U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

(Mark One)

[ ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the fiscal year ended

[X]  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 For the transition period from November 1, 1998 to
     June 30, 1999

                           Commission File No. 0-25668

                            GLOBAL TECHNOLOGIES, LTD.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

                  DELAWARE                             11-3197148
     -------------------------------             ----------------------
     (State or Other Jurisdiction of               (I.R.S. Employer
      Incorporation or Organization)             Identification Number)


                         1811 Chestnut Street, Suite 120
                        Philadelphia, Pennsylvania 19103
                    ----------------------------------------
                    (Address of Principal Executive Offices)


                                 (215) 972-8191
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

<TABLE>
<S>                                                     <C>
               Title of Each Class                      Name of Each Exchange on Which Registered
-----------------------------------------------         -----------------------------------------
Class A Common Stock, $0.01 par value per share                   Nasdaq National Market
</TABLE>


     Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 in response to Item
405 of Regulation S-K contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     The Issuer's revenues for the Transition Period ended June 30, 1999 were
$1,582,461.

     The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the Registrant on October 15, 1999 was approximately
$17,666,160, based on the closing sales price of the Class A Common Stock on
such date as reported by the Nasdaq National Market.

     The number of shares outstanding of the Registrant's Class A Common Stock,
$0.01 par value, on October 15, 1999 was 6,114,217.

     Transitional Small Business Disclosure Format: Yes       No X
                                                       ---      ---

                       DOCUMENTS INCORPORATED BY REFERENCE

     None.


<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.

                        Transition Report on Form 10-KSB

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I....................................................................... 1
   ITEM 1  - DESCRIPTION OF BUSINESS......................................... 1
   ITEM 2  - DESCRIPTION OF PROPERTY.........................................21
   ITEM 3  - LEGAL PROCEEDINGS...............................................22
   ITEM 4  - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............24

PART II......................................................................24
   ITEM 5  - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........24
   ITEM 6  - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.......26
   ITEM 7  - FINANCIAL STATEMENTS............................................43
   ITEM 8  - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
             AND FINANCIAL DISCLOSURE........................................43

PART III.....................................................................43
   ITEM 9  - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT...............43
   ITEM 10 - EXECUTIVE COMPENSATION..........................................45
   ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..49
   ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................51
   ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K................................53

SIGNATURES...................................................................59


<PAGE>


                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

The Company

     Global Technologies, Ltd., a Delaware corporation ("Global," and together
with its subsidiaries, the "Company"), is the successor by merger to Interactive
Flight Technologies, Inc., a Delaware corporation (see "Recent Events"), which
in turn is the successor by merger to In-Flight Entertainment Services Corp., a
New York corporation.

     In May 1998, former management of Global determined to exit the business of
developing, assembling, installing and operating a computer-based in-flight
entertainment network (the "Entertainment Network") which provided aircraft
passengers with the opportunity to view movies, to play computer games and, in
certain cases where permitted by applicable law, to gamble through an in-seat
video touch screen. The Entertainment Network was capable of supporting
interactive advertising, e-commerce and shopping. Global's only agreement for
the Entertainment Network was with Swissair VKB ("Swissair"). Pursuant to the
Swissair agreement, Global installed and maintained the Entertainment Network in
19 aircraft.

     On September 2, 1998, Swissair flight 111 crashed near Halifax, Nova Scotia
and all passengers and crew were killed. To date, the causes of the accident
have not been determined. The Entertainment Network had been installed on the
aircraft which crashed. The crash has led to many lawsuits. See Item 3 - "Legal
Proceedings" and Item 6 - "Management's Discussion and Analysis or Plan of
Operation." On September 28, 1999, the Federal Aviation Administration
issued an Airworthiness Directive that prohibits the installation of the
Entertainment Network as it was configured on the type of aircraft which
crashed. See "Recent Events - FAA Airworthiness Directive (No. 99-20-08)."

     For reasons unrelated to the Swissair crash, the former management and
Board of Directors of Global resigned and the current Board of Directors was
elected in September 1998. The current Directors of Global were reelected by the
stockholders at the annual meeting on October 30, 1998. The new Board instated
the current management team.

     At the beginning of the last fiscal year, Global's new management was
evaluating whether its in-flight entertainment technology was adaptable to
alternative markets and how to redeploy its capital to exploit
technology-related business opportunities. Ultimately, the new management of
Global developed a strategic plan to take advantage of the opportunities
associated with Global's technologies and management resources. New management
pursued a sale to or a strategic alliance with other entities in the travel and
entertainment business to maximize the potential of the Entertainment Network
and began to evaluate technology-related businesses that could build upon
Global's core competencies, as well as other technology-related business
opportunities.

     Consistent with this vision, through a series of acquisitions, investments
and divestitures, Global reorganized itself as a diversified technology-based
company. The subsidiaries and affiliates of the Company operate interactive
entertainment, gaming, networking solutions, e-commerce, and



<PAGE>


telecommunications businesses. In connection with the reorganization, Global
changed its fiscal year-end from October 31 to June 30. The Company's dry
cleaning operation acquired by former management was sold during the Transition
Period ended June 30, 1999.

     A graphical depiction of the Company's current corporate structure
(including its affiliate companies) and a description of the Company's business
is set forth below. The ownership percentages are as of October 15, 1999. IFT
Lottoco, Inc., IFT Subco, Inc., IFT Investments and IFT Leasing Limited were all
formed subsequent to June 30, 1999 and had no direct employees as of October 15,
1999.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       2

<PAGE>

<TABLE>
<CAPTION>

                                     GLOBAL
                               TECHNOLOGIES, LTD.
                            (a Delaware corporation)
                                        |
                                        |
-------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                <C>                                 <C>                <C>               <C>
80%  |            11.15%* |          100% |                              100% |             100% |            100% |
     |                    |               |                                   |                  |                 |
The Network       U.S. Wireless       IFT Holdings                       IFT Lottoco,       IFT Subco,          Interactive
Connection,        Corporation          Limited                              Inc.              Inc.                Flight
   Inc.            (a Delaware       (a UK company)                      (a Delaware        (a Delaware         Technologies
(a Georgia         corporation)       |                                   corporation)       corporation)      (Gibraltar) Ltd.
corporation)                          |                                          |                 |             (a Gibraltar
                                      |                                          |                 |                company)
                                      |                                          |                 |                   |
                                      |                                    99%LP |            1%GP |             24.5% |
                                      |                                          |_________________|                   |
           ___________________________|___________________________               |                                     |
              27.5%              100% |               100%                       |                                     |
                                      |                                          |                                     |
           Inter Lotto(UK)         IFT              IFT Leasing                IFT                               Donativos,
             Limited            Management            Limited               Investments                         S.A. de C.V.
          (a UK company)         Limited           (a UK company)          (a UK limited                         (a Mexican
                              (a UK company)                                partnership)                           company)
</TABLE>

* See discussion below under "The Affiliate Companies - U.S. Wireless
  Corporation."


                                       3

<PAGE>


Recent Events

   Merger of Interactive Flight Technologies, Inc. into Global
   Technologies, Ltd.

     On September 30, 1999, the stockholders of Global approved a
reincorporation proposal pursuant to an Agreement and Plan of Merger dated as of
August 16, 1999 (the "Merger Agreement"). Pursuant to the Merger Agreement,
Interactive Flight Technologies, Inc. ("IFT") merged with and into Global
Technologies, Ltd. and all stockholders of the former became stockholders of the
latter on a share-for-share basis.

     The primary purpose of the reincorporation proposal was to remove the
restrictions imposed on IFT by Section 203 of the Delaware General Corporation
Law. Section 203 prohibited IFT from engaging in certain transactions, as more
fully described below. Prior to the merger, Global was a non-operating,
wholly-owned subsidiary of IFT formed for the purpose of completing the merger.

     As a result of the merger, Global currently owns all assets that were owned
by IFT, is subject to all of the liabilities of IFT, and conducts all of the
business operations previously conducted by IFT. There has been no material
change in the business, management, operations or financial statements of the
Company as a result of the merger. All of IFT's contracts and other assets
vested in Global. The officers and directors of IFT immediately prior to the
merger are now the officers and directors of Global. All benefit plans of IFT
were adopted by Global.

     The Certificate of Incorporation of Global is substantially identical to
the Amended and Restated Certificate of Incorporation of IFT, except for the
name of the Company and a provision electing not to be governed by Section 203.
The following is a brief summary of Section 203 and the merger.

     Subject to certain exceptions, Section 203 prohibits business combinations
between corporations and "interested stockholders" for a three-year period
following the time that such stockholder becomes an "interested stockholder,"
unless the Board of Directors gives prior approval to such transaction or unless
the business combination is approved by the Board of Directors and the holders
of at least 66-2/3% of the outstanding voting stock of the corporation not owned
by the "interested stockholder." Section 203, the complete text of which is
attached as Exhibit B to the Proxy Statement filed August 17, 1999, defines
"interested stockholder" as "any person that (i) [owns or has the right to
acquire,] 15% or more of the outstanding voting stock of a corporation or (ii)
is an affiliate or associate of the corporation and was the owner of 15% or more
of the outstanding voting stock of the corporation at any time within the 3-year
period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder, and the affiliates and the
associates of such person..."

     IFT's Chief Executive Officer, Irwin L. Gross was an "interested
stockholder" of IFT pursuant to clause (b) above. As a director and chief
executive officer of IFT, Mr. Gross was deemed an affiliate of IFT and, through
his control of Ocean Castle Partners, LLC ("Ocean


                                       4

<PAGE>


Castle"), he beneficially owned as much as 33.9% of the voting power of IFT
within the past three years.

     Although Section 203 is intended to provide anti-takeover protection for
Delaware corporations by imposing supermajority disinterested stockholder voting
requirements for certain self-dealing transactions with large stockholders, the
Board believed that the potential transactions between Mr. Gross or his
affiliates or associates on the one hand and Global on the other hand would be
beneficial to both Global and its stockholders (other than Mr. Gross or his
affiliates or associates), and that the need to meet the supermajority
disinterested stockholder approval requirements under Section 203 for each such
transaction would have made it more difficult to pursue potentially attractive
business opportunities and more time consuming and expensive to effect them. As
a result of the merger, Global, as successor to IFT, will be able to enter into
business combinations with Mr. Gross or his affiliates or associates without
obtaining the stockholder approval required by Section 203.

   FAA Airworthiness Directive (No. 99-20-08)

     On September 28, 1999, the Federal Aviation Administration ("FAA") issued
an Airworthiness Directive (the "Directive") applicable to all McDonnell Douglas
Model MD-11 series airplanes (the "MD-11"). The Directive prohibits the
installation of the Entertainment Network, as it was configured on the MD-11
involved in the Swissair Flight 111 crash. The Directive was prompted by the
results of a special certification review of the Entertainment Network installed
on the MD-11 that crashed in the Swissair flight 111 accident. The action taken
by the FAA by way of the Directive is intended to prevent possible confusion as
the flight crew performs its duties in response to a smoke/fumes emergency.
Management believes that adjustments to the way the Entertainment Network is
installed in MD-11 airplanes necessary to address the FAA concerns could be
easily implemented. The Directive provides that no causal factors of the
accident have been determined to date. The Company is unaware of any findings
that would indicate that the Entertainment Network either caused, or was related
to a cause of, the crash.

     The Company does not believe that the Directive will have a material
adverse effect on its business or operations. The Company no longer offers the
Entertainment Network for sale to the commercial air transport market. However,
the Company has combined the technologies of the Entertainment Network with the
system architecture of The Network Connection, Inc.'s (a corporation of which
approximately 80% of the capital stock is owned by Global) technologies. The
Company is marketing the resulting system, AirView, to original equipment
manufacturers ("OEMs") and operators of business jets. See Item 1 --
"Description of Business -- The Affiliate Companies -- The Network Connection
Inc. -- TNCi Products and Services."

Business Strategy

     In connection with its reorganization, Global's business strategy is to
identify companies capable of being market leaders in the Internet, networking
solutions, telecommunications, or gaming industries and which are at a stage of
development that would benefit from Global's management support, financing, and
market knowledge. Global generally seeks to acquire a large enough stake in an
affiliate company to enable Global to have significant influence over the


                                       5

<PAGE>


management and policies of the company and to realize a large enough return to
compensate Global for it's investment of management time and effort, as well as
capital.

     In assessing the advisability of making an investment in a business in one
of these industries, Global focuses on four major criteria: (1) the size of the
market opportunity, (2) proprietary aspects of the business that offer strong
and sustainable competitive advantages, (3) the quality of the current
management team and (4) the ability of Global to create extra value with
strategic planning and access to capital.

     Global gains exposure to emerging companies through management's reputation
as successful developers and operators of technology and telecommunications
companies, referrals from the investment community, management's relationship
with venture capital and private equity funds, and the participation of
directors, officers and employees of the Company in various non-profit and
charitable organizations. Global considers its access to potential affiliate
companies to be good.

     Global has capital and managerial resources to provide financing and
strategic, managerial, and operational support to certain emerging companies.
The corporate staff of Global provides hands-on assistance to the managers of
its affiliate companies in the areas of management, financial, marketing, tax,
risk management, human resources, legal and technical services, based on the
affiliate's needs. Global seeks to assist affiliate companies by providing or
locating and structuring financing, identifying and implementing strategic
initiatives, providing marketing assistance, identifying and recruiting
executives and directors, assisting in the development of equity incentive
arrangements for executives and employees, and providing assistance in
structuring, negotiating, documenting, financing, implementing and integrating
mergers and acquisitions.

     Global's goal is to maximize the value of its affiliate companies for the
stockholders of the Company.

The Affiliate Companies

   The Network Connection, Inc.

     General

     The Network Connection, Inc., a Georgia corporation ("TNCi") (NASDAQ:
TNCX), is engaged in the development, manufacturing and marketing of
computer-based entertainment and data networks, which provide users access to
information, entertainment, business applications and a wide array of service
options, such as movies, shopping for goods and services, computer games, access
to the World Wide Web, and gambling where permitted by applicable law. The
Company is currently targeting cruise lines, school systems, rail carriers,
business jet OEMs and operators, corporations (for training purposes) and hotel
operators for sales of TNCi's products.


                                       6

<PAGE>


     TNCi's systems can support live-feed, closed-circuit and satellite based
digital television programs in addition to personal interactive entertainment
and video/audio on demand, shopping, multi-player games, gambling, shore
excursion/event booking, karaoke and Internet access, all simultaneously,
independently and with full user control through a keyboard, wireless television
remote control or touch screen display. In addition, attendant or crew
interactive training can be provided at the same time. As part of the turnkey
solution sought by the transportation industry, the Company may also provide and
manage content for use with TNCi's systems on a fee-for-service basis or on a
revenue sharing basis.

     TNCi's products are sold under the names TRIUMPH, Cheetah(TM), and related
sub product names. These systems are based upon non-proprietary or open system
PC hardware standards and utilize major commercial components and subsystems in
order to provide flexibility and reliability. TNCi's products are designed to be
compatible with industry standard network operating systems and new network
operating systems as they become available. Product design allows compatibility
with most applications running in such network environments, and enables TNCi's
systems to operate efficiently as servers and work stations for groups of
interconnected PCs arranged in LANs, WANs, intranets and the Internet. TNCi has
distributed its products worldwide principally through its own internal sales
force and strategic resellers.

     On May 10, 1999, Global acquired from The Shaar Fund, Ltd. ("Shaar") 1,500
shares of TNCi Series B 8% Convertible Preferred Stock, par value $.01 per
share, stated value $1,000 per share (the "TNCi Series B Shares"), and cash in
the amount of $980,000 (net of $50,000 in legal fees) in exchange for (a) 3,000
shares of Global's Series A 8% Convertible Preferred Stock, par value $.01 per
share, stated value $1,000 per share, and (b) warrants to purchase 87,500 shares
of Global's Class A Common Stock, par value $.01 per share, at an exercise price
of $3.00 per share. In connection with this acquisition, Global also received an
assignment of (a) certain registration rights under a Registration Rights
Agreement dated October 23, 1998 between TNCi and Shaar (the "Registration
Rights Agreement") and (b) certain rights of first refusal held by Shaar with
respect to future TNCi financings.

     Also on May 10, 1999, Global acquired directly from TNCi 800 shares of TNCi
Series C 8% Convertible Preferred Stock, par value $.01 per share, stated value
$1,000 per share (the "TNCi Series C Shares"), in consideration for Global's
waiver of all prior TNCi defaults and arrearages arising out of or related to
the TNCi Series B Shares.

     In connection with the forgoing acquisitions of the TNCi Series B Shares
and TNCi Series C Shares, Global also acquired the right to convert a Secured
Promissory Note (the "Secured Promissory Note") made by TNCi in January 1999,
payable to the order of Global, into additional TNCi Series C Shares at the rate
of $1,000 per TNCi Series C Share. The original principal amount of the Secured
Promissory Note was $500,000.

     On May 18, 1999, Global received from TNCi 1,055,745 shares of TNCi's
common stock and 2,495,400 shares of TNCi's Series D Convertible Preferred Stock
(the "TNCi's Series D Shares") in exchange for $4,250,000 in cash and
substantially all the assets and certain liabilities of Global's Interactive
Entertainment Division, as defined in the Asset Purchase and Sale


                                       7

<PAGE>


Agreement dated as of April 29, 1999, as amended (the "TNCi Transaction"). TNCi
did not, however, assume any liability or obligation with respect to claims
arising out of the crash of Swissair flight 111 (See Item 3 - "Legal
Proceedings"). Each share of TNCi Series D Shares is convertible into 6.05
shares of TNCi common stock.

     On June 2, 1999, Global acquired from Sigma Designs, Inc. 110,000 shares of
TNCi common stock, and a warrant to purchase another 40,000 shares of TNCi
common stock with an exercise price based on a formula derived from the average
market price for the common stock over a period of time immediately preceding
such exercise, for approximately $254,000.

     On July 16, 1999, Global acquired from third parties certain notes issued
by TNCi (collectively, the "TNCi Series A and E Notes"). The TNCi Series A and E
Notes had a principal balance of $1,254,082, and interest, redemption premiums,
and other charges incurred but unpaid thereon to the date of acquisition
totaling $640,925, for a total of $1,895,007. Global agreed to cancel the TNCi
Series A and E Notes in exchange for which TNCi increased the balance due under
the Secured Promissory Note in a corresponding amount. On August 12, 1999,
Global acquired from third parties certain notes issued by TNCi (collectively,
the "TNCi Series D Notes"). The TNCi Series D Notes had a principal balance of
$350,000, and interest, redemption premiums, and other charges incurred but
unpaid thereon to the date of acquisition totaling $127,750. Again Global agreed
to cancel the TNCi Series D Notes in exchange for which TNCi increased the
balance due under the Secured Promissory Note in a corresponding amount.

     On August 24, 1999, the Board of Directors of Global elected to convert the
amounts outstanding under the Secured Promissory Note into TNCi common stock.
Such conversion, to the extent it exceeded approximately one million shares of
TNCi's common stock on August 24, 1999, was contingent upon receiving
shareholder approval to increase the authorized share capital which was
subsequently approved on September 17, 1999 at the TNCi shareholder meeting.

     On August 24, 1999, the Board of Directors of Global approved a $5 million
secured revolving credit facility by and among Global and TNCi (the "Facility").
The Facility provides that TNCi may borrow up to $5 million for working capital
and general corporate purposes at the prime rate of interest plus 3%. The
Facility matures in September 2001. TNCi paid an origination fee of $50,000 to
Global and will pay an unused line fee of 0.5% per annum. The Facility is
secured by all of the assets of TNCi and is convertible, at Global's option,
into shares of TNCi Series C Shares. Global executed the Facility on October 12,
1999.

     Global's investments in TNCi as of October 15, 1999, aggregate
approximately 80% of TNCi's common stock on a fully converted basis.

     TNCi Business Strategy

     TNCi's strategy is to position itself as a leading provider of
comprehensive interactive information system solutions which are scalable to
accommodate small or large user groups and, are based on a high-speed and secure
network. TNCi can also offer customized video content options and interfaces
with a customer's existing applications and network. Additionally, TNCi


                                       8

<PAGE>


will continue to position itself as an integrated browser-based software
developer and a content programming, procurement, integration and management
service provider. Content programming and procurement can include educational
and training products, video entertainment, gaming, e-mail and Internet access,
and e-commerce capabilities.

     Sales, Marketing And Distribution

     TNCi currently distributes its products principally through the efforts of
its internal direct sales force. TNCi also attends trade shows and hosts end
user seminars or meetings to promote and market its products. Additionally, TNCi
may advertise in trade publications. TNCi plans to continue and accelerate these
efforts.

     Also, TNCi is developing relationships with strategic "partners" capable of
providing customer solutions through TNCi's products, or encouraging their
customers to purchase TNCi's systems in conjunction with their own products on
the basis that overall system or product performance will be enhanced. TNCi will
assist these partner-vendors by determining the configuration of TNCi's products
that will deliver optimal performance along with the partner-vendor's products.

     The purchase price for TNCi's "turn-key" packaged systems depends upon
various factors, such as the size and type of train or ship, and the requested
system features. There can be a relatively long sales cycle for some products,
because of the need to evaluate TNCi's technology, to conduct a test
installation of each customized system, and to negotiate agreements with other
providers. The sales cycle is also dependent upon a number of factors beyond
TNCi's control, such as the financial condition of the customer, safety and
maintenance concerns, regulatory issues and purchasing patterns of particular
operators, and the industry generally. This can result in long and unpredictable
buying patterns for TNCi's transportation-related products. See Item 6
-- "Management's Discussion and Analysis or Plan of Operation."

     Overview Of The TNCi Markets And Industries

     The Company is targeting four primary markets for TNCi's products at this
time: (1) multimedia servers for education and corporate training; (2)
interactive entertainment and information systems for cruise ships; (3)
interactive entertainment and information systems for trains; and (4)
interactive information systems for business aviation (as contrasted with
commercial aviation). Corporate training programs and interactive education for
high schools and universities constitute large markets in excess of several
billion dollars per year. Indeed, high schools and universities are beginning to
seek innovative ways of bringing the Internet and interactive courseware to the
classroom. Interactive entertainment and information systems for cruise ships
and trains represent large, relatively untapped markets. For example, there
currently are more than 70 cruise ships in revenue service with 500 or more
guest cabins, and the build schedule for ships of this size shows more than 30
new ships entering revenue service between now and the end of 2001. Only nine
ships to date have had interactive entertainment and information systems
installed. In the case of commuter trains, no interactive entertainment and
information systems have been installed. Finally, OEMs and


                                       9

<PAGE>


operators of business jets are just beginning to see the benefits of installing
interactive and multimedia servers connected to a high-speed LAN to provide
business travelers with an "office-in-the-sky." Although the Company believes
these markets are large, relatively untapped, and potentially profitable, no
assurances can be given that TNCi will be successful in any of them.

     TNCi Products And Services

     Interactive Information Systems For Business Aviation (AirView)

     AirView is the Company's planned in-flight portal to advertising, shopping,
video and similar features, as well as business-related applications. AirView is
the combination of the Company's Entertainment Network with TNCi's system
architecture, which is intended to be installed on business jets.

     In April 1998, the Boeing Company identified TNCi's AirView interactive and
video server as a key element of an "office-in-the-sky" for the new B737-73Q
Business Jet. In November 1998, TNCi received an order from the Raytheon
Company, which was contracted by Boeing Company, to equip the Boeing Business
Jet (BBJ) B737-73Q "Demonstrator" aircraft with TNCi's AirView interactive and
video server and switches. Installation is due to be completed on the
Demonstrator aircraft in the quarter ending December 1999. There can be no
assurance, however, that any additional business jet orders for TNCi's AirView
system will be received. See Item 6- "Management's Discussion and Analysis or
Plan of Operation."

     Interactive Entertainment And Information Systems For Cruise Ships
     (CruiseView)

     CruiseView is an advanced cabin entertainment and information management
system for the Cruise industry. The CruiseView system is a high bandwidth,
high-speed video-enabled intranet, tailored to meet the environmental demands of
cruise conditions. With video and data servers connected to cabin set top PCs,
via a gigabit digital network backbone for voice, video and data, CruiseView
delivers to each cabin, on demand, a unique entertainment and information
experience, independent of all other passengers.

     In September 1998, TNCi entered into a Turnkey Agreement (the "Carnival
Agreement") with Carnival Corporation ("Carnival"), a Panamanian registered
corporation, for the purchase, installation and maintenance of CruiseView on one
Carnival Cruise Lines ship. During the four-year period commencing on the date
of the Carnival Agreement, Carnival has the right to designate an unspecified
number of additional ships for the installation of CruiseView by TNCi. The cost
per cabin for CruiseView purchase and installation on each ship is provided for
in the Carnival Agreement. In December 1998, Carnival exercised its right and
ordered the installation of CruiseView on one Carnival Cruise Lines Fantasy
Class ship. Delivery and installation of CruiseView for this Fantasy Class ship
began in December 1998 and has been in operational use, on a test basis, since
August 1999. It is expected to begin commercial operation in the quarter ending
December 31, 1999. In August 1999, Carnival exercised its right and ordered the
installation of CruiseView on one Carnival Cruise Lines Destiny Class ship which
is expected to be completed in the quarter ending December 31, 1999. There can
be no assurance, however,


                                       10

<PAGE>


that Carnival will exercise its right under the Carnival Agreement to order
CruiseView for installation on any additional ships. See Item 6 -- "Management's
Discussion and Analysis or Plan of Operation -- Liquidity and Capital
Resources."

     CruiseView offers passengers video and music libraries; e-commerce
capabilities; casino-style and action games; previews of and the ability to book
shore tours; and integration with ship operations, including billing, room
service, surveys and customer requests.

     Interactive Entertainment And Information Systems For Trains (TrainView)

     Like CruiseView, TrainView is a browser-based information portal, which
provides advertising, shopping, route and city information, video features,
games and music to the captive train commuter audience.

     In February 1999, TNCi received an engineering design order from Alstom
Transport Limited ("Alstom"), a unit of ALSTOM SA, a worldwide leader in
manufacturing high speed passenger trains, to incorporate the design of
TrainView, TNCi's advanced Infoactive Business and Entertainment System, into
Alstom's concept high-speed train design. The TrainView all-digital system
proposed is an adaption of TNCi's existing system currently installed for cruise
customers and in the process of being installed for in-flight business
customers. The system is expected to deliver personal interactive entertainment,
video/audio on demand, e-commerce for shopping, event booking, Internet and
business services to the seat through TNCi's TransPORTAL applications. There can
be no assurance that Alstom or any of its customers will purchase a TrainView
system for installation on any train.

     In September 1999, TNCi announced the formation of a Passenger Rail
Division and the hiring of a Division President, based in the United Kingdom.
The focus of the new Division will be to pursue new business opportunities in
the world-wide passenger rail market.

     Corporate Training And Academic Solutions

     TNCi has developed a high speed multimedia server for use in the education
and training markets. Through this product, students and faculty are able to
access hundreds of hours of multimedia content, search the Internet, and build
interactive courses.

     In August 1999, TNCi received an order of approximately $5.3 million to
manufacture and install its Cheetah(TM) multimedia servers in approximately 193
schools as part of the Georgia Metropolitan Regional Education Services Agency
("MRESA") Net 2000 Project. The award is part of a three year state-wide
program, whereby MRESA hopes to bring advanced multimedia learning tools and
technology to all 700 Georgia schools K-12, under the guidance of the Georgia
MRESA. Installation at all 193 schools was completed by September 30, 1999.

     There is no assurance that TNCi will receive any further orders in
connection with the MRESA Net 2000 Project, or any orders to put its systems in
any additional schools or to have its systems installed for corporate training
purposes.


                                       11

<PAGE>


     Product Features and Technology

     The interactive system's open architecture and compatibility features are
believed by management to permit ease of support for new and emerging content
options. The system is a proven, all digital, in-room or in-seat interactive
system. Dual, fault-tolerant video and file servers serve as the heart of the
system. A gigabit LAN backbone provides 100 megabit connectivity to each client.
The scaleable architecture is based on Intel processors and Microsoft operating
systems. In addition, the core software design allows simple customization of
the user interface and integration of third-party software. The system
interfaces with both color flat panel and TV displays.

     Operations, Manufacturing and Suppliers

     TNCi currently manufactures all of its products in the United States,
either at its Phoenix, Arizona facility or at its supplier locations. Final
assembly, integration, burn-in, and functional testing are conducted at its
facilities in Phoenix, Arizona.

     TNCi obtains electronic components and finished sub-assemblies for its
products "off-the-shelf" from a number of qualified suppliers. TNCi has
established a comprehensive testing protocol to ensure that components and
sub-assemblies meet TNCi's specifications and standards before final assembly
and integration. TNCi has elected to procure off-the-shelf component parts and
sub-assemblies from suppliers to ensure better quality control and pricing. TNCi
does not have formal purchase contracts for supplies, but instead generally
purchases such items under individual purchase orders. To date, TNCi has not
experienced interruptions in the supply of such component parts and
sub-assemblies, and believes that numerous qualified suppliers are available.
The inability of most of TNCi's current suppliers to provide component parts to
TNCi would not adversely affect TNCi's operations on a long-term basis.

     Intellectual Property

     TNCi relies on a combination of trade secret and other intellectual
property law, nondisclosure agreements with all of its employees and other
protective measures to establish and protect its proprietary rights in its
products. TNCi believes that because of the rapid pace of technological change
in the open systems networking industry, legal protection of its proprietary
information is less significant to TNCi's competitive position than factors such
as TNCi's strategy, the knowledge, ability and experience of TNCi's personnel,
new product development, market recognition and ongoing product maintenance and
support. Without legal protection, however, it may be possible for third parties
to copy aspects of TNCi's products or technology or to obtain and use
information that TNCi regards as proprietary. In addition, the laws of some
foreign countries do not protect proprietary rights in products and technology
to the same extent as do the laws of the United States. Although TNCi continues
to implement protective measures and intends to defend its proprietary rights
vigorously, there can be no assurance that these efforts will be successful. The
failure or inability of TNCi to effectively protect its proprietary information
could have an adverse affect on TNCi's business. TNCi does not believe that its


                                       12

<PAGE>


technologies infringe on any third-party property rights, but no assurances can
be made that it will not be subject to a suit alleging the same.

     Research And Development

     The market for TNCi's products is characterized by rapid technological
change and evolving industry standards, and it is highly competitive with
respect to timely product innovation. The introduction of products embodying new
technology and the emergence of new industry standards can render existing
products obsolete and unmarketable. TNCi believes that its future success will
depend upon its ability to develop, manufacture and market new products and
enhancements to existing products on a cost-effective and timely basis. The
system architecture for TNCi's interactive entertainment and information
products was designed to permit hardware and software upgrades over time.
Moreover, the current architecture presents no known limits on a customer's
ability to offer compelling content to the user in a rapid and reliable manner.
Therefore, a major focus of TNCi's research and development efforts is to reduce
the cost of network and client hardware and to enhance the core software of the
system to permit even easier integration of new content.

