SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
                   ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended March 31, 2002


                           Commission File No. 0-23199

                            Phone 1 Globalwide, Inc.
              (Exact Name of Small Business Issuer in Its Charter)

          Delaware                                            65-0669842
(State or Other Jurisdiction of                           (I.R.S.) Employer
Incorporation or Organization)                            Identification Number)

100 N. Biscayne Boulevard, Suite 2500, Miami Florida                   33132
     (Address of principal executive offices)                        (Zip Code)

                                 (305) 371-3300
                (Issuer's Telephone Number, Including Area Code)


    SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT: NONE

   SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT: COMMON
                             Stock, $.001 per share

Check whether the issuer: (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 |_|

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained herein, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |_|

State the issuer's revenues for its most recent fiscal year: $3,712,480

STATE THE AGGREGATE MARKET VALUE OF THE ISSUER'S VOTING STOCK HELD BY
NON-AFFILIATES OF THE ISSUER AS OF JUNE 17, 2002: $9,234,700 (NEED TO COMPLETE
THIS)

State the number of shares outstanding as of the issuer's classes of common
stock as of June 17, 2002: Common Stock, $.001 par value: 41,078,702.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None.

Transitional Small Business Disclosure Format: Yes |_| No |X|



<PAGE>

                    FORWARD-LOOKING AND CAUTIONARY STATEMENTS

Sections of this Form 10-KSB, including the Management's Discussion and Analysis
of Financial Condition and Results of Operations, contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the Securities Act), Section 21E of the Securities and Exchange Act of
1934, as amended (the Exchange Act), and the Private Securities Litigation
Reform Act of 1995, as amended. These forward-looking statements are subject to
risks and uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from the results,
performance or achievements expressed or implied by the forward-looking
statements. You should not unduly rely on these statements. Forward-looking
statements involve assumptions and describe our plans, strategies, and
expectations. You can generally identify a forward-looking statement by words
such as may, will, should, expect, anticipate, estimate, believe, intend, or
project. This report contains forward-looking statements that address, among
other things,

o        our business and financing plans,
o        regulatory environments in which we operate or plan to operate, and
o        trends affecting our financial condition or results of operations, the
         impact of competition, the start-up of certain operations, roll out of
         products and services and acquisition opportunities.

Factors, risks, and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements (Cautionary Statements)
include, among others,

o        our ability to raise capital,
o        our ability obtain distribution for our products and services,
o        our ability to roll out products and services,
o        our ability to provide our products and services at competitive rates,
o        our ability to execute our business strategy in a very competitive
         environment,
o        our degree of financial leverage,
o        risks associated with our acquiring and integrating companies into our
         own,
o        risks associated with rolling out products and services,
o        risks relating to rapidly developing technology and providing services
         over the Internet;
o        regulatory considerations and risks related to international economies,
o        risks related to market acceptance and demand for our products and
         services,
o        our dependence on third party suppliers,
o        the impact of competitive services,
o        other risks referenced from time to time in our SEC filings.

All subsequent written and oral forward-looking statements attributable to us,
or anyone acting on our behalf, are expressly qualified in their entirety by the
cautionary statements. We do not undertake any obligations to publicly release
any revisions to any forward-looking statements to reflect events or
circumstances after the date of this report or to reflect unanticipated events
that may occur.


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

BACKGROUND

We were initially organized on May 17, 1996 in Florida to locate and effect
business combinations with existing business. On January 21, 2000, we
consummated a stock purchase agreement with all of the shareholders of
Globaltron Communications Corporation, a Delaware corporation (GCC) whereby we
acquired 100% of the outstanding GCC shares. As a result, GCC became a wholly
owned subsidiary of Win-Gate Equity Group, Inc. On November 17, 2000, we changed
our name from Win-Gate Equity Group, Inc. to Globaltron Corporation. Our trading
symbol also changed to GBCP.OB from WGEG.OB on January 19, 2001. On June 13,
2001, we consummated a stock purchase agreement with all of the shareholders of
Phone 1, Inc, a Florida corporation (Phone 1) whereby we acquired 100% of the
outstanding Phone 1 shares. As a result, Phone 1 became a wholly owned
subsidiary of Globaltron Corporation. On September 25, 2001, we changed our name
to Phone 1 Globalwide and reincorporated as a Delaware corporation. Our trading
symbol changed to PHGW.OB from GBCP.OB. On November 16, 2001, the Company
entered into a joint venture agreement with MTG Interconnection LC (MTG), a
Florida limited liability company, to form Phone 1 Smart, a Delaware limited
liability company. The Company owns 51% of Phone 1 Smart. Unless we expressly
state otherwise, when we refer to us or we or the Company or Phone 1 Globalwide,
we include each of our subsidiaries.

Our executive office is located at 100 North Biscayne Boulevard, Suite 2500,
Miami, Florida 33132 and our telephone number is (305) 371-3300.

OVERVIEW

We operate in two basic business areas.

The first business is to act as a wholesale carrier of telephone traffic to
United States based local and long distance (domestic and international)
companies to termination points within and without the United States. We
currently have two main switch facilities, one located in New York and the other
in Miami, Florida. The two locations are interconnected by a backbone with
different vendors for redundancy purpose. We operate this backbone as an IP/ATM
between the host switch in Miami and the gateway in New York. The switches
support different types of signaling to accommodate our customers and vendors.
The compression and circuit emulation equipment is capable of delivering
voice-over IP protocols. Additionally, we maintain operating agreements that
enable us to deliver services in various countries throughout the world using
third party networks. We have constructed an international carrier grade
convergent Internet Protocol (IP) network to deliver reliable, low cost
connectivity to customers in our target markets. We have an Asynchronous
Transfer Mode/Voice over Internet Protocol (VoIP/ATM) switching network
operating in the United States.

The second business area, where the Company intends to concentrate its
resources, is a marketing, technology research and development company, carrier
and reseller using the network of our GCC subsidiary to deliver retail products
to consumers through payphones owned by third parties. This business is
conducted by Phone 1, Inc. ("Phone 1"), a wholly owned subsidiary of the Company
acquired in June 2001 for 12.0 million restricted shares of our common stock and
assumption of debt. The core product of Phone 1 consists of direct dialed
international and domestic calls for $1.00 to anywhere in the world. Each call
is rated or priced by a preset pricing structure consisting of a number of
minutes for the destination dialed by the customer. The consumer simply dials
011, the country code and destination for international calls and 1+ the number
for domestic calls. Prior to depositing the coins a voice prompt tells the
customer how many minutes they will be able to talk for the $1.00 deposited. The
call is routed to the Company's platform, which provides fraud detection and
prevention as well as generates call detail records. The routing is a method of
transporting a call from one location to another. The platform then processes
the call and switches it to the Company's network. The Company is
inter-connected with several tier one carriers as well as carrier service
providers to specific countries. This allows the Company to provide competitive
pricing to the consumer or customer using the service. The customer recognizes
the international service availability by the Company's bright yellow signature
handset installed on the payphone.

Phone 1 has developed a marketing and business plan for the placement of
international and domestic long distance (including Canada) telephone calls from
public payphones in the United States to anywhere in the world at competitive
consumer rates. The service is currently being offered in South Florida, Central
Florida, metropolitan New York and certain other areas of the country on a
test basis and a regular commercial basis. The business plan is to roll out the
service in six of the largest metropolitan areas of the United States, utilizing
the Company's existing VOIP/ATM switching networks as well as other third party
telecommunication providers.


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STRATEGY

We intend to capitalize on the rapidly increasing immigrant population in the
United States, initially focusing on immigrants from Mexico, Central & South
America and the Caribbean region. The population of those areas is one of the
fastest growing segments of immigrants in the United States. Our goal is to
provide both international and domestic long distance services through
Phone1-enabled payphones at competitive rates to such immigrants living in the
United States. Phone1 intends to capture a large portion of the calls from
payphones made by these immigrants through its local brand-awareness campaigns
which include the following elements:

o        Yellow handsets co-branded with our telephone customers' logos. A
         distinctive yellow handset with the bright green Phone1 logo
         complimented by our customer's logo calls attention to our phone
         services and communicates to consumers immediately that a particular
         phone is Phone1-enabled.

o        Point of Sales (POS) material. Phone1 provides colorful point-of-sales
         material at the phone site advertising Phone1 services and in some
         cases providing rate information for the end-user.

o        Media support. Phone1 develops launch advertising on radio and
         television as well as in newspapers and on buses in support of Phone1
         initiated services for its customers.

o        Personal assistance. Phone1 stages sales assistance around new
         Phone1-enabled sites and helps consumers understand how to use the
         service, emphasizing the simplicity and inexpensive cost of the
         service.

o        Caller support center. Phone1 maintains a call center to handle any
         complaints or phone outage problems.

o        Call database. Phone1 captures detailed call records and analyzes the
         information to help its customers fine-tune the service offerings to
         various countries and manage rate plans on a real-time basis.

Developing, as well as constructing network, marketing, branding and expanding
our businesses, requires significant capital expenditures, a substantial portion
of which is incurred before the realization of revenues. These expenditures,
together with the associated early operating expenses have resulted and will
result in negative cash flow until an adequate customer base is established.
However, as our user base grows, we expect that incremental revenues can be
generated with decreasing incremental operating expenses. However, we make no
assurances that we will be able to identify, attract, finance, or consummate our
operational and strategic objectives, all of which are heavily dependent upon,
among other things, the Company's ability to obtain additional financing. In
order to help attain our goal, our strategy is to:

o        Enhance our network capability for international transport with
         emphasis in Voice over IP (VoIP). The backbone between the two
         switching facilities in Miami and New York transport the legacy
         system, digital telephony and supports ATM as transport protocol for
         management of devices and redundancy among VoIP equipment for
         convenience. The international convergent IP network have been
         constructed with Lucent Technology and Cisco routing devices which
         supports the different business and class of service of the company.

o        Phone 1 has entered into reseller agreements with payphone owners and
         operators. Through those payphones, we intend to offer international
         and domestic long distance, inclusive of Canada, telephone calls in the
         United States to anywhere in the world at competitive consumer rates.
         The Company does not incur expense for maintaining and operating the
         payphones. The payphone owners and operators are responsible for
         installing the necessary proprietary hardware and signage (provided by
         Phone1) as well as continuing to maintain the payphones. The payphone
         owners are also responsible for collecting the coins and keeping the
         payphones operational. The payphone owners are responsible for the
         monthly phone line charges for operating the payphone.

         This service is currently being offered in South Florida, Central
         Florida, metropolitan New York and certain other areas of the country
         on test basis and on a regular commercial basis. Phone 1's business
         plan is to roll out its services in six of the largest metropolitan
         areas of the United States, utilizing the Company's existing VoIP/ATM
         switching networks as well as other third party telecommunications
         providers.

         We currently have approximately 400 to 500 payphones that are
         undergoing tests conducted by five major telecom companies. If the
         tests are deemed successful by these telecom companies, it is expected
         that it will be an implementation of the Phone 1 services in their
         payphones.


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<PAGE>


INDUSTRY OVERVIEW

COMPONENTS OF A LONG DISTANCE TELEPHONE CALL

A long distance telephone call consists of three parts:

1.       Origination
2.       Transport
3.       Termination

Generally, a national long distance call originates on a local exchange network
or a leased line and is transported to a network of long distance carriers. The
call is then carried along the long distance network to another local exchange
network where the call is terminated. An international long distance call is
similar to a national long distance call, but typically involves at least two
traditional long distance carriers. The first carrier transports the call from
the country of origination and the second carrier terminates the call in the
country of termination. The two companies may be operating companies within a
group or under common ownership. The international long distance
telecommunications services industry consists of all transmissions of voice and
data that originate in one country and terminate in another.

CHANGES AND GROWTH STRATEGIES IN THE INDUSTRY

The telecommunications industry has undergone a period of fundamental change,
which has resulted in a growth in international telecommunications traffic. The
strong growth experienced in the international telecommunications market is
driven principally by the following factors:

o        Increases in the availability of telephones and the number of access
         lines in service around the world, stimulated by technological
         advancements

o        Opening of overseas telecommunications markets due to deregulation and
         the privatization of government-owned monopoly carriers, permitting the
         emergence of new carriers

o        Increase globalization of commerce, trade and travel, which is creating
         increased communications needs

o        Reduction of international long distance rates, which is making
         international calling available to a much larger customer base and
         stimulating increasing traffic volumes

o        Increased availability and quality of digital undersea fiber optic
         cable, which has enabled long distance carriers to improve the quality
         of their service while reducing customer access cost


PAYPHONE INDUSTRY OVERVIEW AND CURRENT TRENDS

According to industry sources there are approximately 2 million payphones in the
United States. The major telecommunications companies including Verizon, SBC,
AT&T, Sprint, Qwest, Cincinnati Bell and Bell South dominate the payphone
market, and operate approximately 75 percent of the payphones in the United
States. The remaining payphones are managed and often-times owned by Independent
Payphone Operators ("IPPs").

During the early 1990's, many of the large telecommunication companies sold
payphones to independent operators to mitigate replacement capital costs. They
also developed plans to increase payphone ownership by independents such as
granting development contracts to independents who wanted to grow and expand.
The FCC enacted rules to encourage payphone expansion to meet the social needs
of lower income people. As competition intensified as a result of the 1996
Telecommunications Act margins were squeezed for independents, wireless access
became a substitute product for those capable of paying for it and thereby
encroached on the payphone access market as well. Finally, prepaid calling cards
gained popularity and further eroded margins for payphone owners. The result has
been a lack of growth in the number of payphones and a lack of investment in the
market. Fraud also created serious problems for payphone owners, resulting in
the near elimination of coin-operated international calls. Fortunately, there is
still a large market for international calls originated by payphones. For the
less financially fortunate, they are generally left with but one alternative,
(prior to Phone 1) the purchase of a pre-paid calling card. Functionally an
effective solution for international calling, the prepaid card industry has its
own structural problems which give rise to the opportunity to use coins.
Pre-paid cards, for example, generally face high distribution costs, ranging
from 20%-40% of the card's face value.

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<PAGE>

Phone1 is seeking to address the industry problems by developing simple pricing
formats - a call for $1 in coins for five, or seven or some other amount of
minutes. There are no hidden fees for the consumer. The Phone1 program does not
require continuous high distribution costs - Phone1 makes use of efficient media
and POS material to create awareness at lower costs than those of its
competitors in the pre-paid business. The standard Phone1 agreement permits
payphone owners to collect their revenues immediately unlike the dial around
revenues, which may or may not be paid, and which typically take substantially
longer to collect. We believe this puts Phone1 in a superior position from its
competition.

SERVICES

SWITCHED VOICE SERVICES

We currently have two main switch facilities, one located in New York and the
other in Miami, Florida. These locations are interconnecting customers and
commercial dedicated services with enhanced features. The two locations are
linked by a backbone with different vendors for redundancy purposes. We operate
this network as an IP/ATM between the host switch in Miami and the gateway in
New York. The switches support different types of signaling to accommodate our
customers and vendors requirements. The compression and circuit emulation
equipment is capable of delivering voice-over IP protocols.

PHONE 1 SERVICES

Through our wholly-owned subsidiary, Phone 1, we intend to offer domestic and
international long distance, inclusive of Canada, telephone calls from third
party owned payphones in the United States at competitive consumer rates. The
core product consists of direct dialed international and domestic calls for
$1.00 to anywhere in the world. Each call is rated or priced by a preset pricing
structure consisting of a number of minutes for the destination dialed by the
customer. The consumer simply dials 011, the country code and destination for
international calls and 1+ the number for domestic calls. Prior to depositing
the coins a voice prompt tells the customer how many minutes they will be able
to talk for the $1.00. The call is routed to the Company's platform, which
provides fraud detection and prevention as well as generates call detail records
(CDR). The routing is a method of transporting a call from one location to
another. The platform then processes the call and switches it to the company's
network. The Company is inter-connected with several tier one carriers as well
as other carrier service providers to specific countries. This allows the
Company to provide competitive pricing to the consumer or customer using the
service.

Phone1 realized through market tests that the calls could not be efficiently
made directly from payphones with coins because of various fraud issues and
antiquated technology. The Company and third party design teams developed
exclusive firmware and software versions for smart payphones to enable the
service. These smart payphones exists in an installed base throughout the United
States and are operated by independent phone companies as well as regional bell
operating companies. Although there can be no assurance that the Company will be
able to obtain patents, certain aspects of the technology developed by the
Company have patent pending status. The technology incorporates several systems
of software and firmware that once installed into the existing smart payphone
locations allows the service to be sold to the consumer.

Protel is a leading manufacturer of smart payphone technology located in
Lakeland, FL. Our ten-year agreement with Protel is to an exclusive proprietary
firmware installed in the Protel brand smart phones that allows for an increase
to 290 country codes to be defined and rated or priced differently. Minutes of
use can vary from 7 minutes per $1.00 to Mexico City to 5 minutes per $1.00 to
Bogota, Colombia or 7 minutes to Sao Pablo, Brazil. Firmware prior to the Protel
agreement only allowed for 9 destinations to be rated at different prices. The
Protel agreement also provides to the Company a proprietary and exclusive use of
the answer detection (a method of signaling) when the call is answered by the
called party. This aids in customer satisfaction when it comes to collecting the
deposit or returning the coins when a call is not answered. There are
approximately 650,000 Protel brand smart payphones deployed in the United
States.

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QuorTech Solutions, Inc. is a Delaware company with manufacturing facilities in
Bradenton, FL. We recently entered into an agreement with QuorTech for an
exclusive license for a special developed software version of Quortech's family
of products. This includes the Elcotel legacy product as well as products known
as "Gemini" and "Millenium". There are over 800,000 payphones installed
throughout the United States and Canada where the exclusive technology can be
applied. The agreement calls for a special version of software to be used in
routing international coin type calls to the Company's platform. These
enhancements include increasing the rating table for international calls to at
least 100 destinations at different rates and more destinations at the same
rates as well as the Company's answer detection method provided from the
Company's platform as well as a precise call duration control for billing
purposes. The Gemini version includes domestic calls rated and routed as well.

"Smart payphones" have an internal processor for recognizing the type of call
(whether local or long distance) and from a programmable rate table determine
the amount to charge. In most instances it has voice capability that plays a
voice prompt telling the customer how much money to deposit. It monitors the
coin deposit and if satisfied follows the predefined programming to place the
call. This aspect of placing the call is referred to as "routing". It has the
means of determining complete and incomplete calls based on standard protocols
in communications, and controls the collection or refund of coin. It is line
powered via the voltage from the phone line with battery back up or AC power.
Smart phones have up to 2MB of memory capacity and are managed with a simple
Personal Computer (PC). There are approximately 1 million of these phones
deployed throughout the country.

