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

                                   FORM 10-KSB

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended June 30, 2001.

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

     For the Transition Period from _________ to _________.

                           COMMISSION FILE NO. 0-25668

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

           DELAWARE                                             86-0970492
(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:

                                                           NAME OF EACH EXCHANGE
              TITLE OF EACH CLASS                           ON WHICH REGISTERED
              -------------------                           -------------------
Class A Common Stock, $0.01 par value per share                    None

     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. [ ]

     The  Issuer's  revenues  for the  fiscal  year  ended  June 30,  2001  were
$290,295.

     The aggregate market value of the voting and non-voting  common equity held
by  non-affiliates  of the  Registrant  on November  15, 2001 was  approximately
$1,704,000,  based on the closing sale price of the Class A Common Stock on such
date on the Over-The-Counter Bulletin Board.

     The number of shares  outstanding of the Registrant's Class A Common Stock,
$0.01 par value, on November 15, 2001 was 14,196,682.

          Transitional Small Business Disclosure Format: Yes [ ] No [X]

                       DOCUMENTS INCORPORATED BY REFERENCE
                                     None.

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<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.

                          ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I.........................................................................1
  ITEM 1  -- DESCRIPTION OF BUSINESS...........................................1
  ITEM 2  -- DESCRIPTION OF PROPERTY...........................................9
  ITEM 3  -- LEGAL PROCEEDINGS.................................................9
  ITEM 4  -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............12

PART II.......................................................................12
  ITEM 5  -- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........12
  ITEM 6  -- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........13
  ITEM 7  -- FINANCIAL STATEMENTS.............................................24
  ITEM 8  -- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE............................24

PART III......................................................................24
  ITEM 9  -- DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
               COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT..............24
  ITEM 10 -- EXECUTIVE COMPENSATION...........................................26
  ITEM 11 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...29
  ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................30
  ITEM 13 -- EXHIBITS AND REPORTS ON FORM 8-K.................................32

SIGNATURES....................................................................40
<PAGE>
                                     PART I

ITEM 1 -- DESCRIPTION OF BUSINESS

INTRODUCTION

     SUMMARY OF OUR CURRENT OPERATIONS

     In the past, Global Technologies,  Ltd. was engaged in developing, managing
and  commercializing  emerging growth companies  primarily in the technology and
telecommunications  sectors.  As a result of difficult  market  conditions and a
determination  by management to refocus  operations,  Global is concentrating on
its investment in entertainment  and information  systems for the passenger rail
market.  This business is carried on through Global's United Kingdom subsidiary,
TNCi UK  Limited,  a company  incorporated  under the laws of England and Wales.
Global currently owns 60% of the outstanding equity of TNCi UK.

     TNCi  UK  has  developed  a  broadband,   interactive   entertainment   and
information  system for the  passenger  rail  market.  The system is designed to
provide rail passengers with Internet and e-mail access,  with such customizable
services  as  on-demand  films,  videos  and  music,  video  games,  reservation
information,  train  schedules  and other  Internet-based  content and  commerce
applications.  TNCi UK is currently marketing the system to major rail operators
in the United Kingdom and continental Europe.

     In  addition  to the TNCi UK  investment,  Global  owns  lottery  equipment
consisting of lottery terminals,  a network operating center and radio pads that
allow the terminals to communicate with the operating  center  remotely.  Global
consummated  the sale of these  assets to a third  party on  November  3,  2001.
Global received $1,455,000 for these assets.

     Global  also  owns  approximately  62.5%  of  the  equity  of  The  Network
Connection,  Inc.  ("TNCi") and 476,300 shares of common stock of U.S.  Wireless
Corporation,   both  of  which  were  formerly  publicly  traded,  Nasdaq-listed
companies that are now in Chapter 11 proceedings.

     The Company has suffered losses aggregrating $72.4 million for the two year
period ended June 30, 2001 and has a  stockholders'  deficiency of $15.7 million
and a working  capital  deficiency  of $8.4  million at June 30, 2001 that raise
substantial doubt about its ability to continue as a going concern.

     Since  April  2001,  and  through  the date of the sale of  certain  of the
Company's  lottery  equipment in November,  2001, as discussed in this document,
the Company's cash  requirements,  including the cash  requirements  of TNCi UK,
have been met through advances from the Company's Chief Executive  Officer,  Mr.
Irwin L.  Gross.  Through  that  date,  Mr.  Gross  had  advanced  approximately
$850,000.  The Company received  approximately $1.4 million from the sale of the
lottery  equipment in November 2001. The Company repaid Mr. Gross  approximately
$767,000 from the lottery equipment  proceeds.  At November 15, 2001 the Company
has cash of approximately $400,000.

     The Company  believes it has sufficient cash to fund its  requirements  and
the cash requirements of TNCi UK through January 2002. We plan to sell a portion
of or  borrow  against  our  investment  in the  interactive  entertainment  and
information  system  for the  passenger  rail  market  to  cover  our  financial
obligations and to continue to execute on our business  strategy.  We provide no
assurance that we will be able to sell a portion of or borrow against our assets
at planned times or for prices necessary to meet our financial obligations or to
take  advantage  of  investment   opportunities  consistent  with  our  business
strategy.

     OUR HISTORY

     Global  Technologies,  Ltd.  had  previously  been a  technology  incubator
investing  in,   developing  and  managing  emerging  growth  companies  in  the
networking  solutions,   interactive   information  and  entertainment  systems,
e-commerce, telecommunications and gaming industries.

     Global is the successor by merger to Interactive Flight Technologies,  Inc.
Prior  to  the  merger,  Interactive  Flight  was  engaged  in the  business  of
developing,  assembling,  installing  and  operating  computer-based,  in-flight
entertainment  networks in aircraft and installed  these networks on 19 Swissair
aircraft, two Debonair Airlines aircraft and three Alitalia aircraft.

     On  September  2, 1998,  Swissair  Flight 111 crashed  near  Halifax,  Nova
Scotia.  To date,  the  causes  of the  accident  have not been  determined.  An
Interactive Flight entertainment network had been installed on the aircraft that
crashed. The crash has led to many lawsuits in which we, together with Swissair,

                                       1
<PAGE>
Boeing and DuPont,  among others,  have been named as  defendants.  In addition,
TNCi is seeking  payment by Swissair of $6,773,906 for sums owed by Swissair and
SR Technics to us for  equipment and warranty  contracts.  We have also asserted
claims for business  torts  arising  from the  unjustified  deactivation  of the
entertainment network systems following the crash of Swissair Flight 111 in this
action.

     In  September  1998,  a new  Board of  Directors  was  elected  to lead the
company.  The new Board  instated a new  management  team,  which has  pursued a
strategy of forming  strategic  alliances  with other entities in the travel and
entertainment  business to maximize the potential of the  entertainment  network
technology   and   began   to   evaluate   other   technology-related   business
opportunities.  Through a series of acquisitions,  investments and divestitures,
the Company's new leadership  reorganized the company as a technology  incubator
with  interests  in  emerging  growth  companies  in the  networking  solutions,
interactive     information    and    entertainment     systems,     e-commerce,
telecommunications and gaming industries.

     Through  its  majority  owned  subsidiary,  TNCi,  the  Company  previously
provided  broadband  entertainment,  information and e-commerce  systems for the
"away-from-home"  marketplace (e.g., hotels,  cruise ships,  long-haul passenger
trains and schools).

     On March 24,  2001,  TNCi  filed for  protection  under  Chapter  11 of the
Bankruptcy  Code.  TNCi opted for  Chapter 11 (as opposed to  liquidation  under
Chapter 7) because of the potential during the reorganization process to realize
value from or increase the value of certain of TNCi's remaining  assets,  namely
the Swissair  lawsuit and its 40%  interest in TNCi UK.  There is no  assurance,
however,  that any  such  value  will be  realized  or  increased,  or,  that if
realized,  such value would be to an extent  sufficient  for TNCi to emerge from
Chapter 11. In addition, Swissair has recently filed for bankruptcy protection.

     Also, the Company had previously  owned an operating  center and network of
approximately  2,000  installed  remote  terminals  through which GTL Management
Limited, one of our wholly owned United Kingdom subsidiaries, operated lotteries
on behalf of charities in Great  Britain.  In October 2000, the Company began to
shut down its lottery network, and subsequently  de-installed and warehoused the
terminals  and system while  seeking a purchaser.  The Company has since sold or
otherwise  disposed  of  most  of the  terminals  and  has  recorded  a loss  on
disposition and writedown of equipment of approximately $7.4 million.

TNCI UK LIMITED

     GENERAL

     Our subsidiary,  TNCi UK Limited, a company  incorporated under the laws of
England and Wales,  believes that it has  identified an emerging  opportunity in
the passenger train market. To pursue this opportunity, TNCi UK has developed an
interactive   entertainment  and  information   system  for  individual  at-seat
installations on passenger trains.  TNCi UK is currently marketing the system to
train  operating  companies  in the  United  Kingdom  and  continental  European
countries.  Longer  term,  TNCi UK plans to  market  the  systems  in Asia  and,
ultimately,  in the United States,  as well. We have recruited a management team
consisting of rail industry  personnel with experience in business  development,
finance and engineering, led by a former senior executive from the international
train  manufacturer  ALSTOM, to develop and deliver TNCi UK's system to the rail
market.

     The system that TNCi UK has developed is a  video-server-based  system that
combines broadband delivery  technologies and interactive  content to give train
travelers access to  entertainment,  productivity  tools and information  during
their journeys. The system is digital and utilizes a touch-screen graphical user
interface,  which we believe  lends to ease of use.  The system is  designed  to
provide access to content and services such as on-demand  feature  films,  news,
business information,  sports,  weather,  digital newspapers,  interactive video
games, Internet  connectivity,  email, public address  announcements,  and train
schedules and timetables. TNCi UK has applied for a patent in the United Kingdom
relating  to this  system and  anticipates  applying  for  further  patents  and
copyrights in applicable  countries.  TNCi UK believes that its turnkey  content
and  systems  package  can offer  train  operator  partners  a means to  satisfy
increasing  passenger  expectations and enhance passengers' overall train travel
experience.  At the same time,  TNCi UK believes  that the system  offers  train
operators  opportunities  for  revenue  generation  and  operating  efficiencies
through advertising, e-commerce and other value-added services.

                                       2
<PAGE>
     On  March  12,  2001,  Global  and TNCi UK  announced  the  formation  of a
strategic alliance with General Dynamics Interactive  Corporation,  an affiliate
of General  Dynamics  Corporation,  a multi-billion  dollar  worldwide leader in
systems   integration  and  defense   products,   to  provide   engineering  and
manufacturing  expertise  in our  pursuit  of the rail  market  opportunity.  In
accordance  with  this  alliance,  TNCi  UK will  provide  the  concept,  design
specifications and marketing resources to the project, and General Dynamics will
lend its  expertise in systems  integration,  deployment  and support for mobile
communications  platforms  to provide the  hardware and software for the core of
the system. In addition, General Dynamics is to provide service support for this
equipment to TNCi UK during the operational life of the equipment.

     TNCi UK has also  entered  into an  alliance  with COM DEV  Wireless  UK, a
wholly owned subsidiary of COM DEV International  Ltd. Under the agreement,  COM
DEV is to provide its connectivity expertise to TNCi UK's passenger rail system.
COM DEV is a designer,  manufacturer and distributor of wireless infrastructure.
COM DEV's M/ERGY(TM) system is designed to provide broadband radio  connectivity
for  automatic  content  update to trains in service.  It is  expected  that the
M/ERGY  system will  initially  allow for  automatic  updating  at stations  and
maintenance depots and eventually provide broadband  high-speed  connectivity on
trains while traveling.

     TNCi UK is  currently  negotiating  relationships  with other  content  and
technology providers that it believes can add value to the system. We anticipate
that these  alliances will allow TNCi UK to offer  state-of-the-art  technology,
tailored specifically for the emerging rail market, and allow TNCi UK to support
multiple  contracts.  We  believe  that the  combination  of TNCi UK's  existing
technical and managerial experience,  together with the support and resources of
strategic partners, will position TNCi UK to capture a share of what it believes
to be a developing market for passenger rail-based interactive entertainment and
information  systems.  There can be no assurance that TNCi UK will be successful
in entering into any further alliances beyond the ones with General Dynamics and
COM DEV relating to the  development  and  maintenance  of TNCi UK's systems or,
that if any  additional  affiliations  are entered into,  they would be on terms
favorable to us.

     TNCi UK has developed  relationships with and submitted preliminary pricing
proposals  to several  of the  world's  largest  train  operators  in the United
Kingdom and other European countries for new and retrofit  installations of TNCi
UK's  passenger  rail  system.  Advanced  discussions  with some of these  train
operators are currently in progress.  TNCi UK's proposals to potential customers
have been designed so that, if accepted,  we anticipate  that revenues  would be
generated from equipment sales,  maintenance support, and content management and
delivery,  including  revenue sharing  arrangements  with respect to e-commerce,
advertising and marketing data revenue generated by the system. While we believe
that these are attractive opportunities, there is no assurance that TNCi UK will
be successful in obtaining a contract with any of these train operators, or with
any other train  operator,  for the sale,  installation  and maintenance of TNCi
UK's  systems,  or, that if any  contracts  are  obtained,  they would  generate
revenues or be profitable.  To date, no proposals have been accepted and TNCi UK
has not generated any material revenues.

     THE MARKET

     While most major  European  rail markets  have  experienced  only  moderate
growth over the past five years, we believe that ridership and revenues in these
markets  are  poised  to  grow  at an  increasing  rate  in the  coming  decade.
Increasingly  congested airways and roadways have led governments to investigate
ways to incentivize  increased  inter-city railway travel. While rail travel has
always  been an  important  means of  transportation  in the United  Kingdom and
Europe,  government authorities,  such as the United Kingdom's Strategic Railway
Authority,  are  working to further  encourage  rail  travel by  increasing  the
availability and quality of high-speed train service.  In addition to government
initiatives  and  railway  improvements,   we  expect  factors  such  as  rising
automotive  fuel  costs and  congested  roads to be  additional  drivers of this
growth.  Furthermore,  we expect inter-city trains to continue to achieve higher
top speeds,  allowing rail travel to better  compete with airline travel in many
cases.

     As a result of government efforts and the other previously mentioned market
conditions,  passenger  rail growth has begun to increase in our United  Kingdom
and  continental  European  target  markets.  According to the United  Kingdom's
Strategic  Railway  Authority,  last year the United Kingdom's  railways carried
more  passengers  than at any time since WWII.  In  addition,  industry  experts
believe  that  Eurostar's  operations  between  London  and  Paris  through  the
Eurotunnel or "Chunnel" (the tunnel train route under the English  Channel) have
taken a share of market away from the airlines  for  passengers  traveling  that
route. In France,  there is now only limited  internal air service as TGV's (the
French high-speed, inter-city trains) have replaced them.

                                       3
<PAGE>
     In response to industry  perception that inter-city  passenger rail markets
in both the United  Kingdom and  continental  Europe may increase  substantially
over the next decade and  competitive  pressures  resulting from  privatization,
train operating  companies are striving to offer improved services in an attempt
to maintain and increase their  respective  market  shares.  It seems that these
train  operating  companies,  perhaps  learning from adjacent  industries  (e.g.
airlines,  hotels),  have begun to  consider  the  potential  for  entertainment
systems to enhance  the  passengers'  travel  experiences,  provide  competitive
differentiation and generate new sources of revenue.

     As a result of these developments, we believe that there is an incentivized
international market for providers of interactive  entertainment and information
systems for the rail  industry.  In the United Kingdom and  continental  Europe,
where  long-haul  passenger rail travel is already highly  developed,  there are
currently fifteen operators of long haul passenger trains, representing over 500
million  intercity  passenger  journeys,  or more than 485,000 seats. We believe
that the Asian  (consisting  primarily  of Japan and Hong  Kong) and  Australian
markets are also attractive with a total of more than 300,000 seats. Finally, we
are hopeful that the United States  market,  where we believe that faster trains
will be introduced  and  congestion  on the roadways and airways will  increase,
will prove to be attractive in the long-term.

           EUROPE                                TOTAL HIGH-SPEED TRAIN SEATS*
           ------                                -----------------------------
     United Kingdom                                         119,536
     International (Eurostar)                                26,810
     France                                                 193,019
     Germany                                                 96,688
     Italy                                                   50,790
                                                           --------
     TOTAL                                                  486,843
                                                           ========
     ASIA AND AUSTRALIA
     ------------------
     Japan                                                  288,336
     Australia                                               21,566
     Hong Kong                                                7,715
                                                           --------
     TOTAL                                                  317,617
                                                           ========
----------
*    AS OF JANUARY, 2001. COMPILED FROM JANE'S ALL THE WORLD'S RAILWAYS WEB SITE
     STATISTICS

     TNCi UK has decided to focus  initial  marketing  and sales  efforts in the
United Kingdom and on certain select continental  European  operators,  based on
the favorable market dynamics and TNCi UK management's  experience in these rail
environments.  A leader in the global  railways  industry,  in 1993,  the United
Kingdom  was  one of the  first  industrialized  countries  to  initiate  a rail
privatization  program.  Under the direction of the United  Kingdom's  Strategic
Railway  Authority,  significant  investments  have been made in improving  rail
infrastructure  and modernizing the trains themselves  through the refurbishment
of existing vehicles and the purchase of new ones.

     We believe  train  operating  companies  in the United  Kingdom are further
along than those in other  markets in  understanding  the  competitive  dynamics
inherent in a privatized system. The train operating  companies that now run the
various train lines  throughout  the United Kingdom have begun to face increased
competitive  pressures to enhance passenger services in order to sustain current
passenger demand, and to achieve projected passenger growth rates going forward.
In this competitive  environment,  the train operating companies have considered
new ways of enhancing  the passenger  experience  and  maximizing  per-passenger
revenues. In evaluating various alternative revenue generation opportunities, it
is  our  understanding  that  the  train  operating   companies  have  expressed
significant interest in offering on-board passenger  entertainment systems. TNCi

                                       4
<PAGE>
UK is aware  that a number  of train  operating  companies  are now  considering
at-seat  passenger  systems as a means of meeting the  challenges  of satisfying
present passengers and enticing new ones. In addition,  we understand that still
other train  operating  companies have  committed to delivering  such systems as
part of their  renewed  franchising  agreements  with the  British  government's
Strategic Rail Authority.

     While  TNCi UK has  begun  preliminary  discussions  with  train  operating
companies outside of the United Kingdom market, it does not anticipate  entering
additional markets until it has adequately penetrated the United Kingdom market.

     THE SYSTEM

     TNCi  UK has  substantially  developed  an  interactive  entertainment  and
information  system  exclusively  for passenger  trains.  Certain salient points
regarding the system's technology are as follows:

     *    It is all digital and video-server-based;
     *    It combines broadband delivery technologies and interactive content;
     *    It utilizes a touch-screen graphical user interface,  which management
          believe lends to ease of use;
     *    It is  designed  to provide  access to content  and  services  such as
          on-demand feature films, news, business information,  sports, weather,
          digital newspapers,  interactive video games,  Internet  connectivity,
          email,   public  address   announcements,   and  train  schedules  and
          timetables;
     *    TNCi UK has applied for a patent in the United Kingdom relating to the
          system and anticipates  applying for further patents and copyrights in
          applicable countries; and
     *    It is  intended  to be  available  for  both  new and  retrofit  train
          installations.

     TNCi  UK's  goal is to  provide  a  product  that  will  meet the  needs of
inter-city  train operators who desire a total solution  consisting of a bundled
package of equipment,  content and services  customized to meet the expectations
of  both  the  passenger/end-users  and  the  train  operators  themselves.  The
following equipment and service elements are included in the turnkey offering:

     *    Supply  of  original   equipment  for  both  seat-back  and  table-top
          mounting;
     *    Integration and installation  into new or existing  passenger  vehicle
          environments;
     *    Achievement of the necessary safety certifications;
     *    Provision of appropriate content and automated updating;
     *    Provision and management of advertising and revenues; and
     *    Complete life cycle maintenance support.

     We  believe  that  TNCi  UK's  system  can meet  train  operators'  current
expectations,  and that its inherent  structural  flexibility  should enable the
system to accommodate  future demands and technology  advances as they arise. In
addition,   the  system'S  structural  flexibility  permits  customization  that
reflects the specific needs of train  operators,  their particular  trains,  and
their passengers. This customization can take the form of:

     *    Architectural/design differences adjusted to accommodate various train
          configurations,  vehicle styles,  as well as  functionality  needs for
          both new and retro-fit vehicles;
     *    Content  selected on the basis of train  operator  needs and passenger
          demographics which may include video, audio, e-commerce,  games, news,
          information  and  passenger   services  such  as   e-ticketing,   seat
          reservations,  concession sales, communications and passenger surveys;
          and
     *    At-Seat    System     Interface     (graphical     user     interface)
          customized/personalized  to reflect the branding of the train operator
          and the needs or interests of the passengers.

     In  designing  the  system,  TNCi UK has  recognized  that the  content and
services  offered  on the  system  are  some of the  primary  drivers  behind  a
passenger's  decision to use the system. With the goal of providing  compelling,
usage-stimulating  content  selection,  TNCi UK is seeking to develop  strategic
relationships  with content  developers and aggregators to deliver a varied menu

                                       5
<PAGE>
of choices to passengers.  Through a variety of relationships,  TNCi UK hopes to
offer general,  local interest and country-specific  content such as destination
and  region/demographic-specific  videos.  To date, TNCi UK has not entered into
any  agreements  with any content  developers  or  aggregators.  There can be no
assurance that TNCi UK will be successful in entering into any  agreements  with
any of these content  developers and aggregators for the provision of content or
services over TNCi UK's systems,  or, that if any  agreements  are entered into,
they would be on terms favorable to us.

     In addition,  we believe that TNCi UK's system has revenue  generation  and
operational cost savings  potential that could cause prospective train operating
company  customers  to consider  the system as a  potential  profit  center,  as
opposed to a cost center.  Revenues may be generated from system advertisements,
"pay-for-use"  content  and  e-commerce  transactions,  while  operational  cost
savings may be realized through the system's  e-ticketing,  seat reservation and
in-seat surveying capabilities.

     TNCi UK believes that its system could provide  train  operating  companies
with the following key points of competitive differentiation:

     *    "TURNKEY"  SOLUTION.  TNCi UK will offer train  operating  companies a
          complete system, including equipment,  content,  automated loading and
          ongoing maintenance, allowing the train operators to remain focused on
          the operation of their core businesses.

     *    REVENUE  GENERATING  MODEL.  To the best of TNCi UK's  knowledge,  its
          system  would  be the  first  interactive  at-seat  entertainment  and
          information  systems offering its broad range of content and services,
          and could provide train  operating  companies the potential to realize
          incremental   revenues   through   advertising,   e-commerce,   select
          pay-per-use  features,  and perhaps from increased passenger loads. We
          believe that prospective  customers could consider the system a profit
          center.

     *    POTENTIAL  COST  SAVINGS.  The system  may  provide  operational  cost
          savings to train operators  through use of the system for e-ticketing,
          real time seat reservations and passenger surveys.

     *    ENCOURAGING  PASSENGER  FEEDBACK.   Recent  limited  passenger  trials
          conducted on TNCi UK's fully  operational  system simulator located at
          its headquarters in Derby, England yielded positive results. More than
          90% of the  passengers  reported  that the  system  would  make  their
          journey more enjoyable.

     STRATEGIC ALLIANCES

     TNCi UK believes that by  incorporating  high-quality  components  into its
proprietary  design,  it can  provide  train  operating  companies  with a truly
state-of-the-art  system.  To this end, TNCi UK seeks to enter into arrangements
with companies that it views as leaders in their industries. TNCi UK has entered
into a  strategic  alliance,  embodied  in a  teaming  agreement,  with  General
Dynamics  Interactive  Corporation  and it has progressed in  negotiations  with
additional potential strategic partners.

     In March 2001, together with TNCi UK and General Dynamics  Interactive,  we
announced  the formation of an alliance with the goal of providing the worldwide
passenger  rail  market  with a  single  source  for  the  design,  development,
integration and delivery of interactive broadband  entertainment and information
systems on trains. General Dynamics Interactive Corporation is a part of General
Dynamics Communication Systems, a business unit of General Dynamics Corporation,
a  multi-billion  dollar  worldwide  leader in systems  integration  and defense
products.

     In accordance with its alliance with General Dynamics,  the parties plan to
leverage their  respective core  competencies to develop the market for the TNCi
UK system:

     *    TNCi UK will provide the concept,  design specifications and marketing
          resources.
     *    General  Dynamics  is to lend its  expertise  in systems  integration,
          deployment and support for mobile communications  platforms to provide
          the hardware and software for the core of the system.

                                       6
<PAGE>
     *    General Dynamics is also to provide service support for this equipment
          to TNCi UK during the operational life of the equipment.

     TNCi UK has also  entered  into an  alliance  with COM DEV  Wireless  UK, a
wholly owned subsidiary of COM DEV International  Ltd. Under the agreement,  COM
DEV is to provide its connectivity expertise to TNCi UK's passenger rail system.
COM DEV is a designer,  manufacturer and distributor of wireless infrastructure.
COM DEV's M/ERGY(TM) system is designed to provide broadband radio  connectivity
for  automatic  content  update to trains in service.  It is  expected  that the
M/ERGY  system will  initially  allow for  automatic  updating  at stations  and
maintenance depots and eventually provide broadband  high-speed  connectivity on
trains while traveling.

     TNCi UK is  currently  negotiating  relationships  with other  content  and
technology providers that it believes can add value to the system. We anticipate
that these  alliances will allow TNCi UK to offer  state-of-the-art  technology,
tailored specifically for the emerging rail market, and allow TNCi UK to support
multiple  contracts.  We  believe  that the  combination  of TNCi UK's  existing
technical and managerial experience,  together with the support and resources of
strategic partners, will position TNCi UK to capture a share of what it believes
to be a developing market for passenger rail-based interactive entertainment and
information  systems.  There can be no assurance that TNCi UK will be successful
in entering into any further alliances beyond the ones with General Dynamics and
COM DEV relating to the  development  and  maintenance  of TNCi UK's systems or,
that if any  additional  affiliations  are entered into,  they would be on terms
favorable to us.

     COMPETITION

     We believe that there are few actual products available for train operators
to consider in terms of at-seat  entertainment and information systems. In fact,
to date,  we are not aware of any  company  that has  offered  a total  solution
package of systems,  content and services  customized for the specific needs and
rigors  of the  train  environment.  In  light  of the  absence  of  substantive
competition  in the market,  and what we perceive as an expanding  interest from
the industry,  we believe there is an opportunity  for TNCi UK to be one of the,
if not the,  first-to-market in making available to train operators a customized
at-seat multimedia information and entertainment system solution.

     TNCi UK has submitted preliminary pricing and specification requirements to
several  major train  operators  and has  engaged in  discussions  beyond  these
proposals  with  these  operators   regarding   development,   installation  and
maintenance  of TNCI UK system for them.  Discussions  with some of these  train
operators are currently in advanced  stages.  There is no assurance  that any of
the proposals that we have  submitted to, or the  discussions  and  negotiations
that we have had with, any train operating company will result in a contract, or
that if a contract is obtained,  it would result in revenue or be profitable for
us or TNCi UK.

     While TNCi UK, with the assistance of strategic  partner General  Dynamics,
believes that it has developed a novel product offering, it could face potential
competition  from a number of  companies  operating  in various  industries.  We
believe TNCi UK's main  competitor is a company called Joyce Loebl.  This United
Kingdom-based  military/ transport  electronics supply company recently absorbed
SmartWorld(TM),  a United  Kingdom  company  with  experience  in the  in-flight
entertainment   industry   that  had   recently   begun  to   market  a  limited
video-on-demand "multi-cast" system for passenger trains. While TNCi UK does not
believe that this system is functionally  comparable to its system,  it could be
considered a solution by train operators.

     While TNCi UK  believes  that no other  company is  currently  offering  an
interactive  entertainment  system  comparable  to its system to the  inter-city
passenger rail market, other entities with experience in the rail industry, such
as train  manufacturers,  or interactive  entertainment system providers for the
airline industry could decide to enter the market.  Train  manufacturers such as
ALSTOM, Bombardier, Siemens or others could leverage their railway expertise and
resources to develop and market a competitive  product.  In addition,  in-flight
entertainment system providers,  such as Rockwell-Collins and Matsushita,  could
potentially  leverage  their  expertise  in  interactive  systems  to  provide a

                                       7
<PAGE>
competitor system. Most of these companies have greater personnel, technical and
financial resources than we and TNCi UK, which could enable them to compete more
successfully  in this  market  if they  determined  to enter it. If TNCi UK does
experience  success  in  the  rail  market,  the  opportunity  may  become  more
attractive  to  potential  competitors  who may be able to leverage  significant
resources  to  develop a  competitive  product.  In  addition,  train  operating
companies could also decide to deploy less sophisticated  entertainment  systems
on their trains.

     Despite the potential for competitors with greater personnel, technical and
financial  resources  to enter  the  market,  TNCi UK  believes  that it has the
following advantages over competitors that may enter the market:

     *    EARLY MOVER  ADVANTAGE.  TNCi UK  believes  that it is one of very few
          companies  (and  possibly  the only  company)  currently  marketing an
          interactive  entertainment system as comprehensive as TNCi UK's system
          to the rail industry.

     *    PRODUCT DESIGN.  Significant  resources have already been committed to
          developing  a  working   prototype  of  TNCi  UK's  core   interactive
          entertainment  system for the passenger rail environment.  All aspects
          of the  system  from the server to the seat and  tabletop  integration
          have been customized  functionally and ergonomically  with the purpose
          of accommodating in-train installations.  The system is ready to enter
          the safety  certification  process,  one of the last  steps  necessary
          prior to installation. The system has not yet been tested in an actual
          rail  environment,  however,  and there is no  assurance  that it will
          respond as anticipated.

     *    SYSTEM  SIMULATOR.  In June 2000,  TNCi UK launched its  demonstration
          showroom and full-scale  system simulator in the United Kingdom.  This
          simulator,  which we  believe is the first and only one of its kind in
          the world,  has been  instrumental  in allowing  train  operators  and
          passengers to evaluate firsthand the features of TNCi UK's system in a
          life-size replica of a modern passenger rail vehicle environment.  The
          feedback  from  use  of  the  simulator  has  provided  TNCi  UK  with
          invaluable information about potential users' likes and dislikes.

     *    STRATEGIC   RELATIONSHIPS.   We  believe  that  TNCi  UK's   strategic
          relationships  with General  Dynamics and COM DEV provides access to a
          wealth of  engineering  and systems  integration,  communications  and
          connectivity resources and know-how, increases the credibility of TNCi
          UK's system with prospective customers,  reduces up-front and on-going
          capital  requirements,  and  provides  the  scalability  necessary  to
          support  multiple  contracts.   We  are  pursuing  relationships  with
          companies of a similar caliber, although no assurance is given that we
          will  be  successful   in   consummating   any  of  these   additional
          relationships.

     *    RAIL  INDUSTRY   EXPERTISE.   TNCi  UK's  management  has  significant
          experience  in the railway  industry,  including  extensive  work with
          leading  international  rail companies,  such as ALSTOM and the former
          British  Railways.  We believe  that their  experience  with the train
          operating  companies will prove valuable to the design,  marketing and
          maintenance of the TNCi UK system.

     TNCI UK MANAGEMENT

     We have recruited a management team  consisting of rail industry  personnel
with  experience  in business  development,  finance and  engineering,  led by a
former senior executive from the  international  train  manufacturer  ALSTOM, to
develop and deliver TNCi UK's system to the rail market:

     *    STEPHEN OLLIER - MANAGING DIRECTOR
          Mr. Ollier joined TNCi UK in September 1999 as its Managing  Director.
          Prior to joining  TNCi UK, Mr.  Ollier  was head of  ALSTOM's  Railway
          Maintenance  Services Ltd.  division,  which he  established  in 1994.
          Prior to this position,  Mr. Ollier served as UK Business  Development
          Director of ALSTOM Transport. Prior to ALSTOM, Mr. Ollier held several
          management  posts within British  Railways over a twenty-year  period.
          Mr. Ollier  obtained a Degree in Mechanical  Engineering  from Salford
          University,   and  is  a  Member  of  the  Institution  of  Mechanical
          Engineers.

                                       8
<PAGE>
     *    PHILIP CAMPBELL - COMMERCIAL DIRECTOR
          Mr. Campbell joined TNCi UK in March 2000 as its Commercial  Director.
          Prior to joining  TNCi UK, Mr.  Campbell  was  Director of  Commercial
          Services  at ALSTOM  Train  Services  Ltd.  During  his ten years with
          ALSTOM,  Mr.  Campbell  held a series of  positions  with the company,
          including  creating  the  Materials  Division  of the  ALSTOM  Service
          business.  Prior to  joining  ALSTOM,  Mr.  Campbell  held a number of
          financial posts with companies based in Europe and abroad.

     *    JULIAN BURRELL - SALES DIRECTOR
          Mr. Burrell joined TNCi UK in March 2000 as its Sales Director.  Prior
          to joining TNCi UK, Mr.  Burrell was Director of Sales & Marketing for
          SmartWorld(TM)(a.k.a.  Joyce Loebl),  a company seeking to develop and
          provide  media  systems to the  railway  industry.  Mr.  Burrell was a
          founding  member of  SmartWorld(TM),  formed by  former  employees  of
          in-flight   entertainment   manufacturer   MBM.   Prior  to   founding
          SmartWorld(TM),  Mr. Burrell managed the Sales & Marketing  efforts of
          MBM's Aerotech Division.  Prior to this, Mr. Burrell held a variety of
          managerial positions with companies such as The Volex Group, Brand Rex
          Cables and  others.  Mr.  Burrell  received  an HND  (Higher  National
          Diploma) in Mechanical Engineering with Sperry Vickers.