     If TNCi is unable, for technological or other reasons, to develop new
products in a timely manner in response to changes in the industry, or if
products or product enhancements that TNCi develops do not achieve market
acceptance, TNCi's business will be materially and adversely affected. There can
be no assurance that technical or other difficulties in the future will not
delay the introduction of new products or enhancements.

     There can be no assurance that alternative technologies will not be
developed in the future which will be capable of providing certain services now
performed by network servers. The development of such technologies could reduce
the need for network servers and adversely affect TNCi's operating results.

     TNCi Customers

     TNCi's products are sold to end users in a wide range of industries.
Customers that have purchased TNCi's products are financial institutions, health
care companies, academic institutions, communications/broadcasting companies,
governmental agencies, entertainment providers, transportation operators and
end-users operating in various other industries. TNCi's high-end, high
performance, multimedia video capable products currently are targeted to
education and corporate skills training providers, hotel, train and ship
operators, business jet OEMs and operators, and retail facility information
kiosk businesses. Most sales efforts in 1998 and 1999 were focused on larger
system sales into niche markets of TNCi's "turn-key" packaged solutions,
AirView, CruiseView and TrainView. There can be no assurance that TNCi will
successfully negotiate definitive agreements for the purchase of these systems.
The markets for these types of products are new and management believes their
actual aggregate size is impossible to measure accurately. Although management
expects the video server market to experience growth, with the growth to come
principally from the high-performance superserver


                                       13

<PAGE>


segment of the market, no assurances can be made that TNCi's products will be
accepted within the market.

     Competition

     The market for the products and services that TNCi offers is very
competitive. Factors for TNCi's success include product quality, technical
capability, system reliability, price, promptness of program performance, and
warranty protection. There are numerous international and U.S. firms that
currently compete, or are capable of competing, with TNCi. Many competitors have
greater financial and human resources than TNCi.

     TNCi faces substantial competition from the manufacturers of several
different types of products used as network servers. TNCi expects competition to
intensify as more firms enter the market and compete for market share. In
addition, companies currently in the server market will continue to change
product offerings in order to capture further market share.

     With respect to base configuration, TNCi competes with manufacturers of
high-end PCs used as network servers. Competitors offering products in this
market include International Business Machines Corporation ("IBM"), Compaq
Computer, Inc., Gateway Corporation, and Dell Corporation. One of the principal
competitive factors in the market for simple LANs is price, and the economies of
scale available to high-end PC manufacturers may permit them to offer their
products at a lower price. TNCi expects its competitors to continue to improve
the performance, availability, scalability and upgradability features of their
products. TNCi expects all of its competitors in the simple LAN market to
improve the distribution channels for their products used as servers.

     With respect to more fully configured high-end video servers for larger and
more complex LANs and more sophisticated or business-critical applications, TNCi
competes indirectly with manufacturers of mainframes and minicomputers.
Manufacturers that promote their products in this market include IBM, Digital
Equipment Corporation, Hewlett-Packard Corporation and UNYSIS, Inc. TNCi's
operating results could be adversely affected if one or more of these
competitors elects to compete more aggressively with respect to price or product
features of their mainframes or minicomputers. TNCi competes in the market for
complex LANs with other manufacturers of superservers, including Sun, Silicon
Graphics and Ncube. TNCi competes in the market for "turn-key" systems for
travel-related entertainment with other manufacturers of complete systems,
including Rockwell Collins Passenger Systems, BE Aerospace, Sony Transcom,
Matsushita, Allin Interactive, and Trans Digital.

     As many of TNCi's competitors are more established, benefit from greater
market recognition, and have greater financial, technological, production and
marketing resources than TNCi, establishing and maintaining TNCi's competitive
position will require continued investment by TNCi in research and development
and sales and marketing. There can be no assurance that TNCi will have
sufficient resources to make such investments or survive the sales cycle and
support the receivables collection cycle, or that TNCi will be able to make the
technological advances necessary for it to be competitive. In addition, if more
manufacturers of


                                       14

<PAGE>


PCs, mainframes or minicomputers were to develop and market their own
superserver class of products, TNCi's operating results could be adversely
affected.

     Government Regulation

     The installation and use of TNCi's AirView system on any particular
aircraft will require prior certification and approvals from the FAA and may
require certification and approvals from aeronautical agencies of foreign
governments. Other regulatory requirements may apply in the passenger rail,
cruise or other markets to which TNCi markets its products that may affect
TNCi's ability to deliver or install its products on a timely basis. See Item
6 - "Management's Discussion and Analysis or Plan of Operation."

     United States law, with certain exceptions, currently prohibits the knowing
transportation of gaming devices operated on modes of interstate transportation.
In addition, states may prohibit the transportation and use of gaming devices.
Federal law also prohibits the installation, transportation or operation of
gaming devices by any U.S. or foreign air carrier or for such carriers to permit
their use on aircraft operated to or from the United States in foreign air
transportation. The laws regarding the transmission of gaming data into, out of,
or within United States territory, even where such data was lawfully obtained in
another jurisdiction, are unclear. As a result, there can be no assurance that
the transmission of such data will not be restricted or prohibited. Because
gaming may generate greater revenues and profitability than other entertainment
options available on TNCi's products, the inability to offer gaming in certain
markets may have a material adverse impact on TNCi's business and on the market
acceptance of TNCi's products. TNCi may also be subject to the laws of foreign
jurisdictions which may similarly restrict or prohibit the gaming or other
activities offered on TNCi's products.

     Backlog Orders And Work-In-Progress

     As of June 30, 1999, TNCi had no backlog. Work-in-progress consisted of
programs with Carnival Cruise Lines ("Carnival") under TNCi's 1998 contract with
Carnival. In August 1999, TNCi received an order to manufacture and install its
Cheetah(TM) multimedia servers in approximately 193 schools in the State of
Georgia. The total sales price of this order was approximately $5.3 million. All
product was successfully produced and installed by September 30, 1999.

     Employees

     As of June 30, 1999 TNCi had approximately 22 full-time employees,
including four executive officers. None of the employees are covered by a
collective bargaining agreement. TNCi's success depends to a significant extent
upon the performance of its executive officers and other key personnel. TNCi
considers its relations with its employees to be good.

     Warranties

     TNCi provides a warranty regarding its products for periods ranging from
one to three years, depending on the requirements of customers. To date, TNCi
has not experienced


                                       15

<PAGE>


significant claims under warranties, and its ability to meet the full demands of
having a significant number of units sold to customers who require such service
has not been tested. TNCi also passes through to end users the warranties that
it receives from vendors on any separate hardware, software or component parts
that it sells independently of full systems.

   U.S. Wireless Corporation

     General

     U.S. Wireless Corporation, a Delaware corporation ("US Wireless") (NASDAQ:
USWC), has developed a geographic location system designed to pinpoint the
location of wireless telephone subscribers within a wireless network. The system
uses proprietary technology developed by US Wireless. US Wireless believes its
system has advantages over competing technologies which are based on
triangulation or the global positioning system ("GPS"). The US Wireless system
is anticipated to be able to offer to wireless carriers services and
applications, including enhanced 911, live navigation assistance, enhanced 411,
asset and vehicle tracking, ITS systems and network management systems. Thus
far, US Wireless has not generated operating revenues from the sale or licensing
of its technology (or from any other source).

     There are approximately 75 million people using wireless telephones in the
United States today. According to the Cellular Telecommunications Industry
Association, March 1999, that number will grow to 120 million by the year 2000.
In addition, there are many millions of wireless telephone subscribers located
outside of the United States. To accommodate the increased consumer demand for
wireless services, the industry has aggressively continued its buildup of
wireless infrastructure, and has implemented more efficient standards and
digital technologies. The introduction of these standards into the market has
additionally served as a selling point for manufacturers and service providers
in the already extremely competitive arena of telecommunications.

     The emerging market for value-added services based on location represents
an opportunity for wireless carriers to enhance current and future revenue
streams. The growth in the demand for wireless communications services during
the past decade has resulted in decreased pricing for wireless service, a
favorable regulatory environment, increasing competition among service providers
and a greater availability of wireless value-added services. In addition, many
developing countries are installing wireless telephone networks as an
alternative to installing, expanding or upgrading traditional wireline networks.

     Companies competing for market share in the wireless caller-location
industry are typically divided into two categories: those that employ
handset-based techniques and those that employ network-based techniques.
Handset-based techniques rely on the integration of GPS system receivers into
the wireless handsets. GPS-integrated handsets are not currently commercially
available. Adding GPS to handsets may create larger, heavier, more expensive
telephones with shorter battery life. Additionally, GPS will require
retrofitting or replacing the wireless phones currently owned by over 75 million
wireless subscribers and therefore makes GPS an unlikely near-term solution to
the FCC's E-911 Mandate (see below).


                                       16

<PAGE>


     Network-based techniques do not rely on the addition of any dedicated
equipment to the handset, but operate entirely from the wireless network
infrastructure. US Wireless' RadioCamera system falls into the category of
network-based solutions. Competing network-based systems rely on triangulation
techniques such as Angle of Arrival ("AOA") and Time Difference of Arrival
("TDOA"). The RadioCamera system architecture does not rely on triangulation.
Both AOA and TDOA systems require multiple base stations or points of reference
from which to triangulate, and both systems are at a disadvantage in urban
environments where there are rarely direct lines of sight between a wireless
caller and multiple base stations. Due to the lack of line of sight, the
subscribers' wireless transmissions bounce off of buildings and other obstacles,
reaching the base station antennas via multiple paths. By receiving
transmissions from multiple orbiting satellites, GPS units also use
triangulation techniques to establish location, and are also challenged in
environments such as "urban canyons," where line of sight to the multiple
satellites is blocked.

     As the demand for wireless service increases, so will the need for
location-based safety services like wireless E-911. According to Yankee Group
(Boston), more than one quarter of all new wireless customers purchase their
phones for security reasons. In 1997, over 30 million cellular calls were placed
to 911 emergency call centers across the United States. Yet, unlike calls placed
from wire-line telephones, calls are not traceable when a caller uses a wireless
phone to call for emergency assistance (the emergency operator does not
automatically know the location of the caller). In response to this and other
safety concerns, the U.S. Federal Communications Commission issued a mandate
requiring wireless service providers to have the ability to locate wireless
calls for emergency assistance within certain parameters and time schedules.

     As a result of these and other safety issues, the wireless industry, the
Public Safety Answering Point ("PSAP") (a network of regional emergency call
centers), members of the E-911 community and the FCC began joint efforts in
mid-1994 to solve the technological and policy hurdles in providing location
information for wireless 911 calls. In June 1996, the FCC issued a Report and
Order in Docket 94-102, formalizing certain performance requirements, and
implementing a schedule for wireless service providers to establish geolocation
capabilities. In so doing, the FCC ordered that the deployment and integration
of wireless E-911 features and functions be accomplished in two phases. The
first phase requires wireless service providers to report the callback number
and originating cell site and/or sector of a 911 call to PSAP operators.
Pursuant to the mandate, commencing in October 1997, the service provider must
commence providing such information to qualified requesting PSAPs within six
months of a PSAP's request. Service providers have commenced the implementation
of products in order to meet this requirement. The second phase requires
wireless service providers to pinpoint and report to the PSAPs the location of
all 911 callers with an accuracy of 125 meters in 67% of all cases, using root
mean square techniques. The FCC has mandated completion of Phase II by October
1, 2001. In December 1998, the FCC's Wireless Telecommunications Bureau released
a public notice outlining a filing schedule for requests for waivers of the
Phase II E-911 requirements. Various wireless carriers have submitted requests
for waivers, and various other parties have subsequently filed comments with the
FCC regarding the question of waivers. The issue of waivers and/or modifications
of the E-911 Phase II requirements is being reviewed by the FCC in


                                       17

<PAGE>


an ongoing public forum. To date, the FCC has not granted any waivers of the
Phase II E-911 conditions, nor has it made any modifications to the mandate.

     US Wireless is working to build upon the promising results of its field
trials and complete the development and refinement of the RadioCamera systems
that support all cellular/PCS protocols. US Wireless intends to work with
wireless carriers, information content providers, and equipment vendors on a
nationwide and international basis. In addition to the FCC-mandated E-911
service that requires precise location information, there are additional
applications that could provide considerable value in the private and public
sectors. US Wireless will seek to establish its leadership position by
contracting with strong well-known suppliers and hiring an experienced
operations management team. Presently, US Wireless is assessing and evaluating
the timing and resource requirements necessary to implement this plan.

     In March 1999, Global invested $3 million in US Wireless in exchange for
30,000 shares of Series B Preferred Stock ("US Wireless Series B"). Each share
of US Wireless Series B is convertible into approximately 67 shares of common
stock of US Wireless until March 2000, after which each such share is
convertible into 100 shares of common stock of US Wireless. The US Wireless
Series B is subject to mandatory conversion into common stock at any time at a
conversion rate of 100 shares of common stock of US Wireless in the event the
closing price for US Wireless' common stock as reported on NASDAQ is at least
$5.00 per share for 30 consecutive trading days.

     The US Wireless Series B entitles the holder to receive $100 per share
liquidation preference before any distributions to the holders of common stock
in the event of a liquidation of US Wireless. In addition, the Company and other
holders of the US Wireless Series B have, as a separate class, elected one
member to US Wireless' Board of Directors and one additional individual as an
observer to the Board. The Company elected Irwin L. Gross, Global's Chairman and
Chief Executive Officer, to serve on the US Wireless Board. As a condition to
making the investment, the Company also obtained certain registration rights
relating to the registration under the Securities Act of 1933 of those shares of
common stock of US Wireless into which the US Wireless Series B held by the
Company is convertible. The Company has waived its registration rights.

     Based on the foregoing, the Company currently beneficially owns 11.15% of
the common stock of US Wireless (based on a conversion rate of 67 shares of
common stock per share of US Wireless Series B) and, assuming no further share
issuances until March 2000, will beneficially own 15.25% of the common stock of
US Wireless at that time (based on a conversion rate of 100 shares of common
stock per share of US Wireless Series B). Both percentages assume full
conversion of US Wireless Series A preferred stock (into 560,000 shares) and US
Wireless Series B (into 3,350,000 and 5,000,000 shares based on conversion at
the 67 share rate and 100 share rate, respectively). The fair market value of
the Company's investment in US Wireless Series B at June 30, 1999, assuming
conversion into 67 shares or 100 shares, of common stock for each share of US
Wireless Series B and a discount of 25% (which discount might actually be higher
or lower, depending upon market conditions) for potential lack of marketability
of the unregistered shares, are estimated to be $5.7 million and $8.6 million,
respectively. The corresponding figures as of October 15, 1999 were $6.9 and
$10.4 million, respectively.

     There is no assurance that the Company will realize any gain on its
investment in US Wireless.

   Donativos

     Donativos, S.A. de C.V. ("Donativos") is a Mexican corporation formed for
the purpose of operating an entertainment center in Monterrey, Nuevo Leon,
Mexico (the "Center"). The Center is located in a two-story structure containing
approximately 16,000 square feet of floor space. The Center offers 332 slot
machines and food and beverages. Monterrey is a city of


                                       18

<PAGE>


approximately five million people and is located approximately 300 miles south
of San Antonio, Texas. Currently customers at the Center are unable under
Mexican law to win cash in the games offered. Rather, customers are able to win
lottery tickets for the Loteria Nacional or to obtain rights usable for future
play at the Center. Donativos is seeking to obtain a secondary prize permit
which would also allow customers to win valuable merchandise such as a new car.
There is no assurance, however, that Donativos will obtain such a permit.

     In May 1999, Global, through its wholly-owned subsidiary, Interactive
Flight Technologies (Gibraltar) Ltd., a Gibraltar company ("IFT Gibraltar"),
loaned approximately $1.6 million to Donativos and acquired a 24.5% equity
interest in the venture. In addition to IFT Gibraltar, other partners in the
venture include Regal Gaming and Entertainment, Inc., a Minnesota corporation
("Regal Gaming"), which also has a 24.5% equity interest, and a Mexican
national, who has a 51% interest. The IFT Gibraltar loan bears interest at an
annual rate equal to the prime rate plus three percent (3%) and matures on April
30, 2001. The Company has also provided a letter of credit in the amount of
$913,445 to secure payment of the purchase price of the slot machines acquired
by IFT Gibraltar, and which are leased to Donativos at the rate of $37,500 per
month. In addition to its 24.5% equity interest in Donativos, in consideration
for making the loan and providing the letter of credit, the Company will receive
25% of any profits generated by Donativos and, for a term of 10 years, the
Company will have an equity interest of at least 10% in any gaming venture in
which Regal Gaming, or a subsidiary or affiliate of Regal Gaming, is an investor
and which relates to gaming activities in Mexico.

     The Center was scheduled to open in June 1999, but the opening was delayed
until mid-August 1999. In addition, the costs of opening the Center, which were
anticipated to approximate $1.6 million and for which the Company's loan was
made, in fact were considerably higher. Cost overruns on the Center's
construction left insufficient funds for budgeted marketing and promotional
activities. The Company does not have complete records at present as to the
extent of the cost overrun. Regal Gaming and its three principals and their
spouses (all of who are United States nationals) are contractually responsible
to Global for the amount of the cost overrun up to a maximum of $500,000, but
thus far, the cost overruns have not been paid by Regal Gaming or its principals
or their spouses. On October 25, 1999, Global initiated a lawsuit against Regal
Gaming, its principals and their spouses with respect to the non-payment by them
of these cost overruns. See Item 3 - "Legal Proceedings." The Company is not
contractually obligated to fund any cost overruns. See Item 6 - "Management's
Discussion and Analysis or Plan of Operation - Liquidity and Capital Resources."

     Since the Center opened, operating expenses have continuously exceeded
revenues by a significant amount of money, and, as a result, the slot machine
equipment lease payments owed to the Company by Donativos have not been made,
nor has Donativos made the contractually required interest and principal
payments on its approximately $1.6 million obligation to the Company.
Furthermore, as a result of the cash flow shortfall, it is possible that third
party vendors have also not been paid. Management believes that operational
shortfalls are not likely to improve significantly unless Donativos is
successful in obtaining the secondary prize permit referred to above, and, even
if such permit is received, there is no assurance of such improvement.


                                       19

<PAGE>


     Regal Gaming was responsible for managing the Center under a management
agreement. The Company and the majority shareholder of Donativos believe that
Regal Gaming failed to perform several material obligations under the management
agreement, and further believe that Regal Gaming's financial controls over the
construction and opening of the Center and over its operations since opening
have been inadequate. As a result, Donativos terminated the management agreement
with Regal Gaming effective October 21, 1999. Donativos has identified two
potential replacement managers who are believed to be capable of running the
Center on behalf of Donativos, and is discussing with each of them the
possibility of their engagement as promptly as possible. Until one of these
full-time managers is engaged by Donativos, Donativos is operating the Center
through the use of qualified consultants. Donativos has commenced legal action
in Mexico against Regal Gaming and its principals in connection with these
transactions.

   Inter Lotto

     In most jurisdictions around the world, the government owns the lottery and
subcontracts its management to a service provider. In the United Kingdom,
private companies or individuals can secure a license to run a lottery.
Currently Camelot Group PLC ("Camelot") holds the exclusive license to run the
National Lottery. Separately, the Gaming Board for Great Britain is responsible
for issuing a certificate to manage Society or Local Authority lotteries. In
1996-1997 (latest available) the United Kingdom gaming industry was estimated to
have had annual gaming revenue of (pound)40.5 billion (approximately $66.4
billion at current exchange rates).

     In May 1999, Global completed the acquisition of a 27.5% equity interest in
Inter Lotto (UK) Limited ("Inter Lotto") through its wholly owned subsidiary,
IFT Holdings Limited, a United Kingdom company ("IFT Holdings"). The balance of
the shares of Inter Lotto is owned by seven shareholders. The only shareholder
with a greater ownership interest than that of IFT Holdings is HGI House &
General Investment Foundation, a Liechtenstein foundation, which has a 48.5%
equity interest.

     Inter Lotto was granted a license by the Gaming Board for Great Britain to
operate lotteries on behalf of charities throughout the United Kingdom. By
way of an Operating Agreement between Inter Lotto and IFT Management Limited
("IFT Management"), a United Kingdom company and wholly-owned subsidiary of IFT
Holdings, Inter Lotto appointed IFT Management as Inter Lotto's exclusive
service provider in connection with the lotteries. As such, IFT Management has
been granted authority to perform substantially all services necessary or
appropriate for the conduct of the lotteries subject to the direction and
control of Inter Lotto's Board and to the extent permitted by United Kingdom
gaming laws. Inter Lotto will retain responsibility for charity recruiting and
certain other functions as required under United Kingdom gaming laws. For its
services under the Operating Agreement, IFT Management will retain a portion of
the revenues generated by the lotteries. IFT Management has engaged two
individuals to consult with and assist it in connection with these
responsibilities. These two individuals are principals of Regal Gaming.

     On September 9, 1999, IFT Leasing Limited, a United Kingdom company and
wholly-owned subsidiary of IFT Holdings ("IFT Leasing"), entered into an
agreement with International


                                       20

<PAGE>


Lottery & Totalizator Systems, Inc., a California corporation ("ILTS"), to
purchase an on-line lottery system for the operation of the Inter Lotto
lotteries. The base sale price of the lottery system purchased from ILTS is
$12.3 million. In addition, IFT Management entered into an eight year facilities
management agreement with ILTS to provide operational and technology support for
the system. Under this agreement, IFT Management is required to make weekly
payments to ILTS of $72,000 plus additional amounts based on the number of
installed terminals in excess of 3,500 and plus a percentage of the average
daily sales.

     Financing for the gaming operations, including funding for the ILTS
equipment, is expected to be provided through several wholly-owned subsidiaries
of Global which have been formed for the purpose of providing such financing.
IFT Lottoco, Inc. and IFT Subco, Inc., each a Delaware corporation, are partners
in a United Kingdom limited partnership, IFT Investments, which is expected to
provide funding to IFT Leasing to acquire the equipment necessary for the
operation of the lotteries. IFT Leasing is expected to own the gaming equipment,
but is expected to lease such equipment to IFT Management for use in operating
the lotteries on behalf of Inter Lotto. The funds to purchase the gaming
equipment for IFT Leasing are expected to be obtained through debt financing,
although no assurances can be made that such financing will be available. If the
Company is unable to secure such financing, such inability would have a material
adverse effect on Inter Lotto's operations and also on the Company's liquidity.

     The Inter Lotto lottery operation is expected to begin operations in the
first quarter of calendar 2000. Inter Lotto's most significant competition comes
from Camelot. Camelot is a consortium of four companies, Cadbury Schweppes
(26.67%), Racal (26.67%), De La Rue (26.67%) and ICL (20%), and is responsible
for managing the National Lottery.

   Other

     In May 1999, the Company completed the sale of Johnny Valet, Inc. for
$750,000 in cash less fees and expenses of approximately $50,000. This
divestiture terminates the Company's involvement in the dry cleaning business.

Employees

     As of October 15, 1999, Global employed 7 people on a full-time basis and 1
person on a temporary basis. No employee is covered by a collective bargaining
agreement. Global considers its relations with its employees to be good.

ITEM 2 - DESCRIPTION OF PROPERTY

     Global's principal executive offices, located in Philadelphia,
Pennsylvania, consists of approximately 1,500 square feet of office space. The
space is leased to Ocean Castle and Global reimburses Ocean Castle for the rent
and related expenses in connection therewith in the approximate monthly amount
of $2,700. Ocean Castle is owned by Irwin L. Gross, the Chief Executive Officer
and Chairman of the Board of Directors of Global.


                                       21

<PAGE>


     Similarly, pursuant to an agreement with First Lawrence Capital Corp.
("First Lawrence"), Global occupies approximately 1,500 square feet of office
space in Larchmont, New York which is leased to First Lawrence. Global pays
monthly rent for the use of such space of approximately $4,100.

     Global has recently executed a lease for approximately 5,000 square feet of
executive office space in New York City. The lease expires in October 2009. The
lease provides for monthly rent of approximately $23,500 for the first 5 years,
and of approximately $24,300 for the last 5 years. It is expected that
activities currently conducted at the Larchmont facility will be transferred to
this facility.

     Global also leases office space, and the assembly and warehouse facilities
for the Company, in Phoenix, Arizona. This space contains approximately 17,500
square feet and is occupied pursuant to a lease providing for monthly rent of
approximately $9,100. The lease expires in July 2002.

     Global has no policy regarding investments in real estate or interests in
real estate, real estate mortgages or securities of persons primarily engaged in
real estate activities. Global currently holds no such investments.

ITEM 3 - LEGAL PROCEEDINGS

     Since September of 1998, claims have been filed by the families of many
victims of the Swissair flight 111 crash. These cases are consolidated in the
multi-district litigation captioned Swissair/MDL-1269, In re Air Crash Near
Peggy's Cove, Nova Scotia, on September 2, 1998. The Swissair MD-11 aircraft
involved in the crash was equipped with an Entertainment Network system.
Following the crash, investigations were conducted and continue to be conducted
by Canadian and United States agencies concerning the cause of the crash. No
investigative agency has linked the Entertainment Network, which is certified by
the Federal Aviation Administration, to the crash or to a fire on board the
aircraft believed to have broken out before the crash. Estates for the victims
of the crash have filed lawsuits throughout the United States against Swissair,
Boeing, DuPont and various other defendants, including Global. The victims'
litigation is a multi-district litigation matter in the United States district
courts that is being overseen by the United States District Court for the
Eastern District of Pennsylvania. Global denies all liability for the crash.
Global is being defended by its aviation insurer in connection with these claims
and denies that it has any liability or responsibility for the crash. On
September 28, 1999, the FAA issued the Directive. (See Item 1, "Business --
Recent -- Events FAA Airworthiness Directive"). Global does not believe that the
Directive will have any material affect on the litigation.

     On April 7, 1999, a complaint captioned Fidelity and Guaranty Insurance
Company v. Interactive Flight Technologies, Inc., CV No. 99-410, was filed in
the United States District Court for the District of Minnesota. This is a
declaratory judgment action where Global and its insurers are seeking a
declaration of the applicability of an excess liability policy to claims made by
the estates of victims of the crash of Swissair flight 111.


                                       22

<PAGE>


     On May 5, 1999, a complaint captioned First Lawrence Capital Corp. v. James
Fox, Irwin Gross and Interactive Flight Technologies, Inc., No. 7196/99 was
filed in the Supreme Court of the State of New York. This is a claim made
against Global arising from the hiring of James Fox, a former First Lawrence
employee, by Global. First Lawrence asserts that business opportunities of First
Lawrence were diverted to Global by James Fox. This case was settled by the
issuance to First Lawrence of 250,000 shares of common stock of Global and the
agreement by IFT Holdings to pay First Lawrence 24 monthly installments of
$41,667 beginning February 1, 2000. In exchange, First Lawrence will be
available to perform management consulting services to IFT Holdings.

     On May 6, 1999, a complaint captioned Interactive Flight Technologies, Inc.
v. Swissair Swiss Air Transport Company, Ltd., et al., No. Civ. 99-0936PHXSMM,
was filed in the United States District Court for the District of Arizona. This
is a claim by Global against Swissair for $6,773,906, being sums owed by
Swissair to Global for equipment and warranty contracts. Global has also
asserted claims for business torts arising from the unjustified deactivation of
the Entertainment Network systems following the crash of Swissair flight 111.

     On August 18, 1999, a complaint captioned Eric Schindler ("Schindler") v.
Interactive Flight Technologies, Inc. Et Al., case no. 99-V51560685, was filed
in the state court for Fulton County, Georgia. The lawsuit names Global and TNCi
as defendants. The complaint alleges that TNCi and Global failed to pay
severance pay pursuant to a written employment contract following Schindler's
resignation as an employee and vice president of TNCi in May 1999. Specifically,
the complaint alleges (1) breach of contract (against TNCi), (2) conspiracy and
interference with contract rights (against TNCi and Global), and (3)
interference with contract rights (against the Company). The Complaint seeks
$85,000 in severance pay on the contract claims, unspecified damages for loss of
stock options, punitive damages of at least $450,000, attorneys' fees and costs.
TNCi and Global deny any liability, intend to defend themselves vigorously and
are considering counterclaims. No responsive pleading has yet been filed.

     In September of 1999, IFT filed a lawsuit against Barrington Capital Group,
L.P. in Maricopa County Superior Court, Arizona, seeking a declaratory judgment
that no sums were owed to Barrington Capital pursuant to a Financial Advisory
Service Agreement dated in October of 1998. In October of 1999, Barrington
Capital Group filed a lawsuit on the same contract in the Supreme Court of the
State of New York, County of New York, Index No. 99-604606, captioned Barrington
Capital Group, L.P. v. Interactive Flight Technologies, Inc., alleging that
Barrington is owed $1,750,471 in connection with services alleged to have been
performed pursuant to the Financial Advisory Service Agreement. IFT denies all
liability and denies that any sums are owed to Barrington.

     On October 25, 1999, Global filed a lawsuit against Regal Gaming (and its
principals and their spouses) in the United States District Court for the
Southern District of Florida seeking judgment in favor of Global on the $500,000
promissory note made by Regal Gaming (and guaranteed by its principals and their
spouses) to Global. The promissory note was made to secure Regal Gaming's
obligations to fund cost overruns at the Center.


                                       23

<PAGE>


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

     None.

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Until October 1, 1999, Global's Class A Common Stock was traded on the
Nasdaq National Market under the symbol FLYT, and since such date, under the
symbol GTLL.

     The following table sets forth the high and low last sale prices for
Global's Class A Common Stock for each quarter within its last two fiscal years
and for the quarter ended September 30, 1999, as reported by the Nasdaq National
Market.

Class A Common Stock                                     High            Low
--------------------                                    ------          ------
November 1, 1997 through January 31, 1998...........    $4.625          $1.875
February 1, 1998 through April 30, 1998.............     3.688           2.375
May 1, 1998 through July 31, 1998...................     3.500           1.875
August 1, 1998 through October 31, 1998.............     3.125           1.875
November 1, 1998 through January 31, 1999...........     3.625           1.313
February 1, 1999 through April 30, 1999.............     4.313           1.813
May 1, 1999 through June 30, 1999...................     4.875           3.594
July 1, 1999 through September 30, 1999.............     4.625           3.000


     The closing sales price of the Class A Common Stock on October 15, 1999, as
reported by the Nasdaq National Market, was $3.03 per share.

     As of October 15, 1999, there were approximately 60 record holders and
approximately 2,700 beneficial owners of Class A Common Stock.

     On October 30, 1998, the Global stockholders approved a one-for-three
reverse stock split of Global's capital stock. The reverse stock split was
effective on November 2, 1998. All references to the number of shares, price per
share and stock option data contained in this Transition Report have been
restated as appropriate to reflect the effect of the reverse stock split for all
periods presented.

     On December 17, 1997 and October 30, 1998, the Board of Directors
authorized Global to repurchase shares of its Class A Common Stock on the open
market. Through October 31, 1998, Global had purchased a total of 844,667 shares
of its Class A Common Stock in open market activities at a total cost of
$2,315,983. All 844,667 shares were retired on January 11, 1999. As of October
15, 1999, Global had repurchased an additional 78,600 shares at prices


                                       24

<PAGE>


ranging from $2.47 to $2.94 per share. Global may make additional open market
purchases in the future.

