf of all other similarly situated
                  Plaintiffs v. N. Norman Muller, et al. From information made
                  available to the Company, it appears that this action has been
                  dismissed by the District Court, and an appeal to the United
                  States Court of Appeals for the Ninth Circuit from the
                  dismissal is presently pending.

   
              B. An action pending in the California  Superior Court, Los 
                 Angeles County, entitled Krishna Shah v. N. Norman Muller,
                 et al. The Company has been advised that a tentative 
                 settlement agreement has been reached and the parties are in
                 the process of preparing the necessary documentation.
    

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

      None.

                                   PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters.

     The Common Stock of Global is listed on the NASDAQ Small Cap Market under
the symbol GBIT. The following table sets forth the high and low bid prices of
Common Stock as reported on NASDAQ for each calendar quarter during the year
ended December 31, 1997 and for the period from May 16, 1996 (when Global's
Common Stock was first listed on NASDAQ) to December 31, 1996:


                                                             Bid
                                                        -------------
1997.................................................   High      Low
----                                                    ----      ---
January 1 through March 31 ..........................  $3.25    $1.81
April 1 through June 30 .............................   2.88     1.72
July 1 through September 30 .........................   3.13     2.16
October 1 through December 31 .......................   2.69     1.41

                                                             Bid
                                                        -------------
1997.................................................   High      Low
----                                                    ----      ---
January 1 through March 31 ..........................  $3.25    $1.81
May 16 to June 30, 1996 .............................   6.88     4.00

                                      9
<PAGE>

July 1 to September 30, 1996.........................   6.00     2.75
October 1 to December 31, 1996 ......................   6.00     1.88
       

     From November 13, 1995 to May 16, 1996, Global's Common Stock was listed on
the OTC Bulletin Board under the symbol "GBIT." The high and low bid quotations
for the Common Stock from November 13 to December 31, 1995, as reported on the
OTC Bulletin Board, were $3.25 and $1.00, respectively. The high and low bid
quotations on the OTC Bulletin Board for the first quarter of 1996 were $7.38
and $3.00, respectively.

     The bid quotations represent inter-dealer prices and do not include retail
mark-ups, mark-downs or commissions and may not necessarily represent actual
transactions.

     No dividends have been declared or paid with respect to the Common Stock.

     As of April 10, 1998, there were approximately 3,657 record holders of the
Company's Common Stock and 7,952,345 shares of Common Stock outstanding.

     Issuance of Securities Not Registered under the Securities Act of 1933, as 
Amended

     The following unregistered securities were issued by the Company in 1997:

         (a) In January, 1997, the Company issued an aggregate of 589,439 shares
     of Common Stock in conversion of shares of Series 1 and Series 4
     Convertible Preferred Stock previously sold by the Company in 1996 private
     placement financing transactions under Regulation S. The Regulation S
     financing transactions were described in quarterly reports filed by the
     Company in 1996.

         (b) In May, 1997, the Company issued an aggregate of 24,326 shares of
     Common Stock to Avonwood Capital Corp. in lieu of payment of consulting
     fees in the amount of $60,000 and in consideration of the early termination
     of a consulting agreement.

         (c) In September, 1997, in connection with the Company's acquisition by
     merger of the shares of Automated Systems Development of Indiana, Inc.
     ("ASDI"), the Company issued a total of 785 shares of Series 5 Convertible
     Preferred Stock, having a liquidation preference of $1,000 per share and
     convertible into Common Stock at a ratio of one share of Common Stock for
     each $10.00 of liquidation value. The Series 5 Convertible Preferred shares
     were issued in payment of a portion of the purchase price paid for ASDI.

         (d) In September, 1997, the Company issued an aggregate of 15,000
     shares of Common Stock to nine former stockholders of Natcom in lieu of a
     payment of $48,000 due under the terms of the Company's September, 1995
     acquisition of Natcom.

         (e) In December, 1997, the Company issued a total of 1,200 shares of
     Series 6 Convertible Preferred Stock to two institutional investors in
     connection with a private placement financing. See "Recent Equity
     Financing" in Item 1, above.

   
     All of the securities described in paragraphs (b) through (e) above were
issued with standard restrictive legends, and stop transfer instructions were
filed with the Company's transfer agent in connection therewith. Such issuances
represented rivate transactions, and nounderwriter or public offering was
involved. By reason of the foregoing facts, the Company claims exemption for
such issuances as private transactions pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
    

                                      10
<PAGE>

   
     With respect to the issuances of shares of Common Stock upon conversion
of Series 1 and Series 4 Convertible Preferred Stock referred to in
paragraph (a) above, such shares were issued without restrictive legend 
pursuant to the provisions of Regulation S and after (i) the expiration of
holding periods required by Regulation S and (ii) the receipt of legal opinions
from attorneys for the purchasers of Series 1 and 4 Preferred Stock.
    



                                      11
<PAGE>

Item 6. Selected Financial Data

Consolidated Statement of Operations Data

<TABLE>
<CAPTION>
                                                         Company                              Predecessor Company
                                        --------------------------------------------      ----------------------------
                                          Year             Year             Year            January 1         Year
                                          Ended            Ended            Ended            1994 to          Ended 
                                        December 31     December 31       December 31      December 31      December 31
                                           1997             1997             1997             1994(1)          1993
                                        -----------     -----------        ----------      ------------      ----------
<S>                                     <C>             <C>               <C>               <C>              <C>
Net sales..........................     $51,235,126     $28,054,341        $8,769,599        6,411.975        7,462,184
Income (loss) from
   Continuing operations.......          (2,302,808)       (706,493)          203.332           97,943          225,343
   Discontinued operations.....          (7,133,152)       (378,895)           66,851          251,854          611,059
Income (loss) per share from
   Continuing operations......                (0.34)          (0.22)             0.07              N/A              N/A
   Discontinued operations...                 (0.95)          (0.11)             0.02              N/A              N/A
Pro forma net income (2)....                     N/A             N/A              N/A           58,825          135,633
Pro forms net income per share..                 N/A             N/A              N/A              N/A              N/A
Shares used in computing net
income (loss) per share...                7,481,307       3,527,053        2,927,170              N/A              N/A
</TABLE>


Consolidated Balance Sheet Data

<TABLE>
<CAPTION>
                                  December 31      December 31      December 31
                                     1997             1996             1995
                                  -----------      -----------      -----------    ----------      ----------
<S>                               <C>               <C>             <C>             <C>             <C>
Working capital (deficit)         $ (6,783,555)      $ 3,930,788     $(1,106,451)       516,965         765,762
Total assets                         18,934,967       22,822,892       11,313,831     5,988,568       5,936,352
Due to financial institutions         3,269.418        1.711,429        4,994,135     4,546,657       4,793,856
Long-Term Liabilities                 1,632,115        2,298,490          750,228
Stockholders' equity                  1,892,299        9.625,172        2,329,524       903,199         853,402
</TABLE>

---------
(1)      The Company was incorporated on September 1, 1994. The Company 
         purchased the net assets of the Predecessor Company on December 8, 
         1994 and commenced operations on that date.

(2)      Pro forma net income has been presented to show results of operations
         assuming the Predecessor Company filed its income tax return as a C
         corporation.

(3)      See Notes 2 and 20 of Notes to the Consolidated Financial Statements 
         for an explanation of the calculation of shares used in computing net
         income (loss) per share.

(4)      The Predecessor Company's continuing operations for 1994 and 1993 
         represent its non-aggregator activities.

                                      12
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and 
Results of Operation

     Background

     In December, 1994, Global acquired the assets and business of a predecessor
company. Effective September 1, 1995, pursuant to a registration statement filed
with the Securities and Exchange Commission, a public distribution of 850,000
shares of Global's Common Stock was made to shareholders of another publicly
held entity, as a result of which Global became a reporting public company.

     On September 28, 1995, the Company acquired Natcom, and, effective
September 1, 1996, the Company purchased the business now operated through
Global- InSync.

     Effective July 1, 1997, the Company discontinued its Nevcor aggregator
operations as a result of a decision by NEC, which accounted for more than 90%
of Nevcor's business, to cease distributions through the aggregator channel.

     Effective August 1, 1997, the Company discontinued its Speech Solutions
operations as a result of management's decision that the ratio of capital
requirements' to revenue for a software developer such as Speech Solutions was
incompatible with the overall focus of the Company and its subsidiaries.

     With respect to the Company's continuing operations, the following
discussion and analysis compares: (i) the operating results of the Company for
the year ended December 31, 1997 with the operating results of the Company for
1996 (which includes the operating results of Global InSync from September 1,
1996 to December 31, 1996); (ii) the Company's operating results for 1996 as
compared with the operating results of the Company for 1995 and; (iii) due to
discontinued operation of Nevcor, no comparison is possible with the operating
results of the Company for the year 1995 with the operating results of the
Company for the period from Global's inception on September 1, 1994 through
December 31, 1994. All comparison information reflects restatement of financials
as a result of the discontinued operations.

     Also included is a discussion and analysis of the Company's financial
condition and liquidity as of December 31, 1997. The following text should be
read in conjunction with the Company's Consolidated Financial Statements
contained in this report.

Results For The Year Ended December 31, 1997 As Compared With Results For the 
Year Ended December 31, 1996

     Net Sales

   
     Net Sales increased to $51,235,126 for the year ended 1997 from $28,054,341
for the year ended 1996, an 83% increase. The increase in net sales resulted
from the following circumstances. Global-InSync, the production company, was
purchased in October 1996, and the sales for the partial year were $13,985,710.
In 1997, there was a full year of business and the sales amounted to $24,910.892
or a $10,925, 182 increase. In addition, the implementation of the systems
integration business at Vircom TG resulted in an increase in sales of
$11,925,330. The purchase of ASDI as of July, 1997 added another $330,273 to 
the increase.
    

                                      13
<PAGE>

     Gross Profit

     As a result of increased sales, the Company's gross profit for 1997 rose to
$6,567,644 from $4,275,166 for 1996, an increase of $2,292,475. Overall gross
profit for the two years as a percentage of sales amounted to 12.8% in 1997 and
15.2% in 1996. The decrease in gross profit percentages is mainly as a result of
increased sales at the InSync subsidiary, which traditionally sells at lower
margins.

     Operating Expenses

   
     Operating expenses for 1997 rose significantly to $7,822,729 from 1996's
level of $5,202,193, a 50% increase. The increase was primarily due to the
inclusion of Global-InSync, the production company's expense of $2,970,889 for
twelve months in 1997 against three months or $903,119 in 1996 for an increase
of $2,067,770. The acquisition of ASDI added expenses of $326,908 and the
systems integration business, Vircom TG, added another $242,597.00.
    

     Other Expenses

     Other expenses rose to $1,557,852 for 1997 from $238,803 for 1996, a
$1,319,049 increase. The increase was primarily due to a reserve being carried
as a result of an indemnitor refusing to honor an indemnification agreement for
which the Company has agreed to act as secondary indemnitor. See discussion
under Item 3, "Legal proceedings."

     Provision for Income Tax Credits

     The 1997 benefit for income taxes was $510,129, compared with a benefit 
of $459,337 for 1996.  The deferred tax benefits are based on deferred tax
assets.

     Income (Loss) from Continuing and Discontinued Operations

   
For 1997 the Company generated a loss of ($2,302,808) after operating and other
expenses, compared to loss of ($706,493) after operating and other expenses in
1996. The increase in the loss was caused primarily by a decrease in the gross
profit margins and an increase in expenses as mentioned above. In 1997, the
Company discontinued the Nevcor and Speech Solutions businesses. Of the
Company's aggregate 1997 loss of $9,435,960, the loss from discontinued
businesses was $7,133,152. The loss from these discontinued businesses was
$378,895 in 1996 and $111,418 in 1995. The losses of the discontinued businesses
as reflected in the income statement are the actual losses of the businesses
that were eliminated. No material disposal expenditure charges such as loss or
sale of fixed assets, severance pay or lease termination charges were incurred.
The Nevcor business was discontinued because the main supplier, NEC, decided to
change its method of distribution. This left a busines with high costs, and no
sales.
    


Net Income (Loss) Per Share

     As a result of the factors discussed above, the net loss for 1997 was
($9,435,960) and the net loss per share was ($1.29), as compared to a net loss
of ($1,085,388) and a net loss per share of ($.33) in 1996. The per share
calculation is based on the weighted average number of shares outstanding.

                                      14
<PAGE>

Year Ended December 31, 1996 as Compared With Year Ended December 31, 1995 
    (Continuing Operations)

Net Sales

     Net sales increased to $28,054,341 for the year ended 1996 from $8,769,599
for the year ended 1995, a 220% increase. Net sales of InSync from the effective
date of its acquisition on September 1, 1996 to December 31, 1996 were
$13,985,710. Net sales of NATCOM for the full 1996 year were $5,315,711 compared
to $2,356,670 from the date of its acquisition on September 28, 1995 to December
31, 1995. The increase in Global's aggregate net sales for 1996 were primarily
due to the InSync and NATCOM acquisitions.

Gross Profit

     The Company's gross profit for 1996 rose to $4,275,166 from $680,215 for
1995, with the gain of $3,594,951 representing contributions from a full year of
operations of NATCOM and four months of operations of InSync in 1996. Overall
gross profit for the two years as a percentage of net sales amounted to 15.2% in
1996 and 7.7% in 1995, although these amounts are not representative of a
comparison based on consistent full-year results because of the timing of the
NATCOM and InSync acquisitions.

Operating Expenses

     Operating expenses for 1996 rose substantially, to $5,202,193 from 1995's
level of $720,969, a 622% increase. Of the $4,481,224 increase, $2,338,916
represents incremental operating expense resulting from the inclusion of a full
year of operations of NATCOM and four months of operations of InSync in 1996,
and the remaining $2,142,308 represents additional investment in sales,
marketing and administrative personnel, along with expenditures in integrating
acquired operations.

Other Expenses

     Other expenses, principally interest expense, rose to $238,803 for 1996
from other income of $13,778 for 1995, or a $252,581 increase. The increase in
1996 interest expense was primarily due to higher costs associated with
short-term bridge loans earlier in the year, as well as to an increase in
indebtedness to the Company's factor and financial institution because of higher
operating levels.

     Income (Loss) Before Provision for Income Tax Credits

     For 1996, the Company generated a loss of ($1,165,830) after operating and
other expenses, compared to a loss before tax credits of ($26,976) in 1995, as
the gains in gross profit from the full-year of operations of NATCOM and from
the four-month contribution of InSync were more than offset by the increases in
such expenses as noted above.

     Provision for Income Tax Credits

     The 1996  benefit for income taxes was $459,337  compared  with a benefit 
of $230,308 for 1995.  The deferred tax benefits are based on deferred tax
assets which are considered realizable.

     Net Income (Loss) Per Share

     As a result of the factors discussed above, the net loss for 1996 was
($1,085,388) and net loss per 

                                      15
<PAGE>

share was ($.33), as compared to net income of
$270,183 and net income per share of $.09 for 1995. The per share calculation is
based on the weighted average number of shares outstanding.

Financial Condition and Liquidity

     The Company's cash balance at year-end was $138,469 and it had a working
capital deficit of ($6,783,555), compared to cash of $1,516,072 and working
capital of $3,930,788 at the end of 1996. Cash used in operations was
$2,970,785, compared to a cash flow of $1,048,307 in 1996.