Among other things the Smart phone technology involves the use of proprietary
methods of answer supervision and answer detection necessary to validate the
call being answered by the person called from the Company's platform. In the
past due to the non standard ring cadence and system messages that vary
throughout the world, the existing technology in the payphones did not recognize
an answered call correctly 100 percent of the time and oftentimes collected the
coins deposited when a call was not answered. This is now performed reliably by
the Company's platform software and switches, which process the call, detect and
prevent fraud. The Company has the ability to set predetermine caps or
limitations based on the phone number initiating the call. This limits the
Company's exposure to the possibility of fraud. The Company's licensed and
proprietary exclusive use of technology allows the consumer to have his money
refunded or collected as required.

Many technical issues had to be contemplated to prevent fraud. In the past,
payphone operators trying to provide an international service would find on
their monthly phone bill, calls with no money in the coin box. This type of
fraud is preformed by clipping onto an unsuspecting operators service or phone
line and placing the call directly out on the line. The operator had no
alternative except to block international calls. The Company's developed
technology allows 011 international calls to be blocked at the central office
level. This is basically accomplished via access numbers and pin numbers being
preprogrammed into the smart phone and interacting with the Company's platform
in order for the call to be placed. This is transparent to the customer. They
simple dial direct and deposit the $1.00 or 4 quarters.

Phone1 is developing an expanded capability to provide platform services for
"dumb phones". Currently, Phone1's market is limited to customers that use smart
technology. Dumb phones need Phone1's platform driven enhancements since there
is no microprocessor included in the phone. As the Company developed the
technique for the service on smart phones many of the regional bell operating
companies (RBOC) have shown interest in the service as well. With a few
exceptions these companies use a much older technology that is commonly referred
to as Dumb Phones. These network controlled dumb payphones require the use and
interconnection of technologically antiquated systems from every central office
throughout the country. This network has basically been in place since the
1960's. The last major upgrade to dumb phones was the replacement of the rotary
dial to push button.

On these Dumb Phones, the method of rating the call and announcing how much
money to deposit for a specified number of minutes, occurred at a rating
platform. Many times these calls are routed to expensive live operators to
listen for the coin tones that are produced when the coin is deposited. This
cost prohibitive system is scheduled to be uninstalled over the next year
beginning in September of 2002. This leaves the dumb phone operators in a
predicament of trying to provide this service themselves through their own
external rating system (referred to as a TOPS). Many dumb payphones currently in
operation can only handle local calls. However, many of the major RBOCs that
the company has spoken to, do not have the capability to provide this additional
service on their over loaded rating platforms and the use of live source
operators is economically unattractive.

The Company is in the process of developing technology which it believes will
allow for the rating of domestic long distance calls from the dumb phones as
well as 011 international calls. If successful, such a technological innovation
could effectively double the market size of the Phone1 platform and provide our
customers with the functionality of a smart phone. It would also further aid our
customers in avoiding costly phone upgrades to the smart technology. Currently,
Phone1 is finalizing its dumb phone technology, but there can be no assurance
that it will be successful in such efforts.


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SALES, MARKETING AND SERVICE DELIVERY

Our sales and marketing approach is to build long-term business relationships
with customers. We currently have a staff of one person coordinating our
wholesale carrier business. We plan to hire an additional person in the near
future. Sales personnel locate potential business customers by several methods,
including customer referral, market research, cold-calling, and networking
alliances.

On the Phone 1 side, there are three people that are servicing the sales and
marketing of that business. They have limited themselves to the regional bell
operating companies and approximately 50 major independent payphone operators.

We have a staff of approximately 10 people dedicated to development and
maintenance of our network. This same staff has developed the fraud detection
technology that we use for our Phone 1 services.

COMPETITION

OVERVIEW

The markets in which we currently operate and plan to operate are extremely
competitive and can be significantly influenced by the marketing and pricing
decisions of larger industry participants. There are limited barriers to entry
in many of the telecommunications and Internet markets in which we compete and
plan to compete. We expect competition in these markets to intensify in the
future.

We compete in the international telecommunications market, based on price,
customer service, transmission quality, and breadth of service offerings. Our
competitors include large, facilities-based, multinational carriers, and smaller
facilities-based long distance service providers and pre-paid phone cards. We
cannot assure anyone that we will be able to effectively compete in any of our
target market areas or for targeted services, which could adversely affect our
plan of operations, business, and operating results.

COMPETITION WITHIN THE UNITED STATES

We compete for customers in the telecommunications markets primarily based on
price and, to a lesser extent, on the type and quality of service offered.
Increased competition could force us to reduce our prices and profit margins if
competitors are able to procure rates or enter into service agreements that are
comparable to or better than those we obtain, or if they are able to offer other
incentives to existing and potential customers. We could also face significant
pricing pressure if we experience a decrease in the volume of minutes that we
carries on our network, as our ability to obtain favorable rates from our
carrier suppliers depends, to a significant extent, on our total volume of
international long distance call traffic. There is no guarantee that we will be
able to maintain the volume of international long distance traffic necessary to
obtain favorable rates. Although we have no reason to believe that our
competitors will adopt aggressive pricing policies that could adversely affect
us, we make no assurances that such price competition will not occur or that we
will be able to compete successfully in the future.

INTERNATIONAL LONG DISTANCE SERVICE COMPETITION

Prices for international long distance calls are determined in part by
international settlement rates, which are the rates that a carrier (often a PTT)
charges to terminate an international call in its home country. While the
industry has experienced a reduction in settlement rates for a variety of
reasons inclusive of regulating limitations, this area of competition in the
international long distance business does not directly affect us because we no
longer maintain or provide direct routes from the United States to foreign
countries. At the present time, the Company is merely a reseller of others
international call termination services.

COMPETITION FROM THE PREPAID CALL CARD INDUSTRY

The prepaid calling card industry is extremely competitive, and we expect
competition to increase in the future. We estimate there are over 100 companies
offering prepaid calling cards in the United States. While the prepaid card
industry is highly price competitive, in our judgment, our product offers better
convenience and reliability to the customer.

EMPLOYEES

As of March 31, 2002, the Company employed 28 individuals on a full time basis.
We believe that our future success will depend on our continued ability to
attract and retain highly skilled and qualified employees. We have been seeking
to hire a Chief Executive Officer. None of our employees is subject to a
collective bargaining agreement. We believe that our Company's relations with
employees are good.

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ITEM 2.  DESCRIPTION OF PROPERTY

The Company's corporate headquarters and principal executive offices and network
operations center is located at 100 North Biscayne Blvd., Miami, Florida, where
we occupy approximately 12,980 square feet under a lease that expires in
November 2009. During year one of the lease, the annual rental was $311,520.
During year two of the lease, the annual rental was $323,980. During year three
of the lease, the annual rental is $336,960. During year four of the lease, the
annual rental is $350,460. During year five of the lease, the annual rental is
$364,478. During year six of the lease, the annual rental is $379,016. During
year seven of the lease, the annual rental is $394,202. During year eight of the
lease, the annual rental is $409,908. During year nine of the lease, the annual
rental is $426,393. The Company also pays certain pass-through expenses.

The Company's corporate headquarters and principal executive was previously
located in New York, New York, where it had occupied approximately 4,749 square
feet under a lease that expires in July 2010. The Company entered into sublease
agreement with a third party to occupy this facility. This sublease agreement is
set to expire in July 2010.

We also lease co-location space for our telephonic switching equipment in New
York. Currently, the lease cost incurred by us for such space in New York City
is $19,200 per month.

ITEM 3.  LEGAL PROCEEDINGS

The Company is a party to the following two lawsuits outside of the ordinary
course of business. Spitfire Merchants, Ltd. v. Globaltron Corporation f/k/a
Win-Gate Equity Group, Inc. n/k/a Phone 1 Globalwide Inc. was filed in June 5,
2001 in the Eleventh Judicial Circuit Court in and for Miami-Dade County,
Florida. The lawsuit seeks damages for alleged breach of contract regarding the
purchase of shares in the Company. Spitfire alleges that it was not given the
correct amount of shares and that some of the shares it received were
restricted, allegedly in violation of Spitfire's subscription agreement with the
Company. Spitfire has sought damages in excess of $1,000,000.00, which is
disputed by the Company. In its answer, the Company asserted the affirmative
defenses of failure to mitigate damages and failure of consideration. The
Company intends to vigorously defend this matter. Daleen Technologies, Inc. v.
Phone1, Inc. , was filed in April 1, 2002 in the Fifteenth Judicial Circuit
Court in and for Palm Beach County, Florida. Daleen seeks damages in the
approximate amount of $700,000.00 for alleged breach of a software licensing
agreement, specifically payment of monthly licensing and maintenance fees.
Phone1 filed a counterclaim against Daleen seeking damages for breach of the
same software licensing agreement, breach of express warranty, breach of an
implied warranty of fitness for a particular purpose, money had and received,
and unjust enrichment. Phone 1is seeking damages in excess of $1,000,000.00,
which sum is comprised of (1) a refund of approximately $520,000.00 for
licensing fees paid to Daleen, and (2) $500,000.00, representing the amounts
paid by Phone1 to a third party to assist in implementing and hosting the
software licensed from Daleen.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                       9
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our Common Stock trades on the OTC Bulletin Board (OTCBB) under the symbol
PHGW.OB. Prior to September 25, 2001, our Common Stock traded as GBCP.OB. The
following table sets forth, for the period indicated, the high and low sales
prices of the Company's common stock. The quotations reflect inter-dealer
prices, without retail mark-up, markdown, or commission and may not represent
actual transactions.


    Period                                           High             Low
    ------                                           ----             ----
March 31, 2002
April 1, 2001 - June 30, 2001                       $ 2.66           $ 1.00
July 1, 2001 - September 30, 2001                   $ 2.49           $ 0.77
October 1, 2001 - December 31, 2001                 $ 1.85           $ 0.87
January 1, 2002 - March 31, 2002                    $ 1.30           $ 0.80

March 31, 2001
April 1, 2000 - June 30, 2000                       $10.25           $ 5.75
July 1, 2000 - September 30, 2000                   $ 9.13           $ 5.50
October 1, 2000 - December 31, 2000                 $ 6.00           $ 1.63
January 1, 2001 - March 31, 2001                    $ 3.50           $ 0.88



At June 17, 2002, approximately 93 shareholders of record of our Common Stock
were active. We have never declared dividends on our Common Stock since
inception and have no present intention of declaring or paying any dividends in
the near future. We intend to retain any earnings, which we may realize in the
near future to finance our operations. The terms of certain loan agreements
restrict the payment of dividends or distributions.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion and analysis should be read in conjunction with, and is
qualified in its entirety by, the Financial Statements included elsewhere in
this Report. Historical results are not necessarily indicative of trends in
operating results for any future period.

GENERAL

Phone 1 Globalwide, Inc. formerly known as Globaltron Corporation and as
Win-Gate Equity Group, Inc., was reincorporated as a Delaware corporation on
September 25, 2001. The Company was initially organized on May 17, 1996 in
Florida, to locate and effect business combinations with existing businesses.

On January 21, 2000, we consummated a stock purchase agreements with all of the
shareholders of Globaltron Communications Corporation, a Delaware corporation
whereby we acquired 100% of the outstanding GCC shares. As a result, GCC became
a wholly owned subsidiary.

On June 13, 2001, we acquired all of the outstanding common stock of Phone 1,
Inc., a telecommunications marketing company, for 12.0 million restricted shares
of our common stock. As a result, Phone 1 became a wholly owned subsidiary.

On November 16, 2001, the Company entered into a joint venture agreement with
MTG Interconnection LC (MTG), a Florida limited liability company, to form Phone
1 Smart, a Delaware limited liability company. The Company owns 51% of Phone 1
Smart; an entity through which the Company intends in the future to offer Phone
1 services to commercial and residential customers without the use of payphones.

We are a facilities-based provider of integrated communications services to
United States-based local and long distance telecommunications operators. We
currently have two main switch facilities, one located in New York and the other
in Miami, Florida. The two locations are linked with different vendors for
redundancy purposes. We operate this backbone as an IP/ATM between the host
switch in Miami and the gateway in New York. The switches support different
types of signaling to accommodate all of the customers and vendors. The
compression and circuit emulation equipment is capable of delivering voice-over
IP protocols both domestically as well as overseas. Additionally, we maintain
operating agreements that enable us to deliver services in many countries
throughout the world using the third party networks.

                                       10
<PAGE>

To date, we have primarily been engaged in network engineering, developing and
testing products and services, creating brand, selecting vendors, initiating
market entry by means of agreements for developing our carrier business and
obtaining distributing agreements to provide international and domestic long
distance (including Canada) services through public payphones. We had
constructed an international carrier grade convergent Internet Protocol (IP)
network to deliver reliable, low cost connectivity to customers in our target
markets. We have an Asynchronous Transfer Mode/Voice over Internet Protocol
(VoIP/ATM) switching network operating in the United States.

Our wholly owned subsidiary Phone 1 is a marketing, technology research and
development company, carrier and reseller using the network of our GCC
subsidiary to deliver retail products to consumers through payphones owned by
third parties. The core product of Phone 1 consists of direct dialed
international and domestic calls for $1.00 to anywhere in the world. Each call
is rated or priced by a preset pricing structure consisting of a number of
minutes for the destination dialed by the customer. The consumer simply dials
011, the country code and destination for international calls and 1+ the number
for domestic calls. Prior to depositing the coins a voice prompt tells the
customer how many minutes they will be able to talk for the $1.00 deposited. The
call is routed to the Company's platform, which provides fraud detection and
prevention as well as generates call detail records. The routing is a method of
transporting a call from one location to another. The platform then processes
the call and switches it to the Company's network. The company is
inter-connected with several tier one carriers as well as unique carrier service
providers to specific countries. This allows the Company to provide competitive
pricing to the consumer or customer using the service. The customer recognizes
the international service availability by the company's bright yellow signature
handset installed on the payphone.

At the present time, Phone 1 Smart, which is intended to provide the Phone 1
services to business and residential customers in their offices and homes will
not be actively promoted by the Company until a full roll out of Phone 1
services is completed.

PLAN OF OPERATION

In support of our platform customers, we intend to capitalize on the rapidly
increasing immigrant population in the United States, initially focusing on
immigrants from Mexico, Central & South America and the Caribbean region. The
population of those areas is one of the fastest growing segments of immigrants
in the United States. Our goal is to provide both international and domestic
long distance services through Phone1-enabled payphones at competitive rates to
such immigrants living in the United States. Phone1 intends to capture a large
portion of the calls from payphones made by these immigrants through its local
brand-awareness campaigns which include the following elements:

o        Yellow handsets co-branded with our telephone customers' logos. A
         distinctive yellow handset with the bright green Phone1 logo
         complimented by our customer's logo calls attention to our phone
         services and communicates to consumers immediately that a particular
         phone is Phone1-enabled.

o        Point of Sales (POS) material. Phone1 provides colorful point-of-sales
         material at the phone site advertising Phone1 services and in some
         cases providing rate information for the end-user.

o        Media support. Phone1 develops launch advertising on radio and
         television as well as in newspapers and on buses in support of Phone1
         initiated services for its customers.

o        Personal assistance. Phone1 stages sales assistance around new
         Phone1-enabled sites and helps consumers understand how to use the
         service, emphasizing the simplicity and inexpensive cost of the
         service.

o        Caller support center. Phone1 maintains a call center to handle any
         complaintsor phone outage problems.

o        Call database. Phone1 captures detailed call records and analyzes the
         information to help its customers fine-tune the service offering to
         various countries and manage rate plans on a real-time basis.

Developing, as well as constructing network, marketing, branding and expanding
our businesses, requires significant capital expenditures, a substantial portion
of which is incurred before the realization of revenues. These expenditures,
together with the associated early operating expenses have resulted and will
result in negative cash flow until an adequate customer base is established.
However, as our user base grows, we expect that incremental revenues can be
generated with decreasing incremental operating expenses. However, we make no

                                       11
<PAGE>

assurances that we will be able to identify, attract, finance, or consummate our
operational and strategic objectives, all of which are heavily dependent upon,
among other things, the Company's ability to obtain additional financing. In
order to help attain our goal, our strategy is to:

o        Enhance our network capability for international transport with
         emphasis in Voice over IP (VoIP). The backbone between the two
         switching facilities in Miami and New York transports the legacy
         system, digital telephony and supports ATM as transport protocol for
         management of devices and redundancy among VoIP equipment for
         convenience. The international convergent IP network have been
         constructed with Lucent Technology and Cisco routing devices which
         supports the different business and class of service of the company.

o        Phone 1 has entered into reseller agreements with payphone owners and
         operators. Through those payphones, we intend to offer domestic and
         international and domestic long distance, inclusive of Canada,
         telephone calls in the United States to anywhere in the world at
         competitive consumer rates. The company does not incur in any expense
         for maintaining and operating the payphones. The payphone owners and
         operators are responsible for installing the necessary proprietary
         hardware and signage (provided by the Company) as well as continuing to
         maintain the payphones. The payphone owners are also responsible for
         collecting the coins and keeping the payphones operational. The
         payphone owners are responsible for the monthly phone line charges for
         operating the payphone.

         This service is currently being offered in South Florida, Central
         Florida, metropolitan New York and certain other areas of the country
         on test basis and on a regular commerical basis. Phone 1's business
         plan is to roll out its services in six of the largest metropolitan
         areas of the United States, utilizing the Company's existing VoIP/ATM
         switching networks as well as other third party telecommunications
         providers.

         We currently have approximately 400 to 500 payphones that are
         undergoing tests conducted by five major telecom companies. If the
         tests are deemed successful by these telecom companies, it is expected
         that it will be an implementation of the Phone 1 services in their
         payphones.

CRITICAL ACCOUNTING POLICIES

Our accounting policies are more fully described in Note A of the Notes to the
Consolidated Financial Statements. As disclosed therein, the preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions about future events that affect the amounts reported in the
financial statements and accompanying Notes. Future events and their effects
cannot be determined with absolute certainty. Therefore, the determination of
estimates requires the exercise of judgment. Actual results may differ from
those estimates and such differences may be material to the financial
statements.

The most significant accounting estimates inherent in the preparation of the
Company's financial statements include those related to impairment of assets,
allocation of purchase price to intangible assets, contingencies and the
collectibility of accounts receivable. Various assumptions and other factors
underlie the determination of these significant estimates. The process of
determining significant estimates is fact specific and takes into account
factors such as historical experience, current and expected economic conditions,
and product mix. The Company constantly re-evaluates these significant factors
and makes adjustments where facts and circumstances dictate. Historically,
actual results have not significantly deviated from those determined using the
estimates described above.

RESULTS OF OPERATIONS

The discussion below relates to results of operations for the fiscal year ended
March 31, 2002 and March 31, 2001 Revenues for the year ended March 31, 2002
were approximately $3,712,000 compared to $2,752,000 for the year ended March
31, 2001 an increase of $960,000 or 35%. The increase was primarily the result
of $1,059,000 increase in arbitrage sales, which occur from packaging wholesale
foreign termination rates from third-party carriers and reselling them to
carriers that connect to one of the Company's domestic switch sites, $759,500 in
prepaid calling cards and $137,000 in Phone1, Inc. sales. These increases were
partially offset by a decrease in carrier sales. Carrier sales amounted to
approximately $970,000 and $1,911,000 in March 31, 2002 and 2001, respectively,
a decrease of $941,000. The decrease was due to the competitive pricing
pressures and discontinuation of our overseas Point of Presence (POPs) Carrier
sales are wholesale carrier termination sales of international voice and data
telecommunications into foreign countries.