     The Company has not paid any dividends on the common stock of the Company
during the last two fiscal years and does not intend to do so in the foreseeable
future.

     Unregistered Issuances

     In November 1996, Global executed a Strategic Alliance Agreement with Hyatt
Ventures, Inc. ("Hyatt"), an affiliate of Hyatt Corporation. The president of
Hyatt is also a former director of Global. Under the terms of the Strategic
Alliance Agreement, Hyatt, directly and through certain of its affiliates,
agreed to use its best commercial efforts to assist Global in advancing Global's
business with respect to the Entertainment Network. The Alliance Agreement was
terminated in November 1997 as a result of changing market conditions. In
January 1997, Global issued 20,000 unregistered shares of Class A common stock
to Hyatt in connection with Hyatt's acting as a guarantor on behalf of Global in
certain contract negotiations. The issuance was made in private offering
pursuant to Section 4(2) of the Securities Act of 1933.

     On May 11, 1999, Global issued 3,000 shares of its Series A Convertible
Preferred Stock and warrants to purchase 87,500 shares of Global's Class A
Common Stock to The Shaar Fund, Ltd. In exchange for 1,500 shares of TNCi Series
B 8% Convertible Preferred Stock and cash in the amount of $980,000 (net of
$50,000 in legal fees). The issuance was made in private offering pursuant to
Section 4(2) of the Securities Act of 1933. The Series A Convertible Preferred
Stock is convertible into shares of the Company's common stock at a conversion
price of $3.00 per share; provided, however, that no conversion is permitted if
such conversion would cause the holder of the Series A Convertible Preferred
Stock to be converted, on account of such conversion, to be the beneficial owner
of more than 19.99% of the outstanding common stock of the Company.

     On July 16, 1999, Global issued an aggregate of 272,610 shares of its Class
A Common Stock and cash in the amount of $555,000 to various holders of TNCi's
Series A and Series E Notes in exchange for such Notes. The issuance was made in
a private offering pursuant to Section 4(2) of the Securities Act of 1933.

     On August 9, 1999, Global issued an aggregate of 115,000 shares of its
Class A Common Stock to various holders of TNCi's Series D Notes in exchange for
such Notes and for warrants to purchase 70,000 shares of TNCi common stock. The
issuance was made in a private offering pursuant to Section 4(2) of the
Securities Act of 1933.

     On August 13, 1999, Global issued 250,000 shares of its Class A Common
Stock to First Lawrence Capital Corp., pursuant to the terms of a Release and
Settlement Agreement executed by First Lawrence, Global, Irwin L. Gross, James
W. Fox and IFT Holdings. The issuance was made in private offering pursuant to
Section 4(2) of the Securities Act of 1933.


                                       25

<PAGE>


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The following discussion should be read in conjunction with, and is
qualified in its entirety by, the Company's Consolidated Financial Statements
and the Notes thereto appearing elsewhere herein. Historical results are not
necessarily indicative of trends in operating results for any future period.

     Acquisitions and Investments

     The Network Connection, Inc.

     On May 18, 1999, the Company received from The Network Connection, Inc.
("TNCi") 1,055,745 shares of its common stock and 2,495,400 shares of its Series
D Convertible Preferred Stock in exchange for $4,250,000 in cash and
substantially all the assets and certain liabilities of the Company's
Interactive Entertainment Division ("IED"), as defined in the Asset Purchase and
Sale Agreement dated April 30, 1999, as amended (the "Transaction"). The Company
has consolidated the results of operations of TNCi from the date of the
transaction forward. TNCi is a majority-owned subsidiary of the Company whose
ownership, through a combination of the Transaction described above and the
Company's purchase of Series B 8% preferred stock and 110,000 shares of TNCi's
common stock from third-party investors, approximates 80% (as of October 15,
1999) of TNCi on an if-converted common stock basis.

     In an Agreement dated as of June 19, 1997, TNCi entered into an AirView
Purchase Agreement (the "AirView Agreement") with Fairlines, a French
corporation engaged in the start-up operation of a commercial airline, for the
purchase of up to ten AirView systems for installation on ten Fairlines
aircraft. Fairlines filed for bankruptcy under French law in the first quarter
of calendar year 1998. Although TNCi does not expect to recover its investment
in this program, TNCi is pursuing its remedies, contractual and otherwise, in
respect to collection of amounts due and damages incurred under the AirView
Agreement.

     In October, 1997, the Company entered into a revised agreement with
Swissair which required the Company to install and maintain the Entertainment
Network in the first, business and economy class sections of three aircraft at
no cost to Swissair and in the first and business classes of another sixteen
aircraft at an average price of $1.7 million per aircraft. As of October 31,
1998, the Company had completed all installations under the initial Swissair
program. The Company was responsible for maintenance costs through September
1998 for all nineteen aircraft and specific software and hardware upgrades to
the Entertainment Network that are not yet completed. The Swissair agreement
also provided for a one-year warranty on the Entertainment Network. The Company
entered into a contract dated April 1, 1998 with Swissair for $3,975,000 to
extend the warranty on the installed system for a second and third year. Through
May 18, 1999, the Company has been paid $707,500 under this contract. No
subsequent payments have been received from Swissair.

     In April 1998 and October 1998, the Company entered into additional
contracts with Swissair for a $4.7 million order for first and business class
installations on four Swissair MD-11

                                       26
<PAGE>


aircraft that are being added to the Swissair fleet. As of February 26, 1999,
Swissair has made payments of $1,450,000 on the $4.7 million order for the four
installations.

     On September 2, 1998, Swissair Flight 111 crashed. The aircraft involved in
the crash was an MD-11 equipped with the Entertainment Network. Despite the fact
that there is no evidence that the Entertainment Network had anything to do with
the crash, on October 29, 1998, the Company was notified by Swissair of the
airline's decision to deactivate the Entertainment Network on all Swissair
aircraft. Until April 1999, the Company and its system integrator/installation
contractor had been working closely with Swissair to take the necessary steps
that would allow Swissair to reactivate the systems as quickly as possible.
However, by April 1999, discussions between the Company and Swissair regarding
outstanding financial matters related to current accounts receivable, inventory,
purchase commitments and extended warranty obligations, as well as planning
discussions for an October 1999 reactivation ceased to be productive.

     On May 6, 1999, the Company filed a lawsuit against Swissair in the United
States District Court for the District of Arizona seeking damages for Swissair's
failure to honor its obligations for payment and reactivation of the Company's
Entertainment Network. Swissair has failed to make payments to the Company under
installation and warranty contracts and has harmed the Company's business and
reputation by failing to honor its commitments to reactivate the Entertainment
Network on Swissair aircraft. Even though there has been no evidence that the
Entertainment Network contributed in any way to the crash of Swissair Flight No.
111 on September 2, 1998, Swissair has continued to use the unfortunate
circumstances of the crash as an excuse to avoid its obligations.

     The Swissair agreements are not assignable to third parties under the terms
of such agreements. However, in connection with the Transaction, the Company has
agreed to pay to TNCi any net proceeds received from Swissair as a result of the
above litigation or otherwise. Further, TNCi, as a subcontractor to the Company,
will assume any operational responsibilities of the Swissair agreement in the
event that such requirement arises. TNCi has not assumed any liabilities or
obligations arising out of the crash of Swissair Flight No. 111. See "Item 3 --
Legal Proceedings."

     As a result of the above events, management concluded that its only source
of future payment, if any, will be through the litigation process. In addition,
with the deactivation of the entertainment system and Swissair's breach of its
agreements with the Company, TNCi believes it will not be called upon by
Swissair to perform any ongoing warranty, maintenance or development services.
Swissair's actions have rendered TNCi's accounts receivable, inventory and
deposits worthless as of June 30, 1999. Accordingly, TNCi has recognized
deferred revenue on equipment sales to the extent of cash received of $876,000;
charged off inventory to cost of equipment sales in the amount of $1,517,000;
wrote off deposits of $655,000 to special charges; and reversed all warranty and
maintenance accruals totaling $5,164,000.

     TNCi entered into a CruiseView Purchase Agreement, dated as of February 13,
1998 (the "Star Agreement"), with Continuous Network Advisors ("CNA") on behalf
of Star Cruises Management Limited ("Star"), an Isle of Man corporation engaged
in the operation of a

                                       27
<PAGE>

commercial cruise line, for the purchase of CruiseView systems for installation
on up to two Star cruise vessels. Certain issues arose during the contract
installation period which lead to a settlement agreement between Star and CNA
dated June 1999 whereby Star would return the TNCi's equipment by December 31,
1999. No cash payments are required to be made to TNCi pursuant to the
settlement agreement. TNCi is objecting to the settlement agreement although
TNCi believes modifying such settlement and receiving payment at this time is
unlikely.

     US Wireless Corporation

     In March 1999, the Company invested $3 million in US Wireless in exchange
for 30,000 shares of Series B Preferred Stock ("US Wireless Series B"). As of
June 30, 1999, the Company accounts for this investment at cost. Each share of
US Wireless Series B is convertible into approximately 67 shares of common stock
of US Wireless until March 2000, after which each such share is convertible into
100 shares of common stock of US Wireless. The US Wireless Series B is subject
to mandatory conversion into common stock at any time at a conversion rate of
100 shares of common stock of US Wireless in the event the closing price for US
Wireless' common stock as reported on NASDAQ is at least $5.00 per share for 30
consecutive trading days.

     The US Wireless Series B entitles the holder to receive $100 per share
liquidation preference before any distributions to the holders of common stock
in the event of a liquidation of US Wireless. In addition, the Company and other
holders of the US Wireless Series B have, as a separate class, elected one
member to US Wireless' Board of Directors and one additional individual as an
observer to the Board. As a condition to making the investment, the Company also
obtained certain registration rights relating to the registration under the
Securities Act of 1933 of those shares of common stock of US Wireless into which
the US Wireless Series B held by the Company is convertible. The Company has
waived its registration rights.

     Based on the foregoing, the Company currently beneficially owns 11.15% of
the common stock of US Wireless (based on a conversion rate of 67 shares of
common stock per share of US Wireless Series B) and, assuming no further share
issuances until March 2000, will beneficially own 15.25% of the common stock of
US Wireless at that time (based on a conversion rate of 100

                                       28
<PAGE>


shares of common stock per share of US Wireless Series B). Both percentages
assume full conversion of US Wireless Series A preferred stock (into 560,000
shares) and US Wireless Series B (into 3,350,000 and 5,000,000 shares based on
conversion at the 67 share rate and 100 share rate, respectively). The fair
market value of the Company's investment in US Wireless Series B at June 30,
1999, assuming conversion into 67 shares or 100 shares, of common stock for each
share of US Wireless Series B and a discount of 25% (which discount might
actually be higher or lower, depending upon market conditions) for potential
lack of marketability of the unregistered shares, are estimated to be $5.7
million and $8.6 million, respectively. The corresponding figures as of October
15, 1999 were $6.9 and $10.4 million, respectively.

     There is no assurance that the Company will realize any gain on its
investment in US Wireless.

     Inter Lotto (UK) Limited

     IFT Leasing entered into an agreement with International Lottery &
Totalizator Systems, Inc., a California corporation ("ILTS"), to purchase an
on-line lottery system for the operation of the Inter Lotto lotteries. The base
purchase price of the lottery system purchased from ILTS is $12.3 million. In
addition, IFT Management entered into an eight-year facilities management
agreement with ILTS to provide operational and technology support for the
system. Under this agreement, IFT Management is required to make weekly payments
to ILTS of $72,000 plus additional amounts based on the number of installed
terminals in excess of 3,500 and plus a percentage of the average daily sales.

     As of June 30, 1999, the Company's investment in Inter Lotto was $1,050,775
consisting of working capital advances, notes receivable and capitalized
acquisition costs. During the Transition Period ended June 30, 1999, the Company
recorded its proportionate share of losses of Inter Lotto and equity goodwill
amortization of $167,493 which has been recorded as equity in loss of
non-consolidated affiliates in the consolidated statement of operations.

     Donativos

     In May 1999, the Company, through its wholly-owned subsidiary, Interactive
Flight Technology (Gibraltar) Ltd., a Gibraltar company ("IFT Gibraltar"),
loaned $1,632,000 to Donativos and acquired a 24.5% interest in the venture. The
Company accounts for this investment under the equity method. In addition to IFT
Gibraltar, other partners in the venture include Regal Gaming, which also has a
24.5% interest, and Manuel G. Caldera, a Mexican national, who has a 51%
interest. The IFT Gibraltar loan bears interest at an annual rate equal to the
prime rate plus three percent (3%) and matures on April 30, 2001. The Company
has also provided a letter of credit in the amount of $913,445 to secure
repayment of the purchase price of certain gaming equipment to be acquired by
IFT Gibraltar and leased to Donativos. In addition to its 24.5% equity interest
in Donativos, in consideration for making the loan and providing the letter of
credit, the Company will receive 25% of any profits generated by Donativos and,
for a term of 10 years, the Company will have an equity interest of at least 10%
in any gaming venture in which Regal Gaming, or a subsidiary or affiliate of
Regal Gaming, is an investor and which relates to gaming activities in Mexico.

     As of June 30, 1999, the Company's investment in Donativos was $1,664,555
consisting of the $1,632,000 loan receivable and capitalized acquisition costs.
During the Transition Period

                                       29
<PAGE>

ended June 30, 1999, the Company recorded its proportionate share of losses of
Donativos and equity goodwill amortization of $28,211 which has been recorded as
equity in loss of non-consolidated affiliates in the consolidated statement of
operations.

     Change in Fiscal Year-End

     Global elected to change its fiscal year-end from October 31 to June 30.
Accordingly, the eight-month period resulting from this change, November 1, 1998
through June 30, 1999, is referred to as the "Transition Period."

     Results of Operations

     The unaudited results of operations for the eight months ended June 30,
1998 are as follows and are presented for comparative purposes only.

                                                            Eight Months Ended
                                                              June 30, 1998
                                                               (Unaudited)
                                                            ------------------
     Revenues                                                   $18,383,360
     Cost of equipment sales                                     15,239,568
     Cost of service income                                          13,533
     Research and development                                     1,092,316
     General and administrative expenses                          4,023,760
     Interest expense                                                 8,873
     Interest income                                              1,490,025
     Other income                                                    10,679
                                                                -----------
     Net loss to common stockholders                            $   493,986
                                                                ===========



     Revenue for the Transition Period ended June 30, 1999 was $1,582,461, a
decrease of $16,800,899 (or 91%) compared to revenue of $18,383,360 (unaudited)
for the corresponding period ended June 30, 1998. Revenue for the Transition
Period ended June 30, 1999 consisted of equipment sales of $875,957 and service
income of $706,504. The decline in revenue is the result of Swissair's refusal
to take delivery of additional Entertainment Networks and a lack of new customer
orders. The equipment sales were generated from payments received from Swissair
for one of four Entertainment Networks billed per the April 1998 contract. The
service income was principally generated from the Company's dry cleaning plant
which was sold on May 13, 1999. Revenue for the eight-month period ended June
30, 1998 consisted of equipment sales of $17,949,591 (unaudited) and service
income of $433,769 (unaudited). The equipment sales were principally generated
from the installation of the Entertainment Networks on ten Swissair aircraft.
The service income was generated from services provided to Swissair pursuant to
the media programming, services agreement, the Company's share of gaming profits
generated by the Swissair systems and revenue earned under the Swissair Letter
of Intent to extend the warranty.

     Revenue for the year ended October 31, 1998 was $19,142,961, an increase of
$8,042,252 (or 72%) over revenue of $11,100,709 for the year ended October 31,
1997. Revenues in each year consist of equipment sales (principally from the
installation of the Entertainment Networks

                                       30
<PAGE>

on Swissair aircraft) and service income. During the year ended October 31,
1998, the Company completed installations on-board Swissair aircraft under the
initial Swissair program in ten business classes and eighteen first classes
whereas installations completed in fiscal 1997 were in nine business classes and
one first class. Revenues from equipment sales rose 71% from $10,524,828 in
fiscal 1997 to $18,038,619 in fiscal 1998 due to the increased installations in
fiscal 1998. Service income of $1,104,342 for the year ended October 31, 1998
was principally generated from programming services provided to Swissair, the
Company's share of gaming profits generated by the Swissair systems and revenue
earned under the Swissair extended warranty Letter of Intent. Also included in
service income for the year ended October 31, 1998 is revenue of $326,000
generated by the Company's dry cleaning operations acquired on July 24, 1998.
Service income of $575,881 for the year ended October 31, 1997 was primarily
derived from a Product Identification/Product Development Agreement with an
airline and entertainment programming services provided to customers.

     Cost of equipment sales for the Transition Period ended June 30, 1999 was
$1,517,323, a decrease of $13,722,245 (or 90%) compared to cost of equipment
sales of $15,239,568 (unaudited) for the corresponding period ended June 30,
1998. Cost of equipment sales includes materials, installation and maintenance
costs, as well as estimated warranty costs and costs of upgrades. For the eight
months ended June 30, 1998 cost of sales resulted from the installation of
equipment on ten Swissair aircraft whereas the decreased cost of sales in the
Transition Period ended June 30, 1999 resulted from material costs for only four
Swissair aircraft. Cost of service income for the Transition Period ended June
30, 1999 was $445,585, an increase of $432,052 compared to cost of service
income of $13,533 (unaudited) for the eight months ended June 30, 1998. Cost of
service income for the Transition Period ended June 30, 1999 is primarily
related to the Company's dry cleaning operation which was acquired on July 24,
1998.

     Cost of equipment sales and service income for the year ended October 31,
1998 was $15,762,119, a decrease of $9,116,341 (or 37%) over the comparable
figure of $24,878,460 for the fiscal year ended October 31, 1997. The decrease
in cost of equipment sales is primarily a result of the inclusion of provisions
for inventory obsolescence, unusable inventory and rework adjustments of
$11,496,748 in cost of equipment sales for fiscal 1997. The 1997 provision for
inventory obsolescence was a result of the Company's purchasing inventory for
installation in the economy sections of Swissair aircraft but actually
completing only three economy installations. The unusable inventory and rework
adjustments primarily resulted from the Company's redesign of the tray table
used in the Entertainment Networks for the economy section of an aircraft. The
decrease in cost of equipment sales for fiscal 1998 is also attributable to
reductions in maintenance costs and estimated one-year warranty costs as the
reliability of the Entertainment Networks has improved. Additionally, the
Company recognized a reduction in installation costs from its subcontractor
during fiscal 1998. Included in cost of service income for fiscal 1998 is
$225,047 of production costs related to the Company's dry cleaning operations.

     Provisions for doubtful accounts for the Transition Period ended June 30,
1999 were $30,092 compared to zero (unaudited) for the corresponding period
ended June 30, 1998. Fiscal

                                       31
<PAGE>

1999 provisions resulted primarily from entertainment programming services
provided to Swissair.

     Provisions for doubtful accounts for the year ended October 31, 1998 were
$9,869 compared to $216,820 for the year ended October 31, 1997. Fiscal 1998
provisions resulted from the Company's dry cleaning operations and fiscal 1997
provisions resulted from entertainment programming services provided to a
previous customer.

     Bad debt recoveries of $1,064,284 during the year ended October 31, 1997
resulted from the recovery of accounts receivable under a customer agreement
which were reserved for during the Company's fourth quarter of its fiscal year
ended October 31, 1996.

     There were no research and development expenses for the Transition Period
ended June 30, 1999, compared to $1,092,316 (unaudited) for the corresponding
period ended June 30, 1998. The decrease in expenses reflects the Company's
decision not to develop the next generation of the Entertainment Network and the
resulting reduction in staff and professional fees.

     Research and development expenses for the year ended October 31, 1998 were
$1,092,316, a decrease of $6,729,324 (or 86%) over expenses of $7,821,640 for
the year ended October 31, 1997. The decrease in expenses reflects the Company's
decision not to develop the next generation of the Entertainment Network and the
resulting reduction in staff and professional fees. The Swissair agreement
requires the Company to provide specific upgrades to the Entertainment Network.
The Company has ceased development of these upgrades as a result of Swissair's
breach of its agreement and does not plan to develop any further upgrades to the
Entertainment Network.

     General and administrative expenses for the Transition Period ended June
30, 1999 were $6,688,813, an increase of $2,665,053 (or 66%) over expenses of
$4,023,760 (unaudited) for the corresponding period ended June 30, 1998.
Significant components of general and administrative expenses include costs of
consulting agreements, legal and professional fees and corporate insurance
costs. Significant components attributable to the increase in general and
administrative expenses from 1998 to 1999 include legal and consulting fees
related to the Donativos and Inter Lotto investments, legal fees related to the
investment in TNCi and a 1999 accrual of approximately $1.6 million to write-off
certain consulting agreements determined, in the current period, to have no
future value.

     General and administrative expenses for the year ended October 31, 1998
were $11,387,872, a decrease of $1,186,351 (or 9%) over expenses of $12,574,223
for the year ended October 31, 1997. The decrease in expenses reflects the
Company's reduction in staff in administrative areas, including production,
marketing and program management departments. As of May 29, 1998, the Company
terminated almost all sales and marketing efforts related to IED. The decrease
in expenses during fiscal 1998 was partly offset by the payment of $3,053,642 in
severance to three former executives of the Company.

     For the Transition Period ended June 30, 1999 the Company recorded
warranty, maintenance, commission and support cost accrual adjustments of
$5,117,704, $504,409,

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<PAGE>

$303,321 and $1,225,959 respectively. Such adjustments to prior period
estimates, which totaled $7,151,393 resulted from an evaluation of specific
contractual obligations and discussions between the new management of the
Company and other parties related to such contracts. Based on the results of the
Company's findings during fiscal 1999, such accruals were no longer considered
necessary. If these accruals had not been adjusted, the Company's loss for the
Transition Period would have been approximately $9.6 million.

     Special charges for the Transition Period ended June 30, 1999 were
$2,485,660 compared to zero (unaudited) for the corresponding period of the
previous fiscal year. Special charges resulted from a $521,590 write-off of
accounts receivable and deposits due from Swissair, offset by deferred revenue
under the Swissair extended warranty contract. Swissair's actions, as described
above, have rendered the Company's accounts receivable and deposits from
Swissair worthless as of June 30, 1999 and, accordingly, the Company wrote-off
such assets. Also included in special charges are expenses of $1,843,750 and
$120,320 for the settlement of litigation matters with First Lawrence Capital
Corp. and FortuNet, Inc., respectively

     Special charges for the year ended October 31, 1998 were $400,024 compared
to $19,649,765 for the year ended October 31, 1997. Special charges in fiscal
1998 primarily resulted from equipment write-offs of $1,006,532. The write-offs
were for excess computers, furniture and other equipment that the Company is not
utilizing in its operations and is in the process of disposing. The equipment
write-offs were partly offset by a recovery of special charges expensed in
fiscal 1997. During fiscal 1998, a recovery of $190,000 was recognized as a
special charge credit as a result of a reduction in the number of Entertainment
Networks requiring maintenance. The Company also recognized a recovery of
$416,508 related to Swissair's decision to not develop the system for the front
row in the economy sections of its aircraft. Special charges in fiscal 1997
primarily resulted from the installment of the Entertainment Networks on three
Swissair aircraft and installations required by the Debonair agreement. The
Company was responsible for the costs of installing the system on three Swissair
aircraft, including materials, installation, upgrades, a one-year warranty and
maintenance through September of 1998. The costs for these three systems of
$14,292,404 were recorded as a special charge during fiscal 1997. Due to the
termination of the Debonair agreement, the costs of the installed system
($956,447) and all inventory on-hand under the Debonair agreement ($2,881,962)
were written off as a special charge in fiscal 1997. Additionally, the Company
recorded a special charge of $1,518,952 for the write-off of a system
integration lab utilized in software development and testing. The lab equipment
will not be utilized in the Company's future operations.

     Expenses associated with investments of $550,000 for the fiscal year ended
June 30, 1999 represent $150,000 and $250,000 write-offs of investments deemed
to have no value and a $150,000 standstill fee related to the Inter Lotto
acquisition.

     Interest expense was $74,684 for the Transition Period ended June 30, 1999
compared to $8,873 (unaudited) for the period ended June 30, 1998. The 1999
Transition Period expense is attributable principally to long-term debt
obligations, whereas the expense for the eight months

                                       33
<PAGE>

ended June 30, 1998 is attributable to the Company's capital leases for
furniture that expire in September 1999.

     Interest expense was $11,954 for the year ended October 31, 1998
compared to $13,423 for the year ended October 31, 1997. The expense is
attributable to the Company's capital leases for furniture that expired in
September of 1999.

     Interest income for the Transition Period ended June 30, 1999 was
$1,060,229, a decrease of $429,796 (or 29%) compared to income of $1,490,025
(unaudited) for the corresponding period ending June 30, 1998. The interest
arose principally out of short-term investments of working capital. The decrease
in income is due to the lower average cash balance during 1999 compared to 1998.

     Interest income for the year ended October 31, 1998 was $2,251,055, an
increase of $80,380 (or 4%) over income of $2,170,675 for the year ended October
31, 1997. The interest arose principally out of short-term investments of
working capital. The increase in income is due to the higher average cash
balance during 1998 compared to 1997.

     Other income for the Transition Period ended June 30, 1999 was $61,252
compared to $10,679 (unaudited) for the corresponding period ended June 30,
1998. Other income in fiscal 1999 represents sublet income for the sublease of
office space and proceeds from the sale of office furniture and equipment to
employees. Other income in fiscal 1998 represents proceeds from the sale of
equipment and scrapped inventory.

     Other income of $10,179 for the year ended October 31, 1998 represents
proceeds from the sale of scrapped inventory. Other expense of $203,649 for the
year ended October 31, 1997 represents the loss on disposals of property and
equipment.

     For the Transition Period ended June 30, 1999 the Company recorded a gain
of $133,396 on the sale of its dry cleaning operation. The dry cleaning
operation was sold in May 1999.

     For the Transition Period ended June 30, 1999 the Company recorded its
proportionate share of its equity interest in losses of Inter Lotto in the
amount of $195,704.

     Liquidity and Capital Resources

     At June 30, 1999, the Company had cash, cash equivalents, and short-term
investments of approximately $19.8 million. Prior to the last fiscal year, the
Company's primary source of funding had historically been through equity
offerings. Subsequent to June 30, 1999, the Company obtained orders consisting
of a $5.3 million purchase order for the manufacture, delivery and installation
of 193 Cheetah(TM) multimedia servers to certain Georgia schools, and a service
order under the Carnival Agreement for installation of a second CruiseView
system. As of October 25, 1999, all 193 servers had been delivered and the
Company has received payment. The Company received an installment payment from
Carnival in August 1999. Excluding the benefit of the Georgia program, cash,
cash equivalents, and short-term investments will continue to decrease as the
Company continues to invest in inventory for the

                                       34
<PAGE>

Carnival service order, invest in business development and cover overhead
expenses, contribute capital into affiliate companies and complete new
transactions which may not generate cash flow in the next twelve months.

     During the Transition Period ended June 30, 1999, the Company used $5.2
million of cash for operating activities, an increase of $2.0 million from the
$3.2 million of cash used by operating activities for the fiscal year ended
October 31, 1998. Cash utilized in operations during the Transition Period
resulted primarily from general and administrative expenses and a reduction in
accounts payable. The cash used in operations during the year ended October 31,
1998 is primarily a result of increases in accounts receivable and increases in
inventories and an increase in accrued product warranties, offset by decreases
in accounts payable and deferred revenue.

     During the Transition Period ended June 30, 1999, restricted cash increased
by $373,000 as a result of payments of $540,000 made under consulting and
severance agreements with three former executives of the Company, offset by an
increase of $913,000 representing cash collateral posted by the Company to
secure its contingent obligation under a letter of credit.

     Cash flows used in investing activities were $7.7 million during the
Transition Period ended June 30, 1999. Investments in affiliates of $7.6 million
accounted for the majority of the use of cash. Investments primarily include US
Wireless, Inter Lotto and Donativos. Increases in restricted cash and purchases
of investment securities in excess of sales and maturities of investment
securities, offset by proceeds from the sale of Johnny Valet, Inc., accounted
for the balance of the change.

     Cash provided from financing activities during the Transition Period ended
June 30, 1999 of $588,000 resulted primarily from Global's issuance of its
Series A 8% Convertible Preferred Stock ("Series A Preferred") offset by
payments on notes and purchases of treasury stock.

     The holder of Series A Preferred is entitled to receive, when, as and if
declared by the Board of Directors, an annual cumulative dividend of $80 per
share payable quarterly in cash or common stock. Cumulative undeclared and
unpaid dividends at June 30, 1999 total $33,333. At the option of the holder,
beginning November 6, 1999, each share of Series A Preferred is convertible into
common stock at a price equal to $3.00 per share or into Series B Preferred
Stock at the rate of 1.19 shares of Series B Preferred Stock for each share of
Series A Preferred Stock. Global's Series B Preferred Stock is entitled to one
vote for each share of common stock into which it may convert. There are no
shares of Series B Preferred Stock outstanding.

     Global may redeem the Series A Preferred at prices ranging from 115% to
125% of stated value, plus accrued and unpaid dividends at any time between
November 6, 1999 and May 4, 2000. If the Series A Preferred is not redeemed or
converted into shares of Global's Series A Common Stock by May 5, 2000, then the
Series A Preferred automatically converts into shares of Global's Series B 8%
Convertible Preferred Stock at the rate of 1.25 shares of Series B Preferred
Stock for each share of Series A Preferred Stock.

     Shares of Series B 8% Convertible Preferred Stock are, in turn, convertible
into Class A Common Stock of Global at a price per share equal to the lower of
(a) 82% of Market Price (as

                                       35
<PAGE>

defined in the Certificate of Rights, Preferences, and Designations of the
Series B Preferred Stock) or (b) $3.00 per common share. Because the terms of
any such conversion into Series B 8% Convertible Preferred Stock are unfavorable
to Global, it is likely that Global will redeem the Series A 8% Convertible
Preferred Stock. On November 6, 1999, the redemption price will be approximately
115% of stated value per share ($3,450,000) plus accrued and unpaid dividends,
which will be approximately $120,000 at that time.

     Global may be required to commit additional funds to its affiliate
companies, TNCi, Donativos and Inter Lotto, which would come from existing
working capital of the Company. Such additional funds, if required, could have a
material adverse effect on the Company's ability to acquire new operating
companies or make new investments. In particular, because of the cash flow
deficit being experienced by Donativos (see Item 1 "Description of Business -
Donativos"), the Company will probably be forced to service the obligations
associated with its purchase of 332 slot machines without receiving
corresponding timely equipment rental payments from Donativos. As of October 15,
1999, the balance due for the slot machines is approximately $856,000.