   
The company had a working capital deficit of $6,784,000 as of December 31, 1997,
due to a loss of $9,435,960 during 1997. Accounts Payable increased
significantly at year end, because the operating loss restricted the Company's
ability to make current payments to its vendors. The main sources of financing
during 1997 were the sale of preferred stock and additional borrowings from
financial institutions.
    

     The Company has a factoring agreement under which it factors trade
receivables. The maximum aggregate amount available under the factoring facility
is $9,000,000, receivables are handled on a recourse basis. The Company's
obligations under the factoring arrangement are personally guaranteed by two of
the Company's directors.

     Since inception, the Company has been actively engaged in making
acquisitions of related businesses. Under existing acquisition agreements, the
Company has a variety of commitments, as described below.

     In accordance with the agreements relating to the acquisition of NEVCOR,
the Company is required to pay a contingent payment based upon 1/2% of NEVCOR's
net sales which was due quarterly during 1996, and monthly after January 1, 1997
thereafter. The Company believes that no payments are required subsequent to the
discontinuance of NEVCOR.

     The acquisition and related employment agreements pursuant to which the
Company acquired Natcom in 1995 required the Company to make various installment
payments. Effective as of December 31, 1997, the Company negotiated the
termination of such agreements and accepted the resignation of Natcom's
President. The termination arrangements provide for a total payment to the
former Natcom shareholders of $177,000, which payment may be made by the
issuance of an aggregate of 85,500 shares of the Company's Common Stock. The
Company may also issue an aggregate of 150,000 shares of Common Stock to certain
former Natcom officers in consideration of such officer's entering into binding
non-compete agreements. The non-compete shares vest over a two-year period and
the non-competition agreements expire December 31, 1999. After considering and
evaluating a possible discontinuance of certain Natcom operations, the Company
has determined that Natcom's operations should not be discontinued and should
instead be organized and consolidated in the Virom TG division.

     Future commitments for the Company's acquisition of the InSync business
include a promissory note, guaranteed by the Company, for $1,486,084, (the
"First Note") bearing interest at 9% per annum and a second promissory note,
guaranteed by the Company, for $470,000 ("the Second Note"). Under the terms of
the First Note, interest starts to accrue on March 16, 1997. Payments under the
First Note are to be made 45 days after the close of each fiscal quarter,
commencing with the quarter ended June 30, 1997, in the amount of 2% of InSync's
net sales. If, at the end of each subsequent 12-month period beginning with the
12 months ending June 30, 1998, the sum of the quarterly Note payments is less
than the interest accrued over the previous four quarters, plus 10% of the
original principal amount, an adjustment payment will be made to cover any
shortfall. The Second Note contains substantially the same terms as the First
Note, except that payments do not 

                                      16
<PAGE>

commence until the earlier of December 31, 2001, or upon payment in full of 
the First Note.

   
     The Company experienced a loss of approximately $9,435,960, of which
$7,133,152 was from discontinued operations. The Company has a working capital
deficit of $6,784,000 at December 31, 1997. These matters, among others, have
caused the Company's auditors to doubt the Company's ability to continue as a
going concern (see Note 1 to Financial Statement). Subsequent to the going
concern opinion, the Company has restructured its operations including
discontinuing unprofitable businesses and reducing overhead in the others.
Overhead reduction measures include: (a) the consolidation of the Natcom
operations under Vircom TG; (b) the closing of two of the Company's offices; (c)
a reduction in the Company's workforce of approximately 40 people; (d) the
relocation of the Vircom TG subsidiary to smaller and more cost effective space
in Exton, PA: and (e) the election of new health and life insurance benefits
which will result in significant savings to the Company. In addition, the
Company has raised additional capital through the sale of preferred stock and is
attempting to raise capital through a pending offering. In order to increase its
working capital and to sustain present operating levels, the Company will
require financing in addition to recent equity financing (see "Recent Equity
Financing" above). The Company also anticipates converting debts to several
creditors to an equity position. No assurance can be given that such financing
will be available on commercially acceptable terms. All of the above represent
the Company's efforts to achieve profitable operations and continuation of the
business, which is dependent on the Company's ability to achieve sufficient cash
flow and to meet its current obligations.
    

Inflation.

     The impact of inflation on the Company's operations has not been
significant to date. There can be no assurance that a high rate of inflation in
the future would not have an adverse effect on the Company's operations.

Item 8.   Financial Statements and Supplementary Data

The response to this item is submitted as a separate section of this report
commencing on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and 
          Financial Disclosure.

None.

                                    PART III

     Pursuant to General Instruction G-3, and in response 'to the items
contained in this Part III, the Registrant is incorporating by reference the
information which will be included in Registrant's definitive proxy statement to
be filed within 120 days after December 31, 1997.

                                     PART IV

Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.

     (a) The following documents are filed as a part of this report:

         1.       Financial Statements
                  The response to this portion of Item 14 is submitted as a
                  separate section of this report commencing on page F-1.

                                      17
<PAGE>

         2.       Financial Statements Schedules
                  The Financial Statement Schedules are appended following the
                  Financial Statements.

         3.       Exhibits

     The following is a description of exhibits required to be filed with this
report (item numbers are those assigned in the Exhibits Table of Item 601,
Regulation S-K), and the incorporation-by-reference codes following each item
are explained at the end of the listing:


(3.1)    Restated Articles of Incorporation and Certificate of Change.(*)

(3.2)    Amended and Restated By-Laws.(*)

(3.3)    Form of Certificate of Designation for Series 6 Convertible 
         Preferred Stock.

(3.4)    Form of Certificate of Designation for Series 7 Convertible 
         Preferred Stock.

(3.5)    Form of Certificate of Designation for Series 8 Convertible 
         Preferred Stock.

(4.1)    Form of Common Stock Certificate.(*)

(4.2)    Escrow Agreement, dated as of February 24, 1995, among Communications
         and Entertainment Corp., Continental Stock Transfer & Trust Company 
         and Global Intellicom, Inc. ("Global")(*)

(4.3)    Lock-Up Agreement dated May 26, 1995.(*)

(4.4)    Form of Regulation S Securities Subscription Agreement, pursuant to 
         which the Company sold 330,000 shares of Series 1 Convertible 
         Preferred Stock.(++)

(4.5)    Form of Offshore Securities Subscription Agreement, pursuant to which
         the sold 825 shares of Series 2 Convertible Preferred Stock.( ++)

(4.6)    Form of Regulation S Securities Subscription Agreement, pursuant to 
         which the Company sold 25,000 shares of Series 4 Convertible Preferred
         Stock.( ++)

(5)      Form of Opinion of Goodkind Labaton Rudoff & Sucharow LLP.(**)

(10.1)   Asset Purchase Agreement, dated as of October 28, 1994, between 
         Tech Acquisition Corp. and AMCom Business Centers Corp. (*)

(10.2)   Assignment and Assumption dated as of December 8, 1994 between Tech 
         Acquisition Corp. and Global.(*)

(10.3)   Global Stock Option Plan.(*)

(10.4)   Additional Benefit Plan of Global.(*)

(10.5)   Employment Agreement, dated as of January 1, 1995, between Global and 
         Anthony R. Cucchi.(*)


                                      18
<PAGE>

(10.6)   Loan and Security Agreement, dated December 8, 1994, among Finova 
         Capital Corporation ("Financial Institution") (f/k/a Greyhound 
         Financial Corporation) and Global's subsidiaries.(*)

(10.7)   First Amendment to Loan and Security Agreement dated May 26, 1995, 
         among the Financial Institution, Global's subsidiaries and certain 
         guarantors.(*)

(10.8)   Floorplan Credit Line Replacement Note, dated May 26, 1995, payable 
         to the Financial Institution by Global's subsidiaries.(*)

(10.9)   Letter Agreement dated May 26, 1995 between Vircom, Inc. ("VIRCOM") 
         and Century Business Credit Corporation. ("Century")(*)

(10.10)  Letter Agreement, dated May 26, 1995, between AMCom Business Centers 
         Corp. ("AMCOM") and Century.(*)

(10.11)  Corporate Guaranty Unlimited executed by Global to Century, dated May 
         26, 1995, with respect to AMCOM.(*)

(10.12)  Intercreditor Agreement, dated May 26, 1995, among AMCOM, VIRCOM, the 
         Financial Institution and Century.(*)

(10.13)  Distribution Agreement, dated April 11, 1991, between Claren, Inc. 
         and Texas Instruments, Inc. and Assignment Agreement from Claren, 
         Inc. to AMCOM.(*)

(10.14)  Nectech Authorized Major Reseller Agreement dated April 12, 1990.(*)

(10.15)  Dealer Agreement, dated December 1995, between AT&T Global 
         Information Solutions (f/k/a NCR Corporation) and AMCOM.(*)

(10.16)  Lease Agreement, dated March 20, 1995, between AMCOM and Warehouse 
         Associates for Global's West Chester, Pennsylvania facilities.(*)

(10.17)  Stock Purchase Agreement dated September 28, 1995 by and between 
         Global and the Sellers named therein(***)

(10.18)  Warrant  Agreement dated March 20, 1996 by and between Global and N. 
         Norman Muller, Howard Maidenbaum, Anthony R. Cucchi, Thomas W. Smith, 
         Wayne M. Rogers and David A. Mortman (each a Director)(++++)

(10.19)  Letter Agreement dated as of January 1, 1995 between Global and Perry 
         Schemer.(++++)

(10.20)  Letter Agreement dated January 1, 1996 between Global and Wayne M. 
         Rogers.(++++)

(10.21)  Warrant Agreement dated March 5, 1996 by and between Global and 
         Pacific Consulting Group.(++++)

(10.22)  Warrant Agreement dated March 20, 1996 by and between Global and 
         Wharton Associates.(++++)

(10.23)  Warrant Agreement dated March 5, 1996 by and between Global and 
         MWW/Strategic Communications, Inc.(++++)

                                      19
<PAGE>

(10.24)  Letter Agreement dated as March 27, 1996 by and between Global, AMCOM 
         and Warehouse Associates. (++++)

(10.25)  Amendment Agreement dated as of March 28, 1996 by and between Global 
         and the Sellers named therein. (++++)

(10.26)  Employment Agreement dated September 28, 1995. between National 
         Computer Resources, Inc. ("NATCOM"), Global as guarantor and 
         Frederick Smith. (++++)

(10.27)  Employment Agreement dated September 28, 1995 between NATCOM, Global 
         as guarantor and Richard Dilts. (++++)

(10.28)  Consulting Agreement dated September 28, 1995 between NATCOM, Global 
         as guarantor and Stephen T. Barry. (++++)

(10.29)  Letter Agreement dated December 31, 1995 by and between Global and 
         Messrs. Maidenbaum and Muller. (++++)

(10.30)  Warrant Agreement dated March 20, 1996 by and between Global and 
         Perry Scheer. (++++)

(10.31)  Settlement Agreement and Mutual Release dated March 28, 1996 by and 
         between Grove Avenue Corp. and AMCOM, VIRCOM and Global. (++++)

(10.32)  Assignment & Assumption Agreement dated December 8, 1994 between Tech 
         Acquisition Corp. and AMCom Business Centers Corp.(**)

(10.33)  Employment Agreement, dated January 1, 1994 between Thomas Vetterani 
         and AMCom.(**)

(10.34)  Stock Purchase Agreement by and between Global Intellicom, Inc. and 
         the Sellers named therein.(***)

(10.35)  Asset Purchase Agreement dated as of September 16, 1996, pursuant to 
         which the Company's wholly owned subsidiary Global-InSync, Inc. 
         purchased substantially all of the assets of ManTech Solutions 
         Corporation ("MSOE"), by and between the Company, InSync, MSOL, and 
         MSOL's parent, ManTech International Corporation ("ManTech").(+)

(10.36)  Asset Purchase Agreement dated as of October 18, 1996 by and between 
         Pro Notes Acquisition Corporation and the Company on the one hand and 
         Pro Notes Inc. and Alan Costilo on the other, by which the Company
         purchased the assets of Pro Notes, Inc.( ++)

(10.37)  Agreement dated January 22, 1997 between Global and Century Business 
         Credit Corporation.(++++)

(10.38)  Promissory Note dated February 1, 1996 between Global as borrower and 
         Triangle Bridge Group, LE.(++++)

(10.39)  Extension Agreement dated November 22, 1996 between Global and 
         Triangle Bridge Group, LP.(++++)

(10.40)  Letter Agreement dated February 16, 1996 between Global and Goodkind 
         Labaton Rudoff & Sucharow LLP.(++++)

                                      20
<PAGE>

(10.41)  Stock Purchase Agreement dated February 16, 1996 between Goodkind 
         Labaton Rudoff & Sucharow LLP and various Purchasers.(++++)

(10.42)  Letter Agreement dated August 21, 1996 between Global and World 
         Capital Funding, Inc.(++++)

(10.43)  Lead/Corporate Relations Agreement dated August 15, 1996 between 
         Global and Corporate Relations Group, Inc.(++++)

(11)     Statement re: Computation of Per Share Earnings, attached as Exhibit 
         11 to the Financial Statements.

(21)     List of the Company's Subsidiaries.

(27)     Financial Data Schedule

     (b) Reports on Form 8-K

     On October 1, 1996, the Company filed a current report on Form 8-K,
describing the Company's purchase of substantially all the assets of ManTech
Solutions Corporation, followed by an amendment containing the required
financial statements.

     (c) See (a)(3) above.

     (d) See Schedule II included at the end of the Financial Statements.

-------------
 (*)     Designates document incorporated herein by reference to Global's 
         Registration Statement on Form S-I, File No. 33-93098.

 (**)    Designates document incorporated by reference to Amendment No. 1 to 
         Global's Registration Statement on Form S-l, File No. 33-93098.

 (***)   Designates document incorporated herein by reference to Global's Report
         on Form 8-K dated October 12, 1995, File No. 0-26684, as amended by
         Amendment No.1 to Report on Form 8-K dated December 8, 1995.

 (+)     Designates document incorporated herein by reference to Global's 
         Report on Form 8-K dated September 16, 1996, File No. 0-26684.

 (++)    Designates document incorporated herein by reference to Global's 
         Report on Form 10-Q dated June 30, 1996, File No. 0-26684.

 (++)    Designates document incorporated herein by reference to Global's 
         Report on Form 10-Q dated September 30, 1996, File No. 0-26684.

 (++++)  Designates document incorporated herein by reference to Global's Report
         on Form 10-K dated March 30, 1996.

 (++++)  Designates document incorporated herein by reference to Global's Report
         on Form 10-K dated March 31, 1997.