Cost of sales for the year ended March 31, 2002 were approximately $5,916,000
compared to $5,132,000 for the year ended March 31, 2001, an increase of
$784,000 or 15%. The two major components cost of sales are fixed recurring cost
and variable cost. Fixed recurring cost for the year ended March 31, 2002 and
March 31, 2001 were approximately $3,162,000 and $4,659,000, respectively, a
decrease of $1,497,000 or (32%). The decrease was primarily due to the Company
terminating certain service agreements with vendors. Variable cost was
$2,405,000 and $473,000 of the cost of sales for the year ended March 31, 2002
and March 31, 2001, respectively, an increase of $1,932,000 or 408%. The
increase is primarily attributable to the increased traffic volumes associated
with revenue growth from arbitrage sales and prepaid calling cards.

Selling, general, and administrative expenses totaled approximately $7,945,000
for the year ended March 31, 2002 and $6,524,000 for the year ended March 31,
2001, an increase of $1,421,000 or 22%. The increase was due to the salaries,
professional fees and other expenses for the Phone 1 subsidiary.

                                       12
<PAGE>

Marketing and promotion expense totaled approximately $1,449,000 and $460,000
for the year ended March 31, 2002 and 2001, an increase of $989,000 or 215%. The
increase relates to the marketing and advertisement for the Phone 1 subsidiary.

Depreciation expense for the year ended March 31, 2002 was $3,114,700 and for
the year ended March 31, 2001, the amount was $2,650,000, an increase of
$465,000 or 18%. Amortization of intangible assets incurred because of
acquisitions, which amounted to $7,772,000 and $891,600 for the period ended
March 31, 2002 and 2001, respectively, an increase of $6,880,000 or 770%. Loan
cost amortization of approximately $0 and $24,647,000 was recorded for the years
ended March 31, 2002 and 2001, respectively. (See Note M of the attached
consolidated financial statements) Provision for non-current assets for the year
ended March 31, 2002 amounted to approximately $730,000. Included in this amount
are approximately $639,000 reserves for fixed assets overseas and approximately
$91,000 for fixed assets no longer in use. No such provision was made for the
year ended March 31, 2001. Net interest expense for the year ended March 31,
2002 was $1,059,000 and $2,061,000 for the year ended March 31, 2001, a decrease
of $1,003,000 or 49%. Such decrease was the result of debt reductions. Losses
from the write-off and disposal of fixed assets amounted to $1,616,000 and
$3,708,000 for March 31, 2002 and March 31, 2001, respectively, a decrease of
$2,093,000 or 56%. During March 31, 2002, the Company wrote off $644,000 of
equipment stored at a third party facility which the third party claims was
their equipment. As a result of the discontinuance of operations in Brazil, the
Company wrote-off equipment of approximately $234,000. The Company wrote off
certain billing software due to a disagreement with a vendor in the amount of
approximately $558,000. In addition, the Company wrote-off approximately
$170,000 of switch equipment not in use. In March 31, 2001, the Company
purchased equipment from a vendor for approximately $2,100,000. The vendor did
not deliver the equipment to the Company and the Company did not have possession
of the equipment as of March 31, 2001. As a result, the Company wrote off the
equipment. The Company also wrote off approximately $1,600,000 of additional
equipment due to the discontinuation of their sites in Jamaica and Panama during
the year ending March 31, 2001. Settlement of service agreement for the year
ended March 31, 2002 was $1,076,000, which resulted from the Company settling
certain service agreements with vendors. Loss on investments in other ventures
amounted to $693,000 for the year ended March 31, 2002. The expenses were
primarily incurred due to the Company discontinuing its operations in Brazil,
Morocco and Ivory Coast. Gains on extinguishment of debt amounted to
approximately $11,441,000 for the year ended March 31, 2002, which resulted from
the extinguishment of its vendor debt. (See Note H of the attached consolidated
financial statements)

LIQUIDITY AND CAPITAL RESOURCES

We currently have two main switch facilities, one located in New York and the
other in Miami, Florida. The costs associated with the initial construction and
operation of a network may vary primarily due to market variations in geographic
and demographic characteristics, and the types of construction technologies,
which can be used to deploy the network. As we develop and roll out Phone 1
services in each of our markets, additional capital expenditures, marketing and
net operating costs will be incurred. The amount of these costs will vary, based
on the number of payphones served and the actual services provided.

We are incurring negative cash flows due, in major part, to the funding
requirements for working capital, network construction, development, marketing
and early stage operational cost for the Phone1 subsidiary. We expect to
continue to incur negative cash flow for at least two years. We make no
assurance that our networks or any of our other services will ever provide a
revenue base adequate to sustain profitability or generate positive cash flow.
During fiscal year 2003, the amount of capital required for implementation of
our integrated networks, marketing and other services and to fund negative cash
flow, including interest payments, is now projected to be at least $20,000,000.

Developing, enhancing and rolling out new services and expending networks will
also require substantial capital expenditures. The funding of these expenditures
is dependent upon the Company's ability to raise substantial equity and debt
financing. We are actively seeking additional funding from a variety of sources,
including potential issuances of our securities in one or more private
transactions. However, we make no assurances that we will be able to obtain such
financing or, if obtained, that it will be on terms profitable to us.

By reason of factors outlined in the attached report of independent certified
public accountants, the auditors are of the belief that there substantial doubt
about the Company's ability to continue as a going concern. Management plans to
address those issues as described in Note B of the financial statements.


                                       13
<PAGE>

EQUIPMENT FINANCING AGREEMENTS

In order for us to continue to acquire the VoIP/ATM switching network equipment
necessary to develop our network, we had entered into various equipment
financing agreements with equipment vendors. Equipment vendors typically finance
capital equipment used by us in our network . In the instance of a direct
financing facility, the vendor itself will negotiate the facility with us,
advance the funding, receive payments, and administer all details related to the
transaction. In an indirect financing transaction, the vendor will have
pre-selected a group of third party financial institutions that will represent
the vendor to affect customer financing. The vendor accepts an order from us,
while the financing institution and we will together negotiate the financial
details of the transaction. The respective facility is characterized either as
conditional sales contract or as a capital lease agreement, generally with a
nominal buy-out option at termination. Regardless of the form of the agreement,
the facilities feature deferred payment terms, multi-year maturity dates and
allowance for such ancillary soft costs as shipping, taxes, installation and
set-up necessary to place the equipment into service.

On October 25, 1999, the Company entered into two separate equipment financing
agreements with a telecommunications equipment vendor, and on January 24, 2000,
the Company entered into an additional equipment financing agreement with the
same vendor. Pursuant to these agreements, we purchased switches and routers and
pay for related ancillary costs of equipment maintenance, installation, and
preparation. The Agreement has a term of 36 months for the purchase of equipment
and 24 months for ancillary costs including shipping, taxes, installation,
cabling, and software. In June 2001, the Company entered into an agreement with
the vendor. The Company returned $4,197,064 of equipment and paid $3,002,936 in
cash for full and complete satisfaction of the approximately $14.4M outstanding
obligations due to the vendor. The Company recorded approximately $7.2 million
of extraordinary gain due to the settlement of debt.

On August 23, 1999, the Company entered into an equipment financing proposal
with another vendor. Pursuant to the proposal, the Company had the ability to
borrow up to $10 million in order to purchase equipment and services and to pay
for ancillary costs associated with the installation and preparation of the
equipment for operation. The equipment facility was divided into three phases.
Phase 1 was for up to $1,750,000 and was to be used towards the purchase
equipment to be deployed outside of the United States. Phase 2 was for up to
$6,750,000 and was to be used towards the purchase of equipment to be deployed
in the United States. Phase 3 was for up to $1,500,000 and was to be used
towards the purchase of professional services, plus costs relating to taxes and
shipping. On September 15, 1999, GCC entered into a Master Conditional Sale
Agreement with the same vendor finalizing all of the terms and conditions of the
equipment financing proposal. On September 30, 2001, the Company entered into an
agreement with the vendor. The Company paid $1.0 million in cash and signed a
$2,000,000 promissory note bearing an interest rate of 8.5% to the vendor for
full and complete satisfaction of the outstanding obligations to the vendor. The
Note and the accrued interest will be paid in four (4) quarterly installments on
December 31, 2001, March 31, 2002, June 30, 2002, and September 30, 2002. The
Note is secured by a lien on the vendor's equipment and a guaranty of the
Company. When the Agreement was reached the total obligation owed to the vendor,
including interest was approximately $7.2M. The Company recorded approximately
$4.2 million of extraordinary gain due to the settlement of the debt.

TERMINATION OF CERTAIN AGREEMENTS WITH VENDORS

On April 4, 2002, the Company terminated a telecommunication service agreement
with a vendor, whereas the vendor agreed to release the Company of all claims
for the outstanding balance owed to the vendor and the execution of a new
co-location agreement with the vendor. The Company did not incur any penalties
as a result of the early termination. The Company entered into a new agreement
with the vendor for equipment racks to house the Company's equipment. Under the
new agreement, the Company is required to pay for services totaling $768,000 at
a rate of $19,200 per month, through August 9, 2005.

On June 28, 2002 the Company reached an agreement with a vendor to terminate all
agreements and release the Company of all claims for the outstanding balance
owed to the vendor. Under the settlement the Company will pay $150,000 at the
signing of the agreement, vendor will retain the deposit of approximately
$46,000. In addition, the Company will pay $10,000 a month for 18 months
starting from December of 2002. In the event the Company orders new services
from the vendor the monthly, payments of $10,000 will be applied against the new
services.

LOANS FROM GNB BANK (PANAMA) S.A.

Since February 2000, the Company has entered into a series of financings and
refinancings with GNB Bank (Panama) S.A. ("GNB Bank"). On February 29, 2000, the
Company obtained a loan from GNB Bank in the principal amount of $5.0 million
plus interest at Citibank N.A.'s base rate plus 1%. The GNB Loan was evidenced
by an unsecured convertible promissory note ("GNB Note") that was due October
31, 2001 (the "Maturity Date").

The principal portion of the Loan and the Note was convertible, in whole or in
part, either prior to or after the Maturity Date, as elected by GNB Bank into
that number of shares of common stock of the Company with certain preferential
rights ("Qualifying Shares"), if there was a private placement in the amount of
not less than $10.0 million to persons unrelated to GNB Bank of a new series of
the common stock of the Company ("Qualifying Private Placement"); or that number
of shares of common stock of the Company equal to the principal and interest
accrued under the GNB Note, as elected by GNB Bank to be converted, divided by
the lower of the price of any Qualifying Shares issued by the Company in a
Qualifying Private Placement, if any, or the average closing price of the shares
of the Company common stock during 20 consecutive trading days prior to any
notice to convert.

                                       14
<PAGE>

As of June 6, 2001, the Loan Agreement was further modified to provide that the
GNB Note could be converted into either common stock or any other class of
equity stock.

On June 26, 2001, GNB Bank converted the outstanding principal amount of the
Loan into 4.0 million shares of Series A Convertible Preferred Stock ("Series A
Preferred") of the Company. The Series A Preferred carries an 8% yearly
dividend, votes with the holders of Common Stock on a one-vote-for-one-share
basis, and is convertible into Common Stock on a one-share-for-one-share basis.
For a further description of the series A Preferred see "Sale of Preferred
Stock" below.

In June 2001, the Company entered into two additional loans with GNB Bank in the
principal amount of $1.25 million and $1.2 million, respectively, plus interest
at Citibank N.A.'s base rate plus 2%. Payments of the outstanding obligations
were due on July 8, 2001. The proceeds from the loan were used for working
capital. Additionally, GNB Bank loaned Phone 1 an aggregate of $3,050,000 for
working capital, which obligations were assumed by the Company because of its
acquiring Phone 1. The loans to Phone 1 were due on July 6, 2001 (as to $2.75
million) and on July 8, 2001 (as to $300,000). On June 29, 2001, the Company
repaid all of the outstanding obligations due to GNB Bank by the Company and
Phone 1.

On July 31, 2001 Phone 1, entered into a loan with GNB Bank in the principal
amount of $2.0 million, plus interest at Citibank N.A.'s base rate plus 2%.
Payment of the outstanding obligations was due on September 17, 2001. The
proceeds from the loan were used for working capital. On September 28, 2001, the
Company repaid the $2.0 million loan, plus the accrued interest.

On September 28, 2001, Phone 1 entered into a loan agreement with GNB Bank in
the principal amount of $6.0 million, plus interest at the rate of 10% per
annum. The GNB Loan was evidenced by an unsecured convertible promissory note
(the "$6 million Note") that was due September 27, 2002. The
loan was guaranteed by the Company. The principal and interest of the Loan and
the $6 million Note is convertible, in whole or in part, prior either to or
after its Maturity Date (if the loan and the note are not fully paid.). On
November 1, 2001, the Company repaid the $6.0 million loan, plus the accrued
interest.

On October 31, 2001, Phone 1 entered into a loan agreement with GNB Bank in the
principal amount of $10.0 million, plus interest at the rate of 10% per annum.
The GNB Loan is evidenced by an unsecured convertible promissory note (the "$10
million Note) that is due October 30, 2002. The Loan is
guaranteed by the Company.

The principal and interest of the $10 million Note is convertible, in whole or
in part, prior either to or after the maturity date (if the loan and the note
are not fully paid), as elected by GNB Bank into:

         1.       that number of shares of common stock or any other class of
                  securities issued by Phone 1, having privileges or rights
                  senior to the common stock, equal to the principal and
                  interest accrued thereon under the $10 million Note that the
                  GNB Bank elects to convert divided by:

                  o        If GNB Bank has elected to convert the Loan and the
                           $10 million Note in whole, such conversion price per
                           share that results in granting to the GNB Bank such
                           number of securities of the Company representing
                           12.5%, on a fully diluted basis, of the total issued
                           and outstanding stock of the Company immediately
                           after the conversion: and

                  o        If GNB Bank has elected to convert the Loan and the
                           $10 million Note in part, such conversion price per
                           share that results in granting to the GNB Bank such
                           number of securities of the Company representing the
                           percentage, on a fully diluted basis, of the total
                           issued and outstanding stock of Phone 1 equal to 7.5%
                           multiplied by the principal amount and interest of
                           the $10 million Note that GNB Bank elects to convert
                           divided by the total outstanding principal and
                           interest of the $10 million Note (the "Partial
                           Election Percentage"); or

         2.       That number of shares of common stock of the Company equal to
                  the principal and interest accrued thereon under the $10
                  million Note that the GNB Bank elected to convert divided by
                  1.5.

On March 27, 2002, the Company signed an Overdraft Facility with GNB Bank for
$2,000,000 with an interest rate of 12% per annum. The Overdraft Facility
expires on March 27, 2003 and it is callable, however, the facility was extended
and on April 29, 2002, the Company increased its Overdraft Facility up to an
aggregate amount of $3,200,000. On May 30, 2002, the Company obtained an
additional $380,000, increasing the overdraft facility to an aggregate amount of
$3,580,000. Effective on June 20, 2002, the aggregate principal outstanding
amount under this Overdraft facility was increased to $4,580,000.

Jaime Gilinski, Chairman of the Board of the Company, is also the Chairman of
GNB Bank. Mr. Gilinski has provided collateral to GNB Bank for the payment and
performance of the Company and Phone 1 of each of the loans from GNB Bank and
the Overdraft Facility.

                                       15
<PAGE>

LOANS FROM FINANCIAL INSTITUTIONS

On March 29, 2002, the Company entered into a loan agreement with a related
party financial institution in the principal amount of $1 million. The loan was
funded April 1, 2002. The interest rate charged on the loan agreement was based
on the prime rate plus 1%. The loan was evidenced by a promissory note. The loan
was payable on demand and it was paid off on April 29, 2002.

On April 29, 2002, the Company entered into a loan agreement with a related
party financial institution in the principal amount of $1 million. The interest
rate charged on the borrowings under the loan agreement was the prime rate plus
1%. The loan was payable on demand and the outstanding balance under the loan
agreement was paid on May 31, 2002.

On May 30, 2002, the Company signed a new loan agreement with a related party
financial institution in the principal amount of $1 million. Interest rate
charged on the borrowing under the loan agreement is 5.75%. The loan is payable
on demand.

Jaime Gilinski has guaranteed the payment and performance by the Company of the
three loans described above.

SALE OF PREFERRED STOCK

On June 26, 2001, the Company sold an aggregate of 5.0 million shares of its
Series A Preferred Stock (the "Series A Preferred") for $2.00 per share. The
Series A Preferred is entitled to receive dividends at the rate of 8% per annum,
only if declared by the Board of Directors. Upon any liquidation or dissolution
of the Company (including certain deemed liquidations) the holders of the Series
A Preferred are entitled to receive an amount equal to the amount paid for such
stock plus any accrued but unpaid dividends before any amounts are distributed
to the holders of any junior stock (including the Company's common stock).
Holders of the Series A Preferred are entitled to one vote per share and, except
in certain limited circumstances, vote together with the holders of the
Company's common stock. Certain actions may not be undertaken without the
separate vote of the holders of at least 70% of the then outstanding Series A
Preferred. Shares of the Series A Preferred are convertible into shares on
common stock initially on a one for one basis. The conversion rate is subject to
adjustment upon the occurrence of certain dilutive stock issuances and in the
event of stock splits, reclassifications and the like.

GNB Bank purchased 3.0 million shares of the Series A Preferred for an aggregate
of $6.0 million and Premium Quality Fund, a Cayman Islands company ("PQF"),
acquired 2.0 million shares of the Series A Preferred for an aggregate of $4.0
million. The proceeds from the sale were used to pay off certain outstanding
obligations and to meet working capital requirements. The sales were made
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

SALE OF COMMON STOCK TO COMPANY DIRECTORS

As of April 30, 2001, three of the Company's Directors each purchased 10,000
shares of restricted common stock at the then fair market price of $1.95 per
share. The proceeds from the sales were used for working capital. In June 2001,
the Company's fourth Director also purchased 10,000 shares on the same terms.

ITEM 7.  FINANCIAL STATEMENTS

The report of Grant Thornton LLP, our independent certified public accountants,
dated June 12, 2002. and the consolidated financial statements of the Company
are filed as part of this Form 10-KSB and are set forth on pages F-1 to F-23.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has experienced a net loss of $ 16,548,256 for
the year ended March 31, 2002. Additionally, the Company's current liabilities
exceeded its current assets by $16,078,889 at March 31, 2002. A convertable loan
payable in the amount of $10.0M is due to a related party bank and the Company
used cash of $ 11,689,228 in its operations for the year ended March 31, 2002.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans about these matters are also described in
Note B. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.