     The Company had no purchase commitments as of June 30, 1999. In September
1999, the Company entered into an agreement to purchase $12.3 million of lottery
systems in connection with its investment in Inter Lotto. The Company paid $2.8
million towards the purchase price and expects to finance the balance of this
commitment with debt financing to be obtained from a financial institution. No
assurances can be made that such financing will be available to the Company. If
the Company is unable to obtain such financing, such inability would have a
material adverse effect on the Company's liquidity. The Company also entered
into a facilities management agreement for servicing of the lottery systems.
Under this agreement, IFT Management is required to make weekly payments to ILTS
of $72,000 plus additional amounts based on the number of installed terminals in
excess of 3,500 and plus a percentage of the average daily sales.

     On August 13, 1999, the Company and two of its officers entered into a
Release and Settlement Agreement ("Agreement") with First Lawrence Capital Corp.
("First Lawrence") whereby the Company issued 250,000 shares of its Class A
common stock and agreed that its wholly-owned subsidiary, IFT Holdings, will pay
First Lawrence 24 consecutive monthly payments of $41,667 each beginning
February 1, 2000. In exchange, First Lawrence will be available to perform
management consulting services to IFT Holdings. Funding for the consulting
services is expected to be derived from operating cash flow of Inter Lotto.
Should Inter Lotto not generate sufficient cash flow to IFT Holdings, then the
consulting payment may not be made.

     On August 24, 1999, the Board of Directors of Global approved a $5 million
secured revolving credit facility in favor of TNCi ("the Facility"). The
Facility provides that TNCi may borrow up to $5 million for working capital and
general corporate purposes at an annual interest rate equal to the prime rate
plus 3%. The Facility matures in September 2001. TNCi paid an origination fee of
$50,000 to the Company and will pay an unused line fee of 0.5% per annum.

                                       36
<PAGE>

The Facility is secured by all of the assets of TNCi and is convertible, at the
Company's option, into shares of the Series C preferred Stock or TNCi Common
Stock.

     A note payable of TNCi due September 5, 1999 was in default at June 30,
1999. Subsequent to year-end, the note was converted into 200,000 shares of
TNCi's common stock.

     The terms of the Carnival Agreement provide that Carnival may return the
CruiseView system within the Acceptance Period, as defined in the Carnival
Agreement. For the Fantasy Class ship on which CruiseView was installed in
December 1998, the Acceptance Period is 12 months. As of June 30, 1999, the
Company recorded deferred revenue of $365,851, reflecting amounts paid by
Carnival. As of June 30, 1999, the Company has not recognized any revenue in
association with the Carnival Agreement.

     The Company is required to provide a performance bond or standby letter of
credit in favor of Carnival ensuring Carnival's ability to be repaid amounts
previously paid to the Company in the event Carnival determines not to accept
the system as permitted under the Carnival Agreement. The Company has not
provided a bond or letter of credit. If Carnival requires the Company to do so,
the Company may be required to provide cash collateral to a financial
institution to secure such a financial instrument.

     Moreover, if Carnival does not accept the system the Company will be
obliged to return the purchase price, which would have a material effect on
liquidity.

     Cautionary Factors That May Affect Future Results

     In addition to the risks articulated elsewhere in this report with respect
to Donativos, Inter Lotto, and US Wireless, the following risks are associated
with TNCi.

     Risks Inherent In Development Of New Products And Markets. TNCi's strategy
includes developing new applications for its interactive entertainment and
information technologies and entering new markets, such as the train industry.
This strategy presents risks inherent in assessing the value of development
opportunities, in committing capital in unproven markets and in integrating and
managing new technologies and applications. Within these new markets, TNCi will
encounter competition from a variety of sources. It is also possible that TNCi
will experience unexpected delays or setbacks in developing new applications of
its technology. There can be no assurance that TNCi's new products and
applications will generate additional revenue for TNCi or that TNCi will
successfully penetrate these additional markets.

     Risk Of Technological Obsolescence. The ability of TNCi to maintain a
standard of technological competitiveness is a significant factor in TNCi's
strategy to maintain and expand its customer base, enter new markets and
generate revenue. While TNCi believes that its systems are currently
technologically competitive, TNCi's continued success will depend in part upon
its ability to identify promising emerging technologies and to develop, refine
and introduce high quality services in a timely manner and on competitive terms.
There can be no assurance that future technological advances by direct
competitors or other providers will not result in improved

                                       37
<PAGE>

systems that could adversely affect TNCi's business, financial condition and
results of operations. Additionally, TNCi may fail to identify emerging
technologies.

     Management Of Growth. TNCi's growth strategy will require its management to
conduct operations and respond to changes in technology and the market, while
substantially expanding operations and personnel. If TNCi's management is unable
to manage growth effectively, its business, financial condition and results of
operations will be materially adversely affected.

     Risk Of System Failure Or Inadequacy. The failure of one of TNCi's systems
at any particular time could occur as a result of component malfunction,
operator error or some other reason. Although system interruptions historically
have been inconsequential, any system failure could harm TNCi's reputation,
cause a loss or delay in market acceptance of TNCi's systems, and have a
material adverse effect on TNCi's business, financial condition and results of
operations. To reduce the risk of system failure, TNCi performs extensive
testing of its systems and engages in ongoing quality assurance efforts
involving the use of redundant systems and sophisticated diagnostic tools to aid
in system maintenance and trouble-shooting. Despite these measures, there can be
no assurance that system failures or interruptions will not occur.

     Dependence On Key Personnel. TNCi's success is dependent on a number of key
management, research and operational personnel for the management of operations,
development of new products and timely installation of its systems. The loss of
one or more of these individuals could have an adverse effect on TNCi's business
and results of operations. TNCi depends on its continued ability to attract and
retain highly skilled and qualified personnel. There can be no assurance that
TNCi will be successful in attracting and retaining such personnel.

     Dependence On Transportation Industry And Continued Operation Of
Transportation Industry Customers. A substantial portion of TNCi's revenue is
expected to be generated in the near term from its transportation industry
operations, thereby making TNCi's business dependent upon the transportation
industry in general and the continued operations of TNCi's transportation
industry customers. A significant reduction in the operations of any of these
customers could, depending on the extent of the reduction, have a material
adverse effect on TNCi. Additionally, the transportation industry is dependent
on customers having disposable income. Therefore, a general economic downturn or
a recession could negatively impact the transportation industry before affecting
other segments of the economy, even though transportation providers typically
offer promotional pricing and incentives during recessionary periods to ensure a
steady occupancy rate.

     Concentration of Customer Base. TNCi has only two principal customers -
Carnival in the transportation industry and MRESA in the educational industry.
If TNCi is unable to maintain good relations with these customers or expand its
customer base, or if either customer determines not to continue purchasing
servers at all, there is a risk that results of operations will be materially
adversely affected.

     Competition. The market for entertainment networks is rapidly evolving and
highly competitive. Many of TNCi's current and potential competitors have longer
operating histories

                                       38
<PAGE>

and significantly greater financial, technical, marketing and other resources
than TNCi and therefore may be able to respond more quickly to new or changing
opportunities, technologies and customer requirements. Although TNCi's business
strategy targets certain markets which it believes offer a competitive
advantage, there can be no assurance that TNCi will be able to compete
effectively with current or future competitors or that the competitive pressures
faced by TNCi will not have a material adverse effect on TNCi's business,
financial condition and results of operations.

     Government Regulation And Legal Uncertainties. TNCi is subject, both
directly or indirectly, to various laws and governmental regulations relating to
its business. TNCi believes that it is currently in compliance with such laws
and that they do not have a material impact on its operations. However, as a
result of rapid technology growth and other related factors, laws and
regulations may be adopted which significantly impact TNCi's business.

     Long Sales Cycles; Lack Of Existing Backlog. The sales cycle for TNCi's
systems is relatively long because it involves the evaluation of TNCi's
technology for each project, a test installation of each customized system, and
negotiation of related agreements from other providers such as movie and
Internet access providers and computer gaming operators. All of these items
requires a large investment on the part of TNCi and occurs before a contract is
signed with an end-user. The long sales cycles for TNCi's products, combined
with the fact that TNCi had no backlog orders as of June 30, 1999, could place a
significant strain on TNCi's financial and other resources. The failure by TNCi
to build a backlog of orders in the future would have a material adverse effect
on TNCi's financial condition.

     Unproven Business Strategy. In connection with the acquisition of IED, TNCi
has retained a new management team. TNCi's new management has shifted TNCi's
business strategy to position itself as a provider of comprehensive systems
solutions and as an integrated browser-based software developer and content
programming, procurement, integration and management service provider. Moreover,
TNCi has recently begun focusing its sales efforts on the business jet, train
and cruise transportation industries and on the training and academic solution
provider industry. Since this new strategy has been implemented recently, TNCi
has a minimal operating history to reflect the results of this strategy.
Therefore, there can be no assurance that TNCi will succeed in implementing its
strategy or that it will obtain financial returns sufficient to justify its
investment in the markets in which it plans to participate.

     Insurance And Potential Excess Liability. The Company maintains liability
insurance to protect against claims arising for it. These policies have limits
of up to $10 million in the aggregate and insures against both property damage
and personal injury. The policies are written on an "occurrence" basis, which
provides coverage for insured risks that occur during the policy period,
irrespective of when a claim is made. Higher policy limits are sometimes
purchased for individual projects when contractually required. If the Company
incurs liability in excess of the Company's policy coverage, the Company's
financial condition could be adversely affected.

     Economic And General Risks Of Business. The Company's success will depend
upon factors that are beyond its control and that cannot clearly be predicted at
this time. Such factors include general economic conditions, both nationally and
internationally, changes in tax laws,

                                       39
<PAGE>

fluctuating operating expenses, changes in governmental regulations, changes in
technology, and trade laws.

     Inflation and Seasonality

     The Company does not believe it is significantly affected by inflation.
Company operations are not seasonal in nature, except to extent fluctuations in
quarterly operating results occur due to the specifically cyclical nature of
government funding to be obtained in connection with education programs.

     Risks Associated With Year 2000

     The commonly referred to Year 2000 ("Y2K") problem results from the fact
that many existing computer programs and systems use only two digits to identify
the year in the date field. These programs were designed and developed without
considering the impact of a change in the century designation. If not corrected,
computer applications that use a two-digit format could fail or create erroneous
results in any computer calculation or other processing involving the Year 2000
or a later date. The Company has identified two main areas of Y2K risk:

          1. Internal computer systems or embedded chips could be disrupted or
     fail, causing an interruption or decrease in productivity in the Company's
     operations, and

          2. Computer systems or embedded chips of third parties including
     (without limitation) financial institutions, suppliers, vendors, landlords,
     customers and service providers and others ("material third parties") could
     be disrupted or fail, causing an interruption or decrease in the Company's
     ability to continue operations.

     The Company has developed, or is in the process of developing, plans for
implementation and testing of any necessary modifications to its key computer
systems and equipment with embedded chips to ensure that it is Y2K compliant.
The Company believes that its internal systems are Y2K compliant. The Company
believes that the Y2K issue will not pose significant operational problems for
it. However, if the modifications and conversions made are not sufficient, Y2K
could have a material impact on its operations. The Company has performed an
assessment of its TRIUMPH products for Y2K issues. The TRIUMPH products use a
four-digit identifier and, therefore, the Company believes the TRIUMPH products
are Y2K compliant.

     The Company's cost of addressing Y2K has been insignificant to date. The
financial impact of making any additional systems changes, or other remediation
efforts, if any, cannot be known precisely at this time, but it is not expected
to be material to the Company's financial position, results of operations, or
cash flows.

     In addition, the Company has identified and is communicating with material
third parties to determine their Y2K status and any possible affect on the
Company as a result of dealing with them. The Company will continue to track and
evaluate its long-term relationships with material third parties based on the
responses it receives and on information learned from other sources. If any of
the Company's material third parties are not Y2K ready and such non-compliance
causes a

                                       40
<PAGE>


material disruption to any of their respective businesses, the Company's
business could be materially adversely affected. Disruptions could include,
among other things: the failure of a material third party's business; a
financial institution's inability to take and transfer funds; an interruption in
delivery of supplies from vendors; a loss of voice and data connections; a loss
of power to the Company's facilities; and other interruptions in the normal
course of the Company's operations, the nature and extent of which the Company
cannot foresee. The Company will continue to evaluate the nature of these risks,
but at this time the Company is unable to determine the probability that any
such risk will occur, or if it does occur, what the nature, length or other
effects, if any, that it may have on the Company. If a significant number of
material third parties experience failures in their computer systems or
operations due to Y2K non-compliance, it could affect the Company's ability to
process transactions or otherwise engage in similar normal business activities.
For example, while the Company expects its internal systems to be Y2K ready, the
Company and its customers will be dependent upon the Y2K readiness of many
providers of communications services and in turn, those providers' vendors and
suppliers. If, for example, such providers and others are not Y2K ready, the
Company and its customers may not be able to send and receive data and
electronic transmissions, which would have a material adverse effect on the
business and revenues of the Company and its customers. While many of these
risks are outside the Company's control, the Company has instituted a process to
identify material third parties and to address any non-compliance issues.

     Although the Company believes that it is adequately addressing the Y2K
issue, there can be no assurance that its Y2K analysis will be completed on a
timely basis, or that the cost and liabilities associated with the Y2K issue
will not materially adversely impact its business, prospects, revenues or
financial position. The Company is uncertain as to its most reasonably likely
worst case Y2K scenario, and it has not yet developed a contingency plan to
handle a worst case scenario.

     Forward-Looking Information

     This Report contains certain forward-looking statements and information
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The cautionary statements made in this
Report should be read as being applicable to all related forward-looking
statements wherever they appear in this Report. Forward-looking statements, by
their very nature, include risks and uncertainties. Accordingly, the Company's
actual results could differ materially from those discussed herein. A wide
variety of factors could cause or contribute to such differences and could
adversely impact revenues, profitability, cash flows and capital needs. Such
factors, many of which are beyond the control of the Company, include, without
limitation, the following: resolution of the Swissair-related litigation;
maintenance of the Donativos permit for operation of the Center; obtaining a
secondary prize permit by Donativos for use at the Center; obtaining financing
for the Inter Lotto gaming equipment; remedying or improving dramatically the
cash shortfall in Donativos' operations; the inability to cover the obligations
to ILTS from the operations of a start-up venture in an untried game in the UK
market; the Company's success in obtaining new contracts; the volume and type of
work orders that are received under such contracts; the accuracy of the cost
estimates for the projects; the Company's ability to complete its projects on
time and within budget; levels of, and ability to

                                       41

<PAGE>

collect accounts receivable; availability of trained personnel and utilization
of the Company's capacity to complete work; competition and competitive
pressures on pricing; and economic conditions in the United States and in other
regions served by the Company.

     New Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which establishes standards for
the accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts, and hedging activities. This
statement generally requires recognition of gains and losses on hedging
instruments, based on changes in fair value or the earnings effect of forecasted
transactions. As issued, SFAS No. 133 is effective for all fiscal quarters of
all fiscal years beginning after June 15, 1999. In June 1999, the FASB issued
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133--An
Amendment of FASB Statement No. 133," which deferred the effective date of SFAS
No. 133 until June 15, 2000. The Company is currently evaluating the impact of
SFAS No. 133.

     On November 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for reporting and
presentation of comprehensive income and its components in a full set of
financial statements. Comprehensive income consists of net income and unrealized
gains and losses on investment securities net of taxes and is presented in the
consolidated statements of stockholders' equity and comprehensive income; it
does not affect the Company's financial position or results of operations.

     On November 1, 1998, the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 supersedes SFAS
No. 14, "Financial Reporting for Segments of a Business Enterprise" replacing
the "industry segment" approach with the "management" approach. The management
approach designates the internal organization that is used by management for
making operating decisions and assessing performance as the source of the
Company's reportable segments. SFAS No. 131 also requires disclosure about
products and services, geographical areas, and major customers. The adoption of
SFAS No. 131 does not affect results of operations or financial position but
does affect the disclosure of segment information.

     On November 1, 1998, the Company adopted Statement of Position (SOP) 98-5
"Reporting on the Costs of Start-Up Activities" issued by the Accounting
Standards Executive Committee of the American Institute of Certified Public
Accountants. SOP 98-5 provides guidance on the financial reporting of start-up
costs and organization costs. The SOP requires start-up activities and
organization costs to be expensed as incurred. The adoption of SOP 98-5 did not
have a material impact on the Company's results of operations.

                                       42
<PAGE>


ITEM 7 - FINANCIAL STATEMENTS

     The audited consolidated financial statements of the Company for the
Transition Period ended June 30, 1999 are located beginning at page F-1 of this
Transition Report.

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

     There are no items or circumstances to be disclosed under this Item 8.

                                    PART III

ITEM 9 - Directors, Executive Officers, Promoters and Control
         Persons; Compliance With Section 16(a) of the Exchange Act.

     The following sets forth biographical information about each of Global's
directors and executive officers as of June 30, 1999:

Name                   Age     Position/Office
----                   ---     ---------------
Irwin L. Gross         55      Chief Executive Officer and Chairman of the Board
James W. Fox           49      President, Chief Operating Officer and Director
Morris C. Aaron        35      Vice President and Chief Financial Officer
David N. Shevrin       37      Vice President and Secretary
M. Moshe Porat         52      Director
Charles T. Condy       59      Director
Stephen Schachman      55      Director


     Irwin L. Gross has been the Chairman of the Board of Directors and Chief
Executive Officer of Global since September 1998 and Chairman of the Board of
Directors and Chief Executive Officer of TNCi since May 18, 1999. He is a
founder of Rare Medium, Inc., a publicly held company listed on the NASDAQ
National Market, and was Chairman and a Director of Rare Medium, Inc. from 1984
to 1998. In addition, Mr. Gross served as the Chief Executive Officer of
Engelhard/ICC, a joint venture between Rare Medium and Engelhard. In December of
1998, Mr. Gross became a director of ORBIT/FR, a publicly held company
specializing in the design and manufacture of sophisticated automated microwave
test measurement systems for the wireless communication, satellite and aerospace
industries. Mr. Gross has served as a consultant to, investor in and director
of, numerous publicly held and private companies. Mr. Gross also serves on the
board of directors of several charitable organizations. Mr. Gross has a Bachelor
of Science degree in Accounting from Temple University and a Juris Doctor degree
from Villanova University

     James W. Fox is the President and Chief Operating Officer of Global. He was
formerly the Managing Partner of First Lawrence, and was responsible for the
firm's management and the

                                       43
<PAGE>

growth of its mergers and acquisitions advisory and principal investment
activities. From 1989 to 1996, Mr. Fox was a director with national practice
development and management responsibility with Coopers & Lybrand in New York,
with primary responsibility for mergers and acquisitions activities. He has held
senior mergers and acquisitions positions with General Foods Corp., Arthur Young
and W.R. Grace Co. Mr. Fox has a Bachelor of Arts degree in Mathematics and
History from Amherst College and an M.B.A. in Finance from the University of
Pennsylvania's Wharton School.

     Morris C. Aaron, is the Chief Financial Officer of Global. Since May 18,
1999, Mr. Aaron has also served as an executive officer and a Director of TNCi.
Prior to his involvement in Global, from January 1996 to September 1998, Mr.
Aaron was the Chief Financial Officer and Treasurer of Employee Solutions, Inc.,
a publicly-held company listed on the NASDAQ National Market. From 1986 to 1996,
Mr. Aaron was with the firm of Arthur Andersen, LLC in the corporate finance and
corporate restructuring group. Mr. Aaron holds a Bachelors Degree in Accounting
from Pennsylvania State University, an M.B.A. from Columbia University and is a
Certified Public Accountant in the State of New York.

     David N. Shevrin, has served as Vice President and Secretary of the Company
since September 1998, with primary responsibility for business development and
analysis. Prior thereto, from July 1998, Mr. Shevrin was Vice President of Ocean
Castle Investments, LLC, another affiliate of Irwin L. Gross. His
responsibilities there were also in the areas of business development and
analysis. From November 1994 to July 1998, Mr. Shevrin was Assistant to the
Chairman and Chief Executive Officer of Rare Medium, Inc. Before then, Mr.
Shevrin served as a Product Manager with Kraft General Foods.

     M. Moshe Porat has been a Director of Global since September 1998 and a
Director of TNCi since May 18, 1999. Since September 1996, Dr. Porat has served
as the Dean of the School of Business and Management at Temple University. He is
the Chairholder of the Joseph E. Boettner Professorship in Risk Management and
Insurance. From 1988 to 1996 he was Chairman of the Risk Management, Insurance
and Actuarial Science Department at Temple University. He received his
undergraduate degree in economics and statistics (with distinction) from Tel
Aviv University. His M.B.A. (Magna Cum Laude) is from the Recanati Graduate
School of Management at Tel Aviv University. He completed his doctoral work at
Temple University. Prior to his academic work, Dr. Porat served as deputy
general manager of a large international insurance brokerage firm and insurance
company as an economic and financial consultant. Dr. Porat has authored several
monographs on captive insurance companies and their use in risk management, has
published numerous articles on captive insurance companies, self insurance and
other financial and risk topics, has served as an expert witness and has won
several awards. Dr. Porat holds the CPCU professional designation and is a
member of ARIA (American 25 Risk and Insurance Association), IIS (International
Insurance Society), RIMS (Risk and Insurance Management Society) and Society of
CPCU.

     Charles T. Condy has been a Director of Global since September 1998 and has
been a director of Rare Medium, Inc. since June 1996. Mr. Condy is the founder,
chairman and chief executive officer of Next Century Restaurants, Inc., a
private company which is the owner of Aqua, and

                                       44
<PAGE>

Charles of Nob Hill, both of which are in San Francisco, and Aqua of Las Vegas.
He is founder and has been chairman and chief executive officer of Proven
Alternatives, Inc., a privately held international energy management company,
since 1991. Mr. Condy was chairman and chief executive officer of California
Energy Company, Inc., a geothermal energy company which he founded in 1971, and
which become the largest geothermal energy company in the world. Prior to
founding California Energy Company, Mr. Condy was executive vice
president--Western region of John Nuveen and Company, members of the New York
Stock Exchange. In the public policy area, Mr. Condy helped found and has served
as a board member of the Business Council for a Sustainable Energy Future and
the Coalition for Energy Efficiency and Renewable Technologies. Mr. Condy
currently advises the U.S. Department of Energy, the U.S. Agency for
International Development, and the U.S. Asian Environmental Partnership on
energy efficiency technology transfer and related funding to developing
economies.

     Stephen Schachman has been a Director of Global since September 1998. Mr.
Schachman became a Director of TNCi on May 18, 1999 and currently is a
consultant to TNCi. Since 1995, Mr. Schachman has been the owner of his own
consulting firm, Public Affairs Management, which is located in the suburban
Philadelphia area. From 1992 to 1995, Mr. Schachman was an executive officer and
consultant to Penn Fuel Gas Company, a supplier of natural gas products. Prior
thereto, he was an attorney with the Philadelphia law firm Dilworth, Paxson,
Kalish & Kaufman. Mr. Schachman was also an Executive Vice President of Bell
Atlantic Mobile System and prior thereto, President of the Philadelphia Gas
Works, the largest municipally owned gas company in the United States. Mr.
Schachman has a Bachelor of Arts degree from the University of Pennsylvania and
Juris Doctor degree from the Georgetown University Law School.

     Officers serve at the discretion of the Board of Directors, subject to
rights, if any, under contracts of employment.

     Compliance With Section 16(a) Of The Securities Exchange Act Of 1934

     The SEC has comprehensive rules relating to the reporting of securities
transactions by directors, officers and stockholders who beneficially own more
than 10% of Global's Class A Common Stock (collectively, the "Reporting
Persons"). These rules are complex and difficult to interpret. Based solely on a
review of Section 16 reports received by Global from Reporting Persons, Global
believes that no Reporting Person has failed to file a Section 16 report on a
timely basis during the most recent fiscal year.

ITEM 10 - EXECUTIVE COMPENSATION.

     The summary compensation table below sets forth the aggregate compensation
paid or accrued by Global for the Transition Period ended June 30, 1999 and
Global's last two fiscal years ended October 31, 1998 and October 31, 1997 to
(i) the Chief Executive Officer (the "CEO"), (ii) Global's most highly paid
executive officers other than the CEO who were serving as executive officers at
the end of the last completed fiscal year and whose total annual salary and
bonus exceeded $100,000, and (iii) one other employee for whom such information
would have been disclosed pursuant to the preceding clause, but for the fact
that such employee was not an executive officer at the end of the last completed
fiscal year (collectively, the "Named Executives").


                                       45
<PAGE>

<TABLE>
<CAPTION>
                                                                                           Long Term
                                                                                         Compensation
                                                           Annual Compensation          Sec. Underlying
                                                       ----------------------------       Stock Option
    Name And Principal Position            Year        Salary ($)         Bonus ($)        Awards (#)
    ---------------------------            ----        ---------          ---------    ----------------
<S>                                        <C>         <C>                <C>           <C>
Irwin L. Gross,                            1999              --               --                --
Chief Executive Officer                    1998              --               --                --
                                           1997              --               --                --

James W. Fox, President (1)                1999         104,718               --            70,000
                                           1998              --               --            30,000
                                           1997              --               --                --

Morris C. Aaron,                           1999         130,289               --            50,000
Chief Financial Officer (2)                1998          18,590               --                --
                                           1997              --               --                --

David Shevrin, Secretary (3)               1999          71,924               --            50,000
                                           1998           8,462               --                --
                                           1997              --               --                --

Frank Gomer, President,                    1999         101,042           43,797                --
Interactive Entertainment Division (4)     1998         153,686           54,445             7,667
                                           1997          90,658           20,000             9,000
</TABLE>
------------

(1) Mr. Fox started employment with Global on January 1, 1999.

(2) Mr. Aaron started employment with Global on September 25, 1998.

(3) Mr. Shevrin started employment with Global on September 15, 1998.

(4) Dr. Gomer started employment with Global on February 10, 1997. The
    amount for the annual bonus during the 1997 fiscal year represents a
    signing bonus.

     Option Grants In Fiscal Year

     The following table sets forth the stock option grants made during the
Transition Period to the Named Executives:

<TABLE>
<CAPTION>
                                 Number of         Percent of Total
                                Securities        Options Granted To
                            Underlying Options       Employees In        Exercise Price
       Name                     Granted (#)       Transition Period (1)    ($/Share)        Expiration Date
       ----                  ------------------   ---------------------  --------------     ---------------
<S>                          <C>                  <C>                    <C>                <C>
Irwin L. Gross                      --                    --                   --                --
James W. Fox (2)                  70,000                33.2%                 2.50            01/01/2009
Morris C. Aaron (3)               50,000                23.7%                 1.69            12/12/2008
David Shevrin (4)                 50,000                23.7%                 1.69            12/12/2008
Frank Gomer (5)                    4,500                 2.2%                 2.63            02/19/2008
</TABLE>

----------
(1)  Based on a total of 210,698 options granted to employees during the 1999
     fiscal year.

(2)  14,000 options are immediately exercisable, and 14,000 become exercisable
     on each of January 1, 2000, December 31, 2000, January 1, 2002 and December
     31, 2002.


                                       46

<PAGE>


(3)  10,000 options are immediately exercisable, and 10,000 become exercisable
     on each of December 12, 1999, 2000, 2001 and 2002.

(4)  16,667 options become exercisable on each of December 12, 1999, 2000 and
     2001.

(5)  Represents 2,000 and 2,500 options repriced from $21.94 and $13.50,
     respectively, on April 10, 1999.

     Option Exercises In Last Fiscal Year And Fiscal Year-End Values

     The following table sets forth the stock options exercises made during the
Transition Period by the Named Executives, as well as the value of their
unexercised stock options as of the end of the Transition Period:

<TABLE>
<CAPTION>

                                                           Number of Securities
                                                          Underlying Unexercised            Value of Unexercised
                        Shares                                 Options at                  In-The-Money Options at
                      Acquired on        Value               June 30, 1999                     June 30, 1999
  Name                Exercise (#)    Realized ($)     Exercisable/Unexercisable (1)      Exercisable/Unexercisable ($)
  ----                ------------    ------------     -----------------------------      -----------------------------
<S>                   <C>             <C>              <C>                                <C>
Irwin L. Gross            --             --                       --                                  --
James W. Fox              --             --                  14,000/86,000                       24,500/172,750
Morris C. Aaron           --             --                  10,000/40,000                       25,620/102,480
David Shevrin             --             --                    --/50,000                             --/128,100
Frank Gomer               --             --                  7,065/9,102                        11,481/18,541
</TABLE>

----------
(1)  Subject to reduction as described above under "Option Grants in Fiscal
     Year," all of these options had an exercise price less than the closing bid
     price per share of Global's Class A Common Stock on the Nasdaq National
     Market of $4.25 at June 30, 1999.


     Director Compensation

     Outside directors receive $1,000 for each meeting of the Board of
Directors, and $500 for each committee meeting, attended in person or by
telephone. In addition, all directors are reimbursed for expenses actually
incurred in connection with each meeting of the Board of Directors or any
Committee thereof attended. Each director has also received grants of options
under the Company's 1997 Stock Option Plan.

     Global's 1994 Stock Option Plan (the "1994 Plan") provides for the
automatic grant of non-qualified stock options to directors of Global who are
not employees or principal stockholders of the Company ("Eligible Directors") to
purchase shares of common stock ("Director Options"). On the date an Eligible
Director becomes a director of Global, he or she is granted Director Options to
purchase 10,000 shares of Global's Class A Common Stock (the "Initial Director
Options"). On the day immediately following the date of the annual meeting of
stockholders for Global for each fiscal year, each Eligible Director, other than
directors who received Initial Director Options since Global's prior annual
meeting, is granted Director Options to purchase 1,000 shares of Global's Class
A Common Stock (each an "Automatic Grant"), as long as such director is a member
of the Board of Directors on such day. The exercise price for each share subject
to a Director Option shall be equal to the fair market value of the Class A


                                       47

<PAGE>


Common Stock on the date of grant, except for directors who receive incentive
options and who own more than 10% of the voting power, in which case the
exercise price shall be not less than 110% of the fair market value on the date
of grant. Director Options are exercisable in four equal annual installments,
commencing one year from the date of grant. Director Options will expire the
earlier of 10 years after the date of grant or 90 days after the termination of
the director's service on the Board of Directors. The 1994 Plan and Global's
1997 Stock Option Plan (the "1997 Plan") also allow grants to directors in
addition to or in lieu of an Automatic Grant.

     During the Transition Period, Messrs. Gross, Fox, Porat, Condy and
Schachman each received an Automatic Grant. No Initial Director Options were
granted.

     Employment And Severance Agreements

     Dr. Frank Gomer serves as President and Chief Operating Officer of TNCi
pursuant to the terms of an employment agreement that terminates on June 10,
2001. Dr. Gomer receives a minimum annual base salary of $215,000. Beginning
June 11, 1999 and ending June 11, 2003, Dr. Gomer also receives 50,000 10-year
options under the Company's Stock Option Plan, which vest in increments of
10,000 options per year pursuant to the terms and conditions of the employment
agreement. The employment agreement also provides for a severance payment in the
event that the Company terminates Dr. Gomer other than for "cause" as defined in
the employment agreement. The severance payment would be equal to two times the
remaining balance of his base salary for the remainder of the then current term.
The employment agreement also provides a payment in the event the Company
terminates Dr. Gomer due to a termination of the Company's business as defined
in the employment agreement or upon termination without cause following a change
in control. In either such event, Dr. Gomer would receive an amount equal to two
times his remaining base salary for the then current term, but not less than his
annual base salary for one year. The employment agreement also provides that the
company may pay other incentive compensation as may be set by the Board of
Directors from time to time, and for such other fringe benefits as are paid to
other executive officers of the Company. Such fringe benefits take the form of
medical and dental coverage and an automobile allowance of $500 per month.

