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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, 2000.

[ ] 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,                                   Nasdaq National Market
$0.01 par value per share

     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,  2000  were
$7,396,996.
     The aggregate market value of the voting and non-voting  common equity held
by  non-affiliates  of the  Registrant on September  25, 2000 was  approximately
$41.7  million,  based on the closing sales price of the Class A Common Stock on
such date as reported by the Nasdaq National Market.
     The number of shares  outstanding of the Registrant's Class A Common Stock,
$0.01 par value, on September 25, 2000 was 10,725,489.

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

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None
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                            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........................................18

  ITEM 3  -- LEGAL PROCEEDINGS..............................................18

  ITEM 4  -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............20

PART II.....................................................................21

  ITEM 5  -- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.......21

  ITEM 6  -- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
             OF OPERATION...................................................22

             RISK FACTORS...................................................28

  ITEM 7  -- FINANCIAL STATEMENTS...........................................42

  ITEM 8  -- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE............................42

PART III....................................................................43

  ITEM 9  -- DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT..............43

  ITEM 10 -- EXECUTIVE COMPENSATION.........................................45

  ITEM 11 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
             MANAGEMENT.....................................................48

  ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................50

  ITEM 13 -- EXHIBITS AND REPORTS ON FORM 8-K...............................52

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

     Throughout this Annual Report on Form 10-KSB, "Global Technologies,  Ltd.",
"Global Technologies", "Global", "we", "us", and "our", and other possessive and
other  derivations  thereof,   refer  to  Global  Technologies,   Ltd.  and  its
consolidated subsidiaries, unless the context otherwise requires. All trademarks
and trade names appearing in this prospectus are the property of Global,  unless
otherwise  indicated.  In  addition,  "The  Network  Connection"  or "TNCi"  and
possessive  derivations  thereof refer to The Network  Connection,  Inc. and its
consolidated   subsidiary,   and  "U.S.   Wireless"  or  "USWC"  and  possessive
derivations  thereof  refer to U.S.  Wireless  Corporation,  unless the  context
otherwise requires.
<PAGE>
                                     PART I

ITEM 1 -- DESCRIPTION OF BUSINESS

INTRODUCTION

     SUMMARY OF OUR CURRENT OPERATIONS

     Global  Technologies,  Ltd.  is a  technology  incubator  that  invests in,
develops and manages  emerging  growth  companies in the  networking  solutions,
interactive     information    and    entertainment     systems,     e-commerce,
telecommunications and gaming industries.

     We currently hold common stock and convertible preferred stock representing
approximately  79% of the  outstanding  common stock of The Network  Connection,
Inc. on a fully converted  basis.  The Network  Connection is publicly traded on
the Nasdaq SmallCap Market under the ticker symbol "TNCX."

     The  Network  Connection  is a pioneer and  leading  provider of  broadband
entertainment,  information  and  e-commerce  systems  for the  "away-from-home"
marketplace  (e.g.,  hotels,  cruise  ships,   long-haul  passenger  trains  and
schools). TNCi's fully-interactive,  all-digital systems are designed to provide
consumers and students with a personalized,  high-speed  entertainment  platform
where  they  can  access  services  such  as  on-demand  films,   music  videos,
reservation and tour information,  IP telephony,  e-mail, Internet, video games,
casino  gaming,  courseware,  lectures,  and other  Internet-based  content  and
commerce  applications  through the privacy of their hotel room,  cruise  cabin,
passenger seat or classroom.  Through TNCi's CruiseView(TM),  ProjecTRAINbow(TM)
(a.k.a.  TrainView(R)),  InnView(TM) and EduView(R)  services,  "away-from-home"
industries can provide guests with 21st century  entertainment  and  information
technology to meet the demands of an ever-growing marketplace.

     We also hold 3,000,000  shares of common stock  representing  approximately
14.2% of the outstanding common stock of U.S. Wireless Corporation, based on the
number of  outstanding  shares of U.S.  Wireless  common stock on June 30, 2000.
U.S.  Wireless is publicly traded on the Nasdaq National Market under the ticker
symbol  "USWC".  U.S.  Wireless  provides  mobile  location and  traffic-related
information  to  wireless  carriers,   Internet  providers,  public  safety  and
transportation/telematics companies.

     U.S.  Wireless is building a national  location  network and has  announced
plans  to roll  out  traffic  and  transportation  services  in San  Diego,  CA,
Washington,  D.C.,  Hampton Roads,  VA, and the Greater San  Francisco,  CA, bay
area.  The  company's  network  is  based on its  award-winning  RadioCamera(TM)
pattern matching positioning  technology that pinpoints the location of cellular
callers  to enable  the  delivery  of  mobile  services  that rely on  location,
including life saving emergency 911 caller  location,  live traffic and traveler
information,  navigation assistance, localized directory assistance, and vehicle
and asset tracking.

     We  also  own 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,  operates  lotteries  on behalf of
charities in Great  Britain.  Inter Lotto (UK) Limited  maintains the license to
operate  these  lotteries.  Prior to August 18,  2000,  we owned  27.5% of Inter
Lotto, but have terminated our relationship with that entity. In connection with
the  termination,  we received  approximately  (pound)750,000,  transferred  our
shares of Inter Lotto to three of its other  shareholders  and  entered  into an
arrangement  pursuant  to which we and  Inter  Lotto  will  continue  to run the
lotteries  through  December 31, 2000.  We are  currently  pursuing  alternative
operating  strategies for the lottery  infrastructure.  Such strategies  include
utilizing the network for operating pools, lotteries and betting for established
gaming  companies,  and  developing a national  linked bingo game in partnership
with proprietary  private clubs throughout the UK. We intend to have implemented
an alternative  operating strategy by December 31, 2000,  however,  no assurance
can be given that we will be successful in doing so.

     We also hold an approximately 4% equity interest in Shop4Cash.com,  Inc., a
privately held, cash-incentive,  Internet shopping portal with a growing base of
approximately  250 affiliated  merchants.  Shop4Cash has recently  determined to
expand  the scope of its  existing  business  model to offer  merchants  on-line
credit card  processing  and  transaction  services in addition to the  existing
services of the  Shop4Cash  website.  Shop4Cash  expects  that these  additional
<PAGE>
services  will create  additional  value for both  consumers  and  businesses by
facilitating the flow of consumers from the Shop4Cash  website to the merchants'
virtual storefronts.

     OUR HISTORY

     We are a Delaware  corporation  and 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.

     In May  1998,  management  of  Interactive  Flight  determined  to exit the
entertainment network business and redirect the company's resources into the dry
cleaning  industry.  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,  Boeing and DuPont,  among  others,  have been named as
defendants.

     Later in September  1998,  former  management and the Board of Directors of
Interactive  Flight  resigned and our current  Board of Directors was elected to
lead the company.  Our new Board  instated our current  management  team,  which
immediately   began   evaluating   whether   Interactive    Flight's   in-flight
entertainment  technology  was  adaptable  to  alternative  markets  and  how to
redeploy  its  capital to  exploit  technology-related  business  opportunities.
Ultimately,  new management  developed a strategic plan to take advantage of the
opportunities  associated with Interactive Flight's  technologies and management
resources.  New management  pursued a sale to or a strategic alliance with other
entities in the travel and  entertainment  business to maximize the potential of
the   entertainment   network   technology   and   began   to   evaluate   other
technology-related business opportunities.

     Consistent with this vision, through a series of acquisitions,  investments
and divestitures, Interactive Flight'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.  In connection with the
reorganization,  Interactive  Flight changed its fiscal year-end from October 31
to June 30.

     On September 30, 1999, the  stockholders  of Interactive  Flight approved a
reincorporation  proposal pursuant to which  Interactive  Flight merged with and
into Global Technologies,  Ltd. Prior to the merger, Global was a non-operating,
wholly  owned  subsidiary  of  Interactive  Flight  formed  for the  purpose  of
completing the merger.

     OUR BUSINESS STRATEGY

     In  connection  with  our  reorganization,  we have  developed  a  business
strategy to identify companies capable of being market leaders in the networking
solutions, telecommunications,  e-commerce or gaming industries and which are at
a stage of development that would benefit from our management support, financing
and market  knowledge.  We generally  seek to acquire a large enough stake in an
affiliate company to enable us to have significant influence over the management
and policies of the company and to realize a large enough  return to  compensate
us for our investment of management time and effort, as well as capital.

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

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

                                       -2-
<PAGE>
     We have capital and managerial  resources to provide financing,  as well as
strategic,  managerial and operational  support,  to certain emerging companies.
The corporate  staff of Global provides  hands-on  assistance to the managers of
its affiliate companies in the areas of management,  financial,  marketing, tax,
risk management,  human resources,  legal and technical  services,  based on the
affiliate's  needs.  We seek to  assist  affiliate  companies  by  providing  or
locating and  structuring  financing,  identifying  and  implementing  strategic
initiatives,   providing  marketing   assistance,   identifying  and  recruiting
executives  and  directors,  assisting in the  development  of equity  incentive
arrangements  for  executives  and  employees,   and  providing   assistance  in
structuring,  negotiating,  documenting, financing, implementing and integrating
mergers and acquisitions.

     Our goal is to maximize the value of our  affiliate  companies for Global's
stockholders.

OUR AFFILIATE COMPANIES

     THE NETWORK CONNECTION, INC.

     GENERAL

     The  Network  Connection  is a pioneer in bringing  broadband,  all-digital
entertainment  and information  solutions to the  "away-from-home"  marketplace.
Their solutions are designed to deliver customized  interactive services such as
digital movies,  video-on-demand,  e-commerce,  Internet/Intranet access, laptop
connectivity,   video-based  training,   advertising,   Internet  protocol  (IP)
telephony,  and other IP-based  services.  TNCi's  platform is based on the same
standards  that power the  Internet  today,  providing  the ability to scale and
expand their solutions along with industry  advancements.  Each  installation is
based on the same advanced system  architecture,  allowing the company to easily
upgrade and expand the services available over time.

     TNCi is a leader in developing and deploying these  all-digital  solutions,
and their  technology  has been selected and installed in hotels,  cruise ships,
educational facilities, and in a railway simulator car in Europe.

     The company has had the following recent developments:

     *    EXECUTIVE  MANAGEMENT - In March 2000,  TNCi announced the appointment
          of a new  executive  management  team,  including  Robert S.  Pringle,
          President and Chief  Operating  Officer,  Dr. Jay R. Rosan,  Executive
          Vice President, and Richard E. Genzer, Chief Technology Officer. These
          well-regarded  Internet  executives have broad  experience in building
          branded Internet portals,  creating successful  e-commerce  solutions,
          and aggregating information and entertainment content.

     *    SYSTEM  DEPLOYMENT  - In  September  2000,  the  company  announced  a
          relationship with Comdisco  (NYSE:CDO),  enhancing their capability to
          manage  system  installation,  monitoring  and  deployment on a global
          basis.

     *    CONTENT  DIVISION - In March 2000, TNCi formed a new division to focus
          on creating long-term business models for content, commerce, community
          and   connectivity.    This   division   will   create   an   enhanced
          "away-from-home"  experience  where  people can  access and  customize
          content and data.  Richard  Gallagher was hired in August 2000 to lead
          this division.

     *    HOTEL  &  HOSPITALITY   DIVISION  -  TNCi's  technology  is  currently
          installed in approximately 800 guest rooms, and the company has signed
          contracts to install the  technology  in over 2,500  additional  guest
          rooms.   The  InnView(TM)   system  has  been  well  received  in  the
          marketplace,  and the company expects  progress in this marketplace to
          continue to accelerate given the initial successful implementations.

     *    CRUISE SHIP DIVISION - TNCi has  developed an enhanced  version of the
          CruiseView(TM)technology  platform,  increasing  its  performance  and
          capabilities, and is in advanced discussions with several major cruise
          companies,  including  Carnival  Cruise Lines,  about  installing this
          interactive system. The company has terminated the prior contract with
          Carnival  through a mutual  release  that  allows  TNCi to retain  its
          inventory  and  retain  up to  $1.6  million  in cash  advances.  TNCi

                                       -3-
<PAGE>
          continues  to  operate  the  CruiseView(TM)system  on one  1,040-cabin
          Carnival   ship  while  it   negotiates   the  terms  of  a  potential
          forward-looking agreement to deploy the latest CruiseView(TM)solution.

     *    EDUCATION & CORPORATE  TRAINING  DIVISION - In  September  1999,  TNCi
          completed delivery and installation of 195 Cheetah(R) video servers to
          Georgia schools in connection with the Georgia  Metropolitan  Regional
          Education  Services  Agency Net 2000  project.  The  company  received
          payment  of $5.4  million in  connection  with the  project.  TNCi has
          subsequently  developed  a  national  network  of  leading  technology
          integrators for the educational marketplace, and has submitted several
          significant proposals for new business in this area.

     *    PASSENGER  RAIL  DIVISION - In September  1999,  TNCi hired Stephen J.
          Ollier  to lead  the  division.  The  company  has  submitted  pricing
          proposals to two of the world's  largest  train  operators for new and
          retrofit  installations of  ProjecTRAINbow(TM)  systems. In June 2000,
          the company launched its ProjecTRAINbow(TM) demonstration showroom and
          full-scale  system  simulator in the United  Kingdom.  The company has
          entered into advanced  discussions with leading train operators in the
          UK to outfit the system on their fleets.

     Guest Services available through the CruiseView(TM) and InnView(TM) Systems
include:

     *    On-demand films, short video features and music videos;

     *    Free-to-guest television programs;

     *    Concierge information and reservations;

     *    In-room guest messaging and bulletin boards; and

     *    In-room folio review, express check-out and guest surveys.

     Eventually, TNCi also plans to include the following guest services through
the systems:

     *    High-speed Internet access and e-mail;

     *    Voice-over IP (i.e., long distance telephone calls over the Internet);

     *    E-commerce services, such as interactive shopping;

     *    Interactive  games and  casino-style  gambling where permitted by law;
          and

     *    Interactive  advertising and promotion of customer  events,  shops and
          restaurants.

     TNCI'S BUSINESS STRATEGY

     TNCi's primary objective is to be a leading provider of broadband solutions
for the "away-from-home" marketplace. To this end, the company has developed the
following strategies:

     *    DEPLOY, OWN AND OPERATE BROADBAND NETWORKS ACROSS MULTIPLE SEGMENTS OF
          THE  "AWAY-FROM-HOME"  MARKETPLACE.  TNCi provides both infrastructure
          and  programming,  retaining the long-term  rights to deliver services
          over its  broadband  networks.  Its  business  model  balances  shared
          up-front capital investment with shared long-term revenue streams.

     *    BE  RECOGNIZED  AS A TOTAL  SOLUTION  PROVIDER.  TNCi will continue to
          develop the content division,  which will acquire, package and monitor
          a broad range of compelling  multimedia  content tailored to appeal to
          the  typical  end-users  in each of its market  segments.  The company
          believes  this is necessary so that it can be viewed by its  customers
          not  as a  system  infrastructure  provider,  but  rather  as a  total
          solution provider.

                                       -4-
<PAGE>
     *    LEVERAGE ITS CORE TECHNOLOGY ACROSS MARKET SEGMENTS.  TNCi will pursue
          new  markets  and   applications   for  its   systems,   products  and
          technologies.

     *    NURTURE KEY  BUSINESS  PARTNERS  AND  STRATEGIC  ALLIANCES.  TNCi will
          nurture  existing  business  relationships,  and develop new ones with
          partners that have strong national and  international  presences.  The
          company will use these business relationships to further penetrate the
          targeted markets.

     *    DEVELOP THE NEWLY CREATED  DIVISIONS AND PENETRATE FURTHER THE MARKETS
          SERVED.  TNCi  continues to invest in its newly created  divisions and
          staff them with the skilled professionals necessary to effectively and
          efficiently  maximize order  generation for the systems,  products and
          services in the markets they serve.

     *    INVEST IN CORE COMPETENCIES.  TNCi will continue to attract and retain
          highly skilled professionals in these critical  disciplines:  industry
          specific  marketing  and  sales;   multimedia   content   development,
          acquisition and management; systems and software engineering; supplier
          management; finance; contracts administration;  and program management
          applied to large-scale systems.

     PRODUCTS AND SERVICES

     TECHNOLOGY

     The  hardware  for  TNCi's  interactive  systems  consists  of  high  speed
Cheetah(R) servers,  multiple disk drives,  networking  infrastructure,  set-top
personal  computers,  and televisions or other electronic displays that serve as
monitors for the systems.  TNCi's  TransPORTAL(TM)  system  software is based on
standardized Web browser component technology.  The systems provide a variety of
informative,  entertainment  and  interactive  content which may be accessed and
viewed on demand.  The systems are 100% digital and offer customers  flexibility
in adding new content to the system,  as well as the  ability to  customize  and
brand their marketing vision via the "look and feel" of the underlying graphical
user interface.

     Dual,  fault-tolerant Cheetah(R) servers serve as the heart of the systems.
One  Cheetah(R)  server  operates  as the local area  network  backbone  and can
provide up to 100 megabit connectivity to each user on the system. The scaleable
architecture  of  TNCi's  server  is  based on Intel  processors  and  Microsoft
operating  systems.  The  systems  interface  with a variety of color flat panel
computer monitors and television displays.

     The design for the  interactive  information and  entertainment  systems is
proprietary  to TNCi, as are the  Cheetah(R)  video servers and  TransPORTAL(TM)
software tools.  However,  other hardware and components used in the systems are
predominantly  commercial,  off-the-shelf hardware,  based on non-proprietary or
open-system  computer and IP network  standards.  TNCi believes that this use of
available   commercial   hardware  allows  it  to  outsource  component  product
manufacturing  to suppliers  without  compromising  overall  product quality and
reliability.  The company  believes  that it also allows it to focus  operations
resources on supplier management, final assembly and testing.

     Each of the video servers can scale to serve up to 300 simultaneous  users.
The company can install multiple video servers where required.

     TURNKEY INTERACTIVE INFORMATION AND ENTERTAINMENT SYSTEMS

     TNCi currently  markets three  customized  turnkey  systems.  Each of these
systems is built on the Cheetah(R) servers and TransPORTAL(TM) software package.
The company  customizes the content available through the systems to provide the
best total solution for respective market purchasers:

     *    ProjecTRAINbow(TM)  is the newest  system  solution for  long-haul and
          cross   country   passenger   trains.   TNCi   anticipates   that  the
          ProjecTRAINbow(TM)  system will provide interactive  entertainment and
          other content to be determined in conjunction  with future  customers,
          if any.  A  ProjecTRAINbow(TM)  prototype  has been  developed  and is
          currently being marketed to train operators in Europe and Asia.

                                       -5-
<PAGE>
     *    InnView(TM)  is the  system  solution  for the  hotel  and  time-share
          market.   Generally,   TNCi   expects  to  provide   interactive   and
          entertainment  content for use by the hotel guests. The system is also
          designed to provide  Internet access over the  television,  voice over
          IP, and concierge and other guest services. Some of the content can be
          available free of charge, some can be advertising supported,  and some
          can be  available  on a  pay-per-use  basis.  The  company  will share
          revenues  from  advertising  and  pay-per-use  with  the  hotels  on a
          negotiated percentage basis.

     *    CruiseView(TM) is the system solution for the cruise ship market.  The
          system is  designed  to provide  information,  entertainment,  gaming,
          shore  excursions  and  free-to-guest  services.  The  system  is also
          designed to provide  Internet access over the  television,  voice over
          IP, and concierge and other guest services. Some of the content can be
          available free of charge, some can be advertising supported,  and some
          can be  available  on a  pay-per-use  basis.  The  company  will share
          revenues from  advertising and pay-per-use  with the cruise lines on a
          negotiated percentage basis.

     SERVER SALES

     TNCi's current  business  strategy is to offer and sell  complete,  turnkey
interactive  information  and  entertainment  systems.  However,  a  substantial
portion of the revenues generated since June 30, 1999 have come from the sale of
the  Cheetah(R)  video  servers  which have been part of a system  designed  and
installed  by  others,  primarily  in the  education  market.  Although  it will
continue to offer and sell the servers as stand-alone,  high-end, video servers,
the company is  endeavoring to be known as a total system  solution  provider in
the education market as well as in the other markets it serves.

     CONTENT

     TNCi obtains the content that is shown on the systems in several  different
ways. Movies are obtained by licensing products from industry  suppliers.  Other
content is purchased or licensed from other providers.

     The  company  expects  to expand all of its  systems to include  additional
content  and  features,  such as Internet  access,  on-line  shopping  and local
entertainment  guides.  The content  division is  currently  being  developed to
oversee  this  development.  The  division  is also  looking  to provide a total
solution system for the education and corporate training markets.

     TNCI'S HISTORY

     TNCi was  incorporated  in Georgia in 1985.  The company's  common stock is
listed on the Nasdaq  SmallCap  Market under the ticker  symbol  "TNCX."  TNCi's
primary focus under prior  management from inception to 1995 was providing video
products  and  services  to the  educational  market.  After an  initial  public
offering in 1995, prior management began to market  interactive  information and
entertainment  systems to the  commercial  airline  and  passenger  cruise  ship
industries.

     TNCi's AirView product was installed on two Fairlines Airlines aircraft. In
addition,  the  in-flight  entertainment  system  developed  by the  interactive
entertainment  division it acquired from Global Technologies was installed on 19
Swissair  aircraft,  two Debonair Airlines aircraft and three Alitalia aircraft.
The heavily regulated nature of the airline market  prohibitively  increased the
company's  costs.  Fairlines filed for bankruptcy  protection and TNCi was never
able to collect  the amounts  owed.  These  facts,  together  with the  Swissair
litigation,  led TNCi and Global  Technologies  to stop  pursuing this market in
1998.

     In addition,  prior management entered into agreements with Carnival Cruise
Lines and Star Cruises to install TNCi's interactive systems on several of their
cruise  ships.  Operational  problems on the Star cruise ship led Star to cancel
its  agreement,  and the  company was unable to recover  its  investment.  Prior
management  also  negotiated a fixed price  agreement with Carnival Cruise Lines

                                       -6-
<PAGE>
and  installed  a system  on one  Carnival  ship.  TNCi has now  terminated  the
Carnival agreement through a mutual release,  which allows the company to retain
its inventory and recognize  previously  deferred  revenue of $1.4 million.  The
company  continues  to  operate  the  CruiseView(TM)  system on one  1,040-cabin
Carnival ship while the terms of a potential forward-looking agreement to deploy
the latest CruiseView(TM) solution are negotiated.