                                       16
<PAGE>


                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The following table sets forth certain information concerning the Company's
executive officers and directors as of June 17, 2001:


             Name              Age        Position
--------------------------------------------------------------------------------
Jaime Gilinski                 44         Chairman of the Board of Directors

Syed Naqvi                     37         Chief Financial Officer

Louis Giordano                 36         Director

Frederic Z. Haller             56         Director

Michael Spritzer               57         Director

John Wilson                    53         Director


JAIME GILINSKI has served as the Chairman of the Board and as a Director since
September 2001. Mr. Gilinski has served as Chairman of GNB Bank (Panama) S.A.,
since 1998 and Chairman of Eagle National Holding Company, of Miami, Florida,
which owns approximately 99.5% of Eagle National Bank of Miami N.A. He was the
Chairman of Banco de Colombia, one of the largest banks in the Republic of
Colombia, from January 1994 to December 1997. He has also served as Chairman of
other banks within the United States and in Latin America commencing in 1992.
Mr. Gilinski received a Bachelors degree in Industrial Engineering from Georgia
Tech University in 1978 and a Masters in Business Administration from Harvard
University in 1980; spent approximately one year thereafter as an associate at
Morgan Stanley & Company in the investment banking area; and then spent the next
9 years planning and implementing business strategies for various companies in
the consumer products and snack food businesses in South America in conjunction
with several major multinational United States companies.

SYED A. NAQVI has served as the Controller of Phone1 Globalwide since December
2000, and has served as its Chief Financial Officer since May 2001. Mr. Naqvi
has experience in operational finance and consulting in various
executive/management positions. Before joining Globaltron, from August 1999 to
November 2000, he was the executive consultant for Focus Consulting Group
providing strategic consulting and business development services to startups,
middle market companies, and advising various governments and companies in
contract negotiations. From March 1998 to August 1999, Mr. Naqvi was the Chief
Financial Officer of Intelesis Group Inc. From February 1997 to February 1998,
Mr. Naqvi was the Chief Financial Officer of TelMed Inc. Mr. Naqvi has also held
various positions with Columbia-HCA, Inc. and Laboratory Corporation of America
Holdings. Mr. Naqvi received his B.A. in Accounting from Florida Atlantic
University. He is a Certified Public Accountant and a member of Financial
Executives International.

LOUIS GIORDANO has served as a Director since February 2000. He currently has
served as the Executive Vice President and Chief Financial Officer of New World
Network Holdings, Ltd. (New World) since June 2000, when New World received
approximately $400 million in a combination of debt and equity financing to
complete its funding of ARCOS-1, a fiber optic submarine cable ring which
connects the United States to points in Mexico, Central America, South America
and the Caribbean. Before joining New World, Mr. Giordano served in the
financial services sector for more than 13 years, primarily in mergers and
acquisitions in Latin America. Mr. Giordano served as Director of Latin American
Corporate Finance at Barclays Bank PLC from 1997 to 1998, where he managed a
group providing debt financing to telecommunications and power companies in
Latin America. From 1995 to December 1997, Mr. Giordano was employed at and
served on the Board of Directors of Banco de Colombia where he served as an
advisor on international strategy and operations advising the Chairman of the
Board of Directors. Mr. Giordano received his B.S. in Finance from the
University of Virginia.

FREDERIC Z. HALLER has served on our Board of Directors since February 2000 and
currently serves as a Director of a number of international companies located in
the United States, Luxembourg, Johannesburg, South Africa, and London, England.
From 1997 to 1999, Mr. Haller was Chairman of the Emerging Markets Traders
Association. From 1990 to 1999, Mr. Haller served as a Director and member of
the Executive Committee of Deutsche Bank Group, located in Frankfurt, Germany; a
Director and head of emerging markets-investment bank of Morgan Grenfell PLC, a
London-based merchant bank; and a Director and a member of the Management
Committee of Deutsche Morgan Grenfell a London-based merchant bank. Mr. Haller
currently resides in London, England.

                                       17
<PAGE>

MICHAEL SPRITZER has served on our Board of Directors since February 2000 and
currently is the Managing Partner of Berenfeld, Spritzer, Shechter & Sheer,
CPA's, located in Miami Florida where he has practiced for the past 29 years.
Mr. Spritzer has served as Chairman of the Board of Eagle National Bank of Miami
since August 1999 and been a member of its Board of Directors since 1997. Mr.
Spritzer is a member of the Board of Overseers of Hebrew Union College-Jewish
Institute of Religion, New York, New York and a member of the Board of Directors
of the Union of American Hebrew Congregations, New York City, New York. Mr.
Spritzer is a member of the Florida Institute of Certified Public Accountants
and the American Institute of Certified Public Accountants.

JOHN WILSON has served on our Board of Directors since March 2002 and since
November 2000 he also serves as director of A Novo Broadband Corporation. From
December 1998 to January 2002 Mr. Wilson was a Managing Director Senior Advisor
of Credit Suisse First Boston Corporation. From August 1996 to December 1998 Mr.
Wilson was Director Investment Banking of Credit Suisse First Boston
Corporation. From December 1995 to August 1996 Mr. Wilson was Vice President
Investment Banking of Salomon Brothers Incorporated. From July 1992 to December
1995 Mr. Wilson was the Vice President Finance of Bell Canada International. Mr.
Wilson received his BA in Economics from North Carolina State University and his
MA in Applied Economics from the University of North Carolina.

It is the Board's intent to increase the size of the Board of Directors in the
near future. The Board is also actively seeking to hire a Chief Executive
Officer.

Each Director is elected at the Company's Annual Meeting of Shareholders and
holds office until the next Annual Meeting of Shareholders, or until the
successors are elected and qualified. At present, the Company's bylaws provide
for not less than one or more than nine Directors. Currently, we have six
Directors. The bylaws permit the Board of Directors to fill any vacancy and such
director may serve until the next Annual Meeting of Shareholders or until his
successor is elected and qualified. Officers are elected by the Board of
Directors and their terms of office are, except to the extent governed by
employment contracts, at the discretion of the Board. There are no family
relations among any Executive Officers or Directors of the Company. The officers
of the Company devote full time to the business of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
Executive Officers, Directors and 10% Shareholders to file reports regarding
initial ownership and changes in ownership with the SEC. Executive Officers,
Directors, and 10% shareholders are required by SEC regulations to furnish us
with copies of all Section 16(a) forms they file. Our information regarding
compliance with Section 16 is based solely on a review of the copies of such
reports furnished to us by our Executive Officers, Directors and 10%
shareholders. These forms include (i) Form 3, which is the Initial Statement of
Beneficial Ownership of Securities, (ii) Form 4, which is a Statement of Changes
in Beneficial Ownership, and (iii) Form 5, which is an Annual Statement of
Changes in Beneficial Ownership.

A Form 4, which was to be filed by our former Chief Executive Officer and
Chairman of the Board, Gary Morgan, for February 2001, has not yet been filed.
Frederic Haller, one of our Directors, was late in filing his Form 3 and a Form
4 for the period of May 2001.

ITEM 10.  EXECUTIVE COMPENSATION

The following table sets forth certain summary information for the years
indicated concerning the compensation awarded to, earned by, or paid to (i)
those persons serving as the Chief Executive Officer during the 2001 fiscal
year, and (ii) up to three additional individuals who had served as an Executive
Officer of the Company during the 2001 fiscal year but who were not Executive
Officers at March 31, 2002. The persons named in this table shall be
collectively referred to as the Named Executive Officers.

Summary Compensation Table
<TABLE>
<CAPTION>

                                                                                               Long-Term Compensation

                                             Annual Compensation                       Awards               Payouts

                                      Fiscal                                         Restricted
                                      Year                         Other Annual       Stock      Options/    LTIP        All Other
Name and Principal Position           End    Salary     Bonus ($)  Compensation ($)   Awards ($)   SARs    Payouts   ($)Compensation


<S>                                   <C>    <C>           <C>           <C>         <C>            <C>        <C>            <C>
Kevin P. Fitzgerald, Former Chief     2002   $ 24,231     -0-           -0-          $  -0-        -0-        -0-         220,000
Executive Officer (1)
                                      2001   $150,000     -0-           -0-          $96,000       -0-        -0-            -0-

Syed Naqvi  Chief Financial           2002   $146,538      -0-          -0-             -0-        -0-        -0-            -0-
Officer (2)

</TABLE>

                                       18
<PAGE>


(1) Mr. Fitzgerald served as Chief Executive Officer from October 2, 2000
through April 30, 2001.

(2) Mr. Naqvi has served as Chief Financial Officer since May 22, 2001.

The following sets forth certain information regarding the Company's outstanding
stock option plans as of March 31, 2002:
<TABLE>
<CAPTION>

EQUITY COMPENSATION PLAN INFORMATION
                                                                                                     Number of Securities Remaining
                                    Number of Securities to                                         Available for Future Issuance
                                    be Issued upon Exercise         Weighted-average Exercise       Under Equity Compensation Plan
                                    of Outstanding Options,       price of Outstanding Options,    (excluding securities reflected
          Plan Category               Warrants, and Rights             Warrants and Rights                   in column(a)
     ------------------------     --------------------------     -------------------------------    --------------------------------
<S>                                <C>                           <C>                                <C>
     Equity Compensation
     Plans approved by
     Security Holders                      1,916,000                          $2.58                            2,084,000

     Equity Compensation
     Plans not approved by
     Security Holders                          0                                0                                  0
                                   --------------------------    -------------------------------    --------------------------------
     Total                                 1,916,000                          $2.58                            2,084,000
</TABLE>

STOCK OPTION GRANTS IN LAST FISCAL YEAR

During the fiscal year ended March 31, 2002, the following options were granted
to the following Named Executive Officers.

<TABLE>
<CAPTION>

                                              Individual Grants

                          Number of Securities         Percent of Total
                           Underlying Options         Options/SARs Granted        Exercise Price
Name                        SARs Granted ($)       to Employees in Fiscal Year    Base Price($SH)     Expiration Date
----                        ----------------       ---------------------------    ---------------     ---------------

<S>                          <C>                           <C>                     <C>                     <C> <C>
Syed A. Naqvi                200,000                       62.5%                   $2.25               May 22, 2011

</TABLE>

COMPANY AMENDED AND RESTATED STOCK INCENTIVE PLAN

The Company sponsors the Amended and Restated Phone 1 Globalwide 2000 Stock
Incentive Plan (Stock Incentive Plan) which has 4.0 million shares reserved for
issuance. Participation in the Stock Incentive Plan is limited to employees,
consultants and directors of the Company and its affiliates. The Stock Incentive
Plan provides for grants of non-qualified stock options (NQSOs) and incentive
stock options (ISOs) to purchase shares of common stock and restricted stock
(collectively, the Awards). The Stock Incentive Plan provides for equitable
adjustment of the number of shares subject to the Stock Incentive Plan, the
number of shares of each subsequent award of stock, and the unexercised portion
of the stock option award described below in the event of a change in the
capitalization of the Company due to a stock split, stock dividend
re-capitalization, merger, or similar event.

In April, 2002, the Board of Directors amended and restated the Stock Incentive
Plan to increase the number of shares of common stock that may be subject to
stock options granted to non-employee directors upon their beginning service as
a director from 50,000 shares to 150,000 shares and to authorize the grant of
stock options to purchase up to a maximum of 75,000 shares in any calendar year.
Stock option grants made in connection with a non-employee director's beginning
service shall be 50% vested and exercisable on the date of grant and the
remainder of the stock option will vest and become exercisable on the first
anniversary of the date of grant. Stock option grants made in calendar years
other than the calendar year in which a non-employee director begins service
shall vest and become exercisable as determined by the Board of Directors. The
Board of Directors also amended the Stock Incentive Plan to provide for a
"cashless exercise" procedure with respect to all stock options granted under
the Stock Incentive Plan if the Common Stock is quoted on the Over The Counter
Bulletin Board.

Unless terminated by the Board of Directors earlier, the Plan shall terminate on
October 1, 2010.

                                       19
<PAGE>

As of March 31, 2002, options to purchase 1,916,000 shares were outstanding at
exercise prices ranging from $.95 to $5.50 and 2,084,000 shares were available
for issuance under the Stock Incentive Plan.

OPTION EXERCISES AND YEAR END VALUES

The following table provides information on options exercised in the fiscal year
ended March 31, 2002 by the persons named in the Summary Compensation Table
above, the number of unexercised options each of them held at March 31, 2002 and
the value of the unexercised in-the-money options each of them held as of that
date.

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------

                                                                              Number of Securities          Value of Unexercised
      Name                                                                   Underlying Unexercised             In-the-money
                               Shares Acquired         Value Realized        Options/SARs at FY-End             Options/SARs
                                 on Exercise                 ($)            Exercisable/Unexercisable          at FY-End ($)
                                                                                                          Exercisable/Unexercisable
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                     <C>                <C>                                 <C>
   Kevin Fitzgerald                 -0-                     -0-                 384,000 / 00                        0 / 0

   Syed A. Naqvi                    -0-                     -0-                 125,000 / 75,000                    0 / 0

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

COMPENSATION OF DIRECTORS

Under the Stock Incentive Plan, non-employee directors may receive an option to
purchase up to a maximum of 150,000 shares of Common Stock as of the date the
non-employee Directors begins serving in that capacity. Additionally, each
non-employee director may also receive an option to purchase up to a maximum of
an additional 75,000 shares of Common Stock in a calendar year. The exercise
price for each option is the fair market value of the Common Stock at the time
of grant. On March 12, 2002, each non-employee director received an option to
purchase additional 50,000 shares of Common Stock at $0.95 per share.

EMPLOYMENT AND CONSULTING AGREEMENTS

Kevin P. Fitzgerald. Effective October 2, 2000, Globaltron entered into an
employment agreement with Kevin P. Fitzgerald, our former Chief Executive
Officer, and a former Director. Pursuant to the agreement, Mr. Fitzgerald
received an annual base salary at the rate of $300,000 per annum, all normal
Company benefits, and stock options. On April 30, 2001, Mr. Fitzgerald left the
Company effective as of the to pursue other business and financial
opportunities. Mr. Fitzgerald will received a total of $220,000 starting May 1,
2001 for over a period of nine months. Additionally, the exercise period for Mr.
Fitzgerald's vested options to purchase 384,000 shares of Company common stock
at $5.50 per share was extended through July 31, 2002. He is subject to the
non-disclosure provisions of his agreement, and he may not compete with the
Company through February 2002.

Gary Stukes. In December 1999, we executed an employment agreement dated
December 31, 1999 with Gary Stukes, then President of our wholly owned
subsidiary, Globaltron Communications Corporation. Pursuant to his agreement,
Mr. Stukes received an annual base salary for the fiscal year 2001 of $263,261.
Mr. Stukes also received all normal Company benefits, reimbursement for
reasonable out-of-pocket expenses incurred in connection with Company business
and use of a premium class automobile. Pursuant to the employment agreement, Mr.
Stukes is subject to confidentiality, no solicitation, and non-competition
provisions. At no time may he divulge any confidential information concerning
our business or trade secrets. As of February 28, 2001, Mr. Stukes and the
Company mutually agreed to terminate his employment agreement.
Contemporaneously, the Company entered into an agreement with Mr. Stukes and a
corporate affiliate of his whereby the affiliate served as an independent
advisor to the Company with respect to all issues relating to the
telecommunications industry for a period of 10 months. Under the consulting
agreement, the affiliate received $125,000.

Syed A. Naqvi. The Company granted Mr. Naqvi an option to acquire up to 200,000
shares of Company's Common Stock, exercisable at $2.25 per share through May 21,
2011. 50,000 options to purchase shares of Common Stock were fully vested at the
grant date. The remaining options will vest in increments of 37,500 each, every
six months. Mr. Naqvi receives an annual base salary at the rate of $165,000 per
annum and is entitled to receive all normal Company benefits and reimbursement
for reasonable out-of-pocket expenses incurred in connection with Company
business.


                                       20
<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of June 17, 2002, the shares of Common Stock
owned beneficially by (i) each of our Executive officers, (ii) each of our
current Directors, (iii) all Executive Officers and Directors as a group, (iv)
each person known by us to be the beneficial owner of more than five percent of
our Common Stock. Beneficial Ownership is a technical term broadly defined by
the Securities and Exchange Commission to mean more than ownership in the usual
sense. For example, you beneficially own Common Stock not only if you hold it
directly, but also if you hold indirectly (though a relationship, a position as
a director or trustee, or a contract or understanding), have (or share the power
to vote the stock, or sell it) the right to acquire it within 60 days. Except as
disclosed in the footnotes below, each of the Executive Officers, Directors and
Nominees for Directors listed have sole voting and investment power over his or
its shares. As of June 17, 2002, there were 41,078,072 shares of Common Stock
issued and outstanding and approximately 100 holders of record.



<TABLE>
<CAPTION>

Name (1)                            Current Title                               Shares Beneficially Owned (4)    Percent of Class

<S>                              <C>                                                   <C>                             <C>
Kevin P. Fitzgerald(2)           Former Chief Executive Officer and                      384,000                         *
                                 Former Director

Syed A. Naqvi (1) (3)            Chief Financial Officer                                 125,000                         *

Jaime Gilinski (4)               Director, Chairman                                          0                           *

Louis Giordano (1)(5)            Director                                                185,000                         *

Frederic Z. Haller (1)(6)        Director                                                230,000                         *

Michael Spritzer (1)(7)          Director                                                196,000                         *

John Wilson  (1) (8)                                                                      95,000                         *

All Current Officers and                                                                 831,000                      2.0%
Directors as a Group
(six persons)(9)

GNB Bank (10)(11)(4)                                                                   9,500,000                     23.1%

Premium Quality Fund (12) (13)                                                        16,294,000                     39.6%

Whitmer Ltd. (14)                                                                      9,576,000                     23.3%
</TABLE>




* Less than 1%.

(1) The address for each of the Company's Directors and Executive Officers is
100 North Biscayne Boulevard, Suite 2500, Miami, Florida 33132.

(2) Mr. Fitzgerald's address is 5225 Collins Avenue, #709, Miami, Florida 33140.
This represents options to purchase up to 384,000 shares at $5.50 per share
through July 2002.

(3) Represents options to purchase up to 125,000 shares at $2.25 per share
through May 21, 2011

(4) Jaime Gilinski, Chairman of the Board of the Company, is also the Chairman
of GNB Bank. Mr. Gilinski does not have the power to direct the vote of the
shares owned by GNB Bank. Mr. Gilinski's immediate family are the beneficiaries
of a trust which indirectly owns GNB Bank. Neither Mr. Gilinski nor any of such
family members have or share investment authority with regard to the assets of
the trust. Consequently, Mr. Gilinski disclaims beneficial ownership (for U.S.
securities law purposes) of the shares of the Company's capital stock owned by
GNB Bank. The address of Mr. Gilinski is Torre Banco Continental, Piso 30, Calle
50 y Aquilino De La Guardia, Panama City Panama.