     Morris C. Aaron serves as Executive Vice President and Chief Financial
Officer of TNCi pursuant to the terms of an employment agreement that terminates
on June 10, 2001. Mr. Aaron receives a minimum annual base salary of $215,000.
Beginning June 11, 1999 and ending June 11, 2003, Mr. Aaron also receives 50,000
10-year options under the Company's Stock Option Plan, which vest in increments
of 10,000 options per year pursuant to the terms of the employment agreement.
The employment agreement provides for a severance payment in the event that the
Company terminates Mr. Aaron other than for "cause" as defined in the employment
agreement. The severance payment would be equal to two times the remaining
balance of his base salary for the remainder of the then current term. The
employment agreement also provides a payment in the event the Company terminates
Mr. Aaron due to a termination of the Company's business as defined in the
employment agreement. In the event of the termination of the Company's business,
Mr. Aaron would receive an amount equal to two times his remaining base salary
for the then current term, but not less than his annual base salary for one
year. The


                                       48

<PAGE>


employment agreement also provides that the company may pay other incentive
compensation as may be set by the Board of Directors from time to time, and for
such other fringe benefits as are paid to other executive officers of the
Company. Such fringe benefits take the form of medical and dental coverage and
an automobile allowance of $500 per month.

     James W. Fox serves as President and Chief Operating Officer pursuant to
the terms of an employment agreement that terminates on December 31, 2000. Mr.
Fox receives a minimum annual base salary of $225,000 and, subject to the
achievement of assigned goals, bonuses of not less than 20% of his annual
salary. Mr. Fox also received 70,000 10-year options under the Company's 1997
Stock Option Plan, which vest in increments of 14,000 options per year pursuant
to the terms of the employment agreement. The employment agreement provides for
a severance payment in the event that the Company terminates Mr. Fox other than
for "cause" as defined in the employment agreement. The severance payment would
be equal to two times the remaining balance of his base salary for the remainder
of the then current term. The employment agreement also provides a payment in
the event the Company terminates Mr. Fox due to a termination of the Company's
business as defined in the employment agreement. In the event of the termination
of the Company's business, Mr. Fox would receive an amount equal to two times
his remaining base salary for the then current term, but not less than his
annual base salary for one year. The employment agreement also provides that the
company may pay other incentive compensation as may be set by the Board of
Directors from time to time, and for such other fringe benefits as are paid to
other executive officers of the Company. Such fringe benefits take the form of
medical and dental coverage and an automobile allowance of $450 per month.

     Stock Option Repricings

     On February 10, 1998, Global's former Board of Directors adopted a plan to
reduce the exercise price on the stock options under the 1994 Plan and the 1997
Plan. The exercise price on one-half of each outstanding option was reduced to
$2.625 per share (the closing price for Global's stock on February 10, 1998) on
October 10, 1998, and on the other half of each outstanding option on April 10,
1999, provided the option holder was still employed by Global on such dates. The
plan amendment was approved by the Board of Directors to retain key employees,
retain appropriate levels of incentive and maintain competitive compensation
levels.

     As a result of this action, 4,000 options and 5,000 options held by Dr.
Gomer with exercise prices of $21.939 and $13.50, respectively, were repriced to
$2.625.

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth certain information as of October 15, 1999
regarding the ownership of Global's Class A Common Stock and Series A Preferred
Stock and of TNCi's common stock by (i) each person known by Global to own
beneficially more than five percent of any class of Global's voting securities,
(ii) each director of Global, (iii) each executive officer of Global and (iv)
all executive officers and directors of Global as a group.


                                       49

<PAGE>

<TABLE>
<CAPTION>

                                                                           Series A
                                               Class A                   Convertible                   TNCi
                                             Common Stock              Preferred Stock              Common Stock
                                      --------------------------     ---------------------     ----------------------
Name and Address of                   Number of       Percent of      Number      Percent       Number       Percent
Beneficial Owner (1)                   Shares         Class (2)      of Shares    of Class     of Shares     of Class
--------------------                  -----------     ----------     ---------    --------     ---------     --------
<S>                                   <C>                 <C>         <C>          <C>         <C>             <C>
Irwin L. Gross

Ocean Castle Partners, LLC            522,874 (3)         8.3%            --          --        66,667           1%

Charles T. Condy                       13,750 (4)           *             --          --            --          --

Stephen M. Schachman                   10,000 (5)           *             --          --            --          --

M. Moshe Porat                        652,610 (6)        10.7%            --          --            --          --

David N. Shevrin                       16,667 (7)           *             --          --            --          --

Morris C. Aaron                        24,100 (8)           *             --          --        10,000(13)      --

James W. Fox                           24,000 (9)           *             --          --            --          --

The Shaar Fund, Ltd.                   87,500 (10)        1.4%         3,000         100%           --          --

Ruki Renov                            431,014 (11)        7.0%            --          --            --          --

Esther Stahler                        381,781 (12)        6.2%            --          --

All executive officers and
  direcors of the Company
  as a group (7 persons)            1,264,001            19.6%            --          ---       76,667          1%
</TABLE>

-------------------
*    Less than 1%.

 (1) Unless otherwise noted, all persons named in the table have sole voting and
     investment power with respect to all shares beneficially owned by them.
     Except as otherwise indicated below, the address of each beneficial owner
     is c/o Global Technologies, Ltd., 1811 Chestnut Street, Philadelphia,
     Pennsylvania 19103.

 (2) Based on 6,114,217 shares of Class A Common Stock outstanding, except that
     shares underlying options and warrants to purchase Class A Common Stock
     exercisable within sixty (60) days are deemed to be outstanding for
     purposes of calculating the percentage owned by the holder(s) of such
     options and warrants.

 (3) Includes 99,542 shares owned by Ocean Castle Partners, LLC, an entity
     controlled by Mr. Gross, and 33,963 shares owned by trusts for the benefit
     of Mr. Gross' children as to which Mr. Gross disclaims beneficial
     ownership. Also includes 250,000 shares issuable to Mr. Gross upon exercise
     of options exercisable within 60 days.

 (4) Includes 10,000 shares issuable to Mr. Condy upon exercise of options
     exercisable within 60 days.

 (5) Represents 10,000 shares issuable to Mr. Schachman upon exercise of options
     exercisable within 60 days.

 (6) Includes 637,610 shares owned by third parties over which Mr. Porat retains
     voting power pursuant to certain proxy agreements, and 10,000 shares
     issuable to Mr. Porat upon exercise of options exercisable within 60 days.

 (7) Represents 16,667 shares issuable to Mr. Shevrin upon exercise of options
     exercisable within 60 days.

 (8) Includes 20,000 shares issuable to Mr. Aaron upon exercise of options
     exercisable within 60 days.

 (9) Represents 24,000 shares issuable to Mr. Fox upon exercise of options
     exercisable within 60 days.

(10) Represents 87,500 shares issuable to The Shaar Fund, Ltd. upon exercise of
     a Warrant exercisable within 60 days. The address of The Shaar Fund, Ltd.
     is c/o Shaar Fund Advisory Services, Ltd., 62 King George Road, Apartment
     4F, Jerusalem, Israel.

                                       50

<PAGE>


(11) According to Amendment No. 2 to Schedule 13G dated September 29, 1999 filed
     by Ruki Renov, Mrs. Renov's address is 172 Broadway, Lawrence, NY 11559.
     Mrs. Renov has sole voting power over 9,000 shares owned directly by her,
     and options to purchase 86,332 additional shares, which options are
     exercisable within 60 days. Mrs. Renov also has shared voting power over
     250,000 shares which are owned by an entity of which she is a director.
     Mrs. Renov may also be deemed to be the beneficial owner of 34,566 shares
     owned by a family limited partnership controlled by her, 42,783 shares
     owned jointly by Mrs. Renov and her spouse, and 9,333 shares owned by her
     spouse.

(12) According Amendment No. 1 to Schedule 13G dated September 29, 1999 filed by
     Esther Stahler, Mrs. Stahler's address is 10 Lakeside Drive, Lawrence, NY
     11559. Mrs. Stahler has sole voting power over 3,666 shares owned directly
     by her, and options to purchase 86,332 additional shares, which options are
     exercisable within 60 days. Mrs. Stahler also has shared voting power over
     250,000 shares which are owned by an entity of which she is a director, and
     may also be deemed to be the beneficial owner of 41,783 shares owned
     jointly by her and her spouse.

(13) Represents 10,000 shares issuable to Mr. Aaron upon exercise of options
     exercisable within 60 days.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

   CONSULTING ARRANGEMENTS

     Global's Chief Executive Officer is a principal of Ocean Castle Partners,
LLC which maintains administrative offices for Global's Chief Executive Officer,
Corporate Secretary and certain other employees. During the year ended October
31, 1998, Ocean Castle executed consulting agreements with two principal
stockholders of Global. The rights and obligations of Ocean Castle under the
agreements were assumed by TNCi in connection with the TNCi Transaction. The
consulting agreements require payments aggregating $1,000,000 to each of the
consultants through December 2003 in exchange for advisory services. Each of the
consultants also received stock options to purchase 33,333 shares of Global's
Class A Common Stock at an exercise price of $4.50. As of June 30, 1999, TNCi
determined that the consulting agreements had no future value due to TNCi's
shift away from in-flight entertainment into alternative markets such as leisure
cruise and passenger rail transport. Only limited services were provided in 1999
and no future services will by utilized. Accordingly, TNCi recorded a charge to
general and administrative expenses in the Transition Period of $1.6 million
representing the balance due under such contracts.

     The Company has entered into a consulting agreement with First Lawrence
Capital Corp. to perform various financial advisory services related to ongoing
business development and management. The former managing director of First
Lawrence was also a director of the Company. The Company retained, on a full
time basis as President and Chief Operating Officer, the services of the former
managing director of First Lawrence effective December 12, 1998. Accordingly,
the Company has entered into an employment contract with such individual. During
the year ended October 31, 1998, the Company paid $11,846 under the First
Lawrence consulting agreement. The Company executed a consulting agreement with
the Whitestone Group, LLC, a shareholder of First Lawrence. Pursuant to the
agreement, the Company paid $250,000 for consulting services received during
fiscal 1998.

     On September 15, 1998, Global entered into consulting agreements with
Messrs. Michail Itkis, Thomas M. Metzler and John W. Alderfer in connection with
Global's agreements with Swissair. In consideration for such services, Global
has paid Mr. Itkis $200,000 through September 15, 1999, Mr. Metzler $300,000
through June 15, 1999 and Mr. Alderfer $235,000 through March 15, 1999.


                                       51

<PAGE>


   FORTUNET LICENSE

     In October 1994, Global entered into an Intellectual Property License and
Support Services Agreement with FortuNet, Inc. ("FortuNet"), which was amended
and restated on November 7, 1996 (as amended, the "FortuNet License"). The
FortuNet License grants Global a worldwide, perpetual license to FortuNet's
current and future patents, copyrights, trade secrets and related know-how
covering a computerized system for use in all fields other than bingo halls.
Further, this license is exclusive to Global within the airline industry. As
consideration, Global must pay FortuNet an annual license fee of $100,000 in
monthly installments through November 2002. Global was previously also required
to compensate FortuNet for certain development, support and maintenance
services, but this obligation has been terminated. Further, the restated version
of the FortuNet License no longer prohibits Global from engaging in any gaming
activities outside of airplanes. In exchange for these amendments to the
FortuNet License and certain other modifications, on November 7, 1996, Global
issued to FortuNet a warrant to purchase 16,667 shares of Class A Common Stock
at a price of $29.25 per share, which was repriced on January 6, 1997 to $24.00
per share. Under the FortuNet License, an aggregate of $100,000 was paid to
FortuNet in fiscal 1998. Subsequent to June 30, 1999, the Company agreed to a
termination of this agreement and paid FortuNet $100,000 plus legal fees. During
the Transition Period ended June 30, 1999, the Company had revised its estimated
accrual to $200,000 which is included in accrued liabilities in the consolidated
balance sheet at June 30, 1999. Additionally, the Company repriced the exercise
price of the stock purchase warrants to $4.50 per share.

     Yuri Itkis, a former director of Global, is the President and sole
stockholder of FortuNet and Boris Itkis, a former director of Global and a son
of Yuri Itkis, is an employee of FortuNet. Michail Itkis, the former Chief
Executive Officer and a former director of Global, is also a son of Yuri Itkis
and was an employee of FortuNet until October 1994.

   STOCKHOLDERS' AGREEMENT

     In October 1994, Global entered into a stockholders' agreement with Yuri
Itkis, Michail Itkis, Boris Itkis, Steven M. Fieldman, Donald H. Goldman and
Lance Fieldman (the "Stockholders' Agreement"). In connection with the May 1996
and November 1996 resignations of Messrs. Goldman, Steven Fieldman and Lance
Fieldman, and in connection with the execution of the Strategic Alliance
Agreement with Hyatt, the parties to the Stockholders' Agreement entered into
agreements which terminated the Stockholders' Agreement as to Messrs. Goldman,
Steven Fieldman and Lance Fieldman, added Hyatt as a Stockholder under the
Stockholders' Agreement, and amended certain terms of the Stockholders'
Agreement. On November 10, 1997 with the termination of the Alliance Agreement
with Hyatt, the Stockholders' Agreement was amended again to terminate Hyatt's
rights.

     As amended, the Stockholders' Agreement provided that Michail Itkis and
Yuri Itkis shall each be entitled to designate one nominee to Global's Board of
Directors. No other parties had any continuing right under the Stockholders'
Agreement to nominate a director. Each stockholder who was a party to the
Stockholders' Agreement agreed to vote all the shares of Common Stock owned by
him for the election of the directors so nominated and not to take any action to
remove


                                       52

<PAGE>


any director so elected (except for the director(s) nominated by such
stockholder). The Stockholders' Agreement was terminated on September 15, 1998.

    PURCHASE OF SHARES

     Pursuant to the settlement of various lawsuits and other claims instituted
by Barrington Capital Group, L.P. ("Barrington") against Global, Ocean Castle
and others, Ocean Castle purchased from Barrington 99,542 shares of Class A
Common Stock of Global at $4.50 per share on October 21, 1998. Global
temporarily loaned the funds to Ocean Castle to effectuate such purchase and
Ocean Castle has subsequently repaid such loan.

    EMPLOYMENT MATTERS

     Global has employment agreements with certain of its executive officers and
has granted such officers options to purchase shares of Class A Common Stock.
See Item 10 -- "Executive Compensation -- Employment and Severance Agreements".

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

     The following Index to Exhibits lists the Exhibits filed as part of this
Annual Report on Form 10-KSB. Where so indicated, Exhibits which were previously
filed are incorporated by reference. Documents filed herewith are denoted with
an asterix (*).


                                       53

<PAGE>


Exhibit
Number                             Description
-------                            -----------

 2.1     Asset Purchase and Sale Agreement dated as of April 29, 1999 between
         the Registrant and TNCi. (8)

 2.2     First Amendment to Asset Purchase and Sale Agreement dated as of May
         14, 1999 between the Registrant and TNCi. (8)

 3.1     Certificate of Ownership and Merger. (1)

 3.2     Amended and Restated Certificate of Incorporation of the
         Registrant. (1)

 3.3     Certificate of Amendment of Amended and Restated Certificate of
         Incorporation of Registrant dated November 2, 1998. (9)

 3.4     Certificate of Designations, Preferences, and Rights of Series A
         Convertible Preferred Stock of the Registrant. (9)

 3.5     Certificate of Designations, Preferences, and Rights of Series B
         Convertible Preferred Stock of the Registrant. (9)

 3.6     By-laws of the Registrant. (1)

 4.1     Warrant Agreement, dated as of March 7, 1995 among the Registrant,
         D. H. Blair Investment Banking Corp. and American Stock Transfer &
         Trust Company. (1)

 4.2     Amendment to March 7, 1995 Warrant Agreement, among the Registrant,
         D. H. Blair Investment Banking Corp. and American Stock Transfer &
         Trust Company. (4)

 4.3     Warrant Agreement dated as of October 24, 1996 among the Registrant,
         D. H. Blair Investment Banking Corp. and American Stock Transfer &
         Trust Company. (4)

 4.4     Amendment to October 24, 1996 Warrant Agreement, among the Registrant,
         D. H. Blair Investment Banking Corp., and American Stock Transfer &
         Trust Company. (4)

 4.5     Form of Underwriter's Unit Purchase Option. (1)

 4.6     Stock Purchase Warrant dated as of November 7, 1996 issued to FortuNet,
         Inc. (4)

 4.7     Stock Purchase Warrant dated as of November 12, 1996 issued to Houlihan
         Lokey Howard & Zukin. (4)

 4.8*    Form of Warrant issued to The Shaar Fund Ltd. dated May 10, 1999

 4.9*    Registration Rights Agreement dated May 6, 1999 between the Registrant
         and The Shaar Fund Ltd.


                                       54

<PAGE>


Exhibit
Number                             Description
-------                            -----------

10.1     Amended and Restated 1994 Stock Option Plan. (3)

10.2     Employment Agreement between the Registrant and Michail Itkis dated as
         of October 31, 1994. (l)

10.3     Employment Agreement between the Registrant and John Alderfer dated as
         of October 2, 1996. (4)

10.4     Severance Agreement between the Registrant and Lance Fieldman dated as
         of November 4, 1996. (4)

10.5     Amended and Restated Shareholders' Agreement by dated as of October 6,
         1994 Yuri Itkis, Michail Itkis, Boris Itkis, Steven M. Fieldman, Donald
         H. Goldman, Lance Fieldman and Registrant [still applicable]. (l)

10.6     Amended and Restated Intellectual Property License and Support Services
         Agreement dated as of November 7, 1996 between FortuNet, Inc. and
         Registrant. (4)

10.7     Amended and Restated Escrow Agreement between the Registrant, American
         Stock Transfer & Trust Company, Yuri Itkis, Michail Itkis, Boris Itkis,
         Steven M. Fieldman, Donald H. Goldman and Lance Fieldman. (1)

10.8     Sublease and Consent dated July 16, 1996 between the Registrant and AGF
         4041 Limited Partnership. (4)

10.9     Office Lease dated July 15, 1996 between the Registrant and AGF 4041
         Limited Partnership. (4)

10.10    Standard Industrial/Commercial Single-Tenant Lease-Net, dated as of
         June 27, 1996, between the Registrant and 44th Street and Van Buren
         Limited Partnership. (4)

10.11    Form of Indemnification Agreement. (1)

10.12    Strategic Alliance Agreement dated as of November 12, 1996 between the
         Registrant and Hyatt Ventures, Inc. (4)

10.13    Registration Rights Agreement dated as of November 12, 1996 between the
         Registrant and Hyatt Ventures, Inc. (4)

10.14    Amendment No. 2 to Amended and Restated Shareholders' Agreement dated
         as of November 12, 1996. (4)

10.15    Employment Agreement between the Registrant and Thomas Metzler dated as
         of November 18, 1996. (5)

10.16    Termination Agreement dated November 10, 1997 between the Registrant
         and Hyatt Ventures, Inc.

10.17    Lease Surrender Agreement dated as of May 12, 1998. (6)


                                       55

<PAGE>


Exhibit
Number                             Description
-------                            -----------

10.18    Amendment to Severance Compensation Agreement dated as of August 28,
         1998 between the Registrant and Michail Itkis. (7)

10.19    Second Amendment to Employment Agreement dated as of August 28, 1998
         between the Registrant and John Alderfer. (7)

10.20    Second Amendment to Employment Agreement dated as of August 28, 1998
         Between the Registrant and Thomas Metzler. (7)

10.21*   Office Lease dated as of September 10, 1999 between the Registrant and
         135 East 57th Street LLC.

10.22    Securities Purchase Agreement dated as of May 10, 1999 between the
         Registrant and The Shaar Fund, Ltd. (9)

10.23*   Assignment dated May 10, 1999 of rights under the Securities Purchase
         Agreement and the Registration Rights Agreement, both dated October 23,
         1998 between TNCi and the Shaar Fund Ltd. to the Registrant.

10.24*   Amendment dated May 10, 1999 to Registration Rights Agreement dated
         October 23, 1998 between Registrant and TNCi.

10.25*   Securities Purchase Agreement dated as of May 10, 1999 between TNCi and
         the Registrant for TNCi Series C Convertible Preferred Stock.

10.26*   Form of Securities Purchase Agreement dated as of June 25, 1999.

10.27*   Registration Rights Agreement dated July 1999 respecting shares issued
         pursuant to the Securities Purchase Agreement dated as of June 25,
         1999, for the purchase of TNCi Series A and Series E Notes

10.28*   Form of Put/Call Agreement dated July 1999.

10.29*   Securities Purchase Agreement dated August 9, 1999 for the purchase of
         TNCi Series D Notes.

10.30*   Form of Warrant Purchase Agreement dated August 9, 1999 between
         Registrant and certain TNCi Warrant holders.

10.31*   Registration Rights Agreement dated August 12, 1999 among the
         Registrant, XCEL Capital, LLC and Elaine Martin.

10.32*   Registration Rights Agreement dated August 12, 1999 among the
         Registrant, Robert E. Benninger, Jr., Sara Anne Benninger, Will
         Brantley and Elaine Martin.

10.33*   Form of Put/Call Agreement dated August 12, 1999 respecting shares
         issued pursuant to the Warrant Purchase Agreement between the
         Registrant and certain TNCi Warrant holders.

10.34*   Employment Agreement between the Registrant and James W. Fox.


                                       56

<PAGE>


Exhibit
Number                             Description
-------                            -----------

23*      Consent of KPMG

27*      Financial Data Schedule

99.1     Certificate of Designations of Series B Convertible Preferred Stock of
         TNCi dated October 23, 1998. (8)

99.2     Amendment dated as of April 29, 1999 to Certificate of Designations of
         Series B Convertible Preferred Stock of TNCi. (8)

99.3     Certificate of Designations of Series C Convertible Preferred Stock of
         TNCi dated as of April 30, 1999. (8)

99.4     Certificate of Designations of Series D Convertible Preferred Stock of
         TNCi dated as of May 5, 1999. (8)

99.5*    Agreement for the Sale and Purchase of Shares in Inter Lotto (UK)
         Limited dated April 29, 1999 between Crown Leisure Sales Limited and
         IFT Holdings Limited.

99.6*    Shareholders Agreement dated April 29, 1999 by and between Norman
         Feinstein & Others and IFT Holdings Limited and Inter Lotto (UK)
         Limited.

99.7*    Operating Agreement dated April 29, 1999 between Inter Lotto (UK)
         Limited and IFT Management Limited.

99.8     Secured Promissory Note dated January 29, 1999 made by TNCi and payable
         to the order of the Company. (8)

99.9     Allonge to Secured Promissory Note dated January 29, 1999. (8)

99.10    Second Allonge to Secured Promissory Note dated March 19, 1999. (8)

99.11    Third Allonge to Secured Promissory Note dated March 24, 1999. (8)

99.12    Fourth Allonge to Secured Promissory Note dated May 10, 1999. (8)

99.13*   Fifth Allonge to Secured Promissory Note dated July 16, 1999.

99.14*   Sixth Allonge to Secured Promissory Note dated August 9, 1999.

99.15*   Seventh Allonge to Secured Promissory Note dated August 24, 1999.

99.15    Opinion of ValueMetrics, Inc. addressed to TNCi dated May 14, 1999. (8)

----------

 (1) Incorporated by reference from the Registrant's Registration Statement on
     Form SB-2, Registration No. 33-86928.

 (2) Incorporated by reference from the Registrant's Quarterly Report on Form
     10-QSB for the fiscal period ended July 31, 1996, filed with the Securities
     and Exchange commission on September 16, 1996, File No. 0-25668.

 (3) Incorporated by reference from the Registrant's Registration Statement on
     Form SB-2, Registration No. 333-02044.

 (4) Incorporated by reference from the Registrant's Registration Statement on
     Form S-3, Registration No. 333-14013.

 (5) Incorporated by reference from the Registrant's Quarterly Report on Form
     10-QSB for the fiscal quarter ended January 31, 1997, filed with the
     Securities and Exchange Commission on March 17, 1997, File No. 0-25668.


                                       57

<PAGE>


 (6) Incorporated by reference from the Registrant's Quarterly Report on Form
     10-QSB for the fiscal quarter ended April 30, 1998, filed with the
     Securities and Exchange Commission on June 5, 1998, File No. 0-25668.

 (7) Incorporated by reference from the Registrant's Quarterly Report on Form
     10-QSB for the fiscal quarter ended July 31, 1998, filed with the
     Securities and Exchange Commission on September 15, 1998, File No. 0-25668.

 (8) Incorporated by reference from the Registrant's Current Report on Form 8-K
     dated May 17, 1999, filed with the Securities and Exchange Commission on
     June 1, 1999, File No. 0-25668.

 (9) Incorporated by reference from the Registrant's Quarterly Report on Form
     10-QSB for the fiscal quarter ended April 30, 1999, filed with the
     Securities and Exchange Commission on June 14, 1999, File No. 0-25668.

(10) Incorporated by reference from the Registrant's Annual Report on Form 10-K
     for the fiscal year ended October 31, 1998, filed with the Securities and
     Exchange Commission on January 20, 1999, File No. 0-25668.

Reports on Form 8-K.

     On May 17, 1999 Global filed a report on Form 8-K regarding the sale of the
Interactive Entertainment Division to TNCi, the acquisition of the TNCi Series B
Preferred Stock from The Shaar Fund, Limited and the Fourth Allonge to the
Secured Promissory Note from TNCi. This filing was amended on August 2, 1999 to
provide certain pro forma financial information with respect to the transaction
with TNCi.


                                       58

<PAGE>

                                   SIGNATURES


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

                                                     GLOBAL TECHNOLOGIES, LTD.

Dated: October 26, 1999                     By: /s/ IRWIN L. GROSS
                                                -----------------------
                                                Irwin L. Gross,
                                                Chief Executive Officer

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

<TABLE>
<CAPTION>

         Signature                                   Title                                    Date
         ---------                                   -----                                    ----
<S>                                         <C>                                         <C>
/s/ Irwin L. Gross                          Chief Executive Officer                     October 26, 1999
------------------------------------        and Director
Irwin L. Gross

/s/ James W. Fox                            President and Director                      October 26, 1999
------------------------------------
James W. Fox

/s/ Morris C. Aaron                         Chief Financial Officer                     October 26, 1999
------------------------------------        (Principal Financial Officer)
Morris C. Aaron

/s/                                         Director                                    October __, 1999
------------------------------------
Charles T. Condy

/s/ Stephen Schachman                       Director                                    October 26, 1999
------------------------------------
Stephen Schachman

                                            Director                                    October __, 1999
------------------------------------
M. Moshe Porat

</TABLE>
<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

                                                                                                    Page
                                                                                                    ----
<S>                                                                                                <C>
Independent Auditors' Report........................................................................ F-2
Consolidated Balance Sheets as of June 30, 1999 and October 31, 1998................................ F-3
Consolidated Statements of Operations for the Transition Period Ended June 30, 1999
         and the Years Ended October 31, 1998 and 1997.............................................. F-4
Consolidated Statements of Stockholders' Equity and Comprehensive Income
         for the Transition Period Ended June 30, 1999 and the Years Ended
         October 31, 1998 and 1997.................................................................. F-5
Consolidated Statements of Cash Flows for the Transition Period Ended June 30, 1999
         and the Years Ended October 31, 1998 and 1997 ............................................. F-6
Notes to Consolidated Financial Statements ................................................. F-7 to F-35
</TABLE>


                                       F-1
<PAGE>


                          INDEPENDENT AUDITORS' REPORT



The Stockholders and Board of Directors
Global Technologies, Ltd. and subsidiaries:

We have audited the accompanying consolidated balance sheets of Global
Technologies, Ltd. and subsidiaries as of June 30, 1999 and October 31, 1998 and
the related consolidated statements of operations, changes in stockholders'
equity and comprehensive income and cash flows for the Transition Period ended
June 30, 1999 and each of the years in the two-year period ended October 31,
1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material respects, the financial position of Global Technologies,
Ltd. and subsidiaries as of June 30, 1999 and October 31, 1998 and the results
of their operations and their cash flows for the Transition Period ended June
30, 1999 and each of the years in the two-year period ended October 31, 1998, in
conformity with generally accepted accounting principles.