                                      21
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                           GLOBAL INTELLICOM, INC.
                                           Dated: April    , 1998

                                           By: /s/ N. NORMAN MULLER
                                               --------------------
                                                 N. Norman Muller
                                             (Chief Executive Officer)

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Maidenbaum and David Mortman his true and
lawful attorney-in-fact, each acting alone, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments to this report, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue thereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

    Signatures                      Title                            Date
    ----------                      -----                            ----
 /s/ N. NORMAN MULLER   Chairman of the Board and Chief           April , 1998
 --------------------   Executive Officer (Class III Director)
 N. Norman Muller               

 /s/ DAVID A. MORTMAN   President and Chief Operating Officer     April , 1998 
 --------------------   and Class I Director
 David A. Mortman               

 /s/ HOWARD MAIDENBAUM  Executive Vice President and Class III    April , 1998
 ---------------------  Director
 Howard Maidenbaum              

 /s/ THOMAS W. SMITH    Class I Director                          April , 1998
 -------------------
 Thomas W. Smith

 /s/ WAYNE M. ROGERS    Class II Director                         April , 1998
 -------------------
 Wayne M. Rogers

 /s/ ROBERT L. OLSON    Vice President Finance                    April , 1998
 -------------------    Chief Accounting Officer
 Robert L. Olson             


                                      22




<PAGE>
                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                 REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

                          DECEMBER 31, 1997 AND 1996


                                     F-1

<PAGE>
                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                 REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

                          DECEMBER 31, 1997 AND 1996


                                   CONTENTS

                                                                        PAGE
                                                                        ----
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                      F-3

CONSOLIDATED BALANCE SHEETS                                          F-4 - F-5

CONSOLIDATED STATEMENTS OF OPERATIONS                                   F-6

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                      F-7 - F-8

CONSOLIDATED STATEMENTS OF CASH FLOWS                                F-9 - F-10

   
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                          F-11 - F-47
    


                                     F-2

<PAGE>
              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Board of Directors
Global Intellicom, Inc.
New York, New York

We have audited the accompanying consolidated balance sheets of Global
Intellicom, Inc. and Subsidiaries (the "Company") as of December 31, 1997 and
1996, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the years ended December 31, 1997, 1996
and 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements of the Company referred to
above present fairly, in all material respects, the financial position as of
December 31, 1997 and 1996 and the results of their operations and their cash
flows for the periods presented in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements as at and for the year ended
December 31, 1997 have been prepared assuming that the Company will continue as
a going concern. As discussed in Note 1, the Company has suffered recurring
losses from operations and has a working capital deficiency. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plan in regard to these matters are also described in Note
1. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

We have also audited Exhibit 11 of the Company for the years ended December 31,
1997 and 1996 included in the 1997 annual report of the Company on Form 10-K. In
our opinion, Exhibit 11 presents fairly the information required to be set forth
therein.



                                                MILLER, ELLIN & COMPANY, LLP
                                                CERTIFIED PUBLIC ACCOUNTANTS
April 13, 1998
New York, New York

                                     F-3

<PAGE>
                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS


                                    ASSETS
                                      
                                                             DECEMBER 31,
                                                       -----------------------
                                                         1997        1996
                                                       ----------- -----------
CURRENT ASSETS:
   Cash                                                $   138,469 $ 1,516,072
   Accounts receivable - trade, less allowance for
     doubtful accounts of $24,392 and $40,000,
     respectively                                        3,684,106   4,337,942
   Accounts receivable - non-trade                         268,815     262,688
   Other receivables                                       206,770     250,409
   Inventories                                           3,001,519   3,275,166
   Notes receivable - officers and stockholders                 -      457,979
   Note and loans receivable - other                        40,113      61,788
   Prepaid expenses and other current assets               624,322     148,797
   Deferred income taxes                                   630,000     690,476
   Current assets of discontinued operations                32,884   3,828,701
                                                       ----------- -----------
              Total current assets                       8,626,998  14,830,018
                                                       ----------- -----------

PROPERTY AND EQUIPMENT - net of accumulated
   depreciation and amortization                         1,326,058     723,999
                                                       ----------- -----------

INTANGIBLE ASSETS - net of accumulated
   amortization                                          5,542,385   3,281,440
                                                       ----------- -----------

OTHER ASSETS:
   Deferred income taxes                                 2,645,000     493,832
   Deferred costs                                          707,106      25,465
   Other assets                                             34,058      11,113
   Other assets of discontinued operations                  53,362   3,395,014
   Software development costs                                   -       62,011
                                                       ----------- -----------
                                                         3,439,526   3,987,435
                                                       ----------- -----------
                                                       $18,934,967 $22,822,892
                                                       =========== ===========


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

                                     F-4
<PAGE>

                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS
                                 (CONTINUED)

                     LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                      
                                                                                            DECEMBER 31,
                                                                                    ----------------------------
                                                                                         1997          1996
                                                                                    -------------  -------------
<S>                                                                                 <C>            <C>
CURRENT LIABILITIES:
   Due to financial institution                                                     $   3,269,418  $   1,711,429
   Due to factor                                                                          884,227        236,432
   Note payable - bank                                                                     50,000           -
   Accounts payable - trade                                                             7,883,413      3,837,898
   Accounts and note payable - related party                                                 -            81,778
   Customer deposits                                                                       21,578        881,100
   Notes payable - officers and stockholders                                              132,677        216,076
   Acquisition indebtedness - current portion                                             581,823        693,942
   Capital lease obligations - current portion                                            147,615          5,182
   Income taxes payable                                                                   238,534        240,901
   Accrued expenses and other current liabilities                                       1,976,510      1,307,016
   Current liabilities of discontinued operations                                         224,758      3,398,905
                                                                                    -------------  -------------
              Total current liabilities                                                15,410,553     10,899,230
                                                                                    -------------  -------------

LONG-TERM LIABILITIES:
   Acquisition indebtedness - net of current portion                                    1,545,261      2,109,886
   Capital lease obligations                                                               86,854         11,831
   Other liabilities of discontinued operations                                              -           176,773
                                                                                    -------------  -------------
                                                                                        1,632,115      2,298,490
                                                                                    -------------  -------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock - $.01 par value (liquidating value ranging from $10 to
     $1,000 per share amounting to $5,546,250 and $4,386,250, respectively
     including dividends in arrears):
     Authorized                                                                      - 10,000,000 shares
     Issued and outstanding    -      351,985 shares - 1997
                               -      378,500 shares - 1996                                 3,520          3,785
   Common stock - $.01 par value:
     Authorized                -   20,000,000 shares
     Issued                    -    7,497,345 shares - 1997
                               -    6,880,830 shares - 1996                                74,973         68,808
   Common stock to be issued                                                              417,188         95,873
   Additional paid-in capital                                                          12,003,524     10,438,979
   Accumulated deficit                                                                (10,598,022)      (973,389)
   Treasury stock, at cost                                                                 (8,884)        (8,884)
                                                                                    -------------  -------------
              Total stockholders' equity                                                1,892,299      9,625,172
                                                                                    -------------  -------------

                                                                                    $  18,934,967  $  22,822,892
                                                                                    =============  =============
</TABLE>


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

                                     F-5
<PAGE>
                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                        YEARS ENDED DECEMBER 31,
                                                       ---------------------------------------------------------
                                                            1997                  1996                  1995
                                                       --------------        -------------         -------------

<S>                                                    <C>                   <C>                   <C>          
NET SALES                                              $   51,235,126        $  28,054,341         $   8,769,599

COST OF GOODS SOLD                                         44,667,482           23,779,175             8,089,384
                                                       --------------        -------------         -------------

GROSS PROFIT                                                6,567,644            4,275,166               680,215
                                                       --------------        -------------         -------------

OPERATING EXPENSES:
   Selling, shipping and general and
     administrative expenses                                7,261,496            4,966,644               682,413
   Depreciation and amortization                              250,231               78,465                16,965
   Amortization of intangibles                                311,002              157,084                21,591
                                                       --------------        -------------         -------------

                                                            7,822,729            5,202,193               720,969
                                                       --------------        -------------         -------------

OPERATING LOSS                                             (1,255,085)            (927,027)              (40,754)

OTHER INCOME (EXPENSES) (includes interest
   expense to related parties of $12,091,
   $34,391 and $-0-, respectively                          (1,557,852)            (238,803)               13,778
                                                       --------------        -------------         -------------

LOSS BEFORE PROVISION
   FOR INCOME TAX CREDITS                                  (2,812,937)          (1,165,830)              (26,976)

PROVISION FOR INCOME TAX
   CREDITS                                                   (510,129)            (459,337)             (230,308)
                                                       --------------        -------------         -------------

INCOME (LOSS) FROM
   CONTINUING OPERATIONS                                   (2,302,808)            (706,493)              203,332

DISCONTINUED OPERATIONS:
   Income (loss) from discontinued operations,
     net of income taxes (tax benefits) of
     $(1,580,563), $(247,202) and $44,567                  (7,133,152)            (378,895)               66,851
                                                       --------------        -------------         -------------

NET INCOME (LOSS)                                      $   (9,435,960)       $  (1,085,388)        $     270,183
                                                       ==============        =============         =============

BASIC INCOME (LOSS) PER
   COMMON SHARE:
     Income (loss) from continuing operations          $         (.34)       $        (.22)        $         .07
     Discontinued operations                                     (.95)                (.11)                  .02
                                                       --------------        -------------         -------------
                                                       $        (1.29)       $        (.33)        $         .09
                                                       ==============        =============         =============

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                                7,481,307            3,527,053             2,927,170
                                                            =========            =========             =========

DIVIDENDS                                                    $188,673                 None                  None
                                                             ========                 ====                  ====

</TABLE>


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

                                     F-6
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                       THREE YEARS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
                                                                                                                   COMMON
                                                                 PREFERRED STOCK             COMMON STOCK           STOCK  
                                                               --------------------     ---------------------       TO BE
STOCKHOLDERS'                                                   SHARES       AMOUNT      SHARES       AMOUNT        ISSUED
                                                               -------       ------     ---------     -------      --------
<S>                                                            <C>           <C>        <C>           <C>          <C>  
BALANCE AT DECEMBER 31, 1994                                      -          $ -        5,000,000     $50,000      $   -
     Reverse stock split                                          -            -       (2,500,000)    (25,000)         -
     Capital contributions                                        -            -          643,203       6,432          -
     Deferred offering costs in connection
       with registration of common stock                          -            -            -            -             -
     Common stock to be issued for services
       rendered or to be rendered                                 -            -            -            -          181,753
     Repurchase of fractional shares                              -            -            -            -             -
     Net income for the year ended December 31, 1995              -            -            -            -             -
                                                               -------       ------     ---------     -------      --------

BALANCE AT DECEMBER 31, 1995                                      -            -        3,143,203      31,432       181,753
     Sale of securities under Regulation S                     355,825        3,558       140,000       1,400          -
     Offering costs in connection with sale of securities         -            -            -            -             -
     Preferred and common stock issued in connection with
       acquisition of net assets of ManTech Solutions Corp.    350,000        3,500        72,001         720          -
     Common stock issued for services rendered                    -            -           69,504         695       (45,000)
     Common stock to be issued for services rendered              -            -            -            -           95,873
     Reversal of shares authorized in 1995
       for services rendered                                      -            -            -            -         (136,753)
     Conversion of preferred stock into common stock          (327,325)      (3,273)    3,456,122      34,561          -
     Net loss for the year ended December 31, 1996                -            -            -            -             -
                                                               -------       ------     ---------     -------      --------

BALANCE AT DECEMBER 31, 1996                                   378,500        3,785     6,880,830      68,808        95,873

  Sale of securities                                             1,200           12         -            -             -   
  Offering costs in connection with sale of securities            -            -            -            -             -
  Preferred stock issued in connection with merger of
     Automated Systems Development of Indiana, Inc.                785            8         -            -             -
  Common stock issued for services rendered                       -            -           39,326         393       (95,873)
  Common stock to be issued for services rendered                 -            -            -            -          417,188
  Conversion of preferred stock into common stock              (28,500)        (285)      589,439       5,894          -
  Other adjustments                                               -            -          (12,250)       (122)         -   
  Dividends                                                       -            -            -            -             -   
  Net loss for year ended December 31, 1997                       -            -            -            -             -   
                                                               -------       ------     ---------     -------      --------

BALANCE AT DECEMBER 31, 1997                                   351,985       $3,520     7,497,345     $74,973      $417,188
                                                               =======       ======     =========     =======      ========
</TABLE>

<TABLE>
<CAPTION>
                                                                                    RETAINED
                                                                    ADDITIONAL      EARNINGS                      TOTAL
                                                                     PAID-IN      (ACCUMULATED     TREASURY   STOCKHOLDERS'
STOCKHOLDERS'                                                        CAPITAL        DEFICIT)        STOCK        EQUITY
                                                                   -----------    ------------     -------     ----------
<S>                                                                 <C>           <C>              <C>         <C>       
BALANCE AT DECEMBER 31, 1994                                        $1,850,000    $   (158,184)    $  -        $1,741,816
     Reverse stock split                                                25,000           -            -              -
     Capital contributions                                             337,068           -            -           343,500
     Deferred offering costs in connection
       with registration of common stock                              (198,844)          -            -          (198,844)
     Common stock to be issued for services
       rendered or to be rendered                                       -                -            -           181,753
     Repurchase of fractional shares                                    -                -          (8,884)        (8,884)
     Net income for the year ended December 31, 1995                    -              270,183        -           270,183
                                                                   -----------    ------------     -------     ----------

BALANCE AT DECEMBER 31, 1995                                         2,013,224         111,999      (8,884)     2,329,524
     Sale of securities under Regulation S                           6,966,542           -            -         6,971,500
     Offering costs in connection with sale of securities           (2,677,371)          -            -        (2,677,371)
     Preferred and common stock issued in connection with
       acquisition of net assets of ManTech Solutions Corp.          3,900,780           -            -         3,905,000
     Common stock issued for services rendered                         267,092           -            -           222,787
     Common stock to be issued for services rendered                    -                -            -            95,873
     Reversal of shares authorized in 1995
       for services rendered                                            -                -            -          (136,753)
     Conversion of preferred stock into common stock                   (31,288)          -            -             -
     Net loss for the year ended December 31, 1996                      -           (1,085,388)       -        (1,085,388)
                                                                   -----------    ------------     -------     ----------

BALANCE AT DECEMBER 31, 1996                                        10,438,979        (973,389)     (8,884)     9,625,172

  Sale of securities                                                 1,199,988           -            -         1,200,000
  Offering costs in connection with sale of securities                (510,428)          -            -          (510,428)
  Preferred stock issued in connection with merger of
     Automated Systems Development of Indiana, Inc.                    784,992           -            -           785,000
  Common stock issued for services rendered                             95,480           -            -             -
  Common stock to be issued for services rendered                       -                -            -           417,188
  Conversion of preferred stock into common stock                       (5,609)          -            -             -
  Other adjustments                                                        122           -            -             -
  Dividends                                                             -             (188,673)       -          (188,673)
  Net loss for year ended December 31, 1997                             -           (9,435,960)       -        (9,435,960)
                                                                   -----------    ------------     -------     ----------

BALANCE AT DECEMBER 31, 1997                                       $12,323,939    $(10,598,022)    $(8,884)    $1,892,299
                                                                   ===========    ============     =======     ==========
</TABLE>


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

                                     F-7
<PAGE>
                  GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                YEARS ENDED DECEMBER 31,
                                                                      ---------------------------------------------
                                                                         1997            1996              1995
                                                                      -----------     -----------       -----------
<S>                                                                   <C>             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                  $(9,435,960)    $(1,085,388)      $   270,183
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) continuing operations:
       Loss (income) from discontinued operations                       7,133,152         378,895          (203,332)
       Depreciation and amortization                                      250,231          78,465            16,965
       Amortization of intangibles                                        311,002         157,084            21,591
       Deferred income taxes                                             (510,129)       (735,331)         (180,000)
       Imputed interest on ManTech acquisition                             29,340          58,683              -
       Write-off of intangible assets                                     895,388            -                 -
       Reversal of shares authorized                                         -           (136,753)             -
       Loss on disposition of property and equipment                         -               -                5,983
       Changes in assets and liabilities:
         Accounts receivable - trade                                      703,520      (1,037,342)          294,391
         Accounts receivable - non-trade                                   (6,127)       (252,140)          (10,548)
         Inventories                                                      273,647        (222,396)          (40,865)
         Other receivables                                                 43,639        (157,471)          (92,938)
         Notes and loan receivable - other                                 21,675         (50,056)          (11,148)
         Prepaid expenses and other                                      (358,336)        (63,403)          (50,136)
         Other assets                                                     (22,554)         37,023               220
         Accounts payable - trade                                       4,014,805       2,020,383          (354,830)
         Accounts and note payable - related party                        (81,778)       (363,922)          (66,392)
         Customer deposits                                               (859,522)        797,303              -
         Income taxes payable                                              (2,367)         98,398           142,503
         Accrued expenses and other                                       653,378         464,072           264,340
                                                                      -----------     -----------       -----------