(5) Includes options to purchase (i) 50,000 shares at $3.125 per share and (ii)
75,000 shares at $1.95 per share (iii) 50,000 shares at $0.95 per share

(6) Includes options to purchase (i) 50,000 shares at $3.125 per share and (ii)
75,000 shares at $1.95 per share (iii) 50,000 shares at $0.95 per share

(7) Includes options to purchase (i) 50,000 shares at $3.125 per share and (ii)
75,000 shares at $1.95 per share (iii) 50,000 shares at $0.95 per share.

                                       21
<PAGE>

(8) Includes options to purchase 50,000 shares at $0.95 per share

(9) Does not include Mr. Fitzgerald, our former Chief Executive Officer and a
former Director.

(10) Their address is Torre Banco Continental, Piso 30, Calle 50 y Aquilino De
La Guardia, Panama City, Panama.

(11) This amount includes 7.0 million shares of Series A 8% Convertible
Preferred Stock, which is voting stock, based on one vote for each one share
held and is convertible into Common Stock on a one-share-for-one-share basis.

(12) This amount includes 2.0 million shares of Series A 8% Convertible
Preferred Stock, which is voting stock, based on one vote for each one share
held and is convertible into Common Stock on a one-share-for-one-share basis.

(13) Its address is c/o Maples & Calder, P.O. Box 309, Grand Cayman, Cayman
Islands, British West Indies

(14) Its address is c/o Aleman, Cordero, Galindo & Lee Trust (Panama) S.A., 2nd.
Floor, Swiss Bank Building, East 53rd Street, Marbella, PO Box 6-1014, El
Dorado, Panama City, Panama.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Alvaro Davila Pena, the former Vice President and Chief Operating Officer of
Latin American Operations and a former Company Director, is an attorney and
partner in the law firm, Davila Davila Asociados Ltda. in Bogota, Colombia. Mr.
Davila resigned as an officer and a Company Director in February 2001. Mr.
Davila and his law firm perform certain legal services on behalf of the Company.
Mr. Davila invoices the fees for such legal services at his normal and customary
rates. Mr. Davila is also reimbursed for all out-of-pocket expenses incurred in
connection with the performance of such legal services.

David W. Sloan a former Chairman of the Board of Directors and a former Director
is a senior partner with the law firm of Proskauer Rose LLP. Mr. Sloan and his
law firm perform certain legal services on behalf of the Company. His law firm
invoiced the Company at his firm's normal and customary rates. During the fiscal
year ended March 31, 2002, the total amount invoiced by Proskauer Rose LLP to
the Company, including fees and costs, was approximately $785,000.

GNB Bank, a principal shareholder, is also one of the Company's lenders. Please
refer to the discussion under "Liquidity and Capital Resources - Loans from GNB"
for a discussion of the terms of these loan transactions.

Michael Spritzer member of the Board is the Chairman of the Board of Eagle
National Bank.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are filed as a part of this report or are incorporated
by reference to previous filings, if so indicated:

2.12     Stock Purchase Agreement between Win-Gate Equity Group, Inc. and the
         Shareholders of Globaltron Communications Corporation dated January 21,
         2000. (1)
2.2.1    Certificate of Merger between Phone 1Globalwide, Inc., a Florida
         corporation and Phone1Globalwide Inc., a Delaware corporation(16)
2.2.2    Articles of Merger between Phone1 Globalwide, Inc., a Florida
         corporation and Phone1 Globalwide Inc., a Delaware corporation (16)
2.3      Plan and Agreement of Merger between Phone 1Globalwide, Inc., a Florida
         corporation and Phone1Globalwide Inc., a Delaware corporation(16)
3.1.1    Articles of Incorporation of Win-Gate Equity Group, Inc.  (2)
3.1.2    Articles of Amendment to the Articles of Incorporation.  (13)
3.1.3    Certificate of Designation for the Series A 8% Convertible Preferred
         Stock  (17)
3.1.4    Certificate of Incorporation of Phone1Globalwide, Inc.(16)
3.2.1    By-Laws of Win-Gate Equity Group, Inc.  (2)
3.2.2    Bylaws of Phone1Globalwide Inc.  (16)
4.1      Specimen Common Stock Certificate.  (2)
10.1.1   Win-Gate Equity Group, Inc. 1996 Stock Option Plan.  (2)
10.1.2   Globaltron Corporation's 2000 Stock Incentive Plan.  (12)
10.1.3   Amendment Number One to Globaltron Corporation 2000 Stock Incentive
         Plan (15)

                                       22
<PAGE>

10.1.4   Amended and Restated Phone1Globalwide 2000 Stock Incentive Plan
10.1.5   Amendment to Phone1Globalwide 2000 Stock Incentive Plan
10.1.6   Schedule A to the Minutes of the Board of Directors
10.2     Loan Agreement dated February 29, 2000 byand amon g Win-Gate Equity
         Group, Inc., Globaltron Communications Corporation, and GNB Bank
         (Panama) S.A.(4)
10.3     Letter Agreement dated February 29, 2000 between Gary D. Morgan and GNB
         Bank Panama, S.A. (4)
10.4     Loan Agreement dated July 26, 2000 between Win-Gate Equity group, Inc.
         and Arthur E. Lipson, Trustee(5)
10.5     Equipment Financing Proposal dated August 23, 1999 between Globaltron
         Communications Corporation and Lucent Technologies.  (5)
10.6     Master Conditional Sale Agreement dated September 15, 1999 between
         Globaltron Communications Corporation and Lucent Technologies.  (5)
10.7     Term Sheet dated June 23, 2000 between Globaltron Communications
         Corporation and Italtel SPA.  (5)
10.8     Equipment Financing Agreement dated October 25, 1999 between Globaltron
         Communications Corporation and Cisco Systems Capital Corporation.  (5)
10.9     Soft Cost Financing Agreement dated October 25, 1999 between Globaltron
         Communications Corporation and Cisco Systems Capital Corporation.  (5)
10.10    Equipment Financing Agreement dated January 24, 2000 between Globaltron
         Communications Corporation and Cisco Systems Capital Corporation.  (5)
10.11    Term Sheet dated July 13, 2000 between Globaltron Communications
         Corporation and Tropico Sistemas e Telecomunicacoes S.A. (5)
10.12    Term Sheet dated July 11, 2000 between Globaltron Communications
         Corporation and CPqD Technologies.  (5)
10.13    Equipment Financing Agreement dated June 23, 2000 between Globaltron
         Communications Corporation and Gallant Capital & Finance, LLC.  (5)
10.14    Term Sheet dated June 13, 2000 between Win-Gate Equity Group, Inc. and
         ECI Telecom Ltd. (5)
10.15    Executive Employment Agreement between Globaltron Communications
         Corporation and Gary Stukes(5)
10.16    Satellite Bandwidth Agreement dated November 9, 1999 between Globaltron
         Communications Corporation and Satelites Mexicanos, S.A. de C.V. (5)
10.17    Contract of Sale dated November 9, 1999 between Globaltron
         Communications Corporation and Owners of 64% of Startcomm Corporation.
         (5)
10.18    Amendment dated September 27, 2000 to the Loan Agreement dated February
         29, 2000 among Win-Gate Equity Group, Inc., Globaltron Communications
         Corporation, and GNB Bank (Panama) S.A. (6)
10.19    Letter Agreement dated September 27, 2000 from Gary D. Morgan to GNB
         Bank (Panama) S.A. (6)
10.20    Letter Agreement dated September 27, 2000 from Win-Gate Equity Group,
         Inc. to GNB Bank (Panama) S.A. re: Transfer and Voting Matters.  (6)
10.21    Stock Purchase Agreement dated September 27, 2000 between Gary D.
         Morgan and Tremaine Trading Co. (7)
10.22    Employment Agreement between Win-Gate Equity Group, Inc. and Kevin P.
         Fitzgerald dated September 27, 2000.  (7)
10.23    Loan Agreement dated September 27, 2000 between Win-Gate Equity Group,
         Inc., Globaltron Communications Corporation, Gary D. Morgan, and
         Colpafinsa S.A. (7)
10.24    Pledge Agreement dated September 27, 2000 between Gary D. Morgan and
         Colpafinsa S.A. (7)
10.25    Stock Purchase Agreement dated April 11, 2000 between Win-Gate Equity
         Group, Inc. and Oriental Allied Holdings Ltd. (7)
10.26    Pledge and Security Agreement dated April 11, 2000 between Win-Gate
         Equity Group, Inc. and Oriental Allied Holdings Ltd. (7)
10.27    Settlement Agreement dated November 21, 2000 among Globaltron
         Corporation, Globaltron Communications Corporation, and Atlas
         Communications, Ltd. (8)

                                       23
<PAGE>

10.28    Agreement to Settle Promissory Note dated December 7, 2000 by and among
         International Investments Communications, Ltd., Globaltron
         Communications Corporation and Gary Morgan.  (Exhibit omitted) (9)
10.29    Second Amendment dated as of December 5, 2000, but effective on October
         24, 2000, to the Loan Agreement dated as of February 29, 2000, as
         amended September 27, 2000 by and among Globaltron Corporation,
         formerly known as Win-Gate Equity Group, Inc., Globaltron
         Communications Corporation and GNB Bank (Panama) S.A. (exhibits
         omitted) (11)
10.30    Pledge and Security Agreement dated as of November 21, 2000 between
         Gary D. Morgan and Arthur Lipson, trustee, with GNB Bank (Panama) S.A.
         and Colpafinsa S.A. as joiners to the Agreement.  (11)
10.31    Amendment dated as of December 5th, 2000, but effective as of October
         24, 2000, to a certain Loan Agreement, dated as of September 27, 2000,
         by and among Globaltron Corporation, formerly known as Win-Gate Equity
         Group, Inc., Globaltron Communications Corporation, Gary D. Morgan as
         Guarantor and Colpafinsa S.A. (10)
10.32    Common Stock Purchase Agreement dated May 15, 2001 between Globaltron
         Corporation and the shareholders of Phone 1, Inc. (14)
10.33    Pledge and Security Agreement dated May 15, 2001 between Globaltron
         Corporation and the shareholders of Phone 1, Inc. (14)
10.34    Loan Agreement dated October 31, 2001 among Phone1, Inc., Phone1
         Globalwide Inc. and GNB Bank (Panama) S.A. (16)
10.35    Service and License Agreement dated April 4, 2002 by and between
         Globaltron Commnications Corporation and Verestar, Inc.
10.36    Equipment Vendor Settlement Agreement between Globaltron Communications
         Corporation and New Skies Satellites N.V.
10.37    Limited liability Company Agreement dated November 16, 2001 of Phone 1
         Smart LLC between Phone 1 Inc. and MTG Interconnection LC  (18)
10.38    Overdraft Loan Facility dated March 27, 2002 between GNB Bank (Panama)
         S.A. and Phone 1, Inc., together with promissory note in the amount of
         $2,000,000
10.39    Amendment to Overdraft Loan Facility dated April 29, 2002 between GNB
         Bank (Panama) S.A. and Phone 1, Inc., together with promissory note in
         the amount of $1,200,000.
10.40    Amendment to Overdraft Loan Facility dated May 30, 2002 between GNB
         Bank (Panama) S.A. and Phone 1, Inc., together with promissory note in
         the amount of $380,000.
10.41    Amendment to Overdraft Loan Facility dated June 20, 2002 between GNB
         Bank (Panama) S.A. and Phone1, Inc., together with promissory notes in
         the amounts of $400,000 and $600,000.
10.42    License Agreement dated June 21, 2002 between Quortech and Phone 1.
10.43    Promissory Note dated May 8, 2001 in the amount of $1,250,000.
10.44    Promissory Note dated June 6, 2001 in the amount of $1,200,000.
10.45    Promissory Note dated July 16, 2001 in the amount of $2,000,000
10.46    Loan agreement dated September 28, 2001 by and between Phone1, Inc. and
         Eagle National Bank of Miami.
10.47    Intentionally ommitted.
10.48    Loan Agreement dated March 29, 2002 by and between Phone1, Inc. and
         Eagle National Bank of Miami.
10.49    Loan agreement dated April 29, 2002 by and between Phone 1, Inc. and
         Eagle National Bank of Miami.
10.50    Loan Agreement dated May 30, 2002 by and between Phone 1, Inc. and
         Eagle National Bank of Miami.
21       List of subsidiaries of Phone 1 Globalwide Inc.

(1)      Filed as an exhibit to the Company's Current Report on Form 8-K (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on January 31, 2000.

(2)      Filed as an exhibit to the Company's Registration Statement on Form
         SB-2 (File No. 333- 5188-A), as filed with and declared effective by
         the Commission on October 10, 1997.


                                       24
<PAGE>



(3)      Filed as an exhibit to the Company=s Annual Report on Form 10-KSB for
         the fiscal year ended December 31, 1998 (File No. 333- 5188-A), filed
         with the Commission on October 27, 1999.

(4)      Filed as an exhibit to the Company's Current Report on Form 8-K (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on March 20, 2000.

(5)      Filed as an exhibit to the Company's Annual Report on Form 10-KSB for
         the fiscal year ended March 31, 2000 (File No. 333- 5188-A), filed with
         the Commission on August 25, 2000 as amended on August 28, 2000.

(6)      Filed as an exhibit to the Company's Current Report on Form 8-K/A (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on October 11, 2000.

(7)      Filed as an exhibit to the Company's Current Report on Form 8-K (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on October 13, 2000.

(8)      Filed as an exhibit to the Company's Current Report on Form 8-K (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on December 18, 2000.

(9)      Filed as an exhibit to the Company's Current Report on Form 8-K (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on December 18, 2000.

(10)     Filed as an exhibit to the Company's Current Report on Form 8-K/A (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on December 18, 2000.

(11)     Filed as an exhibit to the Company's Current Report on Form 8-K/A (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on December 18, 2000.

(12)     Filed as an exhibit to the Company's Definitive Information Statement
         on Form 14C (File No. 333-05188-A), as filed with the Securities and
         Exchange Commission on October 16, 2000.

(13)     Filed as an exhibit to the Company's Quarterly Report on form 10-QSB
         (File No. 333-05188-A), as filed with the Securities and Exchange
         Commission on February 20, 2001.

(14)     Filed as an exhibit to the Company's Current Report on Form 8-K (File
         No. 333-05188-A), as filed with the Securities and Exchange Commission
         on May 15, 2001, as amended on May 22, 2001.

(15)     Filed as an exhibit to the Company's Current Report on Form 8-K (File
         No. 333-05188-A).

(16)     Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB
         (File No. 333-05188-A), as filed with the Securities and Exchange
         Commission on November 14, 2001.

(17)     Filed as an exhibit to the Company's Annual Report on Form 10-KSB
         (File No. 333-05188-A), as filed with the Securities and Exchange
         Commission on June 29, 200l.

(18)     Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB
         (File No. 333-05188-A), as filed with the Securities and Exchange
         Commission on February 13, 2002.



                                       25
<PAGE>


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

PHONE1 GLOBALBWIDE, INC.





BY:  /s/ Syed Naqvi
    ----------------------------------------------------------
         Syed Naqvi
         Chief Financial Officer



Date: July 1, 2002

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


/s/ Jaime Gilinski                                          Date: July 1, 2002
---------------------------------------
Jaime Gilinski
Chairman of the Board

/s/ Syed Naqvi                                              Date: July 1, 2002
---------------------------------------
Syed Naqvi
(Principal Financial Officer)


/s/ Louis Giordano                                          Date: July 1, 2002
----------------------------------------
Louis Giordano
Director


/s/ Frederic Z. Haller                                      Date: July 1, 2002
----------------------------------------
Frederic Z. Haller
Director


/s/ Michael Spritzer                                        Date: July 1, 2002
----------------------------------------
Michael Spritzer
Director

/s/ John Wilson                                             Date: July 1, 2002
----------------------------------------
John Wilson
Director



                                       26
<PAGE>
                    Phone 1 Globalwide Inc. and Subsidiaries

                              Financial Statements

                                    CONTENTS

                                                                    Page
                                                                    ----

Report of Independent Certified Public Accountants ..................F-1

Consolidated Balance Sheet...........................................F-2

Consolidated Statement of Operations.................................F-3

Consolidated Statement of Stockholders Equity (Deficit)..............F-4

Consolidated Statement of Cash Flows.................................F-5 - F-7

Notes to Consolidated Financial Statements...........................F-8 - F-23


<PAGE>

                         REPORT OF INDEPENDENT CERTIFIED
                               PUBLIC ACCOUNTANTS

Board of Directors
Phone1 Globalwide, Inc.