/s/ KPMG LLP

Phoenix, Arizona
October 22, 1999



                                       F-2
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                    JUNE 30,          OCTOBER 31,
                                     ASSETS                                           1999               1998
                                                                                 -------------       -------------
<S>                                                                              <C>                 <C>
Current assets:
     Cash and cash equivalents                                                   $  15,521,275       $  27,914,551
     Restricted cash                                                                 1,412,736           1,039,311
     Investments                                                                     4,594,751           3,690,604
     Accounts receivable, net                                                          128,489           1,135,342
     Notes receivable from related parties                                              98,932             447,939
     Inventories, net                                                                1,400,000           1,005,427
     Prepaid expenses                                                                  607,900             567,601
     Assets held for use                                                                  --               699,196
     Assets held for sale                                                              800,000                --
     Other current assets                                                              470,273             379,046
                                                                                 -------------       -------------
                    Total current assets                                            25,034,356          36,879,017
Investments                                                                          5,752,599                --
Note receivable from related party                                                      75,000                --
Property and equipment, net                                                          1,369,392             780,035
Intangibles, net                                                                     7,119,806                --
Other assets                                                                            61,468             605,150
                                                                                 -------------       -------------

                    Total assets                                                 $  39,412,621       $  38,264,202
                                                                                 =============       =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                            $   2,530,675       $   1,447,815
     Accrued liabilities                                                             2,292,609           3,939,633
     Deferred revenue                                                                  365,851             453,022
     Accrued product warranties                                                           --             5,369,008
     Current maturities of notes payable                                                24,391              76,840
     Notes payable to related parties                                                   68,836             125,000
                                                                                 -------------       -------------
                    Total current liabilities                                        5,282,362          11,411,318
Notes payable                                                                        3,467,045                --
Accrued litigation settlement                                                        1,843,750                --
                                                                                 -------------       -------------
                    Total liabilities                                               10,593,157          11,411,318
                                                                                 -------------       -------------

Minority interest                                                                    1,165,098                --

Commitments and contingencies

Stockholders' equity:
     Preferred stock, par value $0.01 per share, 5,000,000 shares authorized
        Series A 8% Convertible preferred stock, 3,000 shares
        designated, issued and outstanding (liquidation preference
        of $1,200 per share)                                                                30                --
     Series B 8% Convertible preferred stock, 3,000 shares designated,
        zero shares issued and outstanding                                                 --                --
     Class A common stock, one vote per share, par value $0.01 per share,
        40,000,000 shares authorized;5,460,636 and
        6,125,908 shares issued and outstanding, respectively                           54,606              61,259
     Class B common stock, six votes per share, par value $0.01 per
        share, 4,000,000 shares authorized; 0 and 1,225,445 shares
        issued and outstanding, respectively. The latter including 1,066,667
        shares placed in escrow                                                           --                12,445
     Additional paid-in capital                                                    113,462,394         112,371,141
     Accumulated other comprehensive income:
        Net unrealized gain (loss) on investment securities                            (10,107)              6,754
     Accumulated deficit                                                           (85,658,567)        (83,282,732)
     Treasury stock, at cost; 78,600 and 844,667 shares respectively                  (193,990)         (2,315,983)
                                                                                 -------------       -------------
                    Total stockholders' equity                                      27,654,366          26,852,884
                                                                                 -------------       -------------

                    Total liabilities and stockholders' equity                   $  39,412,621       $  38,264,202
                                                                                 =============       =============
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-3
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                        TRANSITION
                                                                       PERIOD ENDED
                                                                          JUNE 30,            YEAR ENDED OCTOBER 31,
                                                                           1999              1998                1997
                                                                       ------------       ------------       ------------
<S>                                                                    <C>                <C>                <C>
Revenue:
     Equipment sales                                                   $    875,957       $ 18,038,619       $ 10,524,828
     Service income                                                         706,504          1,104,342            575,881
                                                                       ------------       ------------       ------------
                                                                          1,582,461         19,142,961         11,100,709
                                                                       ------------       ------------       ------------
Costs and expenses:
     Cost of equipment sales                                              1,517,323         15,523,282         24,646,334
     Cost of service income                                                 445,585            238,837            232,126
     Provision for doubtful accounts                                         30,092              9,869            216,820
     Research and development expenses                                         --            1,092,316          7,821,640
     General and administrative expenses                                  6,688,813         11,387,872         12,574,223
     Special charges                                                      2,485,660            400,024         19,649,765
     Expenses associated with investments                                   550,000               --                 --
     Reversal of warranty, maintenance and commission accruals           (7,151,393)              --                 --
     Bad debt recoveries                                                       --                 --           (1,064,284)
                                                                       ------------       ------------       ------------
                                                                          4,566,080         28,652,200         64,076,624
                                                                       ------------       ------------       ------------

        Operating loss                                                   (2,983,619)        (9,509,239)       (52,975,915)

Other:
     Interest expense                                                       (74,684)           (11,954)           (13,423)
     Interest income                                                      1,060,229          2,251,055          2,170,675
     Equity in loss of nonconsolidated affiliates                          (195,704)              --                 --
     Gain on sale of assets                                                 133,396               --                 --
     Other income (expense)                                                  61,252             10,179           (203,649)
                                                                       ------------       ------------       ------------
        Net loss before minority interest and preferred dividends        (1,999,130)        (7,259,959)       (51,022,312)
                                                                       ------------       ------------       ------------
     Minority interest                                                     (376,705)              --                 --

        Net loss before preferred dividends                            $ (2,375,835)      $ (7,259,959)      $(51,022,312)

Cumulative dividend on preferred stock                                      (33,333)              --                 --
                                                                       ------------       ------------       ------------

Net loss attributable to common stockholders                           $ (2,409,168)      $ (7,259,959)      $(51,022,312)
                                                                       ============       ============       ============

Basic and diluted net loss per share of common stock                   $      (0.44)      $      (1.22)      $      (8.89)
                                                                       ============       ============       ============

Weighted average shares outstanding: basic and diluted                    5,416,124          5,933,004          5,738,987
                                                                       ============       ============       ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                                           CLASS A                          CLASS B
                                                                          COMMON STOCK                    COMMON STOCK
                                                                ------------------------------    ---------------------------
                                                                   SHARES           AMOUNT           SHARES        AMOUNT
                                                                -------------    -------------    -------------  ------------
<S>                                                             <C>             <C>                <C>          <C>
Balance as of October 31, 1996                                     2,700,683       $  27,007        1,320,000    $  13,200
  Class A common stock issued for services received
     (20,000 shares)                                                  20,000             200             --           --
  Class A common stock issued pursuant to Class B
     warrant exercise offer                                        3,266,587          32,666             --           --
  Registration costs                                                    --              --               --           --
  Redemption of Class B warrants                                        --              --               --           --
  Class A common stock issued under stock option
     plan pursuant to cashless exercise option                           507               5             --           --
  Automatic conversion of Class B shares to
     Class A shares upon sale to non-holder of
     Class B shares                                                   75,555             755          (75,555)        (755)
  Net loss                                                              --              --               --           --
                                                                   ---------       ---------       ----------    ---------

Balance as of October 31, 1997                                     6,063,332       $  60,633        1,244,445    $  12,445
  Issuance of common stock pursuant to bonus plan                     62,576             626             --           --
  Treasury stock purchases (844,667 shares)                             --              --               --           --
  Comprehensive income (loss):
     Unrealized gains on available for sale securities                  --              --               --           --
     Net loss                                                           --              --               --           --
  Total comprehensive loss                                              --              --               --           --
                                                                   ---------       ---------       ----------    ---------

Balance as of October 31, 1998                                     6,125,908       $  61,259        1,244,445    $  12,445
  Contribute to capital Class B shares held in escrow                   --              --         (1,066,667)     (10,667)
  Voluntary conversion of Class B shares to Class A shares           177,778           1,778         (177,778)      (1,778)
  Exercise of stock options                                            1,617              16             --           --
  Treasury stock purchases (78,600 shares)                              --              --               --           --
  Issuance of Series A preferred stock                                  --              --               --           --
  Issuance of Class A warrants                                          --              --               --           --
  Compensation expense                                                  --              --               --           --
  Unearned compensation, net                                            --              --               --           --
  Equity attributable to minority interest                              --              --               --           --
  Retirement of Treasury Stock                                      (844,667)         (8,447)            --           --
  Comprehensive income (loss):
     Unrealized loss on available for sale securities                   --              --               --           --
     Net loss                                                           --              --               --           --
  Total comprehensive loss                                              --              --               --           --
                                                                   ---------       ---------       ----------    ---------

  Balance as of June 30, 1999                                      5,460,636       $  54,606             --      $    --
                                                                   =========       =========       ==========    =========


<CAPTION>
                                                                     SERIES A                               NET UNREALIZED
                                                                   PREFERRED STOCK          ADDITIONAL      GAINS (LOSSES)
                                                              -------------------------      PAID-IN         ON INVESTMENT
                                                                 SHARES       AMOUNT         CAPITAL          SECURITIES
                                                              -----------   -----------   -------------     -------------
<S>                                                            <C>           <C>           <C>               <C>
Balance as of October 31, 1996                                     --        $   --        $  42,668,125       $    --
  Class A common stock issued for services received
     (20,000 shares)                                               --            --              466,675            --
  Class A common stock issued pursuant to Class B
     warrant exercise offer                                        --            --           73,557,109            --
  Registration costs                                               --            --           (4,481,164)           --
  Redemption of Class B warrants                                   --            --              (40,576)           --
  Class A common stock issued under stock option
     plan pursuant to cashless exercise option                     --            --               13,869            --
  Automatic conversion of Class B shares to
     Class A shares upon sale to non-holder of
     Class B shares                                                --            --                 --              --
  Net loss                                                         --            --                 --              --
                                                                -------      --------      -------------       ---------

Balance as of October 31, 1997                                     --        $   --        $ 112,184,038       $    --
  Issuance of common stock pursuant to bonus plan                  --            --              187,103            --
  Treasury stock purchases (844,667 shares)                        --            --                 --              --
  Comprehensive income (loss):
     Unrealized gains on available for sale securities             --            --                 --             6,754
     Net loss                                                      --            --                 --              --
  Total comprehensive loss                                         --            --                 --              --
                                                                -------      --------      -------------       ---------

Balance as of October 31, 1998                                     --        $   --        $ 112,371,141       $   6,754
  Contribute to capital Class B shares held in escrow              --            --               10,667            --
  Voluntary conversion of Class B shares to Class A shares         --            --                 --              --
  Exercise of stock options                                        --            --                4,228            --
  Treasury stock purchases (78,600 shares)                         --            --                 --              --
  Issuance of Series A preferred stock                            3,000          30            4,079,970            --
  Issuance of Class A warrants                                     --            --              391,802            --
  Compensation expense                                             --            --              120,320            --
  Unearned compensation, net                                       --            --              (73,449)           --
  Equity attributable to minority interest                         --            --           (1,134,749)           --
  Retirement of Treasury Stock                                     --            --           (2,307,536)           --
  Comprehensive income (loss):
     Unrealized loss on available for sale securities              --            --                 --           (16,861)
     Net loss                                                      --            --                 --              --
  Total comprehensive loss                                         --            --                 --              --
                                                                -------      --------      -------------       ---------

  Balance as of June 30, 1999                                     3,000      $   30        $ 113,462,394       $ (10,107)
                                                                =======      ========      =============       =========


<CAPTION>

                                                                                                   TOTAL
                                                                 ACCUMULATED       TREASURY      STOCKHOLDERS'
                                                                   DEFICIT          STOCK          EQUITY
                                                                -------------    -------------  -------------
<S>                                                              <C>              <C>             <C>
Balance as of October 31, 1996                                   $ (25,000,461)   $      --       $ 17,707,871
  Class A common stock issued for services received
     (20,000 shares)                                                      --             --            466,875
  Class A common stock issued pursuant to Class B
     warrant exercise offer                                               --             --         73,589,775
  Registration costs                                                      --             --         (4,481,164)
  Redemption of Class B warrants                                          --             --            (40,576)
  Class A common stock issued under stock option
     plan pursuant to cashless exercise option                            --             --             13,874
  Automatic conversion of Class B shares to
     Class A shares upon sale to non-holder of
     Class B shares                                                       --             --               --
  Net loss                                                         (51,022,312)          --        (51,022,312)
                                                                 -------------    -----------     ------------

Balance as of October 31, 1997                                   $ (76,022,773)   $      --       $ 36,234,343
  Issuance of common stock pursuant to bonus plan                         --             --            187,729
  Treasury stock purchases (844,667 shares)                               --       (2,315,983)      (2,315,983)
  Comprehensive income (loss):
     Unrealized gains on available for sale securities                    --             --               --
     Net loss                                                       (7,259,959)          --               --
  Total comprehensive loss                                                --             --         (7,253,205)
                                                                 -------------    -----------     ------------

Balance as of October 31, 1998                                   $ (83,282,732)   $(2,315,983)    $ 26,852,884
  Contribute to capital Class B shares held in escrow                     --             --               --
  Voluntary conversion of Class B shares to Class A shares                --             --               --
  Exercise of stock options                                               --             --              4,244
  Treasury stock purchases (78,600 shares)                                --         (193,990)        (193,990)
  Issuance of Series A preferred stock                                    --             --          4,080,000
  Issuance of Class A warrants                                            --             --            391,802
  Compensation expense                                                    --             --            120,320
  Unearned compensation, net                                              --             --            (73,449)
  Equity attributable to minority interest                                --             --         (1,134,749)
  Retirement of Treasury Stock                                            --        2,315,983             --
  Comprehensive income (loss):
     Unrealized loss on available for sale securities                     --             --               --
     Net loss                                                       (2,375,835)          --               --
  Total comprehensive loss                                                --             --         (2,392,696)
                                                                 -------------    -----------     ------------

  Balance as of June 30, 1999                                    $ (85,658,567    $  (193,990)    $ 27,654,366
                                                                 =============    ===========     ============

</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                 TRANSITION
                                                                                PERIOD ENDED
                                                                                   JUNE 30,           YEAR ENDED OCTOBER 31,
                                                                                     1999             1998             1997
                                                                                 ------------     ------------     ------------
<S>                                                                              <C>              <C>              <C>
Cash flows from operating activities:
  Net loss                                                                       $ (2,375,835)    $ (7,259,959)    $(51,022,312)
  Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                    394,317        1,338,017        1,815,779
     Expense recognized upon issuance of stock options, warrants
        and shares of Class A common stock                                               --               --            480,749
     Provision for doubtful accounts                                                   30,092            9,869          216,820
     Change in inventory valuation allowance                                         (892,010)            --          8,297,933
     Equity in loss of nonconsolidated affiliates                                     195,704             --               --
     Loss applicable to minority interest                                             376,705             --               --
     Special charges                                                                2,365,340         (606,507)      19,649,765
     Gain on sale of Johnny Valet, Inc.                                              (133,396)            --               --
     Non cash compensation expense                                                    139,649             --               --
     Non cash expenses associated with investments                                    550,000             --               --
     Reversal of warranty, maintenance and commission accruals                     (7,151,393)            --               --
     Loss on disposals of property and equipment                                         --          1,006,531          203,649
     Changes in assets and liabilities, net of acquisition:
       Decrease (increase) in accounts receivable                                    (560,439)       4,505,074       (3,815,139)
       Decrease in provision for doubtful accounts                                       --               --         (1,949,197)
       Decrease (increase) in inventories                                           1,897,437        5,105,334      (12,563,721)
       Increase in note receivable                                                       --           (447,939)            --
       (Increase) decrease in prepaid expenses, other current assets
          and other assets                                                           (152,919)        (532,338)         183,394
       (Decrease) increase in accounts payable                                     (1,218,791)      (4,284,167)       1,673,893
       (Decrease) increase in accrued liabilities                                     153,682         (892,345)        (584,655)
       (Decrease) increase in deferred revenue                                      1,138,048       (1,930,882)       2,383,904
       Increase in accrued product warranties                                            --            758,321          836,667
                                                                                 ------------     ------------     ------------
                Net cash used in operating activities                            $ (5,243,809)    $ (3,230,991)    $(34,192,471)
                                                                                 ------------     ------------     ------------

Cash flows from investing activities:
  Maturities of investment securities                                               1,049,995        2,468,880        6,810,275
  Purchases of investment securities                                               (3,891,176)      (4,015,616)      (2,137,084)
  Sales of investment securities                                                    1,913,768             --               --
  Investments in affiliates                                                        (7,572,409)            --               --
  Payments received on related party note receivable                                  509,391             --               --
  Issuance of related party note receivable                                           (75,000)
  Purchases of property and equipment                                                 (56,255)         (77,013)     (10,341,561)
  Proceeds from sale of equipment                                                       7,200            3,620             --
  Increase in restricted cash                                                        (373,425)      (1,039,311)            --
  Purchase of Johnny Valet, Inc.                                                         --           (688,736)            --
  Proceeds from sale of Johnny Valet, Inc.                                            750,000             --               --
                                                                                 ------------     ------------     ------------
                 Net cash used in investing activities                           $ (7,737,911)    $ (3,348,176)    $ (5,668,370)
                                                                                 ------------     ------------     ------------

Cash flows from financing activities:
  Payments on capital lease obligations                                                  --            (80,753)         (53,085)
  Payments on notes payable                                                          (201,840)            --               --
  Purchase of treasury stock                                                         (193,990)      (2,315,983)            --
  Proceeds from issuance of common stock                                                4,244             --         73,589,775
  Proceeds from sale of Series A 8% Convertible Preferred Stock                       980,030             --               --
  Registration costs                                                                     --               --         (4,481,164)
  Redemption of Class A and Class B warrants                                             --               --            (40,576)
                                                                                 ------------     ------------     ------------
                 Net cash provided by (used in) financing activities             $    588,444     $ (2,396,736)    $ 69,014,950
                                                                                 ------------     ------------     ------------

                 Net increase (decrease) in cash and cash equivalents             (12,393,276)      (8,975,903)      29,154,109

Cash and cash equivalents at beginning of year                                     27,914,551       36,890,454        7,736,345
                                                                                 ------------     ------------     ------------

Cash and cash equivalents at end of year                                         $ 15,521,275     $ 27,914,551     $ 36,890,454
                                                                                 ============     ============     ============
</TABLE>


See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

       (A)    DESCRIPTION OF BUSINESS

              Global Technologies, Ltd. (formerly known as Interactive Flight
       Technologies, Inc.), and subsidiaries (the "Company" or "GTL") is a
       diversified technology-oriented operating company that develops and
       operates investments in the areas of e-commerce, interactive
       entertainment, networking solutions, telecommunications and gaming. The
       most significant of the Company's subsidiaries is The Network Connection,
       Inc. ("TNCi"). TNCi is engaged in the development, manufacturing and
       marketing of computer-based entertainment and data networks, which
       provides users access to information, entertainment and a wide array of
       service options, such as movies, shopping for goods and services,
       computer games, access to the World Wide Web and gambling, where
       permitted by applicable law. The Company's primary markets for its
       products are cruise ships, passenger trains, schools and corporate
       training. Secondary markets include business jets and hotel operators,
       among others. TNCi was acquired by the Company effective May 18, 1999
       (May 1, 1999 for accounting purposes). Prior to the Transaction with
       TNCi, the consolidated financial statements for all periods presented
       included the results of operations of the Company's Interactive
       Entertainment Division ("IED") which was the primary business of the
       Company.

       (B)    PRINCIPLES OF CONSOLIDATION

              The consolidated financial statements include the accounts of
       Global Technologies, Ltd. and its wholly-owned subsidiaries: IFT Holdings
       UK, Ltd., IFT Management, Ltd., Interactive Flight Technologies
       Gibralter, Ltd., and MTJ Corp; and the majority-owned and controlled
       subsidiary TNCi. The ownership interest of minority shareholders in
       TNCi are recorded as "minority interest" on the accompanying consolidated
       financial statements. All significant intercompany accounts and
       transactions have been eliminated.

              The equity method of accounting is used for the Company's 50% or
       less owned affiliates over which the Company has the ability to exercise
       significant influence. The amount by which the Company's carrying value
       exceeds its share of the underlying net assets of equity affiliates
       ("Equity Goodwill") is amortized over five years on a straight-line basis
       which adjusts the Company's share of the affiliates earnings or losses.
       The Company has an investment that is accounted for at cost.

              The Company continually evaluates investments for indications of
       impairment based on the market value of each investment relative to cost,
       financial condition, near-term prospects of the investment, and other
       relative factors. If impairment is determined the carrying value is
       adjusted to fair value.

       (C)    USE OF ESTIMATES

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

                                      F-7

<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       (D)    CHANGE IN FISCAL YEAR END

              The Company has changed its fiscal year end from October 31 to
       June 30. Accordingly, the eight-month period resulting from this change,
       November 1, 1998 through June 30, 1999, is referred to as the "Transition
       Period".

       (E)    REVERSE STOCK SPLIT

              On October 30, 1998, the stockholders of the Company approved a
       one-for-three reverse stock split on the Company's Class A common stock
       and Class B common stock. One share was issued for three shares of Common
       Stock held by stockholders of record as of the close of business on
       November 2, 1998.

              All references to the number of common shares, per share amounts
       and stock option data elsewhere in the consolidated financial statements
       and related footnotes have been restated as appropriate to reflect the
       effect of the reverse split for all periods presented prior to the
       reverse split.

       (F)    CASH AND CASH EQUIVALENTS

              The Company considers all highly liquid investments with original
       maturities at the date of purchase of three months or less to be cash and
       cash equivalents.

       (G)    RESTRICTED CASH

              At June 30, 1999 and October 31, 1998, the Company held restricted
       cash of $1,412,736 and $1,039,311, respectively. At June 30, 1999 and
       October 31, 1998, included in restricted cash was $52,612 and $601,809,
       respectively, held in a trust fund for payments required under consulting
       and severance agreements with three former executives of the Company, and
       $446,679 and $437,502 as of June 30, 1999 and October 31, 1998,
       respectively, for payments which may be required for one of the three
       former executives. See Note 17. At June 30, 1999, restricted cash also
       included $913,445 held in a certificate of deposit with a commercial bank
       as collateral for a letter of credit issued to secure repayment of
       equipment purchases for the Mexican Gaming project.

       (H)    INVESTMENT SECURITIES

              Investment securities consist of debt securities with a maturity
       greater than three months at the time of purchase. In accordance with
       Statement of Financial Accounting Standards No. 115, "Accounting for
       Certain Investments in Debt and Equity Securities" ("SFAS No. 115") the
       debt securities are classified as available-for-sale and carried at fair
       value, based on quoted market prices. The net unrealized gains or losses
       on these investments are reported in stockholders' equity. The specific
       identification method is used to compute the realized gains and losses
       on the debt securities.

       (I)    INVENTORIES

              Inventories consisting principally of entertainment network
       components are stated at the lower of cost (first-in, first-out method)
       or market.

       (J)    INTANGIBLES

              Intangibles consist of goodwill and trademarks. Goodwill
       represents the excess of the purchase price over the fair value of the
       net assets acquired and is amortized over ten years using the
       straight-line method.

                                      F-8

<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       Trademarks are stated at fair market value at the date of acquisition
       and are amortized over ten years using the straight-line method.


              The Company continually evaluates whether events and circumstances
       have occurred that indicate the remaining estimated useful lives of
       intangibles may warrant revision or that the remaining balances may not
       be recoverable. When factors indicate that the assets should be evaluated
       for possible impairment, the Company uses an estimate of the undiscounted
       net cash flows over the remaining life of the assets in measuring whether
       the asset is recoverable.

        (K)   PROPERTY AND EQUIPMENT

              Property and equipment are stated at the lower of cost or net
       realizable value. Depreciation and amortization are provided using the
       straight-line method over the estimated useful lives of the assets
       ranging from three to seven years. Leasehold improvements are depreciated
       using the straight-line method over the shorter of the underlying lease
       term or asset life.

              Assets acquired under capital lease arrangements have been
       recorded at the present value of the future minimum lease payments and
       are being amortized on a straight line basis over the estimated useful
       life of the asset or lease term, whichever is shorter. Amortization of
       this equipment is included in depreciation and amortization expense.

       (L)    REVENUE RECOGNITION

              The Company's revenue derived from sales and installation of
       equipment is recognized upon installation and acceptance by the customer.
       Fees derived from servicing installed systems is recognized when earned,
       according to the terms of the service contract. Revenue pursuant to
       contracts that provide for revenue sharing with the customer and/or
       others is recognized as cash is received in the amount of the Company's
       retained portion of the cash pursuant to the revenue sharing agreement.
       Revenue earned pursuant to extended warranty agreements is recognized
       ratably over the warranty period.

       (M)    DEFERRED REVENUE

              Deferred revenue at June 30, 1999 represents cash received on
       advance billings of equipment sales as allowed under installation
       contracts. At October 31, 1998, deferred revenue represents the gross
       profit on advance billings of equipment sales as allowed under
       installation and extended warranty contracts.

       (N)    RESEARCH AND DEVELOPMENT

              Research and development costs are expensed as incurred except for
       development costs required by a customer contract. Development costs
       incurred pursuant to contractual obligations are allocated to deliverable
       units. These development costs are expensed as cost of equipment sales
       upon installation of the complete product and acceptance by the customer.

       (O)    WARRANTY COSTS

              The Company provides, by a current charge to income, an amount it
       estimates will be needed to cover future warranty obligations for
       products sold with an initial warranty period. Revenue and expenses under
       extended warranty agreements are recognized ratably over the term of the
       extended warranty.



                                      F-9
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       (P)    IMPAIRMENT OF LONG-LIVED ASSETS

              The Company records impairment losses on long-lived assets used in
       operations when indicators of impairment are present and the undiscounted
       cash flows estimated to be generated by those assets are less than the
       assets' carrying amount. If impairment is determined the carrying value
       is adjusted to fair value.

       (Q)    INCOME TAXES

              Income taxes are accounted for under the asset and liability
       method. Deferred tax assets and liabilities are recognized for the future
       tax consequences attributable to differences between the financial
       statement carrying amounts of existing assets and liabilities and their
       respective tax bases and operating loss and tax credit carryforwards.
       Deferred tax assets and liabilities are measured using enacted tax rates
       expected to apply to taxable income in the years in which those temporary
       differences are expected to be recovered or settled. The effect on
       deferred tax assets and liabilities of a change in tax rates is
       recognized in income in the period that includes the enactment date.

       (R)    LOSS PER SHARE

              During fiscal 1998, the Company adopted Financial Accounting
       Standards Board (FASB) SFAS No. 128, "Earnings per Share" (SFAS No. 128).
       Loss per share for all prior periods have been restated to conform to the
       provisions of SFAS 128. Basic loss per share is computed by dividing loss
       attributable to common stockholders, by the weighted average number of
       common shares outstanding for the period. Diluted loss per share reflects
       the potential dilution that could occur if securities or other contracts
       to issue common stock were exercised or converted into common stock or
       resulted in the issuance of common stock that then shared in the loss of
       the Company. Weighted shares for purposes of the loss per share
       calculation do not include one million shares of common stock issuable
       upon the conversion of Series A 8% Convertible Preferred Stock at June
       30, 1999, 1,066,667 shares placed in escrow at October 31, 1998 and 1997
       due to the fact that they are contingently issuable and 749,146, 685,610
       and 710,717 stock options outstanding at June 30, 1999, October 31, 1998
       and 1997, respectively, because their inclusion would have been
       anti-dilutive.

       (S)    STOCK-BASED COMPENSATION

              In accordance with the provisions of Accounting Principals Board
       Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"),
       the Company measures stock-based compensation expense as the excess of
       the market price at the grant date over the amount the employee must pay
       for the stock. The Company's policy is to generally grant stock options
       at fair market value at the date of grant; accordingly, no compensation
       expense is recognized. As permitted, the Company has elected to adopt the
       pro forma disclosure provisions only of SFAS No. 123, "Accounting for
       Stock-Based Compensation". See Note 13.

       (T)    RECLASSIFICATIONS

              Certain  reclassifications  have been made to the 1998 and 1997
       consolidated  financial statements to conform to the 1999 presentation.

       (U)    RECENT ACCOUNTING PRONOUNCEMENTS

              In June 1998, the Financial Accounting Standards Board ("FASB")
       issued Statement of Financial Accounting Standards ("SFAS") No. 133,
       "Accounting for Derivative Instruments and Hedging Activities", which
       establishes standards for the accounting and reporting for derivative
       instruments, including certain



                                      F-10
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       derivative instruments embedded in other contracts, and hedging
       activities. This statement generally requires recognition of gains and
       losses on hedging instruments, based on changes in fair value or the
       earnings effect of forecasted transactions. As issued, SFAS No. 133 is
       effective for all fiscal quarters of all fiscal years beginning after
       June 15, 1999. In June 1999, the FASB issued SFAS No. 137, "Accounting
       for Derivative Instruments and Hedging Activities -- Deferral of the
       Effective Date of FASB Statement No. 133 -- An Amendment of FASB
       Statements No. 133", which deferred the effective date of SFAS No. 133
       until June 15, 2000. The Company is currently evaluating the impact of
       SFAS No. 133.

              On November 1, 1998, the Company adopted SFAS No. 130, "Reporting
       Comprehensive Income". SFAS No. 130 establishes standards for reporting
       and presentation of comprehensive income and its components in a full set
       of financial statements. Comprehensive income consists of net income and
       unrealized gains and losses on investment securities net of taxes and is
       presented in the consolidated statements of stockholders' equity and
       comprehensive income; it does not affect the Company's financial position
       or results of operations.

              On November 1, 1998, the Company adopted SFAS No. 131,
       "Disclosures about Segments of an Enterprise and Related Information".
       SFAS No. 131 supersedes SFAS No. 14, "Financial Reporting for Segments of
       a Business Enterprise" replacing the "industry segment" approach with the
       "management" approach. The management approach designates the internal
       organization that is used by management for making operating decisions
       and assessing performance as the source of the Company's reportable
       segments. SFAS No. 131 also requires disclosure about products and
       services, geographical areas, and major customers. The adoption of SFAS
       No. 131 does not affect results of operations or financial position but
       does affect the disclosure of segment information.

              On November 1, 1998, the Company adopted Statement of Position
       (SOP) 98-5 "Reporting on the Costs of Start-Up Activities" issued by the
       Accounting Standards Executive Committee of the American Institute of
       Certified Public Accountants. SOP 98-5 provides guidance on the financial
       reporting of start-up costs and organization costs. The SOP requires
       start-up activities and organization costs to be expensed as incurred.
       The adoption of SOP 98-5 did not have a material impact on the Company's
       results of operations.

(2)    ACQUISITION

       On May 11, 1999, the Company acquired from The Shaar Fund, Ltd. ("Shaar")
1,500 shares of Series B 8% Convertible Preferred Stock of TNCi, par value $.01
per share, stated value $1,000 per share (the "TNCi Series B Shares") and cash
in the amount of $980,000 (net of $50,000 of legal fees) in exchange for (a)
3,000 shares of the Company's Series A 8% Convertible Preferred Stock, par value
$.01 per share, stated value $1,000 per share with an estimated fair value of
$4,080,000 and (b) warrants to purchase 87,500 shares of the Company's Class A
Common Stock, par value $.01 per share, at an exercise price of $3.00 per share.
In connection with this acquisition, the Company also received an assignment of
(a) certain registration rights under a Registration Rights Agreement dated
October 23, 1998 between TNCi and Shaar (the "Registration Rights Agreement")
and (b) certain rights of first refusal held by Shaar with respect to future
TNCi financings.

       Also on May 11, 1999, the Company acquired directly from TNCi 800 shares
of Series C 8% Convertible Preferred Stock of TNCi, par value $.01 per share,
stated value $1,000 per share (the "TNCi Series C Shares") in consideration for
the Company's waiver of all prior TNCi defaults and arrearages arising out of or
related to the TNCi Series B Shares.

       In connection with the forgoing acquisitions of the TNCi Series B Shares
and TNCi Series C Shares, the Company also acquired the right to convert a
Secured Promissory Note (the "Secured Promissory Note") made by TNCi in January
1999, payable to the order of the Company, into additional TNCi Series C Shares
at the rate of $1,000 per TNCi Series C Share. The original principal amount of
the Secured Promissory Note was $500,000.




                                      F-11
<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       On May 18, 1999, the Company received from TNCi 1,055,745 shares of its
common stock and 2,495,400 shares of its Series D Convertible Preferred Stock in
exchange for $4,250,000 in cash and substantially all the assets and certain
liabilities of the Interactive Entertainment Division, as defined in the Asset
Purchase and Sale agreement dated April 30, 1999, as amended (the
"Transaction").

     The Company has consolidated the results of operations of TNCi from the
date of acquisition. TNCi is a majority-owned subsidiary of the Company whose
ownership, through a combination of the Transaction described above and the
Company's purchase of TNCi's Series B Shares and 110,000 shares of TNCi's common
stock from third party investors, approximates 78% of TNCi on an if-converted
common stock basis.