NET CASH PROVIDED BY (USED IN)
   CONTINUING OPERATIONS                                                3,053,004         (13,896)            5,987
                                                                      -----------     -----------       -----------

   Net cash provided by (used in) discontinued operations:
     Income (loss) from discontinued operations                        (7,133,152)       (378,895)          203,332
     Depreciation and amortization                                         82,549         182,914            91,456
     Amortization of intangibles                                          144,301         144,786           187,763
     Deferred income taxes                                             (1,580,563)
     Discontinued operations - net                                      2,463,076       1,113,398           508,688
                                                                      -----------     -----------       -----------
                                                                       (6,023,789)      1,062,203           991,239
                                                                      -----------     -----------       -----------

NET CASH PROVIDED BY (USED IN)
   OPERATING ACTIVITIES                                                (2,970,785)      1,048,307           997,226
                                                                      -----------     -----------       -----------
</TABLE>


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

                                     F-8
<PAGE>
                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                YEARS ENDED DECEMBER 31,
                                                                      ---------------------------------------------
                                                                         1997            1996              1995
                                                                      -----------     -----------       -----------
<S>                                                                   <C>             <C>               <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
   Receipt of cash from asset purchase                                $    11,732     $      -          $   482,012
   Purchases of assets pursuant to agreement                              (20,000)           -             (100,000)
   Reductions in note receivable - officer and stockholder                457,979         177,601              -
   Other intangibles                                                     (838,411)       (333,712)         (484,649)
   Purchases of property and equipment                                   (407,916)       (144,000)         (182,796)
   Software development costs                                              62,011         (62,011)             -
   Other deferred costs                                                  (681,641)        (25,465)          (29,103)
   Discontinued operations - net                                          510,865      (1,047,124)         (743,899)
   Loans to stockholders                                                     -           (215,900)         (419,680)
                                                                      -----------     -----------       -----------

NET CASH USED IN INVESTING ACTIVITIES                                    (905,381)     (1,650,611)       (1,478,115)
                                                                      -----------     -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Capital contributions                                                1,200,000       6,971,500           368,500
   Deferred offering costs                                               (510,428)     (2,281,195)         (324,233)
   Due from factor                                                        647,795         466,299          (229,867)
   Due to financial institutions - net                                  1,557,989            -                 -
   Proceeds from (payments to) notes payable -
     officers and stockholders                                            (83,399)        216,076              -
   Payments on capitalized lease obligations                             (110,971)         (4,270)             (436)
   Payments on due on acquisitions                                           -           (338,017)             -
   Purchases of treasury stock                                               -               -               (8,884)
   Proceeds from note payable - bank                                        5,000
   Discontinued operations - net                                          (18,750)     (3,408,639)        1,136,164
   Dividends                                                             (188,673)           -                 -
                                                                      -----------     -----------       -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                               2,498,563       1,621,754           941,244
                                                                      -----------     -----------       -----------

NET CHANGE IN CASH                                                     (1,377,603)      1,019,450           460,355

CASH - beginning                                                        1,516,072         496,622            36,267
                                                                      -----------     -----------       -----------

CASH - ending                                                         $   138,469     $ 1,516,072       $   496,622
                                                                      ===========     ===========       ===========
</TABLE>



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

                                     F-9
<PAGE>
                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (CONTINUED)
<TABLE>
<CAPTION>
                                                                              YEARS ENDED DECEMBER 31,
                                                                       -----------------------------------------
                                                                         1997           1996             1995
                                                                       ---------      ---------        ---------
<S>                                                                    <C>            <C>              <C>
SCHEDULES OF NON-CASH ACTIVITIES:

   Acquisition                                                         $ 785,000      $ 125,000        $   -
                                                                       =========      =========        =========

   Settlement of acquisition debt                                      $ 706,084      $    -           $    -
                                                                       =========      =========        =========

   Common stock to be issued for
     non-competition agreement                                         $ 300,000      $    -           $    -
                                                                       =========      =========        =========

   Common stock to be issued for services
     rendered                                                          $ 117,188      $  47,873        $    -
                                                                       =========      =========        =========

   Purchase of property and equipment by
     capital leases                                                    $  40,427      $  19,319        $ 338,033
                                                                       =========      =========        =========

   Deferred offering costs                                             $    -         $ 125,389        $    -
                                                                       =========      =========        =========

   Issuance of note to vendor                                          $    -         $ 665,950        $    -
                                                                       =========      =========        =========

   Increase in Natcom purchase price                                   $    -         $ 359,435        $    -
                                                                       =========      =========        =========

   Offset of note receivable from purchase
     of business                                                       $    -         $    -           $  36,748
                                                                       =========      =========        =========

   Common stock to be issued for services to be
     rendered                                                          $    -         $    -           $ 156,753
                                                                       =========      =========        =========

   Payments due on purchase of business                                $    -         $    -           $ 850,310
                                                                       =========      =========        =========

   Issuance of note to related party as part of
     settlement of accounts payable                                    $    -         $    -           $ 295,700
                                                                       =========      =========        =========

   Reverse stock split                                                 $    -         $    -           $  25,000
                                                                       =========      =========        =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:

   Cash paid for interest                                              $ 968,052      $ 640,082        $ 334,327
   Cash paid for income taxes                                               -             5,259            6,540
</TABLE>


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

                                     F-10
<PAGE>
                   GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 1 - GOING CONCERN

     The accompanying consolidated financial statements have been prepared
     assuming that the Company will continue as a going concern. The Company
     experienced a loss of approximately $9,436,000 and has a working capital
     deficit of approximately $6,784,000 at December 31, 1997. These matters,
     among others, raise substantial doubt about the Company's ability to
     continue as a going concern.

     Management's plan includes the restructuring of its operations including
     discontinuing unprofitable businesses and reducing overhead in the others.
     In addition, the Company has raised additional capital through the sale of
     preferred stock. The Company also has plans to enter into an agreement to
     secure a $4,000,000 equity line of credit utilizing subordinated
     convertible debentures. The unaudited pro forma effect of the sale of
     preferred stock is presented in Note 27.

     In 1998, the Company has raised approximately $2,174,000 of additional
     capital through the sale of preferred stock. However, continuation of the
     business thereafter is dependent on the Company's ability to achieve
     profitable operations and sufficient cash flow to meet its current
     obligations.

     The accompanying consolidated financial statements do not include any
     adjustments relating to the recoverability and classification of assets and
     liabilities that might be necessary should the Company be unable to
     continue as a going concern.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization

     Global Intellicom, Inc. (the "Company") was incorporated in the state of 
     Nevada on September 1, 1994.

     Business

     The Company, through its wholly-owned subsidiaries listed below, conducts
     the following business:

     1.   VIRCOM TECHNOLOGIES GROUP, INC. ("VIRCOM TG") - Value-added reseller
          and provides a wide range of information technology services,
          including systems integration, applications, internal and external
          network testing and support services. VIRCOM TG began operations on
          July 2, 1997. Cable Co., Inc. - a wholly-owned subsidiary of Vircom TG
          was incorporated on March 9, 1998 to provide cable and fiber optic
          wiring services.

     2.   NEVCOR TECHNOLOGIES GROUP, INC. ("NEVCOR") (formerly known as AMCOM) -
          aggregator/distributor of computers, wireless communications products,
          peripherals and software, and sells to customers throughout the United
          States. On July 1, 1997 the Company discontinued its aggregator
          portion of its NEVCOR business.

                                      F-11
<PAGE>



                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Business (Continued)

     3.   VIRCOM, INC. ("VIRCOM") - reseller of microcomputers, peripherals,
          software and wireless communication products, and sells to corporate
          and other professional end-users throughout the United States.

     4.   NATIONAL COMPUTER RESOURCES, INC. ("NATCOM") - Value-added reseller of
          computer systems consisting primarily of high-end servers and
          distributes to corporations, school districts and state governmental
          agencies throughout the United States.

     5.   GLOBAL-INSYNC, INC. ("INSYNC") - Manufacturer of made-to-order
          computer servers and workstations and serves customers in the United
          States.

     6.   SPEECH SOLUTIONS, INC. ("SPEECH SOLUTIONS") - Provider of voice
          recognition tools and interfaces for speech-activated computer
          programs and sells to customers in the United States . SPEECH
          SOLUTIONS was discontinued on August 1, 1997.

     7.   NATCOM AUTOMATED SOLUTIONS, INC. ("NASI") - is a full service
          integrator, providing modular products (hardware and software) that
          can be customized under a building block concept according to its
          customers' needs. In addition to installation, NASI provides full
          product support, training and maintenance.

     Principles of Consolidation

     The consolidated financial statements include the accounts of the Company
     and its subsidiaries. All significant intercompany balances and
     transactions have been eliminated in consolidation.

     Use of Estimates in the Preparation of Financial Statements

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenue and expenses
     during the reporting period. Actual results could differ from these
     estimates.

     Revenue Recognition

     Revenue is recognized upon the shipment of products or performance of
     services.

     Service revenue is recognized only when all significant obligations have
     been performed.

                                      F-12
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Sales Returns and Warranties

     The Company does not provide an accrual for sales returns on damaged
     merchandise as such costs are borne by the Company's vendors. The Company
     provides for an amount it estimates will be needed to cover future warranty
     obligations.

     Sales Incentive Program

   
     Sales incentive program rebates are amounts received from vendors for
     promotional programs, price protection programs and cooperative advertising
     programs, and are recognized in the period earned. Amounts receivable from
     vendors under such programs are classified either as accounts receivable -
     non-cash or have been offset against amounts due from financial
     institutions.

     Amounts received under such programs is as follows:
    

<TABLE>
<CAPTION>
                                                                   1997           1996           1995
                                                                ----------    ------------    ------------
<S>                                                             <C>           <C>             <C>      
         Continuing operations:
           Price protection                                     $  115,637    $      3,280    $       -
                                                                ==========    ============    ============

           Promotional programs                                 $   41,721    $     18,075    $       -
           Cooperative advertising                                  19,608          18,249            -
                                                                ----------    ------------    ------------
                                                                $   61,329    $     36,324    $       -
                                                                ==========    ============    ============
         Discontinued operations:
           Price protection                                     $  115,637    $    823,333    $    893,100
                                                                ==========    ============    ============

           Promotional programs                                 $   15,989    $    132,491    $    207,162
           Cooperative advertising                                  19,608          60,141         156,170
                                                                ----------    ------------    ------------
                                                                $  151,234    $  1,015,965    $  1,256,432
                                                                ==========    ============    ============
</TABLE>

     Concentrations of Credit Risk

         Accounts Receivable - Trade

         Accounts receivable consist of open trade accounts with various
         companies. The Company performs ongoing credit evaluations of its
         customers and believes that adequate allowances for any uncollectible
         receivables are maintained.

         In 1995, NEVCOR, VIRCOM TG, VIRCOM and NATCOM entered into factoring
         agreements with Century Business Credit Corp. ("Century"). INSYNC
         entered into a factoring agreement with Century in January 1997.

         At December 31, 1997, there were no major accounts receivable.  One 
         customer accounted for 42% of accounts receivable at December 31, 1996.

         One customer accounted for 22%, 21% and 11% of net sales for 1997, 1996
         and 1995, respectively.

                                      F-13
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


   
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Concentrations of Credit Risk (Continued)

         Cash

         The Company maintains cash balances in its banks which at times may
         exceed the limits of the Federal Deposit Insurance Corp.
    

     Inventories

     INSYNC values its inventory on an identified cost basis at the lower of
     cost or market. The other subsidiaries value their inventory at the lower
     of cost (first-in, first-out) or market.

   
     Property and Equipment

     Property and equipment is stated at cost. Depreciation is provided using
     the straight-line method over the estimated useful lives of the assets as
     follows:
    

         Machinery and equipment                     -          2 - 5 years
         Furniture and fixtures                      -          2 - 7 years
         Vehicles                                    -          2 years
         Leasehold improvements                      -          Life of lease

     Expenditures for repairs and maintenance are charged to expense as
     incurred.

     Intangible Assets

     The excess of the purchase cost over the fair value of net assets acquired
     in the acquisitions is included in intangible assets and is being amortized
     over fifteen years on a straight-line basis. In accordance with Statement
     of Financial Accounting Standards No. 121 (SFAS No. 121), "Accounting for
     the Impairment of Long-lived Assets and For Long-lived Assets to Be
     Disposed Of," the Company periodically reviews goodwill to assess
     recoverability based upon undiscounted expected future cash flows for each
     subsidiary. Testing for such recoverability in each reporting period may
     not be cost effective or even possible and in such cases, the Company will
     test assets for impairment if a triggering event occurs (events or changes
     in circumstances such that the carrying amount of the assets may not be
     recoverable). Impairments would be recognized if a permanent diminution in
     value were to occur.

     In 1997, the Company discontinued its NEVCOR and SPEECH SOLUTIONS
     businesses and approximately $895,388 of goodwill were charged to
     discontinued operations.

     Computer Software

     The costs incurred for the development of computer software that will be
     sold, leased or otherwise marketed were capitalized when technological
     feasibility was established. These capitalized costs were subject to an
     ongoing assessment of recoverability based upon anticipated future revenues
     and changes in hardware and software technologies. Costs that were
     capitalized included labor and related overhead.

     Amortization of capitalized software development costs began in March 1997
     when the product was available for general release. Amortization was
     provided on a product-by-product basis using the straight-line method over
     three years.

                                      F-14
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Computer Software (Continued)

     At December 31, 1996, unamortized capitalized software development costs
     were $220,347.

     In 1997, the Company discontinued its SPEECH SOLUTIONS business and all
     remaining unamortized software costs totalling approximately $457,316 were
     charged to discontinued operations.

     Income Taxes

     The Company adopted SFAS No. 109, "Accounting for Income Taxes," which
     requires the use of the liability method of accounting for income taxes.
     The liability method measures deferred income taxes by applying enacted
     statutory rates in effect at the balance sheet date to the differences
     between the tax bases of assets and liabilities and their reported amounts
     in the financial statements. The resulting deferred tax assets or
     liabilities are adjusted to reflect changes in tax laws as they occur.

     Advertising Costs

     Advertising costs are charged to operations when incurred.

     Earnings Per Share

     The Company adopted SFAS No. 128, "Earnings Per Share" which establishes
     new standards for computing and presenting earnings per share. The
     statement also requires restatement of all prior period earnings per share
     data presented.

     Net loss per common share is based on the weighted average number of common
     shares outstanding during the period. The weighted average number of shares
     outstanding has been adjusted to reflect the recapitalization in connection
     with the private placement as it it had occurred as of the beginning of the
     period for which loss per share is presented. Common stock equivalents have
     not been included as their effect would be antidilutive.