We have audited the accompanying consolidated balance sheets of Phone1
Globalwide, Inc. and Subsidiaries ("the Company")as of March 31, 2002 and 2001,
and the related consolidated statements of operations, stockholders' equity
(deficit), and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Phone1 Globalwide,
Inc. and Subsidiaries as of March 31, 2002 and 2001, and the consolidated
results of their operations and their consolidated cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has experienced a net loss of $16,548,256 for
the year ended March 31, 2002. Additionally, the Company's current liabilities
exceeded its current assets by $16,078,889 at March 31, 2002, a convertible loan
payable in the amount of $10,000,000 is due to a related party bank on October
31, 2002 and the Company used cash of $11,689,228 in its operations for the year
ended March 31, 2002. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans about these matters
are also described in Note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ Grant Thornton LLP
-----------------------

Miami, Florida
June 12, 2002 (Except for Sixth and
Ninth Paragraphs of Note O, as to
which the dates are June 20, 2002
and June 28, 2002, respectively)

                                       F-1

<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS

                                    March 31,


<TABLE>
<CAPTION>
                                     ASSETS

                                                                      2002            2001
                                                                 ------------     ------------
<S>                                                              <C>              <C>
Current assets
    Cash                                                         $    174,120     $    643,886
    Accounts receivable, less allowance for doubtful
      accounts of $104,798 and $87,122 at March 31,
      2002 and 2001, respectively                                     220,224          294,979
    Prepaid expenses and other current assets                         177,161          127,321
                                                                 ------------     ------------

               Total current assets                                   571,505        1,066,186

Property and equipment, net                                         7,845,750       11,739,573
Equipment to be returned to vendor                                         --        4,200,000
Deposits and other                                                  1,122,283          440,734
Intangible Assets                                                  21,374,175               --
                                                                 ------------     ------------

               Total assets                                      $ 30,913,713     $ 17,446,493
                                                                 ============     ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
    Bank overdraft - related party                               $     65,127     $         --
    Over draft facility - related party                             1,017,251
    Accounts payable                                                1,793,015        1,117,582
    Convertible loan payable to bank - related party               10,000,000        4,000,000
    Equipment note payable, current portion                         1,500,000        6,759,496
    Capital lease obligations, current portion                             --        4,324,852
    Accrued expenses and other current liabilities                  2,275,001        2,160,844
                                                                 ------------     ------------

               Total current liabilities                           16,650,394       18,362,774

Long-term capital lease obligation, net of current portion                 --        2,028,020

Equipment note payable, net of current portion                             --        6,750,000

Stockholders' equity
    Series A Convertible Preferred stock, par value of $.001,
    10,000,000 shares authorized; Total liquidation value
    $14,840,000, 9,000,000 and no shares of preferred stock
    issued or outstanding as of March 31, 2002 and
    March 31, 2001, respectively                                        9,000               --

    Common stock, par value of $.001, 200,000,000 shares
    authorized; 41,078,702 and 28,690,702 shares issued
    issued and outstanding as of March 31, 2002 and
    March 31, 2001, respectively                                       41,078           28,690

    Additional paid-in capital                                     83,141,611       42,657,123
    Accumulated deficit                                           (68,928,370)     (52,380,114)
                                                                 ------------     ------------

               Total stockholders' equity (deficit)                14,263,319       (9,694,301)
                                                                 ------------     ------------

               Total liabilities and stockholders' deficit       $ 30,913,713     $ 17,446,493
                                                                 ============     ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                       F-2

<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                          For the Years Ended March 31,


<TABLE>
<CAPTION>
                                                                    2002             2001
                                                                ------------     ------------

<S>                                                             <C>              <C>
Revenue                                                         $  3,712,480     $  2,752,377

Expenses
    Cost of sales                                                  5,915,977        5,132,457
    General and administrative                                     7,945,146        6,524,697
    Marketing and promotion                                        1,449,930          460,453
    Depreciation                                                   3,114,718        2,650,023
    Intangible asset amortization                                  7,772,437          891,638
    Provision for non-current assets                                 729,658               --
    Settlement of service agreement                                1,075,694               --
    Loss on write-down and disposal of fixed assets                1,615,637        3,708,058
                                                                ------------     ------------

               Operating loss                                    (25,906,717)     (16,614,949)

Other income (expense)
    Loss on investment in other ventures                            (692,558)              --
    Interest expense, net                                         (1,058,796)      (2,060,952)
    Other expense                                                   (330,767)        (111,696)
    Amortization of deferred loan costs                                   --      (24,647,560)
    Settlement of service agreement                                       --       (1,350,000)
    Loss on acquisition and other deposit                                 --         (638,000)
    Loss on investment in Interloop                                       --       (2,091,894)
                                                                ------------     ------------

Loss before provision for income tax and extraordinary items     (27,988,838)     (47,515,051)

Income tax benefit                                                        --               --
                                                                ------------     ------------

Loss before extraordinary items                                  (27,988,838)     (47,515,051)

Extraordinary gain on extinguishment of debt                      11,440,582               --
                                                                ------------     ------------
Net Loss                                                        $(16,548,256)    $(47,515,051)
                                                                ============     ============


Basic loss per common shares:
    Loss before extraordinary gain                                     (0.75)           (2.22)

    Extraordinary gain on extinguishment of debt                         .30               --
                                                                ------------     ------------
Basic loss per share                                                   (0.45)           (2.22)
                                                                ============     ============

Diluted loss per common shares:
    Loss before extraordinary gain                                     (0.75)           (2.22)

    Extraordinary gain on extinguishment of debt                         .30               --
                                                                ------------     ------------
Diluted loss per share                                                 (0.45)           (2.22)
                                                                ============     ============

Weighted average shares of common stock outstanding:
    Basic                                                         38,519,513       21,387,244
    Diluted                                                       38,519,513       21,387,244
                                                                ============     ============
</TABLE>

Note: Loss per share calculations includes provisions for Series A Preferred
Stock dividend in the amount of $ 840,000 and $0 in March 31, 2002 and 2001,
respectively.

The accompanying notes are an integral part of these statements.

                                       F-3

<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                   For the Years Ended March 31, 2002 and 2001

<TABLE>
<CAPTION>


                                           Shares of                     Shares of
                                           Preferred     Preferred        Common         Common
                                           Stock          Stock           Stock          Stock
                                          -----------   ------------   -----------    ------------
<S>                                                                     <C>               <C>
Balance at March 31, 2000                                               18,150,702        18,150

Issuance of stock in lieu of interest                                        6,000             6

Cancellation of stock                                                      (20,000)          (20)

Issuance of stock - Interloop                                            1,000,000         1,000

Contribution from former CEO - loan
  costs                                                                         --            --

Issuance of stock options to employee                                           --            --

Issuance of stock to settle service
  Agreement                                                                400,000           400

Issuance of stock to settle notes
  payable                                                                  154,000           154

Contribution from related shareholder
  to settle note payable                                                        --            --

Issuance of stock for cash                                              10,000,000        10,000

Cancellation of stock - Interloop                                       (1,000,000)       (1,000)

Net loss                                                                        --            --
                                          ------------   -----------   ------------    ------------

Balance at March 31, 2001                          --            --     28,690,702    $   28,690

Issuance of stock to consultant                    --            --         48,000            48
Issuance of stock to directors                     --            --         40,000            40
Issuance of stock for Phone 1
   acquisition                                     --            --     12,000,000        12,000
Issuance of Preferred stock
   for conversion of loan                   4,000,000         4,000             --            --
Issuance of preferred stock                 2,000,000         2,000             --            --
Issuance of preferred stock                 3,000,000         3,000             --            --
Issuance of stock to settle service
   agreements                                      --            --         300,000           300
Issuance of stock options to consultants           --            --             --            --
Net Loss                                           --            --             --            --
                                         -------------   -----------   ------------    -----------

    Balance at March 31, 2002               9,000,000         9,000     41,078,702         41,078
                                         =============   ===========   ============    ===========
[restub]
<CAPTION>

                                                                                 Total
                                            Additional                        Stockholders'
                                             Paid-in         Accumulated         Equity
                                             Capital           Deficit          (Deficit)
                                           ------------    --------------     -------------
<S>                                          <C>             <C>                <C>
Balance at March 31, 2000                    3,457,625       (4,865,063)        (1,389,288)

Issuance of stock in lieu of interest           51,744               --             51,750

Cancellation of stock                               --               --                (20)

Issuance of stock - Interloop                5,749,000               --          5,750,000

Contribution from former CEO - loan
  costs                                     24,647,560               --         24,647,560

Issuance of stock options to employee           96,000               --             96,000

Issuance of stock to settle service
  Agreement                                  1,299,600               --          1,300,000

Issuance of stock to settle notes
  payable                                      278,971               --            279,125

Contribution from related shareholder
  to settle note payable                       210,624               --            210,624

Issuance of stock for cash                   9,990,000               --         10,000,000

Cancellation of stock - Interloop           (3,124,001)              --         (3,125,001)

Net loss                                            --      (47,515,051)       (47,515,051)
                                           ------------     ------------      -------------

Balance at March 31, 2001                  $42,657,123     $(52,380,114)      $ (9,694,301)

Issuance of stock to consultant                 95,952               --             96,000
Issuance of stock to directors                  77,960               --             78,000
Issuance of stock for Phone 1
   acquisition                              25,908,000               --         25,920,000
Issuance of Preferred stock
   for conversion of loan                    3,996,000               --          4,000,000
Issuance of preferred stock                  3,998,000               --          4,000,000
Issuance of preferred stock                  5,997,000               --          6,000,000
Issuance of stock to settle service
   agreements                                  349,700               --            350,000
Issuance of stock options to consultants        61,876               --             61,876
Net Loss                                            --      (16,548,256)       (16,548,256)
                                           ------------    --------------     -------------

    Balance at March 31, 2002               83,141,611      (68,928,370)        14,263,319
                                           ============    ==============     =============
</TABLE>

The accompanying notes are an integral part of this statement.

                                                                F-4
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                          For the Years Ended March 31,

<TABLE>
<CAPTION>
                                                                           2002             2001
                                                                       ------------     ------------
<S>                                                                    <C>              <C>
Cash flows from operating activities
     Net loss                                                          $(16,548,256)    $(47,515,051)
     Adjustments to reconcile net loss to net cash used
       in operating activities
         Gains on extinguishment of debt                                (11,440,582)              --
         Compensation related to stock options                               61,876               --
         Compensation paid for in common stock                               96,000           96,000
         Provision for non-current assets                                   729,658               --
         Loss on settlement of service agreement                            875,694        1,350,000
         Loss on fair value of Interloop                                         --        2,091,894
         Loss on disposal and write down of fixed assets                  1,615,636        3,708,058
         Loss on acquisition and other deposit                                   --          638,000
         Depreciation and amortization                                   10,887,155        3,541,661
         Amortization of deferred loan costs                                     --       24,647,560
         Provision for bad debts                                            386,417          311,109
         Reserve for deposit to vendor                                      122,828               --
         Other losses due to write downs and charge-off                     966,609               --
         Changes in assets and liabilities, net of effects
           from purchase of subsidiary
              Increase in accounts receivable                              (298,117)        (485,838)
              Increase in deposit and other assets                         (619,498)        (192,533)
              Increase in prepaid expenses and other current assets        (253,962)         (35,196)
              Increase /(decrease) in accounts payable                      868,888         (454,097)
              Increase in accrued expenses and other liabilities            795,299          950,273
              Increase in bank overdraft                                     65,127               --
                                                                       ------------     ------------

                  Net cash used in operating activities                 (11,689,228)     (11,348,160)
                                                                       ------------     ------------

Cash flows from investing activities
     Acquisitions of property and equipment                              (1,790,053)        (863,946)
     Acquisition of Phone 1, net of cash acquired                           (37,017)              --
     Investment in joint venture - Related Party                           (350,000)              --
                                                                       ------------     ------------

                  Net cash used in investing activities                  (2,177,070)        (863,946)
                                                                       ------------     ------------

Cash flows from financing activities
     Proceeds from loans - Related Party                                 20,450,000        5,900,000
     Payment on loans - Related Party                                   (13,500,000)      (7,100,000)
     Proceeds from the sale of stock                                     10,078,000       10,000,000
     Settlement of debt                                                  (3,002,936)              --
     Payment of capital lease obligation                                 (1,000,000)              --
     Payment on equipment note payable                                     (500,000)              --
     Advance made to Phone 1 prior to acquisition                          (145,783)              --
     Proceeds from overdraft facility - Related Party                     1,017,251               --
                                                                       ------------     ------------

                  Net cash provided by financing activities              13,396,532        8,800,000
                                                                       ------------     ------------

Net decrease in cash                                                       (469,766)      (3,412,106)

Cash at beginning of year                                                   643,886        4,055,992
                                                                       ------------     ------------

Cash at end of year                                                    $    174,120     $    643,886
                                                                       ============     ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                       F-5
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                          For the Years Ended March 31,


                                                        2002            2001
                                                      --------        --------
Supplemental disclosure of cash flow information:
     Cash paid during the year for:
         Taxes                                        $100,332        $186,593
                                                      ========        ========
         Interest                                     $703,258        $484,666
                                                      ========        ========

Non-cash investing and financing activity:

For the twelve months ended March 31, 2002, the Company entered into the
following non-cash transactions:

On October 22, 2001, the Company granted 300,000 options to two consultants.
Pursuant to FAS 123, the Company recorded a portion of the fair value of the
stock option as compensation expense, which amounted to approximately $ 61,000.

On September 30, 2001 the Company and GCC entered into an agreement with a
telecommunications product and services vendor pursuant to which the Company,
GCC and the vendor mutually agree to jointly resolve any claims that any of them
may have related to, or arising, directly or indirectly, from certain licensing
agreement that was signed among the parties. GCC paid $75,000.00 in cash and the
Company issued 300,000 shares of its Common Stock.

On September 30, 2001, the Company entered into an agreement with a vendor to
resolve claims between the parties. The Company paid $1.0 million in cash and
signed a $2.0 million promissory note to the vendor, for full and complete
satisfaction of the outstanding obligations to the vendor.

On June 14, 2001, GNB Bank converted its outstanding convertible loan of $4.0
million into 4.0 million shares of Series A 8% Convertible Preferred Stock on a
one-share-for-$1.00 basis.

On June 13, 2001, the Company acquired all the outstanding shares of Phone1,
Inc., a telecommunications marketing company. As part of the agreement, the
Company issued 12 million restricted shares of common stock.

On June 26, 2001, the Company entered into an agreement with a vendor. The
Company returned $4,197,064 of equipment and paid $3,002,936 in cash for full
and complete satisfaction of the outstanding obligations to the vendor.

The Company issued 48,000 shares of restricted common stock for professional
services.

For the twelve months ended March 31, 2001, the Company entered in the following
non-cash transactions:

The Company transferred its equity interest in Startcomm Corporation. As part of
the consideration paid, the buyer undertook to indemnify and hold the Company
harmless from any claims, including attorney fees or advisor fees incurred by
the Company, of any nature arising from or relating to any guarantee or
undertakings the Company to any third party or to Startcomm with respect to
Startcomm's operations, business, or liabilities. Additionally, Startcomm
transferred certain equipment to the Company in exchange for the cancellation of
invoices due by Startcomm to the Company.

                                       F-6
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001


In connection with a finder's fee, loan costs of approximately $25 million were
incurred through the selling of Company stock by the principal stockholder at
less than fair value.

The Company purchased 73.4% of Interloop Americas, Inc. and certain subsidiaries
for 1,000,000 shares of Company stock and a $7 million note payable. Subsequent
to the nine month, ending December 31, 2000 the purchase agreement was
rescinded. As a result, the note was voided and the stock certificate for 1.0
million shares of common stock was cancelled.

The Company purchased approximately $12 million of equipment using capital
leases.

The company terminated certain agreements with a telecommunications company with
cash and issuance of 400,000 shares of company's common stock.

                                       F-7
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   For the Years Ended March 31, 2002 and 2001


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of Business
----------------------------------------

Phone 1 Globalwide, Inc. formerly known as Globaltron Corporation and as
Win-Gate Equity Group, Inc. ("the Company"), was reincorporated as a Delaware
corporation on September 25, 2001. The Company was initially organized on May
17, 1996 in Florida, to locate and effect business combinations with existing
businesses.

On January 21, 2000, the Company consummated a stock purchase agreement with all
of the shareholders of Globaltron Communications Corporation, a Delaware
corporation ("GCC") whereby we acquired 100% of the outstanding GCC shares. As a
result, GCC became a wholly owned subsidiary.

On June 13, 2001, the Company acquired all of the outstanding common stock of
Phone 1, Inc., ("Phone1") a telecommunications marketing company, for 12.0
million restricted shares of our common stock. As a result, Phone 1 became a
wholly owned subsidiary.

On November 16, 2001, the Company entered into a joint venture agreement with
MTG Interconnection LC ("MTG"), a Florida limited liability company, to form
Phone 1 Smart, a Delaware limited liability company. The Company owns 51% of
Phone1 Smart.

The Company is a facilities-based provider of integrated communications services
to U.S.-based local and long distance telecommunications and payphone operators.
The Company currently has two main switch facilities, one located in New York
and the other in Miami, Florida. Additionally, the Company maintains operating
agreements that deliver services in many countries throughout the world using
the third party networks. The Company also offers international and domestic
long distance telephone calls from the payphones in the United States to
anywhere in the world. The Company also intends to offer local dial up, long
distance and internet access to retail and commercial customers through Phone 1
Smart LLC, a joint venture between the Company and MTG Interconnection.

Basis of Presentation
---------------------

The consolidated financial statements include the accounts of Phone 1 Globalwide
and its wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Cash and Cash Equivalents
-------------------------

The Company considers all highly liquid investments with original maturities of
three months or less, when purchased, to be cash equivalents. As of March 31,
2002 and 2001, $16,468 and $522,243, respectively, were located in a Panamanian
bank. At March 31, 2002, all cash is on deposit with two Related Party Financial
Institutions.

Property and Equipment
----------------------

Depreciation and amortization are provided for in amounts sufficient to relate
the initial cost of depreciable assets to operations over their estimated
service lives. Leasehold improvements are amortized over the lives of the
respective leases or the service lives of the improvements, whichever is
shorter. Leased property under capital leases is amortized over the lives of the
respective leases or over the service lives of the assets for those leases that
substantially transfer ownership. The straight-line method of depreciation is
followed for substantially all assets for financial reporting purposes. Cost and
accumulated depreciation of assets returned or retired are removed from the
respective property accounts, and the gain or loss is reflected in the
statements of operations.

Intangible Assets
-----------------

Intangible assets are being amortized on a straight-line basis over a period of
3 years. Intangible assets were approximately $21.4 million and 0 at March 31,
2002 and 2001, respectively, and the related amortization was $7.8 million and
$891,000, respectively.

                                       F-8
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   For the Years Ended March 31, 2002 and 2001

Income Taxes
------------

The Company accounts for deferred taxes utilizing the liability method, which
applies the enacted statutory rates in effect at the balance sheet date to
differences between the book and tax basis of assets and liabilities. The
resulting deferred tax liabilities and assets are adjusted to reflect changes in
tax laws. A valuation allowance is provided against deferred income tax assets
to the extent of the likelihood that the deferred tax asset may not be realized.

Long-Lived Assets
-----------------

The Company evaluates long-lived assets, including intangible assets, in
accordance with the provisions of Statement of Financial Accounting Standards
No. 121 ("FAS 121"), Accounting for Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed of. An impaired review is performed whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable. Factors the Company considers important which could trigger an
impairment review include, but are not limited to significant under-performance
relative to projected operating results, significant changes in strategy for the
Company's overall business, and significant industry or economic trends.

Advertising
-----------

The Company expenses advertising costs as incurred. Total advertising expense
was approximately $820,000 and $0 for fiscal 2002 and 2001, respectively.

Use of Estimates
----------------

In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The Company's operations and ability to grow may be affected by numerous
factors, including changes in customer requirements, new laws and governmental
regulations and policies, technological advances, entry of new competitors and
changes in the willingness of financial institutions and other lenders to
finance acquisitions and operations. The Company cannot predict which, if any,
of these or other factors might have a significant impact on the
telecommunications industry in the future, nor can it predict what impact, if
any, the occurrence of these or other events might have on the Company's
operations.

Fair Value of Financial Instruments
-----------------------------------

The Company estimates that the fair value of its financial instruments
approximates the carrying value of its financial instruments at March 31, 2002
and 2001.

Loss Per Share
--------------

Basic earnings (loss) per common share are based on the weighted average number
of common shares outstanding. The total number of such weighted average shares
was 38,519,513 and 21,387,244 for the years ended March 31, 2002 and 2001,
respectively. Diluted earnings (loss) per common and preferred share is based on
the assumption that all dilutive potential common shares, preferred shares and
dilutive stock options were converted at the beginning of the year. For the
years ended March 31, 2002 and 2001, 300,000 and 0 stock options, 7,500,000 and
4,000,000 shares potentially convertible from the convertible loan payable to
bank were not included in common stock equivalents because their inclusion would
be antidilutive. The preferred shares are also not included as a common stock
equivalent in the year ended March 31, 2002, as their inclusion would be
antidilutive.