       The Transaction has been accounted for by the purchase method of
accounting and, accordingly, the purchase price has been allocated to the assets
acquired and the liabilities assumed based upon estimated fair values at the
date of acquisition as follows:


      Purchase Price:
        Cash                                              $ 4,250,000
        Net liabilities of IED contributed                 (4,012,430)
                                                          -----------
           Total                                              237,570
                                                          -----------
      Assets acquired and liabilities assumed:
        Historical book value of net liabilities           (2,457,723)
      Fair value adjustments:
        Inventory                                          (1,280,847)
        Property                                             (806,873)
        Other Assets                                         (368,255)
        Liabilities                                          (683,388)
                                                          -----------
           Total fair value of liabilities assumed         (5,597,086)
                                                          -----------
      Excess of fair value of TNCi Series B
        8% Preferred Stock and Series C
        8% Preferred Stock over its recorded value         (1,501,000)
      Purchase of Common Stock of TNCi                       (254,658)
                                                          -----------

        Excess of purchase price over fair value of net
        liabilities assumed (goodwill)                    $ 7,115,174
                                                          ===========

       The excess of fair value of TNCi Series B 8% Preferred Stock and Series C
8% Preferred Stock is the result of the Company's acquisition of such shares
based on the fair value of the Company's Series A 8% Convertible Preferred Stock
amounting to $4,080,000, less $980,000 (net of $50,000 of legal fees) cash
received and the historical value of $1,549,000 of the Series B 8% Preferred
Stock.

       Purchase of 110,000 shares of Common Stock of TNCi from a third party was
valued based on the cash consideration paid by the Company for the shares.



                                      F-12
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       Pro Forma

       Pro forma unaudited operations data assuming the TNCi acquisition had
taken place on November 1, 1997 is as follows:

                                TRANSITION PERIOD
                                      ENDED               YEAR ENDED
                                  JUNE 30, 1999        OCTOBER 31, 1998
                                -----------------      ----------------

      Revenue                      $ 1,566,000           $24,146,000
      Net loss                     $11,578,000           $17,590,000
      Net loss per share           $      2.14           $      2.96

(3)      INVESTMENTS

       Investments are classified according to the applicable accounting method
at June 30, 1999. Market value reflects the price of publicly traded securities
at the close of business at the respective date. Unrealized gain (loss) reflects
the excess (deficit) of market value over carrying value of publicly traded
securities classified as available for sale.

       The following summarizes the Company's current portion of investments by
type at:

<TABLE>
<CAPTION>

                                                   GROSS           GROSS
                                                 UNREALIZED      UNREALIZED
                                 AMORTIZED        HOLDING         HOLDING         FAIR
                                   COST            GAINS           LOSSES         VALUE
                                 ----------     -----------      -----------    ----------
<S>                              <C>            <C>              <C>            <C>
JUNE 30, 1999
Available-for-sale:
  Corporate debt securities      $4,604,858      $     --        $  (10,107)     $4,594,751
                                 ==========      ==========      ==========      ==========

OCTOBER 31, 1998
Available-for-sale:
  Corporate debt securities      $3,683,850      $    6,754      $     --        $3,690,604
                                 ==========      ==========      ==========      ==========
</TABLE>


Corporate debt securities consist of corporate bonds with a maturity greater
than three months at the time of purchase.




                                      F-13
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The following summarizes the Company's non-current investments at June 30, 1999:

                                                CARRYING VALUE
                                                ---------------
       Equity Affiliates
         (Approx. voting %)
         Inter Lotto (UK) Ltd. (27.5%)      $        1,050,775
         Donativos S.A. de C.V.
           (24.5%)                                   1,664,555
                                               ---------------
                                            $        2,715,330
       Cost Affiliates
         U.S. Wireless Corporation          $        3,037,269
                                                --------------

       Total Non-Current Investments        $        5,752,599
                                                ==============

       (A)      U.S. WIRELESS CORPORATION

              U.S. Wireless Corporation, a Delaware Corporation ("US Wireless")
       (NASDAQ: USWC), has developed a geographic location system designed to
       pinpoint the location of wireless telephone subscribers within a wireless
       network. The system uses proprietary technology developed by US Wireless.

              In March 1999, the Company invested $3 million in US Wireless in
       exchange for 30,000 shares of Series B Preferred Stock ("US Wireless
       Series B"). As of June 30, 1999, the Company accounts for this investment
       at cost. Each share of US Wireless Series B is convertible into
       approximately 67 shares of common stock of US Wireless until March 2000,
       after which each such share is convertible into 100 shares of common
       stock of US Wireless. The US Wireless Series B is subject to mandatory
       conversion into common stock at any time at a conversion rate of 100
       shares of common stock of US Wireless in the event the closing price for
       US Wireless' common stock as reported on NASDAQ is at least $5.00 per
       share for 30 consecutive trading days.

              As of April 30, 1999, the Company incorrectly accounted for the US
       Wireless investment as available for sale. The excess of fair market
       value over the carrying value (unrealized gain) was incorrectly reflected
       as a separate component of stockholders' equity as of April 30, 1999.
       This investment is carried at cost as of June 30, 1999. Subsequent to
       June 1999, with the Company's concurrence, US Wireless has not registered
       the common shares underlying the US Wireless Series B shares and
       currently has no plans to register such shares.

              The US Wireless Series B entitles the holder to receive $100 per
       share liquidation preference before any distributions to the holders of
       common stock in the event of a liquidation of US Wireless. In addition,
       the Company and other holders of the US Wireless Series B have, as a
       separate class, elected one member to US Wireless' Board of Directors and
       one additional individual as an observer to the Board. As a condition to
       making the investment, the Company also obtained certain registration
       rights relating to the


                                      F-14
<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       registration under the Securities Act of 1933 of those shares of common
       stock of US Wireless into which the US Wireless Series B held by the
       Company is convertible.

       (B)    INTER LOTTO (UK) LTD.

              In May 1999, the Company completed the acquisition of a 27.5%
       equity interest in Inter Lotto (UK) Ltd. ("Inter Lotto") through its
       wholly-owned subsidiary, IFT Holdings Limited, an United Kingdom ("UK")
       company ("IFT Holdings"). The Company accounts for this investment under
       the equity method. The balance of the shares of Inter Lotto is owned by
       seven shareholders.

              Inter Lotto has a license granted by the Gaming Board for Great
       Britain to operate daily lotteries on behalf of charities throughout the
       UK. By way of an Operating Agreement between Inter Lotto and IFT
       Management Limited, an UK company and wholly-owned subsidiary of
       IFT Holdings ("IFT Management"), IFT Management will manage the
       operations of the lotteries and Inter Lotto will retain responsibility
       for regulatory issues, charity recruiting and certain other functions as
       required under the gaming laws. IFT Management will be responsible for
       developing, installing, marketing and operating the lottery, selecting
       the game and managing the network. In exchange, IFT Management will
       retain a portion of the revenues generated.

              As of June 30, 1999, the Company's investment in Inter Lotto was
       $1,050,775 consisting of working capital advances, notes receivable and
       capitalized acquisition costs. During the Transition Period ended June
       30, 1999, the Company recorded its proportionate share of losses of Inter
       Lotto and Equity Goodwill amortization of $167,493 which has been
       recorded as equity in loss of non-consolidated affiliates in the
       consolidated statement of operations. Inter Lotto has not commenced its
       principal operations as of June 30, 1999.

       (C)    DONATIVOS

              Donativos, S.A. de C.V. ("Donativos") is a Mexican corporation
       formed for the purpose of operating a gaming and entertainment center in
       Monterrey, Nuevo Leon, Mexico.

              In May 1999, the Company, through its wholly-owned subsidiary,
       Interactive Flight Technology (Gibraltar) Ltd., a Gibraltar company ("IFT
       Gibraltar"), loaned $1,632,000 to Donativos in exchange for a 24.5%
       interest in the venture. The Company accounts for this investment under
       the equity method. In addition to IFT Gibraltar, other partners in the
       venture include Regal Gaming and Entertainment, Inc., a Minnesota
       corporation ("Regal Gaming"), which also has a 24.5% interest, and a
       Mexican national, who has a 51% interest. The IFT Gibraltar loan bears
       interest at an annual rate equal to the prime rate plus three percent
       (3%) and matures on April 30, 2001. The Company has also provided a
       letter of credit in the amount of $913,445 to secure repayment of the
       purchase price of certain gaming equipment to be acquired by IFT
       Gibraltar and leased to Donativos. In addition to its 24.5% equity
       interest in Donativos, in consideration for making the loan and providing
       the letter of credit, the Company will receive 25% of all of the profits
       generated by Donativos and, for a term of 10 years, the Company will have
       a 24.5% equity interest in any gaming venture in which Regal Gaming, or a
       subsidiary or affiliate of Regal Gaming, is an investor and which relates
       to gaming activities in Mexico.


                                      F-15
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


              As of June 30, 1999, the Company's investment in Donativos was
       $1,664,555 consisting of the $1,632,000 loan receivable and capitalized
       acquisition costs. During the Transition Period ended June 30, 1999, the
       Company recorded its proportionate share of losses of Donativos and
       Equity Goodwill amortization of $28,211 which has been recorded as equity
       in loss of non-consolidated affiliates in the consolidated statement of
       operations.

(4)    ACCOUNTS RECEIVABLE

       Accounts receivable consist of the following:

                                                      JUNE 30,      OCTOBER 31,
                                                        1999           1998
                                                     -----------    -----------

           Trade accounts receivable                 $    75,792    $ 1,130,648
           Other                                          59,241          4,694
                                                     -----------    -----------
                                                         135,033      1,135,342
           Less allowance for doubtful accounts           (6,544)           --
                                                     -----------    -----------

                                                     $   128,489    $ 1,135,342
                                                     ===========    ===========

(5)    INVENTORIES

       Inventories consist of the following:

                                                  JUNE 30,           OCTOBER 31,
                                                   1999                 1998
                                                -----------         ------------

      Raw materials                             $ 2,398,973         $ 2,192,442
      Work in process                             1,405,372           3,439,888
      Finished goods                              5,433,250           4,102,702
                                                -----------         -----------
                                                  9,237,595           9,735,032
      Less inventory valuation allowance         (7,837,595)         (8,729,605)
                                                -----------         -----------

                                                $ 1,400,000         $ 1,005,427
                                                ===========         ===========

(6)    ASSETS HELD FOR USE

       On July 24, 1998, the Company purchased the assets of Johnny Valet, Inc.
a retail dry cleaning plant in San Diego, California. The Company paid $688,736
in cash and signed a note payable for $125,000. The non-interest-bearing note
was due on January 10, 1999. The acquisition was accounted for utilizing the
purchase method of accounting with the purchase price being allocated to the
assets acquired and liabilities assumed based on their fair values. The excess
of the purchase price over the fair value of assets acquired of $543,150 was
recorded as goodwill and was being amortized over ten years.

       In October 1998, the Company decided to not continue to pursue its
strategy of consolidating the dry cleaning industry and determined that it would
sell the assets of Johnny Valet, Inc. Goodwill was written down by $106,000 to
reflect a reduction in the estimated amortizable life of the goodwill. The net
assets held for use total $699,196 and have been classified as current assets on
the consolidated balance sheet as of October 31, 1998.

                                      F-16
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       On May 13, 1999 the Company sold the assets of Johnny Valet, Inc. for
$750,000 in cash less fees and expenses of approximately $50,000. The excess of
the sale price over the book value of the net assets sold was $133,396 and has
been recorded as gain on sale of assets.

(7)    ASSETS HELD FOR SALE

       In connection with the Transaction, the Company relocated the corporate
offices and production capabilities of TNCi to its Phoenix, Arizona offices.
Accordingly, as of June 30, 1999 the decision to sell the Georgia property was
made and the assets were recorded at their net realizable value and classified
as assets held for sale.

(8)    NOTE RECEIVABLE

       At June 30, 1999 the Company had a receivable of $98,932 due from related
parties. See Note 17.

       On October 21, 1998, the Company loaned Ocean Castle Investments, LLC
("Ocean Castle") $447,939 to execute a block purchase of shares of the Company's
Class A common stock from an unrelated third party. The Company's Chief
Executive Officer is a principal of Ocean Castle. The note bears interest at the
prime rate plus 1% with all interest and principal due October 21, 2001. The
note is secured by 99,542 shares of the Company's Class A Common Stock.

       In February 1999, the Company received payment on the $447,939 loan made
to Ocean Castle.

(9)    PROPERTY AND EQUIPMENT

       Property and equipment consist of the following:

                                                 JUNE 30,       OCTOBER 31,
                                                   1999            1998
                                              ------------      -----------
           Leasehold improvements             $    261,668      $   237,551
           Purchased software                      149,703          149,703
           Furniture                               173,460          138,609
           Equipment                             1,700,462          903,873
                                              ------------      -----------
                                                 2,285,293        1,429,736
           Less accumulated depreciation          (915,901)        (649,701)
                                              ------------      -----------

                                              $  1,369,392      $   780,035
                                              ============      ===========

       During the year ended October 31, 1998, the Company recorded equipment
write-offs of $1,006,532 which are included in special charges on the
consolidated statement of operations. The write-offs are principally related to
excess computers, furniture and other equipment that the Company is not
utilizing.

       During the year ended October 31, 1997, the Company recorded equipment
write-offs of $1,518,952 which are included in special charges in the
consolidated statement of operations. The write-offs principally related to a
system integration lab utilized in software development and testing. The lab
equipment will not be utilized in the Company's future operations.


                                      F-17
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(10)   INTANGIBLES

       Intangibles consist of the following:
                                                         JUNE 30,
                                                          1999
                                                      -------------

           Goodwill                                   $   7,115,174
           Other intangibles                                 79,613
                                                      -------------
                                                          7,194,787
           Less accumulated amortization                    (74,981)
                                                      -------------

                                                      $   7,119,806
                                                      =============

(11)   ACCRUED LIABILITIES

       Accrued liabilities consist of the following:

                                                     JUNE 30,       OCTOBER 31,
                                                       1999            1998
                                                     ---------      -----------

          Accrued development and support costs     $     --        $1,845,915
          Accrued maintenance costs                       --           402,418
          Due to related parties (see Note 17)       1,906,607         880,000
          Other accrued expenses                       386,002         811,300
                                                    ----------      ----------

                                                    $2,292,609      $3,939,633
                                                    ==========      ==========



                                      F-18
<PAGE>


                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(12)   NOTES PAYABLE

       Notes payable consists of the following:
<TABLE>
<CAPTION>

                                                                                          JUNE 30,
                                                                                           1999
                                                                                        -----------
<S>                                                                                     <C>
           Series A, D and E Notes (see below)                                          $ 2,386,048
           Note payable due September 5, 1999, interest at 7%, convertible to
               TNCi preferred stock at the option of the Company                            400,000
           Note payable due in varying installments through 2009, interest at
               prime (8.25% at June 30, 1999) plus 2%, collateralized by certain
               commercial property and personally guaranteed by two shareholders            220,508
           Note payable due in varying installments through 2000, interest at 6.9%,
               collateralized by a vehicle                                                   10,308
           Note payable due and payable April 19, 2001, interest at 16% payable
               monthly, collateralized by certain commercial property                       470,000
           Note payable due in varying installments through 2000, interest at 11%,
               collateralized by a vehicle                                                    4,572
                                                                                        -----------
           Total                                                                          3,491,436
           Less current portion                                                              24,391
                                                                                        -----------
                                                                                        $ 3,467,045
                                                                                        ===========
</TABLE>

Aggregate maturities of notes payable as of June 30, 1999 are as follows:

           2000                                     $    24,391
           2001                                         890,491
           2002                                       2,403,402
           2003                                          19,126
           2004                                          21,078
           Thereafter                                   132,948
                                                    -----------
                                                    $ 3,491,436
                                                    ===========

       The Series A, D and E Notes ("Series Notes") were issued by TNCi in 1998
prior to the Transaction. The Series Notes all had original maturities of
approximately 135 days with interest at approximately 7% to 8% per annum. TNCi
could choose to repay such Notes in cash subject to a payment charge equal to
approximately 7% of the face amount of the Note or TNCi could elect to convert
the Series Notes into TNCi preferred stock which is convertible into common
stock at various discounts to market ranging from 15% to 25%. TNCi was in
default on the Series Notes at June 30, 1999. (See Note 23.)

       The note payable due September 5, 1999 was in default at June 30, 1999.
Subsequent to year-end, the note was converted into 200,000 shares of TNCi's
Common Stock. Therefore, the note payable has been classified as long-term at
June 30, 1999.

       Notes payable in the amount of $68,836 to related parties with interest
payable at approximately 5% per annum become due and payable upon achievement of
certain operational goals.


                                      F-19
<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(13)   STOCK OPTION PLANS

       In October 1994, the Company adopted a Stock Option Plan (the 1994 Plan)
which provides for the issuance of both incentive and nonqualified stock options
to acquire up to 200,000 shares of the Company's Class A common stock. In
November 1996, the Company amended and restated the 1994 Plan to increase the
maximum shares that may be issued and sold under the plan to 800,000. The
Company has granted options to purchase stock to various parties. All options
were issued at a price equal to or greater than the market price of the
Company's common stock at the date immediately prior to the grant and have a
term of ten years. Options generally become exercisable after one to three years
at the discretion of the Board of Directors. No further options will be granted
under this plan.

       In June 1997, the Company established a 1997 Stock Option Plan (the 1997
Plan). Options exercisable for a total of 500,000 shares of the Company's Class
A common stock are issuable under the 1997 Plan. The 1997 Plan is administered
by the Board of Directors of the Company (or a committee of the Board) which
determines the terms of options granted under the 1997 Plan, including the
exercise price and the number of shares subject to the option. The 1997 Plan
provides the Board of Directors with the discretion to determine when options
granted thereunder shall become exercisable. During fiscal 1999, 210,698 stock
options with up to a four-year vesting period were granted at exercise prices
ranging from $1.688 to $2.875. As of June 30, 1999, 48,803 stock options under
the 1997 Plan remained available for grant. During fiscal 1998, 240,499 stock
options with up to a three-year vesting period were granted at exercise prices
ranging from $1.875 to $4.50.

       On February 10, 1998, the Company adopted a plan to reduce the exercise
price on the stock options under the Company's 1994 and 1997 Plans on specified
dates to $2.625 provided the holder is a current employee on the applicable
future dates. The exercise price on one-half of each outstanding option was
reduced to $2.625 on October 10, 1998 pursuant to the plan. A similar reduction
in the exercise price for the remaining half of the options occurred on April
10, 1999, provided the option holder was still employed by the Company at that
time.

       During the year ended October 31, 1998, the Company granted stock options
to purchase 33,333 shares of Class A common stock at an exercise price of $4.50
to each of three stockholders of the Company. The options were granted in
exchange for consulting services. See Note 17.

       In accordance with the provisions of APB 25, the Company measures
stock-based compensation expense as the excess of the market price at the grant
date over the amount the employee must pay for the stock. The Company's policy
is to generally grant stock options at fair market value at the date of grant,
so no compensation expense is recognized. As permitted, the Company has elected
to adopt the disclosure provisions only of SFAS No. 123.


                                      F-20
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       Had compensation cost for the Company's stock-based compensation plans
been determined consistent with SFAS No. 123, the Company's net loss and net
loss per share on a pro forma basis would be as indicated below:


<TABLE>
<CAPTION>

                                            TRANSITION
                                           PERIOD ENDED
                                             JUNE 30,              YEARS ENDED OCTOBER 31,
                                               1999               1998                1997
                                           -------------       -----------       -------------
<S>                                        <C>                 <C>               <C>
Net loss:
  As reported                              $  (2,375,835)      $(7,259,959)      $  (51,022,312)
                                           =============       ===========       ==============
  Pro forma (unaudited)                    $  (2,847,535)      $(7,666,463)      $  (53,486,930)
                                           =============       ===========       ==============

Basic and diluted net loss per share:
  As reported                              $       (0.44)      $     (1.22)      $        (8.89)
                                           =============       ===========       ==============
  Pro forma (unaudited)                    $       (0.53)      $     (1.29)      $        (9.32)
                                           =============       ===========       ==============
</TABLE>

       Pro forma net losses reflect only options granted during the Transition
Period, and in fiscal years ended 1998, 1997, and 1996. Therefore, the full
impact of calculating compensation cost for stock options under SFAS No. 123 is
not reflected in the pro forma net loss amounts presented above because
compensation cost is reflected over the options' vesting period and compensation
cost for options granted prior to November 1995 are not considered under SFAS
No. 123.

       For purposes of the SFAS No. 123 pro forma net loss and net loss per
share calculations, the fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for grants in the Transition Period ended June
30, 1999 and the years ended October 31, 1998 and 1997:

                                         TRANSITION
                                         PERIOD ENDED
                                           JUNE 30,    YEARS ENDED OCTOBER 31,
                                            1999          1998       1997
                                         ------------     -----     -----
    Dividend yield                            0%              0%        0%
    Expected volatility                     100%          71.62%    71.62%
    Risk free interest rate                5.67%           5.65%     6.12%
    Expected lives (years)                  5.0             5.0       5.0



                                      F-21
<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       Activity related to the stock option plans is summarized below:

<TABLE>
<CAPTION>

                                        TRANSITION PERIOD ENDED
                                                JUNE 30,                       YEARS ENDED OCTOBER 31,
                                                 1999                        1998                     1997
                                        ----------------------      ---------------------      ---------------------
                                                     WEIGHTED                    WEIGHTED                  WEIGHTED
                                        NUMBER        AVERAGE        NUMBER       AVERAGE      NUMBER       AVERAGE
                                          OF         EXERCISE          OF        EXERCISE        OF         EXERCISE
                                        SHARES         PRICE         SHARES       PRICE        SHARES        PRICE
                                       -------       ---------      -------     ---------     --------     ---------
<S>                                    <C>           <C>            <C>         <C>            <C>         <C>
Balance at the beginning of year       685,610       $   17.42      710,717     $   24.15      534,900     $   29.43
Granted                                210,698            1.93      240,499          3.01      282,233         22.32
Exercised                               (1,617)           2.63         --             --        (2,983)        21.72
Forfeited                             (145,545)          22.18     (265,606)        21.94     (103,433)        23.82
                                      --------                     --------                   --------
Balance at the end of year             749,146           12.73      685,610         17.42      710,717         24.15
                                      ========                     ========                   ========
Exercisable at the end of year         358,800           23.02      426,311         24.70      428,928         24.48
                                      ========                     ========                   ========
Weighted-average fair value of
options granted during the year       $   1.39                     $   1.91                   $  14.04
                                      ========                     ========                   ========
</TABLE>

       The following table summarizes the status of outstanding stock options as
of June 30, 1999:

<TABLE>
<CAPTION>

                                                     OPTIONS OUTSTANDING                       OPTIONS EXERCISABLE
                                       -------------------------------------------------    -------------------------
                                                        WEIGHTED
                                                        AVERAGE             WEIGHTED                        WEIGHTED
                                        NUMBER OF      REMAINING            AVERAGE          NUMBER OF      AVERAGE
                                         OPTIONS      CONTRACTUAL           EXERCISE          OPTIONS       EXERCISE
          RANGE OF EXERCISE PRICES     OUTSTANDING    LIFE (YEARS)           PRICE          EXERCISABLE      PRICE
          ------------------------     -----------    ------------        ----------        -----------     --------
<S>                                    <C>            <C>                 <C>               <C>             <C>
             $1.688 - $4.50              446,481         9.33             $    2.61            56,135       $   2.49
             $13.20 - $16.50              28,666         5.33                 13.24            28,666          13.24
             $24.00                      141,667         7.00                 24.00           141,667          24.00
             $28.86 - $43.14             132,332         7.08                 30.76           132,332          30.76
                                         -------                                              -------
                                         749,146                                              358,800
                                         =======                                              =======
</TABLE>


       At the discretion of the Board of Directors, the Company may allow
optionees to elect to receive shares equal to the market value of the option, in
lieu of delivery of the exercise price in cash. The market value of the shares
issued is charged to compensation expense. As a result of optionees selecting
this exercise option, 507 shares of stock were issued upon the exercise of 2,950
options during the fiscal year ended October 31, 1997. Compensation expense of
$13,874 is included in the accompanying consolidated statement of operations for
the year ended October 31, 1997.

(14)   BENEFIT PLAN

       The Company has adopted a defined contribution benefit plan (the "Plan")
that complies with section 401(k) of the Internal Revenue Code and provides for
discretionary Company contributions. Employees who complete three months of
service are eligible to participate in the Plan. The Company did not make any
contributions to the Plan for the Transition Period ended June 30, 1999 or the
fiscal year ended October 31, 1998.


                                      F-22
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(15)   STOCKHOLDERS' EQUITY

       The Company's capital stock consists of Class A and Class B common stock.
Holders of Class A common stock have one vote per share and holders of Class B
common stock have six votes per share. Shares of Class B common stock are
automatically convertible into an equivalent number of shares of Class A common
stock upon the sale or transfer of such shares to a non-holder of Class B common
stock.

       (A)    STOCK REPURCHASE ACTIVITY

              In connection with a stock repurchase program authorized by the
       Board of Directors on December 17, 1997, the Company purchased a total of
       844,667 shares of the Company's Class A common stock in open market
       activities at a total cost of $2,315,983 through October 31, 1998. On
       October 30, 1998, the Board of Directors authorized another repurchase
       program whereby the Company may repurchase up to 666,667 shares of its
       Class A common stock on the open market. On January 11, 1999, the Company
       retired all 844,667 shares of Class A common stock described above. As of
       June 30, 1999, the Company had repurchased an additional 78,600 shares at
       prices ranging from $1.49 to $2.94 per share for a total cost of
       $193,990.

       (B)    PREFERRED STOCK

              Series A 8% Convertible Preferred Stock ("Series A Stock"); stated
       value $1,000 per share and liquidation value of 120% of stated value. The
       holder of Series A Stock is entitled to receive, when, as and if declared
       by the Board of Directors, an annual cumulative dividend of $80 per share
       payable quarterly in cash or Common stock. Cumulative undeclared and
       unpaid dividends at June 30, 1999 total $33,333 or $11.11 per share. At
       the option of the Holder, beginning 180 days after the issue date, each
       share of Series A Stock is convertible into Common Stock at a price equal
       to $3.00 per share. The Company may redeem the Series A Stock at prices
       ranging from 105% to 120% of stated value, plus accrued and unpaid
       dividends beginning from 180 days and ending 360 days from the Issue
       Date, May 10, 1999. If the Series A Stock is not redeemed or converted
       into shares of the Company's Common Stock by May 10, 2000, then the
       Series A Stock automatically converts into shares of the Company's Series
       B Preferred Stock.

              Series B 8% Convertible Preferred Stock ("Series B Stock");
       stated value $1,000 per share is entitled to one vote for each share of
       common stock into which it may convert. The Series B Stock is entitled to
       the same dividends as the Series A Stock. Each share of Series B Stock is
       generally convertible into Common Stock at an amount equal to the lower
       of; i) 82% of the Market Price, as defined in the Certificate of
       Designation; ii) $3.00 per common share, or; iii) 118% of the closing bid
       price on NASDAQ, as defined. There are no shares of Series B Stock issued
       or outstanding.

       (C)    ESCROW SHARES

              As a condition of the Company's initial public offering in March
       1995, the underwriter required that an aggregate of 1,066,667 shares of
       the Company's Class B common stock be designated as escrow shares. The
       escrow shares are not assignable or transferable until certain earnings
       or market price criteria have been met. As of January 31, 1999, such
       criteria have not been met and the shares have been canceled and
       contributed to the Company's capital.


                                      F-23
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



       (D)    WARRANTS

              The following table summarizes warrant activity for the Transition
       Period ended June 30, 1999 and the year ended October 31, 1998:

<TABLE>
<CAPTION>

                                                        CLASS A            CLASS C           CLASS D       CLASS E
                                                     ------------          --------          -------      -----------
<S>                                                  <C>                   <C>               <C>          <C>
         Outstanding as of October 31, 1997 and
            October 31, 1998                                  --             55,000           55,000           66,667
         Issued in connection with consulting
            services                                       50,000                --               --               --
         Issued in connection with the Transaction         87,500                --               --               --
                                                     ------------          --------          -------      -----------
         Outstanding as of June 30, 1999                  137,500            55,000           55,000           66,667
                                                     ============          ========          =======      ===========
         Exercise price                              $  2.88-3.00          $  33.00          $ 42.00      $4.50-24.00
                                                     ============          ========          =======      ===========
</TABLE>

              Class A, Class C, Class D and Class E warrant entitles the holder
       to one share of Class A common stock. With the exception of the 50,000
       Class A warrants issued in connection with consulting services that vest
       over a 24-month period, all outstanding warrants are exercisable as of
       June 30, 1999.

              In April 1999, the Company retained the services of a financial
       relations firm. In connection with the consulting services to be
       provided, the Company issued stock purchase warrants to purchase 50,000
       shares of the Company's Class A common stock at $2.90 per share. The
       exercise period of the warrants expires in April 2002, and the warrants
       vest ratably over a 24-month period from the date of issuance.

              On May 11, 1999, the Company issued stock purchase warrants to
       purchase 87,500 shares of Class A common stock at $3.00 per share to the
       Shaar Fund, Ltd. in connection with the issuance of its Series A
       Preferred Stock (see Note 15(b)). The exercise period of the warrants
       expire in May 2004.

              On November 22, 1996, the Company offered to the holders of its
       Class B warrants to reduce the exercise price of the Class B warrants to
       $22.50 per share from $29.25 per share upon the exercise of each Class B
       warrant exercised by December 24, 1996. As a result of this offer,
       3,266,587 shares of Class A common stock were issued upon the exercise of
       3,266,587 Class B warrants, yielding net proceeds of approximately
       $69,100,000, net of commissions and expenses approximating $4,480,000.
       Previously on October 23, 1996, the Company had notified the remaining
       Class B warrant holders of its intent to call all outstanding Class B
       warrants for redemption on January 17, 1997. The Company redeemed 269,895
       Class B warrants at $.15 per warrant.

              In November 1996, the Company issued stock purchase warrants to
       purchase 50,000 shares of Class A common stock at $29.63 per share to
       Houlihan Lokey Howard & Zukin in exchange for advisory services. The
       exercise period of the warrants expires in November 2001. On January 6,
       1997, the Company lowered the exercise price of the stock purchase
       warrants to $24 per share, such price being the trading price of the
       Class A common stock at the close of the previous business day.

              In November 1996, the Company issued stock purchase warrants to
       purchase 16,667 shares of Class A common stock at $32.25 per share in
       connection with the amendment and restatement of a License Agreement with
       FortuNet. The exercise period of the warrants expires in November 2001.
       On January 6, 1997, the Company lowered the exercise price of the stock
       purchase warrants to $24 per share, such price being the trading price of
       the Class A common stock at the close of the previous business day. On


                                      F-24
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       September 7, 1999, the Company lowered the exercise price on the stock
       purchase warrants to $4.50 per share, such price representing a premium
       to the then trading price of the Class A common stock which was $3.69.
       (See Note 17.)