     Early in 1999,  prior  management's  inability to collect  receivables  and
other  administrative  problems left the company  struggling  financially and in
need of capital. In May 1999, Global  Technologies  acquired majority control of
TNCi by  exchanging  the assets of our  interactive  entertainment  division and
approximately  $4.25 million in cash for 1,055,745 shares of TNCi's common stock
and 2,495,400 shares of TNCi's Series D Convertible  Preferred Stock.  Through a
series of  additional  transactions,  Global  Technologies  acquired  additional
shares of the company's  common stock and shares of the Series B 8%  Convertible
Preferred Stock so that, on a fully converted  basis, it now owns  approximately
79% of TNCi's  outstanding  common  equity.  The  transaction  brought  together
synergistic   technologies,   and  the   engineering   and  program   management
capabilities   of  two  companies   experienced  in  the  field  of  developing,
manufacturing,    marketing   and   installing   interactive   information   and
entertainment systems.

     In connection with the acquisition, Global Technologies elected a new board
of  directors,  which put in place the  current  management  team.  The Board of
Directors was re-elected,  with the exception that Robert Pringle was elected to
take the place of Morris C. Aaron,  at the 2000 annual  meeting of  shareholders
held on May 11, 2000 in New York City.

     TNCi believes that the recent  developments  outlined  above in the section
headed "GENERAL" will serve as a solid foundation on which the company can build
its anticipated future success,  although it gives no assurances to that effect.
TNCi is in the  early  phases  of  implementing  a new  business  strategy.  Its
recently  formed  divisions and the projects they are pursuing,  as  highlighted
above, are in their infancy.  As such, most of the projects  discussed above are
not expected to generate significant revenue in the near-term,  yet they require
further funding to develop. TNCi estimates that its cash and financing needs for
its current business  through June 2001 will be met by equipment  financing that
is currently  being pursued,  and private  placements of equity  currently being
sought from various sources for working capital purposes.  Toward this end, TNCi
has closed on  approximately  $3.1 million of equity financing in the last three
months.  Despite these infusions,  TNCi's audit report for the fiscal year ended
June  30,  2000  contains  a  "going  concern"  qualification,  as it  has  been
determined that the company's  current sources of cash do not meet its needs for
the ensuing  fiscal year.  TNCi is confident  that it will obtain the  financing
necessary  to meet its needs over the course of the  coming  fiscal  year and to
fully implement its business plan, but no assurances can be made that it will be
able to do so.  Failure to do so would have a material  adverse effect on TNCi's
financial condition, which, in turn, would have a material adverse effect on our
financial condition.

     TNCI'S DIVISIONS AND MARKETS

     Under new  management,  TNCi has  identified  four primary  markets for its
products  and  services.  The  company  believes  that these  markets  represent
opportunities  to achieve  substantial  market  share and  profitability.  These
markets  are:  (1) hotels and  time-share  properties,  (2)  cruise  ships,  (3)
educational  institutions and corporate  training,  and (4) long-haul  passenger
trains.  In an effort to capitalize on opportunities in these markets,  TNCi has
formed  separate  sales  and  marketing   divisions,   and  has  recently  hired
experienced executives to lead each of the four divisions.

     HOTELS AND TIME-SHARE PROPERTIES

     TNCi has begun to market its  InnView(TM)  system and  content  services to
hotels and time-share  properties  throughout  North America.  In addition,  the
company is in the  process of  developing  sales and  marketing  strategies  for
hotels and time-share  properties in Europe, Asia and South America.  Initially,
the company is focusing its efforts on hotels with 100 or more rooms.

     TNCi  formed a Hotel &  Hospitality  Division  in  December  1999.  Company
management  believes there are  approximately  3.6 million rooms in the domestic
hotel market, approximately 1.9 million of which do not have in-room information
and entertainment systems. TNCi's management also believes that there are almost
0.5 million time-share properties,  which also do not have installed information

                                       -7-
<PAGE>
and  entertainment  systems.  Of the unserved hotel rooms, the company estimates
that approximately 0.8 million would meet the economic criteria for installation
of the InnView(TM) systems. In addition, it is estimated that contracts covering
approximately   1.7  million   domestic  hotel  rooms  currently   served  by  a
competitor's system will come up for renewal over the next five years.

     Since  forming  this  division,  TNCi has  retained  several  national  and
international sales executives. To date, the company has entered into agreements
for the  InnView(TM)  system for over  2,500  rooms,  and has live,  operational
installations in over 800 rooms.

     Generally,  TNCi  expects  the  InnView(TM)  systems to become  operational
within four months after entering into an agreement with a particular hotel. The
company has not installed InnView(TM) in any time-share properties.  The systems
are provided at no cost to the hotel in exchange for a revenue  share  agreement
in which TNCi  retains the  majority of such  revenues or shares in the up-front
installation costs and shares the revenues on a commensurate basis.

     PASSENGER RAIL

     There are  currently  11 operators  of  long-haul  passenger  trains in the
world.  TNCi believes that each of these  operators is a potential  customer for
the  ProjecTRAINbow(TM)  system over the next several years. The fleets operated
by these  companies  contain an aggregate of almost 1.0 million seats that could
be fitted with the ProjecTRAINbow(TM)  systems. However, to date, no trains have
been fitted with an interactive  information and entertainment system comparable
to the ProjecTRAINbow(TM) system offered by TNCi.

     In September  1999,  TNCi formed a Passenger  Rail  Division to promote its
interactive information and entertainment systems for installation at individual
seats on long-haul and cross-country  passenger trains in the U.S., European and
Asian markets. This system is called "ProjecTRAINbow(TM)". The company announced
the  appointment  of Stephen J.  Ollier,  the former  General  Manager of ALSTOM
Railway Maintenance Services,  Ltd., as President of the division. TNCi believes
that Mr.  Ollier is  uniquely  qualified  for the  position,  offering  both the
technical and industry experience necessary to bring  ProjecTRAINbow(TM)  to the
international rail market.

     In May 1999,  ALSTOM  Transport  Ltd., a unit of ALSTOM SA, which is one of
the largest train  manufacturers in the world,  contracted with TNCi to engineer
ProjecTRAINbow(TM)  into ALSTOM's  high-speed train design. The company was paid
in connection  with the contract but expects no further  business from ALSTOM as
it has become  aware that ALSTOM is in the process of creating a  subsidiary  to
compete with TNCi in the passenger rail market.

     Under the direction of Mr. Ollier,  TNCi has submitted pricing proposals to
two train operators in the United Kingdom for installation of ProjecTRAINbow(TM)
systems.  To date,  the  company  has not  installed  ProjecTRAINbow(TM)  on any
passenger trains.

     CRUISE SHIPS

     Management  estimates that there are currently more than 70 cruise ships in
revenue  service with 500 or more guest cabins.  TNCi estimates that the current
construction  schedules  for  ships of this  size  show  more  than 30 new ships
entering  service  between  now and the  end of  2004.  In  total,  the  company
estimates the market operates over 10 million passenger  cruises  annually,  the
vast  majority  of which  are  hosted  by one of a  handful  of  leading  cruise
operators.  TNCi believes that only about ten ships to date have had interactive
entertainment and information systems installed.

     Historically, the cruise line industry has not embraced the installation of
interactive  systems in  individual  cabins like their hotel  counterparts.  The
major  reason for this  reluctance  is not  related  to a lack of  demand.  Only
recently has the  technology of interactive  guest systems  progressed to levels
that  enable  them to  profitably  and  logistically  contribute  to cruise line
profits and the vacation experience.  In fact, the most significant hurdles have
been adapting the system to the compact  configuration  and harsh environment of
cruise ships, while maintaining adequate levels of price and performance.

     TNCi has had over a year's  experience  with its  systems  aboard  Carnival
Cruise  Lines,   and  has  recently   developed  an  enhanced   version  of  the
CruiseView(TM) technology platform, increasing its performance and capabilities.
The  company  is in  discussions  with  several  major  cruise  companies  about
installing this interactive system, including Carnival.

                                       -8-
<PAGE>
     EDUCATION AND CORPORATE TRAINING

     TNCi continues to manufacture its Cheetah(R)  family of multimedia  servers
for the interactive  education and corporate training markets.  Sales of servers
have  historically  been a core  business  for  the  company,  with  over  2,000
Cheetah(R) video servers sold worldwide.

     In August 1999, the company sold multimedia  servers in connection with the
first phase of the Georgia school  system's Net 2000 project.  TNCi supplied its
Cheetah(R)  video  servers  as the  central  backbone  of 193  Georgia  schools'
multimedia  networks.  Two other Cheetah(R) servers were delivered in connection
with the order and installed at the Georgia schools' network  operating  center.
Using  these  servers,  students  and  teachers  are able to access,  on-demand,
hundreds of hours of digitally stored  multimedia  content,  access the Internet
and build  interactive  courses.  The total value of orders  received  under the
program was $5.4 million.  The company  believes that this  installation  is the
largest  of its kind in the  country  and  that it may  well be a model  for the
expansion of this type of program.  TNCi's sales in connection with this project
were limited to its Cheetah(R) video servers.  In the future,  the company hopes
to be able to sell entire interactive systems,  called  "EduView(R)",  to school
related purchasers.

     In 1999, the Federal government instituted the E-Rate Program,  which has a
primary goal of bringing the Internet and various  forms of  multimedia  content
directly to elementary and secondary classrooms. The program makes $2.25 billion
available to schools to obtain the technology necessary to achieve this goal. To
obtain these funds, a school district must make application and pay a portion of
the equipment cost. A significant  amount of the funding for the delivery of 195
Cheetah(R)  video  servers to Georgia  schools in  connection  with the Net 2000
project came from the E-Rate Program.

     TNCi formed the Education & Corporate Training Division in December 1999 to
promote its interactive  products and services to educational  institutions  and
corporate training departments. In addition, the company hired James D. Oots and
Farley  Barge as  leaders  of this  division.  The team  brings a great  deal of
experience in the corporate training and education markets.

     ACQUISITION, PACKAGING AND MONITORING OF BROADBAND, MULTIMEDIA CONTENT

     In an effort to capitalize on what is believed to be the  advantages of its
system  architecture  and technology,  TNCi is developing a division to acquire,
package and monitor a broad range of compelling  multimedia  content tailored to
appeal to the  typical  end-users  in each of its market  segments.  The company
believes  that the  provision  of  compelling  content  through the systems will
encourage user  interaction  with the system,  which,  in turn,  should maximize
pay-for-use revenue generation for both TNCi and its vertical market partners.

     The  company  believes  that the content  division  will be integral to its
success. The revenue generated from content can be long-term and should span the
life-cycle  of the  systems.  In  addition,  because  it is  generally  industry
practice in the markets TNCi serves to share the cost of system hardware, and in
the hotel market that TNCi serves to install the  hardware at its cost,  content
revenue will be an essential revenue source.

     SALES AND MARKETING

     TNCi currently markets its systems, products and services worldwide through
the efforts of its sales  people in each  operating  division.  The company also
plans to market its systems  through  value-added  resellers,  distributors  and
alliance partners. System installation and on-site customer support are provided
through  internal  customer  engineering  personnel  and may, in the future,  be
provided through the efforts of value-added resellers and alliance partners.

     The sales arrangements for the systems depend upon various factors, such as
the size and type of hotel,  time-share property,  ship or train, and the system
features  and  other  requested   customization.   There  is  generally  a  long
sales-cycle   for  the  systems  because  of  the  need  to  design  the  system
configuration  for the  particular  environment  in  which  the  system  will be
installed,  to  test  each  installed  system  and to  negotiate  any  necessary
agreements with other providers. The sales cycle is also dependent upon a number

                                       -9-
<PAGE>
of factors beyond the company's control,  such as the financial condition of the
customer,  safety and maintenance  concerns,  regulatory  issues, and purchasing
patterns of particular operators and the industry generally. This is expected to
result in long and unpredictable buying patterns for the systems.

     COMPETITION

     TNCi faces  substantial  competition  in each of its markets.  Some general
factors that are believed to influence whether the company will succeed include:

     *    The  ability  to  deliver  "total"  system  solutions  for  customers,
          including,  system  hardware and software,  as well as ongoing content
          acquisition and management.

     *    Demonstration of system quality, reliability and performance.

     *    Product  hardware and software  that can be easily  upgraded as needed
          throughout the product's life cycle.

     *    Market-driven pricing of the systems, products and services.

     *    Functionality  that  enables  the system to  effectively  deliver  new
          sources of revenue generation for customers.

     There are three major  providers of interactive  guest services  systems in
the hotel and hospitality market. On Command  Corporation  (NASDAQ:ONCO) has the
greatest market share with approximately one million rooms, followed by LodgeNet
Entertainment  Corporation  (NASDAQ:LNET) with approximately  780,000 rooms, and
UK-headquartered  Quadriga.  On  Command  and  LodgeNet  focus  their  sales and
marketing  efforts on North American  properties,  whereas  Quadriga markets its
products primarily to European hotels and to a much lesser extent Middle Eastern
and  African  hotels.  All of  these  competitors  employ a  technology  that is
different  from TNCi's.  TNCi believes  that its system  designs are superior to
those of its  competitors  because the scalability of TNCi servers permits it to
provide the content at each site such that all selections are always  available.
By contrast,  competitors'  systems are often compelled to temporarily reduce or
omit  content  choices  due to the  limited  number  of  users  that  can view a
particular  content title at the same time. In addition,  TNCi believes that its
system designs are superior based on the content and features  offered,  such as
Internet  connectivity and voice-over IP, that can be made available through the
systems.  TNCi's two  primary  competitors  in the cruise  ship market are Allin
Interactive, a subsidiary of Allin Corporation (NASDAQ: ALLN), and a division of
Siemens AG. The company  estimates that Allin currently has installed systems on
two Royal Caribbean cruise ships while Siemens has a system installed on one.

     Although the company has an opportunity to be  first-to-market in providing
train operators with interactive multimedia information and entertainment system
solutions,  SmartWorld(TM),  a UK-based company,  has announced its intention to
develop  and offer a  limited  video-on-demand  system  for the  passenger  rail
market. Matsushita, a leading provider of in-flight entertainment systems in the
long-haul  commercial airplane market, is considering an entry into this market.
In  addition,  the  company  is aware  that  ALSTOM  and  Adtranz  are  creating
subsidiaries in an effort to compete in this market.

     TNCi's  Cheetah(R)  video servers apply hardware control of video streaming
to achieve high-integrity,  MPEG-2 quality images and pause,  fast-forward,  and
rewind  capabilities.   These  servers  are  scaleable  to  provide  up  to  300
simultaneous  video streams.  Competitor  video server  products in this market,
such as those provided by Dell,  Gateway,  Silicon Graphics,  Compaq and Hewlett
Packard,  are  high-speed,  general-purpose  servers,  with software  control of
limited video streams  (typically  less than 10 to 15). nCube has high end video
servers which may also compete with TNCi's product.

     All of these  companies  have greater  financial,  technical  and marketing
resources than TNCi.  Moreover,  competitors  have  developed  goodwill and name
recognition among the hospitality operators whom the company calls on to solicit
sales, and also among end users who have grown accustomed to their offerings. In
addition,  TNCi  expects  that to the extent  that the  market for its  systems,
services and products  develops,  competition will intensify and new competitors
will enter its designated target markets. The company may not be able to compete
successfully against existing and new competitors as the market for its systems,
products and services evolves and the level of competition  increases. A failure
to  compete  successfully  against  existing  and new  competitors  would have a
materially adverse effect on TNCi's business and results of operations.

                                      -10-
<PAGE>
     MANUFACTURING AND SUPPLIERS

     Contract  manufacturers  assemble TNCi's proprietary  systems in the United
States.  Final  assembly,  integration,   burn-in  and  functional  testing  are
conducted  at the  company's  facilities  in Phoenix,  Arizona or at supplier or
customer locations.

     TNCi obtains  electronic  components  and finished  sub-assemblies  for its
system components  "off-the-shelf" from a number of qualified suppliers.  It has
established  a testing  protocol  in an effort to  ensure  that  components  and
sub-assemblies  meet defined  specifications and standards before final assembly
and integration.  The company elected to procure  off-the-shelf  component parts
and sub-assemblies  from suppliers in an effort to ensure better quality control
and pricing.  To date, some  interruptions  in the supply of component parts and
sub-assemblies  have been experienced due to the lack of availability of certain
electronic  components.  In  response,  the  company is  identifying  additional
qualified  suppliers.  The inability of current  suppliers to provide  component
parts,  coupled with an inability to find alternative  sources,  would adversely
affect TNCi's operations.

     PRODUCT DEVELOPMENT

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

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

     PROTECTING TNCI'S INTELLECTUAL PROPERTY

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

                                      -11-
<PAGE>
     EMPLOYEES

     TNCi employs 77 full-time staff at its various  locations and sales offices
and is adding skilled personnel in the following fields: content procurement and
development;  software,  systems and hardware  engineering;  program management;
contracts administration;  supplier management;  customer engineering; and sales
and marketing.

     The company has formed separate vertical sales and marketing  divisions for
each of its four target  markets.  These  divisions  are  anchored by the recent
hiring  of  experienced  executives  from  within  each of these  markets.  TNCi
anticipates  that these  executives  will be able to leverage the company's core
technology  in  broadband,   multimedia  content  distribution  and  IP  network
solutions to increase sales of the systems,  products and services.  The company
has recognized the need to create an additional  internal  operating division to
provide customers with the personalized  programming  necessary to bring users a
broad range of content  options,  and is in the process of hiring  personnel  to
anchor this new division.

     WARRANTIES

     TNCi provides a warranty  regarding  its products for periods  ranging from
one to three years,  depending on the  requirements  of customers.  To date, the
company has not experienced significant claims under warranties, and its ability
to meet  the full  demands  of  having a  significant  number  of units  sold to
customers who require such service has not been tested.  The company also passes
through  to end  users the  warranties  that it  receives  from  vendors  on any
separate  hardware,  software or component parts that it sells  independently of
full systems.

     U.S. WIRELESS CORPORATION

     U.S.  Wireless  Corporation,  a Delaware  corporation  (NASDAQ:  USWC), has
developed a  geographic  location  system  designed to pinpoint  the location of
wireless telephone subscribers within a wireless network.  Using a network-based
patented technology called RadioCamera(TM), the system recognizes the pattern of
the radio waves  emanating from a subscriber's  handset and then uses the unique
"signature" of that pattern to determine the subscriber's  approximate  physical
location.  The  RadioCamera(TM)  system is  compatible  with  existing  wireless
network  infrastructures,  integrates  easily and requires no  modifications  to
either the wireless carrier base station or subscriber handsets.  Currently, the
company plans to deploy a nationwide  location  network based on its proprietary
RadioCamera(TM) technology and operate the network as a service bureau that will
offer  various  location  information  services  and  applications  to  multiple
wireless  carriers.  Initially,  US  Wireless is  focusing  on  providing  E-911
(emergency)   wireless   location   information  to  carriers  and   intelligent
transportation  systems  applications to governmental  agencies to assist in the
managing of roadway congestion.  In addition to providing these enhanced 911 and
intelligent transportation systems services, U.S. Wireless anticipates using its
nationwide network to provide a range of additional "location-based information"
applications  including  live  roadside  navigation  assistance,   enhanced  411
(E-411), asset and vehicle tracking, and carrier network management systems.

     US  Wireless'  activities  to date have  consisted  primarily  of research,
development and testing of the wireless location technology and the financing of
operations.  The company has not yet begun commercial  operations in any market,
and therefore,  has limited revenues.  There is a history and future expectation
of losses and  negative  cash flow,  and the  company  will  require  additional
financing to build out and operate the planned wireless location network.

     Today,  there are over 100 million  wireless  telephone  subscribers in the
United States, and that number is projected to grow to 187.6 million by the year
2004  (Cahners  In-Stat  Group).  There are hundreds of millions  more  wireless
telephone  subscribers  located outside of the United States.  Wireless carriers
aggressively  competing for this rapidly  growing  subscriber base are exploring
new ways to differentiate  their services and increase average revenue per unit.
Enhanced wireless service  offerings (such as  location-based  applications) are
expected to offer sought-after  service  differentiation,  and more importantly,
are  projected  to  provide  significant  new  revenue  opportunities  for these
wireless carriers.  In addition,  wireless  subscribers are now demanding access
to, and are  willing  to pay  carriers  for,  the same data  available  to wired
telephone users, and increasingly  Internet users. A 1999 Strategis Group Report
estimates  that there is a $4.0 billion market for wireless  location  services,
excluding E-911 applications,  such as roadside  assistance,  location-sensitive
billing, E-411 and traffic  management/intelligent  transportation services. The
report  estimates  that 47  million  subscribers  will be using  these  wireless
location services by 2004. U.S. Wireless  therefore believes that the market for
value-added services based on location represents a sizeable new opportunity for
wireless  carriers to enhance current and future revenue  streams.  As a result,
most carriers are evaluating various wireless  location-based  service offerings
and/or technologies in an effort to capture a share of this emerging market.

                                      -12-
<PAGE>
     In  addition,  as the number of  wireless  subscribers,  and the demand for
enhanced  wireless  services,  increases,  so will the  need for  location-based
safety and emergency services like wireless E-911. According to the Yankee Group
(Boston),  more than one quarter of all new wireless  customers  purchase  their
phones for security reasons. In 1999, over 43 million cellular calls were placed
to  911   emergency   call   centers   across   the  United   States   (Cellular
Telecommunications Industry Association). Yet, unlike calls placed from wireline
telephones,  calls are not traceable when a caller uses a wireless phone to call
for emergency assistance (the emergency operator does not automatically know the
location of the caller).  As a result of the numerous safety issues and concerns
arising from these wireless emergency calls, the wireless  industry,  the Public
Safety Answering Points (PSAPs) (a network of regional  emergency call centers),
members of the E-911 community and the U.S.  Federal  Communications  Commission
(FCC),  began joint  efforts in mid-1994 to solve the  technological  and policy
hurdles in providing  location  information for wireless 911 calls. In response,
the FCC has issued several  mandates  requiring  wireless  service  providers to
implement  the  technology  necessary  to locate  wireless  calls for  emergency
assistance within certain  parameters and time schedules.  In June 1996, the FCC
issued a Report and Order in Docket  #94-102,  formalizing  certain  performance
requirements,  and  implementing  a schedule for wireless  service  providers to
establish  "geolocation"  capabilities.  In so doing,  the FCC ordered  that the
deployment  and   integration  of  wireless  E-911  features  and  functions  be
accomplished in two phases.

     Phase I requires  wireless service  providers to report the callback number
and  originating  cell  site  and/or  sector  of a 911  call to PSAP  operators.
Pursuant to the mandate,  beginning in October 1997, service providers have been
required to provide such  information to qualified  requesting  PSAPs within six
months of a PSAP's request.  Service providers have commenced the implementation
of products in order to meet this requirement.