                                       F-9
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   For the Years Ended March 31, 2002 and 2001

Stock Option
------------

The Company grants stock options for a fixed number of shares to employees,
directors and consultants with an exercise price equal to at least 100% of the
fair market value of the shares at the date of grant. The Company has adopted
the disclosure-only provision of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, which permits the Company to account
for stock option grants in accordance with APB Opinion No. 25, Accounting for
Stock Issued to Employees. Under APB 25, compensation expense is recorded when
the exercise price of the Company's employee stock option is less than the
market price of the underlying stock at the date of grant.

Reclassification
----------------

Certain reclassifications have been made to conform to the 2002 presentation.

Revenue Recognition
-------------------

The Company records revenue from sale of telecommunications services at the time
of customer usage primarily based upon minutes used. The Company records payment
received in advance for prepaid calling cards as deferred revenue until the
services are provided.

Recently Issued Pronouncements
------------------------------

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 142, Goodwill and Intangible
Assets. SFAS 142 is effective for fiscal years beginning after December 15,
2001. Major provisions of this Statement and their effective dates for the
Company are as follows:

o goodwill, as well as intangible assets with indefinite lives, acquired after
June 30, 2001, will not be amortized. Effective April 1, 2002, all previously
recognized goodwill and intangible assets with indefinite lives will no longer
be subject to amortization.

o effective April 1, 2002, goodwill and intangible assets with indefinite lives
will be tested for impairment annually and whenever there is an impairment
indicator

o all acquired goodwill must be assigned to reporting units for purposes of
impairment testing and segment reporting.

The Company will continue to amortize goodwill and intangible assets recognized
prior to July 1, 2001, under its current method until April 1, 2002. Beginning
April 1, 2002, the Company will no longer amortize $1.8 million of intangible
assets identified as trade name and trademarks as these assets have been
determined to have an indefinite life. By September 30, 2002, the Company will
have completed a transitional impairment test of all intangible assets with
indefinite lives. Impairment losses, if any, resulting from the transitional
testing will be recognized in the second quarter ended September 30, 2002, as a
cumulative effect of a change in accounting principle.

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets. This statement
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets. SFAS No. 144 will be effective for financial statements of
fiscal years beginning after December 15, 2001. The Company expects to adopt
this statement for the fiscal year ending March 31, 2003, and does not
anticipate that it will have a material impact on the Company's consolidated
financial results.

                                      F-10
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   For the Years Ended March 31, 2002 and 2001

NOTE B - OPERATIONAL MATTERS

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has experienced a net loss
of $ 16,548,256 for the year ended March 31, 2002. Additionally, the Company's
current liabilities exceeded its current assets by $ 16,078,889 at March 31,
2002, a convertible loan payable in the amount of $10,000,000 is due to a
related party bank on October 31, 2002 and the Company used cash of $ 11,689,228
in its operations for the year ended March 31, 2002. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded asset amounts shown in the accompanying balance
sheet is dependent upon future profitable operations of the Company, which in
turn is dependent upon the Company's ability to meet its financing requirements
on a continuing basis, to maintain present financing, and to succeed in its
future operations. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue in existence.

In response to the matters described in the preceding paragraphs, the Company
intends to actively seek additional funding from a variety of sources, including
potential issuances of Company's securities in one or more private transactions.
Management believes that this additional financing will allow the company to
rigorously pursue its expansion efforts in the coming year and that this
expansion will strengthen the Company's cash flow position to provide the
Company with the ability to continue in existence. However, the Company makes no
assurances that it will be able to obtain such financing or if obtained, that it
will be on terms profitable to the Company.

NOTE C - ACQUISITIONS

Phone1, Inc.
------------

On June 13, 2001, the Company acquired all of the outstanding common stock of
Phone1, Inc. a telecommunication marketing company. The Company acquired Phone1
in order to expand its business by providing international and domestic long
distance telephone calls from the United States to anywhere in the world from
public payphones at competitive consumer rates.

The Company acquired Phone1 for 12 million restricted shares of the Company's
common stock. As security for the indemnification provisions given by the Phone1
shareholders, 7.2 million shares were pledged, such pledge is released at June
13, 2002. The purchase price of $25.9 million was allocated to tangible net
assets, including current assets of $146,000, property and equipment of $97,000
and assumed liabilities of $3,426,000. The excess of the purchase price over the
fair value of the tangible net assets acquired of $29.1 million was allocated to
$1.8 million to tradename and trade marks, $136,000 in developed technology,
$52,000 Phone1 website and reseller agreements of $27.2 million, which is being
amortized over a three-year life using the straight-line method. Beginning April
1, 2002, the Company will no longer amortize $1.8 million of intangible assets
identified as trade name and trademarks as these assets have been determined to
have an indefinite life. Pro forma information giving effect to the above
acquisition has not been presented since the pro forma information would not
differ from the historical results of the Company.

The operating results of Phone1, Inc. subsequent to the acquisition date of June
13, 2001 are included in the Company's Consolidated Statements of Operations for
the year ended March 31, 2002.

Interloop Americas
------------------

On April 11, 2000, the Company signed an agreement to acquire 73.4% of Interloop
Americas, Inc., a British Virgin Islands corporation (Interloop Americas) and 6%
of Interloop S.A. Nacional de Telecommunicaciones E.S.P., a Colombian
corporation (Interloop Colombia). The Company acquired the shares of Interloop
Americas and Interloop Colombia in exchange for one million shares of the
Company's common stock in September 29, 2000, which had a market price of
approximately $5.75 per share at the time of issuance and a promissory note for
$7,000,000. The principal amount of the note was due on October 31, 2001 with an
interest rate of 12%. In February 2001, the closing of the transaction was
rescinded, the note was voided, and the stock certificate for one million shares
of the Company's common stock was cancelled. The seller claimed that the
transaction did not close. As a result of the decrease in the market value of
the Company's common stock issued, the Company recorded a loss on investment of
$2,091,894 in March 31, 2001.

                                      F-11
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   For the Years Ended March 31, 2002 and 2001

NOTE D - INVESTMENT IN JOINT VENTURE

Phone1 Smart
------------

On November 16, 2001, the Company entered into a joint venture with MTG to form
Phone1 Smart. The Company contributed $100,000 in cash for 51% of Phone1 Smart
and MTG contributed certain intangible assets and services in return for a 49%
interest. Available cash, after payment of all expenses and obligations and
allocation for reserves of Phone1 Smart, will first be used to pay any
outstanding loans, accrued interest, and then allocated to MTG until it has
received the aggregate amount of $2.4 million.

Brazil
------

Subsequent to year ending March 31, 2002, the Company discontinued its
operations in Brazil. The joint venture is with an individual who owns shares of
the Company. The Company wrote off the investments in Brazil, which amounted to
approximately $389,000 and is included as loss on investment and other ventures
in the Consolidated Statements of Operations. In addition, the Company wrote-off
certain fixed assets net of accumulated depreciation in the amount of
approximately $234,000 which is included as a loss on write-down and disposal of
fixed assets in the Consolidated Statements of Operations and set up a reserve
of approximately $304,000 for the satellite and switch equipment which is
included in the provisions for non-current assets in the Consolidated Statements
of Operations.

NOTE E - FIXED ASSETS

Property and equipment consisted of the following at March 31:

<TABLE>
<CAPTION>
                                            Estimated
                                             Useful
                                          Life - Years            2002              2001
                                          ------------        -----------       ------------
<S>                                       <C>                 <C>               <C>
Office equipment and
  furniture and fixtures                      4 - 7           $ 1,221,693       $   859,989

Leasehold improvements                    Primary term             55,384            20,149
                                            of lease

Site preparation, telecommunication           5 - 7            12,110,946        13,818,938
  and satellite equipment
                                                              ------------      ------------
                                                               13,388,023        14,699,076

Less accumulated depreciation                                  (5,147,615)       (2,959,503)

Provision for fixed assets                                       (394,658)               --
                                                              ------------      ------------

                                                              $ 7,845,750       $11,739,573
                                                              ============      ============
</TABLE>

During the year ended March 31, 2002, the Company wrote off $644,438 of
equipment stored at a third party facility. The third party claims to have claim
on the equipment because the equipment was not removed from their facility on
time. Management disagrees with the third party. No legal claims have been filed
yet. The amount is included in loss on write-down and disposal of fixed assets
in the Consolidated Statements of Operations

                                      F-12

<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   For the Years Ended March 31, 2002 and 2001


On June 28, 2001, the Company entered into a billing software licensing
agreement with a vendor. Under the agreement, the vendor granted the Company a
non-exclusive, non-transferable license to use their software. The Company paid
and capitalized approximately $600,000 for the software. The Company wrote off
the capitalized software net of accumulated depreciation due to certain
disagreements with the vendor (see Note K). This amount is included in loss on
write-down and disposal of fixed assets in the Consolidated Statements of
Operations.

During the year ended March 31, 2002, the Company has established a provision of
approximately $90,000 for equipment that is no longer in use. The amount is
included in the provision for non-current assets in the Consolidated Statements
of Operations.

During the year ended March 31, 2002, the Company established a reserve of
approximately $335,000 for certain other assets. The reserve was recorded to
reduce the cost of the other asset to an estimate of fair market value. The
amount is included in the provision for non-current assets in the Consolidated
Statements of Operations.

During the year ended March 31, 2001, the Company purchased equipment from a
vendor for approximately $2.1 million. The vendor did not deliver the equipment
to the Company and the Company did not have possession of the equipment as of
March 31, 2001. The vendor states that the Company is liable for the amounts
due. Management disagrees with the vendor. No legal claims have been filed. The
Company wrote off the equipment. In addition, the Company wrote off
approximately $1.6 million of equipment due to the discontinuation of their
sites in Jamaica and Panama during the year ending March 31, 2001.

NOTE F - CONVERTIBLE LOAN PAYABLE TO BANK

On February 29, 2000, the Company obtained a loan form GNB Bank (Panama) S. A.
("GNB Bank") a loan in the principal amount of $5.0 million plus interest at
Citibank N.A.'s base rate plus 1%. The GNB Loan was evidenced by an unsecured
convertible promissory note ("GNB Note") that is due October 31, 2001 (the
"Maturity Date").

The principal portion of the Loan and the Note was convertible, in whole or in
part, either prior to or after the Maturity Date, as elected by GNB Bank into
that number of shares of common stock of the Company with certain a certain
preferential rights ("Qualifying Shares"), if there was a private placement in
the amount of not less than $10.0 to Persons unrelated to GNB Bank of a new
series of the common stock of the Company ("Qualifying Private Placement"); or
that number of shares of common stock of the Company equal to the principal and
interest accrued under the GNB Note, as elected by GNB Bank to be converted,
divided by the lower of the price of any Qualifying Shares issued by the Company
in a Qualifying Private Placement, if any, or the average closing price of the
shares of the Company common stock during 20 consecutive trading days prior to
any notice to convert.

As of June 6, 2001, the Loan Agreement was further modified to provide that the
GNB Note could be converted into either common stock or any other class of
equity stock.

On June 26, 2001, GNB Bank converted the outstanding principal amount of the
Loan, into 4.0 million shares of Series A Convertible Preferred Stock ("Series A
Preferred Stock") of the Company. The Series A Preferred Stock carries an 8%
yearly dividend, votes with the holders of Common Stock on a
one-vote-for-one-share basis, and is convertible into Common Stock on a
one-share-for-one-share basis.

On September 28, 2001, Phone 1 entered into a loan agreement with GNB Bank in
the principal amount of $6.0 million, plus interest at rate of 10% per annum.
The GNB Loan was evidenced by an unsecured convertible promissory note (the "$6
million Note) that was due September 27, 2002 (the Maturity Date). The loan was
guaranteed by the Company. The principal and interest of the Loan and the $6
million Note is convertible, in whole or in part, prior either to or after the
Maturity Date (if the loan and the note are not fully paid). On November 1, 2001
the Company repaid the $6.0 million loan, plus the accrued interest.

On October 31, 2001, Phone 1 entered into a loan agreement with GNBBank in the
principal amount of $10.0 million, plus interest at rate of 10% per annum. The
GNB Loan is evidenced by an unsecured convertible promissory note (the "$10
million Note) that is due October 31, 2002 (the Maturity Date). The Loan is
guaranteed by the Company.

The principal and interest of the $10 million Note is convertible, in whole or
in part, prior either to or after the Maturity Date (if the loan and the note
are not fully paid), as elected by GNB Bank into:

     1.   that number of shares of common stock or any other class of securities
          issued by Phone 1, having privileges or rights senior to the common
          stock, equal to the principal and interest accrued thereon under the
          $10 million Note that the GNB Bank elects to convert divided by:

          o    If GNB Bank has elected to convert the Loan and the $10 million
               Note in whole, such conversion price per share that results in
               granting to the GNB Bank such number of securities of the Company
               representing 12.5% on a fully diluted basis, of the total issued
               and outstanding stock of the Company immediately after the
               conversion: and

          o    If GNB Bank has elected to convert the Loan and the $10 million
               Note in part, such conversion price per share that results in
               granting to the GNB Bank such number of securities of the Company
               representing the percentage, on a fully diluted basis, of the
               total issued and outstanding stock of Phone 1 equal to 7.5%
               multiplied by the principal amount and interest of the $10
               million Note that GNB Bank elects to convert divided by the total
               outstanding principal and interest of the $10 million Note (the
               "Partial Election Percentage"); or


                                      F-13
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   For the Years Ended March 31, 2002 and 2001

NOTE F - CONVERTIBLE LOAN PAYABLE TO BANK  - CONTINUED

     2.   That number of shares of common stock of the Company equal to the
          principal and interest accrued thereon under the $10 million Note that
          the GNB Bank elected to convert divided by 1.5.

The convertible loan payable to the bank includes certain restrictive covenants,
including the Company's ability to issue equity, stock options, declare
dividends, and obtain loans with other financial institutions.

Chairman of the Board of the Company, is also the Chairman of GNB Bank. He has
provided collateral to GNB Bank for the payment and performance of the Company
and Phone 1 of each of the loans from GNB Bank and the overdraft facilities.

NOTE G - DEBT

Short-Term Borrowings and Overdraft Facility
--------------------------------------------

In June 2001, the Company entered into two additional loans with GNB Bank
(Panama) in the principal amount of $1.25 million and $1.2 million,
respectively, plus interest at Citibank N.A.'s prime plus 2%. Payments of the
outstanding obligations were due on July 8, 2001. Additionally, GNB Bank
(Panama) loaned Phone1 an aggregate of $3,050,000 for working capital, which
obligations were assumed by the Company because of its acquiring Phone1. The
loans to Phone1 were due on July 6, 2001 (as to $2.75 million) and on July 8,
2001 (as to $300,000). On June 29, 2001, the Company repaid these outstanding
obligations.

On March 27, 2002, the Company signed an overdraft facility with GNB Bank for
$2,000,000 with an interest rate of 12% per annum. The Overdraft facility
expired on March 27, 2003 and it is callable, however, the facility was extended
and on April 29, 2002, the Company increased its overdraft facility of up to an
aggregate amount of $3,200,000. On May 30, 2002, the Company obtained an
additional $380,000, increasing the overdraft facility to an aggregate amount of
$3,580,000. Effective on June 27, 2002, the Company the aggregate principal
outstanding amount under this Overdraft facility will be $4,580,000.

On July 31, 2001 Phone 1, entered into a loan with GNB Bank in the principal
amount of $2.0 million, plus interest at Citibank N.A.'s base rate plus 2%.
Payment of the outstanding obligations was due on September 17, 2001. The
proceeds from the loan were used for working capital. On September 28, 2001, the
Company repaid the $2.0 million loan, plus the accrued interest.

Chairman of the Board of the Company has guaranteed the payment and performance
by the Company of the three loans described above.

                                      F-14
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001


Equipment Note Payable
----------------------

At March 31, 2001, notes payable consists of the following:

                                                             2001
                                                             ----
         Note payable to a vendor, with interest
         at 12.25% on the outstanding principal
         in monthly installment of principal and
         interest maturing in March 1, 2002. The
         note is collateralized by equipment of
         the Company.                                    $ 6,759,496

         Note payable to a vendor, with interest
         at 11.5% on the outstanding principal.
         The note is due in 30 equal monthly
         installments starting from April 1, 2002
         through September 1, 2004. The note is
         collateralized by equipment of the Company.       6,750,000
                                                         -----------
             Total long-term note                         13,509,496
         Less current maturities                           6,759,496
                                                         -----------
             Total long-term note, less
                current maturities                       $ 6,750,000

During the year ended March 31, 2002, the Company settled the note payable (see
Note H).

NOTE H - EXTINGUISHMENT OF DEBT

In June 2001, the Company entered into an agreement with a vendor. The Company
returned $4,197,064 of equipment and paid $3,002,936 in cash for full and
complete satisfaction of the $14.4 million outstanding obligations due to the
vendor. The Company recorded an extraordinary gain of approximately $7.2 million
due to the settlement.

On September 30, 2001, the Company entered into an agreement with the vendor.
The Company paid $1.0 million in cash and signed a $2,000,000 promissory note
bearing an interest rate of 8.5% to the vendor for full and complete
satisfaction of the outstanding obligations to the vendor. These obligations
were previously disclosed as capital lease obligations of approximately $6.4
million. The Note and the accrued interest will be paid in four (4) quarterly
installments on December 31, 2001, March 31, 2002, June 30, 2002, and September
30, 2002. The Note is secured by a lien on the vendor's equipment and a guaranty
of the Company. As of March 31, 2002, the Company has made one quarterly
installment of $500,000, plus interest. Second installment was made on April 1,
2002, plus accrued interest. When the agreement was reached the total obligation
owed to the vendor, including accrued interest was $7.2 million. The Company
recorded an extraordinary gain of approximately $4.2 million due to the
settlement of the debt.

                                      F-15
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001

NOTE I - INCOME TAXES

The Company has no current income tax expense because of a tax net operating
loss for the years ending March 31, 2002 and 2001. The Company has not recorded
a deferred tax expense because of a valuation allowance, which completely
provides for the deferred tax assets.

The following table summarizes the differences between the Company's effective
tax rate and the statutory federal rate as follows:

                                                      2002       2001
                                                     ------     ------
    Statutory federal rate                           (34.0) %   (34.0) %
    Increase (decrease) in tax resulting from:
        Nondeductible items                            18.7 %     22.5 %
        State taxes, net of federal tax benefit       (3.0) %    (3.0) %
        Valuation allowance                            18.3 %     14.5 %
                                                     ------      -----

             Effective tax rate                          -- %        -- %
                                                     ======      ======

Deferred tax assets are comprised of the following at March 31:

                                                 2002           2001
                                             -----------    -----------
    Write-down of investments                $   129,500    $        --
    Reserve on deposits                           45,446             --
    Stock compensation                           243,654        203,000
    Fixed assets write down                    1,094,261        177,599
    Allowance for doubtful accounts               38,775         32,235
    Net operating loss                        10,516,175      7,914,230
                                             -----------    -----------
        Deferred tax assets                   12,067,811      8,327,064

    Less valuation allowance                  12,067,811     (8,327,064)
                                             -----------     ----------

                                             $        --    $        --
                                             ===========    ===========

At March 31, 2002, the Company had net operating loss carry forwards for federal
tax purposes of approximately $28,400,000 that will begin to expire in 2021.
Utilization of net operating losses may be limited if an ownership change has
occurred within the meaning of Internal Revenue Code Section 382.