     *    DOMINIC NEWTON - ENGINEERING DIRECTOR
          Mr. Newton TNCi UK in August 2000 as its Engineering  Director.  Prior
          to his  employment  with TNCi UK,  Mr.  Newton was  employed  by Jones
          Garrard,   one  of  Europe's  leading  technical  design   consultancy
          companies.  Prior to Jones  Garrard,  Mr.  Newton held a research  and
          development position with ALSTOM. Mr. Newton has published 12 academic
          papers in  international  journals  and received  the  Institution  of
          Mechanical Engineers  Bennett-Rowling Prize for his work in artificial
          intelligence   techniques.   Mr.   Newton   graduated   from  Hatfield
          Polytechnic  with a Master of  Engineering  Degree and is a registered
          Chartered Engineer.

     OWNERSHIP OF TNCI UK LIMITED

     On March 9, 2001,  to permit TNCi UK to fund ongoing  operations  and avoid
insolvency and  receivership,  we acquired 600 cumulative  redeemable  preferred
shares of TNCi UK. We paid a  purchase  price of  $600,000  for these  preferred
shares over a five-month period. Prior to this transaction, TNCi UK was a wholly
owned subsidiary of The Network Connection,  Inc., of which we own approximately
62.5%.  The Network  Connection  filed for  bankruptcy  under  Chapter 11 of the
Bankruptcy  Code on March 24, 2001. The 600 preferred  shares of TNCi UK that we
acquired  represent 60% of its outstanding voting equity. The Network Connection
holds the remaining 40% of the outstanding  voting equity of TNCi UK through its
ownership of ordinary shares.

EMPLOYEES

     As of November 15, 2001,  Global employed five people on a full-time basis,
and  had an  independent  contractor  serving  as its  interim  chief  financial
officer. Due to liquidity issues, four of Global's full-time employees have been
receiving  half-salary since December 2000. These employees have agreed to defer
payment of the  remainder  of their  salaries  until such time as Global is in a
position  to pay  the  deferred  amounts.  In  addition,  Global's  consolidated
subsidiary,  TNCi UK, employs four people on a full-time  basis.  No employee is
covered by a collective bargaining agreement. We consider our relations with our
employees to be good.

ITEM 2 -- DESCRIPTION OF PROPERTY

     We  lease  approximately  1,500  square  feet  of  space  in  Philadelphia,
Pennsylvania,  which  serves as our  headquarters.  The space is leased to Ocean
Castle Partners,  LLC and, pursuant to an agreement between Ocean Castle and us,
we pay the rent and related  expenses.  Irwin L. Gross,  Chief Executive Officer
and  Chairman  of the Board of  Directors  of Global,  is a  principal  of Ocean
Castle. Also, through United Kingdom subsidiaries, Global leases warehouse space
in  the  United  Kingdom  in  both  Berkshire  and  Manchester.  Each  space  is
approximately  2,000 square feet.  TNCi UK Limited  leases  approximately  1,000
square feet of space in the United Kingdom in Derby.

                                       9
<PAGE>
     We have 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. We currently hold no such investments.

ITEM 3 -- LEGAL PROCEEDINGS

     SWISSAIR/MDL-1269,  IN  REGARDS  TO AN AIR CRASH NEAR  PEGGY'S  COVE,  NOVA
SCOTIA.  This Multi-district  litigation,  which is being overseen by the United
States District Court for the Eastern Division of  Pennsylvania,  relates to the
crash of Swissair Flight No. 111 on September 2, 1998. The aircraft  involved in
the crash was a McDonnell  Douglas MD-11 equipped with an in-flight  interactive
entertainment  system developed by the Interactive  Entertainment  Division that
The Network  Connection  acquired  from us.  Since then, a number of claims have
been filed by the  families of the  victims of the crash.  We have been named as
one of the many defendants,  including Swissair,  Boeing, DuPont and The Network
Connection  (all claims against The Network  Connection have been stayed pending
resolution  of  bankruptcy  proceedings),  in this  consolidated  multi-district
litigation.  Our aviation  insurer is  defending  us in the action.  We have $10
million in insurance coverage related to the action.  With respect to additional
insurance coverage,  a court has ruled that an umbrella policy for an additional
$10 million in insurance does not cover the Swissair  action.  Currently,  we do
not plan to appeal  such  ruling  in  connection  with the  Swissair  crash.  If
liability  is  assessed  against us, to the extent  this  liability  exceeds the
available  insurance,  our business will be adversely affected.  If found liable
for an amount  substantially  in excess of the limits of our coverage,  we could
lose all of our assets. Swissair has recently filed for Bankruptcy.

     FIDELITY AND GUARANTY INSURANCE COMPANY V. INTERACTIVE FLIGHT TECHNOLOGIES,
INC. This case was before the United States  District  Court for the District of
Minnesota,  CV No.  99-410.  This is a  reformation  action  in which one of the
Company's  insurers is seeking to reform an umbrella policy in the amount of $10
million to include an exclusion for completed  products for policies  issued for
years 1997-98 and 1998-99.  Such  exclusion  would  preclude  claims made by the
estates of victims of the crash of Swissair Flight No. 111 on September 2, 1998.
The insurer recently filed a motion for summary judgment, which was heard before
the United States  District Court for the District of Minnesota on September 12,
2000. On October 24, 2000,  the Court ruled in favor of the insurer.  We filed a
motion to alter or amend the ruling,  which was denied on January 19,  2001.  We
thereafter  determined  not to appeal  this action  further  and entered  into a
voluntary dismissal with respect to this action. The umbrella policy at issue in
this suit is in addition to the $10 million in aviation  insurance coverage that
we currently have in place.

     BRYAN R. CARR V. THE NETWORK CONNECTION, INC. AND GLOBAL TECHNOLOGIES, LTD.
This case was  brought  in the  Superior  Court of  Georgia,  Civil  Action  No.
99-CV-1307.  Bryan R. Carr, The Network  Connection  former Chief  Operating and
Financial  Officer and a former  Director,  filed a claim on  November  24, 1999
alleging a breach of his employment  agreement with The Network Connection.  Mr.
Carr claims that he is entitled to the present value of his base salary  through
October 31,  2001, a share of any "bonus  pool," the value of his stock  options
and accrued  vacation time. The Network  Connection and Global filed a motion to
compel  arbitration of the claims  pursuant to an  arbitration  provision in the
employment  agreement and to stay the State Court action pending the arbitration
proceeding.  Our motion was granted on August 9, 2000. On November 7, 2000,  Mr.
Carr filed his claim for arbitration in Georgia. The arbitration is currently in
the discovery  phase,  although all claims against The Network  Connection  have
been stayed pending resolution of bankruptcy proceedings.

     On May 6, 1999, a complaint captioned INTERACTIVE FLIGHT TECHNOLOGIES, INC.
V. SWISSAIR TRANSPORT COMPANY, LTD., et al., No. Civ.  99-0936PHXSMM,  was filed
in the United States  District Court for the District of Arizona.  In this suit,
we are seeking  payment by Swissair of $6,773,906  for sums owed by Swissair and
SR Technics to us for  equipment and warranty  contracts.  We have also asserted
claims for business  torts  arising  from the  unjustified  deactivation  of the
entertainment network systems following the crash of Swissair Flight 111 in this
action.  Swissair  filed motions to dismiss the action  alleging that the claims
asserted in our complaint are subject to resolution by arbitration.  The motions
to dismiss were granted on March 31, 2000.  We requested  the District  Court to
reconsider its ruling on the motions and such request was denied by the District
Court on May 25, 2000. We appealed  both the March 31 and May 25 District  Court

                                       10
<PAGE>
Orders to the United  States  Court of Appeals for the Ninth  Circuit.  Swissair
filed a motion to dismiss the appeal for lack of jurisdiction, which was granted
on September 18, 2000. On March 28, 2001, the Supreme Court of the United States
granted our  petition  for writ of certiori and remanded the case to the Circuit
Court for  further  consideration.  Both sides have filed  briefs with the Ninth
Circuit  Court of Appeals  and we are  awaiting  oral  argument  on the issue of
whether the case is subject to  arbitration  abroad or can continue  here in the
States.  We have  assigned  any proceeds we may be entitled to in this action to
The Network Connection. Swissair has recently filed for bankruptcy

     In September of 1999, we filed a lawsuit against  Barington  Capital Group,
L. P. in Maricopa County Superior Court, Arizona, seeking a declaratory judgment
that no sums were owed to Barington  pursuant to a one-year  Financial  Advisory
Service  Agreement  dated October 21, 1998. In October 1999,  Barington  filed a
lawsuit  on the same  contract  in the  Supreme  Court of the State of New York,
County of New York, Index No.  99-6041606,  captioned  BARINGTON  CAPITAL GROUP,
L.P. V. INTERACTIVE FLIGHT  TECHNOLOGIES,  INC., alleging that Barington is owed
$1,750,471 in connection with services  alleged to have been performed  pursuant
to the Financial  Advisory  Service  Agreement.  On October 20, 2000,  Barington
filed a Renewed  Motion to Dismiss  for Lack of  Personal  Jurisdiction  and For
Forum Non Conveniens our Amended Complaint in the Arizona action. By Order dated
January 8, 2001, the Arizona Court dismissed our Amended Complaint, finding that
New York was a more convenient  forum for the parties to litigate their dispute.
Accordingly,  the  parties  are  proceeding  with  the New York  action  and are
undertaking discovery.

     A suit captioned AVNET, INC. V. THE NETWORK CONNECTION, INC., was filed May
17, 2000 in Maricopa County Superior Court,  CV2000-009416.  The suit related to
invoices  for  inventory  purchased by The Network  Connection  in late 1998 and
early 1999. Avnet, Inc. sought payment of the invoices, interest and legal fees.
The aggregate amount of relief sought by Avnet was approximately  $900,000.  The
Network  Connection  did not pay for the inventory  purchased  primarily for the
following reasons:  (i) the inventory  purchased did not meet specifications and
thus was not  accepted  by its  customer,  and (ii) The Network  Connection  was
pursuing a  separate  warranty  claim  against  Avnet  regarding  certain  other
inventory  purchased from Avnet. On October 11, 2000, The Network Connection won
a jury  verdict of $1.8 million in the  warranty  suit.  On December 21, 2000 as
amended by letter  agreement  dated  December 22, 2000,  The Network  Connection
settled  this suit for  $700,000  in cash,  the  cancellation  of  approximately
$899,000 of outstanding accounts payable due to Avnet and mutual releases of all
existing  claims.  The  Network  Connection  recorded a gain in other  income of
$1,363,563  reflecting the settlement,  net of legal fees in the year ended June
30, 2001. The Network Connection received the cash payment on January 2, 2001.

     FIRST LAWRENCE  CAPITAL CORP. V. GLOBAL  TECHNOLOGIES,  LTD. AND GLOBALTECH
HOLDINGS LIMITED, F/K/A IFT HOLDINGS LIMITED,  Supreme Court of the State of New
York, County of New York, Index No.: 01/601576. First Lawrence filed a complaint
commencing  this lawsuit  against us and our  affiliate on March 28, 2001.  This
complaint  alleges a breach of the  settlement  agreement  dated August 13, 1999
between First Lawrence and us relating to an earlier lawsuit  commenced by First
Lawrence  against us and  certain of our  affiliates.  The  aggregate  amount of
relief  sought is  approximately  $545,000,  plus  related  interest,  costs and
expenses.

     INSIGHT  DIRECT USA, INC. V. GLOBAL  TECHNOLOGIES,  LTD.,  ET AL,  Superior
Court of the State of Arizona, County of Maricopa, Case No. CV2000-021045.  This
matter relates to a stipulated judgment against us for $36,000,  initially to be
paid $6,000 per month from March  through  August  2001.  The terms of repayment
have been  extended and Global is paying  $3,000 per month  towards the balance.
Final payment will be made in April 2002.

     AMERICAN   EXPRESS  TRAVEL  RELATED  SERVICES   COMPANY,   INC.  V.  GLOBAL
TECHNOLOGIES,  LTD. AND NETWORK CONNECTIONS, INC., Supreme Court of the State of
New York,  County of New York,  Index No.:  01/601416.  American  Express sought
payment of unpaid  balances  on credit  cards  issued  under each of our and The
Network  Connection's  corporate  accounts.  As to us,  American  Express sought
approximately  $34,000 and, as to The Network  Connection,  American  Express is
seeking  approximately  $974,000.  The  latter  action has been  stayed  pending
resolution  of  bankruptcy  proceedings.  The action with  respect to Global was
satisfied as of July 2001 by payment in full.

                                       11
<PAGE>
     MORRIS C. AARON V. THE NETWORK  CONNECTION AND GLOBAL  TECHNOLOGIES,  LTD.,
Superior  Court  of  the  State  of  Arizona,   County  of  Maricopa,  Case  No.
CV2001-003733.  Morris C. Aaron, The Network  Connection  former Chief Financial
Officer, filed a claim on March 5, 2001 for $35,658 for wages claimed and treble
damages.  The action  against The  Network  Connection  has been stayed  pending
resolution  of the  bankruptcy  proceeding,  and both Global and Mr.  Aaron have
filed motions for summary judgment.

     FRANK E. GOMER V. THE NETWORK  CONNECTION  AND GLOBAL  TECHNOLOGIES,  LTD.,
Superior Court of the State of Arizona, County of Maricopa.  Frank E. Gomer, The
Network  Connection  Systems Group former President and Chief Operating  Officer
filed a claim on March  22,  2001 for  $76,000  for  wages  claimed  and  treble
damages.  The action  against The  Network  Connection  has been stayed  pending
resolution  of the  bankruptcy  proceeding,  and both Global and Dr.  Gomer have
filed motions for summary  judgment.  Global's motion for summary  judgement was
granted in November 2001.

     44TH STREET AND VAN BUREN LIMITED PARTNERSHIP V. THE NETWORK CONNECTION AND
GLOBAL  TECHNOLOGIES,  LTD.,  Superior Court of the State of Arizona,  County of
Maricopa,  Case No.  CV2001-004664.  The landlord  for The Network  Connection's
Arizona offices filed this complaint on March 20, 2001 alleging  breaches of the
lease with The Network  Connection  and  guaranteed  by us for those offices and
seeking  approximately  $12,000 and other relief. The action against The Network
Connection has been stayed pending resolution of bankruptcy proceedings.

     DONALD H. GOLDMAN V. GLOBAL TECHNOLOGIES,  LTD.,  arbitration number 13 117
01861 1 before the  American  Arbitration  Association  in New York  City.  This
action was  instituted in September  2001.  Mr.  Goldman has brought this action
seeking  recovery  of an  alleged  $17,000  in  legal  fees  incurred  by him in
connection with termination of a consulting agreement between him and one of our
subsidiaries. The matter was settled on November 13, 2001 for $13,750.

     An action captioned KEATING  DEVELOPMENT COMPANY V. THE NETWORK CONNECTION,
INC. AND GLOBAL TECHNOLOGIES,  LTD., case number 000997 was initiated on January
8, 2001 in the  Philadelphia  County Court of Common Pleas.  The case relates to
the The Network  Connection's alleged breach of a lease for office and warehouse
space.  The lease was  guaranteed  by Global.  Keating is seeking  approximately
$350,000 in damages.  The action against The Network  Connection has been stayed
pending  resolution of bankruptcy  proceedings.  This action  against Global was
settled in November 2001.

     We may be subject to other  lawsuits  and  claims  arising in the  ordinary
course of our business.  In our opinion, as of June 30, 2001, the effect of such
matters will not have a material  adverse effect on our results of operations or
financial condition.

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

     There are no items or circumstances to be disclosed under this Item 4.

                                       12
<PAGE>
                                     PART II

ITEM 5 -- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The  following  table sets forth the high and low last sale  prices for our
Class A Common Stock for each quarter within our last two fiscal years,  and for
the  quarter  ended  September  30,  2001.  Prices are as reported by the Nasdaq
National Market until August 8, 2001.  Thereafter prices are as reflected on the
Over-The-Counter  Bulletin  Board and  represent  inter-dealer  prices,  without
mark-up, mark-down or commission, and may not represent actual transactions.

     CLASS A COMMON STOCK                                 HIGH       LOW
     --------------------                                -------    ------
     July 1, 1999 through September 30, 1999..........   $ 3.083    $2.000
     October 1, 1999 through December 31, 1999........   $ 6.500    $1.583
     January 1, 2000 through March 31, 2000...........   $21.000    $5.500
     April 1, 2000 through June 30, 2000..............   $15.000    $3.375
     July 1, 2000 through September 30, 2000..........   $ 6.375    $3.125
     October 1, 2000 through December 31, 2000........   $ 4.563    $0.375
     January 1, 2001 through March 31, 2001...........   $ 1.969    $0.281
     April 1, 2001 through June 30, 2001..............   $ 0.910    $0.210
     July 1, 2001 through September 30, 2001..........   $ 0.430    $0.100

     The closing sales price of the Class A Common Stock on November 15, 2001 as
reflected by the Over-The-Counter Bulletin Board was $0.12 per share.

     As of November 15, 2001, there were approximately 109 record holders of our
Class A Common Stock.

     We have not paid any cash  dividends on our Class A Common Stock during the
last two fiscal years and do not intend to do so in the foreseeable future.

UNREGISTERED ISSUANCES

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

                                       13
<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, our  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.

RESULTS OF OPERATIONS

     Our  financial  statements  included in this  Annual  Report on Form 10-KSB
contain the results of  operations  for our fiscal years ended June 30, 2001 and
June 30,  2000.  The results of  operations  for the fiscal years ended June 30,
2001  and  June 30,  2000  are  included  in the  table  below  for  comparative
purposes):

                                                     YEAR ENDED     YEAR ENDED
                                                   JUNE 30, 2001   JUNE 30,2000
                                                   -------------   ------------
Revenues:
  Equipment sales                                  $     84,149    $  6,983,787
  Service income                                        206,146         413,209
                                                   ------------    ------------
                                                        290,295       7,396,996
                                                   ------------    ------------
Costs and Expenses:
  Cost of equipment sales                                61,753       4,867,519
  Cost of service income                                170,083         148,221
  General and administrative expenses                19,249,060      21,166,771
  Expenses associated with investments                      --        1,944,743
  Loss from Write off on Intangibles                  5,547,560              --
  Loss from impairment of long-lived assets          10,719,040              --
  Special charges                                       725,753       2,156,205
  Amortization of intangibles                         1,150,395         912,553
                                                   ------------    ------------
                                                     37,623,644      31,196,012
                                                   ------------    ------------
  Operating loss                                    (37,333,349)    (23,799,016)

Other:
  Interest expense                                   (4,278,315)     (5,948,347)
  Interest income                                        47,264         655,194
  Equity in losses of affiliates                             --     (10,345,210)
  Gain on sale of investments                         4,282,844              --
  Gain on legal settlement                            1,336,563              --
  Other expense                                         108,054        ( 14,339)
                                                   ------------    ------------
Loss before minority interest and
  extraordinary item                                (35,836,939)    (39,451,718)

Minority interest                                     1,869.009       1,612,529
Extraordinary item - loss on extinguishments
  of debt                                              (698,117)             --
                                                   ------------    ------------
  Net loss                                          (34,666,047)    (37,839,189)

Cumulative dividend on preferred stock                  (50,000)       (187,415)
Redemption of preferred stock                          (173,469)        509,183
                                                   ------------    ------------
  Net loss attributable to common stockholders     $(34,889,516)   $(37,517,421)
                                                   ============    ============

     Revenues  for the year ended June 30,  2001 were  $290,295,  a decrease  of
$7,106,701  compared to revenues of $7,396,996 for the year ended June 30, 2000.
Revenues  for the year ended  June 30,  2001  consisted  of  equipment  sales of
$84,149 and service  income of  $206,146.  Revenues  for the year ended June 30,
2000 consisted of equipment  sales of $6,983,787 and service income of $413,209.
The decrease in equipment  sales of $6,899,638 and service income of $207,063 is
due to the ceasing of operations by the Network  Connection  and its  subsequent
filing for  bankruptcy  protection  on March 24,  2001.  The decrease in service
income  is also  the  result  of the  cessation  of  operations  by the  Network
Connection  and also the  closure of the United  Kingdom  lottery  operation  in
August 2000.

                                       14
<PAGE>
     Cost of  equipment  sales for the year ended June 30, 2001 was  $61,753,  a
decrease of  $4,805,766,  compared to cost of equipment  sales of $4,867,519 for
the year ended June 30,  2000.  The  decrease is the result of the  cessation of
domestic operations by the Network Connection ("TNCI") and subsequent bankruptcy
filing.  The cost of service  income also fell as a result of the  cessation  of
operations by TNCI and the United Kingdom Lottery operation.

     General and  administrative  expenses for the year ended June 30, 2001 were
$19,249,060,  a decrease of $1,917,711 from expenses of $21,166,771 for the year
ended  June 30,  2000.  Significant  components  of general  and  administrative
expenses include costs of personnel,  legal and professional  fees,  advertising
and  marketing  expenses,  rent and  other  facilities  costs  and  depreciation
expense.  General and  administrative  expenses for the year ended June 30, 2001
would have been  considerably  higher than the  previous  year,  but the initial
cutbacks in  expenditures  by the Network  Connection  beginning in January 2001
with  personnel  layoffs and the complete  cessation of  operations by March 31,
2001 kept the  total  for the year  from  exceeding  the  previous  period.  All
expenses of the  subsidiary,  TNCI  stopped,  for  purposes of the  consolidated
financial  statements as of the date of the bankruptcy due to the discontinuance
of  consolidating  the results of  operations  of the  subsidiary  at that date.
Expenditures for Global Technologies also declined in the fourth quarter, as the
administrative  staff was reduced and the New York office  closed.  Expenditures
for TNCI-UK operations have increased due to the pursuit of major contracts with
European  rail  operators  for the  purchase  of the  interactive  entertainment
system.

     General and Administrative expenses, for the year ended June 30, 2001, also
include non-cash charges of $267,868 primarily related to the issuance of common
stock purchase  warrants for financial  advisory  services and a $561,000 charge
for 1,700,000 shares of common stock issued to Equilink Capital Partners LLC for
financial consulting services.

     Non-cash  compensation  expense  of  $1,905,419  included  in  general  and
administrative  expenses  for the year ended June 30,  2000 is  comprised  of an
$85,000 expense for a former employee as part of a severance package, charges of
$193,318 for modifications of stock option awards for three former employees and
charges  totaling  $1,627,101  related to the issuance of common stock  purchase
warrants and common stock for financial advisory services.

     Expenses  associated  with  investments  of $1,944,743  for the fiscal year
ended June 30, 2000 represent the net loss on our sale of our equity interest in
Donativos of $335,058,  the loss on the transfer of our 27.5% equity interest in
Inter Lotto of $684,685  and the  write-down  of $925,000 of our  investment  in
Shop4Cash.com, Inc.

     Losses from the impairment of long-lived  assets were recognized during the
year ended June 30, 2001 in the amount of  $10,719,040.  The Network  Connection
filed for bankruptcy protection under Chapter 11 on March 24, 2001 and a loss of
$3,324,665 was recognized on the fixed assets,  which had a remaining book value
at June 30, 2001 of approximately $600,000 and are being sold to provide funding
for the final  liquidation of the corporation.  GTL Leasing,  the United Kingdom
company  that  owned  the  lottery  equipment,  has  recognized  a  loss  on the
impairment of fixed assets of $7,316,630  due to the  abandonment of the lottery
operation and  subsequent  sale of the lottery  equipment.  Global  Technologies
incurred a loss of $77,745 on the disposition of its New York office equipment.

     Special charges for the year ended June 30, 2001 were $725,753, compared to
$2,156,205 for the year ended June 30, 2000.  Special charges for the year ended
June 30, 2001 represent the legal settlement  reached with the vendor in regards
to the return of a portion of the lottery equipment that had been purchased from
the vendor. Special charges for the year ended June 30, 2000 represent inventory
write-offs  and accruals for rework costs for future  redeployment  of equipment
and estimated de-installation obligations associated with the termination of the
Carnival Cruise lines contract pursuant to a master settlement agreement between
us and Carnival.

                                       15
<PAGE>
     Amortization of intangibles for the year ended June 30, 2001 was $1,150,395
compared  to  $912,553  for the  year  ended  June 30,  2000.  The  increase  is
attributable  to the impact of the  revision  of the  estimated  useful life for
determining  amortization  for the nine month period up to March 31,  2001.  The
Network Connection recorded a loss on the write off of intangibles of $5,547,560
in the month of March 2001, because of impairment prior to its bankruptcy filing
under Chapter 11 on March 24, 2001.

     Interest  expense for the year ended June 30, 2001 was $4,278,315  compared
to $5,948,347 for the year ended June 30, 2000. The decrease in interest expense
was due to the  conversion  of interest  bearing  Secured  Convertible  Notes to
Preferred and Common Stock issues.

     Interest income for the year ended June 30, 2001 was $47,264, a decrease of
$607,930  compared to income of $655,194 for the year ended June 30,  2000.  The
interest  arose  principally  out of  short-term  investments.  The  decrease in
interest income is due to a significantly lower average cash balance during 2001
compared to 2000.

     For the year  ended  June 30,  2001,  there  were no losses to record  from
equity  interests in affiliates,  as these  investments have been written off at
June 30, 2001.

     For the year ended June 30, 2000,  we recorded our  proportionate  share of
our  equity  interest  in losses of  affiliates  in the  amount of  $10,345,210,
primarily attributable to higher losses at Inter Lotto related to the April 2000
launch of the  lottery  operations  in the UK and  higher  losses  at  Donativos
related to the  launch of the  entertainment  center in  Monterrey,  Mexico.  In
addition,  we  determined  that we retained the majority of the  financial  risk
related to Inter Lotto and, accordingly, recorded against our investment 100% of
the loss incurred by Inter Lotto for the year ended June 30, 2000.

     Gains from the sale of investments of $4,282,844 were recognized during the
year ended June 30, 2001. These gains were from the sale of U.S. Wireless common
stock that was held as an investment by Global Technologies,  Ltd. U.S. Wireless
Corp subsequently  declared bankruptcy under Chapter 11, on August 29, 2001; the
stock is no longer  traded and the  remaining  shares  held by Global  have been
written off at June 30, 2001, resulting in a loss of approximately $450,000.

     Other  income for the year ended June 30,  2001 was  $108,054  compared  to
other expense of $14,339 for the year ended June 30, 2000.  Other income in 2001
consists of  amortization of certain  deferred  credits for financing fees which
were  written  of  entirely  at  March  31,  2001 in  conjunction  with the TNCi
bankruptcy.

     Gains from legal settlements amounted to $1,336,563 for the year ended June
30, 2001. The gain was  recognized by TNCI, as a result of the Avnet  litigation
settlement agreement that was executed in December 2000.

LIQUIDITY AND CAPITAL RESOURCES

     During  the year  ended June 30,  2001,  we used $19.4  million of cash for
operating  activities,  as  compared to $9.3  million of cash used by  operating
activities for the year ended June 30, 2000. Cash utilized in operations  during
the year  ended  June 30,  2001  resulted  primarily  from our net loss of $34.1
million,  partially offset by $25.1 million of non-cash  charges,  including the
impairment of long-lived  asset of $10.7  million,  write down of intangibles of
$5.5 million,  $2.8 million of depreciation and amortization and $3.5 million of
non-cash  interest  expenses,  primarily  related  to charges  for a  beneficial
conversion feature of convertible notes and the estimated fair value of warrants
issued in connection with related party borrowings and collateral pledges.  Cash
was also used by the reduction,  approximately $4.3 million, in accounts payable
and accrued liabilities during the period.

                                       16
<PAGE>
     Cash  utilized in  operations  during the year ended June 30, 2000 resulted
primarily  from our net loss of $37.8  million,  predominately  offset  by $11.6
million  of  non-cash  charges,  including  $2.1  million  of  depreciation  and
amortization,  $5.7 million of non-cash interest  expenses  primarily related to
charges  for a  beneficial  conversion  feature  of  convertible  notes  and the
estimated fair value of pledges,  $1.9 million of compensation  expenses related
to the  issuances  of common  stock or stock  purchase  warrants  for  financial
advisory services, and $1.9 million of expenses associated with the write off or
write down of affiliate investments.  Cash utilized for operating activities was
offset by an increase in accounts payable of $7.8 million during the period.  In
addition, cash utilized in operating activities excludes $10.3 million of equity
in loss of affiliates  related to the losses of Donativos and Inter Lotto, which
are shown as  investments in  non-consolidated  affiliates in cash utilized from
financing  activities at June 30, 2000. The cash utilized  primarily  relates to
our  funding of 100% of the losses of Inter  Lotto  related to the launch of the
lottery operations in the UK.

     Restricted  cash at June 30,  2001 was  $70,538 as  compared to $766,748 at
June 30, 2000.  Restricted cash decreased primarily as a result of our cessation
of  consolidating  TNCi, the Company's major  subsidiary and to a lesser extent,
the termination of the Company's New York office lease. TNCi had restricted cash
of  approximately  $450,000,  related  to an  employment  contract  prior to its
bankruptcy filing. The Company forfeited  approximately  $220,000 of its deposit
on the termination of the New York Office Lease.

     Cash of approximately $9.9 million was provided by the Company's  investing
activities  during the year ended June 30,  2001,  primarily  as a result of the
Company's  sales  of  its  investment  securities,  U.S.  Wireless  Corporation,
partially  offset by  equipment  purchases.  The Company  sold or used to retire
debt,  approximately  2,520,000  shares of it's U. S.  Wireless  holdings.  U.S.
Wireless filed for protection  under Chapter 11 of the US Bankruptcy Code during
August 2001. TNCi purchased,  for approximately $3.4 million,  equipment for use
in  its  hotel  interactive  systems.  The  Company's  basis  in  its  remaining
approximately 480,000 shares of U.S. Wireless was determined to be worthless and
charged to expense at June 30, 2001.

     Cash flows used in investing  activities were $21.8 million during the year
ended June 30, 2000. Cash utilized resulted primarily from purchases of property
and  equipment  of $18.3  million,  including  $9.4  million  of gaming  network
equipment  for the lottery  operations,  $2.5  million of  networking  equipment
installed  at hotels for guest pay  interactive  entertainment  systems and $0.4
million  of  equipment  for a  train  entertainment  system  simulator,  and our
investment in Inter Lotto of $10.0  million to fund their losses  related to the
launch of the lottery.  Cash utilized in investing activities also resulted from
our investment of $1.0 million in  Shop4Cash.com,  Inc. Cash utilized was offset
by net proceeds of $4.6 million from the sale of  available-for-sale  investment
securities,  $1.2  million  from  the  sale  of our  24.5%  equity  interest  in
Donativos,  and $0.7  million  from the sale of the gaming  equipment  leased to
Donativos.

     Net Cash provided from financing  activities during the year ended June 30,
2001, $5.9 million,  primarily  resulted from the issuance of convertible notes,
the sale of common and  preferred  stock,  primarily to officers,  directors and
other related  parties,  and advances from related  parties.  These  financings,
totaling  approximately  $14.1 million were  partially  offset by redemptions of
convertible  notes and a net  reduction  of  borrowing  under a  secured  credit
facility.

     Cash provided from financing activities during the year ended June 30, 2000
of $20.6  million  resulted  primarily  from  the  issuance  of the  Series C 5%
Convertible  Preferred  Stock for net proceeds of $9.7 million,  net  borrowings
under a secured credit facility with Merrill Lynch of $6.3 million, the issuance
of $4.0 million of 6% Secured Convertible Notes due December 7, 2001,  issuances
of our Class A Common Stock to certain related parties totaling $2.7 million and
issuances of our Class A Common Stock totaling $2.1 million through the exercise
of Unit Purchase  Options issued in connection  with our Initial Public Offering
in  1995.  Cash  utilized  was  offset  by the  redemption  of our  Series  A 8%
Convertible  Preferred Stock for $3.6 million and payments totaling $1.4 million
we made to  exercise  call  options to  repurchase  shares of our Class A Common
Stock issued to holders of TNCi notes in connection with the  extinguishment  of
those notes as part of our acquisition by merger of TNCi.

                                       17
<PAGE>
     On October 3, 2000, the Company issued $7.0 million of secured  convertible
notes (the  "October  Notes")  to  Advantage  and Koch.  The notes had an annual
interest  rate of 8% and were  convertible  after  120 days  into  shares of the
Company's  Class A Common Stock at a 20% discount to market,  and after 150 days
into shares of U.S. Wireless common stock also at a 20% discount to market.  The
Company was  obligated to register the Class A Common Stock into which the notes
were convertible.  To secure such borrowing,  the Company pledged 866,538 shares
of U.S.  Wireless  common stock to the holders of the notes.  The Company  could
redeem the secured convertible notes at any time for a premium.

     At the date of issuance, the conversion rate of the October Notes was lower
than the market price of the Company's  common stock,  and as such the notes had
an embedded beneficial conversion feature. As the notes could be converted after
120 days, the Company  recorded a non-cash  interest  expense of $631,725 in the
the year ended June 30, 2001 related to the beneficial conversion feature.

     The  terms  of  the  Stock  Pledge  Agreement  executed  and  delivered  in
connection with issuance of the October Notes required that the Company maintain
collateral  coverage of 150%,  and, in the event that such  coverage  fell below
150%, that it deliver  additional  shares of U.S. Wireless common stock so as to
bring the collateral coverage back to 200%.

     The  price  per  share of U.S.  Wireless  common  stock  fell such that the
collateral  coverage  under  the  Stock  Pledge  Agreement  fell  below the 150%
threshold,  and, in response to such  occurrence,  Advantage and Koch  requested
that the Company  deposit  additional  shares of U.S.  Wireless  common stock to
remedy such deficiency.