     Phase II requires  wireless service providers to pinpoint and report to the
PSAPs the location of all wireless 911 callers to an accuracy, for network-based
solutions,  of within 100 meters for at least 67% of calls and within 300 meters
for 95% of calls.  For  handset-based  solutions  the  carriers  must be able to
identify  the  caller's  location to an accuracy of 50 meters or less for 67% of
calls, and within 150 meters for 95% of calls.  The FCC has mandated  completion
of these  Phase II  requirements  by  October 1, 2001.  Wireless  carriers  have
further  been  required  to file a  report  with  the FCC by  November  9,  2000
(recently  extended form the original filing date of October 1, 2000) describing
their plans for achieving Phase II E-911  compliance,  including their choice of
technology  and  implementation  plan.  In  December  1998,  however,  the FCC's
Wireless  Telecommunications  Bureau released a public notice outlining a filing
schedule for requests  for waivers of the Phase II E-911  requirements.  Various
wireless carriers have submitted requests for waivers, and various other parties
have subsequently filed comments with the FCC regarding the question of waivers.
The issue of waivers and/or  modifications of the E-911 Phase II requirements is
being reviewed by the FCC in an ongoing public forum.  Nonetheless,  the FCC has
not yet made any major modifications to the requirements of the mandate.

     U.S.  Wireless'  patented  RadioCamera(TM)   technology  provides  wireless
services solutions for wireless carriers by offering E-911 location capabilities
in compliance with current FCC mandates,  as well as a wide range of value-added
wireless  location based  applications.  Although  there is intense  competition
within the wireless location market,  U.S. Wireless believes that its system has
several advantages over competing  technologies.  Companies competing for market
share in the wireless  caller location  industry are typically  divided into two
categories:  those that  employ  handset-based  solutions  and those that employ
network-based solutions.

     Handset-based  solutions  rely on the  integration  of  Global  Positioning
System (GPS)  receivers  into the wireless  handsets.  The internal GPS receiver
triangulates  the  location  of a caller  using  multiple  orbiting  satellites.
Although  this  enables GPS to function  with a high degree of accuracy in rural
and suburban  areas where a clear view exists,  it limits the ability to operate
successfully  in densely  populated  metropolitan  areas or indoors,  where tall
buildings and "urban  canyons"  prevent clear lines of sight to the  satellites.
Adding a GPS receiver to new handsets will likely create larger,  heavier,  more
expensive telephones with shorter battery life. Furthermore,  implementing a GPS
solution would require  retrofitting  or replacing the existing  wireless phones
currently owned by over 100 million wireless subscribers (US alone),  making GPS
an unlikely near-term solution to the FCC's E-911 Mandate.

     Network-based  technology  solutions  do not  rely on the  addition  of any
dedicated  equipment  to the  handset,  but operate  entirely  from the wireless
network  infrastructure.  US  Wireless'  RadioCamera(TM)  system  falls into the
category of network-based  solutions.  Competing  network-based  systems rely on
triangulation  techniques  such as Angle of Arrival (AOA) and Time Difference of

                                      -13-
<PAGE>
Arrival  (TDOA).  The  RadioCamera(TM)  system  architecture  does  not  rely on
triangulation.  Both AOA and TDOA  systems  require  multiple  base  stations or
points of  reference  from which to  triangulate  based on either the "angle" or
"time  difference"  of the signal  arrival.  As a result,  both systems are at a
disadvantage in urban  environments where there are rarely direct lines of sight
between a wireless caller and multiple base stations. Due to the lack of line of
sight,  subscribers'  wireless  transmissions  bounce off of buildings and other
obstacles,  reaching the base station  antennas  via multiple  paths,  and hence
degrading  the  accuracy  of  the  signals.   These  solutions  are  also  at  a
disadvantage  in sparsely  populated  areas where it is difficult for signals to
reach the two or more base stations needed to triangulate.

     U.S.    Wireless   believes   that   when   compared   to   the   competing
GPS/handset-based  and  triangulation/network-based  location  solutions  listed
above, its RadioCamera(TM) technology has several distinct advantages.

     *    IMMUNE TO LACK OF LINE OF SIGHT. RadioCamera(TM) performs very well in
          densely  populated  urban  areas  where line of sight to cell sites is
          often  obstructed,  making it  difficult  to  triangulate  a  caller's
          location.

     *    PERFORMS  WELL  IN  RURAL  ENVIRONMENTS.   U.S.  Wireless'  technology
          requires  only a single site to identify the location of a call making
          it well-suited to rural environments where cell stations are not close
          to one another.

     *    CONTINUOUS  TRACKING.  RadioCamera(TM)  provides  continuous  location
          tracking  capabilities  as  well as  initial  location.  Unlike  other
          network-based  solutions  and handset  solutions  that use the control
          channel to transmit one-time location information, the system works on
          a voice channel that is active throughout the call.

     *    MINIMAL  INFRASTRUCTURE  ADAPTATION.  The  system  adapts  to  current
          cellular  infrastructure,  and unlike GPS, does not require alteration
          of either the base station  infrastructure or subscriber handsets.  In
          addition,  compared  to  TDOA  and  AOA,  the  RadioCamera(TM)  system
          requires minimal data back-haul.

     *    LESS STRINGENT CALIBRATION  REQUIREMENTS.  Unlike AOA and TDOA systems
          that  require  strict  timing  calibration  and the use of  calibrated
          antenna arrays,  RadioCamera(TM) requires only periodic drive tests to
          update location databases and associated signal patterns.

     Going forward,  U.S.  Wireless  anticipates  that it will continue to build
upon the promising  results of numerous  completed and ongoing field trials that
have evaluated the functionality and reliability of RadioCamera(TM)  technology.
The U.S. Wireless  technology has proven effective in all of the field trials to
date,   providing   location   information   that  exceeds  the  FCC's  accuracy
requirements, as indicated in the following chart:

<TABLE>
<CAPTION>
                                                                        ANNAPOLIS
LOCATION                  OAKLAND, CA            BILLINGS, MT          JUNCTION, MD    BALTIMORE, MD
--------                  -----------            ------------          ------------    -------------
<S>                      <C>                 <C>                       <C>             <C>
DATES OF TRIAL           1997-Present             1997-1999            1998-Present     1998-Present

TERRAIN                   Dense Urban        Rural & Light Urban         Suburban       Dense Urban

67% ACCURACY (1)           69 meters              84 meters             78 meters        81 meters

CARRIER TECHNOLOGY      AMPS, CDMA, iDen             AMPS                  AMPS          AMPS, CDMA

PARTICIPANTS         GTE Wireless, Nextel    US WEST, XYPOINT,           Verizon          Verizon
                                             Nortel Networks,
                                             Western Wireless,
                                             Williams Communications,
                                             Billings 911 Center,
                                             & Montana 911 program
</TABLE>

----------
(1)  The FCC requires  accuracy within 100 meters on 67% of calls and 300 meters
     on 95% of calls.

                                      -14-
<PAGE>
     In building out the nationwide  network and tailoring its service  package,
US  Wireless  intends  to  work  with  wireless  carriers,  information  content
providers,  and equipment vendors on a nationwide and international basis. Where
appropriate,  the company  will  leverage  the core  competencies  of  strategic
relationship  partners  to provide  the  networking  and data  processing  tools
necessary to create a turnkey solution.  The company has already formed a number
of  strategic  partnerships  within  the  industry  in an effort  to  accelerate
deployment of the wireless  location  network and to enhance  overall  marketing
efforts.  For example, on May 17, 2000, U.S. Wireless announced the formation of
a strategic alliance with American Tower  Corporation,  an owner and operator of
broadcast  transmission  towers in the United States. The alliance was formed to
facilitate U.S.  Wireless' network  deployment,  and as part of the agreement US
Wireless signed a co-location agreement under which it will lease 1,000 to 2,500
American  Tower  facilities  during a three-year  term and will receive  network
build-out  services,  including radio frequency design and site construction and
installment  management.  In  addition  to  agreeing  to support  the  company's
marketing efforts with wireless  carriers,  American Tower also agreed to invest
$22.5  million  in US  Wireless'  Series C  Convertible  Preferred  Stock.  Most
recently, on September 19, 2000,  Hewlett-Packard  Company announced that it had
agreed to invest up to $52.0  million in US  Wireless.  It is  anticipated  that
Hewlett-Packard  will provide $7.0 million in up-front  financing  and up to $45
million  conditionally to create network  operating and data processing  centers
for U.S.  Wireless'  network.  In  addition,  Hewlett-Packard  will  provide the
Internet  infrastructure  and hardware products  necessary to support the future
growth of the network.

     The company  began  building out its wireless  location  network to provide
intelligent  transportation systems in early 2000. Two initial trial intelligent
transportation  systems projects are underway for both the Maryland and Virginia
Departments of  Transportation  to provide  highway and traffic  information for
selected roadways in these states. More recently,  U.S. Wireless  announced,  on
August 1, 2000,  that it is  deploying  its  RadioCamera(TM)  wireless  location
network in San Diego  County,  California.  The network  will be part of the San
Diego Regional Advanced Traveler Information System and Corridor-wide Commercial
Vehicle Operations Project, planned by the San Diego Association of Governments.
This was followed on September  11, 2000, by the  announcement  that the company
will also be implementing its  RadioCamera(TM)  wireless location network in the
greater  San  Francisco  Bay  Area  to  provide  live  traffic  and   congestion
information  for  motorists,   as  part  of  the   Metropolitan   Transportation
Commission's  TRAVINFO program.  As U.S. Wireless enters the deployment phase of
operations,  ongoing research and development  efforts are primarily focusing on
optimizing the cost,  accuracy and reliability of the  RadioCamera(TM)  location
technology.    Additionally,   having   now   completed   development   of   the
RadioCamera(TM)   system  for  compatibility  with  all  US-based   cellular/PCS
protocols,  the company is  currently  developing a GSM version of the system to
service European and other foreign markets.

     In March 1999,  we invested  $3.0 million in U.S.  Wireless in exchange for
30,000  shares of U.S.  Wireless  Series B Preferred  Stock.  In March and April
2000, we converted our U.S.  Wireless  Series B Preferred  Stock into  3,000,000
shares of U.S.  Wireless common stock. Our shares of U.S.  Wireless common stock
represent 14.2% of the outstanding  common stock of U.S. Wireless as of June 30,
2000. The fair market value of our investment in U.S.  Wireless at June 30, 2000
was approximately $64.1 million.  The corresponding market value as of September
25, 2000 was approximately $50.4 million.

     DONATIVOS

     Donativos  S.A. de C.V. is a Mexican entity that was formed for the purpose
of operating an  entertainment  center in  Monterrey,  Nuevo Leon,  Mexico.  The
primary  entertainment  the  center  offers  is  slot  machines,  through  which
customers may win lottery tickets for the Loteria Nacional (the National Lottery
of Mexico) or obtain rights usable for future play at the center.

     In May 1999,  Global,  through  its wholly  owned  subsidiary,  Interactive
Flight   Technologies   (Gibraltar)   Limited,  a  Gibraltar   company,   loaned
approximately  $1.6 million to Donativos and acquired a 24.5% equity interest in
the  venture.  The loan bore  interest at an annual rate equal to the prime rate
plus 3% and was to mature on April 30,  2001.  We had also  provided a letter of
credit in the amount of $913,445 to secure  payment of the purchase price of the
slot machines  acquired by our Gibraltar  subsidiary and leased to Donativos for
use at the center.

                                      -15-
<PAGE>
     In the quarter ended December 31, 1999, we determined that the value of our
investment in Donativos had been permanently impaired.  Since the opening of the
entertainment center, Donativos had not generated sufficient profits to meet its
obligations to us under the loan and equipment lease agreements and,  therefore,
its ability to  continue as a "going  concern"  was in doubt.  At that time,  we
wrote the equity investment off and reserved for the full amount of the loan and
subsequent  advances to Donativos.  These actions resulted in a charge to income
of $1.5 million.

     On April 14, 2000,  we entered  into an agreement  pursuant to which on May
10, 2000 we received $2.0 million from Donativos in return for  cancellation  of
the debt owed by  Donativos to Global and the transfer of the equity that Global
held in Donativos to its majority shareholder. The transaction resulted in a net
loss of  approximately  $335,000,  including the reversal of $1.2 million of the
previous  charge of $1.5  million  for the  equity  write-off  and loan  reserve
discussed  above.  The transaction also involved an exchange of general releases
and  transfer  of title  to the  equipment  in the  center  from  our  Gibraltar
subsidiary to Donativos.

     UNITED KINGDOM LOTTERY OPERATIONS

     In April  1999,  Global and  certain  of its  wholly-owned  United  Kingdom
subsidiaries  entered into an  arrangement  with Inter Lotto (UK) Limited,  a UK
company licensed,  pursuant to an External Lottery Manager's  Certificate issued
by the  Gaming  Board for  Great  Britain,  to  operate  lotteries  on behalf of
charities in Great Britain.  Under this arrangement GlobalTech Holdings Limited,
a wholly  owned UK  subsidiary  of Global,  purchased  27.5% of the  outstanding
capital  stock of Inter Lotto and GTL  Management  Limited,  an indirect  wholly
owned UK subsidiary of Global,  entered into an Operating  Agreement  with Inter
Lotto to run that corporation's lotteries and gaming activities. Simultaneously,
GTL Leasing  Limited,  another  indirect  wholly owned UK  subsidiary of Global,
purchased computer equipment,  which it leased to GTL Management for use in such
lottery and gaming  operations.  GTL Management entered into a further operating
agreement with Inter Lotto on January 13, 2000. The lottery and gaming  business
under these agreements began with an official "launch" on April 4, 2000.

     On August 18, 2000,  Global,  GlobalTech and GTL Management  entered into a
"Deed" with Inter  Lotto and  certain of its  principals  which,  in  substance,
constituted a settlement agreement providing for the disengagement of Global and
its subsidiaries from Inter Lotto and its operations by (i) transferring back to
the other principals of Inter Lotto all of the GlobalTech capital stock in Inter
Lotto;  (ii) payment by Inter Lotto to GTL  Management of an amount equal to the
value  added tax  rebate to Inter  Lotto,  plus  interest,  less an amount to be
retained  by Inter  Lotto  for  salaries;  (iii)  termination  of the  operating
agreement between GTL Management and Inter Lotto, (iv) cooperative  arrangements
for  Global  and its  subsidiaries  to assist in the  operation  of Inter  Lotto
through December 31, 2000; and (v) waiver of all claims and releases.

     The  August  18,  2000  "Deed"  effectively  terminates  the April 1999 and
January 2000 arrangements and provides for a total separation of Inter Lotto and
Global and its  subsidiaries  by the end of the  calendar  year 2000.  Under the
"Deed",  GlobalTech  transferred  all of its  stock in Inter  Lotto to the other
principals of Inter Lotto,  with certificates to have been delivered on or about
August 22, 2000. The "Deed" terminates the operating agreement and provides that
Inter Lotto and GTL Management  will together do whatever is necessary to manage
the lottery operations  through December 31, 2000,  including the maintenance of
Inter Lotto's license during such period.  In consideration  for the transfer of
stock in Inter Lotto by GlobalTech,  Inter Lotto and its principals  have agreed
not to engage in the  business of any three- or  four-digit  lottery game within
the UK for a period of two years  following  August  18,  2000.  Based  upon the
transfer of our stock in Inter Lotto,  we wrote-off our remaining  investment in
Inter Lotto of approximately $700,000.

     The  financial  terms  of the  August  18,  2000  "Deed"  provide  for  the
allocation  of  approximately  (pound)970,000  in value added tax rebates,  with
Inter Lotto  retaining  (pound)220,000  (for the payment of back salaries  which
were the subject of disputes  between  Global and certain  other  principals  of
Inter  Lotto) and  payment to GTL  Management  of the  balance of  approximately
(pound)750,000.  GTL  Management  will be paid all  revenues  from  Inter  Lotto
lottery  operations  through  December  31,  2000,  after  payment  for  prizes,
charities  and sales  commission.  Additionally,  there are  provisions  for the
resolution of certain other outstanding debts and obligations.

     The August 18, 2000 "Deed" also operates as a general settlement  agreement
and includes  waivers of all claims and releases,  including the withdrawal of a
"winding up petition" calling for the dissolution of Inter Lotto, filed in court
by one of the other principals of Inter Lotto.

                                      -16-
<PAGE>
     GTL  Leasing  retains  ownership  of  the  computer  networking   hardware,
software,  terminals and other equipment,  which serve as the  infrastructure of
the lottery  operations  conducted by Inter Lotto and managed by GTL Management.
Such lottery equipment is leased by GTL Leasing to GTL Management.  In addition,
GTL Management remains obligated under the agreement with International  Lottery
and Totalizator  Systems,  Inc. for certain facilities  management  services and
technological  support in connection with such lottery equipment,  which Global,
through GTL Leasing,  purchased  from them.  This  agreement  requires  that GTL
Management pay International  Lottery $72,000 per week, plus additional  amounts
based on any  terminals in excess of 3,500 which are  installed and a percentage
of average daily sales.  This  agreement  expires in September  2007, and we are
currently  negotiating  its  termination.  There is no assurance that we will be
successful in these negotiations or that, if terminated,  the terms thereof will
be favorable to us.  Failure to negotiate a termination of this agreement and to
do so on terms  favorable  to us could  have a  material  adverse  effect on our
results of operations and financial condition.

     We  are  currently  investigating   alternative  operating  strategies  for
GlobalTech, GTL Management and GTL Leasing, and the use of the lottery equipment
and network  operating center  following  termination of the Inter Lotto lottery
operations on or before December 31, 2000. Such strategies include utilizing the
network for  operating  pools,  lotteries  and betting  for  established  gaming
companies,  and  developing  a national  linked bingo game in  partnership  with
proprietary  private clubs throughout the United Kingdom. We intend to implement
an alternative  operating  strategy,  however, no assurance can be given that we
will be  successful in doing so. If we are unable to  successfully  implement an
alternative operating strategy,  GTL Leasing's lottery equipment assets could be
deemed impaired under generally accepted accounting principals,  as the carrying
value of such  assets may not be fully  recoverable  in such  event.  Any "write
down" of the value of such assets due to such  impairment  could have a material
adverse effect on our financial condition.

     SHOP4CASH.COM, INC.

     On November 23, 1999 we acquired  500,000 shares,  or  approximately  4% of
Shop4Cash.com,  Inc.,  at a price of $2.00 per share.  Shop4Cash  is a privately
held, cash  incentive-based,  Internet  shopping  portal.  We have  registration
rights in connection  with these  shares.  The  investment is being  recorded at
cost.

     Recently,  Shop4Cash  determined to implement certain  modifications of its
existing  business  model in order to create  additional  value for its merchant
base.  Shop4Cash  recently  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.  Shop4Cash expects that these additional services will create
additional  value for both consumers and businesses by facilitating  the flow of
consumers from the Shop4Cash website to the merchants' virtual storefronts.

     Contemporaneously with the proposed merger, Shop4Cash is seeking additional
financing for working  capital  purposes of $300,000 from a group of its current
stockholders,  which  includes  us.  It plans to raise  these  additional  funds
through the sale of common stock and has accepted  subscription  agreements  for
the full  $300,000.  We determined it necessary to write-down  our investment in
Shop4Cash by $925,000 as of June 30 (which does not include the shares purchased
by us in  the  recent  financing  round)  to  $75,000  to  reflect  a  permanent
impairment  of our previous  investment.  This  write-down  is reflective of the
lower  price  per  share at  which  Shop4Cash  shares  were  sold in the  recent
financing.

EMPLOYEES

     As of September 25, 2000,  Global employed 13 people on a full-time  basis.
In addition, Global's consolidated subsidiaries, employ the following numbers of
people: TNCI employs 77 people and GTL Management employs 10 people. No employee
is covered by a collective bargaining agreement.  We consider our relations with
our employees to be good.

                                      -17-
<PAGE>
ITEM 2 -- DESCRIPTION OF PROPERTY

     We and our consolidated subsidiaries lease the following properties:

     *    Our   principal   executive   offices,    located   in   Philadelphia,
          Pennsylvania,  consisting of approximately 1,500 square feet of office
          space. 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,  the Chief  Executive  Officer and
          Chairman of the Board of Directors of Global,  is a principal of Ocean
          Castle.

     *    We also lease  approximately  5,000  square feet of  executive  office
          space in New York, New York.

     *    GTL  Management  Limited,  a wholly owned United  Kingdom  subsidiary,
          leases  approximately 12,700 square feet of office space in Bracknell,
          England  which serves as the network  operating  center and  principal
          administrative offices for our lottery operations.

     *    GTL Management also leases  approximately  2,570 square feet of office
          space in London,  England,  which  serves as the  principal  executive
          office for the lottery operations.

     *    GTL  Management  also  leases   approximately  2,000  square  feet  of
          warehouse space for lottery equipment storage in Manchester, England.

     *    TNCi leases office space,  and assembly and warehouse  facilities,  in
          Phoenix,  Arizona.  This space  contains  approximately  17,500 square
          feet.

     *    TNCi also  leases  approximately  1,500  square  feet of office  space
          located  in  Philadelphia,   Pennsylvania,   which  serves  as  TNCi's
          principal executive offices.

     *    TNCi also leases  approximately  16,000 square feet of office space in
          Conshohocken, Pennsylvania. TNCi has not yet moved into this space but
          plans to use it for administrative  purposes and the operations of the
          Content Division.

     *    TNCi UK Limited  leases  approximately  1,000  square feet of space in
          Derby,  England,  which serves as the principal  executive  offices of
          TNCi's Passenger Rail Division.

     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  Swissair  MD-11
aircraft involved in the crash was equipped with an entertainment network system
that had been sold to Swissair by our predecessor  company,  Interactive  Flight
Technologies,  Inc.  Estates of the  victims  of the crash  have filed  lawsuits
throughout the United States against Swissair,  Boeing, Dupont and various other
parties,  including  us and TNCi,  which has been named in some of the  lawsuits
filed on a successor  liability  theory.  TNCi and we deny all liability for the
crash. TNCi and we are being defended by our aviation insurer.

     On  September  1,  1999,   SAir  Group  invited  us  to  participate  in  a
conciliation  hearing  before the  Justice of the Peace in Kloten,  Switzerland,
which is the  customary  manner  in  which  civil  litigation  is  initiated  in
Switzerland. The document informing us of the proceeding states that the request
has been filed in connection  with the crash of Swissair Flight 111 primarily in
order to avoid the expiration of any applicable  statutes of limitations  and to
reserve the right to pursue further claims. The document states that the relief

                                      -18-
<PAGE>
sought is "possibly  the  equivalent  of CHF  342,000,000  - in a currency to be
designated  by the court;  each plus 5% interest  with effect from  September 3,
1998; legal costs and a participation to the legal fees (of the plaintiff) to be
paid by the defendant."

     FIDELITY AND GUARANTY INSURANCE COMPANY V. INTERACTIVE FLIGHT TECHNOLOGIES,
INC., United States District Court for the District of Minnesota, CV No. 99-410.
This is a  reformation  action  in which our  insurer  is  seeking  to reform an
umbrella  policy in the amount of $10.0  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. Plaintiffs,  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.  The Court
has not yet ruled on the summary judgment motion.