     Recently Issued Pronouncement

     SFAS No. 130, "Reporting Comprehensive Income," requires an entity to
     report comprehensive income and its components in a full set of financial
     statements and is effective for fiscal years beginning after December 15,
     1997. Comprehensive income is the change in equity of a business enterprise
     during a period from transactions and other events and circumstances from
     nonowner sources. The Company has elected to adopt SFAS No. 130 in 1998.

     American Institute of Certified Public Accountants Statement of Position
     No. 96-1, "Environmental Remediation Liabilities," establishes specific
     criteria for the recognition and measurement of environmental remediation
     liabilities. The adoption of the statement in 1997 did not have a
     significant effect on the Company's financial condition or results of
     operations.

                                      F-15
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996

   
NOTE 3 - ACQUISITIONS

     AMCOM Business Centers Corp.
    

     On October 28, 1994, the Company purchased certain net assets of AMCOM
     subject to certain liabilities and obligations. This transaction was
     accounted for as a purchase. On December 8, 1994, AMCOM began operations as
     a wholly-owned subsidiary of the Company. In March 1997, AMCOM changed its
     name to NEVCOR.
   
     The total purchase price of the net assets originally consisted of the
     following:

     1.  $300,000 upon execution of the agreement.

     2.  $1,924,000 at closing.

     3.  A contingent payment of $3,056,000 based upon the following:

         a.   1% of gross sales (as defined below) of AMCOM from January 1, 1994
              to December 7, 1994.

         b.   During the next twelve months, 1% of NEVCOR's gross sales, if 
              achieved, payable quarterly.

         c.   Thereafter, until fully paid, 1% of NEVCOR's gross sales, if 
              achieved, payable monthly.

     In March 1996, a Settlement Agreement and Mutual Release ("Agreement") was
     signed amending the amount and payment terms of the contingent payment as
     follows:

     1.  The balance of the contingent payment was deemed to be $2,549,877 at 
         March 31, 1996.

     2.  The balance owed on the note issued by the Sellers in conjunction with
         the asset purchase ($36,748) was deemed to be repaid and intangible 
         assets adjusted accordingly.

     3.  The contingent payment would be paid as follows:

         a.   No payments due from January 1, 1995 through March 31, 1996.

         b.   From April 1, 1996 through December 31, 1996, 1/2% of NEVCOR's 
              gross sales (as defined below), if achieved, payable quarterly.

         c.   Thereafter, until fully paid, 1/2% of NEVCOR's gross sales, if 
              achieved, payable monthly.

     In addition, the Agreement called for the following to be performed on or
     before April 19, 1996:

     1.  The Company paid to a corporation related to the prior AMCOM 
         stockholders ("Sellers") rent owed in the amount of $21,512.

     2.  The Company paid to the Sellers $120,000 representing the estimated 
         income tax reimbursement per the asset purchase agreement (see below).

     3.  The Sellers forgave $65,168, representing amounts owed by the Company.

    
                                      F-16
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996

   
NOTE 3 - ACQUISITIONS

     AMCOM Business Centers Corp. (Continued)

     Gross sales, as defined in the asset purchase agreement, is total revenue
     from sales after deductions for trade discounts and allowances,
     uncollectible accounts, sales taxes, duties, shipping and insurance and
     sales returns.

     NEVCOR's business was discontinued on July 1, 1997 and as such no
     contingent payments were accrued subsequent to July 1, 1997.
    

     The asset purchase agreement required the Company to reimburse the Sellers
     for all income taxes incurred by them with respect to their distributive
     share of AMCOM's taxable income for the period January 1, 1994 through the
     closing date. Management estimated that the aggregate amount of this
     obligation was $120,000 at December 8, 1994. This amount was reflected in
     goodwill. A non-competition agreement for a period of three years ending
     December 8, 1997 was entered into between the Sellers and the Company, and
     $10,000 of the purchase price was allocated to the covenant.

     NEVCOR's business was discontinued on July 1, 1997.

     National Computer Resources, Inc.

     On September 28, 1995, the Company purchased all of the issued and
     outstanding stock of NATCOM. The transaction was pursuant to a stock
     purchase agreement between the Company and the individual stockholders of
     NATCOM and was accounted for as a purchase.

     On December 31, 1997, the stock purchase agreement as well as the
     employment and consulting agreements with NATCOM's former officers were
     terminated. The Company agreed to pay $171,000 in full consideration of all
     obligations accrued under the above stated agreements. The amount will be
     paid in six monthly installments in 1998 and can be made either in cash or
     by the issuance of the Company's common stock to be valued at the closing
     bid price of such shares on the dates prior to the payment. In addition,
     the Company agreed to issue 150,000 shares of common stock to the former
     officers in consideration for the continuation of their respective
     non-competition agreements. The shares vest over a two year period and the
     non-competition agreements expire on December 31, 1999.

     ManTech Solutions Corp.

     On September 16, 1996, INSYNC entered into a contract with ManTech
     Solutions Corp. ("MSOL"), a wholly-owned subsidiary of ManTech
     International Corp. (ManTech) to purchase substantially all of its assets,
     subject to certain liabilities. The acquisition was effective on September
     1, 1996 and was accounted for as a purchase.

                                      F-17
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 3 - ACQUISITIONS (CONTINUED)

     ManTech Solutions Corp. (Continued)

     The purchase price was $5,736,084 and was paid as follows:

     1.  The issuance of 350,000 shares of Series 3 Cumulative Preferred Stock,
         with a 6% annual dividend, convertible at a value of $10 per share to
         restricted shares of common stock. Such preferred stock was valued at
         $3,500,000.

     2.  The issuance of a 9% promissory note for $1,486,084.

     3.  The issuance of a 9% promissory note for $470,000.

     4.  The issuance of 49,778 restricted shares of common stock, valued at 
         $280,000.

     The following condensed balance sheet reflects the purchase of the net
     assets of MSOL on September 16, 1996:

                  Current assets                              $  6,242,898
                  Property and equipment                           468,448
                  Excess cost of acquisition over
                    net tangible assets acquired                 1,637,996
                  Other assets                                      19,761
                  Liabilities assumed                           (2,633,019)
                                                              ------------
                                                              $  5,736,084

     Pro Notes, Inc.

     On October 18, 1996, SPEECH SOLUTIONS entered into a contract with Pro
     Notes, Inc. ("Pro Notes") to purchase certain of its assets. This
     transaction was accounted for as a purchase.

     The purchase price consists of the following:

     1.  $200,000 paid at closing.

     2.  Four quarterly payments of $31,250 on January 15, 1997, April 15, 1997,
         July 15, 1997 and October 15, 1997.  At December 31, 1997, $95,000 is 
         owed.

     The following condensed balance sheet reflects the purchase of the certain
assets of Pro Notes, Inc. on October 18, 1996:

                  Intangible assets, including excess
                    cost of acquisition over net tangible
                    assets acquired                          $  365,000
                                                             ==========

     SPEECH SOLUTIONS' business was discontinued on August 1, 1997 and the
intangible assets were charged to discontinued operations.

                                      F-18
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 3 - ACQUISITIONS (CONTINUED)

     Automated Systems Development of Indiana, Inc.

     On July 1, 1997, Automated Systems Development of Indiana, Inc. (ASDI)
     merged into the Company's NASI subsidiary. The merger was accounted for as
     a purchase.

     The total purchase price of $805,000 consists of:

     1.  $20,000 in cash at closing.

     2.  The issuance of 785 shares of Series 5 Cumulative Preferred Stock, with
         a 6% annual dividend, convertible at a value of $1,000 per share. Such
         preferred stock was valued at $785,000.

     Under the merger agreement, for the five years ended July 1, 2002, NASI is
     to make semi-annual contingent payments to the former shareholder of ASDI
     based on its gross profit (as defined in the plan of merger) as follows:

                  4% of the gross profit on the first $1.5 million of sales
                  3% of the gross profit on the next $1.5 million of sales
                  2% of the gross profit on sales in excess of $3 million

     Such payments will be limited to aggregate earnings before interest and
     taxes (EBIT). As such, if the making of a payment reduces EBIT to zero or
     below, the payment will be limited only to that portion which would bring
     EBIT to zero and the balance would be deferred until the date of the next
     payment. In the event that the aggregate amount of payments is less than
     $600,000, the term of the agreement would be extended up to the earlier of
     three years or to the time that the payments would equal the sum of
     $600,000. At December 31, 1997, the contingent payment owed to the
     stockholders of ASDI was deemed not material and is not reflected in the
     financial statements.

     The following condensed balance sheet reflects the merger of ASDI on July
1, 1997:

                  Current assets                             $   61,417
                  Property and equipment                            561
                  Excess cost of aqcuisition over net
                    tangible assets acquired                    834,457
                  Other assets                                      390
                  Liabilities assumed                           (91,825)
                                                             ----------
                                                             $  805,000

                                      F-19
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 3 - ACQUISITIONS (CONTINUED)

     Acquisition Indebtedness

     Acquisition indebtedness at December 31, consists of the following:

<TABLE>
<CAPTION>
                                                                                      1997              1996
                                                                                  ------------      ------------
       <S>                                                                        <C>               <C>
       9% promissory note for $1,486,084 payable to MSOL
         ("First Note").  Interest began accruing on March 16, 1997.
         Interest was imputed at 9% for the period September 16, 1996
         (date of issuance) to March 15, 1997.  Payments are to be
         made forty-five days after each fiscal quarter, commencing
         with the quarter ended June 30, 1997.  The payments are
         calculated as follows:

         1.  2% of net sales (gross sales less sales discounts,
             returns and allowances) of INSYNC.

         2.  If at the end of four quarters ended June 30th
             (commencing in 1998), the sum of the quarterly payments is less
             than the interest accrued over the previous four quarters plus ten
             percent (10%) of the original principal of the note ($148,608), an
             adjustment payment will be made to cover
             such shortfall.                                                      $  1,486,084(1)   $  1,463,794

       9% promissory note for $470,000 payable to MSOL with
         substantially the same terms as the First Note, except that payments do
         not commence until the earlier of December 31, 2001 or upon the payment
         of the First Note. Interest began accruing on March 16, 1997. Interest
         was imputed at 9% for the period September 16, 1996 (date of issuance)
         to March 15, 1997. The note is guaranteed by the Company.                     470,000           462,950
       NATCOM Settlement Agreement                                                     171,000              -
       Installment payments due to prior NATCOM
         stockholders with interest imputed at 10%                                        -              877,084
                                                                                  ------------      ------------
                                                                                     2,127,084         2,803,828
       Less:  Current portion                                                          581,823           693,942
                                                                                  ------------      ------------

                                                                                  $  1,545,261      $  2,109,886
                                                                                  ============      ============
</TABLE>

      (1) Amounts owed for the quarters ended June 30, 1997, September 30, 1997
and December 31, 1997 totalling $262,215 will be paid as follows:

                      April 3, 1998                      $   25,000
                      April 17, 1998                         25,000
                      April 30, 1998                         25,000
                      On or before April 30, 1998           187,215
                                                         ----------
                                                         $  262,215
                                                         ==========
                                      F-20
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 3 - ACQUISITIONS (CONTINUED)

     Acquisition Indebtedness (Continued)

     Future minimum maturities of notes payable - acquisition are as follows:

                             1998                $    581,823
                             1999                     148,608
                             2000                     148,608
                             2001                     778,045
                             2002                      47,000
                          Thereafter                  423,000
                                                 ------------
                                                 $  2,127,084
                                                 ============

     Imputed interest on the MSOL notes and NATCOM installment payments amounted
to $29,340 and $143,168 in 1997 and 1996, respectively.


NOTE 4 - DUE FROM FACTOR

     VIRCOM TG, VIRCOM, NATCOM and INSYNC collectively entered into factoring
     agreements whereby the companies sell their trade receivables without
     recourse if a customer's credit is approved. Certain dollar limitations may
     be established for a customer. Receivables sold without credit approval or
     in excess of a specified credit limit are subject to recourse in the event
     of non-payment by the customer.

     On April 1, 1997,VIRCOM TG, VIRCOM, NATCOM and INSYNC collectively signed
     an amendment to the factoring agreements whereby the companies sell their
     trade receivables with recourse.

     Other terms of these amended agreements are as follows:

     1.  The aggregate amount of advances shall not exceed the lesser of -

         a.   $9,000,000 or

         b.   90% of the eligible receivables of NEVCOR, VIRCOM and NATCOM plus 
              85% of the eligible receivables of INSYNC less any reserves deemed
              proper and necessary by the factor.

     2.  Factoring commissions are four tenths of one percent (.4%) of sales.
         Interest on advances will be charged at 1% above prime.

     3.  The factor has been granted a first priority security interest in, a
         general lien on and/or a right of set-off of trade receivables and
         general intangibles of VIRCOM TG, VIRCOM, NATCOM and INSYNC. In
         addition, the factor has received a security interest in inventory and
         tangible assets of the Company's subsidiaries. Such additional security
         interest will be subordinate to the one granted to the financial
         institution with which the Company's subsidiaries have loan and
         security agreements.

                                      F-21
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 4 - DUE FROM FACTOR (CONTINUED)

     4.  The factor has received cross-corporate guarantees of the Company and
         VIRCOM TG, VIRCOM, NATCOM and INSYNC as well as the personal guarantees
         of certain officers and directors of the Company.

     5.  The agreement may be terminated by either party on sixty days notice.

     In addition, the Company granted the factor options to purchase 100,000
     shares of the Company's common stock at an option price of $3.00 per share.
     The options expire in April 2000.

     In 1997 and 1996, the Company factored $60,863,117 and $14,852,730 of its
     sales, respectively. At December 31, 1997 and 1996, outstanding receivables
     amounted to $6,925,833 and $2,376,953, respectively.

     The Companies have a tri-party agreement with the factor and a financial
     institution wherein Century, on behalf of the Companies, can wire funds to
     the financial institution for payment of vendors' invoices relating to
     floorplanned inventory.


NOTE 5 - INVENTORIES

     Inventories at December 31, consist of the following:

                                                     1997           1996
                                                 ------------   ------------

                  Finished goods                 $  2,010,616   $  1,288,313
                  Work-in-process                     328,881        500,858
                  Raw materials                       662,022      1,485,995
                                                 ------------   ------------
                                                 $  3,001,519   $  3,275,166
                                                 ============   ============


NOTE 6 - NOTES RECEIVABLE - OFFICER AND STOCKHOLDER

     Notes receivable - officer and stockholder at December 31, consists of the
following:
<TABLE>
<CAPTION>
                                                                                         1997            1996
                                                                                      -----------    -----------
        <S>                                                                           <C>            <C>
        Note receivable from an officer/stockholder bearing interest at 1% over
          prime, principal and accrued interest to be paid on
          December 31, 1997.                                                          $      -       $   457,979
                                                                                      -----------    -----------
                                                                                      $      -       $   457,979
                                                                                      ===========    ===========
</TABLE>

     In 1997, the note was not repaid and the officer/stockholder borrowed an
additional $218,404.

                                      F-22
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 6 - NOTES RECEIVABLE - OFFICER AND STOCKHOLDER

   
     In January 1998, the Company granted the officer/stockholder payments for
     1997 totalling $676,383 as follows: additional salaries of $317,167 as well
     as compensation of $359,216 for the officer's personal guarantee of the
     inventory floorplanning credit line of NEVCOR (a discontinued operation)
     for the last three years. Such amounts were offset against the balance owed
     by the officer at December 31, 1997. $359,216 of such balance was charged
     to discontinued operations. Two other officers and/or directors of the
     Company also gave personal guarantees for the same indebtedness. The
     Company's Board of Directors has not as yet determined what consideration,
     if any, will be given to such officers and/or directors.
    