     The Company and the investors engaged in negotiations regarding the deposit
of  additional  shares of U.S.  Wireless  common  stock,  but such  negotiations
terminated without  resolution.  Advantage and Koch ultimately filed a complaint
(the "Complaint") and obtained a Temporary Restraining Order ("TRO") prohibiting
the  Company  and  its  Chairman  and  Chief  Executive  Officer  from  selling,
conveying, pledging or otherwise transferring any shares of U.S. Wireless common
stock until  resolution of the matters  covered in the Complaint and dissolution
of the TRO.

     Ultimately,  The Company and Advantage and Koch resolved their  differences
pursuant to a Settlement Agreement that provides in general for the following:

     *    The Company transfers ownership of an aggregate of 1,380,000 shares of
          U.S.  Wireless  common stock to  Advantage  and Koch in return for the
          October  Notes  and  related  Stock  Pledge   Agreement  being  deemed
          satisfied in full and canceled (the "Share Transfer");

     *    The Series C 5% Convertible  Preferred Stock (the  "Preferred  Stock")
          held by Advantage and Koch be amended such that it may convert into no
          more than 18.5%  (approximately  1.99 million shares) of the Company's
          Class A  common  stock  outstanding  on the date of  execution  of the
          Settlement Agreement (the "Execution Date");

     *    The Company  registers  for resale the shares of Class A common  stock
          into  which  the  Preferred   Stock  converts  that  are  not  already
          registered for resale;

     *    The Company issues unsecured,  non-convertible  notes to Advantage (in
          the principal  amount of $4,800,000) and Koch (in the principal amount
          of $3,200,000);

     *    The warrants held by Advantage (warrants to purchase 123,055 shares of
          the Company)  and Koch  (warrants  to purchase  102,870  shares of the
          Company) be re-priced so that the exercise  prices  thereof equal 115%
          of market on the day prior to the Execution Date;

     *    The  Complaint be dismissed  with  prejudice and the TRO be dissolved;
          and

     *    The Company, Advantage and Koch exchange mutual releases.

                                       18
<PAGE>
     The  Settlement  Agreement  and  ancillary  documents  were  executed as of
January 31,  2001,  however,  they were held in escrow and not  delivered  until
their  effectiveness  upon  consummation  of the Share  Transfer on February 15,
2001. As a result of the above provisions,  the Company has recognized a gain on
the shares  transferred  to Advantage and Koch amounting to  approximately  $5.5
million and an  extraordinary  loss on  extinguishment  of debt of approximately
$7.6 million, or a net extraordinary loss of approximately $2.1 million.

     In May and June  2000,  The  Gross  Charitable  Unit  Trust  and The  Gross
Charitable  Annuity Trust (together the "Trusts"),  advanced a total of $800,000
to TNCi for working  capital  purposes.  An additional  $250,000 was advanced to
TNCi in July 2000.  On September 12, 2000,  the advances to TNCi were  converted
into two promissory notes, each in the amount of $525,000,  issued to each Trust
by TNCi.  The notes  matured on December 31, 2000 and bore  interest at 9.0%. On
September 28, 2000 the Trusts and two trusts  established for the benefit of Mr.
Gross's children advanced an additional $250,000 in total to TNCi. On January 2,
2001 the notes and the advances were  converted into 260 shares of TNCi Series F
8% Convertible  Preferred  Stock with an aggregrate  stated value of $1,300,000.
The preferred stock is convertible into 1,733,333 shares of TNCi's common stock.
Irwin L. Gross,  Chairman and Chief Executive Officer of Global,  was trustee of
each of these trusts until March 23, 2001.

     In August and  September  2000 the Trusts also advanced a total of $800,000
to Global for working capital purposes. On September 22, 2000, the advances were
converted into two promissory notes,  each in the amount of $400,000,  issued to
each Trust by Global.  The notes  matured on December 31, 2000 and had an annual
interest rate of 9.0%. On December 8, 2000 the Company pledged 200,000 shares of
common  stock of U.S.  Wireless  to the trusts as  security  for the  notes.  On
December 31, the maturity dates of the notes were extended to June 30, 2001.

     During  the  months of August  2000  through  December  2000,  The  Network
Connection's  Executive  Vice  President  advanced  a total of  $335,046  to The
Network Connection for working capital purposes.  Two of these advances totaling
$220,000  were  evidenced by a note dated  November  22, 2000 and allonge  dated
December 5, 2000,  that matured on December 31, 2000.  On January 2, 2001,  this
note and  allonge  were  canceled,  and the  principal  amount  thereof  and the
remainder of these advances were rolled into a promissory  note in the aggregate
principal amount of $335,046 that bears interest at 9% per annum and matures six
months from the date of issuance.

     On October 16, 2000,  an officer of TNCi  purchased  500,000  units of TNCi
consisting  of 500,000  shares of TNCi  common  stock and  warrants  to purchase
166,667  shares of TNCi common  stock.  The  purchase  price was $2.00 per unit,
which was the  closing  market  price of TNCi  common  stock on such  date.  The
warrants  have an  exercise  price of $3.50 per share and a term of  four-years.
Aggregrate  consideration to TNCi was $1 million, which was paid in installments
in August and September 2000.

     On November 22, 2000, $1,667,400 of Mr. Gross' collateral pledged to secure
the Secured  Credit  Facility with Merrill Lynch was applied to repay,  in part,
the Secured Credit  Facility.  The Company issued two promissory  notes totaling
$1,667,400 to Mr. Gross and a charitable  foundation  controlled by him. The new
promissory notes matured on December 31, 2000 and had an annual interest rate of
9.0%. To secure such  borrowing,  the Company  pledged  300,000 shares of common
stock of U.S.  Wireless  to the holders of the notes.  On December  31, 2000 the
maturity dates of the notes were extended to June 30, 2001.

     Between July 2000 and April 2001, Mr. Gross,  the trusts and the charitable
foundation made additional  advances to the Company totaling $757,549  ($644,000
of these advances, plus accrued interest, are in the form of a Treasury Bill and
remain as collateral for the Secured  Credit  Facility with Merrill  Lynch).  On
March 30, 2001, Mr. Gross,  the trusts and the charitable  foundation  converted
the existing  $2,467,400 of notes discussed  above and an additional  $32,600 of
these  advances  into  250  shares  of  Global  Technologies,  Ltd.  Series E 8%
Convertible  Preferred Stock with an aggregate stated value of $2,500,000.  This
preferred  stock is  convertible  into shares of Class A common stock at a fixed
conversion  price of $0.3125 per share,  the closing  price per share of Class A
common stock on March 30, 2001.

                                       19
<PAGE>
     Between  June  30,  2001  and  November  5,  2001,  Mr.  Gross,  a  limited
partnership  controlled by him and certain  Trusts  established  by him advanced
$464,000 to the Company to cover the working capital requirements of the Company
and the  Company's  60% owned  subsidiary,  TNCi UK. The  company  received,  on
November 2, 2001,  $1,455,378  from the sale of terminals  formerly  used in its
lottery business in Great Britain. The Company repaid Mr. Gross and the Trusts a
total $767,000 on November 9, 2001.  Remaining unpaid advances,  at November 12,
2001, received from Mr. Gross and the Trusts total $80,000.

     On June 8, 2000,  the Company  issued $4.0  million of secured  convertible
notes to Advantage Fund II Ltd. and Koch  Investment  Group,  Ltd. (the "Secured
Convertible  Notes").  The notes  bear  interest  at 6% per annum and  mature on
December 7, 2001. The notes are convertible into shares of the Company's Class A
Common  Stock  at a  conversion  price of $2 per  share,  subject  to  customary
adjustments.  To secure such borrowing,  the Company pledged 1,000,000 shares of
common stock of U.S.  Wireless to the holders of the notes.  An event of default
under the notes occurs if U.S.  Wireless  common stock trades at less than $5.00
per  share at any time  during  each of five  trading  days  (which  need not be
consecutive)  within any consecutive  30-day period and certain other conditions
are met.  A default  under the notes  would  allow  the  holders  to  accelerate
repayment  of the  notes.  The  failure  to repay on an  accelerated  basis in a
default  situation could result in the liquidation of the pledged shares of U.S.
Wireless Common Stock.

     On July 7, 2000, the Company  redeemed $2.0 million of the principal amount
of the Secured Convertible Notes. In connection with this redemption, the enders
released to the Company 500,000 shares of U.S.  Wireless common stock previously
held as collateral.  The notes require that in connection  with such  redemption
the Company issue warrants for 125,000 shares, in the aggregate,  of its Class A
Common Stock to the holders of the notes.  These  warrants have a four-year term
and an exercise price of $4.00 per share.  The Company recorded an extraordinary
gain on the extinguishments of debt of $977,580 related to the redemption of the
secured notes.

     On October 5, 2000,  the Company  redeemed  $1.0  million of the  principal
amount of the notes for cash of $1.2 million plus the issuance of 62,500  shares
of its Class A Common  Stock,  as required  under the notes.  As a result of the
redemption,  the lenders released  250,000 shares of U.S.  Wireless common stock
previously  held  as  collateral  to  the  Company.   The  Company  recorded  an
extraordinary  gain on the  extinguishments  of debt of $514,557  for the second
fiscal quarter ended December 31, 2000.

     On February 16, 2000, Global issued 1,000 shares of Series C 5% Convertible
Preferred  Stock  ("Series C Stock")  and  callable  warrants  in return for net
proceeds of $9.7 million.  The preferred stock has a stated value of $10,000 per
share and carries a 5% cumulative dividend payable quarterly in cash or in kind.
As of June 30, 2000, cumulative dividends total $187,415,  and have been paid in
kind.  The  preferred  stock  converts into Class A Common Stock at a conversion
price of $15.21 per share,  representing  120% of the average closing bid prices
thereof  over  the  five  trading  days  beginning  March 1,  2000  (the  "Fixed
Conversion  Price") as adjusted for certain dilutive  events.  Nine months after
funding,  and every three months thereafter,  the conversion price resets to the
lesser  of the Fixed  Conversion  Price or 100% of the  average  of the four low
trading  prices over the course of the  preceding 20 trading  days. On April 14,
2000 the Company  registered  the Class A Common Stock into which the  preferred
stock  and  warrants  are  convertible  or  exercisable,  as the  case  may  be.
Additionally,  the Company may redeem the  preferred  stock for a premium  under
certain  circumstances.  During  March 2001 and April  2001,  the holders of 200
shares of the Series C Stock  converted  such shares into 400,023  shares of the
Company's Class A Common Stock.

     In April 2001,  the holders of the  remaining  800 shares of the  Company's
Series C Stock  Exchanged  such  stock  for 800  shares of the  Company's  newly
authorized Series D Convertible Preferred Stock. This exchange was determined to
be a less costly means of  permitting us to issue shares of our capital stock to
the holders of the Series C Stock having the rights and remedies contemplated by
the amendments to the Series C Stock described in the Settlement  Agreement with
Advantage and Koch. All accrued and unpaid  dividends on the Series C Stock were
cancelled  pursuant  to the  Settlement  Agreement.  The  Series  D  Convertible
Preferred Stock does not accrue  dividends and the conversion price per share of
our Class A Common Stock is fixed at $5.0057 with  adjustment of the  conversion
price  limited to certain  capital  changes and  distributions.  The  settlement
agreement  provides that we register any  unregistered  shares of Class A Common
Stock underlying the Series D Convertible Preferred Stock.

                                       20
<PAGE>
     On April 5, 2000, the Company  entered into a line of credit  facility with
Merrill Lynch in which Merrill Lynch agreed to advance up to $10.0 million based
upon a percentage  of the value of  securities  pledged as  collateral to secure
amounts  drawn  under  the  line of  credit  (the  "Secured  Credit  Facility").
Principal amounts borrowed under the line,  together with accrued interest at an
annual rate equal to the London  Inter-bank Offer Rate (LIBOR) (4.0% at June 30,
2001) plus  1.25%,  are  payable  upon  demand by Merrill  Lynch.  Approximately
$547,000  and $6.3 million was  outstanding  at June 30, 2001 and June 30, 2000,
respectively,  under the Secured Credit Facility. To secure such borrowing,  the
Company  pledged  to  Merrill  Lynch  1,000,000  shares of common  stock of U.S.
Wireless held by the Company.

     If the amount owed under the Secured  Credit  Facility at any time  exceeds
35% of the market value of the shares of common stock of U.S.  Wireless  pledged
to Merrill Lynch,  the Company will be subject to a maintenance call which would
require the Company to pledge  additional  securities  which are  acceptable  to
Merrill  Lynch as  collateral  or require the Company to reduce the  outstanding
balance owed under the Secured Credit  Facility  through payment in cash. On May
2, 2000,  Merrill Lynch issued a maintenance call for approximately $1.4 million
to the Company.  This  maintenance  call was waived until May 12, 2000, when the
Company reduced the outstanding balance by $1.9 million from the proceeds of the
sale of its equity  interest in  Donativos  and the gaming  equipment  leased to
Donativos.  Beginning  on May  24,  2000,  Merrill  Lynch  issued  a  series  of
maintenance  calls  requiring a reduction in the balance  owed of  approximately
$900,000. The final maintenance calls were subsequently satisfied by a pledge of
additional collateral with a market value of approximately $1.6 million, pledged
by Irwin L. Gross,  the Company's  Chairman and Chief Executive  Officer.  As of
June 30, 2000,  the market value of the shares of common stock of U.S.  Wireless
was sufficient to maintain the outstanding balance owed under the Secured Credit
Facility, and Mr. Gross' collateral was released.

     In July and August 2000, Merrill Lynch issued a series of maintenance calls
requiring a reduction in the balance owed of  approximately  $1.2  million.  The
maintenance calls were subsequently secured by pledges of additional  collateral
with a total market value of  approximately  $2.7 million,  pledged by Mr. Gross
for the Company's benefit.

     On November  22, 2000 Merrill  Lynch  issued a demand for  repayment of the
Secured  Credit  Facility  based  upon the  deterioration  in the  price of U.S.
Wireless common stock.  Approximately $6.8 million was outstanding at that time.
The Company  agreed to apply  $1,667,400  of Mr.  Gross'  collateral  as partial
repayment of the Secured Credit Facility and to begin an orderly  liquidation of
the shares of U.S.  Wireless  common stock to repay the balance.  Through  these
sales, the Company reduced the balance of the facility to approximately $840,000
at December 5, 2000.  At the same date the  facility  was secured by a pledge of
777,500  shares of U.S.  Wireless  common  stock and a  $646,000  Treasury  Bill
pledged  for the  benefit  of the  Company  by Mr.  Gross and two  trusts  and a
charitable  foundation that he established.  From March 27, 2001 to May 3, 2001,
the Company sold an additional  242,100 of the pledged  shares of U.S.  Wireless
common stock pursuant to an  arrangement  with Merrill Lynch whereby half of the
proceeds of such sales went to reduce the balance of the credit facility and the
remaining  proceeds went to the Company.  Half of the proceeds  from  additional
sales of  126,900 of these  shares  were  applied  to reduce the  balance of the
credit  facility  to  approximately  $700,000.  The  Company  subsequently  sold
additional  shares of U.S.  Wireless  stock and  further  reduced the balance to
approximately  $581,000.  The balance  owed on the credit  facility is currently
approximately  $547,000.  Merrill Lynch agreed to release the remaining  pledged
shares of U.S. Wireless common stock once the facility was covered by 90% of the
value of the pledged Treasury Bill. The treasury bill continues to be pledged to
Merrill Lynch to secure the credit facility.

     Global is concentrating on its investment in entertainment  and information
systems  for the  passenger  rail  market.  This  business is carried on through
Global's United Kingdom  majority-owned  subsidiary,  TNCi UK Limited, a company
incorporated  under the laws of England and Wales.  Global currently owns 60% of
the equity of TNCi UK.

                                       21
<PAGE>
     TNCi  UK  has  developed  a  broadband,   interactive   entertainment   and
information  system for the  passenger  rail  market.  The system is designed to
provide rail passengers with Internet and e-mail access,  with such customizable
services  as  on-demand  films,  videos  and  music,  video  games,  reservation
information,  train  schedules  and other  Internet-based  content and  commerce
applications.  TNCi UK is currently marketing the system to major rail operators
in the United Kingdom and continental Europe.

     The  Company  has reduced  its number of  employees  to the minimum  number
necessary to continue  developing  and  marketing  the system  discussed  above.
Currently,  the Company has five employees in Philadelphia and four employees in
the United Kingdom.

     The Company has suffered losses aggregrating $72.4 million for the two year
period ended June 30, 2001 and has a  stockholders'  deficiency of $15.7 million
and a working  capital  deficiency  of $8.4  million at June 30, 2001 that raise
substantial doubt about its ability to continue as a going concern.

     Since  April  2001,  and  through  the date of the sale of  certain  of the
Company's  lottery  equipment in November,  2001, as discussed in this document,
the Company's cash  requirements,  including the cash  requirements  of TNCi UK,
have been met through advances from the Company's Chief Executive  Officer,  Mr.
Irwin L. Gross, a company  controlled by him and two trusts  established by him.
Through  that date,  Mr. Gross and these  entities  had  advanced  approximately
$850,000.  The Company received  approximately $1.4 million from the sale of the
lottery  equipment  in November  2001.  The Company  repaid Mr.  Gross and these
entities approximately $767,000 from the lottery equipment proceeds. At November
15, 2001 the Company has cash of approximately $400,000.

     The Company  believes it has sufficient cash to fund its  requirements  and
the cash requirements of TNCi UK through January 2002. We plan to a sell portion
of or  borrow  against  our  investment  in the  interactive  entertainment  and
information  system  for the  passenger  rail  market  to  cover  our  financial
obligations and to continue to execute on our business  strategy.  We provide no
assurance that we will be able to sell a portion of or borrow against our assets
at planned times or for prices necessary to meet our financial obligations or to
take  advantage  of  investment   opportunities  consistent  with  our  business
strategy.

INFLATION AND SEASONALITY

     We do not believe we are  significantly  impacted by  inflation or that our
operations are seasonal in nature.

NEW ACCOUNTING PRONOUNCEMENTS

     In March  2000,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No. 44,  Accounting  for Certain  Transactions  Involving  Stock
Compensation (an  interpretation of APB 25). This  interpretation  clarifies the
application  of APB No. 25 by  clarifying  the  definition  of an employee,  the
determination of non-compensatory plans and the effect of modifications to stock
options.  This  interpretation,  effective  July 1,  2000,  did not have  have a
material effect on Global's consolidated financial statements.

     In June 2001,  the Financial  Accounting  Standards  Board  finalized  FASB
statement No. 141, Business  Combinations  (SFAS 141), and No.142,  Goodwill and
Other  Intangible  Assets (SFAS 142).  SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interest  method of
accounting for business  combinations  initiated  after June 30, 2001.  SFAS 141
also requires that the company recognize  acquired  intangible assets apart from
goodwill if the  acquired  intangible  assets meet  certain  criteria.  SFAS 141
applies to all  business  combinations  initiated  after  June 30,  2001 and for
purchase  business  combinations  completed  on or after July 1,  2001.  It also
requires,  upon  adoption of SFAS 142 that the company  reclassify  the carrying
amounts of intangible  assets and goodwill  based on criteria  specified in SFAS
141.

                                       22
<PAGE>
     SFAS 142 requires,  among other things,  that companies no longer  amortize
goodwill,  but instead  test  goodwill  for  impairment  at least  annually.  In
addition,  SFAS 142 requires that the Company  identify  reporting units for the
purpose of assessing  potential  future  impairments  of goodwill,  reassess the
useful  lives  of  other  existing  recognized   intangible  assets,  and  cease
amortization of intangible  assets with an indefinite useful life. An intangible
asset  with an  indefinite  useful  life  would  be  tested  for  impairment  in
accordance  with  guidance  in SFAS 142.  SFAS 142 is  required to be applied in
fiscal  years  beginning  after  December  15,  2001 to all  goodwill  and other
intangible assets recognized at that date,  regardless of when those assets were
initially  recognized.  SFAS 142 requires the Company to complete a transitional
goodwill  impairment  test six months from due date of asoption.  The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

     The Company's  previous business  combinations were accounted for using the
purchase  method.  As of June 30, 2001,  the Company  wrote off its net carrying
amount of goodwill and other intangible assets totaling $5,547,460. Amortization
expense  during the year ended June 30,  2001 was  $1,150,395.  The  Company has
determined  that the adoption of  Financial  Accounting  Standards  Board "FASB"
Statements  No. 141 (SFAS 141),  Business  Combinations  and No. 142 (SFAS 142),
Goodwill and Other Intangible Assets,  will not have a significant impact on its
financial  position,  results of operations,  and cash flows in the  foreseeable
future.

     The FASB recently issued FASB Statement No. 143,  Accounting for Retirement
Obligations,   to  address  accounting  for  asset  retirement  obligations  and
associated retirement costs of long-lived assets. It will apply to costs such as
those incurred to close a nuclear power plant, an offshore oil platform,  a mine
(e.g., coal or other natural resources),  or a landfill as well as similar costs
incurred  in other  industries.  The  Statement  amends FASB  Statement  No. 19,
Financial  Accounting  and  Reporting  by Oil and Gas  Producing  Companies,  to
indicate  that a company  should  account  for  obligations  for  dismantlement,
restoration,  and  abandonment  costs in accordance  with Statement 143. It also
applies to  rate-regulated  entities that meet the criteria for  application  of
FASB  Statement  No.  71,  Accounting  for  the  Effects  of  Certain  Types  of
Regulation.  Statement 143 is effective for years beginning after June 15, 2002.
Management has  determined  that there will be no material  potential  impact on
financial position, results of operations and cash flows.

     The FASB  recently  issued  FASB  Statement  No.  144,  Accounting  for the
Impairment  or  Disposal  of  Long-Lived   Assets.  The  new  guidance  resolves
significant  implementation issues related to FASB Statement No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of.  Statement 144 is effective for fiscal years  beginning  after  December 15,
2001.  Management has not determined the potential impact on financial position,
results of operations and cash flows.

FORWARD-LOOKING INFORMATION

     This Annual  Report on Form 10-KSB  includes  "forward-looking  statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. This
act  provides  a "safe  harbor"  for  forward-looking  statements  to  encourage
companies to provide  prospective  information  about themselves so long as they
identify these statements as forward-looking  and provide meaningful  cautionary
statements  identifying  important  factors that could cause  actual  results to
differ from the projected results.

     All  statements  other than  statements of historical  fact we make in this
Report are forward-looking.  In particular,  the statements herein regarding our
future  results  of  operations  or  financial   position  are   forward-looking
statements.  In some  cases,  you can  identify  forward-looking  statements  by
terminology such as "may," "will,"  "should,"  "expect,"  "plan,"  "anticipate,"
"believe," "estimate," "predict,"  "potential," or "continue" or the negative of
such terms or other comparable terminology.

                                       23
<PAGE>
     Forward-looking   statements  reflect  our  current  expectations  and  are
inherently uncertain. For these statements,  we claim the protection of the safe
harbor  for  forward-looking  statements  contained  in the  Private  Securities
Litigation  Reform Act of 1995. You should  understand  that future  events,  in
addition to those discussed  elsewhere in this Report,  particularly under "Risk
Factors," and also in other filings made by us with the  Securities and Exchange
Commission,  could affect our future  operations and cause our results to differ
materially  from  those  expressed  in  our  forward-looking   statements.   The
cautionary  statements made in this Report should be read as being applicable to
all related forward-looking statements contained herein.

ITEM 7 -- FINANCIAL STATEMENTS

     Our audited  consolidated  financial  statements for the fiscal years ended
June 30, 2001 and 2000 are located beginning at page F-1 of this Annual 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 our
directors and executive officers as of September 28, 2001:

          NAME             AGE                   POSITION/OFFICE
          ----             ---                   ---------------
     Irwin L. Gross         58      Chief Executive Officer and Chairman of
                                      the Board
     Eric Greenberg         37      President - Gaming Operations
     David N. Shevrin       39      Vice President - Business Development
     S. Lance Silver        33      General Counsel
     M. Moshe Porat         53      Director
     Charles T. Condy       60      Director
     Stephen Schachman      56      Director

     Irwin L. Gross has been  Chairman of Global's  Board of  Directors  and its
Chief  Executive  Officer since  September  1998. Mr. Gross 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 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.  Mr.  Gross has served as a  consultant  to,
investor in and director of,  numerous  publicly held and private  companies and
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.

     Eric Greenberg has served as President - Gaming  Operations of Global since
August 2000.  Prior thereto,  he served as Co-President  of  InteliHealth  since
January  2000  and  from   February   1996  to  January  2000  as  President  of
InteliHealth's Healthy Home catalogue Division,  which he founded.  InteliHealth
is an award-winning  consumer health portal owned by Aetna U.S. Healthcare.  Mr.
Greenberg  co-founded The Fairfield Mint, a consumer  collectibles company based
in  Connecticut,  in August  1995.  He holds a B.A. in  Economics  from  Western
Maryland College and an M.B.A. from Harvard Business School.

                                       24
<PAGE>
     David N.  Shevrin has served as Vice  President - Business  Development  of
Global since  September 15, 1998, with primary  responsibility  for new business
development,  analysis and strategy.  Prior thereto, from July 1998, Mr. Shevrin
was Vice President of Ocean Castle Investments,  LLC. 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 ICC  Technologies.  Before  then,  Mr.  Shevrin  served as a Product
Manager with Kraft General Foods.  Mr. Shevrin  received his M.B.A.  degree from
Duke  University's  Fuqua  School of  Business  and  Bachelor  of Arts degree in
Economics from Emory University.

     S. Lance Silver has served as Vice President and General  Counsel of Global
since September 7, 1999.  Prior thereto,  from September 1994, Mr. Silver was an
associate in the Corporate  Department of Wolf,  Block,  Schorr and Solis-Cohen,
LLP, where his practice focused on securities law, mergers and acquisitions, and
venture  financing.  Mr. Silver received his Juris Doctor (MAGNA CUM LAUDE) from
Temple University School of Law and a Bachelor of Science degree in Finance from
the  Pennsylvania  State  University.  Mr. Silver is licensed to practice law in
Pennsylvania and New Jersey.

     M. Moshe Porat has been a Director of Global since  September  1998.  Since
September  1996,  Dr. Porat has served as the Dean of the School of Business and
Management at Temple  University.  From 1988 to 1996 he was Chairman of the Risk
Management, Insurance and Actuarial Science Department at Temple University. Dr.
Porat  received his  undergraduate  degree in  economics  and  statistics  (with
distinction)  from Tel Aviv  University,  his M.B.A.  (MAGNA CUM LAUDE) from the
Recanati Graduate School of Management at Tel Aviv University, and completed his
doctoral work at Temple  University.  Dr. Porat holds the Chair of the Joseph E.
Boettner  Professorship  in Risk  Management  and  Insurance and has won several
awards in the insurance  field.  Prior to his academic work, Dr. Porat served as
deputy general manager of a large international  insurance company. He holds the
CPCU  professional  designation  and is a  member  of ARIA  (American  Risk  and
Insurance  Association),  IIS (International  Insurance Society), RIMS (Risk and
Insurance  Management  Society)  and  Society of CPCU.  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.

     Charles T. Condy has been a Director of Global since  September  1998.  Mr.
Condy was a director of Rare Medium,  Inc., a publicly  traded company listed on
the  Nasdaq  National  Market,  from  1996 to 1999.  Mr.  Condy is the  founder,
chairman  and chief  executive  officer of Next  Century  Restaurants,  Inc.,  a
private  company that owns Aqua,  and 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. Since
1995,  Mr.  Schachman  has been the  owner of his own  consulting  firm,  Public
Affairs  Management.  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 Systems 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.

                                       25
<PAGE>
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. These rules are complex and difficult
to interpret.  Based solely on a review of Section 16 reports received by Global
from Section 16 reporting persons,  Global believes that no reporting person has
failed to file a Section 16 report on a timely  basis  during the most recent or
any prior  fiscal year,  except as follows:  Irwin L. Gross (one option grant in
fiscal year 2000, and  acquisition  of preferred  stock in fiscal year 2001) and
James W. Fox (one option grant in fiscal year 1999 and two in fiscal year 2000).

ITEM 10 -- EXECUTIVE COMPENSATION

     The summary compensation table below sets forth the aggregate  compensation
paid or accrued by Global for the fiscal years ended June 30, 2001 and 2000, and
the Transition  Period ended June 30, 1999 to (i) the Chief  Executive  Officer,
(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) two individuals
who would  have been  included  in the table but for the fact that they were not
serving  as  executive  officers  of  Global  at the  end of the  most  recently
completed fiscal year (collectively, the "Named Executives").

<TABLE>
<CAPTION>
                                                                                           LONG-TERM
                                                                                          COMPENSATION
                                                           ANNUAL COMPENSATION             SECURITIES
                                                    ----------------------------------     UNDERLYING
NAME AND PRINCIPAL POSITION          FISCAL YEAR    SALARY($)     BONUS($)    OTHER($)     OPTIONS (#)
---------------------------          -----------    ---------     --------    --------     -----------
<S>                                     <C>         <C>           <C>         <C>          <C>
Irwin L. Gross,                         2001        250,000(1)         --         --               --
Chief Executive Officer                 2000        190,846       250,000         --        1,500,000
                                        1999             --            --         --               --

James W. Fox, President                 2001        125,000(2)         --     56,170(3)            --
                                        2000        242,046        45,000         --           25,000
                                        1999        104,718            --         --          105,000

Patrick J. Fodale,                      2001        150,000(4)     26,923         --               --
Chief Financial Officer                 2000        104,708            --     39,766 (5)       75,000
                                        1999             --            --         --               --

Eric Greenberg, President -             2001        175,385(6)         --         --          100,000
Gaming Operations                       2000             --            --         --               --
                                        1999             --            --         --               --

David N. Shevrin, Vice President -      2001        132,000(7)         --         --               --
Business Development                    2000        115,670        22,000         --           25,000
                                        2001         71,924            --         --           75,000

S. Lance Silver,                        2001        118,500(8)         --         --               --
General Counsel                         2000         82,500        11,000         --           75,000
                                        1999             --            --         --               --
</TABLE>

----------
(1)  Due to liquidity  issues,  Mr. Gross has been receiving  half-salary  since
     December  2000.  Thus,  $182,692  was  actually  paid and  $67,308 has been
     deferred indefinitely.
(2)  Mr. Fox left our employ on December 31, 2000.
(3)  Represents severance payments made to Mr. Fox after December 31, 2000.
(4)  Due to liquidity  issues,  Mr. Fodale received  half-salary  since December
     2000.  He left our employ on March 31,  2001.  Thus,  $121,154 was actually
     paid and $28,846 has been deferred indefinitely.

                                       26
<PAGE>
(5)  Represents  reimbursement of moving expenses  incurred by Mr. Fodale in his
     relocation to New York City to begin work for us in December 1999.
(6)  Due to liquidity issues, Mr. Greenberg has been receiving half-salary since
     December  2000.  Thus,  $124,231  was  actually  paid and  $51,154 has been
     deferred indefinitely.
(7)  Due to liquidity issues,  Mr. Shevrin has been receiving  half-salary since
     December  2000.  Thus,  $96,462  was  actually  paid and  $35,538  has been
     deferred indefinitely.
(8)  Due to liquidity  issues,  Mr. Silver has been receiving  half-salary since
     December  2000.  Thus,  $86,596  was  actually  paid and  $31,904  has been
     deferred indefinitely.

OPTION GRANTS IN FISCAL YEAR

     Mr. Eric Greenberg received, during the year ended June 30, 2001, an option
to  purchase  100,000  shares of the  Company's  common  stock.  These  options,
exercisable  at $4 per share,  vest  monthly in equal  monthly  amounts over the
three years following the date of grant and expire on August 2, 2010.

OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES

     The following table sets forth the stock options  exercises made during the
fiscal year ended June 30, 2001 by the Named Executives, as well as the value of
their unexercised stock options as of the end of the Period:

<TABLE>
<CAPTION>
                                                    NUMBER OF SECURITIES
                                                    UNDERLYING UNEXERCISED        VALUE OF UNEXERCISED
                        SHARES                           OPTIONS AT             IN-THE-MONEY OPTIONS AT
                      ACQUIRED ON     VALUE             JUNE 30, 2001                JUNE 30, 2001
      NAME            EXERCISE(#)   REALIZED($)   EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE($)(1)
      ----            -----------   -----------   -------------------------   -------------------------------
<S>                      <C>           <C>               <C>                              <C>
Irwin L. Gross            --            --               775,000/725,000                   --/--
James W. Fox              --            --                93,000/0(2)                      --/--
Patrick J. Fodale         --            --                30,000/45,000                    --/--
Eric Greenberg            --            --                27,780/72,220                    --/--
David N. Shevrin          --            --                62,500/37,500                    --/--
S. Lance Silver           --            --                50,000/25,000                    --/--
</TABLE>

----------
(1)  None of these options had an exercise price less than the closing bid price
     per share of Global's Class A Common Stock on September 28, 2001.
(2)  Mr. Fox's  separation  letter  provided that 93,000 of his options would be
     deemed vested and the remainder canceled.

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.

     Global's  1994  Stock  Option  Plan  provides  for the  automatic  grant of
non-qualified  stock  options to  directors  of Global who are not  employees or
principal  stockholders  ("Eligible  Directors")  to  purchase  shares of common
stock. On the date an Eligible  Director becomes a director of Global, he or she
is to be granted  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 to be granted options to purchase 1,000
shares of Global's Class A Common Stock (each an "Automatic  Grant"), as long as

                                       27
<PAGE>
such  director is a member of the Board of  Directors  on such day. The exercise
price for each share  subject to these options is to be equal to the fair market
value of the Class A 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 is to be not less than 110% of the fair  market
value on the date of grant.  These options are to be  exercisable  in four equal
annual  installments,  commencing  one year from the date of  grant,  and are to
expire  the  earlier  of ten years  after the date of grant or 90 days after the
termination of the director's service on the Board of Directors.