     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. We will proceed to arbitrate these claims in Switzerland.

     GLOBAL  TECHNOLOGIES,  LTD. V. XCEL CAPITAL,  LLC,  United States  District
Court for the Eastern District of Pennsylvania,  Case No. 00-CV-505.  On January
27, 2000, we filed an action against XCEL Capital,  LLC for specific performance
and breach of contract. In the action, we sought to compel XCEL to tender 75,000
shares of  Global  Class A Common  Stock to us at $4.75 per share in  accordance
with XCEL's  obligations  pursuant to a put/call  agreement entered into between
the parties on August 12, 1999. XCEL filed counterclaims. On September 14, 2000,
we settled the action by agreeing to issue an  additional  25,000 shares to XCEL
and to register such shares for resale  (subject to certain  restrictions on the
volume and timing of sales) by October 31, 2000. No money is being paid to XCEL.

     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.  Barington's New York suit has been
stayed pending  resolution of the Arizona action. We deny all liability and that
any sums are owed to Barington.

     A  suit  captioned  LODGENET  ENTERTAINMENT   CORPORATION  V.  THE  NETWORK
CONNECTION,  INC.  was filed April 5, 2000 in the  Circuit  Court for the Second
Judicial  Circuit of the State of South  Dakota.  The action arose out of TNCi's
hiring  of  Theodore  P.  Racz,  a  former  LodgeNet  Entertainment  Corporation
employee,  as its Senior Vice  President of the Hotels &  Hospitality  division.
LodgeNet alleged tortious  interference with contract and tortious  interference
with  business  relationships.  LodgeNet  sought to prohibit Mr. Racz from being
employed  by  TNCi,  as well as  damages,  and  fees and  costs.  This  case was
voluntarily  dismissed  without  prejudice  by  LodgeNet  because  there  was no
jurisdiction in South Dakota.

     BRYAN R. CARR V. THE  NETWORK  CONNECTION,  INC.  AND GLOBAL  TECHNOLOGIES,
LTD.,  Superior Court of Georgia,  Civil Action No.  99-CV-1307.  Bryan R. Carr,
TNCi's 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
TNCi.  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.  TNCi and we 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.

                                      -19-
<PAGE>
Our motion was  granted on August 9,  2000.  As of this date,  Mr.  Carr has not
filed an arbitration claim against TNCi or us, but on September 20, 2000, sent a
letter to our  outside  counsel in the matter  stating  his  demands in hopes of
settlement.

     A suit captioned AVNET, INC. V. THE NETWORK CONNECTION, INC., was filed May
17, 2000 in Maricopa County Superior Court,  CV2000-009416.  The suit relates to
invoices for  inventory  purchased  by TNCi in late 1998 and early 1999.  Avnet,
Inc. seeks payment of the invoices,  interest and legal fees.  TNCi has not paid
for the  inventory  purchased  primarily  for  the  following  reasons:  (i) the
inventory  purchased  did not meet  specifications  and thus was not accepted by
TNCi's customer,  and (ii) TNCi is currently  pursuing a separate warranty claim
against Avnet regarding certain other inventory purchased from Avnet.

     The  company  may be subject to other  lawsuits  and claims  arising in the
ordinary course of its business.  In the company's opinion, as of June 30, 2000,
the  effect  of such  matters  will not have a  material  adverse  effect on the
company's results of operations or financial condition.

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

     We held an Annual Meeting of  Stockholders on May 11, 2000. At the meeting,
the  following  matters  were  submitted to a vote of the  stockholders  and the
results of each vote are set out below, as well:

     *    The election of five directors to hold office as follows:  two Class I
          directors  to  serve  until  the 2001  annual  meeting,  two  Class II
          directors  to serve  until the 2002  annual  meeting and one Class III
          director to serve until the 2003 annual meeting,  and each until their
          respective successors have been duly elected and qualified.

        NAME AND                              VOTES                     BROKER
    CLASS OF DIRECTOR          VOTES FOR     AGAINST    ABSTENTIONS    NON-VOTES
    -----------------          ---------     -------    -----------    ---------
James W. Fox, Class I          8,583,308     111,779         --           --
M. Moshe Porat, Class I        8,583,308     111,779         --           --
Charles T. Condy, Class II     8,583,308     111,779         --           --
Stephen Schachman, Class II    8,583,308     111,779         --           --
Irwin L. Gross, Class III      8,583,308     111,779         --           --

     *    A proposal to ratify the grant of options to purchase 1,500,000 shares
          of our Class A Common  Stock to Irwin L. Gross,  Chairman of the Board
          and Chief Executive Officer of Global.

VOTES FOR          VOTES AGAINST          ABSTENTIONS          BROKER NON-VOTES
---------          -------------          -----------          ----------------
3,155,473             320,416               19,886                5,199,312

     *    A proposal to ratify the  appointment  of KPMG LLP,  certified  public
          accountants,  as our  independent  auditors for the fiscal year ending
          June 30, 2000.

VOTES FOR          VOTES AGAINST          ABSTENTIONS          BROKER NON-VOTES
---------          -------------          -----------          ----------------
8,672,356             12,387                10,344                    --

                                      -20-
<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, 2000 (through  September 25, 2000), as reported
by the Nasdaq National Market.

CLASS A COMMON STOCK                                            HIGH       LOW
--------------------                                           ------     ------
July 1, 1998 through September 30, 1998                        $2.000     $1.375
October 1, 1998 through December 31, 1998                       1.813      0.875
January 1, 1999 through March 31, 1999                          2.875      1.333
April 1, 1999 through June 30, 1999                             3.250      1.208
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      3.750
July 1, 2000 through September 30, 2000 (through September 25)  6.375      3.250

     The closing  sales price of the Class A Common Stock on September 25, 2000,
as reported by the Nasdaq National Market, was $5.00 per share.

     As of September 25, 2000, there were  approximately  104 record holders and
approximately 4,250 beneficial owners of Class A Common Stock.

     On January 5, 2000, the Board of Directors  approved a three-for-two  stock
split to be effected by way of a stock dividend of one share for each two shares
of Class A Common  Stock  held by  stockholders  of  record  as of the  close of
business  February  15,  2000.  The  dividend  was paid on  February  29,  2000;
fractional  shares were paid out in cash. All references to the number of common
shares,  per share amounts and stock option data  elsewhere in the  consolidated
financial  statements and related footnotes have been restated as appropriate to
reflect the effect of the stock dividend for all periods  presented prior to the
stock dividend.

     We have not paid any  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

     On May 16,  2000,  we issued  1,250 shares of our Class A Common Stock to a
stockholder  in a  transaction  exempt from the  registration  provisions of the
Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. The shares
were issued in settlement of certain disputed claims.

     On June 8, 2000,  Advantage  Fund II Ltd.  and Koch  Investment  Group Ltd.
purchased an aggregate of $4.0 million of secured convertible notes from us in a
private  placement  transaction  exempt from the registration  provisions of the
Securities Act pursuant to Section 4(2) thereof. Advantage and Koch received two
notes each, which may be converted into our Class A Common Stock at a conversion
price of $2.00 per share, subject to customary  anti-dilution  adjustments.  The
notes  mature on December 7, 2001 and bear  interest at 6% per annum  payable at
maturity or on  conversion in cash or stock.  The notes are  redeemable by us at
any time and from time to time,  for a premium that increases with the length of
time that the notes are outstanding, and the issuance of warrants or stock, also
based on how long the notes are outstanding. We are obligated to register resale
of the  shares  of our  Class A  Common  Stock  issuable  upon  any  conversion,
redemption  or  payment  of the  notes,  as well as the  shares  underlying  the
warrants issued in connection with the redemption.

     In  connection  with the June  issuance of the secured  convertible  notes,
designees of Reedland Capital Partners received  four-year  warrants to purchase
an aggregate of 20,000  shares of our Class A Common Stock at an exercise  price
of $5.8125 per share for Reedland  Capital  Partners'  role as sales agent.  The
20,000 shares  underlying these warrants have been registered for resale.  These
warrants were issued in a transaction exempt from the registration provisions of
the Securities Act pursuant to Section 4(2) thereof.

                                      -21-
<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

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

     Our  financial  statements  included in this  Annual  Report on Form 10-KSB
contain the results of  operations  for our fiscal year ended  October 31, 1998,
for the  eight-month  Transition  Period  ended June 30, 1999 and for our fiscal
year ended June 30,  2000.  For  purposes of this  management's  discussion  and
analysis,  for  comparative  purposes  only,  we will  refer  to the  pro  forma
unaudited results of operations for the twelve-month period ended June 30, 1999.
In some  instances,  where we compare  results for the pro forma  twelve  months
ended June 30, 1999 with the fiscal year ended  October  31,  1998,  please note
that there is a four month overlap between such periods.

     The pro forma  unaudited  results of operations for the twelve months ended
June 30, 1999 are as follows (the audited  results of operations  for the fiscal
year  ended  June 30,  2000 are  included  in the table  below  for  comparative
purposes):

                                                                    Pro Forma
                                                                  Twelve Months
                                                   Year Ended         Ended
                                                  June 30, 2000   June 30, 1999
                                                   ------------    ------------
                                                    (Audited)       (Unaudited)
Revenues:
  Equipment sales                                  $  6,983,787    $    980,533
  Service income                                        413,209       1,361,530
                                                   ------------    ------------
                                                      7,396,996       2,342,063
                                                   ------------    ------------
Costs and Expenses:
  Cost of equipment sales                             4,867,519       1,801,037
  Cost of service income                                148,221         665,214
  General and administrative expenses                19,261,352      14,054,249
  Non-cash compensation expenses                      1,905,419
  Expenses associated with investments                1,944,743         550,000
  Reversal of warranty maintenance &
    commission accrual                                       --      (7,151,393)
  Special charges                                     2,156,205       2,295,660
  Amortization of intangibles                           912,553          74,981
                                                   ------------    ------------
                                                     31,196,012      12,289,748
                                                   ------------    ------------
  Operating loss                                    (23,799,016)     (9,947,685)

                                      -22-
<PAGE>
                                                                    Pro Forma
                                                                  Twelve Months
                                                   Year Ended         Ended
                                                  June 30, 2000   June 30, 1999
                                                   ------------    ------------
                                                    (Audited)       (Unaudited)

Other:
  Interest expense                                   (5,948,347)        (86,373)
  Interest income                                       655,194       1,829,877
  Equity in losses of affiliates                    (10,345,210)       (195,704)
  Gain on sale of assets                                     --         133,396
  Other expense                                         (14,339)       (498,606)
                                                   ------------    ------------
  Net loss                                          (39,451,718)     (8,765,095)

Minority interest                                     3,259,819        (376,705)
Cumulative dividend on preferred stock                 (187,415)        (33,333)
Redemption of preferred stock                           509,183              --
                                                   ------------    ------------
  Net loss attributable to common stockholders     $(35,870,131)   $ (9,175,133)
                                                   ============    ============

     Revenues for the year ended June 30, 2000 were  $7,396,996,  an increase of
$5,054,933 or 216% compared to revenues of $2,342,063 (pro forma  unaudited) for
the corresponding  period ended June 30, 1999.  Revenues for the year ended June
30, 2000  consisted  of  equipment  sales of  $6,983,787  and service  income of
$413,209. Revenues for the year ended June 30, 1999 consisted of equipment sales
of $980,533 and service income of $1,361,530. The increase in equipment sales of
$6,003,254 is principally  the result of the sale of 195  Cheetah(R)  Multimedia
servers to the Georgia  Metropolitan  Regional Education Services Agency (MRESA)
Net  2000  Project  of  $5,408,744  and the  sale  of  networking  equipment  of
$1,368,066 pursuant to a master settlement agreement with Carnival. The decrease
in service income is due to lower service income from the dry cleaning  business
(acquired by prior management,  but sold in May 1999),  offset by service income
of $305,336 from our United Kingdom lottery operation launched in April 2000.

     Revenues for the  twelve-month  period ended June 30, 1999 were  $2,342,063
(pro forma unaudited), a decrease of $16,800,898 (or 88%) compared to revenue of
$19,142,961 for the year ended October 31, 1998.  Revenues for the twelve months
ended  June 30,  1999  consisted  of  equipment  sales of  $980,533  (pro  forma
unaudited) and service income of $1,361,530 (pro forma  unaudited).  The decline
in revenue is the result of  Swissair's  refusal to take  delivery of additional
entertainment  networks and a lack of new customer  orders.  The equipment sales
were   generated   from  payments   received  from  Swissair  for  one  of  four
entertainment  networks billed per the April 1998 contract  between Swissair and
our predecessor company.  The service income was principally  generated from the
dry cleaning business,  which was sold in May 1999.  Revenues for the year ended
October 31, 1998 consisted of equipment  sales of $18,038,619 and service income
of  $1,104,342.   The  equipment  sales  were  principally  generated  from  the
installation of the  entertainment  networks in ten business class cabins and 18
first-class cabins of Swissair  aircraft.  The service income was generated from
the dry cleaning business  acquired in July 1998,  services provided to Swissair
pursuant  to the  media  programming  services  agreement,  our  share of gaming
profits  generated by the Swissair  systems and revenue  earned from Swissair to
extend its warranty.

     Cost of equipment sales for the year ended June 30, 2000 was $4,867,519, an
increase  of  $3,066,482,  (or  170%)  compared  to cost of  equipment  sales of
$1,801,037 (pro forma unaudited) for the corresponding twelve-month period ended
June 30, 1999. Cost of equipment sales includes materials and estimated warranty
costs associated with the sale of the Cheetah(R)  servers to MRESA of $3,444,474
and the cost of installing  network  equipment onboard two Carnival cruise ships
of $1,368,066.  For the  corresponding  twelve month period ended June 30, 1999,
cost of  equipment  sales  represents  material  costs  for  four  entertainment
networks  sold to Swissair.  Cost of service  income for the year ended June 30,
2000 was  $148,221,  a decrease of $516,993 (or 78%) compared to cost of service
income of $665,214 (pro forma unaudited) for the twelve-month  period ended June
30, 1999.  Cost of service  income for the year ended June 30, 2000 is primarily
related to video content costs for revenue sharing arrangements with Carnival of
$61,978 and direct costs  associated  with lottery ticket sales of $86,243.  The
cost of service income for the corresponding  twelve month period ended June 30,
1999 is primarily related to the dry cleaning  operation,  which was sold in May
1999.

     Cost of  equipment  sales for the twelve  months  ended  June 30,  1999 was
$1,801,037 (pro forma unaudited), a decrease of $13,722,245 (or 88%) compared to
cost of equipment sales of $15,523,282 for the year ended October 31, 1998. Cost
of equipment sales includes  materials,  installation and maintenance  costs, as
well as estimated  warranty costs and costs of upgrades related to installations
of entertainment  networks on Swissair aircraft.  For the year ended October 31,
1998, cost of sales resulted from the installation of equipment in ten business

                                      -23-
<PAGE>
class  cabins  and 18  first-class  cabins of  Swissair  aircraft,  whereas  the
decreased  cost of sales in the twelve  months ended June 30, 1999 resulted from
material costs for only four Swissair  aircraft.  Cost of service income for the
twelve  months  ended  June 30,  1999 was  $665,214  (pro forma  unaudited),  an
increase of $426,377  (or 179%)  compared to cost of service  income of $238,837
for the year ended  October  31,  1998.  Cost of  service  income for the twelve
months  ended June 30, 1999 and the year ended  October  31,  1998 is  primarily
related to the dry  cleaning  operations,  which were  acquired in July 1998 and
sold in May 1999.

     General and  administrative  expenses for the year ended June 30, 2000 were
$19,261,352,  an increase of $5,207,103  (or 37%) over  expenses of  $14,054,249
(pro  forma  unaudited)  for  the  twelve-month  period  ended  June  30,  1999.
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.  Significant  components
attributable to the increase in general and administrative expenses from 1999 to
2000 include the hiring of new  management  and expansion of operations at TNCi,
and the launch of the lottery  operation in the UK, offset by write-offs of $1.6
million for  consulting  agreements  deemed to have no future value,  which were
recorded in the twelve-month period ended June 30, 1999.

     General and  administrative  expenses for the twelve  months ended June 30,
1999 were $14,054,249 (pro forma unaudited),  an increase of $2,656,508 (or 23%)
over expenses of  $11,397,741  for the year ended October 31, 1998.  Significant
components of general and  administrative  expenses  include costs of personnel,
legal  and  professional  fees  and  corporate   insurance  costs.   Significant
components  attributable to the increase in general and administrative  expenses
from 1998 to 1999 include legal and  professional  fees related to the Donativos
S.A. de C.V. and Inter Lotto (UK) Limited investments, legal fees related to the
investment  in TNCi and a write-off of  approximately  $1.6  million  related to
certain consulting  agreements  determined,  in the twelve months ended June 30,
1999,  to have no future  value,  offset by  severance  payments  totaling  $3.1
million to three former employees in the year ended October 31, 1998.

     There were no research and development expenses for the year ended June 30,
2000,  nor the  twelve-month  period ended June 30, 1999 (pro forma  unaudited).
Research and development expenses were $1,092,316 for the year ended October 31,
1998. The decrease in the research and development  expenses  reflects our prior
decision not to develop the next generation of the entertainment network and the
resulting reduction in staff and professional fees.

     Non-cash  compensation  expense of  $1,905,419  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. Expenses associated with investments of $550,000 (pro forma
unaudited) for the twelve-month period ended June 30, 1999 represent $400,000 of
write-offs of investments deemed to have no value and a $150,000  standstill fee
related to the Inter Lotto acquisition.

     For  the  twelve  months  ended  June  30,  1999,  we  recorded   warranty,
maintenance,  commission and support cost accrual adjustments of $5,117,704 (pro
forma unaudited), $504,409 (pro forma unaudited), $303,321 (pro forma unaudited)
and $1,225,959 (pro forma  unaudited),  respectively.  Such adjustments to prior
period estimates, which totaled $7,151,393 (pro forma unaudited),  resulted from
an evaluation of specific  contractual  obligations and discussions  between our
new management and other parties related to such contracts. Based on the results
of our findings during the twelve months ended June 30, 1999, such accruals were
no longer considered necessary.

     Special charges for the year ended June 30, 2000 were $2,156,205,  compared
to $2,295,660 (pro forma unaudited) for the  twelve-month  period ended June 30,
1999.  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  contract  pursuant  to a master  settlement  agreement  between us and
Carnival.  Special  charges  for the  twelve-month  period  ended June 30,  1999
resulted from a $521,590 net write-off of accounts  receivable  and deposits due
from Swissair,  offset by deferred revenue under the Swissair  extended warranty
contract,  and  expenses for the  settlement  of  litigation  matters with First
Lawrence   Capital  Corp.  and  FortuNet,   Inc.  of  $1,843,750  and  $120,320,
respectively.  Special charges for the  twelve-month  period ended June 30, 1999
were offset by a $190,000  recovery of a prior period  special charge related to
the number of entertainment networks requiring maintenance.

                                      -24-
<PAGE>
     Special  charges  for the  twelve-month  period  ended  June 30,  1999 were
$2,295,660 (pro forma unaudited) compared to $400,024 for the year ended October
31, 1998.  For the  twelve-month  period ended June 30,  1999,  special  charges
resulted from a $521,590 (pro forma unaudited)  write-off of accounts receivable
and deposits due from  Swissair,  offset by deferred  revenue under the Swissair
extended  warranty  contract.  Swissair's  actions,  as  described  above,  have
rendered our accounts receivable and deposits from Swissair worthless as of June
30, 1999 and,  accordingly,  we wrote-off such assets.  Also included in special
charges are expenses of $1,843,750 (pro forma unaudited) and $120,320 (pro forma
unaudited) for the settlement of litigation  matters with First Lawrence Capital
Corp.  and  FortuNet,  Inc.,  respectively.  Special  charges for the year ended
October 31, 1998  primarily  resulted  from  equipment  write-offs of $1,006,532
offset by $606,508 in recoveries of special charges from the prior fiscal year.

     Amortization  of intangibles  for the year ended June 30, 2000 was $912,553
compared to $74,981 (pro forma unaudited) for the twelve-month period ended June
30, 1999. The increase is  attributable  to a full twelve months of amortization
of intangibles as a result of our May 1999  acquisition of TNCi and our revision
of the estimated useful life for determining amortization from ten years to five
years effective May 1, 2000.

     Interest  expense for the year ended June 30, 2000 was $5,948,347  compared
to $86,373  (pro forma  unaudited)  for the  twelve-month  period ended June 30,
1999.  The increase in interest  expense is  attributable  principally to a $4.0
million non-cash charge related to a beneficial  conversion  feature embedded in
the 6%  Secured  Convertible  Notes  issued on June 8,  2000 and a $1.5  million
non-cash  interest  charge  related to warrants we granted to a related party in
conjunction  with pledges of collateral to cover  maintenance  calls on our loan
from Merrill Lynch.  In addition,  we entered into several new debt  obligations
during the current year versus the comparable twelve-month period ended June 30,
1999.

     Interest  expense was $86,373 (pro forma  unaudited)  for the  twelve-month
period ended June 30, 1999,  compared to $11,954 for the year ended  October 31,
1998.   The  1999  expense  is   attributable   principally  to  long-term  debt
obligations,  whereas the expense for 1998 is attributable to our capital leases
for furniture that expired in September 1999.

     Interest  income for the year ended June 30, 2000 was $655,194,  a decrease
of $1,174,683  (or 64%) compared to income of $1,829,877  (pro forma  unaudited)
for  the  corresponding   period  ending  June  30,  1999.  The  interest  arose
principally out of short-term  investments of working  capital.  The decrease in
interest income is due to the lower average cash balance during 2000 compared to
1999.

     Interest  income  for the  twelve-month  period  ended  June  30,  1999 was
$1,829,877  (pro forma  unaudited),  a decrease of $421,178 (or 19%) compared to
income of  $2,251,055  for the year ended October 31, 1998.  The interest  arose
principally out of short-term  investments of working  capital.  The decrease in
income is due to the lower average cash balance during 1999 compared to 1998.

     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
compared  to $195,704  in the  corresponding  period  ended June 30,  1999.  The
increase is  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 retain 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.  For the
corresponding  period  ended June 30,  1999,  the equity  interest  in losses of
affiliates represented our 27.5% portion of the losses of Inter Lotto only.

     For  the  twelve-month   period  ended  June  30,  1999,  we  recorded  our
proportionate  share of our  equity  interest  in losses  of Inter  Lotto in the
amount of $195,704 (pro forma unaudited).  There were no affiliates for the year
ended October 31, 1998.

     For the  twelve-month  period  ended June 30,  1999,  we recorded a gain of
$133,396 (pro forma  unaudited) on the sale of the dry cleaning  operation.  The
dry cleaning operation was sold in May 1999.