     Interest income amounted to $-0-, $43,492 and $-0- for 1997, 1996 and 1995,
     respectively.


NOTE 7 - OTHER RECEIVABLES

   
     The Company has indemnified certain of its officers and directors (the
     "Indemnitees") who were previously officers, stockholders, and/or directors
     of the Company's former parent, Communication and Entertainment Corp.
     ("ComEnt") from actions against the Indemnitees arising out of their prior
     service to ComEnt. The Company's indemnification provides that, in the
     event ComEnt fails to honor its indemnification obligation, the Company
     will indemnify such Indemnitees. ComEnt has declined to honor its
     obligations under its indemnification. As such, the Company has paid
     certain legal fees and related expenses in the amount of approximately
     $828,000 in connection with the defense of such claims. The Company intends
     to seek reimbursement from ComEnt for the sums it has paid to the
     Indemnitees. Such amount has been included in other receivables, net of an
     indemnification charge of $621,000.
    

     In 1998, the Company expects to incur additional legal fees in the range of
     $150,000 to $200,000.


NOTE 8 - PROPERTY AND EQUIPMENT

     Property and equipment at December 31, consists of the following:

<TABLE>
<CAPTION>
                                                                              1997           1996
                                                                          ------------    ----------
<S>                                                                       <C>             <C>       
         Machinery and equipment                                          $  1,075,565    $  337,862
         Furniture and fixtures                                                485,448       394,604
         Vehicles                                                               13,773          -
         Leasehold improvements                                                157,006        76,017
         Property and equipment under capital lease                            217,645        19,319
                                                                          ------------    ----------
                                                                             1,949,437       827,802
         Less:  Accumulated depreciation and amortization                      697,236       103,803
                                                                          ------------    ----------
                                                                          $  1,252,201    $  723,999
                                                                          ============    ==========
</TABLE>

     Increases and decreases of property and equipment reflect purchases,
     increases due to the acquisition of ASDI, as well as reclassifications as
     required to properly reflect discontinued operations.

     Depreciation and amortization amounted to $250,231, $78,465 and $16,965 for
     1997, 1996 and 1995, respectively.

                                      F-23
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 9 - INTANGIBLE ASSETS

     Intangible assets at December 31, consist of the following:

                                                        1997            1996
                                                    ------------   ------------
         Goodwill                                   $  6,818,863   $  3,459,388
         Non-compete agreement                           300,000           -
                                                    ------------   ---------
                                                       7,118,863      3,459,388
         Less: Accumulated amortization                  787,955        177,948
                                                    ------------   ------------
                                                    $  6,330,908   $  3,281,440
                                                    ============   ============

     Increases and decreases of intangible assets reflect the acquisition of
     ASDI as well as the charges and reclassifications required to properly
     reflect discontinued operations.

     Amortization amounted to $311,002, $157,084 and $20,863 for 1997, 1996 and
     1995, respectively.


NOTE 10 - DUE TO FINANCIAL INSTITUTIONS

   
     The Company has a loan and security agreement with a financial institution
     providing for an inventory floorplanning credit line of $8,000,000
     including its discontinued NEVCOR business. The line is collateralized by
     the assets of VIRCOM TG, VIRCOM, NATCOM and INSYNC. The agreement expires
     on December 8, 1998 and is automatically renewed from year to year unless
     terminated by either party. The financial institution has received the
     personal guarantees of certain officers and directors of the Company.
    

     At December 31, the line of credit included the following:

                                                     1997            1996
                                                 ------------    ------------

        Due to financial institution             $  4,441,673    $  3,061,728
        Less: Claims receivable from
             vendors for credits due                1,172,255       1,350,299
                                                 ------------    ------------
                                                 $  3,269,418    $  1,711,429
                                                 ============    ============

                                      F-24
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 11 - OBLIGATIONS UNDER CAPITALIZED LEASES

     Minimum future lease payments under capitalized leases at December 31, 1997
are as follows:

                      Year Ending December 31

                                1998                               $  191,548
                                1999                                   44,708
                                2000                                   27,329
                                2001                                    1,283
                                                                   ----------
                      Total minimum lease payments                    264,868
                      Less: Interest                                  (30,399)
                                                                   ----------
                      Present value of net minimum
                         lease payments                            $  234,469
                                                                   ==========

     The capitalized leases have effective interest rates of 9.2% to 15.3%.
     Interest expense amounted to $34,286, $2,914 and $-0- for 1997, 1996 and
     1995, respectively.


NOTE 12 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

     Accrued expenses and other current liabilities at December 31, consist of:

                                                  1997          1996
                                              ------------  ------------

        Sales taxes payable                   $    610,186  $    415,531
        Accrued payroll                            271,739       135,666
        Accrued professional fees                  205,773       132,388
        Other accrued expenses                     228,335        45,483
        Deferred revenue                           275,432        11,718
        Other                                      385,045       566,230
                                              ------------  ------------
                                              $  1,976,510  $  1,307,016
                                              ============  ============

                                      F-25
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 13 - NOTES PAYABLE

     In June 1996, the Company borrowed $500,000 through the issuance of a
     convertible subordinated promissory note bearing interest at 24% per annum.
     Interest on the note totalled $29,667 in 1996. The note was repaid in
     September 1996.

     As a result of the merger with ASDI, the Company has a $50,000 line of
     credit with a bank. The note taken under the line is due on demand and
     bears interest at 2% above prime. Interest on the note amounted to $2,924
     in 1997.


NOTE 14 - NOTES PAYABLE - OFFICERS AND STOCKHOLDERS

     Notes payable - officers and stockholders at December 31, consists of the
following:

<TABLE>
<CAPTION>
                                                                         1997         1996
                                                                       --------     --------
<S>                                                                    <C>          <C>
         Note payable to an officer/stockholder bearing
           interest at 1% over prime, principal and accrued
           interest to be paid on December 31, 1998.                   $ 67,677     $   -

         Note payable to an officer/stockholder bearing
           interest at 1% over prime, principal and accrued
           interest to be paid on December 31, 1997.  The
           balance owed at December 31, 1997 was rolled
           into a new note (see above).                                    -         126,076

         10% promissory notes payable to two directors
           and one stockholder to be paid as follows: $65,000
           in April 1997 and $25,000 in May 1997.  The
           balance owed at December 31, 1997 is now
           due on demand.                                                65,000       90,000
                                                                       --------     --------
                                                                       $132,677     $216,076
                                                                       ========     ========
</TABLE>

     Interest amounted to $12,091 and $16,319 in 1997 and 1996, respectively.
     Accrued interest on three-year notes amounted to $18,309 and $6,218 at
     December 31, 1997 and 1996, respectively.

                                      F-26
<PAGE>

                                      GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                             DECEMBER 31, 1997 AND 1996


NOTE 15 - INCOME TAXES

<TABLE>
<CAPTION>
                                                                         1997           1996            1995
                                                                     -------------   -----------    -----------
<S>                                                                  <C>             <C>            <C>
       The components of the provision
         for income tax credits by taxing
         jurisdiction are as follows:

           Federal:
              Current                                                $        -      $      -       $      -
              Deferred                                                    (413,204)     (395,152)      (181,792)
                                                                     -------------   -----------    -----------
                                                                          (413,204)     (395,152)      (181,792)
                                                                     -------------   -----------    -----------
           States:
              Current                                                         -           28,792         (5,741)
              Deferred                                                     (96,925)      (92,977)       (42,775)
                                                                     -------------   -----------    -----------
                                                                           (96,925)      (64,185)       (48,516)
                                                                     -------------   -----------    -----------

           Net tax (benefit) to discontinued operations                 (1,580,563)     (247,202)        44,567
                                                                     -------------   -----------    -----------
                                                                     $  (2,090,692)  $  (706,539)   $  (185,741)
                                                                     =============   ===========    ===========
</TABLE>

     The major components of deferred tax assets at December 31, are as follows:

<TABLE>
<CAPTION>
                                                                         1997           1996
                                                                      ------------  -------------
<S>                                                                   <C>           <C>          
       Net operating loss carryforwards                               $  5,985,568  $     988,641
       Allowance for doubtful accounts                                     317,472         61,637
       Inventory reserve                                                   246,960         91,030
       Warranty reserve                                                       -            43,000
       Valuation allowance                                              (3,275,000)       -
                                                                      ------------  -------------
                                                                      $  3,275,000  $   1,184,308
                                                                      ============  =============
</TABLE>

   
     At December 31, 1997 and 1996, the current portion of deferred taxes
     amounted to $630,000 and $690,476, respectively. The long-term portion of
     deferred taxes at December 31, 1997 and 1996 amounted to $2,645,000 and
     $493,832, respectively.
    

     At December 31, 1997, a 50% valuation allowance is provided as it is
     uncertain if the deferred tax assets will be fully utilized.

                                      F-27
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 13 - INCOME TAXES (CONTINUED)

     A reconciliation of the Company's income tax expense computed at the U.S.
     federal statutory tax rate of 34% and the provision for income taxes are as
     follows:

<TABLE>
<CAPTION>
                                                                         1997           1996            1995
                                                                     -------------   -----------    -----------
<S>                                                                  <C>             <C>            <C>        
       Income tax expense at statutory rate                          $  (3,931,000)  $  (609,255)   $    29,555
       Net operating loss carryforwards                                  3,931,000       609,255           -
       State income taxes (tax credits)                                       -           28,792         (5,741)
       Deferred income tax credits                                      (2,090,692)     (735,331)      (180,000)
       Financial/tax adjustments - NATCOM - cash basis                        -             -           (29,555)
                                                                     -------------   -----------    -----------
       Provision for income tax credits                              $  (2,090,692)  $  (706,539)   $  (185,741)
                                                                     =============   ===========    ===========
</TABLE>

     At December 31, 1997, for income tax purposes, the Company has unused net
     operating loss carryforwards of approximately $14,200,000 expiring in 2009
     and 2010.

     Income taxes payable include NATCOM's 1995 federal and New Jersey
     liabilities, including penalties and interest, are as follows:

                           Federal                           $  201,953
                           New Jersey                            38,948
                                                             ----------
                                                             $  240,901


NOTE 16 - ECONOMIC DEPENDENCE

     At December 31, 1997, the Company is no longer dependent on one vendor. In
     1996 and 1995, the Company purchased 53% and 84%, respectively of its
     inventory from two vendors.


NOTE 17 - OTHER INCOME (EXPENSES)

     Other income (expenses) consist of the following:

                                           1997           1996         1995
                                      -------------   -----------   ---------

         Interest expense             $    (957,207)  $  (211,633)  $  (6,606)
         Interest income                     20,355        62,424      20,384
         Deferred financing costs              -          (89,594)       -
         Indemnification charge            (621,000)         -           -
                                      -------------   -----------   ---------
                                      $  (1,557,852)  $  (238,803)  $  13,778
                                      =============   ===========   =========

                                      F-28
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 18 - COMMITMENTS AND CONTINGENCIES

     Leases

     The Company rents real property under leases expiring through August 2005.
Certain of the leases stipulate payments of operating expenses.

     Future minimum rental payments required are as follows:

                   Year Ending December 31,

                             1998                        $    787,387
                             1999                             782,083
                             2000                             777,786
                             2001                             464,746
                             2002                             368,918
                          Thereafter                          765,699
                                                         ------------
                                                         $  3,946,619
                                                         ============

     The Company has deposited with a landlord, pursuant to the terms of its
     lease, a stand-by letter of credit for $100,000 (issued by the Company's
     bank) in addition to a security deposit. The terms of the lease require the
     posting of an additional $100,000, which the landlord has requested.

     Rent expense amounted to $865,026, $314,142 and $61,591 for 1997, 1996 and
     1995, respectively.

     Purchase Commitments

     The Company had outstanding purchase commitments to its major vendors which
     were guaranteed under its floorplanning credit line by one of the financing
     companies. Such commitments represented approved orders for the purchase of
     inventory and were not in excess of normal business requirements. Such
     commitments amounted to approximately $-0- and $2,510,000 at December 31,
     1997 and 1996, respectively.

                                      F-29
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 18 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     Employment Agreements

     Company

     In January 1994, the Company entered into an employment contract with one
     of its officers for the period January 1, 1995 through December 31, 1997.
     Compensation under the agreement is as follows:

                           1995                     $  175,000
                           1996                        190,000
                           1997                        210,000

     In addition, the agreement provides for perquisites including various
     insurance coverages, an automobile, expense reimbursements, etc.

     Compensation under the agreement amounted to $194,000, $190,000 and
     $173,872 for 1997, 1996 and 1995, respectively.

     Nevcor

     In May 1995, the Company entered into an employment agreement with another
     of its officers for calendar year 1995 at a salary of $137,000.

     Compensation under this agreement amounted to $137,000 for 1995.

     Natcom

     In conjunction with the purchase of the stock of NATCOM, the Company
     entered into employment agreements with two of NATCOM's key employees and a
     consulting agreement with a former key employee of NATCOM. The agreements
     were terminated in 1997. Compensation amounted to $329,166 for 1996.

                                      F-30
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 18 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

         Speech Solutions

         In conjunction with the purchase of certain assets of Pro Notes, Inc.
         the Company entered into an employment agreement with a key employee of
         SPEECH SOLUTIONS for the period October 18, 1996 to October 17, 2001.
         Compensation under the agreement is as follows:

                         Year

                           1                        $  100,000
                           2                           110,000
                           3                           120,000
                           4                           130,000
                           5                           140,000

         In addition, for the five years ended December 31, 2001, SPEECH
         SOLUTIONS is to make quarterly contingent payments equal to 2% of its
         gross sales. Such payments will be limited to ACIBIT as well as by the
         contingent payments to Pro Notes, Inc.

         The individual is entitled to receive minimum payments totalling
         $130,000 by the end of the fifth year. In the event that the aggregate
         amount of payments is less than $130,000, such deficiency must be paid.
         In addition, if the total amount of the contingent payments is less
         than $950,000, SPEECH SOLUTIONS shall continue to make contingent
         payments for an additional period, not to exceed five years, until such
         time as the payments total $950,000. Such contingent payments are
         subject to the same limitations as described above.

   
         In connection with the discontinuance of Speech Solutions, the Company
         is negotiating a settlement with the individual. Management expects the
         settlement to be in the range of $25,000 to $50,000.
    

     Consulting Agreement

     In January 1996, the Company entered into a letter agreement with one of
     its board members whereby such board member would provide consulting
     services to the Company for the period January 1, 1996 through December 31,
     1999. Consulting fees under the agreement are $60,000 per year. Such fee
     had been waived by the board member in 1996.

     In 1998, the Company issued 100,000 shares of common stock to the board
     member for consulting services provided in 1996 and 1997. The shares vest
     over a two year period in eight equal installments of 12,500 shares per
     quarter.

     Additional Benefit Plan

     In 1995, the Company entered into an Additional Benefit Plan (the "Plan")
     providing cash and stock benefits for certain key employees
     ("Participants"). Such benefits were based solely on the consolidated
     financial performance of NEVCOR and VIRCOM during the period from January
     1, 1995 to December 31, 1997. The Plan was not renewed in 1998.

     No shares were issued under the Plan in 1997, 1996 and 1995.