     None  of the  members  of the  present  Board  of  Directors  has  received
Automatic  Grants.  They have otherwise been granted options under Global's 1994
and 1997 Stock  Option  Plans,  each of which  allows for grants to directors in
addition  to or in lieu of the  Initial  Director  Option  and  Automatic  Grant
mechanisms.

EMPLOYMENT AND SEVERANCE AGREEMENTS

     Irwin L. Gross serves as Global's Chief Executive  Officer  pursuant to the
terms of an employment  agreement  that  terminates  on September 30, 2002.  Mr.
Gross  receives a minimum  annual base salary of  $250,000  and,  subject to the
achievement  of  assigned  goals,  bonuses  of not less  than 20% of his  annual
salary. Mr. Gross also received 1,500,000 ten-year options,  25% of which vested
immediately,  25% of which vest, subject to certain conditions,  in three annual
increments  beginning  on October 8, 2000,  and the balance of which vest on the
sixth anniversary of the date of grant,  subject to accelerated vesting pursuant
to a  three-year  vesting  schedule in the event of the  achievement  of certain
performance  milestones and other conditions.  The employment agreement provides
for a severance payment in the event that Global terminates Mr. Gross 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 Global  terminates  Mr. Gross due to a termination  of its business as
defined in the employment agreement. In the event of the termination of Global's
business,  Mr. Gross 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 Global 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.  Such fringe benefits take the form of medical and dental coverage and
an automobile allowance of $1,000 per month.

     James W. Fox  served as  Global's  President  and Chief  Operating  Officer
pursuant to the terms of an employment agreement that terminated on December 31,
2000. Mr. Fox's employment with Global was not renewed. Under the agreement, Mr.
Fox was to receive 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 105,000 10-year options under Global's 1997 Stock
Option Plan, which vest in increments of 21,000 options per year pursuant to the
terms of the  employment  agreement.  The  employment  agreement  provided for a
severance  payment in the event that  Global  terminated  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 provided a payment in the
event Global  terminated Mr. Fox due to a termination of its business as defined
in the  employment  agreement.  In the  event  of the  termination  of  Global'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 Global 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.  Such fringe benefits took the form of medical and dental coverage and
an automobile  allowance of $450 per month. Mr. Fox's separation letter provided
that 93,000 of his options would be deemed  vested and the  remainder  canceled,
and that he would receive severance payments.

     Patrick J. Fodale received a letter regarding his employment from Global on
December 3, 1999.  Mr.  Fodale  resigned his  position  with Global on March 30,
2001.  The letter  provided  for a start date of December 15, 1999 and salary of
$200,000 per year. The terms of the letter included a  performance-based  bonus,
with a target of 25% of salary, and a grant of options to purchase 75,000 shares
of  Global  Class A  Common  Stock,  vesting  in five  equal  annual  increments

                                       28
<PAGE>
beginning with the date of grant.  Mr. Fodale also received a $400 per month car
allowance and medical and dental coverage. In the event of a termination without
"cause" or termination of Global's business, Mr. Fodale would have been entitled
to six months base salary. Mr. Fodale was also reimbursed for moving expenses of
$39,766.

     Eric Greenberg serves as Global's President - Gaming Operations pursuant to
the terms of an employment  agreement that  terminates on August 1, 2003.  Under
the  agreement,  Mr.  Greenberg  is to receive a minimum  annual  base salary of
$190,000 and, subject to the achievement of assigned goals, bonuses of up to 50%
of his annual salary. Mr. Greenberg also received 100,000 options under Global's
1994 Stock Option Plan, which vest in increments of 2,778 per month, with a last
increment of 2,770. The employment agreement provides for a severance payment in
the event that  Global  terminates  Mr.  Greenberg  other than for  "cause,"  in
connection with termination of its business,  or, if after a "change of control"
Mr. Greenberg leaves for "good reason." The severance  payment would be equal to
one-half  of his base  salary  and  acceleration  of vesting of a portion of his
options.  The  employment  agreement  also  provides  that  Global 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.  Such fringe benefits take the form of medical and dental coverage and
an automobile allowance of $500 per month.

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

     The following table sets forth certain  information as of November 15, 2001
regarding  the  ownership  of  Global's  Class A Common  Stock  and  Series E 8%
Convertible  Preferred  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) the Named Executives and (iv) all executive
officers and directors of Global as a group.

<TABLE>
<CAPTION>
                                   CLASS A                   SERIES E 8% CONVERTIBLE
                                 COMMON STOCK                   PREFERRED STOCK(3)
                                 ------------          -------------------------------------
  NAME AND ADDRESS OF             NUMBER OF            PERCENT OF    NUMBER OF    PERCENT OF
  BENEFICIAL OWNER (1)              SHARES              CLASS(2)       SHARES        CLASS
  --------------------              ------              --------       ------        -----
<S>                              <C>                     <C>            <C>          <C>
Irwin L. Gross                    3,465,151(4)            22.0%          250(5)       100%
Charles T. Condy                    137,025(6)               *            --           --
Stephen Schachman                   131,400(7)               *            --           --
M. Moshe Porat                      506,400(8)             3.5%           --           --
David N. Shevrin                     65,583(9)               *            --           --
James W. Fox                         99,600(10)              *            --           --
Patrick J. Fodale                    45,000(11)              *            --           --
Eric Greenberg                       41,920(12)              *            --           --
S. Lance Silver                      57,167(13)              *            --           --
All executive officers and
  directors as a group            4,549,246(4)(6)(7)
   (9 persons)                (8)(9)(10)(11)(12)(13)      27.7%           250         100%
</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.,  The Belgravia,  1811 Chestnut  Street,
     Suite 120, Philadelphia, Pennsylvania 19103.
(2)  For Global,  these  percentages are based on 14,196,682  shares of Global's
     Class A Common  Stock  outstanding  as of November  15,  2001,  except that
     shares  underlying  options and  warrants to purchase  Class A Common Stock
     exercisable  within 60 days are deemed to be  outstanding  for  purposes of
     calculating  the  percentage  owned by the  holder(s)  of such  options and
     warrants.

                                       29
<PAGE>
(3)  $2,500,000  in  advances  to us were  converted  into  these 250  shares of
     preferred stock on March 30, 2001. Each share has a stated value of $10,000
     and is  convertible  into  shares of Class A common  stock  pursuant to the
     following formula:  stated value/0.3125  ($0.3125 was the closing price per
     share of Class A common  stock on March 30,  2001 as reported by the Nasdaq
     National Market).

(4)  Includes  50,948  shares  owned by trusts  for the  benefit  of Mr.  Gross'
     children  of which Mr.  Gross is not a trustee,  and 9,000  shares  held in
     custodial  accounts  for the  benefit of Mr.  Gross'  children of which Mr.
     Gross' wife serves as  custodian.  Also  includes  149,309  shares owned by
     Ocean  Castle  Partners,  LLC,  and 39,750  shares and  warrants  currently
     exercisable for 198,318 shares held by charitable trusts established by Mr.
     Gross and of which he was trustee until March 23, 2001. Mr. Gross disclaims
     beneficial ownership of all of these shares.

     Includes 4,498 shares and warrants currently exercisable for 361,596 shares
     owned  jointly by Mr.  Gross and his wife.  Also  includes  775,000  shares
     issuable to Mr. Gross upon exercise of currently  exercisable options. Also
     includes  warrants  exercisable  for 192,382  shares  held by a  charitable
     foundation established by Mr. Gross.

(5)  Includes 128 shares held by charitable trusts  established by Mr. Gross and
     of  which  he was  trustee  until  March  23,  2001.  Mr.  Gross  disclaims
     beneficial ownership of all of these shares.

     Includes 24 shares owned  jointly by Mr. Gross and his wife.  Also includes
     98 shares held by a charitable foundation established by Mr. Gross.

(6)  Includes  90,000  shares  issuable to Mr. Condy upon  exercise of currently
     exercisable  options, and 30,000 shares issuable to Mr. Condy upon exercise
     of options exercisable within 60 days.

(7)  Includes 90,000 shares issuable to Mr. Schachman upon exercise of currently
     exercisable  options,  and 30,000  shares  issuable to Mr.  Schachman  upon
     exercise of options exercisable within 60 days.

(8)  Includes  375,000 shares owned by First Lawrence  Capital Corp.  over which
     Dr. Porat retains voting power pursuant to a proxy  agreement until January
     1, 2002. Also includes 90,000 shares issuable to Dr. Porat upon exercise of
     currently exercisable options, and 30,000 shares issuable to Dr. Porat upon
     exercise of options exercisable within 60 days.

(9)  Includes  62,500 shares  issuable to Mr. Shevrin upon exercise of currently
     exercisable  options,  and 833 shares issuable to Mr. Shevrin upon exercise
     of options exercisable within 60 days.

(10) Includes  93,000  shares  issuable to Mr. Fox upon  exercise  of  currently
     exercisable options.

(11) Includes  30,000  shares  issuable  to Mr.  Fodale  upon  the  exercise  of
     currently  exercisable  options,  and 15,000 shares  issuable to Mr. Fodale
     upon exercise of options exercisable within 60 days.

(12) Includes 36,114 shares issuable to Mr. Greenberg upon exercise of currently
     exercisable  options,  and 5,556  shares  issuable  to Mr.  Greenberg  upon
     exercise of options exercisable within 60 days.

(13) Includes  50,000  shares  issuable to Mr. Silver upon exercise of currently
     exercisable  options, and 4,167 shares issuable to Mr. Silver upon exercise
     of options exercisable within 60 days.

ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

BHG FLIGHTS, L.L.C.

     We reimburse BHG Flights, L.L.C. for costs and expenses associated with our
use for  corporate  purposes of an airplane  owned by BHG.  Irwin L. Gross,  our
Chairman and Chief Executive Officer, owns 50% of the interests in BHG. To date,
we have reimbursed BHG approximately $107,585.

                                       30
<PAGE>
PLEDGE OF COLLATERAL FOR MERRILL LYNCH CREDIT FACILITY

     In  response to a demand by Merrill  Lynch that  additional  collateral  be
deposited  with Merrill  Lynch in  connection  with our margin loan from Merrill
Lynch against  1,000,000 shares of U.S. Wireless  Corporation  common stock, Mr.
Gross,  for the benefit of Global,  deposited  certain  collateral  with Merrill
Lynch on two separate dates - May 31 ($653,671 of  collateral)  and June 6, 2000
($956,238 of collateral) - all of which collateral was subsequently  released to
Mr. Gross on June 27, 2000. Merrill Lynch demanded that additional collateral be
deposited in connection  with the margin loan again,  and, on July 24, 2000, Mr.
Gross  redeposited  the  collateral  released to him on June 27,  2000.  Merrill
Lynch, on a third occasion,  demanded that additional collateral be deposited in
connection  with the  margin  loan,  and,  on July 27,  2000,  Mr.  Gross  and a
charitable  foundation that he established deposited an additional $1,129,002 of
collateral with Merrill Lynch.

     In connection with Mr. Gross and the  foundation's  pledge of these amounts
of  collateral  on our behalf,  they have been issued  warrants to purchase that
number of shares of our Class A Common  Stock equal to the fair market  value of
the  aggregate  amount of collateral  deposited as described  above with Merrill
Lynch  (accounting  for the amount of  collateral  released on June 27, 2000 and
redeposited  on July 24,  2000 only  once)  divided  by the last sale price of a
share of our  Class A Common  Stock on the day on  which  the  deposit  was made
(using,  for purposes of the  redeposited  collateral,  the last sale prices per
share  for the days on which  the  deposits  were  first  made).  Mr.  Gross was
therefore issued three tranches of five-year  warrants - one to purchase 174,312
shares  (exercise price of $3.75 per share, the last sale price per share on May
31, 2000),  the second to purchase  159,373 shares  (exercise price of $6.00 per
share, the last sale price per share on June 6, 2000), and the third to purchase
27,911 shares (exercise price of $5.125 per share, the last sale price per share
on July 27, 2000).  The foundation was issued one tranche of five-year  warrants
to purchase  192,382 shares  (exercise price of $5.125 per share,  the last sale
price per share on July 27, 2000).

SERIES E 8% CONVERTIBLE PREFERRED STOCK

     In August and September 2000 two charitable trusts  established by Irwin L.
Gross, our Chairman and Chief Executive Officer, advanced a total of $800,000 to
us for working  capital  purposes.  On  September  22, 2000,  the advances  were
converted  into  promissory  notes,  each in the amount of  $400,000.  The notes
matured  on  December  31,  2000 and had an  annual  interest  rate of 9.0%.  On
December 31, the maturity dates of the notes were extended to June 30, 2001.

     On November 22, 2000,  $1,667,400 of collateral pledged to Merrill Lynch in
connection  with our $10.0 million credit  facility for our benefit by Mr. Gross
and a charitable foundation established by Mr. Gross was applied to pay down the
balance  of the  credit  facility.  We  issued  two  promissory  notes  totaling
$1,667,400 to Mr. Gross and the charitable foundation.  The new promissory notes
matured  on  December  31,  2000 and had an  annual  interest  rate of 9.0%.  On
December 31, the maturity dates of the notes were extended to June 30, 2001.

     Between July 2000 and April 2001, Mr. Gross,  the trusts and the charitable
foundation  made  additional  advances to us totaling  $757,548.58  ($644,000 of
these  advances  plus $2,000 in accrued  interest  are in the form of a Treasury
Bill and remain as collateral for the credit  facility with Merrill  Lynch).  On
March 30, 2001, Mr. Gross,  the Trusts and the charitable  foundation  converted
the existing  $2,467,400 of notes discussed  above and an additional  $32,600 of
these  advances  into  250  shares  of  Global  Technologies,  Ltd.  Series E 8%
Convertible  Preferred Stock with an aggregate stated value of $2,500,000.  This
preferred  stock is  convertible  into shares of Class A common stock at a fixed
conversion  price of $0.3125 per share,  the closing  price per share of Class A
common stock on March 30, 2001. The  Certificate  of  Designation  creating this
series of preferred stock includes certain other terms and conditions  customary
for this type of  investment.  In accordance  with NASDAQ rules,  Class A common
stock  representing no more than 19.99% of the outstanding  Class A common stock
on March 30, 2001 may be issued on  conversion  of the  preferred  stock without
prior stockholder approval.

                                       31
<PAGE>
WARRANTS

     As described  above,  in August and September  2000, each of two charitable
trusts   established  by  Mr.  Gross  advanced  $100,000  and  $300,000  to  us,
respectively.  These advances were  aggregated  into notes,  dated September 22,
2000, for each of the trusts.  Each note is in the principal amount of $400,000,
matures on December 31, 2000 and bears  interest at 9% per annum.  In connection
with the  advances,  each trust was issued  five-year  warrants to purchase that
number of shares of our Class A common stock equal to the amount of each advance
made  divided by the last sale price per share on the day of each such  advance.
Each  trust was  therefore  issued  two  tranches  of  warrants - one for 28,571
(exercise price of $3.50) shares and the other for 70,588 shares (exercise price
of $4.25).  Irwin L. Gross,  Chairman and Chief Executive Officer of Global, was
trustee of each of these trusts until March 23, 2001.

LOANS TO GLOBAL

     Since  March 30,  2001,  when the  conversion  of  advances to the Series E
Preferred  Stock  discussed above  occurred,  Mr. Gross,  two charitable  trusts
established  by him and a limited  partnership  controlled by him have funded an
additional  $847,000 to Global.  These advances are currently evidenced by notes
that  provide  for  interest  at a rate of prime plus 2% per annum,  $767,000 of
which have been repaid.  The remaining debt is secured by a security interest in
the equity of TNCi UK owned by Global.

LEASE OF OFFICE SPACE

     Mr. Gross was a principal of Ocean Castle  Partners,  LLC until April 2000.
Ocean Castle leases the approximately 1,500 square feet of office space in which
our principal  executive  offices are located.  Pursuant to an agreement between
Ocean Castle and us, we pay the landlord for the amount of rent  attributable to
this space. To date, we have paid a total of $74,136 pursuant to this agreement.

EMPLOYMENT MATTERS

     We have employment  agreements  with certain of our executive  officers and
have granted such officers options to purchase shares of Class A Common Stock.

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 asterisk (*).

Exhibit
Number                                  Description
------                                  -----------
2.01    -    Asset  Purchase  and Sale  Agreement  dated as of  April  29,  1999
             between the Registrant and TNCi. (8)

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

2.03    -    Agreement  and Plan of Merger  by and  between  Interactive  Flight
             Technologies,  Inc.  and  Global  Technologies,  Ltd.,  dated as of
             August 16, 1999. (12)

2.04    -    Deed,  dated August 18, 2000,  relating to the transfer of stock in
             Inter  Lotto (UK)  Limited  and the  termination  of the  Operating
             Agreements,  by and among Inter Lotto (UK) Limited,  GTL Management
             Limited,  Global Technologies,  Ltd.,  GlobalTech Holdings Limited,
             The Right  Honourable  The Lord Mancroft,  Roy Fisher,  and Douglas
             Smith. (20)

2.05    -    Articles of Association of TNCi UK Limited. (23)

2.06    -    Application for Shares. (23)

3.01    -    Certificate of Ownership and Merger. (1)

                                       32
<PAGE>
3.02    -    Amended  and  Restated   Certificate   of   Incorporation   of  the
             Registrant. (1)

3.03    -    By-laws of the Registrant. (1)

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

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

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

3.07    -    Amended  and  Restated   Certificate  of  Incorporation  of  Global
             Technologies,  Ltd., filed with the Secretary of State of the State
             of Delaware on August 13, 1999. (12)

3.08    -    Amended and Restated By-Laws of Global Technologies, Ltd. (12)

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

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

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

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

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

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

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

4.08    -    Form of Warrant  issued to The Shaar Fund Ltd.  dated May 10, 1999.
             (11)

4.09    -    Registration  Rights  Agreement  dated  May  6,  1999  between  the
             Registrant and The Shaar Fund Ltd. (11)

4.10    -    Certificate of Designations, Rights, Preferences and Limitations of
             Series A 8%  Convertible  Preferred  Stock of Global  Technologies,
             Ltd. (12)

4.11    -    Certificate of Designations, Rights, Preferences and Limitations of
             Series B 8%  Convertible  Preferred  Stock of Global  Technologies,
             Ltd. (12)

4.12    -    Certificate of Designations, Rights, Preferences and Limitations of
             Series C Convertible  Preferred Stock of Global Technologies,  Ltd.
             (14)

4.13    -    Form of Callable  Warrant issued to holders of Series C Convertible
             Preferred Stock of Global Technologies, Ltd. (14)

4.14    -    Registration  Rights  Agreement dated February 16, 2000 between the
             Registrant and the investors signatory thereto. (15)

                                       33
<PAGE>
4.15    -    Private  Placement  Purchase  Agreement  among  Registrant  and the
             Investors signatory thereto, dated as of June 8, 2000. (18)

4.16    -    Form of Secured Convertible Note issued to Investors. (18)

4.17    -    Form of Warrant  to be issued to  holders  of  Secured  Convertible
             Notes in the event of certain redemptions. (18)

4.18    -    Convertible  Secured Note Purchase  Agreement among  Registrant and
             the Investors signatory thereto, dated as of October 3, 2000. (21)

4.19    -    Form of 8% Convertible Secured Note issued to Investors. (21)

4.20    -    Stock Pledge Agreement, dated as of October 3, 2000. (21)

4.21    -    Certificate of Designations, Rights, Preferences and Limitations of
             Series D Convertible  Preferred Stock of Global Technologies,  Ltd.
             (24)

4.22    -    Financial  Consulting  Agreement dated as of March 22, 2001 between
             Equilink Capital Partners, LLC and the Registrant. (25)

4.23    -    Letter  Amendment  dated  as of  April  6,  2001  to the  Financial
             Consulting   Agreement  among  the  Registrant,   Equilink  Capital
             Partners,  LLC and certain affiliates of Equilink Capital Partners,
             LLC. (25)

4.24    -    Financial  Advisory and Consulting  Agreement  dated April 12, 2001
             among the Registrant,  Equilink Capital Partners,  LLC and National
             Securities Corporation. (25)

4.25    -    Warrant  dated  April  12,  2001  issued  to  National   Securities
             Corporation. (25)

4.26    -    Certificate of Designations, Rights, Preferences and Limitations of
             Series E Convertible  Preferred Stock of Global Technologies,  Ltd.
             (*)

10.01   -    Amended and Restated 1994 Stock Option Plan. (3)

10.02   -    Amended and Restated Shareholders'  Agreement dated October 6, 1994
             by Yuri Itkis,  Michail  Itkis,  Boris Itkis,  Steven M.  Fieldman,
             Donald H. Goldman, Lance Fieldman and Registrant. (l)

10.03   -    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)

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

10.05   -    Form of Indemnification Agreement. (1)

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

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

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

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

                                       34
<PAGE>
10.10   -    Office  Lease dated July 15, 1996  between the  Registrant  and AGF
             4041 Limited Partnership. (4)

10.11   -    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)

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

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

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

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

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

10.21   -    Termination   Agreement   dated   November  10,  1997  between  the
             Registrant and Hyatt Ventures, Inc. (10)

10.22   -    Office Lease dated as of September 10, 1999 between the  Registrant
             and 135 East 57th Street LLC. (11)

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. (11)

10.24   -    Amendment dated May 10, 1999 to Registration Rights Agreement dated
             October 23, 1998 between Registrant and TNCi. (11)

10.25   -    Securities Purchase Agreement dated as of May 10, 1999 between TNCi
             and the Registrant for TNCi Series C Convertible  Preferred  Stock.
             (11)

10.26   -    Form of Securities  Purchase  Agreement  dated as of June 25, 1999.
             (11)

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. (11)

                                       35
<PAGE>
10.28   -    Form of Put/Call Agreement dated July 1999. (11)

10.29   -    Securities Purchase Agreement dated August 9, 1999 for the purchase
             of TNCi Series D Notes. (11)

10.30   -    Form of Warrant  Purchase  Agreement  dated  August 9, 1999 between
             Registrant and certain TNCi Warrant holders. (11)

10.31   -    Registration  Rights  Agreement  dated  August  12,  1999 among the
             Registrant, XCEL Capital, LLC and Elaine Martin. (11)

10.32   -    Registration  Rights  Agreement  dated  August  12,  1999 among the
             Registrant,  Robert E. Benninger,  Jr., Sara Anne  Benninger,  Will
             Brantley and Elaine Martin. (11)

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. (11)

10.34   -    Employment Agreement between the Registrant and James W. Fox. (11)

10.35   -    Employment Agreement between Global Technologies, Ltd. and Irwin L.
             Gross, dated October 1, 1999. (12)

10.36   -    Purchase  Agreement  between IFT Leasing Limited and  International
             Lottery and Totalizator  Systems,  Inc.  regarding purchase of ILTS
             Datatrak  On-Line Turnkey Lottery System,  dated September 8, 1999.
             (12)

10.37   -    Facilities  Management Agreement between IFT Management Limited and
             International  Lottery  and  Totalizator  Systems,  Inc.  regarding
             operational  and  technical  support  management  of ILTS  Datatrak
             On-Line Turnkey Lottery System, dated September 8, 1999. (12)

10.38   -    Guarantee by Global  Technologies,  Ltd. of the  obligations of IFT
             Leasing  Limited  and IFT  Management  Limited  under the  Purchase
             Agreement and Facilities Management Agreement, respectively. (12)

10.39   -    Option  Agreement  between Global  Technologies,  Ltd. and Irwin L.
             Gross, dated October 8, 1999. (13)

10.40   -    Convertible   Preferred  Stock  Purchase   Agreement  among  Global
             Technologies, Ltd. and the Investors Signatory thereto, dated as of
             February 16, 2000. (14)

10.41   -    Employment   Agreement  between  Robert  Pringle  and  The  Network
             Connection, Inc., dated March 6, 2000. (17)

10.42   -    Option Agreement between Robert Pringle and The Network Connection,
             Inc., dated March 6, 2000. (17)

10.43   -    Registration Rights Agreement between The Network Connection,  Inc.
             and Robert Pringle,  Jay Rosan, and Richard Genzer,  dated March 6,
             2000. (17)

10.44   -    Settlement  Agreement by and among  Registrant,  Advantage  Fund II
             Ltd. and Koch Investment Group Ltd. (22)

10.45   -    Note Issued by  Registrant  to Advantage  Fund II Ltd. in Principal
             Amount of $4,800,000. (22)

10.46   -    Note  Issued  by  Registrant  to  Koch  Investment  Group  Ltd.  in
             Principal Amount of $3,200,000. (22)

10.47   -    Release  Among   Registrant,   Advantage  Fund  II  Ltd.  and  Koch
             Investment Group Ltd. (22)

                                       36
<PAGE>
10.48   -    Amendment  dated as of April 26, 2001 to the  Settlement  Agreement
             dated as of January  31,  2001 by and among  Registrant,  Advantage
             Fund II Ltd. And Koch Investment Group, Ltd. (24)

10.49   -    Securities  Exchange  Agreement  dated as of April 26,  2001  among
             Registrant,  Advantage Fund II, Ltd and Koch Investment Group, Ltd.
             (24)

23.00   -    Consent of BDO Seidman, LLP (*)

23.01   -    Consent of KPMG LLP (*)

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

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

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

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

99.05   -    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. (11)

99.06   -    Shareholders  Agreement  dated April 29, 1999 by and between Norman
             Feinstein  & Others and IFT  Holdings  Limited and Inter Lotto (UK)
             Limited. (11)

99.07   -    Operating  Agreement  dated April 29, 1999 between Inter Lotto (UK)
             Limited and IFT Management Limited. (11)

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

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

99.14   -    Fifth Allonge to Secured Promissory Note dated July 16, 1999. (11)

99.15   -    Sixth Allonge to Secured Promissory Note dated August 9, 1999. (11)

99.16   -    Seventh  Allonge to Secured  Promissory Note dated August 24, 1999.
             (11)

99.17   -    Form of Termination and Settlement Agreement with Yuri Itkis. (19)

99.18   -    Form of Termination  and Settlement  Agreement with Donald Goldman.
             (19)

                                       37
<PAGE>
----------
*    Filed Herewith.

(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.

(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.

(11) Incorporated  by  reference  from the  Registrant's  Annual  Report on Form
     10-KSB  for the  transition  period  ended  June 30,  1999  filed  with the
     Securities and Exchange Commission on October 28, 1999, File No. 0-25668.

(12) Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB for the fiscal  quarter  ended  September  30, 1999,  filed with the
     Securities and Exchange Commission on November 15, 1999, File No. 0-25668.

(13) Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB for the fiscal  quarter  ended  December  31,  1999,  filed with the
     Securities and Exchange Commission on February 14, 2000, File No. 0-25668.

(14) Incorporated by reference from the Registrant's  Current Report on Form 8-K
     dated February 16, 2000, filed with the Securities and Exchange  Commission
     on February 28, 2000, File No. 0-25668.

(15) Incorporated by reference from the Registrant's  Registration  Statement on
     Form S-3 filed with the  Securities  and Exchange  Commission  on March 17,
     2000, File No. 333-32772.

(16) Incorporated by reference from the Registrant's  Registration  Statement on
     Form S-3/A filed with the Securities  and Exchange  Commission on April 14,
     2000, File No. 333-32772.

(17) Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB  for the  fiscal  quarter  ended  March  31,  2000,  filed  with the
     Securities and Exchange Commission on May 13, 2000, File No. 0-25668.

                                       38
<PAGE>
(18) Incorporated by reference from the Registrant's  Registration  Statement on
     Form S-3 filed with the  Securities  and  Exchange  Commission  on July 10,
     2000, File No. 333-41096.

(19) Incorporated by reference from the Registrant's  Registration  Statement on
     Form S-3/A filed with the Securities and Exchange  Commission on August 15,
     2000, File No. 333-41096.

(20) Incorporated by reference from the Registrant's  Current Report on Form 8-K
     for the  period  ended  August 18,  2000,  filed  with the  Securities  and
     Exchange Commission on September 5, 2000, File No. 0-25668.

(21) Incorporated by reference from the Registrant's  Current Report on Form 8-K
     dated October 3, 2000, filed with the Securities and Exchange Commission on
     October 20, 2000, File No. 0-25668.

(22) Incorporated by reference from the Registrant's  Current Report on Form 8-K
     dated February 15, 2001, filed with the Securities and Exchange  Commission
     on February 20, 2001, File No. 0-25668.

(23) Incorporated by reference from the Registrant's  Current Report on Form 8-K
     dated March 5, 2001,  filed with the Securities and Exchange  Commission on
     March 20, 2001, File No. 0-25668.

(24) Incorporated by reference from the Registrant's  Current Report on Form 8-K
     dated April 26, 2001, filed with the Securities and Exchange  Commission on
     May 2, 2001, File No. 0-25668.

(25) Incorporated by reference from the Registrant's  Registration  Statement on
     Form S-3 filed with the Securities and Exchange  Commission on May 8, 2001,
     File No. 333-60424.

REPORTS ON FORM 8-K

     We filed the  following  Current  Reports on Form 8-K  during the  relevant
reporting period:

     *    April  5,  2001  explaining  that  on  March  24,  2001,  The  Network
          Connection, Inc., an approximately 70% subsidiary at the time, filed a
          voluntary  petition  for  relief  under  Chapter 11 of Title 11 of the
          United  States Code with the United  States  Bankruptcy  Court for the
          Eastern District of Pennsylvania, in Philadelphia.
     *    May 2, 2001  describing the exchange of all shares of our  outstanding
          Series C Preferred Stock for shares of our Series D Preferred Stock.
     *    June 4, 2001 explaining  that we issued a press release  regarding our
          receipt of a Nasdaq  Staff  Determination  on May 23, 2001  indicating
          that  our  securities  were  subject  to  delisting  and  that  we had
          requested a hearing  before a Nasdaq Listing  Qualifications  Panel to
          review the Staff Determination.
     *    June 13,  2001  explaining  that  trading  in shares of U.S.  Wireless
          Corporation,  sales of which had been a primary  source of  liquidity,
          had been halted by Nasdaq.

     We filed the  following  Current  Reports  on Form 8-K  after the  relevant
reporting period:

     *    August 8, 2001 explaining that a Nasdaq Listing  Qualifications  Panel
          had determined to delist our  securities  from The Nasdaq Stock Market
          effective with the open of business on August 8, 2001.

                                       39
<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: December 13, 2001                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.

        SIGNATURE                        TITLE                       DATE
        ---------                        -----                       ----

/s/ IRWIN L. GROSS           Chief Executive Officer           December 13, 2001
--------------------------   and Director
Irwin L. Gross


/s/ STANLEY O. JESTER        Interim Chief Financial Officer   December 13, 2001
--------------------------   (Principal Financial Officer)
Stanley O. Jester


/s/ CHARLES T. CONDY         Director                          December 13, 2001
--------------------------
Charles T. Condy


/s/ STEPHEN SCHACHMAN        Director                          December 13, 2001
--------------------------
Stephen Schachman


/s/ M. MOSHE PORAT           Director                          December 13, 2001
--------------------------
M. Moshe Porat

                                       40
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                        Page
                                                                        ----

Report of Independent Certified Public Accountants...................    F-2

Independent Auditors' Report.........................................    F-3

Consolidated Balance Sheets as of June 30, 2001 and 2000.............    F-4

Consolidated Statements of Operations for the Years Ended
 June 30, 2001, and June 30, 2000....................................    F-5

Consolidated Statements of Stockholders' Equity (Deficiency) and
 Comprehensive Income (Loss) for the Years Ended June 30, 2001 and
  2000...............................................................  F-6 & F-7
Consolidated Statements of Cash Flows for the Years Ended
 June 30, 2001 and June 30, 2000.. ..................................    F-8

Notes to Consolidated Financial Statements...........................F-9 to F-44

                                      F-1
<PAGE>
Report of Independent Certified Public Accountants

To the Stockholders and Board of Directors
Global Technologies, Ltd.
Philadelphia, Pennsylvania

We  have  audited  the  accompanying   consolidated   balance  sheet  of  Global
Technologies,  Ltd  and  subsidiaries  as of  June  30,  2001  and  the  related
consolidated  statements of operations,  stockholders'  equity  (deficiency) and
comprehensive  income  (loss),  and cash  flows for the year then  ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  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 consolidated financial position of Global
Technologies,  Ltd. and  subsidiaries  as of June 30,  2001,  and the results of
their operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements,  the Company has suffered losses aggregating $72.4 million
for the two year period ended June 30, 2001 and has a  stockholders'  deficiency
of $15.7  million and a working  capital  deficiency of $8.4 million at June 30,
2001 that raise  substantial  doubt  about its  ability to  continue  as a going
concern.  Management's plans in regard to this matter are also described in Note
1. The  financial  statements do not include any  adjustments  that might result
from the outcome of this uncertainty.

The Company is also a defendant in several legal proceedings,  as described more
fully in Note 16 to the consolidated financial statements,  the outcome of which
are not presently determinable.

As discussed in Note 2 to the financial  statements,  the  Company's  majority -
owned  subsidiary,  The Network  Connection,  Inc.,  filed for protection  under
Chapter XI of the Bankruptcy Code. The net liabilities of the subsidiary of $5.9
million  at June 30,  2001  have been  classified  as a  deferred  credit on the
consolidated balance sheet. The disposition of the deferred credit is contingent
upon the bankruptcy court's ultimate resolution of the matter.


                                        BDO Seidman, LLP


Philadelphia, Pennsylvania

November 15, 2001

                                      F-2
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


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

We  have  audited  the  accompanying   consolidated   balance  sheet  of  Global
Technologies,  Ltd.  and  subsidiaries  as of June  30,  2000  and  the  related
consolidated statements of operations, stockholders' equity and comprehensive
income  and cash flows for the year then  ended.  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 audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  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, 2000 and the results of their
operations  and their cash flows for the year then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.