     Other  expense  for the year ended June 30,  2000 was  $14,339  compared to
other  expense  of  $498,606  (pro  forma   unaudited)  for  the   corresponding

                                      -25-
<PAGE>
twelve-month  period ended June 30, 1999.  Other expense in 2000 consists of net
losses on sales of equipment and two buildings  and losses  associated  with the
buyout of  furniture  and  vehicle  leases.  Other  expense in 1999  principally
resulted from furniture and equipment write-offs in October 1998.

     Other expense for the twelve-month  period ended June 30, 1999 was $498,606
(unaudited),  compared to other income of $10,179 for the year ended October 31,
1998 Other expense in 1999  principally  resulted  from  furniture and equipment
write-offs  in October  1998,  whereas  other  income in fiscal 1998  represents
proceeds from the sale of equipment and scrapped inventory.

LIQUIDITY AND CAPITAL RESOURCES

     At June 30, 2000, we had cash, cash equivalents, and short-term investments
of  approximately  $67.9 million.  Prior to June 30, 1999, our primary source of
funding  had  historically  been  through  equity  offerings  and  the  sale  of
entertainment networks to Swissair. Subsequent to June 30, 1999, Global, through
its majority owned  subsidiary,  TNCi, has also generated funds through the sale
of its Cheetah(R)  multimedia servers to MRESA of $5.4 million and from sale and
installation  of  interactive  entertainment  systems under the  agreement  with
Carnival of $1.4 million.  Through its wholly owned  subsidiaries  in the United
Kingdom,  Global also  generated  $0.3 million from the sale of lottery  tickets
since the UK lottery operation was launched in April 2000.

     During  the year  ended  June 30,  2000,  we used $9.3  million of cash for
operating activities,  an increase of $4.1 million from the $5.2 million of cash
used by operating activities for the Transition Period ended June 30, 1999. Cash
utilized in operations  during the year ended June 30, 2000  resulted  primarily
from our net loss of $35.9  million,  predominantly  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 warrants  issued in connection  with related party  borrowings and collateral
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 investments related to 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. 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. The cash used in operations  during the Transition Period ended June 30,
1999  was  primarily  a  result  of  general  and  administrative  expenses  and
reductions of accounts payable.

     During the year ended June 30, 2000,  restricted cash decreased by $645,988
as a result of the release of $913,445 of cash collateral posted by us to secure
our contingent obligation under a letter of credit posted in connection with the
Donativos  S.A. de C.V.  transaction,  offset by the deposit of $290,833 of cash
collateral for another letter of credit issued to secure a lease for our offices
in New York. The Donativos  letter of credit was terminated upon a corresponding
payment for gaming equipment purchased for Donativos.

     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.  Cash used in investing activities during the Transition Period ended
June 30, 1999 was $7.7 million,  consisting primarily of our investments in U.S.
Wireless, Donativos and Inter Lotto.

     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.  Cash  provided from
financing  activities  during the Transition  Period was $0.6 million,  which we
received  from the  issuance  of Series A  Preferred.  In  connection  with such
issuance,  we also  received  1,500  shares  of  TNCi  Series  B 8%  Convertible
Preferred Stock.

                                      -26-
<PAGE>
     On February 16, 2000,  we issued 1,000 shares of our Series C Preferred 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 totaling $187,415 have been recorded,  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.  We may redeem the Series C
Preferred at prices ranging from 110% to 120% of stated value,  plus accrued and
unpaid  dividends  at any time after  issuance and prior to maturity on February
16, 2003. If the Series C Preferred is not redeemed or converted  into shares of
our  Class A  Common  Stock by such  date,  the  remaining  shares  of  Series C
Preferred  automatically  convert into shares of our Class A Common Stock at the
then current conversion price.

     On April 5, 2000,  we 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.  Principal  amounts  borrowed  under the line,
together with accrued interest at an annual rate equal to the London  Inter-bank
Offer Rate  (7.214% at June 30,  2000) plus 1.25%,  are  payable  upon demand by
Merrill Lynch. As of June 30, 2000,  approximately  $6.3 million was outstanding
under this secured credit facility. To secure such borrowing, we have pledged to
Merrill Lynch 1,000,000 shares of common stock of U.S. Wireless held by us.

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

     In July and August 2000, Merrill Lynch issued a series of maintenance calls
requiring a reduction in the balance owed of over $1.2 million.  The maintenance
calls were  subsequently  secured by pledges of  additional  collateral,  with a
total market value of approximately $2.7 million,  by Mr. Gross. As of September
25,  2000,   the   outstanding   balance  of  the  Merrill  Lynch  facility  was
approximately  $7.0  million,  and Mr.  Gross's  collateral  remains  pledged to
Merrill Lynch to secure the credit facility.

     On June 8, 2000,  we issued $4.0  million of secured  convertible  notes to
Advantage Fund II Ltd. and Koch Investment  Group,  Ltd. 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 $2.00 per
share, subject to customary  adjustments.  To secure such borrowing,  we pledged
1,000,000  shares of common stock of U.S.  Wireless to the holders of the notes.
On July 7, 2000, we redeemed $2.0 million of the principal amount of these notes
for $2.2  million in cash plus the  issuance  to each of  Advantage  and Koch of
four-year  warrants to purchase  62,500 shares of our Class A Common Stock at an
exercise price of $4.00 per share. In connection with this  redemption,  500,000
shares U.S. Wireless common stock previously held as collateral were released to
us.

     On  October  3,  2000,  we issued an  additional  $7.0  million  of secured
convertible notes to Advantage and Koch. The notes bear interest at 8% per annum
and are convertible  after 120 days into shares of our Class A Common Stock at a
20%  discount  to market  (we are  obligated  to  register  the  resale of these
shares),  and after 150 days into shares of U.S. Wireless common stock also at a
20% discount to market. In connection with this issuance, on October 5, 2000, we

                                      -27-
<PAGE>
     redeemed  another $1.0 million of the principal  amount of the notes issued
on June 8, 2000 for a total  redemption cost of $1.2 million and the issuance of
62,500  shares of our Class A Common  Stock.  This  redemption  resulted  in the
release  to us of  another  250,000  shares  of our  US  Wireless  common  stock
previously  pledged as  collateral  for the June  notes.  To secure the  October
issuance of  convertible  notes and permit the  conversion of principal  amounts
thereof into shares of U.S.  Wireless  common stock  (possible only in the event
that we have not redeemed before 150 days after issuance), we have repledged the
750,000  shares of US  Wireless  common  stock that had been  released  to us in
connection with redemptions of the June notes, and pledged an additional 116,538
shares of U.S. Wireless common stock, to Advantage and Koch. We are permitted to
redeem the October notes at any time for a premium.

     In May and June  2000,  The  Gross  Charitable  Unit  Trust  and The  Gross
Charitable  Annuity  Trust,  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%.  These  trusts  are
controlled by our Chairman and Chief Executive Officer, Irwin L. Gross.

     In August and September 2000 the trusts  advanced a total of $800,000 to us
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 us. The notes mature on December 31, 2000 and bear interest at 9.0%.

     In August  1999,  our Board of Directors  approved a $5.0  million  secured
revolving  credit  facility in favor of TNCi.  This  revolving  credit  facility
provides that TNCi may borrow up to $5.0 million for working capital and general
corporate  purposes at an annual  interest rate equal to the prime rate plus 3%.
The facility  matures in September 2001. TNCi paid an origination fee of $50,000
to us and will pay an unused line fee of 0.5% per annum. The facility is secured
by all of the assets of TNCi and is convertible,  at our option,  into shares of
TNCi common  stock.  As of June 30, 2000,  we had loaned $4.2 million  under the
facility and converted $1.85 million of this loan into 1,233,333  shares of TNCi
common stock.

     In August 1999,  Global and two of our officers  entered into a release and
settlement  agreement  with  First  Lawrence  Capital  Corp.,  whereby we issued
375,000 shares of our Class A Common Stock to First Lawrence and agreed that our
wholly-owned subsidiary, GlobalTech Holdings Limited, will pay First Lawrence 24
consecutive  monthly  payments  of $41,667  each  beginning  April 1,  2000.  In
exchange,  First  Lawrence  will be available to perform  management  consulting
services to GlobalTech  Holdings.  As of June 30, 2000,  $875,000  remains to be
paid under the Agreement.

     In  September  1999,  GTL Leasing  Limited  entered  into an  agreement  to
purchase  $12.3  million  of  lottery  systems  from  International   Lottery  &
Toltalizator  Systems,  Inc. in  connection  with the lottery  operation  in the
United  Kingdom.   Approximately  $2.9  million  remains   outstanding  on  this
commitment.  GTL  Management  Limited also entered into a facilities  management
agreement  for  servicing  of the lottery  systems.  Under this  agreement,  GTL
Management  is  required to make weekly  payments  to  International  Lottery of
$72,000,  plus additional amounts based on the number of installed  terminals in
excess  of 3,500 and plus a  percentage  of the  average  daily  sales.  We have
guaranteed payment of these obligations.

     As a result of these  obligations  and  guarantees,  we may be  required to
commit additional funds to our subsidiary companies,  TNCi, GlobalTech Holdings,
GTL  Leasing and GTL  Management,  which  would come from our  existing  working
capital.  Such  additional  funds,  if required,  could have a material  adverse
effect on our  financial  position and  liquidity and our ability to acquire new
operating companies or make new investments.

RISK FACTORS

     You  should  be aware of the  following  risk  factors  and  should  review
carefully the financial and other information about us provided in this Report.

                                      -28-
<PAGE>
                             RISKS PARTICULAR TO US

WE PLAN TO SELL OR FURTHER BORROW AGAINST SOME OF OUR INVESTMENTS TO MEET OUR
FINANCIAL OBLIGATIONS OVER THE NEXT 90 DAYS AND THERE IS RISK THAT WE MAY NOT BE
ABLE TO DO SO AT TIMES OR PRICES NECESSARY TO MEET THESE OBLIGATIONS.

     As of September  25,  2000,  we had an  obligation  of  approximately  $2.9
million in connection with the purchase of the hardware and software that serves
as the  network  operating  center of the  on-line  lottery  system that we have
deployed in the United Kingdom,  and the terminals through which lottery players
purchase lottery tickets. In addition,  we currently anticipate that the lottery
project will require approximately $3.0 million in the three-month period ending
December 31, 2000 to continue operations.

     We are also  obligated  to lend The Network  Connection  up to $5.0 million
pursuant to a revolving credit facility agreement. As of September 25, 2000, The
Network  Connection had drawn $4.3 million against this line of credit, of which
we converted  $1.85 million of the  outstanding  balance under the facility into
1,233,333 shares of The Network Connection common stock,  leaving an outstanding
balance of $2.45 million. The Network Connection has recently received orders to
install its InnView(TM)  interactive  information and entertainment system in 10
hotels.  The Network  Connection  recently  sold an aggregate of $1.1 million of
common  stock  to an  investor  pursuant  to a  $12.0  million  equity  purchase
agreement.  In  addition,  The Network  Connection's  Executive  Vice  President
purchased  $1.0  million of newly  issued TNCi common  stock in July 2000 and an
investor group purchased $1.0 million of TNCi Series E Preferred Stock in August
2000.  The  Network  Connection   requires  further  financing  to  support  its
operations and in the event that it does not obtain any such financings, it will
likely continue to draw on the credit facility with us to finance the production
of some or all of the equipment  necessary for these InnView(TM)  installations,
as well as to cover  other  commitments  and  operating  expenses.  The  lottery
equipment purchase and outstanding service obligations and losses that we expect
to fund,  together  with  projected  draws under The Network  Connection  credit
facility and other operating expenses, exceed the sum of our currently available
cash, cash equivalents and currently  remaining  available credit under the line
of credit with  Merrill  Lynch,  which sum totaled $ 0.2 million as of September
25, 2000.

     Although we recently  obtained  $10.0 million in equity  financing from the
issuance of our Series C  Convertible  Preferred  Stock,  obtained a $10 million
line of credit facility with Merrill Lynch, which has been secured with a pledge
of 1,000,000 of our shares of common stock of U.S. Wireless,  and obtained $11.0
million  from the  issuance  of  convertible  notes  secured by the pledge of an
additional  1,866,538  shares of common stock of U.S.  Wireless ($3.0 million of
these secured  convertible  notes have been  redeemed in  connection  with which
750,000 shares of U.S.  Wireless common stock have been released to us), we plan
to sell or further borrow against some of our investments to cover our financial
obligations and to continue to execute on our business strategy of investing in,
developing and managing  emerging growth companies in the e-commerce,  Internet,
networking solutions, information and entertainment systems,  telecommunications
and gaming  industries.  We provide no assurance that we will be able to sell or
borrow  against any of our assets at planned  times or for prices  necessary  to
meet our financial obligations or to take advantage of investment or acquisition
opportunities  consistent  with  our  business  strategy.  Failure  to do so may
prevent or delay further  development of our business and/or cause us to default
under the credit facility to The Network Connection.  Such failure, delay and/or
default would have a material adverse effect on the growth of our business,  The
Network  Connection's and our financial  condition,  and may subject us to legal
liability.

ONE MILLION OF OUR SHARES OF COMMON STOCK OF U.S. Wireless CORPORATION, WHICH WE
HAVE PLEDGED TO SECURE THE MERRILL LYNCH CREDIT FACILITY, MAY BE LIQUIDATED TO
SATISFY OUR OBLIGATIONS TO MERRILL LYNCH.

     On April 5, 2000,  we 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.  Principal  amounts  borrowed  under the line,
together with accrued interest at an annual rate equal to the London  Inter-bank
Offer Rate plus 1.25%, are payable upon demand by Merrill Lynch. As of September
25, 2000, we had an outstanding  balance of approximately $7.0 million under the
Merrill Lynch line of credit facility. To secure such borrowing, we have pledged
1,000,000 of our shares of common stock of U.S. Wireless to Merrill Lynch.

     If the amount  owed under the  Merrill  Lynch  credit  facility at any time
exceeds  35% of the  market  value of the  shares of U.S.  Wireless  pledged  to
Merrill Lynch,  we will be subject to a maintenance  call which would require us
to  pledge  additional  securities  which are  acceptable  to  Merrill  Lynch as
collateral  or  require  us to reduce  the  outstanding  balance  owed under the
Merrill Lynch credit  facility  through payment in cash. We provide no assurance
that we would have  sufficient  additional  collateral or funds necessary to pay
outstanding amounts owed under the Merrill Lynch credit facility in the event of
a maintenance  call or upon demand for payment by Merrill Lynch,  the failure of
either of which would result in the  liquidation of our shares of U.S.  Wireless

                                      -29-
<PAGE>
pledged to Merrill Lynch to satisfy  outstanding  obligations  under the Merrill
Lynch credit facility and a material adverse effect on our financial condition.

     In May and June 2000,  we received  maintenance  calls for an  aggregate of
approximately $0.9 million under the Merrill Lynch credit facility.  In order to
satisfy such maintenance calls, Irwin L. Gross, our Chairman and Chief Executive
Officer,  pledged personal assets to Merrill Lynch. This collateral was released
to Mr. Gross on June 27, 2000.  In July and August 2000, we received a series of
maintenance  calls for  approximately  $1.2  million.  Again,  Mr. Gross pledged
personal assets in order to satisfy these calls.

ANOTHER  866,538 OF OUR  SHARES OF COMMON  STOCK OF U.S.  WIRELESS  CORPORATION,
WHICH WE HAVE PLEDGED TO SECURE A NEW ISSUANCE OF SECURED CONVERTIBLE NOTES, MAY
BE LIQUIDATED TO SATISFY OUR OBLIGATIONS TO THE HOLDERS OF THE NOTES.

     On June 8, 2000,  we issued $4.0  million of secured  convertible  notes to
Advantage Fund II Ltd. and Koch Investment Group, Ltd. The notes are convertible
into shares of our Class A Common Stock at a conversion rate of $2.00 per share,
subject to  customary  adjustments,  and are secured by a pledge of 1,000,000 of
our shares of common stock of US  Wireless.  On July 7, 2000,  we redeemed  $2.0
million  of the  principal  amount  of these  notes.  In  connection  with  this
redemption,  500,000  shares of US  Wireless  common  stock  previously  held as
collateral  were released to us, and we issued warrants for 62,500 shares of our
Class A Common  Stock to each of  Advantage  and  Koch.  These  warrants  have a
four-year term and an exercise price of $4.00 per share.

     On  October  3,  2000,  we issued an  additional  $7.0  million  of secured
convertible notes to Advantage and Koch. The notes bear interest at 8% per annum
and are convertible  after 120 days into shares of our Class A Common Stock at a
20%  discount  to market  (we are  obligated  to  register  the  resale of these
shares),  and after 150 days into shares of U.S. Wireless common stock also at a
20% discount to market.  In connection with this issuance,  we redeemed  another
$1.0 million of the  principal  amount of the notes issued on June 8, 2000 for a
total  redemption  cost of $1.2 million and the issuance of 62,500 shares of our
Class A Common Stock.  This redemption  resulted in the release to us of another
250,000  shares  of  our  U.S.  Wireless  common  stock  previously  pledged  as
collateral for the June notes.

     To  secure  the  October  issuance  of  convertible  notes and  permit  the
conversion  of principal  amounts  thereof into shares of U.S.  Wireless  common
stock,  we have repledged the 750,000 shares of U.S.  Wireless common stock that
had been released to us in connection  with  redemptions of the June notes,  and
pledged an additional 116,538 shares of U.S. Wireless common stock, to Advantage
and  Koch.  We are  permitted  to  redeem  the  October  notes at any time for a
premium.  In the event that we do not redeem these notes prior to 150 days after
the issuance thereof, or we were to default on any of the terms of the documents
executed in  connection  with  issuance of these  notes,  the shares of our U.S.
Wireless common stock serving as collateral for the notes could be liquidated.

OUR PARTNER  COMPANIES ARE GROWING RAPIDLY AND WE MAY HAVE DIFFICULTY  ASSISTING
THEM MANAGE THEIR GROWTH.

     Our partner  companies  have grown,  and we expect them to continue to grow
rapidly. This growth requires our partner companies to:

     *    hire new employees;

     *    aggressively advertise and promote their products and services;

     *    modify and expand the current array of products and services  offered;
          and

     *    push product into new markets where we believe that significant market
          share and profitability may be achieved.

     Such  growth is placing a strain on the  limited  resources  of our partner
companies  and the limited  resources we can allocate to assist them.  The funds
required  to  support   this  growth  may  require  us  to  forego   acquisition
opportunities  that would otherwise be consistent with our business  strategy of

                                      -30-
<PAGE>
investing  in,   developing  and  managing  emerging  growth  companies  in  the
e-commerce,   Internet,  networking  solutions,  information  and  entertainment
systems, telecommunications and gaming industries.

WE ARE A DEFENDANT IN A MULTI-DISTRICT CLASS ACTION LAWSUIT THAT IF DECIDED
ADVERSELY TO US COULD RESULT IN A LOSS OF OUR ASSETS.

     The  business   strategy  under  former  management  was  the  development,
assembly, installation and operation of computer-based,  in-flight entertainment
networks that provided  passengers the opportunity to view movies, play computer
games  and  gamble,  where  legally   permissible,   through  an  in-seat  video
touch-screen. The main contract with respect to these entertainment networks was
with Swissair.  On September 2, 1998, Swissair Flight 111 crashed.  The aircraft
involved  in  the  crash  was  a  McDonnell  Douglas  MD-11  equipped  with  the
entertainment  network developed by former management.  A large number of claims
have been filed by the  families of the victims of the crash.  These claims have
been  consolidated  into a multi-district  class action  litigation in which we,
together with  Swissair,  Boeing,  DuPont and a number of other  companies,  are
defendants.  Our aviation  insurer is defending us in the action.  We have $10.0
million in insurance  coverage  related to the action.  We also have an umbrella
policy for an additional  $10.0 million in coverage;  however,  we are currently
litigating the  applicability of this policy to the action.  If we do not settle
the  multi-district  litigation  within  our policy  limits,  or if we are found
liable for an amount in excess of these limits,  our business would 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.

WE HAVE A LIMITED OPERATING HISTORY ON WHICH YOU MAY EVALUATE US.

     We were formed in February  1994.  Until May 1998,  we were  engaged in the
business of development, assembly, installation and operation of computer-based,
in-flight  entertainment  networks,  at which time former management  decided to
exit that business and to pursue opportunities in the dry-cleaning  industry. In
September 1998, the former board of directors of Global resigned from office and
was  replaced  by our current  board.  The  current  board then  appointed a new
management team and put together our current business  strategy of investing in,
developing and managing  emerging growth companies in the e-commerce,  Internet,
networking solutions, information and entertainment systems,  telecommunications
and gaming industries.

     We have a limited operating history under our new business strategy and new
management  on which you will be able to evaluate our  business  and  prospects.
Each of our  partner  companies  is in the early stage of its  development.  Our
business and  prospects  must be  considered  in light of the risk,  expense and
difficulties frequently encountered by companies in early stages of development,
particularly  companies in new and rapidly  evolving markets such as e-commerce,
Internet,  networking  solutions  and  telecommunications.  If we are  unable to
effectively allocate our resources and help grow existing partner companies,  we
may be  unable to  execute  our  business  strategy  and our stock  price may be
adversely affected.

OUR BUSINESS DEPENDS ENTIRELY ON THE PERFORMANCE OF OUR PARTNER COMPANIES, WHICH
IS UNCERTAIN.

     We own interests in and help our partner companies operate their respective
businesses.  Each of our partner  companies is engaged in a different  operating
business,  and  consequently  is  subject  to a set of risks  particular  to its
business.  Material risks relating to our partner  companies are set forth below
under "Risks  Particular to our Partner  Companies." If our partner companies do
not succeed,  the value of our investments in such companies and our stock price
could decline.

     Our  $121.7   million  in  total  assets  as  of  June  30,  2000  included
approximately  $94.3  million  of assets of our  consolidated  subsidiaries  and
investments  in our other partner  companies.  The carrying value of our partner
company  ownership  interests  includes  our original  acquisition  cost and the
effect of  accounting  for  certain of our  partner  companies  under the equity
method of  accounting.  The  carrying  value of our  partner  companies  will be
impaired  and  decrease if one or more of our partner  companies do not succeed.
Also, the carrying value of our investment in U.S. Wireless is marked to market,
and,  therefore,  a decline  in its  market  price  will  impact  our  financial
position. Our other publicly traded investment,  The Network Connection,  is not
marked to market,  and, as such,  a decline in the market  value of that company
will not impact our  financial  position.  However,  such a decline would likely
affect our stock price.