                                      F-16
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001

NOTE J - LEASE COMMITMENTS

Future minimum payments, by year and in the aggregate, under the aforementioned
leases and other non cancelable operating leases for office space with initial
or remaining terms in excess of one year as of March 31, 2002, are as follows:

        Year                                          Operating
       Ending                                         Leases
  ----------------                                   -----------

       2003                                            350,799
       2004                                            364,854
       2005                                            379,461
       2006                                            394,621
       2007                                            410,391
     Thereafter                                      1,135,559
                                                     -----------

Total minimum lease payments                         3,035,685

Rent expense was $566,992 and $789,533 for the years ended March 31, 2002 and
2001, respectively.

NOTE K - COMMITMENTS AND CONTINGENCIES

On July 24, 2001, Phone1 Inc., a wholly-owned subsidiary, entered into a 10-year
agreement with Protel, Inc., a leading manufacturer and distributor of
intelligent electronic assemblies for payphones, under which Phone1 has
exclusive access to custom firmware technology designed to enhance Phone 1's
coin-operated international long distance services. In addition to the exclusive
use of the firmware technology, Phone1 has been granted licensing rights to use
Protel's proprietary answer detection technology and its Express Net (R) and
Panorama (R) software upgrades. Under this agreement, Phone1 is required to
maintain a minimum inventory of five thousand custom products.

Effective October 2, 2000, Globaltron entered into an employment agreement with
the Chief Executive Officer ("CEO"). The agreement provided an annual base
salary of $300,000. The agreement also provides that the CEO is entitled to
receive options for up to 960,000 shares of our Common Stock, exercisable at
$5.50 per share through October 1, 2010, which options vest in 192,000
increments every six months. He is also subject to confidentiality, no
solicitation, and non-competition provisions. The stock options were issued at
below the fair market value resulting in salary expense and additional paid in
capital of $96,000 in March 31, 2001. On April 30, 2001, the CEO left the
Company. He received a total of $220,000 starting May 1, 2001 paid over a period
of nine months. Additionally, the exercise period for his vested options to
purchase 384,000 shares of the Company's common stock at $5.50 per share was
extended through July 31, 2002.

                                      F-17

<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001

NOTE K - COMMITMENTS AND CONTINGENCIES - CONTINUED

Spitfire Merchants, Ltd. v. Globaltron Corporation f/k/a Win-Gate Equity Group,
Inc. n/k/a Phone 1 Globalwide Inc. was filed in June 5, 2001 in the Eleventh
Judicial Circuit Court in and for Miami-Dade County, Florida. The lawsuit seeks
damages for alleged breach of contract regarding the purchase of shares in the
Company. Spitfire alleges that it was not given the correct amount of shares and
that some of the shares it received were restricted, allegedly in violation of
Spitfire's subscription agreement with the Company. Spitfire has sought damages
in excess of $1,000,000, which is disputed by the Company. In its answer, the
Company asserted the affirmative defenses of failure to mitigate damages and
failure of consideration. The Company intends to vigorously defend this matter.

On June 28, 2001, the Company entered into a billing software licensee agreement
with a vendor. Under the agreement, the vendor granted the Company a
non-exclusive, non-transferable license to use their software. The licensing and
maintenance fees under the licensing agreement were to be paid at a rate of
$21,000 per month for a period of 36 months. The fees to be paid by the Company
under the licensing agreement were also subject to escalation if the Company
reached certain revenue milestones (which milestones were not met prior to the
termination of the agreement). The Company is not currently using the billing
software due to certain disputes. The vendor has filed a claim on April 1, 2002
against the Company for approximately $700,000 for a breach of a software
licensing agreement. The Company has filed a counterclaim against the vendor
seeking damages for the breach of software licensing agreement, breach of
express warranty, breach of an implied warranty of fitness for a particular
purpose, money had and received and unjust enrichment. The Company is seeking
damages in excess of $1,000,000. The claims are in its early stages and no out
come can be determined.

On September 30, 2001 the Company and GCC entered into an agreement with a
telecommunications product and services vendor pursuant to which the Company,
GCC and the vendor mutually agree to jointly resolve any claims that any of them
may have related to, or arising, directly or indirectly, from certain licensing
agreement that was signed among the parties. GCC paid $75,000.00 in cash and the
Company issued 300,000 shares of its Common Stock. The vendor has a put option
against GCC for 10 consecutive days starting on August 31, 2002 to require GCC
to purchase 100,000 of the Company's Common Stock held by the vendor for a
purchase price of $2 per share, if during the period comprised between April 1,
2002 and August 31, 2002, the closing price of the Common Stock of the Company
does not reach an average closing price of $2 or more per share during a period
of thirty consecutive trading days. In addition, either GCC or the Company has a
call option exercisable at any time until August 31, 2002, to buy 100,000 of the
Company's shares held by the vendor at an adjusted purchase price of $2 per
share, irrespective of the price of the stock in the public market. GCC will pay
the vendor an additional $75,000 on April 1, 2002, if the average closing price
of the Company's stock does not reach $2 per share for a period of twenty
consecutive trading days between January 1, 2002 and March 31, 2002. An accrual
was established as of March 31, 2002 for the $75,000 to be paid on April 1,
2002. As of March 31, 2002, the Company established an accrual for $82,000
representing the net effect of the put and call option, as well as an accrual of
$200,000 due to the probability of the exercise of the put option. As regards to
this agreement, the Company recorded $700,000 as Settlement of service agreement
in the Consolidated Statement of Operations for the year ended March 31, 2002.

During the year ended March 31, 2002 the Company received a bill from a vendor
of telecommunication services provider in an amount of approximately $500,000
for the period of March 2000, to June 2001. The Company has disputed the charges
on the grounds the vendor never provided the services; however, the Company has
established a reserve for a potential liability. No claim has been filed against
the Company. The Company is currently purchasing other services from the vendor.

On November 21, 2000, the Company terminated certain agreements with a
telecommunication company. As consideration for the termination, the Company
paid $50,000 in cash and transferred 400,000 shares of its common stock to the
telecommunications company. The Company agreed to issue an additional 50,000
shares of its common stock if the price of the Company's common stock does not
have an average closing price of $7.00 per share or more for 20 consecutive
trading days through November 20, 2001. The cost for settlement of service
agreement amounted to $1,350,000. The Company did not issue the 50,000 shares of
its common stock due to a dispute between the parties.

                                      F-18
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001


NOTE L - EQUITY TRANSACTIONS

Preferred Stock

A total of 10,000,000 shares of the Company's Preferred Stock have been
designated as "Series A 8% Convertible Preferred Stock" (the "Series A
Preferred"). The Series A Preferred is entitled to receive dividends at the rate
of 8% per annum only if declared by the Board of Directors. Upon any liquidation
or dissolution of the Company (including certain deemed liquidations) the
holders of the Series A Preferred are entitled to receive an amount equal to the
amount paid for such stock plus any accrued but unpaid dividends before any
amounts are distributed to the holders of any junior stock (including the
Company's common stock). Holders of the Series A Preferred are entitled to one
vote per share and, except in certain limited circumstances, vote together with
the holders of the Company's common stock. Certain actions may not be undertaken
without the separate vote of the holders of at least 70% of the then outstanding
Series A Preferred, including without limitation (i) the issuance of any
security senior or on parity to the Series A Preferred, (ii) any merger or
consolidation of he Company or any sale of all or substantially all of its
assets , (iii) the Company entering into material joint venture or similar
arrangement, other than in the ordinary course of business, and (iv) making any
changes to the Company's stock option plan and any grants thereunder. Shares of
the Series A Preferred are convertible into shares on common stock initially on
a one for one basis. The conversion rate is subject to adjustment upon the
occurrence of certain dilutive stock issuances and in the event of stock splits,
reclassifications and the like. As of March 31, 2002, the Company had
accumulated $840,000 as preferred dividend. However, no dividend has been
declared by the board.

Sale of Preferred Stock to GNB Bank

On June 26, 2001, the Company sold GNB Bank 3.0 million shares of Series A
Preferred Stock for $2.00 per share, for an aggregate of $6.0 million.

Sale of Preferred Stock to Premium Quality Fund

On June 26, 2001, Premium Quality Fund "PQF" acquired 2.0 million shares of the
Company's newly issued Series A Preferred Stock at $2.00 per share, for an
aggregate of $4.0 million.

Sale of Common Stock to Company Directors

In April 30, 2001, three of the Company's Directors each purchased 10,000 shares
of restricted Common Stock at the then fair market price of $1.95 per share. In
June 2001, the Company's fourth Director also purchased 10,000 shares on the
same terms.

Stocks Issued for Cash

On December 6, 2000, the Company issued 10 million shares of its common stock to
a company based in the Cayman Islands in consideration of $10 million.

                                      F-19
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001


Stock Options
-------------

The Company has adopted a stock option plan (the Plan) for employees,
consultants and directors of the Company. Stock options granted pursuant to the
Plan shall be authorized by the Board of Directors. The aggregate number of
shares, which may be issued under the Plan, shall not exceed 4,000,000 shares of
common stock. Stock options are granted at prices not less than 100% of the fair
market value on the date of the grant. All options granted, for the periods
presented, have been at fair market value except for one employee. Option
terms, vesting, and exercise periods vary, except that the term of an option may
not exceed ten years.

On April 30, 2001 the Company granted 300,000 options to directors with the
strike price being the current fair market value of the share price. The Options
wre 50% vested at the Grant Date and the remainder will be vested on the first
anniversary of the Grant Date.

On May 22, 2001 the Company granted 200,000 options to the Chief Financial
officer of the Company. The exercise price of the options was the closing price
as of May 22, 2001. Twenty-five percent of the options were fully vested on the
grant date and remaining options will be vested over two years.

On October 22, 2001, the Company granted 475,000 options to three employees and
two consultants. The exercise price of the options was the closing price as of
October 22, 2001. Twenty-five percent of the options were fully vested on the
grant date and remaining options will be vested over two years.

On December 3, 2001, one of the above consultants was hired as a full time
employee. Pursuant to FAS 123, transactions in which an entity issues its equity
instruments to acquire goods or services from non-employees must be accounted
for based on fair value of the consideration received or the fair value of the
equity instruments issued, whichever is more reliably measurable. As of March
31, 2002, the Company recorded approximately $62,000 as compensation expense for
the stock options granted to consultants.

On January 28, 2002, the Company granted 50,000 options to an employee. The
strike price of the options was the closing price at January 28, 2002. The
options were fully vested at the Grant Date.

On March 12, 2002, the Company granted 250,000 options to the directors with the
strike price being the current fair market value of the share price. The options
were fully vested.

Information with respect to stock option activity is as follows:

<TABLE>
<CAPTION>
                                                      2002                                 2001
                                 ---------------------------------     --------------------------------
                                                       Weighted -                           Weighted -
                                                        Average                              Average
                                      Shares        Exercise Price           Shares      Exercise Price
<S>                                  <C>               <C>                 <C>              <C>
Outstanding at beginning of
  year                               1,343,500         $   4.08               50,000        $   10.50
Granted                              1,275,000             1.54            1,343,500             4.08
Exercised                                   --               --                  --               --
Forfeited                             (702,500)            4.84             (50,000)            10.50
                                     ---------         ---------          ----------        ---------

Outstanding at end of year           1,916,00             2.58            1,343,500            4.08
                                                                          ==========

Options exercisable at end
  of year                             1,265,500                              545,167
Weighted-average fair value
  of options granted during
  the year                          $     1.42                          $      3.35
</TABLE>

                                                                F-20
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001


Stock Options - (continued)
---------------

The following information applies to options outstanding at March 31, 2002.

<TABLE>
<CAPTION>
                                          Options Outstanding                      Options Exercisable
                   --------------------------------------------------    --------------------------------
                                      Weighted -
                                       Average           Weighted -                          Weighted -
    Range of                          Remaining           Average                             Average
Exercise Prices         Shares    Contractual Life     Exercise Price          Shares      Exercise Price
---------------    ------------   -----------------   ---------------     -------------   ---------------
   <S>               <C>                 <C>             <C>                  <C>            <C>
   $.95 - $2.25      1,200,000           8.95            $    1.56            637,500        $    1.44
   $2.5 - $3.12        332,000           7.95            $    2.92            244,000        $    3.03
   $5.50               384,000           0.34            $    5.50            384,000        $    5.50
</TABLE>

The Company's net earnings (loss) and earnings (loss) per share would have been
changed to the pro forma amounts indicated below had compensation cost for the
stock option issued to employees been determined based on the fair value of the
options at the grant dates consistent with the method of SFAS 123 (in thousands,
except per share data):

                                                     2002             2001
                                                  ---------        ---------
    Net earnings (loss)
      As reported                                 $(16,548)        $(47,515)
      Pro forma                                    (18,340)         (50,308)

    Basic earnings (loss) per share
      As reported                                    (.45)           (2.22)
      Pro forma                                      (.50)           (2.35)

    Diluted earnings (loss ) per share
      As reported                                    (.45)           (2.22)
      Pro forma                                      (.50)           (2.35)

The above pro forma disclosures may not be representative of the effects on
reported net earnings for future years as options vest over several years and
the Company may continue to grant options to employees. In addition, the above
calculations include provisions for Series A Preferred Stock dividend in the
amount of $ 840,000 and $0 in March 31, 2002 and 2001, respectively.

The fair value of each option grant is estimated on the date of grant using the
binomial option-pricing model with the following weighted-average assumptions
used for grants in 2002 and 2001, respectively: expected volatility of 199% for
2002 and 150% for 2001; risk-free interest rates of 4.61% in 2002 and 4.85% in
2001; and expected holding periods is 3 years in 2002 and 2001.


                                      F-21
<PAGE>

                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001

NOTE M - RELATED PARTY TRANSACTIONS

Legal services were performed for the Company by a law firm in which one
director is employed. These services totaled approximately $ 785,000 and $1,
085,000 for the year ended March 31, 2002 and 2001, respectively.

On September 27, 2000, a former Chief Executive Officer sold 4,294,000 shares
held by him to a company based in Isle of Man, for $42,940. The sale was a
result of an agreement by him to personally pay a finder's fee in the Company's
common stock to an entity that would provide the Company with not less than $3
million in loans and equity. The Company recorded the difference between the
fair market value of the shares sold and the cost of the shares as deferred loan
cost of $24,647,560.

A board member of the Company is also the Chairman of the Board of a financial
institution the Company does business with.

Other related party transactions are disclosed in Notes D, F, G, K, L and O.

NOTE N - CONCENTRATION

The Company principally provides telecommunication services and has equipment in
Latin America. The company had four customers in 2002 and 2001 with sales more
that 10% of the total sales. The Company provides trade credit to its customers
in the normal course of business. The operation of the telecommunication
equipment is susceptible to changes in Latin American economies and political
climate.

NOTE O - SUBSEQUENT EVENTS

On April 1, 2002, the Company entered into a loan agreement with a related party
financial institution in the principal amount of $1 million. The interest rate
charged on the loan agreement is based on the prime rate plus 1%. The loan is
evidenced by a secured promissory note and is collateralized by all assets of
the Company. The loan matures April 29, 2002.

The loan was paid off on April 29, 2002.

On April 4, 2002, the Company terminated a telecommunication service agreement
with a vendor, whereas the vendor agreed to release the Company of all claims
for the outstanding balance owed to the vendor and the execution of a new
co-location agreement with the Vendor. The Company did not incur any penalties
as a result of the early termination. The Company entered into a new agreement
with the vendor for equipment racks to house the company's equipment. Under the
new agreement, the Company is required to pay for services totaling $768,000 at
a rate of $19,200 per month, through August 9, 2005.

On April 16, 2002, the Company issued 240,000 options to an employee. The strike
price of the options was the closing price at April 16, 2002. The options are
fully vested at the grant date.

In April, 2002, the Board of Directors amended and restated its Stock Incentive
Plan to increase the number of shares of common stock that may be subject to
stock options granted to non-employee directors upon their beginning service as
a director from 50,000 shares to 150,000 shares and to authorize the grant of
stock options to purchase up to a maximum of 75,000 shares in any calendar year.
Stock option grants made in connection with a non-employee director's beginning
service shall be 50% vested and exercisable on the date of grant and the
remainder of the stock option will vest and become exercisable on the first
anniversary of the date of grant. Stock option grants made in calendar years
other than the calendar year in which a non-employee director begins service
shall vest and become exercisable as determined by the Board of Directors. The
Board of Directors also amended the Stock Incentive Plan to provide for a
"cashless exercise" procedure with respect to all stock options granted under
the Stock Incentive Plan if the Common Stock is quoted on the Over The Counter
Bulletin Board

On April 29, 2002, the Company increased its overdraft facility of up to an
aggregate amount of $3,200,000 with GNB bank. On May 30, 2002, the Company
obtained an additional $380,000, increasing the overdraft facility to an
aggregate amount of $3,580,000. On June 20, 2002, the Company increased the
overdraft facility to an aggregate principal amount of $4,580,000.

On April 29, 2002, the Company entered into a revolving line of credit with a
related party financial institution in the principal amount of $1 million. The
interest rate charged on the borrowings under the revolving line of credit
agreement is the prime rate plus 1%. The loan matures May 30, 2002. The
outstanding balances under the line of credit were paid on May 31, 2002.

                                      F-22

<PAGE>


                    Phone 1 Globalwide Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   For the Years Ended March 31, 2002 and 2001


NOTE O - SUBSEQUENT EVENTS - CONTINUED

On May 30, 2002, the Company signed a revolving line of credit with a related
party financial institution in the principal amount of $1 million. Interest rate
charged on the borrowing under the revolving line of credit agreement is 5.75%.
The loan matures June 30, 2002. The Chairman of the Company has guaranteed the
payment and performance by the Company. As of June 30, 2002 the loan was not
paid.

The Company entered into an agreement with a supplier of telecommunications
services, which commenced March 2001 and continues for a period of 18 months.
Under the agreement, the Vendor provides satellite service for the Company's
telecommunication service. On June 28, 2002, the Company is required to pay the
Vendor for service totaling $900,000. The Company reached an agreement with the
vendor to terminate all agreements and release the Company of all claims for the
outstanding balance owed to the vendor. Under the settlement the Company will
pay $150,000 at the signing of the agreement, vendor will retain the deposit of
approximately $46,000. In addition, the Company will pay $10,000 a month for 18
months starting from December of 2002. In the event the Company orders new
services from the vendor the monthly, payments of $10,000 will be applied
against the new services.



                                      F-23