                                        /s/ KPMG LLP

Phoenix, Arizona
September 27, 2000,
except for Note 10(c) paragraph 1,
which is as of October 4, 2000

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


<TABLE>
<CAPTION>
                                                                     June 30,           June 30,
                                                                       2001               2000
                                                                  -------------       -------------
<S>                                                               <C>                 <C>
                                  ASSETS
Current Assets:
  Cash and cash equivalents                                       $      45,650       $   3,761,301
  Restricted cash                                                        70,538             766,748
  Investment securities                                                      --          64,125,000
  Accounts receivable                                                        --              55,951
  Prepaid expenses                                                      115,333             846,957
  Assets held for sale                                                1,700,000                  --
  Deferred tax asset                                                         --          24,439,131
  Other current assets                                                   48,144           2,204,803
                                                                  -------------       -------------

      Total current assets                                            1,979,665          96,199,891

  Investments                                                                --              75,000
  Note receivable from related party                                         --             117,612
  Property and equipment, net                                           556,009          17,222,957
  Intangibles, net                                                           --           6,697,955
  Other assets                                                           83,678           1,412,516
                                                                  -------------       -------------

      Total assets                                                $   2,619,352       $ 121,725,931
                                                                  =============       =============

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
  Accounts payable                                                $   1,809,255       $   9,956,182
  Accrued liabilities                                                 1,466,819           3,516,012
  Deferred credit                                                     5,929,024                  --
  Accrued product warranties                                                 --             141,796
  Notes payable                                                         747,560           6,314,129
  Notes payable to related parties                                      401,000             800,000
                                                                  -------------       -------------

      Total current liabilities                                      10,353,658          20,728,119
Notes payable                                                         8,000,000           4,000,000
Accrued litigation settlement                                                --             875,000
                                                                  -------------       -------------

      Total liabilities                                              18,353,658          25,603,119
                                                                  -------------       -------------

Minority interest                                                            --                  --

Stockholder's equity (deficiency):
  Series C 5% convertible preferred stock, 1,000 shares
   designated,  zero shares and 1,000 shares issued and
   outstanding respectively                                                  --                  10
  Series D 5% convertible preferred stock, 1,000 shares
   designated, 150 and zero shares issued and outstanding
   Respectively                                                               2                  --
  Series E 8% convertible preferred stock, 250 shares
   Designated, 250 shares issued and outstanding                              3                  --
  Class A common stock, one vote per share, par value $.01
   Share, 40,000,000 shares authorized; 14,196,682 and
   10,395,015 issued and outstanding, respectively                      141,967             103,952
  Additional paid-in capital                                        142,846,151         135,358,848
  Accumulated other comprehensive income (loss)                        (558,626)         84,157,758
  Accumulated deficit                                              (158,163,803)       (123,497,756)
                                                                  -------------       -------------

      Total stockholders' equity (deficiency)                       (15,734,306)         96,122,812
                                                                  -------------       -------------

      Total liabilities and stockholders' equity (deficiency)     $   2,619,352       $ 121,725,931
                                                                  =============       =============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                            YEAR ENDED JUNE 30
                                                                      -------------------------------
                                                                          2001               2000
                                                                      ------------       ------------
<S>                                                                   <C>                <C>
Revenues:
  Equipment sales                                                     $     84,149       $  6,983,787
  Service income                                                           206,146            413,209
                                                                      ------------       ------------
                                                                           290,295          7,396,996
                                                                      ------------       ------------
Costs and expenses:
  Cost of equipment sales                                                   61,753          4,867,519
  Cost of service income                                                   170,083            148,221
  General and administrative expenses                                   19,249,060         21,166,771
  Expenses associated with investments                                          --          1,944,743
  Loss on write off of intangibles                                       5,547,560                 --
  Loss from impairment of long-lived assets                             10,719,040                 --
  Special charges                                                          725,753          2,156,205
  Amortization of intangibles                                            1,150,395            912,553
                                                                      ------------       ------------
                                                                        37,623,644         31,196,012
                                                                      ------------       ------------

      Operating loss                                                   (37,333,349)       (23,799,016)
Other:
  Interest expense                                                      (4,278,315)        (5,948,347)
  Interest income                                                           47,264            655,194
  Equity in loss of nonconsolidated affiliates                                  --        (10,345,210)
  Gain on sale of investments                                            4,282,844                 --
  Gain on legal settlement                                               1,336,563                 --
  Other income (expense)                                                   108,054            (14,339)
                                                                      ------------       ------------
      Loss before minority interest and
        extraordinary item                                             (35,836,939)       (39,451,718)
Minority interest                                                        1,869,009          1,612,529
                                                                      ------------       ------------

      Loss before extraordinary item                                   (33,967,930)       (37,839,189)

Extraordinary loss on extinguishment of debt                              (698,117)                --
                                                                      ------------       ------------

      Net Loss                                                         (34,666,047)       (37,839,189)

Cumulative dividend on preferred stock                                     (50,000)          (187,415)

Redemption of preferred stock                                             (173,469)           509,183
                                                                      ------------       ------------

      Net loss attributable to common shareholders                    $(34,889,516)      $(37,517,421)
                                                                      ============       ============
Loss per common share: basic and diluted
  Loss per common share before extraordinary item                     $      (2.96)      $      (3.81)
  Extraordinary loss on extinguishments of debt                       $       (.06)                --
                                                                      ------------       ------------

Loss per common share                                                 $      (3.02)      $      (3.81)
                                                                      ============       ============

Weighted average common shares outstanding: basic and diluted           11,541,469          9,842,392
                                                                      ============       ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                         AND COMPREHENSIVE INCOME (LOSS)


<TABLE>
<CAPTION>
                                                                CLASS A              CLASS B         SERIES A      SERIES C, D, & E
                                                             COMMON STOCK         COMMON STOCK    PREFERRED STOCK   PREFERRED STOCK
                                                          -------------------    --------------   ---------------   --------------
                                                          SHARES       AMOUNT    SHARES  AMOUNT   SHARES  AMOUNT    SHARES  AMOUNT
                                                          ------       ------    ------  ------   ------  ------    ------  ------
<S>                                                     <C>         <C>           <C>    <C>     <C>       <C>     <C>        <C>
Balance as of June 30, 1999                              8,151,965   $  81,521      --   $   --     3,000  $ 30         --  $  --
Exercise of stock options                                  132,306       1,323      --       --        --    --         --     --
Issuance of stock for purchase of Series Notes             581,415       5,814      --       --        --    --         --     --
Issuance of stock to officers and directors              1,544,250      15,443      --       --        --    --         --     --
Issuance of warrants and stock to third parties
  for services and in connection with financing             22,500         225      --       --        --    --         --     --
Treasury stock purchases                                        --          --      --       --        --    --         --     --
Issuance of Series C preferred stock                            --          --      --       --        --    --      1,000     10
Redemption of Series A preferred stock                          --          --      --       --    (3,000)  (30)        --     --
Conversion of Note Payable to TNCi common stock                 --          --      --       --        --    --         --     --
Unit purchase options                                      168,897       1,689      --       --        --    --         --     --
TNCi purchase of outstanding warrants                           --          --      --       --        --    --         --     --
Advance under equity purchase agreement                         --          --      --       --        --    --         --     --
Net issuance of TNCi commitment shares associated
  with equity purchase agreement                                --          --      --       --        --    --         --     --
Beneficial conversion on convertible notes                      --          --      --       --        --    --         --     --
Compensation expense related to stock option
  modifications                                                 --          --      --       --        --    --         --     --
Issuance of warrants to related party                           --          --      --       --        --    --         --     --
Fractional shares paid for stock dividend                      (38)         --      --       --        --    --         --     --
Retirement of treasury stock                              (582,530)     (5,825)     --       --        --    --         --     --
Issuance of stock in legal settlements                     376,250       3,762      --       --        --    --         --     --
Equity attributable to minority interest                        --          --      --       --        --    --         --     --
Comprehensive income(loss):
  Gain/Loss on foreign currency translation                     --          --      --       --        --    --         --     --
  Net unrealized gain on investments                            --          --      --       --        --    --         --     --
  Unrealized tax benefit of NOL carryforward                    --          --      --       --        --    --         --     --
  Net Loss                                                      --          --      --       --        --    --         --     --
                                                       -----------   ---------   -----    -----   -------   ---    -------   ----

Balance as of June 30, 2000                             10,395,015     103,952      --       --        --    --       1000     10
Issuance of warrants to related party                           --          --      --       --        --    --         --     --
Issuance of common stock in legal settlements              305,045       3,050      --       --        --    --         --     --
Conversion of Note Payable to common stock                 562,500       5,625      --       --        --    --         --     --
Issuance of common stock related to                             --          --      --       --        --    --         --     --
  Consulting Agreement with Equilink                     1,700,000      17,000      --       --        --    --         --     --
Beneficial conversion on secured notes                          --          --      --       --        --    --         --     --
Redemption of secured convertible notes                         --          --      --       --        --    --         --     --
Conversion of Series C & D Preferred stock to
  common stock                                           1,234,122      12,340      --       --        --    --       (850)    (8)
Conversion of related party debt to Preferred stock             --          --      --       --        --    --        250      3
Incremental increase in capital of TNCi
Comprehensive income (loss):
  Gain/loss on foreign currency translation                     --          --      --       --        --    --         --     --
  Net unrealized gain on investments                            --          --      --       --        --    --         --     --
  Unrealized tax benefit of NOL carryforward                    --          --      --       --        --    --         --     --
  Net Loss                                                      --          --      --       --        --    --         --     --
                                                       -----------   ---------   -----    -----   -------   ---    -------   ----

Balance as of June 30, 2001                             14,196,682   $ 141,967      --       --        --    --        400   $  5
                                                       ===========   =========   =====    =====   =======   ===    =======   ====
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                         AND COMPREHENSIVE INCOME (LOSS)
                                   (Continued)


<TABLE>
<CAPTION>

                                                                          ACCUMULATED
                                                        ADDITIONAL           OTHER
                                                          PAID-IN        COMPREHENSIVE     ACCUMULATED
                                                          CAPITAL        INCOME (LOSS)       DEFICIT
                                                       -------------     ------------     -------------

<S>                                                   <C>               <C>              <C>
Balance as of June 30, 1999                            $ 113,435,479     $    (10,107)    $ (85,658,567)
Exercise of stock options                                    563,386               --                --
Issuance of stock for purchase of Series Notes             1,647,812               --                --
Issuance of stock to officers and directors                2,669,495               --                --
Issuance of warrants and stock to third parties
  for services and in connection with financing            1,949,223               --                --
Treasury stock purchases                                          --               --                --
Issuance of Series C preferred stock                       9,847,405               --                --
Redemption of Series A preferred stock                    (3,570,787)              --                --
Conversion of Note Payable to TNCi common stock              399,800               --                --
Unit purchase options                                      2,109,430               --                --
TNCi purchase of outstanding warrants                       (296,036)              --                --
Advance under equity purchase agreement                      447,544               --                --
Net issuance of TNCi commitment shares associated
  With equity purchase agreement                             606,133               --                --
Beneficial conversion on convertible notes                 4,000,000               --                --
Compensation expense related to stock option
  Modifications                                              278,318               --                --
Issuance of warrants to related party                      2,324,195               --                --
Fractional shares paid for stock dividend                       (519)              --                --
Retirement of treasury stock                              (1,583,125)              --                --
Issuance of stock in legal settlements                       972,409               --                --
Equity attributable to minority interest                    (441,314)              --                --
Comprehensive income(loss):
  Loss on foreign currency translation                            --       (1,369,104)               --
  Net unrealized gain on investments                              --       61,097,838                --
  Unrealized tax benefit of NOL carryforward                      --       24,439,131                --

  Net Loss                                                        --               --       (37,839,189)
                                                       -------------     ------------     -------------

Balance as of June 30, 2000                              135,358,848       84,157,758      (123,497,756)

Issuance of warrants to related party                      1,070,527               --                --
Issuance of common stock in legal settlements              1,106,691               --                --
Conversion of Note Payable to common stock                 1,212,933               --                --
Issuance of common stock related to
  Consulting Agreement with Equilink                         561,000               --                --
Beneficial conversion expense on secured notes               842,300               --                --
Redemption of secured convertible notes                   (2,909,704)              --                --
Conversion of Series C & D preferred stock to
  common stock                                                    --               --                --
Conversion of related party debt to preferred stock        2,499,997               --                --
Incremental increase in capital of TNCi                    3,103,559        3,103,559
Comprehensive income (loss):
  Gain on foreign currency translation                            --          820,585                --
  Net unrealized gain on investments                              --      (61,097,838)               --
  Unrealized tax benefit of NOL carryforward                      --      (24,439,131)               --

  Net Loss                                                        --               --       (34,666,047)
                                                       -------------     ------------     -------------

Balance as of June 30, 2001                            $ 142,846,151     $   (558,626)    $(158,163,803)
                                                       =============     ============     =============

                                                                           TOTAL
                                                                       STOCKHOLDERS'    COMPREHENSIVE
                                                        TREASURY          EQUITY           INCOME
                                                          STOCK        (DEFICIENCY)        (LOSS)
                                                       -----------     ------------     -------------
Balance as of June 30, 1999                            $  (193,990)    $ 27,654,366
Exercise of stock options                                       --          564,709
Issuance of stock for purchase of Series Notes                  --        1,653,626
Issuance of stock to officers and directors                     --        2,684,938
Issuance of warrants and stock to third parties
  for services and in connection with financing                 --        1,949,448
Treasury stock purchases                                (1,394,960)      (1,394,960)
Issuance of Series C preferred stock                            --        9,847,415
Redemption of Series A preferred stock                          --       (3,570,817)
Conversion of Note Payable to TNCi common stock                 --          399,800
Unit purchase options                                           --        2,111,119
TNCi purchase of outstanding warrants                           --         (296,036)
Advance under equity purchase agreement                         --          447,544
Net issuance of TNCi commitment shares associated
  With equity purchase agreement                                --          606,133
Beneficial conversion on convertible notes                      --        4,000,000
Compensation expense related to stock option
  Modifications                                                 --          278,318
Issuance of warrants to related party                           --        2,324,195
Fractional shares paid for stock dividend                       --             (519)
Retirement of treasury stock                             1,588,950
Issuance of stock in legal settlements                          --          976,171
Equity attributable to minority interest                        --         (441,314)
Comprehensive income(loss):
  Loss on foreign currency translation                          --       (1,369,104)    $  (1,369,104)
  Net unrealized gain on investments                            --       61,097,838        61,097,838
  Unrealized tax benefit of NOL carryforward                    --       24,439,131        24,439,131

  Net Loss                                                      --      (37,839,189)      (37,839,189)
                                                       -----------     ------------     -------------

Balance as of June 30, 2000                                     --       96,122,812     $  46,328,676
                                                                                        =============
Issuance of warrants to related party                           --        1,070,527
Issuance of common stock in legal settlements                   --        1,109,741
Conversion of Note Payable to common stock                      --        1,218,558
Issuance of common stock related to
  Consulting Agreement with Equilink                            --          578,000
Beneficial conversion expense on secured notes                  --          842,300
Redemption of secured convertible notes                         --       (2,909,704)
Conversion of Series C & D preferred stock to
common stock                                                    --           12,332
Conversion of related party debt to preferred stock             --        2,500,000
Incremental increase in capital of TNCi
Comprehensive income (loss):
  Gain on foreign currency translation                          --          820,585     $     820,585
  Net unrealized gain on investments                            --      (61,097,838)      (61,097,838)
  Unrealized tax benefit of NOL carryforward                    --      (24,439,131)      (24,439,131)

  Net Loss                                                      --      (34,666,047)      (34,666,047)
                                                       -----------     ------------     -------------

Balance as of June 30, 2001                                     --     $(15,734,306)    $(119,382,431)
                                                       ===========     ============     =============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-7
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED JUNE 30
                                                                            -----------------------------
                                                                                2001             2000
                                                                            ------------     ------------
<S>                                                                         <C>              <C>
Cash flows from operating activities:
  Net loss                                                                  $(34,666,047)    $(37,839,189)
  Adjustments to reconcile net loss to net cash
   Used in operating activities:
    Depreciation and amortization                                              2,798,432        2,080,472
    Gain on sale of investments                                               (4,282,844)              --
    Gain on legal settlement                                                  (1,336,563)              --
    Equity in loss of nonconsolidated affiliate                                       --       10,345,210
    Non-cash expenses associated with investments                                174,990        1,944,743
    Loss applicable to minority interest                                      (1,869,009)      (1,612,529)
    Special charges                                                              725,753        2,156,205
    Loss from impairment of long-lived assets                                 10,719,040               --
    Loss on sale of assets held for sale                                              --           37,893
    Loss on sale of furniture                                                         --           44,300
    Non-cash financial advisory expenses                                         561,000               --
    Non-cash compensation expense                                                267,868        1,905,419
    Non-cash interest expense                                                  3,497,937               --
    Non-cash expenses                                                                 --        5,729,936
    Loss from write down of intangibles assets                                 5,547,560               --
    Extraordinary loss on extinguishments of debt                                698,117               --
    Loss on write off of note receivable                                         117,612               --
  Changes in assets and liabilities, net of acquisition:
    (Increase) decrease in accounts receivable                                   (12,268)          72,538
    (Increase) in inventories                                                         --         (957,625)
    (Increase) decrease in prepaid expenses and other current assets           2,815,016       (1,907,400)
    Increase (decrease) in accounts payable                                   (3,481,975)       7,763,641
    Increase (decrease) in accrued liabilities                                  (852,021)         531,826
    Increase in deferred revenue                                                      --          374,234
    Increase in accrued product warranties                                            --          141,796
    Decrease in accrued litigation settlement                                   (875,000)        (125,000)
                                                                            ------------     ------------
         Net cash used in operating activities                               (19,452,402)      (9,313,530)
                                                                            ------------     ------------
Cash flows from investing activities:
  Maturities of investment securities                                                 --        1,450,079
  Purchases of investment securities                                                  --       (1,839,643)
  Sales of investment securities                                              12,779,913        4,994,422
  Investments in affiliates                                                      (99,990)     (10,988,268)
  Payments received on related party note receivable                                  --           42,381
  Purchases of property and equipment                                         (3,450,507)     (18,254,276)
  Proceeds from sale of equipment                                                     --          799,638
  Proceeds from sale of Donativos                                                     --        1,216,155
  Proceeds from sale of assets held for sale                                          --          762,107
  Decrease in restricted cash                                                    696,210          645,988
  Payments to purchase Series A, D and E notes                                        --         (610,000)
                                                                            ------------     ------------
         Net cash provided by (used in) investing activities                   9,925,626      (21,781,417)
                                                                            ------------     ------------
Cash flows from financing activities:
  Issuance of secured convertible notes                                        7,000,000               --
  Issuance of Series E Preferred Stock of Subsidiary                             908,749               --
  Issuance of Unsecured Convertible Notes                                        200,000               --
  Issuance of Series C Preferred Stock                                                --        9,660,000
  Redemption of Series A Preferred Stock                                              --       (3,570,817)
  Net convertible debt borrowings                                                     --        3,985,000
  Exercise of unit purchase options                                                   --        2,111,119
  Purchase of treasury stock                                                          --       (1,394,960)
  Redemption of Secured Convertible Notes                                     (3,405,000)              --
  Payments on notes payable                                                       (4,542)        (790,092)
  Net (repayments) borrowings under Secured Credit Facility                   (5,761,825)       6,327,730
  Issuance of stock to directors and officers                                  1,000,000        2,684,938
  Issuance of common stock of subsidiary                                       1,794,076
  Advances under equity purchase agreement                                            --          500,000
  Re-purchase of outstanding warrants                                                 --         (296,040)
  Advances from related parties                                                4,176,046          800,000
  Proceeds from issuance of common stock                                          17,000               --
  Employee stock option purchases                                                     --          564,710
                                                                            ------------     ------------
         Net cash provided by financing activities                             5,924,504       20,581,588
                                                                            ------------     ------------

Effect of exchange rate on cash and cash equivalents                            (113,379)      (1,246,614)
                                                                            ------------     ------------

         Net decrease in cash and cash equivalents                            (3,715,651)     (11,759,974)
Cash and cash equivalents at beginning of period                               3,761,301       15,521,275
                                                                            ------------     ------------

Cash and Cash equivalents at end of period                                  $     45,650     $  3,761,301
                                                                            ============     ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-8
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

(a) DESCRIPTION OF BUSINESS

     Global Technologies,  Ltd., and subsidiaries ("Global or the "Company"), in
the past,  was engaged in  developing,  managing  and  commercializing  emerging
growth companies, primarily in the technology and telecommunications sectors. As
a result of difficult  market  conditions and a  determination  by management to
re-focus  operations,  Global is now  concentrating its efforts on entertainment
and information systems for the passenger rail market through its United Kingdom
majority-owned  subsidiary,  TNCi UK Limited ("TNCi UK"), a company incorporated
under the laws of England and Wales. Global currently owns 60% of TNCi UK.

     On  March  24,  2001,  the  Network  Connection,  Inc.  ("TNCi"),  a Global
majority-owned  subsidiary,  filed a voluntary petition for relief under Chapter
11 of the U.S.  Bankruptcy  Code.  TNCi  designed,  manufactured,  and installed
information and entertainment  systems.  TNCi was acquired by the Company during
May 1999. TNCi owns the 40% balance of TNCi UK.

     The Company has suffered losses aggregrating $72.4 million for the two year
period ended June 30, 2001 and has a  stockholders'  deficiency of $15.7 million
and a working  capital  deficiency  of $8.4  million at June 30, 2001 that raise
substantial doubt about its ability to continue as a going concern.

     Since  April  2001,  and  through  the date of the sale of  certain  of the
Company's lottery equipment in November,  2001, the Company's cash requirements,
including the cash  requirements of TNCi UK, have been met through advances from
the Company's Chief Executive  Officer,  Mr. Irwin L. Gross.  Through that date,
Mr.   Gross  had  advanced   approximately   $850,000.   The  Company   received
approximately  $1.4 million  from the sale of the lottery  equipment in November
2001.  The Company  repaid Mr.  Gross  approximately  $767,000  from the lottery
equipment  proceeds.  At November 15, 2001 the Company has cash of approximately
$400,000.

     The Company  believes it has sufficient cash to fund its  requirements  and
the cash requirements of TNCi UK through January 2002. We plan to sell a portion
of or  borrow  against  our  investment  in the  interactive  entertainment  and
information  system  for the  passenger  rail  market  to  cover  our  financial
obligations and to continue to execute on our business  strategy.  We provide no
assurance that we will be able to sell a portion of or borrow against our assets
at planned times or for prices necessary to meet our financial obligations or to
take  advantage  of  investment   opportunities  consistent  with  our  business
strategy.

(b) PRINCIPLES OF CONSOLIDATION

     Global  Technologies,  Ltd. and its wholly-owned  subsidiaries:  GTL Subco,
Inc., GTL Lottoco,  Inc., GTL  Investments,  GlobalTech  Holdings  Limited,  GTL
Management  Limited ("GTL  Management"),  GTL Leasing  Limited ("GTL  Leasing"),
Lottery Sales  Company  Limited,  Interactive  Flight  Technologies  (Gibraltar)
Limited,  GlobalTec  Networks,  LLC  and  MTJ  Corp.,  and  its  majority  owned
subsidiaries,  TNCi and TNCi UK Limited,  are  referred to herein as "Global" or
the "Company".

     As a result of TNCi's  bankruptcy filing Global does not have a controlling
financial  interest after that date, as defined in accordance  with Statement of
Financial  Accounting  Standards  No. 94  "Consolidation  of All  Majority-Owned
Subsidiaries".  Consequently,  pending  resolution of the bankruptcy filing, the
net liabilities of TNCi, as of March 31, 2001 have been classified as a Deferred
Credit in the consolidated  balance sheet.  Results of TNCi's operations for the
period from March 24, 2001 through March 31, 2001 are not  significant  and have
not  been  eliminated  from  operations.   Operations  of  TNCi  have  not  been
consolidated subsequent to March 31, 2001.

     On  March  7,  2001,  TNCi  announced  that  it was  suspending  its  hotel
operations and discontinuing its other domestic  operations in order to focus on
long-haul  train  operations  to be  provided  through  its  then  wholly  owned

                                      F-9
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

subsidiary, TNCi UK. TNCi UK's directors had informed TNCi on March 2, 2001 that
it was on the verge of insolvency and subject to imminent voluntary  dissolution
under  English law.  Global,  in order to provide TNCi UK with funds for ongoing
operations and to avoid insolvency,  committed to pay $600,000 for 600 shares of
TNCi UK 9% cumulative,  convertible preferred stock. $446,980 of this amount had
been  funded  through  June 30, 2001 and the  balance is  represented  by a note
payable to TNCi UK. The preferred  shares are  convertible  into ordinary shares
and vote as if they are ordinary shares. As a result of this transaction, Global
acquired a 60% interest in TNCi UK and TNCi maintains the remaining 40%.

     The equity  method of  accounting  was 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") was amortized
over five years on a straight-line basis which adjust the Company's share of the
affiliates earnings or losses.

     The equity  method of accounting  requires that when it is determined  that
only one party in an  investment  has any tangible  assets at risk,  100% of the
equity  loss  should be  recorded  by that party  without  regard to the percent
ownership in the  investment.  The Company  determined  during the quarter ended
December  31,1999 that it retained the majority of the financial risk related to
Inter Lotto (UK) Limited ("Inter Lotto") and, accordingly,  recorded against its
investment,  100% of the loss  incurred by Inter Lotto for the fiscal year ended
June 30, 2000.

     All other  investments  for which the Company  does not have the ability to
exercise  significant  influence  are  accounted  for under  the cost  method of
accounting.

     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.

(d) 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
equivalents.

(e) INVESTMENT SECURITIES

     Investment  securities  at June 30,  2000  consisted  of  corporate  equity
securities  issued by U.S.  Wireless  Corporation and Shop4cash.  U.S.  Wireless
Corporation  filed,  on August 29, 2001, for protection  under Chapter 11 of the
Bankruptcy Code. The Company's remaining basis of approximately  $482,000 in its
U.S.  Wireless  Corporation   securities  was  charged  to  loss  on  investment
securities  during the year ended June 30, 2001. In accordance with Statement of
Financial  Accounting  Standards  ("SFAS")  No.  115,  "Accounting  for  Certain
Investments in Debt and Equity  Securities",  the equity and debt securities are
classified  at June 30,  2000 as  available-for-sale  and carried at fair value,
based on  quoted  market  prices.  The net  unrealized  gains or losses on these
investments were reported in stockholders'  equity. The specific  identification
method  is used to  compute  the  realized  gains and  losses on the  investment
securities.

                                      F-10
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(f) INTANGIBLES

     Intangibles consisted of goodwill and trademarks and represented the excess
of the purchase price over the fair value of the net assets  acquired.  On March
7, 2001, TNCi announced that it had re-evaluated certain aspects of its business
and would focus its efforts on the Company's  operations  in the United  Kingdom
and  discontinue  and suspend its domestic  operations.  In connection with this
discontinuance  and  suspension  of  domestic  operations,  TNCi  determined  it
necessary to write off all of the intangible assets on its balance sheet,  which
consisted  of goodwill  and certain  intellectual  property.  As a result,  TNCi
determined that the remaining unamortized  intangibles were worthless and a loss
on write off of intangibles in the amount of $5,547,560 was recorded.

     Prior to the write off,  goodwill had been  amortized over five years using
the  straight-line  method.  Effective  May 1, 2000,  the  Company  revised  its
estimate of the  remaining  useful life of its  goodwill  from ten years to five
years as a result of economic events which occurred during the period.  Goodwill
amortization expense was $1,150,395 and $896,287 in the year ended June 30, 2001
and June 30, 2000,  respectively.  Had the Company  assumed a five-year life for
goodwill  amortization  at the  beginning  of the year,  additional  expense  of
approximately  $593,000  (unaudited) would have been recorded for the year-ended
June 30, 2000.

     Trademarks are stated at fair market value at the date of  acquisition  and
were 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 assets should be evaluated for possible  impairment,  the
Company uses an estimate of the  undiscounted  net cash flows over the remaining
life of assets in  measuring  whether an asset is  recoverable.  In cases  where
undiscounted  expected  future cash flows are less than the carrying  value,  an
impairment  loss is recognized to reduce the carrying value of the intangible to
its estimated fair value. There were no remaining  intangible assets at June 30,
2001.

(g) PROPERTY AND EQUIPMENT

     Property and  equipment  are stated at the lower of cost or net  realizable
value.   Depreciation   and   amortization   expense  is  calculated  using  the
straight-line  method over the estimated useful lives of the assets ranging from
three  to  seven  years.   Leasehold   improvements   are  amortized  using  the
straight-line  method  over the  shorter of the  underlying  lease term or asset
life.  Property  and  equipment  at June 30,  2001 is  primarily  equipment  and
information  systems used in the information and entertainment  systems business
carried on through TNCi UK.

     In  October  2000,  the  Company  began to shut down its  lottery  network,
consisting of a central  computer system and terminals  connected to the central
system via wireless  technology.  The  Company,  through its wholly owned United
Kingdom  subisidaries,  had previously operated lotteries on behalf of charities
in Great  Britain.  The Company  de-installed  and  warehoused the terminals and
system while seeking a purchaser.  The Company has sold or otherwise disposed of
most of the  terminals and has recorded a loss on  disposition  and writedown of
equipment of approximately $7.4 million.

     On March 7,  2001,  TNCi,  a  majority  owned  subsidiary  of the  Company,
announced  that it had  re-evaluated  certain  aspects of its business and would
focus it's  efforts  on the  Company's  operations  in the  United  Kingdom  and
discontinue its domestic operations.  TNCi wrote down the value of equipment and
systems,  primarily installed interactive entertainent systems, by approximately
$3.3 million.

     Guest pay  interactive  systems at June 30, 2000 consisted of equipment and
related  costs of  installation.  Construction  in  progress  at June  30,  2000
consisted of purchased and manufactured  parts of partially  installed guest pay
interactive systems.

                                      F-11
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(h) REVENUE RECOGNITION

     The Company's  revenue derived from sales and installation of equipment was
recognized upon  installation and acceptance by the customer.  Fees derived from
servicing  installed systems are recognized when earned,  according to the terms
of the service contract.  Revenue pursuant to contracts that provide for revenue
sharing with  customers  and/or others was recognized in the period the services
are purchased by the systems' end users (i.e.,  a hotel guest).  Revenue  earned
pursuant  to  extended  warranty  agreements  was  recognized  ratably  over the
warranty period. The Company is currently  negotiating to install its systems in
passenger trains in Europe and currently has no other revenue streams.

(i) IMPAIRMENT OF LONG-LIVED ASSETS

     The Company  evaluates  the potential  impairment  of long-lived  assets in
accordance  with SFAS No. 121,  "Accounting  for the  Impairment  of  Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." In cases where undiscounted
expected  future cash flows are less than the carrying value, an impairment loss
is  recognized to reduce the carrying  value of the asset to its estimated  fair
value.

(j) 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.

(k) NET LOSS PER SHARE

     Basic net loss per share is  computed  by  dividing  loss  attributable  to
common stockholders, by the weighted average number of common shares outstanding
for all periods presented.  All stock options and warrants outstanding have been
excluded from the weighted average number of common shares  outstanding  because
their inclusion would have been  anti-dilutive.  There were options and warrants
outstanding,  at June 30, 2001,  to purchase  3,904,971  shares of the Company's
class A common stock.

     In  November  1999,  the  Company  redeemed  the  Series A Stock  valued at
$4,080,000  for cash of  $3,520,000,  plus  payment  of  $50,817  for legal fees
related to the  transaction.  The resulting  $509,183  discount  represents  the
excess  carrying  value  amount of the  preferred  stock  over the fair value of
consideration  transferred to the holders of the preferred  stock,  and is added
back to net loss at June 30,  2000 to  arrive  at net loss  available  to common
shareholders  for  determining  basic net loss per share for the year ended June
30,  2000.  In August  2000,  TNCi  issued  100  shares of Series E  convertible
preferred stock that included an embedded beneficial conversion feature. The net
loss  attributable  to  common  stockholders  was  increased  by  $173,469,  the
estimated value of the beneficial conversion feature.

(l) 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. SFAS No. 123
"Accounting for Stock Based Compensation"  established accounting and disclosure
requirements  using  fair value  based  methods of  accounting  for stock  based
employee compensation plans. As permitted,  the Company has elected to adopt the
pro forma disclosure provisions only of SFAS No. 123.

                                      F-12
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(m) RECENT ACCOUNTING PRONOUNCEMENTS

     In March  2000,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No. 44,  Accounting  for Certain  Transactions  Involving  Stock
Compensation (an  interpretation of APB 25). This  interpretation  clarifies the
application  of APB No. 25 by  clarifying  the  definition  of an employee,  the
determination of non-compensatory plans and the effect of modifications to stock
options.  This  interpretation  was  effective  July 1,  2000 and did not have a
material effect on Global's consolidated financial statements.

     In June 2001,  the Financial  Accounting  Standards  Board  finalized  FASB
statement No. 141, Business  Combinations  (SFAS 141), and No.142,  Goodwill and
Other  Intangible  Assets (SFAS 142).  SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interest  method of
accounting for business  combinations  initiated  after June 30, 2001.  SFAS 141
also requires that the company recognize  acquired  intangible assets apart from
goodwill if the  acquired  intangible  assets meet  certain  criteria.  SFAS 141
applies to all  business  combinations  initiated  after  June 30,  2001 and for
purchase  business  combinations  completed  on or after July 1,  2001.  It also
requires,  upon  adoption of SFAS 142 that the company  reclassify  the carrying
amounts of intangible  assets and goodwill  based on criteria  specified in SFAS
141.