                                      -31-
<PAGE>
     The Network  Connection is a development  stage company in the early phases
of implementing a new business  strategy.  Its recently formed divisions and the
projects they are pursuing are in their infancy. As such, most of these projects
are not  expected to generate  significant  revenue in the  near-term,  yet they
require funding to develop. TNCi estimates that its cash and financing needs for
its current business  through June 2001 will be met by equipment  financing that
is currently  being pursued,  and private  placements of equity  currently being
sought from various sources for working capital purposes.  Toward this end, TNCi
has closed on  approximately  $3.1 million of equity financing in the last three
months.  Despite these infusions,  TNCi's audit report for the fiscal year ended
June  30,  2000  contains  a  "going  concern"  qualification,  as it  has  been
determined  that the company's  current  sources of income do not meet its needs
for the ensuing  fiscal year. We are striving to obtain the financing  necessary
to meet  TNCi's  needs over the course of the  coming  fiscal  year and to fully
implement its business  plan, but no assurances can be made that we will be able
to do so.  Failure  to do so would  have a  material  adverse  effect  on TNCi's
financial condition, which, in turn, would have a material adverse effect on our
financial condition.

WE HAVE A HISTORY OF LOSSES AND EXPECT CONTINUED LOSSES IN THE FORESEEABLE
FUTURE.

     For the year ended June 30,  2000,  we lost  approximately  $35.9  million,
including  the profit from the  approximately  $5.4  million sale by The Network
Connection  of 195  Cheetah(R)  multimedia  video servers to schools in Georgia.
Without  the effect of this  income on our net  results  we would have  incurred
greater  losses  for the year.  In 1999,  we changed  our  fiscal  year end from
October 31 to June 30. For the eight-month transition period ended June 30, 1999
we lost $2.4  million.  In  addition,  under prior  management,  we incurred net
losses of $7.3 million in 1998 and $51.0  million in 1997.  Excluding the effect
of any future non-operating gains, we expect to continue to incur losses for the
foreseeable  future and, if we ever have profits,  we may not be able to sustain
them.

     We expect to have a significant  net loss for the year ended June 30, 2001.
Our  expenses  will  increase as we continue to implement  our  business  model.
Specifically, expenses will increase:

     *    in the event we hire additional  employees and lease more office space
          to broaden our partner company support capabilities;

     *    in connection with the operation of our UK lottery project, which will
          require  significant  expenditures  for  progress  payments  under the
          purchase agreement for the equipment that comprises the infrastructure
          of the  lottery,  and for  payments  to the company  that  manages and
          maintains the infrastructure;

     *    with respect to The Network Connection, in the event that it continues
          to draw on the credit facility for funds to hire additional management
          personnel,  to develop its  "away-from-home"  experience  content,  to
          finance  production and  installation  of the systems through which it
          runs its content and other operating expenses;

     *    as we  explore  acquisition  opportunities  and  alliances  with other
          companies; and

     *    as we facilitate business arrangements among our partner companies.

     Expenses  are also  expected to  increase  due to the  potential  effect of
goodwill   amortization  and  other  charges  resulting  from  potential  future
acquisitions.  If any of  these  and  other  expenses  are  not  accompanied  by
increased revenue, our losses will be greater than we anticipate.

OUR REVENUES ARE SUBSTANTIALLY DEPENDENT ON OUR OPERATING SUBSIDIARIES.

     Our consolidated financial statements include our accounts and the accounts
of our wholly owned subsidiaries:

     *    GlobalTech Holdings Limited

                                      -32-
<PAGE>
     *    GTL Management Limited

     *    Interactive Flight Technologies (Gibraltar) Limited

     *    GTL Lottoco, Inc.

     *    GTL Subco, Inc.

     *    GTL Investments

     *    GTL Leasing Limited

     *    Lottery Sales Company Limited

     *    MTJ Corp.

     *    GlobalTec Networks, LLC

and our majority-owned and controlled subsidiary, The Network Connection, and
its wholly-owned subsidiary TNCi UK Limited. The ownership interest of minority
shareholders in The Network Connection are recorded as "minority interest" on
our condensed consolidated financial statements. We generally would not
consolidate with our results of operations the results of operations of a
partner company in which we held less than a 50% voting interest and otherwise
did not maintain management control.

     For the year ended June 30, 2000,  the  revenues of The Network  Connection
represented 96% of our total revenues, and for the eight-month transition period
ended  June  30,  1999,   revenues  from  The  Network  Connection   represented
approximately 61% of our revenues.

     At September 25, 2000, we owned  approximately  79% of the aggregate voting
interests  of The  Network  Connection.  If our voting  ownership  of any of our
operating  subsidiaries,  particularly The Network Connection,  were to decrease
below 50% and we did not maintain  management  control, we would most likely not
continue  to  consolidate  their  results  of  operations  with our  results  of
operations. While this would affect our earnings per share only to the extent of
our  ownership  change,  the  presentation  of  our  consolidated  statement  of
operations   and  balance   sheet  would  change   dramatically.   In  addition,
fluctuations  and  decreases  in  the  revenues  of  any  of  our  subsidiaries,
particularly  The  Network  Connection,  will have a  correlative  effect on our
revenues.

WE MAY NOT HAVE OPPORTUNITIES TO ACQUIRE INTERESTS IN ADDITIONAL COMPANIES.

     We may be unable to identify  companies that complement our strategy.  Even
if we identify a company  that  complements  our  strategy,  we may be unable to
acquire an interest in the company for many reasons, including:

     *    failure to agree on the terms of the acquisition;

     *    incompatibility between our management and management of the company;

     *    competition from other potential acquirers; and

     *    lack of  capital  resources  needed  to  acquire  an  interest  in the
          company.

     If we cannot  acquire  interests in additional  companies,  our strategy to
build a network of technology  partner  companies that will enhance  stockholder
value may not succeed.

                                      -33-
<PAGE>
WE MAY BE UNABLE TO MANAGE NEWLY ACQUIRED PARTNER COMPANIES.

     We  plan  to  continue  to  acquire  interests  in  e-commerce,   Internet,
telecommunications,  networking solutions and gaming companies to complement our
business strategy.  Any additional  acquisitions will likely place strain on our
limited resources and our ability to manage our partner companies. Risks related
to future acquisitions include:

     *    disruption   in  our  ongoing   support  of  our  partner   companies,
          distracting our management and other resources and making it difficult
          to maintain our standards, controls and procedures;

     *    acquisition  of  interests  in  companies  in markets in which we have
          little experience; and

     *    increased  debt or  issuance  of  equity  securities  to  fund  future
          acquisitions, which may be dilutive to existing stockholders.

OUR SUCCESS DEPENDS UPON OUR SENIOR MANAGEMENT AND THE KEY PERSONNEL OF OUR
PARTNER COMPANIES.

     Our success depends upon the continued employment of and performance by our
senior management,  particularly our Chairman and Chief Executive Officer, Irwin
L.  Gross,  and the key  personnel  of our  partner  companies.  It could have a
material  adverse  effect on us if our senior  management  team do not  continue
their  relationships with us, or if our partner companies are unable to hire and
retain a sufficient number of qualified management,  professional, technical and
marketing personnel.

THE MARKET PRICE FOR OUR STOCK IS AND WILL LIKELY CONTINUE TO BE VOLATILE.

     The  market  price  for our  stock  has been  volatile  and has  fluctuated
significantly  to date.  The trading price of our stock is likely to continue to
be highly volatile. In addition,  the stock market in general and the market for
technology  companies in particular,  have experienced  extreme price and volume
fluctuations.  These  broad  market and  industry  factors  may  materially  and
adversely affect the market price of our common stock,  regardless of our actual
operating  performance.  In the past,  following  periods of  volatility  in the
market price of a company's securities,  securities  class-action litigation has
often been instituted  against such companies.  Such litigation,  if instituted,
could result in substantial costs and a diversion of management's  attention and
resources, which would have a material adverse effect on our business, financial
condition and results of operations.

FLUCTUATIONS IN OUR QUARTERLY RESULTS WILL LIKELY CAUSE FLUCTUATIONS IN OUR
STOCK PRICE.

     We expect that our quarterly  results will fluctuate  significantly  due to
many factors, including:

     *    the operating results of our operating subsidiaries;

     *    changes  in  equity,  losses or income and  amortization  of  goodwill
          related to the  acquisition  or  divestiture  of  interests in partner
          companies;

     *    changes  in  our  methods  of  accounting  for  our  partner   company
          interests,  which may result from changes in our ownership percentages
          of our partner companies;

     *    changes in the market price of our investment in U.S. Wireless,  which
          is marked to market;

     *    sales of equity securities by our partner companies, which could cause
          us to recognize gains or losses under applicable accounting rules;

     *    the pace of development or a decline in growth of the markets in which
          our partner  companies  operate and  competition  with  respect to the
          technologies, products and services offered by our partner companies;

     *    exchange rate  fluctuations,  to the extent that we generate  revenues
          from foreign operations;

                                      -34-
<PAGE>
     *    intense  competition  from other  potential  acquirers of  prospective
          partner  companies,   which  could  increase  our  cost  of  acquiring
          interests in additional companies; and

     *    our  ability  to  effectively  manage our growth and the growth of our
          partner companies.

     If our  operating  results in one or more  quarters do not meet  securities
analysts'  or your  expectations,  the price of our  stock  could  decrease.  In
addition,  we expect  that the  price of our  common  stock  will  fluctuate  in
response to announcements by us or our competitors with respect to acquisitions,
divestitures and other corporate developments.

WE MAY HAVE TO BUY, SELL OR RETAIN ASSETS WHEN WE WOULD OTHERWISE NOT WISH TO IN
ORDER TO AVOID REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940.

     Generally,  a company  may be required  to  register  under the  Investment
Company  Act  and  comply  with  significant   restrictions  if  its  investment
securities  exceed 40% of the company's total assets,  or if it holds itself out
as being primarily engaged in the business of investing,  reinvesting or trading
in  securities.  A company is  generally  not  required  to  register  under the
Investment Company Act if less than 45% of its total assets consist of, and less
than 45% of its net income is derived  from,  securities  other than  government
securities and securities of majority-owned subsidiaries and companies primarily
controlled by it.

     We believe that we are not an investment  company,  as that term is defined
under the  Investment  Company Act,  because our interests in partner  companies
that are not majority owned or primarily  controlled by us make up less than 45%
of our total assets and net income.  It is not feasible for us to register as an
investment   company   because  the  Investment   Company  Act  regulations  are
inconsistent with our strategy of acquiring interests in, developing,  operating
and  managing  our  partner  companies.  As the  values  of our  currently  held
investment and  non-investment  securities  change, and if we acquire additional
investment  securities,  it is possible  that we could be subject to  regulation
under the  Investment  Company  Act.  If that were to  happen,  we could ask for
exemptive relief from the Securities and Exchange  Commission.  We are also able
to rely once  every  three  years on a  one-year  temporary  exemption  from the
registration  requirements of the Investment Company Act. If we were not able to
obtain  exemptive  relief and the one-year  temporary  exemption  were no longer
available,  we might need to take certain actions to avoid  regulation under the
Investment  Company Act. We might be compelled to acquire  additional  income or
loss generating  assets that we might not otherwise have acquired,  be forced to
forego  opportunities to acquire  interests in companies that would be important
to our  strategy or be forced to forego the sale of minority  interests we would
otherwise  want to  sell.  In  addition,  we  might  need to  sell  some  assets
considered  to  be  investment   securities,   including  interests  in  partner
companies. Any of these actions could adversely affect our business.

WE MAY BE UNABLE TO OBTAIN MAXIMUM VALUE FOR OUR PARTNER COMPANY INTERESTS.

     We have  significant  positions in our partner  companies.  While we do not
anticipate  selling  significant  portions  of our  investments  in our  partner
companies  in the  foreseeable  future,  if we were to divest  all or part of an
investment  in a partner  company,  we may not  receive  maximum  value for this
position.  For partner companies with publicly traded stock, we may be unable to
sell  our  interest,   or  portions  thereof,   at  then-quoted  market  prices.
Furthermore, for those partner companies that do not have publicly traded stock,
the realizable  value of our interests may ultimately prove to be lower than the
carrying value currently reflected in our consolidated financial statements.

OUR GLOBAL PRESENCE EXPOSES US TO CULTURAL DIFFERENCES, CURRENCY FLUCTUATIONS
AND POLITICAL INSTABILITY.

     We have invested in foreign operations and may consider additional projects
outside the United  States.  Our  international  presence  exposes us to several
risks, including the following:

     *    CULTURAL DIFFERENCES. In transacting business in foreign countries, we
          seek  to  partner  with  entities  from  those  countries  and to hire
          professional  consultants  to help us determine  whether  products and
          services  we propose to offer will be  accepted by the people who live
          there. This process does not, however, ensure acceptance.  Our failure
          to choose  acceptable  products and services to offer abroad will have
          an adverse effect on our business.

                                      -35-
<PAGE>
     *    CURRENCY FLUCTUATIONS. When we purchase interests in non-United States
          partner  companies  for  cash,  we  will  likely  have  to pay for the
          interests  using the  currency  of the country  where the  prospective
          partner company is located. Similarly, although it is our intention to
          act as a  long-term  partner to our partner  companies,  if we sold an
          interest  in a  non-United  States  partner  company we might  receive
          foreign   currency.   To  the  extent  that  we  transact  in  foreign
          currencies, fluctuations in the relative value of these currencies and
          the United States dollar may adversely impact our financial results.

     *    COMPLIANCE  WITH  LAWS.  We are  subject  to the laws of the UK,  with
          respect to our lottery project, and may become subject to the laws and
          regulations of other foreign  countries in the future.  These laws are
          different  than  those of the United  States and we are less  familiar
          with them.  We must go to the expense of hiring legal  counsel in each
          foreign  country  in which we  operate  to comply  with their laws and
          regulations.  The laws of these  foreign  countries  may change at any
          time, which would likely require us to incur additional legal expenses
          to comply  with such  changes,  or could even force us to  discontinue
          operations.

     *    POLITICAL  INSTABILITY.  We  have,  and  may in the  future  purchase,
          interests in foreign partner  companies that are located,  or transact
          business in, parts of the world that experience political instability.
          Political  instability  may  have an  adverse  impact  on the  subject
          country's  economy,  and may limit or  eliminate  a partner  company's
          ability to conduct business.


IF WE DO NOT HAVE ENOUGH SHARES AUTHORIZED OR DO NOT OBTAIN STOCKHOLDER APPROVAL
FOR THE ISSUANCE OF CLASS A COMMON STOCK UPON CONVERSION OF OUR SERIES C
CONVERTIBLE PREFERRED STOCK AND/OR SECURED CONVERTIBLE NOTES IN EXCESS OF
19.999% OF OUR OUTSTANDING CLASS A COMMON STOCK, WE MAY BE FORCED TO REDEEM THE
SERIES C CONVERTIBLE PREFERRED STOCK AND/OR THE SECURED CONVERTIBLE NOTES FROM
THE HOLDERS.

     Pursuant to the terms of the convertible preferred stock purchase agreement
that we entered to with Advantage Fund II Ltd. and Koch Investment Group Ltd. on
February  16,  2000,  in the event of a  "triggering  event,"  as defined in the
Certificate  of  Designations,  relating to the Series C  Convertible  Preferred
Stock,  such  as if we do not  have  enough  shares  of  Class  A  Common  Stock
authorized for issuance upon  conversion of the Preferred Stock or do not obtain
stockholder approval for the issuance of Class A Common Stock upon conversion of
our Series C Convertible  Preferred  Stock held by these  investors in excess of
19.999% of the outstanding  shares of Class A Common Stock  immediately prior to
consummation of the sale of the Series C Convertible Preferred Stock as required
under the Nasdaq listing rules and  regulations,  we may be forced to redeem the
Series C  Convertible  Preferred  Stock from them. We may not have the resources
available to do so. As of September 25, 2000 the Series C Convertible  Preferred
Stock  represented  approximately  6.2% of our  Class A Common  Stock on a fully
converted  basis.  If we were  required  to  redeem  the  Series  C  Convertible
Preferred  Stock, it could have a material  adverse effect on our business.  The
same risks are present in the event that we default on our obligations under the
private placement  purchase  agreement that we entered into with, or the secured
convertible  notes that we issued to,  Advantage and Koch on June 8, 2000. As of
September  25,  2000,  after  the  redemption  of $2.0  million  of the  secured
convertible   notes,  the  remaining   secured   convertible  notes  represented
approximately 9.3% of our Class A Common Stock on a fully converted basis.

WE FACE GENERAL RISKS RELATED TO DOING BUSINESS THAT ARE BEYOND OUR CONTROL.

     Our  success  will  depend in part on certain  factors  that are beyond our
control and that cannot clearly be predicted at this time. These factors include
general economic conditions, both nationally and internationally, changes in tax
laws,  fluctuating  operating  expenses,  changes in  governmental  regulations,
changes in technology and trade laws.

                                      -36-
<PAGE>
                    RISKS PARTICULAR TO OUR PARTNER COMPANIES

FLUCTUATION IN THE PRICE OF THE COMMON STOCK OF OUR PUBLICLY TRADED PARTNER
COMPANIES COULD AFFECT THE PRICE OF OUR STOCK.

     The  Network  Connection  and U.S.  Wireless  are our two  publicly  traded
partner companies. The price of their common stock has been highly volatile. The
market  value of our  holdings in these  partner  companies  changes  with these
fluctuations.  Fluctuations  in the  price of The  Network  Connection's  and US
Wireless'  common  stock are  likely  to affect  the price of our Class A Common
Stock.

     THE NETWORK CONNECTION.  The price of The Network Connection's common stock
may fluctuate in response to  announcements  by it or its competitors  regarding
sales of  products  and  services,  product  enhancements  and  other  corporate
developments.  The Network Connection's  results of operations,  and accordingly
the price of its  common  stock,  may be  adversely  affected  by the  following
factors:

     *    the company's  ability to implement its new business  strategy,  which
          requires  obtaining  and  expending a great deal of capital to develop
          compelling   content  and  new   applications   for  its   interactive
          entertainment  and  information  technologies,  and to  penetrate  new
          markets;

     *    the  company's  ability  to  integrate,  retain  and  manage  the  new
          management  team  that  it  has  put  in  place  to  lead  it  in  the
          implementation of its new business strategy;

     *    the company's  ability to generate  revenues from the markets in which
          it is currently operating, and to do so on a profitable basis;

     *    the company's ability to procure and provide desirable content through
          its interactive entertainment and information systems; and

     *    the outcome of discussions  with Carnival Cruise Lines with respect to
          a new agreement between the company and Carnival which would cover the
          installation of the company's  latest  CruiseView(TM)  technology on a
          Carnival ship and contractual terms more favorable to the company than
          the previous  agreement  with  Carnival,  including a longer-term  and
          multiple ship  arrangement.  While the company is optimistic about the
          discussions,  there  is no  assurance  that it will be  successful  in
          securing a new, more favorable long-term contract with Carnival.

     U.S. Wireless. U.S. Wireless currently has no revenues because it is in the
process of  developing  networks to support its  proprietary  wireless  location
technology,  RadioCamera(TM),  which is designed to enable wireless carriers and
others to provide their customers with location-based services and applications.
U.S.  Wireless  developed  its  RadioCamera(TM)  technology to capitalize on the
market  that it  expects to develop in  response  to the  Federal  Communication
Commission's  mandate,  which requires  geolocation of mobile phone  subscribers
dialing 911. The price of U.S.  Wireless' common stock may be adversely affected
by the following factors:

     *    additional  mandates or other  legislation  or  regulation  negatively
          affecting the FCC mandate;

     *    the  development  of the market for  wireless  location  technologies,
          which currently is almost completely dependent upon the FCC mandate;

     *    results    of   the    testing    of    its    RadioCamera(TM)wireless
          location-technology;

     *    U.S.  Wireless' ability to build out a nationwide network to allow for
          use of the RadioCamera (TM) system on a nationwide  basis,  which will
          require  substantial  capital  commitment,  and developing  additional
          applications and offerings of value-added  services in connection with
          the RadioCamera(TM) technology;

                                      -37-
<PAGE>
     *    the level of acceptance of U.S. Wireless'  RadioCamera(TM)  technology
          as a solution to the FCC mandate and of any  additional  services  the
          company develops for use in connection with that technology;

     *    announcements  by U.S.  Wireless or its  competitors  with  respect to
          system and service enhancements,  strategic and other agreements,  and
          other corporate developments;

     *    competitors'  abilities  to develop  and  implement  their  systems in
          response  to  the  FCC  mandate,   and  the  level  of  acceptance  of
          competitors'  systems,  in  the  event  that  any  are  developed  and
          implemented; and

     *    U.S.  Wireless'  ability to obtain the  financing  necessary for it to
          carry out its business plan.

     An additional  factor that may affect the  volatility of the stock price of
either of our publicly traded partner companies is the extent to which there are
outstanding  shares available for resale and derivative  securities  outstanding
that could  convert to shares  available  for resale.  The sale of a significant
number of shares of either of our publicly  traded  partner  companies  into the
market could cause a decrease in the price per share of that partner company.

THE NETWORK CONNECTION HAS A HISTORY OF LOSSES AND EXPECTS CONTINUED LOSSES.

     The Network Connection generated revenues $18.8 million for the fiscal year
ended  October 31, 1998,  and realized a net loss for that year of $7.2 million.
For  the  eight-month  transition  period  ended  June  30,  1999,  The  Network
Connection  generated revenues of $0.9 million,  and realized net income of $2.3
million. This net income was due entirely to reversal of prior accruals. For the
year ended June 30,  2000,  The Network  Connection  generated  revenues of $7.1
million on which it  realized  a net loss of $16.4  million.  A majority  of the
revenues  generated  in the year ended  June 30,  2000 came from the sale of 195
Cheetah(R)  video servers in connection with the Georgia  Metropolitan  Regional
Education  Services  Agency Net 2000 project.  Without these sales,  The Network
Connection  would have had a loss of $18.4  million for that period.  As of June
30, 2000,  The Network  Connection's  accumulated  deficit was $99.3 million and
working capital deficit was $6.8 million.

     Prior management of The Network  Connection  entered into an agreement with
Carnival  Cruise  Lines,  which  obligated  The  Network  Connection  to install
CruiseView(TM)  systems on all ships  designated  by Carnival  through  December
2002. Since the installation of the CruiseView(TM) system on two Carnival cruise
ships,  and  beginning in the year ended June 30, 2000,  the Network  Connection
experienced costs in excess of those  recoverable under the Carnival  agreement.
Given these costs, and ongoing technical issues, The Network Connection notified
Carnival of its desire to renegotiate their agreement. During these discussions,
Carnival  notified The Network  Connection in a letter dated April 24, 2000 that
it sought to  terminate  the  agreement  and sought to assert  certain  remedies
thereunder.  On September 25, 2000, The Network  Connection and Carnival entered
into an agreement  settling  their claims  against one another.  The  settlement
involves the termination of the Carnival  agreement and the issuance to Carnival
by The Network  Connection of a $550,000  principal amount convertible note that
bears  interest  at 8% and  matures  in  one  year.  In  addition,  The  Network
Connection and Carnival continue to discuss a new agreement that would cover the
installation  of the latest  CruiseView(TM)  technology on a Carnival  ship, and
contain  contractual  terms more  favorable to The Network  Connection  than the
previous agreement, including a longer term and multiple ship arrangement. While
The  Network  Connection  is  optimistic  about  the  discussions,  there  is no
assurance that it will be successful in securing a new, more favorable long-term
contract with Carnival.