                                      F-31
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 18 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     Legal Proceedings

     An action pending in the Supreme Court of the State of New York commenced
     on or about September 18, 1997 against the Company and three of its
     officers and directors by a holder of a warrant issued by the Company for
     claimed damages of $1,000,000, alleging that the Company breached the terms
     of the warrant by failing to register for public sale shares of common
     stock issuable on exercise of the warrant. The Company has included these
     shares in its presently pending registration sttement on Form S-3, has
     asserted as an affirmative defense that the transaction in connection with
     which the warrant was issued was void under New York's usury law, and has
     counterclaimed for $29,667. The Company has moved for summary judgment
     dismissing the complaint an intends to continue to vigorously defend the
     action.

     An action pending in the United States District Court for the District of
     New Jersey commenced on or about April 14, 1998, alleging payments due in
     the amount of approximately $260,000 for leased equipment. Company counsel
     have not yet reviewed the complaint in this action, but have been advised
     by the Company that the claimed amount is not due an that the Company's
     records reflect that the amount owed, if any, is far less than the amount
     demanded. The Company intends to defend this action vigorously.

     In April, 1998, a supplier the Company's Global-InSync subsidiary commenced
     an actio nin the United States District Court for the Eastern District of
     Virginia against the Company and Global-InSync, alleging payments due to
     the Supplier in the amount of $784,556. The Company has not yet had the
     opportunity to evaluate the merits of the Supplier's claim.

     The Company is involved in various other claims and actions incidental to
     the business.

     Indemnification

     The Company has indemnified certain of its officers and directors (the
     "Indemnitees") who were previously officers, stockholders and/or directors
     of another corporation for actions against the Indemnitees arising out of
     their service to that corporation. In the event that the corporation fails
     to honor its obligation it undertook to indemnify the Indemnitees on such
     claims, the Company would then indemnify such Indemnites. The corporation
     has declined to honor its obligations under its indemnification. As such,
     the Company has paid certain legal fees and related expenses in the amount
     of approximately $828,000 in connection with the defense of such claims.
     Such amount has been included in other receivables, net of an
     indemnification charge of $621,000.

                                      F-32
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 19 - RELATED PARTY TRANSACTIONS

     Company

     The Company's outside corporate counsel was a stockholder of the Company.
     In 1995, the Company incurred legal fees of approximately $804,000. On
     February 16, 1996, the Company signed a letter agreement agreeing to pay
     $464,000 in full satisfaction of outstanding legal fees, unbilled time
     charges and disbursements as follows:

     1.  $150,000 upon the signing of the agreement.

     2.  A $314,000 promissory note payable in four installments as follows:
         $75,000 on May 25, 1996, August 25, 1996 and November 25, 1996 and
         $89,000 on December 31, 1996. As the promissory note did not bear
         interest, an interest rate of 10% was imputed. At December 31, 1997 and
         1996, the Company owed $-0- and $81,778, respectively.

     One of the Company's former attorneys who later became an officer provided
     outside legal services in 1996. Fees incurred totalled $179,844.

     In 1995, the Company purchased property and equipment based upon an
     independent appraisal in the amount of $73,850 from the Chairman of the
     Board.


NOTE 20 - STOCKHOLDERS' EQUITY

     Preferred Stock

     On May 30, 1995, the Company authorized the issuance of 10,000,000 shares
     of preferred stock, $.01 par value. Preferred stock consists of the
     following:

         Series 1 Convertible Preferred Stock (Series 1 Preferred)

         Series 1 Preferred stockholders have a liquidation preference of $10
         per share. Series 1 Preferred is convertible into common stock at the
         election of the stockholder at a per share conversion rate equal to the
         lower of seventy percent (70%) of the market price of common stock on
         the day of conversion or $3.50.
         Series 1 Preferred has no voting rights.

         Pursuant to a subscription agreement in July 1996, 330,000 Series 1
         Preferred shares were issued in connection with the sale of securities
         under an exemption pursuant to Regulation S promulgated under the
         Securities Act of 1933. In 1996, 307,500 shares of Series 1 Preferred
         were converted into 1,836,777 shares of common stock. The balance of
         the Series 1 Preferred shares were converted in 1997 into 163,580
         shares of common stock.

                                      F-33
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 20 - STOCKHOLDERS' EQUITY (CONTINUED)

     Preferred Stock (Continued)

         Series 2 Convertible Preferred Stock (Series 2 Preferred)

         Series 2 Preferred stockholders have a liquidation preference of $1,000
         per share. Series 2 Preferred is convertible into common stock at the
         election of the stockholder at a per share conversion rate equal to the
         lower of sixty-five percent (65%) of the market price on the day of
         conversion or $4.03125. Series 2 Preferred has no voting rights.

         In August 1996, 825 Series 2 Preferred shares were issued in connection
         with the sale of securities under an exemption pursuant to Regulation
         S. In 1996, all of the shares of Series 2 Preferred were converted into
         382,743 shares of common stock.

         Series 3 Convertible Preferred Stock (Series 3 Preferred)

         The Series 3 Preferred stockholders have a liquidation preference of
         $10 per share and are entitled to receive, when declared by the board
         of directors, cumulative dividends at an annual rate of 6% of the
         liquidation preference ($.60 per share). Such dividends shall be
         payable on a semi-annual basis commencing on June 30, 1997 and shall
         have preference to dividends on any other class of common or preferred
         stock. Series 3 Preferred has no voting rights except as described
         below:

         1.   On each second Dividend Payment Date that quarterly dividends on
              Series 3 Preferred Stock shall not have been paid in full as
              required herein (a "Dividend Default"), then and in each such
              event, the holder of shares of Series 3 Preferred shall be
              entitled to elect such number of directors ("Special Directors")
              as set forth below, hereof, at the next annual meeting of
              stockholders of the Company. The holders of all shares otherwise
              entitled to vote for directors, voting separately as a class,
              shall be entitled to elect the remaining members of the Board of
              Directors. Such special voting right of the holders of shares of
              Series 3 Preferred may be exercised until all dividends in default
              on the Series 3 Preferred shall have been paid in full or declared
              and funds sufficient therefor set aside, and when so paid or
              provided for together with one additional Dividend Payment Date
              shall have passed without a Dividend Default, such special voting
              right of the holders of shares of Series 3 Preferred shall cease
              and any Special Directors appointed or elected shall resign, but
              subject always to the same provisions for the vesting of such
              special voting rights in the event of any such future Dividend
              Default.

                                      F-34
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 20 - STOCKHOLDERS' EQUITY (CONTINUED)

     Preferred Stock (Continued)

         Series 3 Convertible Preferred Stock (Series 3 Preferred) (Continued)

         2.   On September 30, 1997, in the event that by such date there has
              been a Dividend Default relating to the dividend due on June 30,
              1997, the holders of Series 3 Preferred shall be entitled to elect
              a number of directors sufficient to constitute 15% of the total
              number of directors of the Company. On the second subsequent
              Dividend Payment Date on which there has been a Dividend Default,
              the holders of the Series 3 Preferred Stock shall be entitled to
              elect a number of directors sufficient to constitute an additional
              15% of the total number of directors of the Company, and,
              thereafter, after each second subsequent Dividend Payment Date on
              which there has been a Dividend Default, the holders of the Series
              3 Preferred Stock shall be entitled to elect a number of directors
              constituting an additional 15% of the Board of Directors. In the
              event that the size of the Board of Directors is increased at any
              time during which any Special Director is serving thereon, such
              vacancies shall be filled first by Special Directors elected by
              the holders of the Series 3 Preferred Stock until the appropriate
              number of Special Directors shall have been so elected.

         Series 3 Preferred is convertible at the election of the stockholder at
         a conversion rate equal to $10 plus all accrued but unpaid dividends
         divided by the conversion price ($10).

         The Company has the option to call all or part of the Series 3
         Preferred at an exercise price equal to the liquidation preference ($10
         per share). The Company is required to provide notice of not less than
         five trading days (as defined) and such exercise will be payable within
         three business days after the expiration of the five trading day call
         period.

         In September 1996, 350,000 Series 3 Preferred shares were issued to
         ManTech in connection with the acquisition of MSOL. For the period July
         1, 1997 to December 31, 1997, cumulative undeclared dividends amounted
         to $105,000.

         Series 4 Convertible Preferred Stock (Series 4 Preferred)

         Series 4 Preferred stockholders have a liquidation preference of $100
         per share. Series 4 Preferred is convertible into common stock at the
         election of the stockholder at a per share conversion rate equal to the
         lower of seventy percent (70%) of the market price on the day of
         conversion or $3.50. Series 4 Preferred has no voting rights.

         In September 1996, 25,000 Series 4 Preferred shares were issued in
         connection with the sale of securities under an exemption pursuant to
         Regulation S. In 1996, 19,000 shares of Series 4 Preferred were
         converted into 1,236,602 shares of common stock. In 1997, the balance
         of the Series 4 Preferred shares were converted into 425,859 shares of
         common stock.

                                      F-35
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 20 - STOCKHOLDERS' EQUITY (CONTINUED)

     Preferred Stock (Continued)

         Series 5 Convertible Preferred Stock (Series 5 Preferred)

         The Series 5 Preferred stockholders have a liquidation preference of
         $1,000 per share and are entitled to receive cumulative dividends
         payable in cash at an annual rate of 6% of the liquidation preference
         ($60 per share). Such dividends shall be payable on a semi-annual basis
         commencing on December 31, 1997 and shall have preference to dividends
         on any other class of common or preferred stock. Series 5 Preferred has
         no voting rights.

         Series 5 Preferred is convertible at the election of the stockholders
         at a conversion rate equal to $10 per share and can be converted at any
         time after the earlier of:

         1.   One year from the date of issuance, or
         2.   The date of any notice of redemption of such shares.

         Beginning at any time after July 1, 1998, the Company may, at its sole
         option, redeem the outstanding shares of Series 5 Preferred at any
         time, in whole or in part, upon notice duly given to all stockholders.
         The redemption price shall be equal to the liquidation preference
         ($1,000 per share) plus all unpaid dividends accrued through the
         redemption date.

         In July 1997, 785 Series 5 Preferred shares were issued to the
         stockholders of ASDI in connection with the merger of the business.

         Series 6 Convertible Preferred Stock (Series 6 Preferred)

         The Series 6 Preferred stockholders have a liquidation preference of
         $1,000 per share and are entitled to receive dividends at an annual
         rate of 5% of the liquidation preference ($50 per share) payable as
         follows:

         1.   In cash.
         2.   At the election of the Company, in shares of common stock valued
              at the average closing bid prices for the five days on which the
              common stock was traded immediately prior to the record date for
              the payment of such dividend.

         Such dividends shall be payable on a semi-annual basis commencing on
         July 1, 1998 and shall have preference to dividends on any other class
         of common or preferred stock. Series 6 Preferred has no voting rights.

         Beginning on the sixtieth (60) day after the issuance of the Series 6
         Preferred, such shares are convertible at the election of the
         stockholders at a conversion rate equal to the quotient obtained by
         dividing the liquidation preference by an amount equal to 75% of the
         five day average closing bid price per share of common stock
         immediately prior to the date of conversion.

                                      F-36
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 20 - STOCKHOLDERS' EQUITY (CONTINUED)

     Preferred Stock (Continued)

         Series 6 Convertible Preferred Stock (Series 6 Preferred) (Continued)

         Beginning on the sixtieth (60) day after the issuance of the Series 6
         Preferred, the Company may, at its sole option, redeem the outstanding
         shares of Series 6 Preferred at any time, in whole or in part, upon
         notice duly given to all stockholders. The redemption price shall be
         equal to 133% of the liquidation preference.

         In December 1997, 1,200 Series 6 Preferred shares were issued in
         connection with the sale of securities. In 1998, the Company issued an
         additional 1,000 shares.

         Series 7 Convertible Preferred Stock (Series 7 Preferred) (issued in
         1998)

         The Series 7 Preferred stockholders have a liquidation preference of
         $1,000 per share and are entitled to receive dividends at an annual
         rate of 5% of the liquidation preference ($50 per share) payable as
         follows:

         1.   In cash.
         2.   At the election of the Company, in shares of common stock valued
              at the average closing bid prices for the five days on which the
              common stock was traded immediately prior to the record date for
              the payment of such dividend.

         Such dividends shall be payable on a semi-annual basis commencing on
         July 1, 1998 and shall have preference to dividends on any other class
         of common or preferred stock. Series 7 Preferred has no voting rights.

         Beginning on the sixtieth (60) day after the issuance of the Series 7
         Preferred, such shares are convertible at the election of the
         stockholders at a conversion rate equal to the quotient obtained by
         dividing the liquidation preference by an amount equal to 75% of the
         five day average closing bid price per share of common stock
         immediately to the date of conversion.

         Beginning on the sixtieth (60) day after the issuance of the Series 7
         Preferred, the Company may, at its sole option, redeem the outstanding
         shares of Series 7 Preferred at any time, in whole or in part, upon
         notice duly given to all stockholders. The redemption price shall be
         equal to 133% of the liquidation preference.

                                      F-37
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 20 - STOCKHOLDERS' EQUITY (CONTINUED)

         Series 8 Convertible Preferred Stock (Series 8 Preferred) (issued in
         1998)

         The Series 8 Preferred stockholders have a liquidation preference of
         $1,000 per shae and are entitled to receive dividends at an annual rate
         of 5% of the liquidation preference ($50 per share) payable as follows:

         1.   In cash
         2.   At the election of the Company, in shares of common stock valued
              at the average closing bid prices for the five days on which the
              common stock was traded immediately prior to the record date for
              the payment of such dividend.

         Such dividends shall be payable on a semi-annual basis commencing on
         July 1, 1998 and shall have preference to dividends on any other class
         of common or prefrred stock, other class of common or preferred stock.
         Series 8 Preferred has no voting rights.

         Beginning on the sixtieth (60) day after the issuance of the Series 8
         Preferred, such shares are convertible at the election of the
         stockholders at a conversion rate equal to the quotient obtained by
         dividing the liquidation preference by an amount equal to 75% of the
         five day average closing bid price per share of common stock
         immediately to the date of conversion.

         Beginning on the sixtieth (60) day after the issuance of the Series 8
         Preferred, the Company may, at its sole option, redeem the outstanding
         shares of Series 7 Preferred at any time, in whole or in part, upon
         notice duly given to all stockholders. The redemption price shall be
         equal to 133% of the liquidation preference.