     SFAS 142 requires,  among other things,  that companies no longer  amortize
goodwill,  but instead  test  goodwill  for  impairment  at least  annually.  In
addition,  SFAS 142 requires that the Company  identify  reporting units for the
purpose of assessing  potential  future  impairments  of goodwill,  reassess the
useful  lives  of  other  existing  recognized   intangible  assets,  and  cease
amortization of intangible  assets with an indefinite useful life. An intangible
asset  with an  indefinite  useful  life  would  be  tested  for  impairment  in
accordance  with  guidance  in SFAS 142.  SFAS 142 is  required to be applied in
fiscal  years  beginning  after  December  15,  2001 to all  goodwill  and other
intangible assets recognized at that date,  regardless of when those assets were
initially  recognized.  SFAS 142 requires the Company to complete a transitional
goodwill  impairment  test six months from due date of adoption.  The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

     The Company's  previous business  combinations were accounted for using the
purchase  method.  As of June 30, 2001,  the Company  wrote off its net carrying
amount of goodwill and other intangible assets totaling $5,547,460. Amortization
expense  during the year ended June 30,  2001 was  $1,150,395.  The  Company has
determined  that  the  adoption  of SFAS  141  and  SFAS  142  will  not  have a
significant impact on its financial  position,  results of operations,  and cash
flows in the foreseeable future.

     The FASB recently issued FASB Statement No. 143,  Accounting for Retirement
Obligations,   to  address  accounting  for  asset  retirement  obligations  and
associated retirement costs of long-lived assets. It will apply to costs such as
those incurred to close a nuclear power plant, an offshore oil platform,  a mine
(e.g., coal or other natural resources),  or a landfill as well as similar costs
incurred  in other  industries.  The  Statement  amends FASB  Statement  No. 19,
Financial  Accounting  and  Reporting  by Oil and Gas  Producing  Companies,  to
indicate  that a company  should  account  for  obligations  for  dismantlement,
restoration,  and  abandonment  costs in accordance  with Statement 143. It also
applies to  rate-regulated  entities that meet the criteria for  application  of
FASB  Statement  No.  71,  Accounting  for  the  Effects  of  Certain  Types  of
Regulation.  Statement 143 is effective for years beginning after June 15, 2002.
Management has  determined  that there will be no material  potential  impact on
financial position, results of operations and cash flows.

     The FASB  recently  issued  FASB  Statement  No.  144,  Accounting  for the
Impairment  or  Disposal  of  Long-Lived   Assets.  The  new  guidance  resolves
significant  implementation issues related to FASB Statement No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of.  Statement 144 is effective for fiscal years  beginning  after  December 15,
2001.  Management has not determined the potential impact on financial position,
results of operations and cash flows.

                                      F-13
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(n) FOREIGN CURRENCY TRANSLATION

     The  financial   statements  of  the  Company's   United   Kingdom   ("UK")
subsidiaries  are translated  into U.S.  dollars in accordance with SFAS No. 52,
"Foreign Currency  Translation".  Assets and liabilities of the subsidiaries are
translated into U.S. dollars at current or historical exchange rates. Income and
expense  items are  translated at the average  exchange  rate for the year.  The
resulting translation  adjustments are recorded directly as a separate component
of  stockholders'  equity.  All transaction  gains or losses are recorded in the
consolidated  statement of operations.  The Company  recognized foreign currency
transaction  losses of $139,297  and  $246,938 for the years ended June 30, 2001
and 2000 respectively in general and administrative expenses.

(o) CONCENTRATION OF CREDIT RISK

     Financial   instruments,   which   potentially   subject   the  Company  to
concentrations  of  credit  risk,  consist   principally  of  cash,   investment
securities and accounts receivable.  The Company's investment securities consist
primarily  of  approximately  476,000  and  3,000,000  shares  of U.S.  Wireless
Corporation Common Stock at June 30, 2001 and June 30, 2000, respectively.  U.S.
Wireless  Corporation filed, on August 29, 2001, for protection under Chapter 11
of the Bankruptcy Code. The Company's remaining basis of approximately  $482,000
was charged to loss on investment securities at June 30, 2001.

     Concentrations  of credit risk with respect to accounts  receivable  result
from the Company's current exposure to a limited customer base.

(p) COMPREHENSIVE INCOME (LOSS)

     The Company reports comprehensive income and its components in its full set
of  financial   statements   in  accordance   with  SFAS  No.  130,   "Reporting
Comprehensive Income."  Comprehensive income consists of net income,  unrealized
gains on  investment  securities,  and  foreign  currency  translations,  and is
presented   in  the   Consolidated   Statement  of   Stockholders'   Equity  and
Comprehensive  Income;  it does not affect the Company's  financial  position or
results of operations.

(2) IMPACT OF TNCi's BANKRUPTCY ON GLOBAL TECHNOLOGIES AND GLOBAL TECHNOLOGIES
ACQUISITION OF TNCi UK

     The Company acquired an approximate 79% interest, on an if-converted common
stock  basis,  in TNCi  through a series of  transactions  during May 1999.  The
Company  has  consolidated  the results of  operations  of TNCi from the date of
acquisition through the date of TNCi's bankruptcy filing.

     On March 24,  2001,  TNCi  filed for  protection  under  Chapter  11 of the
Bankruptcy  Code.  TNCi opted for  Chapter 11 (as opposed to  liquidation  under
Chapter 7) because of the potential during the reorganization process to realize
value from or increase the value of certain of TNCi's remaining  assets,  namely
the Swissair  lawsuit (See Note 16) and its 40% interest in TNCi UK. There is no
assurance,  however, that any such value will be realized or increased, or, that
if realized, such value would be to an extent sufficient for TNCi to emerge from
Chapter 11. In addition,  Swissair has recently filed for bankruptcy protection.
After filing its petition for relief under Chapter 11, TNCi filed a Form 15 with
the SEC and  terminated its  registration  under Section 12(g) of the Securities
Act of 1933.

     Pending resolution of the bankruptcy  filing, the net liabilities  totaling
$5,929,024  of TNCi as of March  31,  2001 have been  classified  as a  Deferred
Credit in the Company's consolidated balance sheet as at June 30, 2001, which is
the  result of netting  $1.2  million  of TNCi  assets and $7.1  million of TNCi
liabilities.  The  Deferred  Credit,  or a portion  thereof,  could  represent a
recovery by Global upon the resolution of the bankruptcy.

                                      F-14
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     On  March  7,  2001,  TNCi  announced  that  it was  suspending  its  hotel
operations and discontinuing its other domestic  operations in order to focus on
long-haul  train  operations  to be  provided  through  its  then  wholly  owned
subsidiary, TNCi UK. TNCi UK's directors had informed TNCi on March 2, 2001 that
it was on the verge of insolvency and subject to imminent voluntary  dissolution
under  English law.  Global,  in order to provide TNCi UK with funds for ongoing
operations and to avoid insolvency,  committed to pay $600,000 for 600 shares of
TNCi UK 9% cumulative,  convertible preferred stock. $446,980 of this amount had
been  funded  through  June 30, 2001 and the  balance is  represented  by a note
payable to TNCi UK. The preferred  shares are  convertible  into ordinary shares
and vote as if they are ordinary shares. As a result of this transaction, Global
acquired a 60% interest in TNCi UK and TNCi  maintains the remaining 40% of TNCi
UK's outstanding equity

(3) INVESTMENT SECURITIES

     Market value reflects the price of publicly traded  securities at the close
of business at the  respective  dates.  Unrealized  gain  reflects the excess of
market value over carrying  value of publicly  traded  securities  classified as
available for sale.

     The following  summarizes our investments in marketable  securities at June
30, 2001 and June 30, 2000:

<TABLE>
<CAPTION>
                                                       GROSS         GROSS
                                                     UNREALIZED    UNREALIZED
                                      AMORTIZED       HOLDING        HOLDING         FAIR
                                         COST          GAINS         LOSSES          VALUE
                                     -----------    -----------    -----------    -----------
<S>                                  <C>            <C>            <C>            <C>
JUNE 30, 2001 Available-for-sale:
  Corporate equity Securities        $         0    $         0    $         0    $         0

JUNE 30, 2000 Available-for-sale:
  Corporate equity Securities        $ 3,037,269    $61,087,731    $         0    $64,125,000
</TABLE>

     Corporate equity securities consist of 476,300 and 3,000,000 shares of U.S.
Wireless Corporation ("U.S. Wireless") Common Stock as of June 30, 2001 and June
30, 2000, respectively. U.S. Wireless Corporation filed, on August 29, 2001, for
protection  under Chapter 11 of the  Bankruptcy  Code.  The Company's  remaining
basis of approximately  $482,000 in its U.S. Wireless Corporation securities was
charged to loss on investment securities during the year ended June 30, 2001.

     The Company's  non-current  investments  at June 30, 2000  consisted of its
$75,000 investment in Shop4cash.com which was written off in 2001.

(a) U.S. WIRELESS CORPORATION

     In March 1999, the Company invested $3 million in U.S. Wireless in exchange
for 30,000  shares of Series B Preferred  Stock.  In March and April  2000,  the
Company converted its Series B Preferred Stock of U.S. Wireless Corporation into
3,000,000  shares of U.S.  Wireless Common Stock.  The common stock had not been
registered  under the  Securities  Act of 1934 and any sales by the Company were
subject to the limitations of Rule 144.

     After the  expiration  of the one-year  holding  period,  the Company began
selling its shares of U.S.  Wireless Common Stock under Rule 144. As the Company
intended  to sell all or a portion of these  shares,  the  Company  changed  its
method of accounting for this investment from the cost method to classifying the
investment  as  available-for-sale  carried at fair market value as of March 31,
2000. Unrealized gains on this investment were reflected as a separate component
of  stockholders'  equity.  At June 30, 2000 the market  price of U.S.  Wireless
Common  Stock was $21.375 per share,  resulting  in a total fair market value of
$64,125,000.

                                      F-15
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(b) INTER LOTTO (UK) LIMITED

     The Company,  through  certain  wholly owned United  Kingdom  subsidiaries,
previously  operated  lotteries  on  behalf of  charities  in Great  Britain  in
conjunction  with Inter  Lotto (UK)  Limited  (which  maintained  the license to
operate lotteries).

     In May 1999,  the  Company  completed  the  acquisition  of a 27.5%  equity
interest in Inter Lotto through its wholly-owned subsidiary, GlobalTech Holdings
Limited, a UK company  ("GlobalTech  Holdings").  The Company accounted for this
investment under the equity method.

     Inter Lotto has a license  granted by the Gaming Board for Great Britain to
operate daily  lotteries on behalf of charities  throughout  the UK.  Through an
Operating Agreement between Inter Lotto and GTL Management Limited, a UK company
and  wholly-owned  subsidiary of GlobalTech  Holdings  ("GTL  Management"),  GTL
Management  managed the  operations of the  lotteries  and Inter Lotto  retained
responsibility  for  regulatory  issues,  charity  recruiting  and certain other
functions  as required  under the gaming  laws.  GTL  Management  developed  and
installed  a network  of gaming  terminals  and a  central  operating  center to
operate the lotteries and markets and operated the lottery,  including selecting
the game and managing  the  network.  In  exchange,  GTL  Management  retained a
portion of the revenues generated from lottery ticket sales.

     In December 1999, the Company  determined  that it retained the majority of
the financial risk related to Inter Lotto and, accordingly, recorded against its
investment,  100% of the loss  incurred by Inter Lotto for the fiscal year ended
June 30, 2000.

     On August 18, 2000 the  Company  transferred  its equity  interest in Inter
Lotto back to existing  shareholders  of Inter  Lotto in exchange  for a nominal
amount, the termination of the existing Operating Agreement with GTL Management,
the continued use of the Inter Lotto lottery license  through  December 31, 2000
and the repayment of certain Value Added Tax rebates owed to GTL Management. The
Company wrote off its investment as of June 30, 2000 in Inter Lotto of $684,685,
consisting  of  working  capital  advances,  notes  receivable  and  capitalized
acquisition costs.

     The Company recorded its  proportionate  share of losses of Inter Lotto and
Equity  Goodwill  amortization  of $10,204,125 for the year ended June 30, 2000,
which  was  recorded  as equity in loss of  non-consolidated  affiliates  in the
consolidated statements of operations.

(c) DONATIVOS S.A. DE C.V.

     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 Technologies  (Gibraltar) Limited, a Gibraltar company ("IFT Gibraltar"),
loaned  $1,632,000 to Donativos in exchange for a 24.5% interest in the venture.
The Company  accounted for this investment under the equity method.  In addition
to IFT  Gibralter,  other  partners in the  venture  included  Regal  Gaming and
Entertainment,  Inc. a Minnesota  corporation,  which also had a 24.5% interest,
and a Mexican  national,  who had a 51% interest.  The IFT Gibraltar loan had an
annual  interest  rate  equal to the Prime Rate plus  three  percent  (3%) and a
maturity  date of April 30,  2001.  The  Company  had also  provided a letter of
credit in the amount of $913,445 to secure  repayment of the  purchase  price of
certain gaming equipment  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 was to receive 25% of
all of the profits generated by Donativos.

                                      F-16
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In the quarter ended  December 31, 1999,  the Company  determined  that the
value of its investment in Donativos had been  permanently  impaired.  Donativos
was not  generating  sufficient  profits to meet its  obligations to the Company
under the loan and equipment financing agreements and, therefore, its ability to
continue as a "going concern" was in doubt.  At that time the equity  investment
was written  off and a reserve  for the full amount of the loans and  subsequent
advances to  Donativos  was  recorded,  resulting  in a charge to income of $1.5
million.  On April 14, 2000, the Company  entered into an agreement  pursuant to
which on May 10, 2000 the Company received $2.0 million from Donativos in return
for cancellation of the debt owed by Donativos to IFT Gibraltar and the transfer
of the equity that Global and Regal  Gaming held in  Donativos  to the  majority
shareholder of Donativos.  The transaction  also involved an exchange of general
releases  and  transfer  of title  to the  equipment  in the  gaming  center  in
Monterrey,  Mexico from IFT  Gibraltar to Donativos.  The Company  reversed $1.2
million of the prior loan reserve.  In addition,  in February  2000, the Company
paid the gaming equipment  purchase  obligation in full and cancelled the letter
of credit.

     During the year ended June 30, 2000 the Company recorded its  proportionate
share of losses of Donativos and Equity Goodwill  amortization of $141,085 which
have  been  recorded  as equity in loss of  non-consolidated  affiliates  in the
consolidated statements of operations.

(d) SHOP4CASH.COM, INC.

     On November 23, 1999 the Company acquired 500,000 shares,  or approximately
4% of Shop4Cash.com, Inc. ("Shop4Cash") at a price of $2.00 per share. Shop4Cash
is a privately held, cash incentive based,  Internet shopping portal. Global has
registration rights in connection with these shares. The investment was recorded
at cost.

     In July  2000,  Shop4Cash  decided  to  implement  certain  changes  to its
existing  business  model in order to create  additional  value for its merchant
base. In September 2000,  Shop4Cash signed a letter of intent for the purpose of
merging with an on-line credit card services  provider.  This anticipated merger
would create an e-commerce  platform  servicing both consumers and the Shop4Cash
merchant base. The post-merger  entity would offer merchants on-line credit card
processing and transaction  services in addition to the existing services of the
Shop4Cash website.

     Concurrently  with the proposed  merger,  Shop4Cash was seeking  additional
financing  for  working  capital  purposes  of  $300,000  from  a  group  of its
stockholders,  which includes the Company.  It planned to raise these additional
funds through the sale of common stock and accepted subscription  agreements for
the full  $300,000.  The Company  determined  it  necessary  to  write-down  its
investment in Shop4Cash by $925,000 as of June 30, 2000, (which does not include
the shares to be purchased in the recent  financing round) to $75,000 to reflect
a permanent impairment of its previous investment.

     On October 11, 2000, the Company purchased an additional  999,900 shares of
common stock of Shop4Cash.com,  Inc.  ("Shop4Cash") for $99,990,  resulting in a
total  investment  of  approximately  14% of the  outstanding  common  stock  of
Shop4Cash. Shop4Cash continued to require capital to finance its business model.
As of March 15, 2001,  Shop4Cash has been unable to obtain additional  financing
to  continue  its  operations.  As a  result,  the  Company  wrote off its total
remaining investment of $174,990.

                                      F-17
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) RESTRICTED CASH

     At June 30, 2001 and 2000, the Company held  restricted cash of $70,538 and
$766,748,  respectively.  The June 30,  2001  balance  was the  amount  of lease
collateral  which  was  released,  during  July  2001,  by the  landlord  of the
Company's  New York  office,  upon the  cancellation  of the lease.  The Company
forfeited  approximately  $220,000  upon that  cancellation.  The  Company  held
$475,915 as of June 30, 2000 in a trust fund for payments, which might have been
required under severance agreements with one former executive of the Company. At
June 30, 2000,  restricted cash also included  $290,833 held in a certificate of
deposit with a commercial  bank as  collateral  for a letter of credit issued to
secure the lease for the Company's offices in New York.

(5) ASSETS HELD FOR SALE

     Assets held for sale at June 30, 2001 of  $1,700,000  is the  estimated net
sales value of the remaining  approximate  2,300 terminals and central  computer
system  owned  by  certain  of  the  Company's   wholly  owned  United   Kingdom
subsidiaries.  The Company sold,  during October 2001,  the 2,300  terminals for
$1,455,000.  The Company has not yet found a purchaser for the central  computer
system.

     The  Company,   through   certain  of  its  wholly  owned  United   Kingdom
subsidiaries,  previously  owned a lottery  network and  operated  lotteries  on
behalf of  charities  in Great  Britain in  conjunction  with  Inter  Lotto (UK)
Limited  (which  maintains  the license to operate  lotteries).  The network was
comprised of approximately  3,675 terminals and a central  computer  system.  In
December  2000,  the Company  returned  1,333  terminals  in a  settlement  with
International Lottery & Totalizator Systems, Inc. ("ILTS") in lieu of payment of
approximately $2.8 million of outstanding accounts payable due ILTS for both the
original purchase and facilities  management  services.  The remaining terminals
were sold as discussed above.

(6) IMPAIRMENT OF LONG-LIVED ASSETS

     The Company  continually  evaluates the potential  impairment of long-lived
assets, including intangible assets, primarily goodwill, in accordance with SFAS
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed  Of." In cases  where  undiscounted  expected  future cash
flows are less than the carrying value, an impairment loss will be recognized to
reduce the carrying value of the asset to its estimated fair value.

     On March 7, 2001, TNCi announced that it had  re-evaluated  certain aspects
of its business and would focus it's efforts on the Company's  operations in the
United  Kingdom  and  discontinue  and  suspend  its  domestic  operations.   In
connection with this discontinuance and suspension of domestic operations,  TNCi
determined it necessary to write off all of the intangible assets on its balance
sheet, which consisted of goodwill and certain intellectual property. The amount
written off was approximately $5.5 million. In addition, based on the impairment
of certain fixed assets of TNCi  consisting  primarily of installed  interactive
entertainment  systems at hotel properties,  resulting from the determination to
suspend  hotel  operations,  TNCi has written  down the value of these assets as
reflected  on its balance  sheet by  approximately  $3.3  million in the quarter
ended March 31, 2001.

     On March 22, 2001, TNCi returned new equipment costing  approximately  $1.5
million to a vendor to reduce an outstanding accounts payable balance. In return
the  company  received  a credit for $1.1  million  with the  difference  of $.4
million  representing a 25% restocking  charge from the vendor.  This difference
was recorded to operating expenses.

                                      F-18
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The  Company  owned a lottery  network,  consisting  of a central  computer
system and 2,244  terminals  that  connect to the  central  system via  wireless
technology.  The Company,  through  certain of its wholly  owned United  Kingdom
subsidiaries,  previously  operated  lotteries  on behalf of  charities in Great
Britain in  conjunction  with Inter  Lotto (UK)  Limited  (which  maintains  the
license to  operate  lotteries),  using this  system.  On August 18,  2000,  the
Company  transferred  its equity  interest in Inter  Lotto back to the  existing
shareholders  of Inter Lotto and terminated  the operating  agreement with Inter
Lotto.  While the Company was  entitled to use the Inter Lotto  lottery  license
through  December 31,  2000,  it ceased  operating  lotteries on behalf of Inter
Lotto in October 2000,  and began to shut down the network of lottery  terminals
to reduce costs.  At that time, the network  consisted of the central system and
approximately  3,675  gaming  terminals,   of  which  approximately  3,000  were
installed  at  third-party  retailer  locations  with  the  wireless  connection
technology.  The Company  de-installed  and  warehoused  all the  terminals  and
central system. The base cost of the network was approximately $12.3 million. In
December  2000,  the Company  returned  1,333  terminals  in a  settlement  with
International Lottery & Totalizator Systems, Inc. ("ILTS") in lieu of payment of
approximately $2.8 million of outstanding accounts payable due ILTS for both the
original purchase and facilities management services.

     Based  upon the  value  realized  from  the  settlement  with  ILTS and the
prospects  for  alternative  uses  of  the  network,  the  Company  recorded  an
impairment  loss of  approximately  $3.4  million  in the second  quarter  ended
December  31,  2000.  After a further  review,  the Company  determined  that an
additional  impairment loss of  approximately  $1.4 million was necessary in the
third quarter ended March 31, 2001 to adjust the carrying value of the equipment
to the then estimated net realizable  value of approximately  $4.3 million.  The
company reached a sales agreement on October 12, 2001 with ILTS for the purchase
of the remaining 2,287  terminals for $1,455,378.  Final payment was received on
November 2, 2001 and the equipment was released to the  purchaser.  As a result,
the Company  recorded,  as of June 30, 2001,  an additional  impairment  loss of
approximately $2.6 million.

     The Company also plans to sell the remaining central computer system, which
value is estimated at approximately  $250,000. The lottery equipment is recorded
on the Balance Sheet at June 30,2001 as assets held for sale.

                                      F-19
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) Property and Equipment

    Property and equipment consist of the following:

                                                          JUNE 30,
                                             --------------------------------
                                                 2001                2000
                                             ------------        ------------
     Leasehold improvements                  $     24,044        $    831,388
     Purchased software                            12,550             188,476
     Furniture                                     28,333             414,890
     Equipment                                    892,222          15,090,614
     Guest Pay Interactive Systems:
      Installed                                        --             467,885
      Construction in progress:
       System components                               --             967,215
       Work in progress                                --           1,009,907
                                             ------------        ------------
                                                  957,149          18,970,375
     Less accumulated depreciation
      and amortization                           (401,140)        (1,747,418)
                                             ------------        ------------
                                             $    556,009        $ 17,222,957
                                             ============        ============

(8) INTANGIBLES

     Intangibles consist of the following:

                                                          JUNE 30,
                                             --------------------------------
                                                 2001                2000
                                             ------------        ------------
     Goodwill                                 $        --         $ 7,605,876
     Trademarks                                        --              79,613
                                              -----------         -----------
                                                       --           7,685,489
     Less accumulated amortization                     --            (987,534)
                                              -----------         -----------
                                              $        --         $ 6,697,955
                                              ===========         ===========

     The Goodwill and  trademarks  were recorded on the books of TNCi which,  on
March 24, 2001, filed for Bankruptcy  protection under Chapter 11. Prior to this
filing the  Goodwill  and  Trademarks  were  reevaluated  and  determined  to be
worthless and written off in the quarter ended March 31, 2001.

(9) ACCRUED LIABILITIES

     Accrued liabilities consist of the following:

                                                         JUNE 30,
                                              ------------------------------
                                                 2001                 2000
                                              ----------          ----------
     Due to related parties                   $   95,963          $1,419,716
     Other accrued expenses                    1,370,856           2,096,296
                                              ----------          ----------
                                              $1,466,819          $3,516,012
                                              ==========          ==========

                                      F-20
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(10) NOTES PAYABLE

     Notes payable consists of the following:

<TABLE>
<CAPTION>
                                                                                   JUNE 30,
                                                                         ---------------------------
                                                                            2001             2000
                                                                         ----------      -----------
<S>                                                                      <C>             <C>
     Secured Credit Facility due on demand, interest
      at LIBOR plus 1.25%                                                $  547,560      $ 6,309,385
     Secured Convertible Notes due December 7, 2001, interest
      at 6%, convertible into common stock of the Company                        --        4,000,000
     Unsecured and Non-Convertible Notes due February 2003,
       interest at 8%                                                     8,000,000
     Secured Non-Convertible Note due February 2002,
       interest at Prime plus 4%                                            200,000
     Notes payable due in varying installments through 2000,
       interest ranging from 6.9% to 11% collateralized by vehicles              --            4,744
                                                                         ----------      -----------
             Total                                                        8,747,560       10,314,129
     Less current portion                                                   747,560        6,314,129
                                                                         ----------      -----------
                                                                         $8,000,000      $ 4,000,000
                                                                         ==========      ===========
</TABLE>

     Aggregate maturities of notes payable as of June 30, 2001 are as follows:

              2002                      $   747,560
              2003                        8,000,000
                                        -----------
                                        $ 8,747,560
                                        ===========

(a) SECURED CREDIT FACILITY

     On April 5, 2000, the Company  entered into a line of credit  facility with
Merrill Lynch in which Merrill Lynch agreed to advance up to $10.0 million based
upon a percentage  of the value of  securities  pledged as  collateral to secure
amounts  drawn  under  the  line of  credit  (the  "Secured  Credit  Facility").
Principal amounts borrowed under the line,  together with accrued interest at an
annual rate equal to the London  Inter-bank  Offer Rate (LIBOR)  (3.875% at June
30, 2001) plus 1.25%,  are payable upon demand by Merrill Lynch.  To secure such
borrowing, the Company pledged to Merrill Lynch 1,000,000 shares of common stock
of U.S. Wireless held by the Company.

     If the amount owed under the Secured  Credit  Facility at any time  exceeds
35% of the market value of the shares of common stock of U.S.  Wireless  pledged
to Merrill Lynch,  the Company will be subject to a maintenance call which would
require the Company to pledge  additional  securities  which are  acceptable  to
Merrill  Lynch as  collateral  or require the Company to reduce the  outstanding
balance owed under the Secured Credit  Facility  through payment in cash. On May
2, 2000,  Merrill Lynch issued a maintenance call for approximately $1.4 million
to the Company.  This  maintenance  call was waived until May 12, 2000, when the
Company reduced the outstanding balance by $1.9 million from the proceeds of the
sale of its equity  interest in  Donativos  and the gaming  equipment  leased to
Donativos.  Beginning  on May  24,  2000,  Merrill  Lynch  issued  a  series  of
maintenance  calls  requiring a reduction in the balance  owed of  approximately
$900,000. The final maintenance calls were subsequently satisfied by a pledge of
additional collateral with a market value of approximately $1.6 million, pledged
by Irwin L. Gross,  the Company's  Chairman and Chief Executive  Officer.  As of
June 30, 2000,  the market value of the shares of common stock of U.S.  Wireless
was sufficient to maintain the outstanding balance owed under the Secured Credit
Facility, and Mr. Gross' collateral was released.

                                      F-21
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In July and August 2000, Merrill Lynch issued a series of maintenance calls
requiring a reduction in the balance owed of  approximately  $1.2  million.  The
maintenance calls were subsequently secured by pledges of additional  collateral
with a total market value of  approximately  $2.7 million,  pledged by Mr. Gross
for the Company's benefit.

     On November  22, 2000 Merrill  Lynch  issued a demand for  repayment of the
Secured  Credit  Facility  based  upon the  deterioration  in the  price of U.S.
Wireless common stock.  Approximatley $6.8 million was outstanding at that time.
The Company  agreed to apply  $1,667,400  of Mr.  Gross'  collateral  as partial
repayment of the Secured Credit Facility and to begin an orderly  liquidation of
the shares of U.S.  Wireless  common stock to repay the balance.  Through  these
sales, the Company reduced the balance of the facility to approximately $840,000
at December 5, 2000.  At the same date the  facility  was secured by a pledge of
777,500  shares of U.S.  Wireless  common  stock and a  $646,000  Treasury  Bill
pledged  for the  benefit  of the  Company  by Mr.  Gross and two  trusts  and a
charitable  foundation that he established.  From March 27, 2001 to May 3, 2001,
the Company sold an additional  242,100 of the pledged  shares of U.S.  Wireless
common stock pursuant to an  arrangement  with Merrill Lynch whereby half of the
proceeds of such sales went to reduce the balance of the credit facility and the
remaining  proceeds went to the Company.  Half of the proceeds  from  additional
sales of  126,900 of these  shares  were  applied  to reduce the  balance of the
credit  facility  to  approximately  $700,000.  The  Company  subsequently  sold
additional  shares of U.S.  Wireless  stock and  further  reduced the balance to
approximately  $581,000.  The balance  owed on the credit  facility is currently
approximately  $547,000.  Merrill Lynch agreed to release the remaining  pledged
shares of U.S. Wireless common stock once the facility was covered by 90% of the
value of the pledged Treasury Bill. The treasury bill continues to be pledged to
Merrill Lynch to secure the credit facility.

     In connection  with the pledges of his  collateral to meet the  maintenance
calls,  Mr.  Gross  was  granted  warrants  to  purchase  553,978  shares of the
Company's  Class A Common Stock based upon the amount of collateral  pledged and
the closing  market price of the stock on the date of each  pledge.  The Company
recorded  non-cash  interest  expense of $1,070,527 and $1,526,527 for the years
ended June 30, 2001 and June 30, 2000,  respectively,  related to the  estimated
fair value of the warrants granted for the collateral pledged.

(b) 6% SECURED CONVERTIBLE NOTES

     On June 8, 2000,  the Company  issued $4.0  million of secured  convertible
notes to Advantage Fund II Ltd. and Koch  Investment  Group,  Ltd. (the "Secured
Convertible  Notes").  The notes  bore  interest  at 6% per annum and  mature on
December 7, 2001. The notes are convertible into shares of the Company's Class A
Common  Stock  at a  conversion  price of $2 per  share,  subject  to  customary
adjustments.  To secure such borrowing,  the Company pledged 1,000,000 shares of
common stock of U.S.  Wireless to the holders of the notes.  An event of default
under the notes occurs if U.S.  Wireless  common stock trades at less than $5.00
per  share at any time  during  each of five  trading  days  (which  need not be
consecutive)  within any consecutive  30-day period and certain other conditions
are met.  A default  under the notes  would  allow  the  holders  to  accelerate
repayment  of the  notes.  The  failure  to repay on an  accelerated  basis in a
default  situation could result in the liquidation of the pledged shares of U.S.
Wireless Common Stock.

     At the date of issuance,  the  conversion  rate of the Secured  Convertible
Notes was lower than the market price of the Company's stock at issuance, and as
such the notes have an  embedded  beneficial  conversion  feature.  The  Secured
Convertible  Notes can be converted at any time prior to redemption.  Therefore,
the Company recorded  interest expense of $4.0 million related to the beneficial
conversion feature.

     On July 7, 2000, the Company  redeemed $2.0 million of the principal amount
of the Secured  Convertible  Notes.  In  connection  with this  redemption,  the
lenders  released to the Company  500,000 shares of U.S.  Wireless  common stock
previously  held as collateral.  The notes require that in connection  with such
redemption the Company issue warrants for 125,000 shares,  in the aggregate,  of
its Class A Common  Stock to the  holders of the notes.  These  warrants  have a

                                      F-22
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

four-year term and an exercise price of $4.00 per share. The Company recorded an
extraordinary  gain on the  extinguishments  of debt of $977,580  related to the
redemption of the secured notes.

     On October 5, 2000,  the Company  redeemed  $1.0  million of the  principal
amount of the notes for cash of $1.2 million plus the issuance of 62,500  shares
of its Class A Common  Stock,  as required  under the notes.  As a result of the
redemption,  the lenders released  250,000 shares of U.S.  Wireless common stock
previously  held  as  collateral  to  the  Company.   The  Company  recorded  an
extraordinary  gain on the  extinguishments  of debt of $514,557  for the second
fiscal quarter ended December 31, 2000.

     On October 25, 2000, the remaining $1.0 million of principal  amount of the
notes was converted into 500,000  shares of the Company's  Class A Common Stock.
As a result of the conversion  the lenders  released the final 250,000 shares of
U.S. Wireless common stock previously held as collateral.

(c) 8% SECURED CONVERTIBLE NOTES

     On October 3, 2000, the Company issued $7.0 million of secured  convertible
notes (the  "October  Notes")  to  Advantage  and Koch.  The notes had an annual
interest  rate of 8% and were  convertible  after  120 days  into  shares of the
Company's  Class A Common Stock at a 20% discount to market,  and after 150 days
into shares of U.S. Wireless common stock also at a 20% discount to market.  The
Company was  obligated to register the Class A Common Stock into which the notes
were convertible.  To secure such borrowing,  the Company pledged 866,538 shares
of U.S.  Wireless  common stock to the holders of the notes.  The Company  could
redeem the secured convertible notes at any time for a premium.

     At the date of issuance, the conversion rate of the October Notes was lower
than the market price of the Company's  common stock,  and as such the notes had
an embedded beneficial conversion feature. As the notes could be converted after
120 days, the Company  recorded a non-cash  interest  expense of $842,300 in the
year ended June 30, 2001 related to the beneficial conversion feature.

     The  terms  of  the  Stock  Pledge  Agreement  executed  and  delivered  in
connection with issuance of the October Notes required that the Company maintain
collateral  coverage of 150%,  and, in the event that such  coverage  fell below
150%, that it deliver  additional  shares of U.S. Wireless common stock so as to
bring the collateral coverage back to 200%.

     The  price  per  share of U.S.  Wireless  common  stock  fell such that the
collateral  coverage  under  the  Stock  Pledge  Agreement  fell  below the 150%
threshold,  and, in response to such  occurrence,  Advantage and Koch  requested
that the Company  deposit  additional  shares of U.S.  Wireless  common stock to
remedy such deficiency.