     The Network  Connection has executed  contracts to install its InnView (TM)
system in only 10 hotels.

     We do  not  believe  that  The  Network  Connection's  sales  to  date  are
sufficient to determine whether there is meaningful demand for its products. The
Network Connection  intends to continue to devote  significant  resources to its
sales and  marketing  efforts in an effort to promote  interest in its products.
There is no assurance that The Network  Connection will be successful with these
efforts or that significant market demand for its products will ever develop.

                                      -38-
<PAGE>
     The  Network  Connection  is in the  early  phases  of  implementing  a new
business  strategy.  Its recently  formed  divisions  and the projects  they are
pursuing are in their infancy.  As such, most of these projects are not expected
to generate  significant  revenue in the near-term,  yet they require funding to
develop.  TNCi  estimates  that its cash and  financing  needs  for its  current
business through June 2001 will be met by equipment  financing that is currently
being  pursued,  and private  placements of equity  currently  being sought from
various sources for working capital  purposes.  Toward this end, TNCi has closed
on  approximately  $3.1 million of equity  financing  in the last three  months.
Despite these infusions,  TNCi's audit report for the fiscal year ended June 30,
2000 contains a "going  concern"  qualification,  as it has been determined that
the  company's  current  sources  of cash do not meet its needs for the  ensuing
fiscal year.  We are striving to obtain the  financing  necessary to meet TNCi's
needs over the  course of the  coming  fiscal  year and to fully  implement  its
business  plan,  but no  assurances  can be made  that we will be able to do so.
Failure  to do so would  have a  material  adverse  effect on  TNCi's  financial
condition, which, in turn, would have a material adverse effect on our financial
condition.

DELISTING OF THE COMMON STOCK OF THE NETWORK CONNECTION FROM TRADING ON THE
NASDAQ SMALLCAP MARKET WOULD REDUCE THE MARKETABILITY OF OUR HOLDINGS IN THE
NETWORK CONNECTION.

     The  Network  Connection  common  stock is listed for trading on the Nasdaq
SmallCap  Market under the symbol "TNCX." A listed company may be delisted if it
fails to maintain minimum levels of stockholders'  equity, shares publicly held,
bid price,  number of stockholders or aggregate  market value, or if it violates
other aspects of its listing agreement.  At June 30, 2000 The Network Connection
did not satisfy the minimum level of net tangible  assets  required to be listed
($2.0 million),  nor did The Network  Connection  have sufficient  non-affiliate
market  capitalization  ($35.0  million) or net income  ($500,000 for two of the
past three  years).  The Network  Connection is seeking  additional  capital and
attempting to effect other equity transactions to, among other things,  increase
its net tangible assets to at least the minimum level required.  There can be no
assurance  that it will be able to raise this  additional  capital,  or if it is
able  to  raise  additional  capital,   that  such  capital  will  be  on  terms
satisfactory  to it, or to effect  other  equity  transactions  currently  under
consideration.  If The  Network  Connection  fails to satisfy the  criteria  for
continued listing, its common stock may be delisted.

     If The Network Connection common stock is delisted, public trading, if any,
would  thereafter be conducted in the  over-the-counter  market in the so-called
"pink sheets," or on the NASD's  "Electronic  Bulletin Board." In this event, it
may be more  difficult  to dispose  of, or even to obtain  quotations  as to the
price of, The Network Connection common stock and the price, if any, offered for
its common stock may be substantially  reduced. A decline in the market value of
The Network Connection will not impact our financial position.  However,  such a
decline would likely affect our stock price.

MANY OF OUR PARTNER COMPANIES OPERATE IN MARKETS CHARACTERIZED BY RAPID
TECHNOLOGICAL CHANGE.

     The   markets  in  which  many  of  our  partner   companies   operate  are
characterized by rapid  technological  change,  frequent new product and service
introductions and evolving industry standards. Significant technological changes
could render their existing technologies, products and services obsolete. Growth
and intense  competition in the  networking  solutions,  telecommunications  and
e-commerce  markets  exacerbate  these  conditions.  If our  technology-oriented
partner companies are unable to successfully respond to these developments or do
not respond in a  cost-effective  way, our  business,  financial  condition  and
operating results could be adversely affected.  To be successful,  these partner
companies must adapt to their rapidly changing markets by continually  improving
the responsiveness,  services and features of their products and services and by
developing new features to meet the needs of their  customers.  Our success will
depend,  in part,  on the  abilities of our partner  companies to enhance  their
existing  products and services and develop new  offerings and  technology  that
address the needs of their customers. Our technology-oriented  partner companies
will also need to  respond  to  technological  advances  and  emerging  industry
standards in a cost-effective and timely manner.

                                      -39-
<PAGE>
OUR TECHNOLOGY ORIENTED PARTNER COMPANIES' PRODUCTS COULD EXPERIENCE TECHNICAL
DIFFICULTIES.

     The  products  of our  technology-oriented  partner  companies  are  highly
specialized and involve  intricate  technologies and electronic  components that
may be subject to technical  difficulties.  These technical  difficulties  could
occur at any time as a result of  component  malfunction  or some other  reason.
Although our technology  oriented partner  companies  generally  utilize quality
control  procedures  and  test  products  before  marketing  them,  there  is no
assurance that all defects will be identified.  We believe that reliability will
be an important consideration for customers of our partner companies. Failure to
detect and prevent  defects and design  flaws in the  products of these  partner
companies could adversely affect our business, financial condition and operating
results.

THE SUCCESS OF OUR TECHNOLOGY-ORIENTED PARTNER COMPANIES IS DEPENDENT TO A LARGE
DEGREE ON THE ACCEPTANCE OF E-COMMERCE AS A MEANS OF DOING BUSINESS.

     The success of our  technology-oriented  partner  companies is dependent on
the  continued  growth of  intranets  and the  Internet as media for  commercial
transactions.  The development of the e-commerce  market is in its early stages.
If widespread  commercial  acceptance of e-commerce and use of the Internet does
not  continue to develop,  or if  intranets  and the  Internet do not develop as
effective  media for providing  products and services,  our  technology-oriented
partner  companies may not succeed.  A number of factors could impede acceptance
of e-commerce and the Internet as a medium for doing business, including:

     *    the unwillingness of businesses to shift from traditional processes to
          intranet-based and/or Internet-based processes;

     *    the failure to  continue  the  development  of the  necessary  network
          infrastructure for substantial growth in usage of the Internet;

     *    increased  government  regulation or taxation may adversely affect the
          viability  of  intranets  and the  Internet  as media  for  commercial
          transactions; and

     *    the growth in  bandwidth  may not keep pace with the growth in on-line
          traffic,  which could result in slower response times for the users of
          intranet-based and Internet-based commercial transactions.

THE UK LOTTERY PROJECT HAS NOT GENERATED SUFFICIENT CASH FLOW TO PAY A LARGE
WEEKLY CONTRACTUAL OBLIGATION, AND WE MAY NOT SUCCEED IN IMPLEMENTING AN
ALTERNATIVE OPERATING STRATEGY FOR THE NETWORK OPERATING CENTER AND TERMINALS
UTILIZED IN THE PROJECT, WHICH WE EXPECT TO DISCONTINUE BY DECEMBER 31, 2000.

     Our UK  lottery  project  began  operations  on  March  27,  2000,  and was
officially  launched on April 4, 2000 in  conjunction  with the start of a media
campaign. The project has generated insignificant revenues to date. As discussed
above, we have divested our interest in Inter Lotto,  the company whose External
Lottery Management Certificate we rely on to run the lottery, and have separated
from Inter Lotto in all other  respects,  other than an  arrangement  with Inter
Lotto to  manage  the  lottery  under the  authority  of the  Certificate  until
December 31, 2000.

     GTL Management  Limited, a UK subsidiary of ours, entered into an agreement
with  International  Lottery and  Totalizator  Systems,  Inc.  pursuant to which
International  Lottery  provides  certain  facilities  management  services  and
technological  support in connection with the networking hardware,  software and
terminals that we, through  another UK subsidiary,  purchased from them and that
serves as the  infrastructure  of the lottery.  This  agreement has a seven-year
term and requires  that we pay them $72,000 per week,  plus  additional  amounts
based on any  terminals  in  excess of 3,500  being  installed  (there  are only
approximately  2,000  terminals  installed  at this  time) and a  percentage  of
average daily sales. We guaranteed performance of this agreement.

     The  obligations  under the facilities  management  agreement  commenced on
March 27, 2000 with the sale of the first ticket in connection with the lottery.
Including  the weekly  payments  required  under this  agreement,  we  currently
anticipate that the lottery  enterprise  will require  funding of  approximately
$3.0  million in the  three-month  period  ending  December 31, 2000 to continue

                                      -40-
<PAGE>
operations. After December 31, 2000, we will still be obligated to make payments
under this agreement. We are currently negotiating its termination.  There is no
assurance  that we  will  be  successful  in  these  negotiations  or  that,  if
terminated,  the terms  thereof will be favorable to us.  Failure to negotiate a
termination of this agreement and to do so on terms favorable to us could have a
material adverse effect on our results of operations and financial condition.

     We are currently investigating alternative operating strategies for the use
of the lottery equipment and network  operating center following  termination of
the  Inter  Lotto  lottery  operations  on or before  December  31,  2000.  Such
strategies  include  utilizing  the network for operating  pools,  lotteries and
betting for established gaming companies, and to develop a national linked bingo
game in partnership with proprietary  private clubs throughout the UK. We intend
to implement an alternative  operating  strategy,  however,  no assurance can be
given that we will be successful  in doing so. If we are unable to  successfully
implement an alternative operating strategy,  the lottery equipment assets could
be deemed  impaired  under  generally  accepted  accounting  principals,  as the
carrying value of such assets may not be fully  recoverable  in such event.  Any
"write  down" of the value of such  assets due to such  impairment  could have a
material adverse effect on our financial condition.

ALL OF OUR PARTNER COMPANIES COULD BE ADVERSELY AFFECTED BY COMPETITION IN THE
MARKETS IN WHICH THEY OPERATE.

     The markets in which our partner companies operate are highly  competitive.
Many of the competitors of our partner companies have longer operating histories
and significantly  greater financial,  technical,  marketing and other resources
than they do. These  competitors  are therefore able to respond more quickly and
efficiently  to  new  or  changing  opportunities,   technologies  and  customer
requirements.  If our partner companies'  products and services do not achieve a
significant level of acceptance in the marketplace, or their competitors develop
products and services rendering theirs obsolete, our partner companies,  and, in
turn, we, would be adversely affected.

INTELLECTUAL PROPERTY ISSUES, GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES THAT
COULD AFFECT OUR PARTNER COMPANIES.

     INTELLECTUAL  PROPERTY.  Our partner companies utilize certain  proprietary
technologies  and other  intellectual  property that are valuable to them.  They
protect this intellectual property in a variety of ways, such as through patent,
trademark and copyright law. U.S. Wireless has filed 18 patent applications with
the Patent & Trademark  Office and has  received  three  issued  patents and has
received notices of allowance for another four of these  applications.  There is
no assurance that any of the remaining patents will be granted. In addition, our
partner  companies  rely on  confidentiality  agreements  with key  employees to
prevent disclosure of important intellectual property to third parties. There is
no assurance  that any of these  protections  will prove  sufficient  to prevent
third parties from using our partner  companies'  intellectual  property  either
through legal or illegal means. Use by third parties of intellectual property of
one of our partner  companies  could  adversely  affect that  partner  company's
business. In addition, we give no assurance that any particular aspect of any of
our partner companies' intellectual property will not be claimed to infringe the
intellectual   property   rights  of  a  third  party.   Intellectual   property
infringement litigation for or against any of our partner companies would likely
have an adverse effect on that partner company's business.

     GOVERNMENT  REGULATION AND LEGAL  UNCERTAINTIES.  Our partner companies are
subject,  both  directly  and  indirectly,  to  various  laws  and  governmental
regulations  relating to their  businesses.  Our partner  companies that operate
abroad are subject to the laws and  regulations of foreign  countries with which
we are not familiar.  We believe that our partner companies maintain  compliance
with these laws and  regulations,  and that,  while there is expense incurred in
doing  so,  these  laws and  regulations  do not have a  material  impact on the
operations of our partner  companies;  however,  as a result of rapid technology
growth and other  related  factors,  laws and  regulations  may be adopted which
significantly  impact our  partner  companies'  businesses,  and,  in turn,  our
business.

INFLATION AND SEASONALITY

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

                                      -41-
<PAGE>
RISKS ASSOCIATED WITH YEAR 2000

     Many currently  installed computer systems and software products were coded
to accept  only two digit  year  entries in the date code  field.  Consequently,
subsequent to December 31, 1999, many of these systems became subject to failure
or  malfunction.  Although we are not aware of any material  Year 2000 issues at
this time,  Year 2000  problems  may occur or be made known to us in the future.
Year 2000  issues  may  possibly  affect  software  solutions  developed  by our
affiliate companies or third-party software incorporated into our solutions. Our
affiliate  companies  generally do not guarantee that the software licensed from
third-parties  by their  clients  is Year  2000  compliant,  but they  sometimes
warrant that solutions developed by them are Year 2000 compliant.

FORWARD-LOOKING INFORMATION

     This  Annual  Report on Form  10-K  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.

     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.

NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivatives  and Similar  Financial  Instruments and for Hedging
Activities",  to establish  accounting  and reporting  standards for  derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives  as either  assets or  liabilities  on the balance sheet and measure
those instruments at fair value.  This new standard,  as amended by related SFAS
Nos. 137 and 138,  will be effective  for Global for its fiscal year ending June
30, 2001. We are currently evaluating the impact of SFAS No. 133.

     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  is effective July 1, 2000 and is not expected to
have a material effect on Global's consolidated financial statements.

ITEM 7 -- FINANCIAL STATEMENTS

     Our audited  consolidated  financial  statements the fiscal year ended June
30, 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.

                                      -42-
<PAGE>
                                    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 June 30, 2000:

           NAME          AGE                  POSITION/OFFICE
           ----          ---                  ---------------
     Irwin L. Gross       55   Chief Executive Officer and Chairman of the Board
     James W. Fox         49   President, Chief Operating Officer and Director
     Patrick J. Fodale    37   Vice President and Chief Financial Officer
     David N. Shevrin     37   Vice President - Business Development
     S. Lance Silver      31   Vice President and General Counsel
     M. Moshe Porat       52   Director
     Charles T. Condy     59   Director
     Stephen Schachman    55   Director

     Irwin L. Gross has been  Chairman of Global's  Board of  Directors  and its
Chief  Executive  Officer  since  September  1998 and  Chairman  of the Board of
Directors and Chief Executive  Officer of The Network  Connection  since May 18,
1999. Mr. Gross also  currently sits on the Board of Directors of U.S.  Wireless
Corporation,  a publicly held company listed on the Nasdaq National Market.  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.

     James W. Fox has been a Director of Global since  September  1998.  Mr. Fox
has also served as Global's  President and Chief Operating Officer since January
1, 1999. He was formerly the Managing  Partner of First Lawrence  Capital Corp.,
and was responsible for the firm's  management and the growth of its mergers and
acquisitions  advisory and principal investment  activities.  From 1989 to 1996,
Mr.  Fox was a  director  with  national  practice  development  and  management
responsibility  with Coopers & Lybrand in New York, with primary  responsibility
for  mergers  and  acquisitions  activities.  He has  held  senior  mergers  and
acquisitions positions with General Foods Corp., Arthur Young and W.R. Grace Co.
Mr. Fox has a Bachelor of Arts degree in  Mathematics  and History  from Amherst
College and an M.B.A. in Finance from the University of  Pennsylvania's  Wharton
School.

     Patrick J. Fodale has been Vice  President and Chief  Financial  Officer of
Global since December 15, 1999.  Prior to his  employment by Global,  Mr. Fodale
was a workout specialist  recruited by companies in or contemplating  bankruptcy
under  Chapter 11 of the United  States  Bankruptcy  Code.  In his capacity as a
workout  specialist,  Mr. Fodale,  from March 1998 to September 1999,  served as
Chief Financial  Officer of HomePlace,  Inc., a privately held national retailer
of housewares and home  furnishings,  which was then operating under Chapter 11.
Also,  in his capacity as workout  specialist,  from  November  1995 to February
1998, Mr. Fodale was Chief  Financial  Officer of Color Tile,  Inc., a privately
held national  retailer of floor covering  products also operating under Chapter
11. From 1985 to October 1995, Mr. Fodale was with the firm of Arthur  Andersen,
LLC in the corporate  restructuring  group. Mr. Fodale holds a Masters Degree in
Accounting from the University of Michigan and was a Certified Public Accountant
in the State of Michigan.  We did not hire Mr. Fodale, and he does not serve us,
in his capacity as a workout specialist.

     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

                                      -43-
<PAGE>
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 and a
Director of The Network Connection since May 18, 1999. 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 and a
Director of The Network Connection since May 18, 1999. 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.

                                      -44-
<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 grant in fiscal
year  2000),  James W. Fox (one grant in fiscal year 1999 and two in fiscal year
2000),  Morris C. Aaron (one grant in fiscal year 1999),  David N.  Shevrin (one
grant in fiscal  year 1999 and two in fiscal year  2000),  S. Lance  Silver (one
grant in fiscal year 2000),  Charles T. Condy (one grant in fiscal year 1999 and
one in fiscal year 2000),  M. Moshe Porat (one grant in fiscal year 1999 and one
in fiscal  year 2000) and Stephen  Schachman  (one grant in fiscal year 1999 and
one in fiscal year 2000) did not timely file Form 5s  regarding  certain  option
grants in fiscal years 1999 and 2000.

ITEM 10 -- EXECUTIVE COMPENSATION

     The summary compensation table below sets forth the aggregate  compensation
paid or  accrued  by  Global  for the  fiscal  year  ended  June 30,  2000,  the
Transition  Period ended June 30, 1999 and Global's  preceding fiscal year ended
October 31, 1998 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) one individual who would have been
included in the table but for the fact that he was not  serving as an  executive
officer  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,                   2000        190,846    250,000        --      1,500,000
Chief Executive Officer           1999             --         --        --             --
                                  1998             --         --        --             --

James W. Fox, President           2000        242,046     45,000        --         25,000
                                  1999        104,718         --        --        105,000
                                  1998             --         --        --         45,000

Patrick J. Fodale,                2000        104,708         --    39,766 (1)     75,000
Chief Financial Officer (2)       1999             --         --        --             --
                                  1998             --         --        --             --

Morris C. Aaron,                  2000         90,400     17,200        --             --
Chief Financial Officer (2)       1999        130,289         --        --         75,000
                                  1998         18,590         --        --             --

David N. Shevrin,                 2000        115,670     22,000        --         25,000
Vice President -                  1999         71,924         --        --         75,000
Business Development              1998          8,462         --        --             --
</TABLE>

----------
(1)  Represents  reimbursement of moving expenses  incurred by Mr. Fodale in his
     relocation to New York City, where he works out of our New York office.
(2)  On December  15, 1999,  Mr.  Fodale  replaced  Mr. Aaron as Global's  Chief
     Financial  Officer.  Mr.  Aaron  is  currently  Vice  President  and  Chief
     Financial  Officer  of The  Network  Connection.  Mr.  Aaron had been Chief
     Financial Officer of Global since September 25, 1998.

                                      -45-
<PAGE>
OPTION GRANTS IN FISCAL YEAR

     The  following  table sets forth the stock  option  grants  made during the
fiscal year ended June 30, 2000 to the Named Executives:

<TABLE>
<CAPTION>
                                Number of       Percent of Total
                               Securities      Options Granted to
                           Underlying Options    Employees in      Exercise Price
        Name                   Granted(#)        Fiscal Year(1)       ($/Share)    Expiration Date
        ----                   ----------        --------------       ---------    ---------------
<S>                            <C>                   <C>                <C>            <C>
Irwin L. Gross (2)             1,500,000             72.29%              1.83          10/08/09
James W. Fox (3)                  25,000              1.20%             16.38           3/16/10
Patrick J. Fodale (4)             75,000              3.61%              4.59          12/15/09
Morris C. Aaron                       --                --                 --                --
David N. Shevrin (5)(6)           15,000              0.72%              1.83          10/08/09
                                  10,000              0.48%             16.38           3/16/10
</TABLE>

----------
(1)  Based on a total of 2,075,000  options granted to employees during the 2000
     fiscal year.
(2)  One quarter of these  options  vest on the date of grant,  another  quarter
     vests in three equal annual  increments  beginning on the first anniversary
     of the date of grant, and the remaining half vest on the sixth  anniversary
     of the date of grant,  subject  to  acceleration  to a  three-year  vesting
     schedule in the event that certain performance milestones are achieved.
(3)  These  option vest in four equal annual  increments  beginning on the first
     anniversary of the date of grant.
(4)  These options vest in five equal annual increments beginning on the date of
     grant.
(5)  The  options  for  15,000  shares  vest as  follows:  one third vest on the
     anniversary  of the date of grant and the  remaining  two thirds vest in 24
     equal monthly increments.
(6)  The  options  for  10,000  shares  vest in  four  equal  annual  increments
     beginning on the first anniversary of the date of grant.

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, 2000 by the Named Executives, as well as the value of
their unexercised stock options as of the end of the Transition Period:

<TABLE>
<CAPTION>
                                                  Number of Securities
                                                 Underlying Unexercised          Value of Unexercised
                      Shares                          Options At               In-the-money Options At
                    Acquired On     Value            June 30, 2000                  June 30, 2000
     Name            Exercise(#)  Realized($)  Exercisable/unexercisable(1)  Exercisable/unexercisable($)
     ----            -----------  -----------  ----------------------------  ----------------------------
<S>                    <C>          <C>            <C>                           <C>
Irwin L. Gross             --           --         375,000/1,125,000             1,609,039/4,827,094
James W. Fox               --           --            72,000/103,000                 333,465/353,948
Patrick J. Fodale          --           --             15,000/60,000                   23,091/92,363
Morris C. Aaron        15,000       44,000             15,000/45,000                  74,987/224,960
David N. Shevrin           --           --             25,000/75,000                 124,978/314,316
</TABLE>

----------
(1)  All of these options had an exercise  price less than the closing bid price
     per share of Global's Class A Common Stock on the Nasdaq National Market of
     $6.125 at June 30, 2000.