     Liquidation Preference and Dividends in Arrears

     The value of the liquidation preferences and dividends in arrears is as
     follows:

<TABLE>
<CAPTION>
                                                    Number       Liquidation         Total         Dividend
                                                      of         Preference       Liquidation         in             Total
                                                    Shares        Per Share        Preference       Arrears          Value
                                                ------------     -----------      ------------     ---------      ------------
<S>                                             <C>              <C>              <C>              <C>            <C>
       December 31, 1997
         Series 1                                       -         $   -           $       -        $    -         $       -
         Series 2                                       -             -                   -             -                 -
         Series 3                                    350,000            10           3,500,000        61,250         3,561,250
         Series 4                                       -             -                   -             -                 -
         Series 5                                        785         1,000             785,000          -              785,000
         Series 6                                      1,200         1,000           1,200,000          -            1,200,000
                                                                                  ------------     ---------      ------------
                                                                                  $  5,485,000     $  61,250      $  5,546,250
                                                                                  ============     =========      ============

       December 31, 1996
         Series 1                                     22,500      $     10        $    225,000     $    -         $    225,000
         Series 2                                       -             -                   -             -                 -
         Series 3                                    350,000            10           3,500,000        61,250         3,561,250
         Series 4                                      6,000           100             600,000          -              600,000
                                                                                  ------------     ---------      ------------
                                                                                  $  4,325,000     $  61,250      $  4,386,250
                                                                                  ============     =========      ============
</TABLE>

                                      F-38
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 20 - STOCKHOLDERS' EQUITY (CONTINUED)

     Dividends

     In 1997, the Company declared and paid the following dividends:

                                    Number
                                      of           Dividend        Total
                                    Shares         Per Share     Dividend
                                   --------       -----------   ----------
         Series 3                   350,000       $       .47   $  165,123
         Series 5                       785             30.00       23,550
                                                                ----------
                                                                $  188,673

     Common Stock

     On May 26, 1995, the Company filed Restated Articles of Incorporation with
     the Nevada Secretary of State pursuant to which the Company increased its
     authorized common stock from 20,000,000 pre-split shares, par value $.01
     per share to 40,000,000 shares, par value $.01 per share. In addition, in
     July 1995, the board of directors declared a one-for-two reverse split of
     its common stock. All share data and per share amounts have been adjusted
     to reflect the reverse stock split on a retroactive basis.

     In 1997, the Company authorized the issuance of 200,000 shares of common
     stock as follows:

     1.  50,000 shares at a price of $2.34 per share to a corporation for
         consulting fees for the period October 14, 1997 through October 14,
         1999. The shares will be issued in 1998.

     2.  150,000 shares at $2.00 per share to the former officers of NATCOM in
         consideration for the continuation of their respective non-competition
         agreements. The shares will be issued in 1998.

     In 1996, the Company authorized the issuance of 39,000 shares of common
     stock as follows:

     1.  24,000 shares at a price of $2.00 per share to a corporation in
         connection with the sale of securities. Such amount has been offset
         against additional paid-in capital in the consolidated statements of
         stockholders' equity. The shares were issued in 1997.

     2.  15,000 shares at a price of $3.19 per share to three prior NATCOM
         stockholders relating to the payment of a portion of the purchase price
         per the stock purchase agreement. The shares were issued in 1997.

                                      F-39
<PAGE>

                                      GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                             DECEMBER 31, 1997 AND 1996


NOTE 20 - STOCKHOLDERS' EQUITY (CONTINUED)

     In December 1995, the Company authorized the issuance of 37,792 shares of
     common stock as follows:

     1.  22,792 shares at a price of $6.00 per share totalling $136,753 to the
         lessor of the Company's Pennsylvania warehouse facility to prepay the
         rent for the period February 1996 through October 1996. Such amount has
         been included as prepaid expenses and other current assets in the
         consolidated balance sheets. At December 31, 1995, such shares had not
         been issued and the transaction was reversed in 1996.

     2.  8,333 shares at a price of $3.00 per share totalling $25,000 to two
         board members in payment of director fees. Such amount was included in
         operating expenses in the consolidated statements of operations. Such
         shares were issued in 1996.

     3.  6,667 shares at a price of $3.00 per share totalling $20,000 to two
         board members to prepay 1996 director fees. Such amount was included as
         prepaid expenses and other current assets in the consolidated balance
         sheets at December 31, 1995. The shares were issued in 1996 and the
         amount is included in operating expenses in the consolidated statements
         of operations in 1996.

     Sale of Securities

     In 1996, the Company sold shares of preferred and common stock under an
     exemption pursuant to Regulation S. The Company raised a total of
     $4,294,129, which was net of offering costs totalling $2,677,371.


NOTE 21 - STOCK OPTIONS

     The Company adopted the 1995 Stock Option Plan which provides, among other
     things, for the Company's board of directors to grant options to officers
     and other key employees of the Company and its subsidiaries for the
     purchase of up to 250,000 shares of the Company's common stock at prices,
     and over exercise periods, to be determined by the board of directors at
     the time the options are granted.

   
     In January 1996, the Company granted seven-year options to various officers
     and employees to purchase 107,900 shares of common stock at $3.25 per
     share. The options vest 25% per year on each of the first four
     anniversaries of the date thereof. If the optionee ceases to be an
     employee, the option shall terminate immediately if such cessation is for
     cause or without consent, one year following such cessation if such
     cessation is due to the optionee's death or disability, and three months
     following such cessation in all other cases, but not after the date the
     option would otherwise expire. No compensation expense was recognized as
     the exercise price was greater than the fair market value of the underlying
     common stock at the date of grant.
    

                                      F-40
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 21 - STOCK OPTIONS (CONTINUED)

   
     In April 1997, the Company granted the factor options to purchase 100,000
     shares of common stock at $3.00 per share. The options expire in April
     2000. No expense was recognized as the exercise price was greater than the
     fair market value of the underlying common stock at the date of grant.
    

     No options were exercised in 1996 and 1997. A summary of option activity is
     as follows:

                                                1997        1996        1995
                                              --------    --------     ------

         Beginning balance                     107,600        -             -
         Options issued                        100,000     107,600          -
         Options exercised or expired          (70,600)       -             -
                                              --------    --------     ------
         Ending balance                        137,000     107,600          -
                                              ========    ========     ======


NOTE 22 - WARRANTS

     The Company authorized the issuance of warrants with terms of one to five
     years to various corporations and individuals in connection with the sales
     of securities, loan agreements and consulting agreements. Exercise prices
     range from $1.75 to $6.75 per warrant. The warrants expire at various times
     from August 15, 1998 through November 14, 2002.

     No warrants were exercised in 1996 and 1997. A summary of warrant activity
     is as follows:

                                            1997           1996         1995
                                        ------------    ----------     ------

        Beginning balance                    936,583          -             -
        Warrants issued                    1,218,750       936,583          -
        Warrants exercised or expired       (100,000)         -             -
                                        ------------    ----------     ------
        Ending balance                     2,055,333       936,583          -
                                        ============    ==========     ======

                                      F-41
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 23 - FAIR VALUE OF FINANCIAL INSTRUMENTS

     The amounts at which cash, due from factor, accounts receivable, accounts
     payable, due to financial institution, notes payable and accrued expenses
     and other current liabilities are presented in the balance sheets
     approximate their fair value due to their short maturities. The following
     table presents the carrying amount and fair value at December 31, for due
     on acquisitions.

<TABLE>
<CAPTION>
                                                       1997                        1996
                                             ------------------------    ------------------------
                                              Carrying        Fair        Carrying        Fair
                                               Amount         Value        Amount         Value
                                             ----------    ----------    ----------    ----------
<S>                                          <C>           <C>           <C>           <C>       
         Due on acquisitions                 $2,127,084    $1,571,835    $2,957,058    $2,223,747
                                             ==========    ==========    ==========    ==========
</TABLE>

     The fair value of due on acquisitions has been determined based on
     discounted cash flow using a market rate of interest at the balance sheet
     date as applicable to comparable debt.


NOTE 24 - ACCOUNTING FOR STOCK-BASED COMPENSATION

     The Company has adopted the disclosure-only provisions of SFAS No. 123,
     "Accounting for Stock-Based Compensation," but applies Accounting
     Principles Board Opinion No. 25 and related interpretations in accounting
     for the stock options and warrants granted. No expense was recognized in
     1997 and 1996. If the Company had elected to recognize expense for the
     stock options and warrants granted based on the fair value at the date of
     grant consistent with the method prescribed by SFAS No. 123, net loss and
     loss per share would have been changed to the pro forma amounts indicated
     below:

<TABLE>
<CAPTION>
                                                        1997                            1996
                                            ---------------------------     ---------------------------
                                                 As             Pro             As              Pro
                                              Reported         Forma         Reported          Forma
                                            -----------     -----------     -----------     -----------
<S>                                         <C>             <C>             <C>             <C>         
         Net loss                           $(9,435,960)    $(9,489,611)    $(1,085,388)    $(1,127,178)
         Loss per share                           (1.29)          (1.30)           (.33)           (.34)
</TABLE>

     The fair value of the stock options and warrants used to compute pro forma
     net loss and loss per share disclosures is the estimated present value at
     grant date using the Black-Scholes option-pricing model with the following
     weighted average assumptions: expected volatility of 4% (1996-47%); various
     risk free interest rates of 5.8% to 6.3%; and expected holding periods of
     one to four years.

                                      F-42
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 25 - DISCONTINUED OPERATIONS

     In 1997, the Company discontinued its aggregator portion of the NEVCOR
     business as it smajor vendor decided to cease distributions through the
     aggregator channel. The Company also discontinued its SPEECH SOLUTIONS
     businesses as management concluded that the ratio of capital requirements
     to revenue for a software developer were incompatible with the overall
     operations of the Company's integration, sales and manufacturing
     businesses. Summarized results of the businesses for the years ended
     December 31, are as follows:

<TABLE>
<CAPTION>
                                                                       1997           1996            1995
                                                                  --------------  -------------  -------------
<S>                                                               <C>             <C>            <C>          
              Net sales                                           $    9,230,131  $  14,084,691  $  21,677,868
                                                                  ==============  =============  =============

              Income (loss) from operations before
                income taxes (tax benefits)                       $   (8,713,715) $    (626,097) $     111,418
              Income taxes (tax benefits)                             (1,580,563)      (247,202)        44,567
                                                                  --------------  -------------  -------------
              Total income (loss) from
                discontinued operations                           $   (7,133,152) $    (378,895) $      66,851
                                                                  ==============  =============  =============
</TABLE>

     The net assets of the discontinued businesses are summarized as follows:

<TABLE>
<CAPTION>
                                                                       1997*          1996            1995
                                                                   -------------   ------------   ------------
<S>                                                                <C>             <C>            <C>         
              Current assets                                       $      32,885   $  3,828,701   $  5,490,375
              Property and equipment                                      53,362        403,385        373,578
              Other assets                                                  -         2,382,033      2,177,012
              Current liabilities                                       (224,758)    (3,554,452)    (6,563,937)
              Long-term liabilities                                         -          (176,773)      (302,706)
                                                                   -------------   ------------   ------------
                                                                   $    (138,511)  $  2,882,894   $  1,174,322
                                                                   =============   ============   ============
<FN>

     * In 1997, certain assets were transferred to VIRCOM TG and are not
reflected in discontinued operations.
</FN>
</TABLE>

                                      F-43
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 26 - REGISTRATION FOR SELLING STOCKHOLDERS

     In March 1998, the Company filed a registration statement on Form S-3 under
     the Securities Act of 1933, as amended, for the purpose of meeting an
     obligation to registering certain securities for public sale on behalf of
     certain selling stockholders. Included in such registration statement are
     the following:

         Series 6 Preferred and Series 7 Preferred
         Certain warrants at exercise prices ranging generally from $1.99 to 
         $8.75 per share

     In addition, 742,000 shares are being registered for sale. Certain shares
     being registered will vest over various periods up to two years. The
     Company will not receive proceeds from the sale of any of these shares.

     The Company intends to include Series 8 preferred through a post-effective
     amendment.

     The offering is currently being reviewed by the Securities and Exchange
     Commission.


NOTE 27 - UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

     The following unaudited pro forma, condensed, consolidated balance sheet
     assumes the completion of the sale of Series 6 Preferred and the sale of
     Series 7 Preferred. As of December 31, 1997 (received in 1998). The
     financial information presented herein does not proport to be indicative of
     what would have occurred had both transactions actually been made as of
     such date or of results which may occur in the future.

     The unaudited pro forma condensed consolidated balance sheet of the Company
     at December 31, 1997 assumes the following:

     1.  The sale of the balance of Series 6 Preferred net of offering costs.
     2.  The sale of Series 7 Preferred net of offering costs.

                                      F-44
<PAGE>

                    GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


NOTE 27 - UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
              (CONTINUED)
<TABLE>
<CAPTION>
                                                         Company
                                                           As               Pro Forma
                                                        Reported           Adjustments          Pro Forma
                                                     -------------        ------------        -------------
                                                      (Historical)         (Unaudited)         (Unaudited)
<S>                                                  <C>                  <C>                 <C>          
              Current assets                         $   8,626,998   (1)  $    900,000        $  10,800,998
                                                                     (2)     1,274,000
              Property and equipment                     1,326,058                -               1,326,058
              Other assets                               8,981,911                                8,981,911
                                                     -------------        ------------        -------------
                                                     $  18,934,967        $  2,174,000        $  21,108,967
                                                     =============        ============        =============

              Current liabilities                    $  15,410,553        $       -           $  15,410,553
              Long-term debt                             1,632,115                -               1,632,115
                                                                     (1)       900,000
              Stockholders' equity                       1,892,299   (2)     1,274,000            4,066,299
                                                     -------------        ------------        -------------
                                                     $  18,934,967        $  2,174,000        $  21,108,967
                                                     =============        ============        =============
</TABLE>

(1) To record the sale of 1,000 shares of Series 6 Preferred net of estimated
    offering costs of $100,000. (1,200 shares sold in 1997). 

(2) To record the sale of 1,425 shares of Series 7 Preferred net of
    estimated offering costs of $151,000.

NOTE 28 - BUSINESS SEGMENT DATA

     The Company's operations are conducted through two business segments,
     Systems Integration and Production. The Production division was acquired in
     September 1996 and as such, divisional information is not shown for 1995.

<TABLE>
<CAPTION>
                                                                     Years Ended
                                                                     December 31,
                                                            ----------------------------
                                                                 1997            1996
                                                            -------------  -------------
<S>                                                         <C>            <C>          
              Net Sales by Division:

              Systems Integration                           $  26,324,234  $  14,068,631
              Production                                       24,910,892     13,985,710
                                                            -------------  -------------
                                                            $  51,235,126  $  28,054,341
                                                            =============  =============
</TABLE>

                                      F-45
<PAGE>

                                      GLOBAL INTELLICOM, INC. AND SUBSIDIARIES

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                             DECEMBER 31, 1997 AND 1996



NOTE 28 - BUSINESS SEGMENT DATA (CONTINUED)

     Operating loss of each division is as follows:

<TABLE>
<CAPTION>
                                                                            Years Ended
                                                                            December 31,
                                                                    ----------------------------
                                                                         1997            1996
                                                                    -------------  -------------
<S>                                                                 <C>            <C>          
         Systems Integration                                         $   1,098,802  $    (989,462)
         Production                                                     (2,353,887)        62,435
         Other income (expense)                                         (1,557,852)      (238,803)
         Income tax benefit                                                510,129        459,337
         Discontinued operations                                        (7,133,152) $    (378,895)
                                                                     -------------  -------------
         Net loss                                                    $  (9,435,960) $  (1,085,388)
                                                                     =============  =============
</TABLE>

     Identifiable assets of each division are as follows:
<TABLE>
<CAPTION>
                                                                            Years Ended
                                                                            December 31,
                                                                    ----------------------------
                                                                         1997            1996
                                                                    -------------  -------------
<S>                                                                 <C>            <C>          
         Systems Integration                                         $   9,727,087  $   8,931,706
         Production                                                      4,958,063     10,554,422
         General corporate assets                                        4,249,817      3,336,764
                                                                     -------------  -------------
         Total assets                                                $  18,934,967  $  22,822,892
                                                                     =============  =============
</TABLE>

     Identifiable assets by division are those assets that are used in the
     operation of each division. General corporate assets consist primarily of
     property and equipment, intangible assets and deferred income taxes.


                                      F-46