 (16)  INCOME TAXES

       Income tax benefit differed from the amounts computed by applying the
       U.S. Federal corporate income tax rate of 34% to net loss as a result of
       the following:

<TABLE>
<CAPTION>

                                       1999               1998                1997
                                   ------------       ------------       ------------
<S>                                <C>                <C>                <C>
Computed expected tax benefit      $    807,784       $  2,468,386       $ 17,347,586
Change in valuation allowance          (687,890)        (2,127,293)       (17,328,254)
Non-deductible payments                (119,894)          (416,498)              --
Other                                      --               75,405            (19,332)
                                   ------------       ------------       ------------

                                   $       --         $        --        $       --
                                   ============       ============       ============
</TABLE>

       The tax effects of temporary differences that give rise to significant
portions of the net deferred tax asset are presented below:

                                                    1999               1998
                                                ------------       ------------

Deferred tax assets:
    Net operating loss carryforward             $ 29,108,815       $ 18,836,132
    Property and equipment                           843,204          1,135,837
    Deferred start-up costs                          568,973            825,091
    Accrued product warranty costs                      --            1,825,463
    Issuance of stock options and warrants           819,219            864,577
    Allowance for bad debts                        1,517,086              3,355
    Provision for inventory valuation              3,092,828          2,968,066
    Accrued liabilities                              829,398          1,198,426
    Deferred revenue                                 146,398            154,027
    Other                                            906,293            129,850
                                                ------------       ------------
                                                  37,832,214         27,940,824
Less:
    Valuation allowance                          (28,628,714)       (27,940,824)
    Valuation allowance related to the
       TNCi acquisition                           (9,203,500)              --
                                                ------------       ------------
                                                $        --        $       --
                                                ============       ============

       In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management has
provided a valuation allowance for 100% of the deferred tax assets as the
likelihood of realization cannot be determined. As of June 30, 1999, the Company
has a net operating loss (NOL) carryforward for federal income tax purposes of
approximately $77,600,000, which begins


                                      F-25
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



to expire in 2009, and a research and experimentation tax credit of
approximately $247,000. The Company likely underwent a change in ownership in
accordance with Internal Revenue Code Section 382, the effect of which has not
yet been determined by the Company. This change would effect the timing of the
utilization of the NOL, as well as the amount of the NOL which may ultimately be
utilized, though it is not expected to materially effect the amount of the NOL
carryforward.

(17)   RELATED PARTY TRANSACTIONS

       Prior to the Transaction, TNCi entered into a Secured Promissory Note
with GTL in the principal amount of $750,000, bearing interest at a rate of 9.5%
per annum, and a related security agreement granting GTL a security interest in
its assets (the "Promissory Note"). The Promissory Note is convertible into
shares of TNCi's Series C 8% Preferred Stock at the discretion of GTL.

       GTL has also advanced approximately $898,000 to TNCi in the form of
intercompany advances. Both the Promissory Note and the advances have been
eliminated in consolidation at June 30, 1999.

       The Company's Chief Executive Officer is a principal of Ocean Castle
Investments, LLC (Ocean Castle) which maintains administrative offices for the
Company's Chief Executive Officer, Corporate Secretary and certain other
employees of the Company for which the Company pays rent and other
administrative expenses pursuant to an agreement. During the year ended October
31, 1998, Ocean Castle executed consulting agreements with two principal
stockholders of the Company. The rights and obligations of Ocean Castle under
the agreements were assumed by TNCi in connection with the Transaction. The
consulting agreements require payments aggregating $1,000,000 to each of the
consultants through December 2003 in exchange for advisory services. Each of the
consultants also received stock options to purchase 33,333 shares of Class A
Common Stock of the Company at an exercise price of $4.50. As of June 30, 1999,
TNCi determined that the consulting agreements had no future value due to TNCi's
shift away from in-flight entertainment into alternative markets such as leisure
cruise and passenger rail transport. Only limited services were provided in 1999
and no future services will by utilized. Accordingly, TNCi recorded a charge to
general and administrative expenses in the Transition Period of $1.6 million
representing the balance due under such contracts.

       In August 1999, the Company executed a separation and release agreement
with a shareholder and former officer of TNCi, pursuant to which the Company
paid approximately $85,000 in the form of unregistered shares of the Company's
Common Stock.

       In June 1999, the Company loaned to a vice president of TNCi $75,000 for
the purpose of assisting in a corporate relocation to the Company's headquarters
in Phoenix, Arizona. Such loan is secured by assets of the employee. The note
matures in August 2009 and bears an interest rate of approximately 5%.

       The Company has an Intellectual Property License and Support Services
Agreement (the "License Agreement") for certain technology with FortuNet, Inc.
("FortuNet"). FortuNet is owned by a principal stockholder and previous director
of the Company. The License Agreement provides for an annual license fee of
$100,000 commencing in October 1994 and continuing through November 2002. The
Company paid FortuNet $100,000 during each of the years ended October 31, 1998
and 1997. As of October 31, 1998, the remaining commitment of $400,000 was
included in accrued liabilities in the consolidated balance sheet. TNCi assumed
this liability in connection with the Transaction. Subsequent to June 30, 1999,
TNCi agreed to a termination of this agreement and paid Fortunet $100,000 plus
legal fees. GTL agreed to reprice certain warrants and options held by FortuNet
and a principal shareholder of FortuNet (See Note 15(d)). The Company recorded a
special charge of


                                      F-26
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


$120,320 during the Transition Period for such repricing. The Company had
revised its estimated accrual to $200,000 which is included in accrued
liabilities in the consolidated balance sheet at June 30, 1999.

       During the year ended October 31, 1998, the Company extended by one year
a consulting agreement with a former officer of the Company pursuant to which
the Company will pay $55,000 for services received during the period November
1999 through October 2000. TNCi has assumed the liability for the consulting
agreement in connection with the Transaction in the amount of $73,000 which is
included in accrued liabilities in the consolidated balance sheet at June 30,
1999.

       In October 1998, the Company entered into a consulting agreement with
First Lawrence Capital Corp. (First Lawrence) to perform various financial
advisory services related to ongoing business development and management. The
former managing director of First Lawrence is also a director of the Company.
The Company retained, on a full time basis as President and Chief Operating
Officer, the services of the former managing director of First Lawrence
effective December 12, 1998. Accordingly, the Company entered into an employment
contract with such individual. During the year ended October 31, 1998, the
Company paid $11,846 under the First Lawrence consulting agreement (See Notes 18
and 23). The Company also pays for office expenses and rent of First Lawrence
under the terms of the agreement. The Company paid approximately $35,803 during
the Transition Period for such expenses. The Company executed a consulting
agreement with the Whitestone Group, LLC, a shareholder of First Lawrence.
Pursuant to the agreement, the Company paid $250,000 for consulting services
received during fiscal 1998.

       The Company had a letter agreement dated May 28, 1996 with a specialty
investment-banking firm (the Firm) to act as the Company's financial advisor.
The senior managing director of this Firm is also a former director of the
Company. The Company paid the Firm $811,687 during the year ended October 31,
1997.

       The Company had a consulting agreement with Worldwide Associates
(Worldwide) to perform various consulting services. The chairman and president
of Worldwide is also a former director of the Company. The Company paid
Worldwide $56,063 during the year ended October 31, 1997.

       In November 1996, the Company executed a Strategic Alliance Agreement
(Alliance Agreement) with Hyatt Ventures, Inc. (Hyatt), an affiliate of Hyatt
Corporation. The president of Hyatt is also a former director of the Company.
Under the terms of the Alliance Agreement, Hyatt, directly and through certain
of its affiliates, agreed to use its best commercial efforts to assist the
Company in advancing the Company's business with respect to the entertainment
network. The Alliance Agreement was terminated in November 1997 as a result of
changing market conditions. In January 1997, the Company issued 20,000
unregistered shares of Class A common stock to Hyatt in connection with Hyatt
acting as a guarantor on behalf of the Company in certain contract negotiations.
As a result of the stock issuance, a charge of $466,875 is included in the
consolidated statement of operations for the year ended October 31, 1997.

       During the year ended October 31, 1998, the Company executed severance
and consulting agreements with three former officers pursuant to which the
Company paid the former officers and set aside restricted funds in the amounts
of $3,053,642 and $735,000, respectively. The consulting agreements all expire
by September 1999. Payments totaling $735,000 have been and continue to be made
from restricted cash of the Company through September 1999. Expenses associated
with these agreements were charged to general and administrative expenses in the
Transition Period ended June 30, 1999 and the year ended October 31, 1998.
Additionally, the Company's stockholders' agreement with principle stockholders
covering certain corporate governance matters was cancelled.


                                      F-27
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       During the year ended October 31, 1996, GTL executed severance agreements
with three former officers pursuant to which the Company will pay severance of
$752,500 over a three-year period. As of June 30, 1999 and October 31, 1998,
$18,000 and $55,000 remained to be paid under these agreements. Such liabilities
were assumed by TNCi in connection with the Transaction.

(18)   COMMITMENTS AND CONTINGENCIES

       (A)    LAWSUIT

              First Lawrence Capital Corp. v. James Fox, Irwin Gross and
       Interactive Flight Technologies, Inc., Supreme Court of the State of New
       York, No. 7196/99. This is a claim made against the Company arising from
       the hiring by the Company of James Fox, a former First Lawrence employee.
       First Lawrence asserts that business opportunities of First Lawrence were
       diverted to the Company by James Fox and the Company. This case has been
       settled for 250,000 shares of the Company's common stock. Additionally,
       in connection with the settlement, the Company entered into a two year
       consulting agreement with First Lawrence beginning February 1, 2000
       whereby the Company will pay $41,667 per month and in exchange, First
       Lawrence will be available to perform management consulting services to
       IFT Holdings, Ltd. (UK). The Company accrued $1.8 million as a special
       charge for this settlement during the Transition Period.

              Fidelity and Guaranty Insurance Company v. Interactive Flight
       Technologies, Inc., United States District Court for the District of
       Minnesota, CV No. 99-410. This is a declaratory judgment action where the
       Company and its insurers are seeking a declaration of the applicability
       of an excess liability policy to claims made by the estates of victims of
       the crash of Swissair Flight No. 111 on September 2, 1998.

              Barington Capital Group, L.P. et al. v. Yuri Itkis et al. (No.
       98103878). On March 6, 1998, the Company was named as a nominal defendant
       in a derivative action filed in the Supreme Court of the State of New
       York, County of New York. The lawsuit named ten former officers and
       directors of the Company and alleged various breaches of fiduciary duty.
       On October 21, 1998, the Company settled the lawsuit with Barington
       Capital Group, L.P. ("Barington"). As part of the settlement, the Company
       engaged Barington to provide investment banking services for a period of
       twelve months and has paid Barington a retainer of $250,000 and a
       twelve-month consulting fee of $360,000. The Company also paid Barington
       $150,000 for reimbursement of litigation and proxy solicitation expenses.
       The agreement requires the payment of additional fees should the Company
       utilize the services of Barington through October of 1999.

              Hollingsead International, Inc. v. The Network Connection, Inc.,
       State Court of Forsyth County, State of Georgia, Civil Action File No.
       99S0053. Hollingsead International, Inc. ("Hollingsead") filed suit
       against the Company on January 28, 1999, alleging that the Company failed
       to pay invoices submitted for installation and service of audio-visual
       systems in its aircraft. Hollingsead sought damages in the amount of
       $356,850, in addition to interest at the rate of 18% per annum from March
       2, 1998, attorneys' fees and punitive damages. The parties entered into a
       settlement agreement on or about August 5, 1999 that provided for the
       payment of $427,870 by the Company, to be paid in installments, including
       interest accruing at 8.0% per annum from July 28, 1999 until the balance
       is paid. The last installment is due on or before December 20, 1999.
       Under the settlement agreement, the Company will dismiss its
       counterclaims with prejudice and Hollingsead will dismiss its Complaint
       with prejudice upon completion of all payments by the Company. The
       Company recognized a liability for this settlement at June 30, 1999 in
       the form of purchase price consideration which is included in accounts
       payable.

              Sigma Designs, Inc. ("Sigma") v. The Network Connection, Inc.,
       United States District Court, Northern District of California, San Jose
       Division, Civil Action File No. 98-21149J(EAI). Sigma filed a Complaint
       against the Company on December 1, 1998, alleging breach of contract and
       action on account. Sigma claims that the Company failed to pay for goods
       that it shipped to the Company. The matter was settled by written
       agreement dated January 22, 1999, contingent upon registration of the
       TNCi Common

                                      F-28
<PAGE>

                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       Stock and warrants issued to Sigma as a part of such settlement and
       payment by the Company of $50,000. The Company did not complete its
       obligations under the terms of the original settlement agreement. On or
       about May 1999, the shares of TNCi issued to Sigma as a part of the
       settlement of the above-referenced lawsuit were sold by Sigma to the
       Company. The lawsuit was dismissed with prejudice on July 12, 1999 as a
       condition of GTL's purchase. The purchase of these shares from Sigma was
       deemed to be part of GTL's purchase price of TNCi. (See Note 2.)

              Swissair/Mdl-1269, In regards to an air crash near Peggy's Cove,
       Nova Scotia. This multi-district litigation relates to the crash of
       Swissair Flight No. 111 on September 2, 1998 in waters near Peggy's Cove,
       Nova Scotia resulting in the death of all 229 people on board. The
       Swissair MD-11 aircraft involved in the crash was equipped with an
       Entertainment Network System that had been sold to Swissair by the
       Company. Following the crash, investigations were conducted and continue
       to be conducted by Canadian and United States agencies concerning the
       cause of the crash. No investigative agency has linked the Entertainment
       Network System to the crash. Estates of the victims of the crash have
       filed lawsuits throughout the United States against Swissair, Boeing,
       Dupont and various other parties, including the Company. TNCi was not a
       party to the contract for the Entertainment Network System, but has been
       named in some of the lawsuits filed by families of victims on a claim of
       successor liability. The Company and TNCi deny all liability for the
       crash. TNCi is being defended by the aviation insurer for the Company.

              Federal Express Corporation v. The Network Connection, Inc., State
       Court of Forsyth County, State of Georgia, Civil Action File No.
       99-SC-0053. This lawsuit was served on the Company on or about July 22,
       1999 by Federal Express Corporation. The suit alleges the Company owes
       Federal Express approximately $110,000 for past services rendered.

               The Company is subject to other lawsuits and claims arising in
       the ordinary course of its business. In the Company's opinion, as of June
       30, 1999, the effect of such matters will not have a material adverse
       effect on the Company's results of operations and financial position.

       (B)    LEASE OBLIGATIONS

              The Company leases office space and furniture under operating
       leases that expire at various dates through June 2003. The future
       minimum lease commitments under these leases are as follows:

               YEAR ENDING                    OPERATING
                 JUNE 30,                       LEASES
               -----------                    ---------

                 2000                          $196,088
                 2001                           199,085
                 2002                           145,452
                 2003                            34,551
                                               --------
                                               $575,176
                                               ========

              Rental expense under operating leases totaled $338,082, $960,745
       and $920,412 for the Transition Period ended June 30, 1999, and the years
       ended October 31, 1998 and October 31, 1997, respectively.

                                      F-29
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       (C)    CARNIVAL AGREEMENT

              In September 1998, the Company entered into a Turnkey Agreement
       (the "Carnival Agreement") with Carnival Corporation ("Carnival"), for
       the purchase, installation and maintenance of its advanced cabin
       entertainment and management system for the cruise industry
       ("CruiseView") on a minimum of one Carnival Cruise Lines ship. During the
       four-year period commencing on the date of the Carnival agreement,
       Carnival has the right to designate an unspecified number of additional
       ships for the installation of CruiseView by the Company. The cost per
       cabin for CruiseView purchase and installation on each ship is provided
       for in the Carnival Agreement. In December 1998, Carnival ordered the
       installation of CruiseView on one Fantasy Class ship of Carnival Cruise
       Lines, which has been in operational use, on a test basis, since August
       1999. In August 1999, Carnival ordered the installation of CruiseView on
       one Destiny Class ship of Carnival Cruise Lines.

              The terms of the Carnival Agreement provide that Carnival may
       return the CruiseView system within the Acceptance Period, as defined in
       the Carnival Agreement. For the Fantasy Class ship, the acceptance period
       is 12 months. As of June 30, 1999, the Company recorded deferred revenue
       of $365,851, reflecting amounts paid by Carnival. As of June 30, 1999,
       the Company has not recognized any revenue in association with the
       Carnival Agreement. The Company is required to provide a performance bond
       or standby letter of credit in favor of Carnival ensuring Carnival's
       ability to be repaid amounts previously paid to the Company in the event
       Carnival determines not to accept the system as permitted under the
       Carnival Agreement.

              The Company has not provided a bond or letter of credit as of June
       30, 1999. Should Carnival require the Company to obtain a bond or letter
       of credit the Company may be required to provide cash collateral to a
       financial institution securing such obligation.

       (D)    SPECIAL CHARGES AND REVERSAL OF WARRANTY, MAINTENANCE AND
              COMMISSION ACCRUALS

              GTL has entered into sales contracts with three airlines,
       Swissair, Debonair Airways, Ltd. (Debonair) and Alitalia Airlines, S.p.A.
       (Alitalia) for the manufacture and installation of its in-flight
       entertainment network, and to provide hardware and software upgrades, as
       defined in the agreements. In connection with the Transaction, TNCi
       assumed all rights and obligations of the above contracts.

              Pursuant to the October 1997 agreement with Swissair, Swissair
       purchased shipsets for the first and business class sections of sixteen
       aircraft for an average of $1.7 million per aircraft. Included in the
       purchase price was material, installation, maintenance through September
       1998, one-year warranty and upgrade costs for the sixteen aircraft. As of
       October 31, 1998, the Company had completed installations of the
       entertainment network on all of these aircraft. The agreement also
       required the Company to install the entertainment network in the first,
       business and economy class sections of three additional aircraft, at no
       charge to Swissair. The Company was responsible for all costs including
       entertainment network components, installation and maintenance through
       September 1998 for the three aircraft. As of October 31, 1998, the
       Company had completed installations of the entertainment network on all
       of these aircraft and title to each of these three shipsets had been
       transferred to Swissair. The estimated material, installation,
       maintenance and one-year warranty and upgrade costs for these three
       shipsets of $14,292,404 is included in the accompanying statement of
       operations as a special charge for the year ended October 31, 1997.
       During the fiscal year ended October 31, 1998, the Company recognized a
       recovery of special charges of $606,508. The recovery of special charges
       resulted from a reduction in the number of entertainment networks

                                      F-30
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       requiring maintenance in the economy class sections of the Swissair
       aircraft and a reduction in development expenses.

              In April 1998 and October 1998, the Company entered into
       additional contracts with Swissair. The first letter of intent relates to
       a $4.7 million order for first and business class installations on four
       Swissair MD-11 aircraft that are being added to the Swissair fleet.
       Swissair had made payments of $1,450,000 on the $4.7 million order
       through February 1999. No payments have been received since February. The
       second contract was to extend the warranty on all installed systems for a
       second and third year at a price of $3,975,000. Through February 1999,
       the Company had been paid $707,500 under this contract. No subsequent
       payments have been received from Swissair.

              On October 29, 1998, GTL was notified by Swissair of its
       decision to deactivate the entertainment networks on all Swissair
       aircraft. However, by April 1999, discussions between the Company and
       Swissair regarding outstanding financial matters related to current
       accounts receivable, inventory, purchase commitments and extended
       warranty obligations, as well as planning discussions for an October 1999
       reactivation ceased to be productive. On May 6, 1999, GTL filed a lawsuit
       against Swissair in the United States District Court for the District of
       Arizona seeking damages for Swissair's failure to honor its obligations
       for payment and reactivation of the Company's Entertainment Network.

              The Swissair agreements are not assignable to third parties under
       the terms of such agreements. However, in connection with the
       Transaction, GTL has agreed to pay to TNCi any net proceeds, if
       any, received from Swissair as a result of the above litigation or
       otherwise. Further, TNCi, as a subcontractor to GTL, will assume
       any operational responsibilities of the Swissair agreement in the event
       that such requirement arises.

              As a result of the above events, management concluded that its
       only source of future payment, if any, will be through the litigation
       process. In addition, with the deactivation of the entertainment system
       and Swissair's breach of its agreements, the Company believes it
       will not be called upon by Swissair to perform any ongoing warranty,
       maintenance or development services. Swissair's actions have rendered the
       Company's accounts receivable, inventory and deposits worthless as of
       June 30, 1999. Accordingly, the Company has recognized revenue
       on equipment sales to the extent of cash received of $876,000; charged
       off inventory to cost of equipment sales in the amount of $1,517,000;
       wrote off deposits of $655,000 to special charges; and reversed all
       warranty and maintenance accruals totaling $5,164,000.

              Pursuant to an agreement with Debonair, the Company was to
       manufacture, install, operate, and maintain the entertainment network on
       six Debonair aircraft for a period of eight years from installation. In
       February 1998, the Company and Debonair signed a Termination Agreement.
       Pursuant to the Termination Agreement, Debonair removed the entertainment
       network from its aircraft and the Company paid Debonair $134,235 as full
       and final settlement of all of its obligations with Debonair. Included in
       the accompanying statement of operations for the year ended October 31,
       1997 are special charges of $956,447 for the cost of the first completed
       shipset and $2,881,962 to write-down all inventory related to the
       Debonair program.

              In connection with these agreements with Swissair and Debonair and
       the absence of any new entertainment network orders for the Company,
       property and equipment write-downs of $1,006,532 and $1,518,952 were
       recorded as special charges during fiscal 1998 and 1997, respectively.

                                      F-31
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              Pursuant to an agreement with Alitalia, the Company delivered five
       first generation shipsets for installation on Alitalia aircraft during
       fiscal 1996. Alitalia has notified the Company that it does not intend to
       continue operation of the shipsets, and the Company has indicated that it
       will not support the shipsets.

              For the Transition Period ended June 30, 1999, the Company
       recorded warranty, maintenance and commission accrual adjustments of
       $5,117,704, $1,730,368 and $303,321, respectively, related to the
       Swissair and Alitalia matters. Such adjustments to prior period
       estimates, which totaled $7,151,393 resulted from an evaluation of
       specific contractual obligations and discussions between the new
       management of the Company and other parties related to such contracts.
       Based on the results of the Company's findings during this period, such
       accruals were no longer considered necessary.

       (E)    LETTER OF CREDIT

              In June 1999, the Company granted a letter of credit in the amount
       of $913,445 as security for the payment of certain equipment purchases
       made by an affiliate of the Company. To secure this letter of credit, the
       Company was required to provide cash collateral with a commercial bank.

       (F)    PURCHASE COMMITMENT

              On September 9, 1999, IFT Leasing entered into an agreement with
        International Lottery & Totalizer Systems, Inc., a California
        corporation ("ILTS"), to purchase an on-line lottery system for the
        operation of the Inter Lotto Lotteries. The base value of the lottery
        system purchased from ILTS is $12.3 million. In addition, IFT Management
        entered into an eight-year facilities management agreement with ILTS to
        provide operational and technology support for the system. Under this
        agreement, IFT Management is required to make weekly payments of $72,000
        plus additional amounts based on the number of installed terminals and
        sales volumes upon the commencement of ticket sales through the system.

(19)   FAIR VALUE OF FINANCIAL INSTRUMENTS

       Statement of Financial Accounting Standards No. 107 "Disclosure about
Fair Value of Financial Instruments" requires that the Company disclose
estimated fair values for its financial instruments. The following summary
presents a description of the methodologies and assumptions used to determine
such amounts.

       Fair value estimates are made at a specific point in time and are based
on relevant market information and information about the financial instrument;
they are subjective in nature and involve uncertainties, matters of judgment
and, therefore, cannot be determined with precision. These estimates do not
reflect any premium or discount that could result from offering for sale, at one
time, the Company's entire holdings of a particular instrument. Changes in
assumptions could significantly affect these estimates.

       Since the fair value is estimated as of June 30, 1999, the amounts that
will actually be realized or paid at settlement or maturity of the instruments
could be significantly different.

     The carrying amount of cash and cash equivalents approximates fair value
because their maturity is generally less than three months. The fair value of
current investments are approximately $4,594,751. The fair market value of the
Company's investment in US Wireless Series B, assuming conversion into 67 shares
or 100 shares, of common stock for each share of US Wireless Series B and a
discount of 25% for potential lack of marketability of the unregistered shares,
are estimated to be $5,715,000 and $8,572,000, respectively. The carrying amount
of accounts receivable, accounts payable and accrued liabilities approximate
fair value as they are expected to be collected or paid within ninety days of
year-end. The fair value of notes receivable and notes payable approximate the
terms in the

                                      F-32
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

marketplace at which they could be replaced. Therefore, the fair value
approximates the carrying value of these financial instruments.

(20) RISK RELATED TO CONCENTRATION IN THE VOLUME OF BUSINESS

       Sales of entertainment networks by the Company are typically made to a
relatively few number of customers. This concentration of business among a few
customers exposes the Company to significant risk. For the Transition Period
ended June 30, 1999 and the fiscal years ended October 31, 1998 and 1997, one
customer accounted for 91%, 98% and 95% of the Company's sales, respectively.
Outstanding receivables from this customer were zero and $1.1 million,
respectively at June 30, 1999 and October 31, 1998.

(21)   SUPPLEMENTAL FINANCIAL INFORMATION

       Supplemental disclosure of cash flow information is as follows:

<TABLE>
<CAPTION>

                                                              TRANSITION
                                                             PERIOD ENDED
                                                               JUNE 30,        YEARS ENDED OCTOBER 31,
                                                                 1999            1998          1997
                                                             -----------       --------      --------
<S>                                                          <C>               <C>           <C>
Cash paid for interest                                       $    35,624       $ 11,954      $ 13,423
                                                             ===========       ========      ========
Non-cash investing and financing activities:
  Acquisition:
      Fair value of assets (liabilities) acquired            $  (314,658)      $813,736      $   --
      Fair value of preferred stock issued                     4,080,000           --            --
      Note payable                                             3,467,045        125,000          --
                                                             ===========       ========      ========
  Capital lease obligations incurred                         $      --         $   --        $210,678
  Issuance of stock under stock option plan pursuant to
    cashless exercise option                                 $      --         $   --        $ 13,874
   Issuance of stock for services received                   $      --         $187,729      $466,875
                                                             ===========       ========      ========
</TABLE>

(22)   OPERATING SEGMENTS

        In 1998, the Company adopted SFAS 131, which requires the reporting of
operating segments using the "management approach" versus the "industry
approach" previously required. The Company's reportable segments consist of TNCi
and general corporate operations. TNCi's operations include development,
manufacturing and marketing of computer-based entertainment and data networks,
which provides users access to information, entertainment and a wide array of
service options such as movies, shopping for goods and services, computer games,
access to the World Wide Web and gambling, where permitted by applicable law.
General corporate operations consists of developing and operating affiliate
companies, most of which are engaged in telecommunications, e-commerce,
networking solutions and gaming.

                                      F-33
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

        The following summarizes information related to the Company's segments.
All significant intersegment activity has been eliminated. Assets are the owned
or allocated assets used by each operating segment.

<TABLE>
<CAPTION>

                                      TRANSITION
                                     PERIOD ENDED
                                       JUNE 30,             YEARS ENDED OCTOBER 31,
                                         1999               1998               1997
                                     ------------       ------------       ------------
<S>                                  <C>                <C>                <C>
Revenue
  TNCi                               $    958,607       $ 18,816,962       $ 11,100,709
  Other                                   623,854            325,999               --
                                     ------------       ------------       ------------
                                        1,582,461         19,142,961         11,100,709
Gross profit (loss)(a)
  TNCi                                   (559,196)         3,279,891        (13,777,751)
  Other                                   178,748            100,951               --
                                     ------------       ------------       ------------
                                         (380,448)         3,380,842        (13,777,751)
Operating income (loss)
  TNCi                                  2,338,326         (7,232,321)       (52,975,915)
  Other                                (5,321,945)        (2,276,918)              --
                                     ------------       ------------       ------------
                                       (2,983,619)        (9,509,239)       (52,975,915)
  General corporate operations
     Gain on sale of assets               133,396              --                 --
     Equity in loss of non-
     consolidated affiliate              (195,704)              --                 --
     Net interest                         985,545          2,239,101          2,157,252
     General and administrative              --                 --                 --
     Other income (expenses)               61,252             10,179           (203,649)
     Minority interest                   (376,705)              --                 --
                                     ------------       ------------       ------------
                                          607,784          2,249,280          1,953,603
Net loss                             $ (2,375,835)      $ (7,259,959)      $(51,022,312)
Total assets
  TNCi                                 14,752,462          4,238,030
  General corporate                    24,660,159         34,026,172
                                     ------------       ------------
     Total Assets                    $ 39,412,621       $ 38,264,202
                                     ============       ============
</TABLE>

(a)           Gross profit (loss) is the difference between Revenue and Cost of
              Revenue in the consolidated statement of operations.

(23)    SUBSEQUENT EVENTS

       In July and August 1999, the Company purchased all of the Series A and E
notes and the Series D notes respectively, from the holders of such notes.
Concurrent with such purchase by the Company and TNCi executed the fifth and
sixth allonges to the Promissory Note which cancelled such Series Notes and
rolled the principal balance, plus accrued but unpaid interest, penalties and
redemption premiums on the Series Notes into the principal balance of the
Promissory Note.

                                      F-34
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       On August 13, 1999, the Company and two of its officers entered into a
Release and Settlement Agreement ("Agreement") with First Lawrence Capital Corp.
See Note 18(a).

       On August 24, 1999, the Board of Directors of the Company approved the
conversion of the Promissory Note and outstanding advances to TNCi into Series C
Stock of TNCi and, the simultaneous conversion of the Series C Stock into TNCi's
Common Stock in accordance with the designation of the Series C Stock. Such
conversion, to the extent it exceeded approximately one million shares of TNCi's
Common Stock on August 24, 1999, was contingent upon receiving shareholder
approval to increase the authorized share capital which was subsequently
approved on September 17, 1999. Accordingly, TNCi will issue to the Company
approximately 4.7 million shares of its common stock.

       On August 24, 1999, the Board of Directors of the Company approved a $5
million secured revolving credit facility by and among the Company and TNCi
("the Facility"). The Facility provides that TNCi may borrow up to $5 million
for working capital and general corporate purposes at the prime rate of interest
plus 3%. The Facility matures in September 2001. TNCi paid an origination fee of
$50,000 to the Company and will pay an unused line fee of 0.5% per annum. The
Facility is secured by all of the assets of TNCi and is convertible, at the
Company's option, into shares of the Series C Stock. The Company executed the
Facility on October 12, 1999.

       In September 1999, the Company sold one of its two buildings in
Alpharetta, Georgia. The net proceeds from the sale, plus cash of approximately
$80,000 was used by the Company to repay the note payable due April 19, 2001.
The sale of the second building is expected to occur in November 1999 and net
proceeds are expected to be used to retire the note payable due 2009.

       In September 1999, the Company terminated the License Agreement with
Fortunet. See Note 17.

     In September of 1999, IFT filed a lawsuit against Barrington Capital Group,
L.P. in Maricopa County Superior Court, Arizona, seeking a declaratory judgment
that no sums were owed to Barrington Capital pursuant to a Financial Advisory
Service Agreement dated in October of 1998. In October of 1999, Barrington
Capital Group filed a lawsuit on the same contract in the Supreme Court of the
State of New York, County of New York, Index No. 99-604606, captioned Barrington
Capital Group, L.P. v. Interactive Flight Technologies, Inc., alleging that
Barrington is owed $1,750,471 in connection with services alleged to have been
performed pursuant to the Financial Advisory Service Agreement. IFT denies all
liability and denies that any sums are owed to Barrington.


                                      F-35