     The Company and the investors engaged in negotiations regarding the deposit
of  additional  shares of U.S.  Wireless  common  stock,  but such  negotiations
terminated without  resolution.  Advantage and Koch ultimately filed a complaint
(the "Complaint") and obtained a Temporary Restraining Order ("TRO") prohibiting
the  Company  and  its  Chairman  and  Chief  Executive  Officer  from  selling,
conveying, pledging or otherwise transferring any shares of U.S. Wireless common
stock until  resolution of the matters  covered in the Complaint and dissolution
of the TRO.

     Ultimately,  The Company and Advantage and Koch resolved their  differences
pursuant to a Settlement Agreement that provides in general for the following:

     *    The Company transfers ownership of an aggregate of 1,380,000 shares of
          U.S.  Wireless  common stock to  Advantage  and Koch in return for the
          October  Notes  and  related  Stock  Pledge   Agreement  being  deemed
          satisfied in full and canceled (the "Share Transfer");

     *    The Series C 5% Convertible  Preferred Stock (the  "Preferred  Stock")
          held by Advantage and Koch be amended such that it may convert into no
          more than 18.5%  (approximately  1.99 million shares) of the Company's
          Class A  common  stock  outstanding  on the date of  execution  of the
          Settlement Agreement (the "Execution Date");

                                      F-23
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     *    The Company  registers  for resale the shares of Class A common  stock
          into  which  the  Preferred   Stock  converts  that  are  not  already
          registered for resale;

     *    The Company issues unsecured,  non-convertible  notes to Advantage (in
          the principal  amount of $4,800,000) and Koch (in the principal amount
          of $3,200,000);

     *    The warrants held by Advantage (warrants to purchase 123,055 shares of
          the Company)  and Koch  (warrants  to purchase  102,870  shares of the
          Company) be re-priced so that the exercise  prices  thereof equal 115%
          of market on the day prior to the Execution Date;

     *    The Complaint be dismissed with prejudice and the TRO be dissolved;
          and

     *    The Company, Advantage and Koch exchange mutual releases.

     The  Settlement  Agreement  and  ancillary  documents  were  executed as of
January 31,  2001,  however,  they were held in escrow and not  delivered  until
their  effectiveness  upon  consummation  of the Share  Transfer on February 15,
2001.  As a result  of the above  provisions,  the  Company  has  recognized  an
extraordinary  gain on the shares transferred to Advantage and Koch amounting to
approximately  $5.5 million and an extraordinary  loss on extinguishment of debt
of approximately  $7.6 million,  a net extraordinary  loss of approximately $2.1
million.

(11) NOTES PAYABLE TO RELATED PARTY

     In May and June  2000,  The  Gross  Charitable  Unit  Trust  and The  Gross
Charitable  Annuity Trust (together the "Trusts"),  advanced a total of $800,000
to TNCi for working  capital  purposes.  An additional  $250,000 was advanced to
TNCi in July 2000.  On September 12, 2000,  the advances to TNCi were  converted
into two promissory notes, each in the amount of $525,000,  issued to each Trust
by TNCi.  The notes  mature on December 31, 2000 and bear  interest at 9.0%.  On
September 28, 2000 the Trusts and two trusts  established for the benefit of Mr.
Gross's children advanced an additional $250,000 in total to TNCi. On January 2,
2001 the notes and the advances were  converted into 260 shares of TNCi Series F
8% Convertible  Preferred  Stock with an aggregrate  stated value of $1,300,000.
The preferred stock is convertible into 1,733,333 shares of TNCi's common stock.
Irwin L. Gross,  Chairman and Chief Executive Officer of Global,  was trustee of
each of these trusts until March 23, 2001.

     In August and  September  2000 the Trusts also advanced a total of $800,000
to Global for working capital purposes. On September 22, 2000, the advances were
converted into two promissory notes,  each in the amount of $400,000,  issued to
each Trust by Global.  The notes  matured on December 31, 2000 and had an annual
interest rate of 9.0%. On December 8, 2000 the Company pledged 200,000 shares of
common  stock of U.S.  Wireless  to the trusts as  security  for the  notes.  On
December 31, the maturity dates of the notes were extended to June 30, 2001.

     On November 22, 2000,  $1,667,400 of Mr. Gross'  collateral  was applied to
repay the Secured  Credit  Facility with Merrill  Lynch.  The Company issued two
promissory  notes totaling  $1,667,400 to Mr. Gross and a charitable  foundation
controlled by him. The new promissory notes matured on December 31, 2000 and had
an annual interest rate of 9.0%. To secure such  borrowing,  the Company pledged
300,000 shares of common stock of U.S.  Wireless to the holders of the notes. On
December 31, the maturity dates of the notes were extended to June 30, 2001.

     Between July 2000 and April 2001, Mr. Gross,  the trusts and the charitable
foundation made additional  advances to the Company totaling $757,000  ($644,000
of these advances, plus accrued interest, are in the form of a Treasury Bill and
remain as collateral for the Secured  Credit  Facility with Merrill  Lynch).  On
March 30, 2001, Mr. Gross,  the trusts and the charitable  foundation  converted
the existing  $2,467,400 of notes discussed  above and an additional  $32,600 of
these  advances  into  250  shares  of  Global  Technologies,  Ltd.  Series E 8%
Convertible  Preferred Stock with an aggregate stated value of $2,500,000.  This

                                      F-24
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

preferred  stock is  convertible  into shares of Class A common stock at a fixed
conversion  price of $0.3125 per share,  the closing  price per share of Class A
common stock on March 30, 2001. In accordance with NASDAQ rules,  Class A common
stock  representing no more than 19.99% of the outstanding  Class A common stock
on June 30, 2001 may be issued on  conversion  of the  preferred  stock  without
prior stockholder approval.

     In connection  with the execution of the promissory  notes,  each Trust was
granted warrants to purchase 99,159 shares of the Company's Class A Common Stock
and 155,780  shares of TNCi Common Stock based upon the amount  advanced and the
closing  market  price of each stock on the date of each  advance.  The  Company
recorded deferred financing cost of $797,668, of which $660,925 and $136,743 was
amortized  into interest  expense for the years ended June 30, 2001 and June 30,
2000, respectively.

     Between April 2001 and November 5, 2001, Mr. Gross,  a limited  partnership
controlled by him and certain Trusts established by him advanced $464,000 to the
Company  to cover  the  working  capital  requirements  of the  Company  and the
Company's 60% owned subsidiary,  TNCi UK. The company  received,  on November 2,
2001,  $1,455,378  from  the  sale of  terminals  formerly  used in its  lottery
business in Great  Britain.  The Company  repaid Mr. Gross and these  entities a
total of $767,000 on November 9, 2001.  Remaining unpaid  advances,  at November
12, 2001,  received from Mr. Gross and the Trusts total $80,000.  These advances
are secured by a security interest in the equity of TNCi UK owned by Global.

     During the months of August 2000 through  December 2000,  TNCi's  Executive
Vice  President  advanced  a total  of  $335,046  to TNCi  for  working  capital
purposes. Two of these advances totaling $220,000 were evidenced by a note dated
November 22, 2000 and allonge dated  December 5, 2000,  that matured on December
31,  2000.  On January 2, 2001,  this note and allonge  were  canceled,  and the
principal  amount thereof and the remainder of these advances were rolled into a
promissory  note in the  aggregate  principal  amount  of $335,  046 that  bears
interest a t 9% per annum and matures six months from the date of issuance.

(12) 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  300,000  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  1,200,000.  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 four years
at the  discretion of the Board of Directors.  During fiscal 2000,  the Board of
Directors  resumed  authorizing  stock  option  grants  from the 1994 Plan,  and
530,000  stock  options  with up to a four-year  vesting  period were granted at
exercise  prices  ranging  from $1.833 to $16.375.  Options to purchase  100,000
shares of Class A Common Stock were granted during the year ended June 30, 2001.
As of June 30, 2001,  stock  options to acquire  945,750  shares of common stock
under the 1994 Plan remained available for grant.

     In June 1997, the Company  established the 1997 Stock Option Plan (the 1997
Plan).  Options exercisable for a total of 750,000 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

                                      F-25
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

provides the Board of Directors  with the  discretion to determine  when options
granted thereunder shall become exercisable. No stock options were granted under
the 1997  Plan  during  fiscal  years  2001 or 2000.  As of June 30,  2001,stock
options to acquire  315,600  shares of common stock under the 1997 Plan remained
available for grant.

     In September  1999,  the Company  reduced the  exercise  price per share of
45,000 stock options  granted to a former director of the Company under the 1994
Plan to $3.00 per share and extended the exercise  period to the expiration date
of the stock  options  pursuant  to the  settlement  of a  technology  licensing
agreement with Fortunet, Inc. (See Note 16)

     On October 8, 1999, the Compensation Committee of the Board of Directors of
the Company recommended,  and the Board approved, an option grant to purchase up
to  1,500,000  shares of Global's  Class A Common  Stock to Mr.  Irwin L. Gross,
Chairman  and Chief  Executive  Officer  of the  Company.  One  quarter of these
options  vested  immediately  and one  quarter  vest over each of the next three
years.  The remaining  half vest on the sixth  anniversary of the date of grant,
subject to acceleration to a three-year schedule in the event of the achievement
of certain  performance goals. The exercise price of the options is equal to the
closing  market price of the  Company's  Common Stock on the day prior to grant.
The options expire in October 2009.

     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.

     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 for the year ended June 30,  2000  would  have been  increased  to the pro
forma amounts indicated below:

                                                YEAR ENDED        YEAR ENDED
                                                 JUNE 30,          JUNE 30,
                                                   2001              2000
                                               ------------      -----------
     Net loss:
       As reported                             $(34,889,516)     $(37,517,421)
                                               ============      ============

       Pro forma (unaudited)                   $(36,685,302)     $(39,977,402)
                                               ============      ============
     Basic and diluted net loss per share:
       As reported                             $      (3.02)     $      (3.81)
                                               ============      ============
       Pro forma (unaudited)                   $      (3.18)     $      (4.06)
                                               ============      ============

     Pro forma net losses at June 30, 2001 and 2000 reflect only options granted
during the fiscal years ended 2001, 2000, the Transition  Period ended 1999, 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.

                                      F-26
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     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. Weighted-average assumptions
used for grants in the years ended June 30, 2001 and 2000 were a dividend  yield
of 0%, expected  volatility of approximately  170%, a risk free interest rate of
approximately 6% and expected lives of 5 years.

     Activity related to the stock option plans is summarized below:

                                         YEAR ENDED              YEAR ENDED
                                       JUNE 30, 2001           JUNE 30, 2000
                                   ---------------------    --------------------
                                                Weighted                Weighted
                                     Number      Average     Number      Average
                                       Of       Exercise       Of       Exercise
                                     Shares      Price       Shares       Price
                                   ---------     ------     ---------     ------
Balance at beginning of year       2,801,460     $ 3.45     1,123,719     $ 8.49
  Granted                            100,000       4.00     2,075,000       2.26
  Exercised                                         -0-      (132,306)      2.49
  Cancelled/Forfeited               (950,960)      5.14      (264,953)     14.28
                                   ---------                ---------
Balance at the end of year         1,950,500       2.65     2,801,460       3.45
                                   =========                =========
Exercisable at the end of year       725,250       2.62       788,725       6.60
                                   =========                =========

     Exercise prices of options outstanding at June 30, 2001 range from $1.13 to
     $4.00.  Exercise  prices of  options  exercisable  also range from $1.13 to
     $4.00.

     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.  There were no cashless exercises of
options  during  the years  ended  June 30,  2001 and 2000 or  during  any prior
period.

(13) 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 year ended June 30, 2001,  nor the year ended
June 30, 2000.

(14) 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. There are no Class B common shares outstanding.

(a) COMMON STOCK

     Between  September  2000 and June  2001,  the  holders of 200 shares of the
Company's Series C 5% Convertible  Preferred Stock and the holders of 650 shares
of the Company's Series D Convertible  Preferred Stock converted such stock into
1,234,122  shares of the Company's Class A Common Stock.  There are, at June 30,

                                      F-27
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2001,  150  shares  of  the  Company's  Series  D  Convertible  Preferred  Stock
outstanding. There are no Series C 5% Convertible Preferred Stock outstanding at
June 30, 2001 since the  holders of all of the  remaining  Series C  Convertible
Preferred  Stock  exchanged  such  stock  for a like  number  of  shares  of the
Company's Series D Convertible Preferred Stock.

     On March 22, 2001, the Company engaged  Equilink  Capital Partners , LLC to
provide financial  consulting services to us for a period of two years following
that date. The financial consulting agreement provided that , in addition to the
financial consulting services to be performed by Equilink,  Equilink and certain
of its affiliates shall purchase, in the aggregrate, 1,700,000 shares of Class A
Common  Stock for an  aggregrate  purchase  price of $17,000.  These shares were
issued as  follows:  500,000  shares  of Class A Common  Stock to each of Robert
DePalo,  Old Oak Fund  Inc.  and  Harbor  Fund  Inc.,  150,000  shares to Empire
Ventures,  LLC and 50,000 shares to Equilink.  These shares were issued on April
16,  2001 in a  transaction  exempt  from  the  registration  provisions  of the
Securities  Act of  1933  pursuant  to  Section  4(2)  thereof.  Due  to  market
conditions  and the  deterioration  in the  Company's  businesses  and financial
condition,  the Company has not  requested  and Equilink has not  performed  any
services under the agreement.  Therefore, the difference,  $561,000, between the
market  price at the date of  issuance  of the  Company's  Common  Stock and the
purchase price was charged to expense at June 30, 2001.

     On  March  28,  2001 we also  executed  a  private  equity  line of  credit
agreement with Equilink Capital Partners, LLC. The private equity line of credit
agreement  gives us certain rights in the two year investment  period  following
the effective date of a registration  statement  covering the shares issuable in
connection  with the  private  equity  line of credit and  related  warrants  in
certain  circumstances  and on  certain  conditions  to  exercise a put right to
require  Equilink  to  purchase  shares  of our  Class A Common  Stock and gives
Equilink the option,  in the event we exercise  our put right and under  certain
conditions,  to  exercise a call  right to  require  us to sell them  additional
shares.  The  purchase  price with respect to these  shares is  calculated  with
respect to a discount to the then current market price.  The  investment  period
terminates on the earlier of the date (i) 5,000,000 shares of our Class A Common
Stock are issued  pursuant to our put rights  under the  private  equity line of
credit  agreement,  subject to the 19.9% limitation  discussed  below,  (ii) the
aggregate  purchase  price paid by Equilink to purchase  shares  pursuant to the
private equity line of credit agreement equals $25 million or (iii) the two year
investment period ends.

     In connection  with the above  agreements,  we issued  warrants to Equilink
Capital  Partners LLS and its  affiliates to purchase  400,000 shares of Class A
Common Stock. These warrants are exercisable over the next five years at a price
of $1.00 per share,  which price may be adjusted from time to time under certain
antidilution  provisions.  We may not make any  issuances  of our Class A Common
Stock in connection with the private equity line of credit agreement and related
warrants if that issuance  would result in the issuance of a number of shares in
excess  of 19.9% of the  number of shares  of Class A Common  Stock  issued  and
outstanding on the effective date of the private equity line of credit agreement
unless we obtain prior stockholder approval in accordance with NASDAQ rules.

     We also entered into a financial  advisory and  consulting  agreement as of
April  12,  2001 with  Equilink  and  National  Securities  Corporation  wherein
Equilink  engages  National as its advisor to aid  Equilink in providing us with
consulting services under the financial consulting agreement with Equilink.  The
term of the financial advisory and consulting agreement is until April 12, 2002.
In consideration for its services,  we issued a warrant to National  exercisable
for five years for 100,000  shares of class A Common Stock for an exercise price
of $1.00 per share.  These  securities were issued in a transaction  exempt from
the registration  provisions of the Securities Act of 1933 pursuant to Section 4
(2) thereof.

     We did not record a charge to expense for the  warrants  issued to Equilink
Capital  Partners LLS and  National  Securities  Corporation  since the exercise
price of the warrants was  significantly  greater than the closing price of less
than $.40 per share of the Company's  Common Stock on the dates of issue and the
resulting values were immaterial.

                                      F-28
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In October 2000, the holders of $1.0 million of the principal  amount of 6%
secured  convertible  notes  converted  such  notes into  500,000  shares of the
Company's Class A Common Stock. Also in October, 2000, the Company redeemed $1.0
million of the principal amount of 6% secured convertible notes for $1.2 million
cash plus the issuance of 62,500 shares of the Company's Class A Common Stock.

     In February  2000,  the Company  repurchased  464,630 shares of its Class A
Common Stock issued to former noteholders of TNCI's Series Notes for $1,394,960.
The shares of the common  stock were issued in  connection  with the purchase of
the Series Notes.  Pursuant to the purchase  agreement,  the Company exercised a
call option for the shares of common stock at prices  averaging $3.00 per share.
The repurchased shares were retired from treasury stock.

     In November 1999, the Company issued 1,544,250 shares of its Class A Common
Stock at $1.74 per share for total  proceeds of  approximately  $2,685,000  in a
private placement transaction with several employees,  officers and directors of
the Company.  The price per share was based upon the closing market price of the
Company's Common Stock on the date the Board of Directors approved the sale. The
shares of common stock have not been registered under the Securities Act of 1933
and no registration rights were granted.

     On October 30, 1998, the Board of Directors  authorized a stock  repurchase
program whereby the Company may repurchase up to 1,000,000 shares of its Class A
Common  Stock  on the  open  market.  As of  June  30,  1999,  the  Company  had
repurchased 117,900 shares at prices ranging from $0.99 to $1.96 per share for a
total cost of $193,990.  On March 16, 2000,  the Company  retired all 117,900 of
these shares from Treasury Stock.

(b) PREFERRED STOCK

     On May 10, 1999, the Company issued 3,000 shares of 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.  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 $2.00 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.  On
November 16,  1999,  the Company  redeemed the Series A Stock for  approximately
$3.57  million,  consisting of its stated value of $3 million,  plus accrued and
unpaid  dividends  of  approximately   $120,000  and  a  redemption  premium  of
approximately $450,000.

     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.

     On February 16, 2000, Global issued 1,000 shares of Series C 5% Convertible
Preferred  Stock  ("Series C Stock")  and  callable  warrants  in return for net
proceeds of $9.7 million.  The preferred stock has a stated value of $10,000 per
share and carries a 5% cumulative dividend payable quarterly in cash or in kind.
As of June 30, 2000, cumulative dividends total $187,415,  and have been paid in
kind.  The  preferred  stock  converts into Class A Common Stock at a conversion
price of $15.21 per share,  representing  120% of the average closing bid prices
thereof  over  the  five  trading  days  beginning  March 1,  2000  (the  "Fixed
Conversion  Price") as adjusted for certain dilutive  events.  Nine months after
funding,  and every three months thereafter,  the conversion price resets to the
lesser  of the Fixed  Conversion  Price or 100% of the  average  of the four low
trading  prices over the course of the  preceding 20 trading  days. On April 14,
2000 the Company  registered  the Class A Common Stock into which the  preferred
stock and warrants are convertible or exercisable, as the case may be.

                                      F-29
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Additionally,  the  Company  may redeem the  preferred  stock for a premium
under certain  circumstances.  During March 2001 and April 2001,  the holders of
200 shares of the Series C Stock  converted  such shares into 400,023  shares of
the Company's Class A Common Stock.

     In April 2001,  the holders of the  remaining  800 shares of the  Company's
Series C Stock  Exchanged  such  stock  for 800  shares of the  Company's  newly
authorized Series D Convertible Preferred Stock. This exchange was determined to
be a less costly means of  permitting us to issue shares of our capital stock to
the holders of the Series C Stock having the rights and remedies contemplated by
the amendments to the Series C Stock described in the Settlement  Agreement with
Advantage and Koch. All accrued and unpaid  dividends on the Series C Stock were
cancelled  pursuant  to the  Settlement  Agreement.  The  Series  D  Convertible
Preferred Stock does not accrue  dividends and the conversion price per share of
our Class A Common Stock is fixed at $5.0057 with  adjustment of the  conversion
price  limited to certain  capital  changes and  distributions.  The  settlement
agreement  provides that we register any  unregistered  shares of Class A Common
Stock underlying the Series D Convertible Preferred Stock.

     On March 30, 2001,  Mr. Gross,  certain  trusts  related to Mr. Gross and a
charitable foundation related to Mr. Gross, converted $2,467,400 of notes and an
additional  $32,600 of  advances  into 250 shares of Global  Technologies,  Ltd.
Series E 8%  Convertible  Preferred  Stock  with an  aggregate  stated  value of
$2,500,000.  This preferred  stock is convertible  into shares of Class A common
stock at a fixed  conversion  price of $0.3125 per share,  the closing price per
share of Class A common  stock on March 30,  2001.  In  accordance  with  NASDAQ
rules,  Class A common stock representing no more than 19.99% of the outstanding
Class A common  stock  on June  30,  2001 may be  issued  on  conversion  of the
preferred stock without prior stockholder approval.

(c) UNIT PURCHASE OPTIONS

     In connection with the Company's March 6, 1995 public offering, the Company
issued  140,000 Unit  Purchase  Options to  designees of D. H. Blair  Investment
Banking  Corporation for their role as  underwriters of the offering.  Each Unit
Purchase  Option was  exercisable  into one share of Class A Common  Stock,  One
Class A Warrant  and One  Class B Warrant  at an  exercise  price of $12.00  per
share.  Each Class A Warrant  was  exercisable  into one share of Class A Common
Stock and one  additional  Class B Warrant  at an  exercise  price of $13.71 per
share (as  adjusted  for  certain  dilutive  events).  Each Class B Warrant  was
exercisable  into one  share of Class A  Common  Stock at an  exercise  price of
$19.10 per share (as adjusted for certain dilutive events). At the option of the
holders of the Unit Purchase  Options,  the holder could elect to receive shares
equal to the market  value of the  option in lieu of  delivery  of the  exercise
price in cash ("cashless  exercise").  The options and underlying  warrants were
set to expire March 6, 2000.

     Prior to March 6,  2000 all Unit  Purchase  Options  were  exercised.  As a
result of certain holders electing cashless exercise,  104,458 shares of Class A
Common Stock,  104,458 Class A Warrants and 104,458 Class B Warrants were issued
upon the exercise of the Unit Purchase  Options.  An additional 64,439 shares of
Class A Common Stock and 64,439 Class B Warrants  were issued as a result of the
exercise of Class A Warrants. No Class B Warrants were exercised.  All remaining
warrants have expired. The Company received proceeds of $2,111,119.

(d) WARRANTS

     The following table  summarizes  warrant  activity for the years ended June
30, 2001 and June 30, 2000:

                                      F-30
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                           CLASS A        CLASS B       CLASS C       CLASS D      CLASS E
                                                         -----------     ----------    ----------    --------    -----------
<S>                                                      <C>             <C>           <C>           <C>          <C>
     Outstanding as of June 30, 1999                         206,250             --        82,500      82,500        100,000
     Issued in connection with Series C Stock                150,925             --            --          --             --
     Issued in connection with Secured
      Convertible Notes                                       20,000
     Issued in connection with consulting services            75,000             --            --          --             --
     Issued in connection with Unit Purchase Options         104,458        168,897            --          --             --
     Exercised during the year                               (64,439)
     Expired during the year                                 (40,019)      (168,897)      (82,500)    (82,500)            --
                                                         -----------     ----------    ----------    --------    -----------
     Outstanding as of June 30, 2000                         452,175             --            --          --        100,000
     Issued in connection with financial
      Advisory services                                      500,000
     Issued in connection with redemption of
      Notes payable                                          125,000
     Issued in connection with collateral pledge
      On credit facility                                     553,978
     Issued in connection with cash advances                 198,318
     Other issues                                            125,000
                                                         -----------     ----------    ----------    --------    -----------
     Outstanding as of June 30, 2001                       1,954,471                                                 100,000
                                                         ===========     ==========    ==========    ========    ===========

     Exercise price                                      $1.00-16.00     $       --    $       --    $     --    $3.00-16.00
                                                         ===========     ==========    ==========    ========    ===========
</TABLE>

Warrants  entitle  the  holder  to one  share  of  Class  A  common  stock.  All
outstanding warrants are exercisable as of June 30, 2001.

     We issued warrants, on March 28, 2001, to Equilink Capital Partners LLS and
its affiliates to purchase  400,000 shares of Class A Common Stock in connection
with the private  equity line of credit  discussed  above.  These  warrants  are
exercisable over the next five years at a price of $1.00 per share,  which price
may be adjusted from time to time under certain antidilution provisions.

     In consideration for financial  consulting  services as discussed above, we
also issued,  on April 12, 2001, a warrant to National  Securities  Corporation,
exercisable  for five years,  for 100,000  shares of class A Common Stock for an
exercise price of $1.00 per share.

     We did not record a charge to expense for the  warrants  issued to Equilink
Capital  Partners LLS and  National  Securities  Corporation  since the exercise
price of the warrants were significantly  greater than the closing price of less
than $.40 per share of the Company's  Common Stock on the dates of issue and the
resulting values were immaterial.

     On  September  12,  2000,  in  connection  with the  execution  of  certain
promissory  notes discussed  above, the trusts were granted warrants to purchase
198,318  shares of the  Company's  Class A common  stock  based  upon the amount
advanced and the closing market price of such stock on the date of each advance.
The warrants have five year terms. 57,142 of the warrants have an exercise price
of $3.50 and the remaining 141,176 warrants have an exercise price of $4.25.

     In connection with the pledges of his collateral to meet maintenance  calls
on the Secured  Credit  Facility,  Mr.  Gross was  granted  warrants to purchase
553,978  shares of the  Company's  Class A common stock based upon the amount of
collateral pledged and the closing market price of the stock on the date of each
pledge.  The warrants  have  exercise  prices equal to the closing  price of our
Class A common stock on the date of the relevant pledge and a term of five years
from such date. Three tranches of warrants were issued:  one to purchase 174,312

                                      F-31
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

shares at an exercise price of $3.75 per share,  the second to purchase  159,373
shares at $6.00 per share and the third to purchase 220,293 shares at $5.125 per
share.  The  Company  recorded  non-cash  interest  expense  of  $1,070,527  and
$1,526,527  for the years ended June 30, 2001 and June 30,  2000,  respectively,
related to the estimated  fair value of the warrants  granted for the collateral
pledged.

     On July 7, 2000, the Company  redeemed $2.0 million of the principal amount
of Secured  Convertible  Notes. In connection with this redemption,  the Company
issued  warrants for 125,000  shares,  in the  aggregate,  of its Class A Common
Stock to the holders of the notes.  These  warrants have a four-year term and an
exercise price of $4.00 per share. In accordance  with the Settlement  Agreement
with  Advantage and Koch discussed  above,  the exercise price of these warrants
was re-priced to 115% of the closing price, $1.25, of the Company's Common Stock
on the day before the  execution  date,  January  31,  2001,  of the  Settlement
Agreement.

     In  connection  with the June 7, 2000  issuance of the Secured  Convertible
Notes  noted  above,  designees  of  Reedland  Capital  Partners,  a division of
Financial  West Group,  received  warrants to  purchase an  aggregate  of 20,000
shares of the  Company's  Class A Common Stock at $5.8125 per share for Reedland
Capital  Partners'  role as sales agent.  The warrants  expire in June 2004. The
Company  recorded  deferred  financing costs of $146,702,  of which $138,550 and
$8,150 was amortized into interest expense for the years ended June 30, 2001 and
June 30, 2000, respectively.

     In March  2000,  the Company  issued  104,458  Class A and 168,897  Class B
warrants in  connection  with the  exercise  of certain  Unit  Purchase  Options
discussed  above. Of these,  64,439 Class A warrants were exercised.  All of the
unexercised warrants expired March 6, 2000.

     In connection  with the February 16, 2000 Series C Preferred Stock issuance
noted above,  the Company issued warrants to purchase 100,925 shares of Global's
Class A Common Stock to the holders of the preferred  stock.  These warrants are
exercisable  at a price of $15.21 per share (as  adjusted  for certain  dilutive
events) and expire in February 2005. In accordance with the Settlement Agreement
with  Advantage and Koch discussed  above,  the exercise price of these warrants
was re-priced to 115% of the closing price, $1.25, of the Company's Common Stock
on the day before the  execution  date,  January  31,  2001,  of the  Settlement
Agreement.

     In connection  with the February 16, 2000 Series C Preferred Stock issuance
noted above,  designees of Reedland  Capital  Partners,  a division of Financial
West Group,  received  warrants to purchase an aggregate of 50,000 shares of the
Company's  Class A Common  Stock at  $17.835  per  share  for  Reedland  Capital
Partners' role as sales agent.  The exercise  period of the warrants  expires in
February 2005.

     In  December  1999,  the Company  retained  the  services of two  financial
relations firms. In connection with the consulting services to be provided,  the
Company  issued  stock  purchase  warrants  to  purchase  37,500  shares  of the
Company's  Class A common  stock at $5.25 per share to each firm.  The  warrants
vested  immediately  and have an exercise  period that expires in December 2004.
The Company  recorded  $356,082 as compensation  expense for the year ended June
30, 2000.

     In May 1999, the Company issued stock purchase warrants to purchase 131,250
shares of Class A common  stock at $2.00 per share to the Shaar  Fund,  Ltd.  In
connection  with the issuance of its Series A Preferred.  The exercise period of
the warrants expires in May 2004.

                                      F-32
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     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 75,000 shares of the Company's Class
A common stock at $1.92 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.  The Company recorded $359,362 as compensation expense for the
year ended June 30, 2000.

     In November 1996,  the Company  issued Class E Stock  Purchase  Warrants to
purchase 25,000 shares of Class A common stock at $21.50 per share in connection
with the amendment and  restatement of a License  Agreement  with  FortuNet.  In
January  1997,  the Company  lowered the  exercise  price of the stock  purchase
warrants to $16.00 per share,  such price being the trading price of the Class A
Common Stock at the close of the previous  business day. In September  1999, the
Company  lowered the exercise price on the stock purchase  warrants to $3.00 per
share, such price  representing a premium to the then trading price of the Class
A Common Stock which was $2.46.  The Company also extended the  expiration  date
from November 2001 to September 2002.

(e) PROCEEDS FROM EXERCISE OF COMMON STOCK OPTIONS

     During the year ended  June 30,  2000,  current  and former  employees  and
directors  exercised common stock options for the purchase of 132,306  resulting
in proceeds of $564,710.  No options were  exercised  during the year ended June
30, 2001.

(f) TNCi FINANCING

TNCi COMMON STOCK

     During the period from July 1, 2000 up until prior to March 24, 2001,  when
TNCi entered into  protection  under Chapter 11 of the  Bankruptcy  Code, it has
issued  approximately  1,474,000  shares  of its  common  stock to  third  party
investors for net proceeds of approximately $1,794,000.

CONVERSION OF SERIES D PREFERRED STOCK

     On August 2, 2000, upon receipt of notice of conversion  from Global,  TNCi
issued 5,000,000 shares of its common stock to Global upon conversion of 826,447
shares of the Company's Series D Preferred Stock held by Global.

ISSUANCE OF SERIES E CONVERTIBLE PREFERRED STOCK

     In August  2000,  TNCi  designated  500  shares of Series E 6%  Convertible
Preferred  Stock  ("Series  E  Stock");  stated  value  $10,000  per  share  and
liquidation value $10,000 per share plus accrued and unpaid dividends. On August
3, 2000,  TNCi issued 100 shares of such stock to third party  investors for net
proceeds of approximately  $909,000. At the option of the Holder,  beginning 180
days after the date of issue,  each share of Series E Stock is convertible  into
common stock at the lesser of $4.00 per share or 80% of the Average Market Price
for common stock for the five  consecutive  trading days  immediately  preceding
such date, as defined. TNCI may redeem the Series E Stock at prices ranging from
110% to 120% of stated value,  plus accrued  dividends during the first 180 days
from date of issue. The redemption  premium  increases at a rate of 3% per month
to a maximum of 140% of stated value.

INVESTMENT BY OFFICER

     On August 3, 2000, TNCi's Executive Vice President purchased 500,000 units,
consisting of 500,000 shares of TNCi's common stock and warrants exercisable for
166,667  shares of TNCi's common stock.  The warrants have an exercise  price of
$3.50 per share and a term of four years. The purchase price for these units was
$2.00 per unit resulting in aggregate  consideration of $1.0 million,  which was
paid to TNCi in  installments in August and September 2000. The market price per
share of TNCi common stock on October 16, 2000 was $2.00 per share.

ISSUANCE OF SERIES F PREFERRED STOCK

     On January 2, 2001,  notes  totaling  $1,050,000  and  additional  advances
totaling $250,000 made by two trusts controlled by Irwin L. Gross and two trusts
established for the benefit of Mr. Gross's children were converted in 260 shares
of Series F 8%  Convertible  Preferred  Stock with an aggregate  stated value of
$1,300,000.  The preferred  stock is convertible  into 1,733,333  shares of TNCi
common stock at a fixed conversion price of $.75 per common share.

                                      F-33
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MINORITY INTEREST

     These  transactions,  net of new  common  equity  valued  at  approximately
$1,050,000,  issued to Global in compensation for Global's  satisfaction of TNCi
liabilities  to  third  parties,   reduced   Global's   investment  in  TNCI  to
approximately 70% on an if-converted basis. Approximately 30% of the new equity,
or $1,869,000,  representing  the minority  interest was credited to loss before
minority  interest  and  extraordinary  item on the  consolidated  statement  of
operations for the year ended June 30, 2001.

     Approximately  70% of the  additional  new cash  equity  investment  in the
subsidiary,  which accrues to Global,  was credited to  consolidated  additional
paid-in capital on the consolidated balance sheet at June 30, 2001.

(15) 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:

                                                       2001            2000
                                                   ------------    ------------
     Computed expected tax benefit                 $(11,595,716)   $(12,865,324)
     Change in federal valuation Allowance          (11,595,716)    (13,007,270)
     Non-deductible payments                                 --       1,433,463
                                                   ------------    ------------
                                                   $        -0-    $(24,439,131)
                                                   ============    ============

     Total income taxes for the year ending June 30, 2000 were as follows:

                                                       Total
                                                   ------------
     To loss from continuing operations                      --
     To stockholders' equity                       $(24,439,131)
                                                   ------------
                                                   $(24,439,131)
                                                   ============

     The net deferred tax asset at June 30, 2000 was associated exclusively with
the unrealized gain on the U.S.  Wireless stock.  Since such U.S. Wireless stock
has been disposed or written off, there are no deferred tax benefits at June 30,
2001

                                      F-34
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The tax  effects of  temporary  differences  that give rise to  significant
portions of the net deferred tax asset at June 30, 2000 are presented below:

                                                     2000
                                                 ------------
     Deferred tax assets:
      Net operating loss carryforward            $ 39,581,215
      Property and equipment                          939,514
      Deferred start-up costs                         170,784
      Issuance of stock options and warrants        1,157,963
      Allowance for bad debts                       4,135,431
      Provision for inventory valuation             3,336,316
      Accrued liabilities                           1,141,754
      Other                                           512,334
                                                 ------------
                                                   50,975,311
     Less:
      Valuation allowance                         (26,536,180)
                                                 ------------
                                                 $ 24,439,131
                                                 ============

     Management has determined that a calculation of temporary differences and a
gross deferred tax asset is not meaningful at June 30,2001.

     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  at June 30,  2001,
substantially  comprised  of that  amount  attributable  to net  operating  loss
carryforwards,  as the likelihood of realization can not be determined. In March
2000,  Management  determined  that the realization of a portion of the deferred
tax  asset was  likely as of June 30,  2000  given the  realizable  gains on its
investments in U.S. Wireless and TNCi.

     As  of  June  30,  2001,  the  Company  has  a  net  operating  loss  (NOL)
carryforward  for federal  income tax  purposes of  approximately  $138,000,000,
which begins 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 affect 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  affect the amount of the
NOL carryforward.

(16) RELATED PARTY TRANSACTIONS

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

     In July and August 1999,  Global  purchased all of the Series A and E notes
and the  Series D notes  issued  by TNCi  (collectively,  the  "Series  Notes"),
respectively  from the holders of such notes.  Concurrent  with such  purchases,
TNCi  executed  allonges to the Secured  Promissory  Note,  which  cancelled the
Series Notes and rolled the principal balance, plus accrued interest,  penalties
and  redemption  premiums of the Series Notes into the principal  balance of the
Secured Promissory Note.

                                      F-35
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In August 1999,  TNCi executed  another  allonge to the Secured  Promissory
Note which rolled approximately $1.2 million of prior intercompany advances from
Global  into the  Secured  Promissory  Note and  granted  Global the  ability to
convert the Secured  Promissory Note directly into shares of TNCi's Common Stock
as an administrative convenience.

     On  August  24,  1999,  the  Board of  Directors  of  Global  approved  the
conversion of the Secured  Promissory Note into approximately 4.8 million shares
of  TNCi's  Common  Stock.   Such   conversion  was  contingent  upon  receiving
shareholder  approval to increase the  authorized  share  capital of TNCi.  This
increase in authorized share capital was approved on September 17, 1999, and the
shares were subsequently issued in December 1999 based as on the August 24, 1999
conversion date.

     On August 24, 1999, the Company's Board of Directors  approved a $5,000,000
revolving credit facility by and between TNCi and Global (the  "Facility").  The
Facility  provides that TNCi may borrow up to $5,000,000 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
an unused line fee of 0.5% per annum. The Facility is convertible into shares of
TNCi's  Common  Stock at a price of $1.50 per share as defined  in the  Facility
agreement.

     During the year ended June 30, 2000,  TNCi  borrowed  $4,200,000  under the
Facility. On June 29, 2000 the Company exercised its right to convert $1,850,000
of the Facility into 1,233,333  shares of TNCi Common Stock. The balance owed on
the Facility was  $3,775,000  and $2,350,000 at June 30, 2001 and June 30, 2000,
respectively. Global has filed a claim in the TNCi bankruptcy case.

     The  Facility  and  any  other  intercompany  balances  are  eliminated  in
consolidation at June 30, 2000.

     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,  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  50,000  shares of Class A Common Stock of the Company at an
exercise  price  of  $3.00.  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 be utilized.  As of June 30, 2000, the outstanding  balance
was  approximately  $1.3  million.  In August 2000,  Global,  on behalf of TNCi,
settled the outstanding obligation with the principal stockholders of Global for
a total of 279,028 shares of Class A Common Stock. TNCi issued 411,146 shares of
its common stock as reimbursement to Global for such settlement.

     In November 1999, the Company issued 1,544,250 shares of its Class A Common
Stock at $1.74 per share for total  proceeds of  approximately  $2,685,000  in a
private placement transaction with several employees,  officers and directors of
the Company.  The price per share was based upon the closing market price of the
Company's Common Stock on the date the Board of Directors approved the sale. The
shares of common stock have not been registered under the Securities Act of 1933
and no registration rights were granted.

     In April 2000,  the  Directors  of the Company were  authorized  options to
purchase equities in GTL Management totaling 10% of the fair market value of GTL
Management  based upon the fair market  value at the date of grant.  The options
were not issued  and,  subsequent  to the  granting of such  options  management
decided to exit the business and determined that such options were worthless.

                                      F-36
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     On August  2,  2000 the Board of  Directors  of the  Company  approved  the
conversion  of 826,447  shares of Series D Preferred  Stock of TNCi owned by the
Company  into  5,000,000  shares of common  stock of TNCi based upon an adjusted
conversion rate of 6.05 common shares per preferred share.

     In May and June  2000,  The  Gross  Charitable  Unit  Trust  and The  Gross
Charitable  Annuity Trust (together the "Trusts"),  advanced a total of $800,000
to TNCi for working  capital  purposes.  An additional  $250,000 was advanced to
TNCi in July 2000.  On September 12, 2000,  the advances to TNCi were  converted
into two promissory notes, each in the amount of $525,000,  issued to each Trust
by TNCi.  The notes  mature on December 31, 2000 and bear  interest at 9.0%.  On
September 28, 2000 the Trusts and two trusts  established for the benefit of Mr.
Gross's children advanced an additional $250,000 in total to TNCi. On January 2,
2001 the notes and the advances were  converted into 260 shares of TNCi Series F
8% Convertible  Preferred  Stock with an aggregrate  stated value of $1,300,000.
The preferred stock is convertible into 1,733,333 shares of TNCi's common stock.
Irwin L. Gross,  Chairman and Chief Executive Officer of Global,  was trustee of
each of these trusts until March 23, 2001.

     In August and  September  2000 the Trusts also advanced a total of $800,000
to Global for working capital purposes. On September 22, 2000, the advances were
converted into two promissory notes,  each in the amount of $400,000,  issued to
each Trust by Global.  The notes  matured on December 31, 2000 and had an annual
interest rate of 9.0%. On December 8, 2000 the Company pledged 200,000 shares of
common  stock of U.S.  Wireless  to the trusts as  security  for the  notes.  On
December 31, the maturity dates of the notes were extended to June 30, 2001.

     In connection  with the execution of the promissory  notes,  each Trust was
granted warrants to purchase 99,159 shares of the Company's Class A Common Stock
and 155,780  shares of TNCi Common Stock based upon the amount  advanced and the
closing  market  price of each stock on the date of each  advance.  The  Company
recorded deferred financing cost of $797,668, of which $660,925 and $136,743 was
amortized  into interest  expense for the years ended June 30, 2001 and June 30,
2000, respectively.

     On October 16, 2000,  an officer of TNCi  purchased  500,000  units of TNCi
consisting  of 500,000  shares of TNCi  common  stock and  warrants  to purchase
166,667  shares of TNCi common  stock.  The  purchase  price was $2.00 per unit,
which was the  closing  market  price of TNCi  common  stock on such  date.  The
warrants  have an  exercise  price of $3.50 per share and a term of  four-years.
Aggregrate  consideration to TNCi was $1 million, which was paid in installments
in August and September 2000.

     On September 28 and 29,  2000,  a group of European  investors  invested an
aggregate of $474,046 in The Network  Connection in return for 280,071 shares of
its common stock. The shares were issued at an average price of $1.69.

     On January 26 and 31,  2001,  a group of  European  investors  invested  an
aggregate of $389,675 in equity units,  each of which consisted of two shares of
The Network  Connection's  common stock and a  three-year  warrant to purchase a
share of its common  stock.  The  Network  Connection  issued a total of 272,631
shares of its common stock  pursuant to this  offering,  and issued  warrants to
purchase an aggregate of 136,315 shares of its common stock at an exercise price
of $2.50 per share. The shares were issued at an average price of $1.43.

     During  the  months of August  2000  through  December  2000,  The  Network
Connection's  Executive  Vice  President  advanced  a total of  $335,046  to The
Network Connection for working capital purposes.  Two of these advances totaling
$220,000  were  evidenced by a note dated  November  22, 2000 and allonge  dated
December 5, 2000,  that matured on December 31, 2000.  On January 2, 2001,  this
note and  allonge  were  canceled,  and the  principal  amount  thereof  and the
remainder of these advances were rolled into a promissory  note in the aggregate
principal amount of $335,046 that bears interest at 9% per annum and matures six

                                      F-37
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

months from the date of issuance.  This note was issued in a transaction  exempt
from the  registration  provisions  of the  Securities  Act of 1933  pursuant to
Section 4(2) thereof.

     On November 22, 2000, $1,667,400 of Mr. Gross' collateral pledged to secure
the Secured  Credit  Facility with Merrill Lynch was applied to repay,  in part,
the Secured Credit  Facility.  The Company issued two promissory  notes totaling
$1,667,400 to Mr. Gross and a charitable  foundation  controlled by him. The new
promissory notes matured on December 31, 2000 and had an annual interest rate of
9.0%. To secure such  borrowing,  the Company  pledged  300,000 shares of common
stock of U.S. Wireless to the holders of the notes. On December 31, the maturity
dates of the notes were extended to June 30, 2001.

     Between July 2000 and April 2001, Mr. Gross,  the trusts and the charitable
foundation  made  additional  advances  to  the  Company  totaling   $757,548.58
($644,000  of  these  advances,  plus  accrued  interest,  are in the  form of a
Treasury  Bill and remain as  collateral  for the Secured  Credit  Facility with
Merrill  Lynch).  On March 30, 2001,  Mr. Gross,  the trusts and the  charitable
foundation  converted the existing  $2,467,400 of notes  discussed  above and an
additional  $32,600 of these  advances  into 250 shares of Global  Technologies,
Ltd. Series E 8% Convertible  Preferred Stock with an aggregate  stated value of
$2,500,000.  This preferred  stock is convertible  into shares of Class A common
stock at a fixed  conversion  price of $0.3125 per share,  the closing price per
share of Class A common stock on March 30, 2001.  Remaining advances made by Mr.
Gross,  the  trusts  and the  charitable  foundation  are  secured by a security
interest in the lottery  equipment  formerly  used by the Company in its lottery
business in Great Britain.

     Between  June  30,  2001  and  November  5,  2001,  Mr.  Gross,  a  limited
partnership  controlled by him and certain Trusts  establisheded by him advanced
$464,000 to the Company to cover the working capital requirements of the Company
and the Company's 60% owned subsidiary, TNCi UK. These advances are secured by a
security interest in the lottery  equipment  formerly used by the Company in its
lottery business in Great Britain.  The company  received,  on November 2, 2001,
$1,455,378 from the sale of terminals  formerly used in its lottery  business in
Great  Britain.  The  Company  repaid  Mr.  Gross and these  entities a total of
$767,000 on November 9, 2001.  Remaining unpaid advances,  at November 12, 2001,
received from Mr. Gross and the Trusts total $80,000. These advances are secured
by a security interest in the equity of TNCi UK owned by Global.

     The Company has agreed to reimburse BHG Flights,  L.L.C.  ("BHG") for costs
and expenses associated with the use for corporate purposes of an airplane owned
by BHG. Irwin L. Gross,  Chairman of the Board and Chief Executive Officer, owns
a 50%  interest  in BHG.  Through  September  2000,  the  Company  had  incurred
approximately  $106,085 for such costs and expenses.  The Company reimbursed BHG
approximately  $1,500 for costs and expenses between September 2000 and November
2001.

     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 TNCi 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. TNCi also added other outstanding advances totaling $42,000 to
the  principal  amount  of the  note.  Such  loan was  secured  by assets of the
employee.  The note had a maturity date if August 2009 and bore an interest rate
of approximately  5%. The employee left the Company in January 2001 and the note
was charged to expense during the third quarter.

     The  Company had 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 former 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. In
September 1999, TNCi agreed to a termination of this agreement and paid Fortunet
$100,000 plus legal fees.  In addition,  Global agreed to reprice and extend the

                                      F-38
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

exercise  period of  certain  warrants  and  options  held by  FortuNet  and its
principal shareholder,  a former director of the Company.  During the year ended
June 30, 2000,  actual costs associated with this settlement were  approximately
$157,000.

     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 paid $55,000 for services  received during the period November 1999
through October 2000. TNCi assumed the liability for the consulting agreement in
the amount of $55,000 in connection with the transaction wherein Global acquired
its interest in TNCi.  As of June 30, 2001,  no amounts were owed in  connection
with this consulting agreement.

     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 June 30,  2000,  the Company  paid
$43,064 for office  expenses and rent of First  Lawrence  under the terms of the
agreement.  The agreement  with First  Lawrence  Capital Corp. to provide office
space for the Chief  Operating  officer of the Company was  terminated  in March
2000.

(17) COMMITMENTS AND CONTINGENCIES

(a) LITIGATION

     SWISSAIR/MDL-1269,  IN  REGARDS  TO AN AIR CRASH NEAR  PEGGY'S  COVE,  NOVA
SCOTIA.  This Multi-district  litigation,  which is being overseen by the United
States District Court for the Eastern Division of  Pennsylvania,  relates to the
crash of Swissair Flight No. 111 on September 2, 1998. The aircraft  involved in
the crash was a McDonnell  Douglas MD-11 equipped with an in-flight  interactive
entertainment  system developed by the Interactive  Entertainment  Division that
The Network  Connection  acquired  from us.  Since then, a number of claims have
been filed by the  families of the  victims of the crash.  We have been named as
one of the many defendants,  including Swissair,  Boeing, DuPont and The Network
Connection  (all claims against The Network  Connection have been stayed pending
resolution  of  bankruptcy  proceedings),  in this  consolidated  multi-district
litigation.  Our aviation  insurer is  defending  us in the action.  We have $10
million in insurance coverage related to the action.  With respect to additional
insurance coverage,  a court has ruled that an umbrella policy for an additional
$10 million in insurance does not cover the Swissair  action.  Currently,  we do
not plan to appeal  such  ruling  in  connection  with the  Swissair  crash.  If
liability  is  assessed  against us, to the extent  this  liability  exceeds the
available  insurance,  our business will be adversely affected.  If found liable
for an amount  substantially  in excess of the limits of our coverage,  we could
lose all of our assets.

     FIDELITY AND GUARANTY INSURANCE COMPANY V. INTERACTIVE FLIGHT TECHNOLOGIES,
INC. This case was before the United States  District  Court for the District of
Minnesota,  CV No.  99-410.  This is a  reformation  action  in which one of the
Company's  insurers is seeking to reform an umbrella policy in the amount of $10
million to include an exclusion for completed  products for policies  issued for
years 1997-98 and 1998-99.  Such  exclusion  would  preclude  claims made by the
estates of victims of the crash of Swissair Flight No. 111 on September 2, 1998.
The insurer recently filed a motion for summary judgment, which was heard before
the United States  District Court for the District of Minnesota on September 12,
2000. On October 24, 2000,  the Court ruled in favor of the insurer.  We filed a
motion to alter or amend the ruling,  which was denied on January 19,  2001.  We
thereafter  determined  not to appeal  this action  further  and entered  into a
voluntary dismissal with respect to this action. The umbrella policy at issue in
this suit is in addition to the $10 million in aviation  insurance coverage that
we currently have in place.

                                      F-39
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     BRYAN R. CARR V. THE NETWORK CONNECTION, INC. AND GLOBAL TECHNOLOGIES, LTD.
This case was  brought  in the  Superior  Court of  Georgia,  Civil  Action  No.
99-CV-1307.  Bryan R. Carr, The Network  Connection  former Chief  Operating and
Financial  Officer and a former  Director,  filed a claim on  November  24, 1999
alleging a breach of his employment  agreement with The Network Connection.  Mr.
Carr claims that he is entitled to the present value of his base salary  through
October 31,  2001, a share of any "bonus  pool," the value of his stock  options
and accrued  vacation time. The Network  Connection and Global filed a motion to
compel  arbitration of the claims  pursuant to an  arbitration  provision in the
employment  agreement and to stay the State Court action pending the arbitration
proceeding.  Our motion was granted on August 9, 2000. On November 7, 2000,  Mr.
Carr filed his claim for arbitration in Georgia. The arbitration is currently in
the discovery  phase,  although all claims against The Network  Connection  have
been stayed pending resolution of bankruptcy proceedings.

     On May 6, 1999, a complaint captioned INTERACTIVE FLIGHT TECHNOLOGIES, INC.
V. SWISSAIR TRANSPORT COMPANY, LTD., et al., No. Civ.  99-0936PHXSMM,  was filed
in the United States  District Court for the District of Arizona.  In this suit,
we are seeking  payment by Swissair of $6,773,906  for sums owed by Swissair and
SR Technics to us for  equipment and warranty  contracts.  We have also asserted
claims for business  torts  arising  from the  unjustified  deactivation  of the
entertainment network systems following the crash of Swissair Flight 111 in this
action.  Swissair  filed motions to dismiss the action  alleging that the claims
asserted in our complaint are subject to resolution by arbitration.  The motions
to dismiss were granted on March 31, 2000.  We requested  the District  Court to
reconsider its ruling on the motions and such request was denied by the District
Court on May 25, 2000. We appealed  both the March 31 and May 25 District  Court
Orders to the United  States  Court of Appeals for the Ninth  Circuit.  Swissair
filed a motion to dismiss the appeal for lack of jurisdiction, which was granted
on September 18, 2000. On March 28, 2001, the Supreme Court of the United States
granted our  petition  for writ of certiori and remanded the case to the Circuit
Court for  further  consideration.  Both sides have filed  briefs with the Ninth
Circuit  Court of Appeals  and we are  awaiting  oral  argument  on the issue of
whether the case is subject to  arbitration  abroad or can continue  here in the
States.  We have  assigned  any proceeds we may be entitled to in this action to
The Network Connection. Swissair recently filed for bankruptcy.

     In September of 1999, we filed a lawsuit against  Barington  Capital Group,
L. P. in Maricopa County Superior Court, Arizona, seeking a declaratory judgment
that no sums were owed to Barington  pursuant to a one-year  Financial  Advisory
Service  Agreement  dated October 21, 1998. In October 1999,  Barington  filed a
lawsuit  on the same  contract  in the  Supreme  Court of the State of New York,
County of New York, Index No.  99-6041606,  captioned  BARINGTON  CAPITAL GROUP,
L.P. V. INTERACTIVE FLIGHT  TECHNOLOGIES,  INC., alleging that Barington is owed
$1,750,471 in connection with services  alleged to have been performed  pursuant
to the Financial  Advisory  Service  Agreement.  On October 20, 2000,  Barington
filed a Renewed  Motion to Dismiss  for Lack of  Personal  Jurisdiction  and For
Forum Non Conveniens our Amended Complaint in the Arizona action. By Order dated
January 8, 2001, the Arizona Court dismissed our Amended Complaint, finding that
New York was a more convenient  forum for the parties to litigate their dispute.
Accordingly,  the  parties  are  proceeding  with  the New York  action  and are
undertaking discovery.

     A suit captioned AVNET, INC. V. THE NETWORK CONNECTION, INC., was filed May
17, 2000 in Maricopa County Superior Court,  CV2000-009416.  The suit related to
invoices  for  inventory  purchased by The Network  Connection  in late 1998 and
early 1999. Avnet, Inc. sought payment of the invoices, interest and legal fees.
The aggregate amount of relief sought by Avnet was approximately  $900,000.  The
Network  Connection  did not pay for the inventory  purchased  primarily for the
following reasons:  (i) the inventory  purchased did not meet specifications and
thus was not  accepted  by its  customer,  and (ii) The Network  Connection  was
pursuing a  separate  warranty  claim  against  Avnet  regarding  certain  other
inventory  purchased from Avnet. On October 11, 2000, The Network Connection won
a jury  verdict of $1.8 million in the  warranty  suit.  On December 21, 2000 as
amended by letter  agreement  dated  December 22, 2000,  The Network  Connection
settled  this suit for  $700,000  in cash,  the  cancellation  of  approximately
$899,000 of outstanding accounts payable due to Avnet and mutual releases of all

                                      F-40
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

existing  claims.  The  Network  Connection  recorded a gain in other  income of
$1,336,563 reflecting the settlement,  net of legal fees. The Network Connection
received the cash payment on January 2, 2001.

     FIRST LAWRENCE  CAPITAL CORP. V. GLOBAL  TECHNOLOGIES,  LTD. AND GLOBALTECH
HOLDINGS LIMITED, F/K/A IFT HOLDINGS LIMITED,  Supreme Court of the State of New
York, County of New York, Index No.: 01/601576. First Lawrence filed a complaint
commencing  this lawsuit  against us and our  affiliate on March 28, 2001.  This
complaint  alleges a breach of the  settlement  agreement  dated August 13, 1999
between First Lawrence and us relating to an earlier lawsuit  commenced by First
Lawrence  against us and  certain of our  affiliates.  The  aggregate  amount of
relief  sought is  approximately  $545,000,  plus  related  interest,  costs and
expenses.

     AMERICAN   EXPRESS  TRAVEL  RELATED  SERVICES   COMPANY,   INC.  V.  GLOBAL
TECHNOLOGIES,  LTD. AND NETWORK CONNECTIONS, INC., Supreme Court of the State of
New York,  County of New York,  Index No.:  01/601416.  American  Express sought
payment of unpaid  balances  on credit  cards  issued  under each of our and The
Network  Connection's  corporate  accounts.  As to us,  American  Express sought
approximately  $34,000 and, as to The Network  Connection,  American  Express is
seeking  approximately  $974,000.  The  latter  action has been  stayed  pending
resolution  of  bankruptcy  proceedings.  The action with  respect to Global was
satisfied as of July 2001 by payment in full.

     An action captioned KEATING  DEVELOPMENT COMPANY V. THE NETWORK CONNECTION,
INC. AND GLOBAL TECHNOLOGIES,  LTD., case number 000997 was initiated on January
8, 2001 in the  Philadelphia  County Court of Common Pleas.  The case relates to
the The Network  Connection's alleged breach of a lease for office and warehouse
space.  The lease was  guaranteed  by Global.  Keating is seeking  approximately
$350,000 in damages.  Global has agreed to pay Keating  $15,000  and,  upon such
payment,  will be  dismissed  from the  action.  The action  against The Network
Connection has been stayed pending resolution of bankruptcy proceedings.

     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, 2001,  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  January  2005.  The  future  minimum  lease
commitments under these leases are as follows:

                       YEAR ENDING               OPERATING
                         JUNE 30,                  LEASES
                         --------                  ------
                           2002                  $  91,238
                           2003                     86,256
                           2004                     81,745
                           2005                     46,507
                                                 ---------
                                                 $ 305,746
                                                 =========

     Rental expense under operating  leases totaled  $808,721,  and $616,081 for
the year ended June 30, 2001, and the year ended June 30, 2000, respectively.

(c) PURCHASE COMMITMENTS

     In September  1999,  GTL Leasing  Limited  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 value of the lottery system being purchased from ILTS
was $12.3 million,  of which approximately $2.9 million was yet to be paid as of
June 30, 2000. In addition,  in September  1999, GTL Management  entered into an

                                      F-41
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

eight-year  facilities management agreement with ILTS to provide operational and
technology  support for the system.  Under this  agreement,  GTL  Management was
required,  beginning  April 1, 2000,  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.  Global guaranteed the
obligations  of GTL  Leasing  Limited  and GTL  Management  Limited  under these
agreements.  In  December  2000,  the  Company  returned  1,333  terminals  in a
settlement with ILTS in lieu of payment of outstanding accounts payable due ILTS
for both the original purchase and facilities management services.

(d) CARNIVAL AGREEMENT

     In September  1998,  TNCi 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(TM)")  on a minimum of one Carnival
Cruise Lines ship.  During the  four-year  period  commencing on the date of the
Carnival Agreement, Carnival had the right to designate an unspecified number of
additional ships for the installation of CruiseView(TM).  The cost per cabin for
CruiseView(TM)  purchase and  installation  on each ship was provided for in the
Carnival  Agreement.  In December 1998,  Carnival  ordered the  installation  of
CruiseView(TM) on one Carnival Cruise Lines "Fantasy" class ship, which has been
in  operational  use since August 1999.  In August  1999,  Carnival  ordered the
installation of CruiseView(TM) on one Carnival Cruise Lines "Destiny" class ship
which was operational use from October 1999 through March 2000.  Under the terms
of the agreement,  TNCi was to receive payment for 50% of the sales price of the
system in installments through commencement of operation of the system. Recovery
of the  remaining  sales  price of the system  was to be  achieved  through  the
receipt  of  TNCi's  50 % share  of net  profits,  as  defined  in the  Carnival
Agreement, generated by the system over future periods.

     The terms of the Carnival  Agreement  provided that Carnival may return the
CruiseView(TM)  system within the acceptance  period, as defined in the Carnival
Agreement,  or for breach of warranty. The acceptance period for the Fantasy and
Destiny  class ships were twelve  months and three  months,  respectively,  from
completion  of  installation  and testing,  which  occurred in February 1999 and
October 1999,  respectively.  The initial  warranty period for these systems was
three years. As of March 31, 2000, the Company had recorded  deferred revenue of
approximately $2.1 million related to the two Carnival ships.

     Since the installation of the CruiseView(TM)  system on two Carnival cruise
ships,  and beginning in the quarter ended March 31, 2000,  TNCi had experienced
costs in excess of those recoverable under the Carnival  Agreement.  Given these
costs, and ongoing  technical  issues,  TNCi notified  Carnival of its desire to
renegotiate the Carnival Agreement. During these discussions,  Carnival notified
TNCi in a letter dated April 24, 2000 that it sought to  terminate  the Carnival
Agreement and sought to assert  certain  remedies  thereunder.  On September 25,
2000,  TNCi entered into a Master  Settlement  Agreement and Mutual Release with
Carnival (the "Settlement  Agreement").  The Settlement Agreement specifies that
TNCI and Carnival  agree:  (i) to  terminate  the  Carnival  Agreement;  (ii) to
negotiate  in good  faith to enter  into a New  Agreement;  (iii) that TNCi will
issue to Carnival a one-year convertible note payable in the principal amount of
$550,000;  (iv) to mutually  release each party from any prior  claims;  and (v)
that Carnival shall purchase from TNCi all networking  equipment  aboard the two
ships and TNCi shall retain ownership of all other equipment.

     Based on the above, the Company recorded,  in the year ended June 30, 2000,
revenue of $1.4  million  for the value of  networking  equipment  purchased  by
Carnival,  and cost of revenue in an equal amount by applying the cost  recovery
method of accounting.  The Company also recorded a special charge reflecting the
write-off of: (i) all remaining  inventory  associated with Carnival  (including
the reversal of warranty  reserve) as substantial  uncertainty  exists regarding
its realizability  (approximately $2.1 million);  (ii) all costs associated with
the  deinstallation  and removal of equipment from the two ships  (approximately
$85,000)  and (iii) all  costs  associated  with the  refurbishment  of  certain
equipment  such  that  the  equipment  may be  re-deployed  to  other  customers
($157,000).  Special charges were offset by the reversal of deferred  revenue of
$190,000,  which  TNCi was not  required  to return  to  Carnival  for  warranty
accruals for which TNCi has no continuing obligation. Certain in-cabin equipment
removed  from  Carnival  which  may  be  re-deployed  to  other   customers  was
reclassified  into  Construction-In-Progress  at June  30,  2000  (approximately
$681,000).

                                      F-42
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Pursuant  to  the  Settlement   Agreement,   TNCi  and  Carnival  continued
discussions  with respect to a New Agreement which would cover the  installation
of TNCi's latest CruiseView(TM) technology on the "Fantasy" class ship discussed
above, and contractual terms more favorable to TNCi than the Carnival Agreement,
including  a  longer-term  and  multiple  ship  arrangement.  However,  TNCi and
Carnival were unable to reach a mutually satisfactory resolution of the Carnival
Agreement  and  discussions  were   discontinued.   TNCi  filed  for  bankruptcy
protection on March 24, 2001.

(18) 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,  2001,  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,  cash   equivalents  and  restricted  cash
approximates  fair value  because  their  maturity is generally  less than three
months. 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  marketplace  at  which  they  could be
replaced.  Therefore,  the fair value  approximates  the carrying value of these
financial instruments.

(19) SUPPLEMENTAL FINANCIAL INFORMATION

     Supplemental disclosure of cash flow information is as follows:

<TABLE>
<CAPTION>
                                                                          YEAR ENDED       YEAR ENDED
                                                                         JUNE 30, 2001    JUNE 30, 2000
                                                                         -------------    -------------
<S>                                                                      <C>               <C>
     Cash paid for interest                                              $   307,611       $    75,126
     Non-cash investing and financing activities:
      Modifications to stock option awards                                                 $   278,318
      Issuance of warrants to related party for collateral pledges                         $ 2,324,195
      Issuance of warrants to related parties                            $ 1,070,527
      Issuance of warrants for services and in connection with
        financing                                                                          $ 1,949,448
      Issuance of stock for financial consulting services                $   578,000       $       --
      Issuance of stock for legal settlements                            $ 1,106,691       $   976,171

      Conversion of note payable to TNCi common stock                                      $   400,000
      Conversion notes payable to common stock                           $ 1,218,588

      Conversion of related party debt to Preferred Stock                $ 2,500,000
      Beneficial conversion on secured convertible debt                  $   842,300       $ 4,000,000
      Stock issued in connection with purchase of Series Notes                             $ 1,647,812
      Net issuance of commitment shares associated with equity
        purchase agreement                                                                 $   553,677
      Conversion of Series C and D preferred stock to common stock       $    12,332
</TABLE>

                                      F-43
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(20) OPERATING SEGMENT

     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,  including TNCi UK, and general corporate  operations.  On March 24, 2001,
Global's majority-owned subsidiary,  TNCi, filed a voluntary petition for relief
under  Chapter  11 of  the  U.S.  Bankruptcy  Code.  Pending  resolution  of the
bankruptcy  filing,  the net liabilities of TNCi, as of March 31, 2001 have been
classified as a Deferred Credit in the consolidated balance sheet. Operations of
TNCi have not been  consolidated  subsequent to March 31, 2001. In a transaction
described  above,  Global,  in order to provide  TNCi UK with funds for  ongoing
operations and to avoid insolvency, committed to pay $600,000 for a 60% interest
in TNCi UK. The Company's direct investment in TNCi UK continues the segment for
the Company's financial reporting purposes.

     In  the  past,  TNCi  designed,  manufactured,   installed  and  maintained
advanced,   high-end,   high-performance   computer   servers  and  interactive,
broad-band  information  and  entertainment  systems for both the  domestic  and
foreign  markets,  including  the passenger  rail market in the United  Kingdom,
carried on through TNCi UK. General corporate  operations  consist of developing
and   operating   affiliate   companies,   most  of   which   are   engaged   in
telecommunications, e-commerce, networking solutions and gaming.

     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. One customer  accounted for
60% and 72% of the Company's sales during the years ended June 30, 2001 and June
30, 2000, respectively.

                                      F-44
<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.

                                                  YEAR ENDED        YEAR ENDED
                                                JUNE 30, 2001     JUNE 30, 2000
                                                -------------     -------------
Revenue
   TNCi                                          $    150,417      $  7,091,660
   Other                                              139,878           305,336
                                                 ------------      ------------
                                                      290,295         7,396,996
  Gross profit (loss)(a)
   TNCi                                               (43,592)        2,162,163
   Other                                              102,051           219,093
                                                  -----------      ------------
                                                       58,459         2,381,256
  Operating (loss)
   TNCi                                           (20,471,110)      (11,739,631)
   Other                                          (16,862,239)      (12,059,385)
                                                  -----------      ------------
                                                  (37,333,349)      (23,799,016)
  General corporate operations
   Gain on sale of investments                      4,282,844                --
   Gain on legal settlement                         1,336,563
   Equity in loss of non-consolidated
    affiliate                                              --       (10,345,210)
   Net interest                                    (4,231,051)       (5,293,153)
   Loss on extinguishment of debt                    (698,117)
   Other income (expenses)                            108,054           (14,339)
   Minority interest                                1,869,009         1,612,529
                                                -------------     -------------
                                                    2,667,302       (14,040,173)
                                                -------------     -------------
  Net loss                                      $ (34,666,047)    $ (37,839,189)
                                                =============     =============
  Total assets
   United Kingdom Operations                          831,942        13,468,699
   General corporate                                1,787,410       108,257,232
                                                 ------------      ------------

  Total Assets                                    $ 2,619,352     $ 121,725,931
                                                 ============     =============

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

     Long-lived assets at June 30, 2001 primarily  represent assets used by TNCi
UK of  $439,000  in its Great  Britain  railway  information  and  entertainment
business. As of June 30, 2000, the Company had significant  long-lived assets in
both North America and Europe (UK).  Long-lived  assets located in North America
included net property plant and equipment and intangibles totaling  $10,272,236.
Long-lived assets located in Europe included net property plant and equipment of
$13,648,676.

                                      F-45