                                      -46-
<PAGE>
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
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. Messrs. Fox, Condy, Porat and Schachman were each granted options to
purchase  90,000 shares of our Class A Common Stock pursuant to the 1997 Plan in
fiscal year 2000.  Also in fiscal year 2000,  Irwin L. Gross,  our  Chairman and
Chief Executive Officer, received a grant of options to purchase up to 1,500,000
shares of our Class A Common Stock  pursuant to a Stock Option Plan (approved by
the stockholders on May 11, 2000) separate from the 1994 and 1997 Plans.

     In fiscal year 2000, Mr. Gross received grants of options to purchase up to
800,000  shares of TNCi common  stock,  each of Messrs.  Porat and Schachman was
granted  options to purchase  50,000  shares of TNCi common  Stock,  and each of
Messrs.  Fox and Condy was granted  options to purchase  40,000 shares of common
stock of TNCi. During fiscal year 2000, each of Messrs. Gross, Fox, Condy, Porat
and  Schachman  was also granted  options to purchase  equity in GTL  Management
Limited, one of our UK subsidiaries,  at fair market value on the date of grant.
Mr. Gross' options are for 7% of GTL Management, each of Messrs. Fox and Condy's
options are for 1% of GTL Management,  and each of Messrs. Porat and Schachman's
options are for 0.5% of GTL Management.

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

                                      -47-
<PAGE>
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  serves as  Global's  President  and Chief  Operating  Officer
pursuant to the terms of an employment agreement that terminates on December 31,
2000. Mr. Fox receives a minimum annual base salary of $225,000 and,  subject to
the  achievement of assigned  goals,  bonuses of not less than 20% of his annual
salary.  Mr. Fox also received 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  provides for a
severance  payment in the event that  Global  terminates  Mr. Fox other than for
"cause" as defined in the employment  agreement.  The severance payment would be
equal to two times the remaining balance of his base salary for the remainder of
the then current term. The  employment  agreement also provides a payment in the
event Global  terminates 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 the 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 $450 per month.

     Patrick J. Fodale received a letter regarding his employment from Global on
December 3, 1999.  It provides  for a start date of December 15, 1999 and salary
of $200,000  per year.  The letter also  provides  for a target  bonus 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 beginning with the date of grant.
Mr.  Fodale also  receives 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 be entitled to six months base salary. Mr.
Fodale was also reimbursed for moving expenses of $39,766.

     Morris  C.  Aaron  currently  serves  as Chief  Financial  Officer  of TNCi
pursuant to the terms of an  employment  agreement  that  terminates on June 10,
2001.  During a portion of fiscal year 2000, Mr. Aaron served as Chief Financial
Officer of both TNCi and Global. TNCi paid Mr. Aaron's salary during this period
of  time,  and  Global  reimbursed  TNCi  for  40% of his  salary.  Mr.  Aaron's
employment  agreement  with TNCi  provides  for a minimum  annual base salary of
$215,000 and for the grant of ten-year  options to purchase up to 75,000  shares
of TNCi  common  stock,  which vest in  increments  of 15,000  options  per year
beginning with his start date. The employment agreement provides for a severance
payment in the event that TNCi  terminates Mr. Aaron other than for "cause." 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  for a  payment  in  the  event  TNCi  terminates  Mr.  Aaron  due to a
termination  of its  business.  The amount of this payment would equal 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
TNCi  may  pay  other  incentive  compensation  as may be  set by the  Board  of
Directors from time to time,  and for such other fringe  benefits as are paid to
other executive  officers of TNCi. 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 September 25, 2000
regarding the ownership of Global's  Class A Common Stock and Series C Preferred
Stock  and of  TNCi's  common  stock by (i) each  person  known by Global to own
beneficially more than five percent of any class of Global's voting  securities,
(ii) each director of Global,  (iii) the Named Executives and (iv) all executive
officers and directors of Global as a group:

                                      -48-
<PAGE>
<TABLE>
<CAPTION>
                                               Class a                         Tnci
                                             Common Stock                  Common Stock
                                       -------------------------    ----------------------------
Name and Address of                   Number of       Percent of     Number           Percent
Beneficial Owner (1)                   Shares          Class (2)    of Shares       of Class (2)
--------------------                   ------          ---------    ---------       ------------
<S>                                 <C>                  <C>       <C>                  <C>
Irwin L. Gross                      3,440,151(3)         28.1%     851,430(11)          4.2%
Charles T. Condy                       77,025(4)            *           --               --
Stephen Schachman                      71,400(5)            *       10,000(12)            *
M. Moshe Porat                        446,400(6)          4.1%      10,000(13)            *
David N. Shevrin                       32,667(7)            *           --               --
Morris C. Aaron                        24,148(8)            *       20,000(14)            *
James W. Fox                           78,600(9)            *           --               --
Patrick J. Fodale                      20,000(10)           *           --               --
All executive officers and          4,220,474(3)(4)(5)             858,430(11)(12)
 directors as a group (9 persons)    (6)(7)(8)(9)(10)    33.6%            (13)(14)      4.3%
</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 10,725,489  shares of Global's
     Class A Common  Stock  outstanding  as of September  25, 2000,  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.  For TNCi,  these  percentages are based on 19,973,117  shares of
     TNCi common stock  outstanding as of September 25, 2000, except that shares
     underlying  options and warrants to purchase TNCi 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.
(3)  Includes  4,498 shares owned jointly by Mr. Gross and his wife, and 149,309
     shares owned by Ocean Castle  Partners,  LLC, an entity  controlled  by Mr.
     Gross. Includes 50,948 shares owned by trusts for the benefit of Mr. Gross'
     children,  and 9,000 shares held in  custodial  accounts for the benefit of
     Mr. Gross' children of which Mr. Gross' wife serves as custodian, as to all
     of which shares Mr. Gross  disclaims  beneficial  ownership.  Also includes
     39,750 shares held in trusts of which Mr. Gross is a trustee. Also includes
     375,000 shares issuable to Mr. Gross upon exercise of currently exercisable
     options,  and 375,000 shares issuable upon exercise of options  exercisable
     within 60 days. Also includes 553,978 shares and 198,318 shares issuable to
     Mr. Gross and to trusts of which Mr. Gross is a trustee, respectively, upon
     exercise of currently exercisable warrants.
(4)  Includes  15,000  shares  issuable to Mr. Condy upon  exercise of currently
     exercisable  options, and 45,000 shares issuable to Mr. Condy upon exercise
     of options exercisable within 60 days.
(5)  Includes 15,000 shares issuable to Mr. Schachman upon exercise of currently
     exercisable  options,  and 45,000  shares  issuable to Mr.  Schachman  upon
     exercise of options exercisable within 60 days.
(6)  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 15,000 shares issuable to Dr. Porat upon exercise of
     currently exercisable options, and 45,000 shares issuable to Dr. Porat upon
     exercise of options exercisable within 60 days.

                                      -49-
<PAGE>
(7)  Includes  25,000 shares  issuable to Mr. Shevrin upon exercise of currently
     exercisable options, and 5,417 shares issuable to Mr. Shevrin upon exercise
     of options exercisable within 60 days.
(8)  Includes  15,000  shares  issuable to Mr. Aaron upon  exercise of currently
     exercisable options.
(9)  Includes  72,000  shares  issuable to Mr. Fox upon  exercise  of  currently
     exercisable options.
(10) Includes  15,000  shares  issuable  to Mr.  Fodale  upon  the  exercise  of
     currently exercisable options.
(11) Includes  190,200 shares held by trusts of which Mr. Gross is a trustee and
     66,667 shares held by Gross Investment Company, LP, an entity controlled by
     Mr. Gross. Also includes 125,000 shares issuable to Mr. Gross upon exercise
     of currently  exercisable options, and 125,001 shares issuable to Mr. Gross
     upon exercise of options  exercisable within 60 days. Also includes 311,562
     shares  issuable to trusts of which Mr. Gross is a trustee upon exercise of
     currently exercisable warrants.
(12) Consists  of 10,000  shares  issuable  to Mr.  Schachman  upon  exercise of
     currently exercisable options.
(13) Consists of 10,000 shares  issuable to Dr. Porat upon exercise of currently
     exercisable options.
(14) Consists  of 20,000  shares  issuable  to Mr.  Aaron upon the  exercise  of
     currently exercisable options.

ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CONSULTING ARRANGEMENTS

     Irwin L. Gross, our Chairman and Chief Executive Officer, is a principal of
Ocean Castle Partners,  LLC, which maintains the principal executive offices for
Global. On September 30, 1998, Ocean Castle executed consulting  agreements with
two principal  stockholders and former executive officers of Global, Don Goldman
and Yuri Itkis.  The rights and obligations of Ocean Castle under the agreements
were  assumed by The Network  Connection  in  connection  with the merger of our
predecessor  company's  interactive  entertainment  division  with  The  Network
Connection. 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
our Class A Common Stock at an exercise price of $3.00 per share. As of June 30,
1999, The Network  Connection  determined that the consulting  agreements had no
future   value  due  to  The  Network   Connection's   shift  out  of  in-flight
entertainment  into markets such as hotel and  hospitality,  leisure  cruise and
passenger  rail  transport.  Only limited  services were provided in 1999 and no
future services will by utilized. Accordingly, The Network Connection recorded a
charge to general and  administrative  expenses in the  transition  period ended
June 30, 1999 of $1.6 million representing the balance due under such contracts.

     On July 31,  2000,  we entered into  separate  termination  and  settlement
agreements  between us, The Network  Connection,  Ocean Castle Partners LLC, Mr.
Gross,  and  each of  Messrs.  Itkis  and  Goldman  terminating  each  of  their
consulting  agreements  with Ocean Castle Partners and providing for the release
of any and all potential  claims which may have been  asserted by Messrs.  Itkis
and Goldman under their  respective  consulting  agreements.  In connection with
termination  of these  agreements,  we issued  139,514 shares to each of Messrs.
Itkis and  Goldman  (96,083 of which we  registered  for  resale).  The  Network
Connection,  whose  liability the agreements  were,  will reimburse us for these
payments by issuing to us 411,146 shares of TNCi common stock.

     We entered into a consulting agreement with First Lawrence Capital Corp. to
perform  various  financial   advisory  services  related  to  ongoing  business
development  and management.  The former managing  director of First Lawrence is
also a director of Global.  Global  retained,  on a full time basis as President
and Chief Operating  Officer,  the services of the former  managing  director of

                                      -50-
<PAGE>
First Lawrence  effective  December 12, 1998. We have entered into an employment
contract with such  individual.  During the year ended October 31, 1998, we paid
$11,846 under the First Lawrence  consulting  agreement.  We also entered into a
consulting  agreement  with  Whitestone  Group,  LLC,  a  shareholder  of  First
Lawrence.  Pursuant to this agreement,  we paid $250,000 for consulting services
received during fiscal 1998.

     On September 15, 1998, we entered into  consulting  agreements with Messrs.
Michail Itkis, Thomas M. Metzler and John W. Alderfer, former executive officers
of our  predecessor  company,  in  connection  with  our  predecessor  company's
agreements with Swissair. In consideration for such services, Mr. Itkis was paid
$200,000,  Mr. Metzler $300,000 and Mr. Alderfer  $235,000.  No further payments
are to be made under these agreements.

STOCKHOLDERS' AGREEMENT

     In October  1994,  our  predecessor  company  entered into a  stockholders'
agreement  with Yuri Itkis,  Michail  Itkis,  Boris Itkis,  Steven M.  Fieldman,
Donald  H.  Goldman  and Lance  Fieldman.  In  connection  with the May 1996 and
November  1996  resignations  of  Messrs.  Goldman,  Steven  Fieldman  and Lance
Fieldman, and in connection with the execution of a strategic alliance agreement
with Hyatt, the parties to the  stockholders'  agreement entered into agreements
which  terminated  the  stockholders'  agreement as to Messrs.  Goldman,  Steven
Fieldman  and  Lance   Fieldman,   added  Hyatt  as  a  stockholder   under  the
stockholders'   agreement,  and  amended  certain  terms  of  the  stockholders'
agreement.  On November 10, 1997 with the termination of the alliance  agreement
with Hyatt, the  stockholders'  agreement was amended again to terminate Hyatt's
rights.

     As amended,  the  stockholders'  agreement  provided that Michail Itkis and
Yuri Itkis shall each be entitled to  designate  one nominee to our  predecessor
company's  Board of Directors.  No other parties had any continuing  right under
the stockholders'  agreement to nominate a director.  Each stockholder who was a
party to the  stockholders'  agreement  agreed to vote all the  shares of common
stock owned by him for the election of the  directors  so  nominated  and not to
take any action to remove any  director so elected  (except for the  director(s)
nominated by such  stockholder).  The stockholders'  agreement was terminated on
September 15, 1998.

PURCHASE OF SHARES

     Pursuant to the settlement of various lawsuits and other claims  instituted
by Barington  Capital  Group,  L.P.  against us, Ocean Castle and others,  Ocean
Castle  purchased from  Barington  149,313 shares of our Class A Common Stock at
$3.00 per share on October 21, 1998.  We  temporarily  loaned the funds to Ocean
Castle to effectuate such purchase and Ocean Castle has subsequently repaid such
loan.

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. Mr. Gross owns 50% of
the interests in BHG. To date, we have reimbursed BHG approximately $106,085.

LOANS TO GLOBAL

     On August 31 and September 7, 2000,  each of the Gross  Charitable  Annuity
Trust and the Gross Charitable Unit Trust advanced  $100,000 and $300,000 to us,
respectively.  These advances have been 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, is trustee of each of these trusts.

                                      -51-
<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 deposited an
additional  $1,129,002 of collateral  with Merrill Lynch. In connection with Mr.
Gross' pledge of these  amounts of collateral on our behalf,  he has 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  220,293 shares  (exercise price of $5.125 per share,  the
last sale price per share on July 27, 2000).

LEASE OF OFFICE SPACE

     Mr. Gross is a principal of Ocean Castle Partners, LLC. 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 $62,570 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)

                                      -52-
<PAGE>
Exhibit
Number                                 Description
------                                 -----------
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)

3.01      -    Certificate of Ownership and Merger. (1)

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)

                                      -53-
<PAGE>
Exhibit
Number                                 Description
------                                 -----------
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)

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)

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)

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)

                                      -54-
<PAGE>
Exhibit
Number                                 Description
------                                 -----------
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)

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)

                                      -55-
<PAGE>
Exhibit
Number                                 Description
------                                 -----------
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)

23.00     -    Consent of KPMG. (*)

27.00     -    Financial Data Schedule. (*)

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)

                                      -56-
<PAGE>
Exhibit
Number                                 Description
------                                 -----------
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)

----------
(1)  Incorporated by reference from the Registrant's  Registration  Statement on
     Form SB-2, Registration No. 33-86928.
(2)  Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB for the fiscal period ended July 31, 1996, filed with the Securities
     and Exchange Commission on September 16, 1996, File No. 0-25668.
(3)  Incorporated by reference from the Registrant's  Registration  Statement on
     Form SB-2, Registration No. 333-02044.
(4)  Incorporated by reference from the Registrant's  Registration  Statement on
     Form S-3, Registration No. 333-14013.
(5)  Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB  for the fiscal  quarter  ended  January  31,  1997,  filed with the
     Securities and Exchange Commission on March 17, 1997, File No. 0-25668.

                                      -57-
<PAGE>
(6)  Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB  for the  fiscal  quarter  ended  April  30,  1998,  filed  with the
     Securities and Exchange Commission on June 5, 1998, File No. 0-25668.
(7)  Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB  for the  fiscal  quarter  ended  July  31,  1998,  filed  with  the
     Securities and Exchange Commission on September 15, 1998, File No. 0-25668.
(8)  Incorporated by reference from the Registrant's  Current Report on Form 8-K
     dated May 17, 1999,  filed with the Securities  and Exchange  Commission on
     June 1, 1999, File No. 0-25668.
(9)  Incorporated by reference from the  Registrant's  Quarterly  Report on Form
     10-QSB  for the  fiscal  quarter  ended  April  30,  1999,  filed  with the
     Securities and Exchange Commission on June 14, 1999, File No. 0-25668.
(10) Incorporated by reference from the Registrant's  Annual Report on Form 10-K
     for the fiscal year ended October 31, 1998,  filed with the  Securities and
     Exchange Commission on January 20, 1999, File No. 0-25668.
(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. 0-25668.
(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. 0-25668.
(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.
(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. 0-25668.
(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. 0-25668.
(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.

REPORTS ON FORM 8-K

     On  September  5, 2000,  Global  filed a report on Form 8-K  regarding  the
transfer of its interest in Inter Lotto (UK) Limited and termination of existing
Operating  Agreements between Global or its wholly-owned  subsidiaries and Inter
Lotto (UK)  Limited to operate  lotteries  on behalf of  charities  in the Great
Britain under Inter Lotto's External Lottery Manager's Certificate.

                                      -58-
<PAGE>
                                   SIGNATURES

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


                                        GLOBAL TECHNOLOGIES, LTD.


Dated: October 5, 2000                  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           October 5, 2000
---------------------------    and Director
Irwin L. Gross


/s/ JAMES W. FOX               President and Director            October 5, 2000
---------------------------
James W. Fox


/s/ PATRICK J. FODALE          Chief Financial Officer           October 5, 2000
---------------------------    (Principal Financial Officer)
Patrick J. Fodale


/s/ CHARLES T. CONDY           Director                          October 5, 2000
---------------------------
Charles T. Condy


/s/ STEPHEN SCHACHMAN          Director                          October 5, 2000
---------------------------
Stephen Schachman


/s/ M. MOSHE PORAT             Director                          October 5, 2000
---------------------------
M. Moshe Porat

                                      -59-
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                        Page
                                                                        ----

Independent Auditors' Report.............................................F-2

Consolidated Balance Sheets as of June 30, 2000 and 1999.................F-3

Consolidated Statements of Operations for the Year Ended
 June 30, 2000, the Transition Period Ended June 30, 1999 and
 the Year Ended October 31, 1998 ........................................F-4

Consolidated Statements of Stockholders' Equity and Comprehensive
 Income for the Year Ended June 30, the Transition Period Ended
 June 30, 1999 and the Year Ended October 31, 1998 ......................F-5

Consolidated Statements of Cash Flows for the Year Ended
 June 30, 2000, the Transition Period Ended June 30, 1999 and
 the Year Ended October 31, 1998.........................................F-6

Notes to Consolidated Financial Statements...........................F-7 to F-40



                                       F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


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


We  have  audited  the  accompanying   consolidated  balance  sheets  of  Global
Technologies, Ltd. and subsidiaries as of June 30, 2000 and 1999 and the related
consolidated  statements of operations,  stockholders'  equity and comprehensive
income and cash flows for the year ended June 30, 2000,  the  Transition  Period
ended June 30, 1999 and the year ended  October  31,  1998.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with 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 1999 and the  results of their
operations and their cash flows for the year ended June 30, 2000, the Transition
Period ended June 30, 1999 and the year ended  October 31, 1998,  in  conformity
with accounting principles generally accepted in the United States of America.


                                              /s/ KPMG LLP

Phoenix, Arizona
September 27, 2000, except for Note 20(f)
  to the consolidated financial statements
  which is as of October 4, 2000

                                      F-2
<PAGE>
                            GLOBAL TECHNOLOGIES, LTD.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                              JUNE 30,          JUNE 30,
                                                                               2000               1999
                                                                          -------------      -------------
                                     ASSETS
<S>                                                                       <C>                <C>
Current assets:
 Cash and cash equivalents                                                $   3,761,301      $  15,521,275
 Restricted cash                                                                766,748          1,412,736
 Investment securities                                                       64,125,000          4,594,751
 Accounts receivable                                                             55,951            128,489
 Notes receivable from related parties                                               --             98,932
 Inventories                                                                         --          1,400,000
 Prepaid expenses                                                               846,957            607,900
 Assets held for sale                                                                --            800,000
 Deferred tax asset                                                          24,439,131                 --
 Other current assets                                                         2,204,803            470,273
                                                                          -------------      -------------
        Total current assets                                                 96,199,891         25,034,356

 Investments                                                                     75,000          5,752,599
 Note receivable from related party                                             117,612             75,000
 Property and equipment, net                                                 17,222,957          1,369,392
 Intangibles, net                                                             6,697,955          7,119,806
 Other assets                                                                 1,412,516             61,468
                                                                          -------------      -------------

        Total assets                                                      $ 121,725,931      $  39,412,621
                                                                          =============      =============

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                                                         $   9,956,182      $   2,530,675
 Accrued liabilities                                                          3,516,012          2,292,609
 Deferred revenue                                                                    --            365,851
 Accrued product warranties                                                     141,796                 --
 Notes payable                                                                6,314,129             24,391
 Notes payable to related parties                                               800,000             68,836
                                                                          -------------      -------------
        Total current liabilities                                            20,728,119          5,282,362
Notes payable                                                                 4,000,000          3,467,045
Accrued litigation settlement                                                   875,000          1,843,750
                                                                          -------------      -------------
        Total liabilities                                                    25,603,119         10,593,157
                                                                          -------------      -------------

Minority interest                                                            (1,647,290)         1,165,098

Stockholders' equity:
 Series A 8% Convertible preferred stock, 3,000 shares designated,
  zero and 3,000 shares issued and outstanding, respectively
  (liquidation preference of $3,600,000)                                             --                 30
 Series C 5% Convertible preferred stock, 1,000 shares designated,
  1,000 and zero shares issued and outstanding, respectively
  (liquidation preference of $10,187,415)                                            10                 --
 Class A common stock, one vote per share, par value $0.01 per share,
  40,000,000 shares authorized; 10,395,075 and 8,151,965 shares
  issued and outstanding, respectively                                          103,952             81,521
 Additional paid-in capital                                                 135,358,848        113,435,479
 Accumulated other comprehensive income                                      84,157,758            (10,107)
 Accumulated deficit                                                       (121,850,466)       (85,658,567)
 Treasury stock, at cost                                                             --           (193,990)
                                                                          -------------      -------------
        Total stockholders' equity                                           97,770,102         27,654,366
                                                                          -------------      -------------

        Total liabilities and stockholders' equity                        $ 121,725,931      $  39,412,621
                                                                          =============      =============
</TABLE>
           See accompanying notes to consolidated financial statements.

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

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                               TRANSITION
                                                             YEAR ENDED       PERIOD ENDED        YEAR ENDED
                                                               JUNE 30,          JUNE 30,         OCTOBER 31,
                                                                2000              1999              1998
                                                            ------------      ------------      ------------
<S>                                                         <C>               <C>               <C>
Revenue:
 Equipment sales                                            $  6,983,787      $    875,957      $ 18,038,619
 Service income                                                  413,209           706,504         1,104,342
                                                            ------------      ------------      ------------
                                                               7,396,996         1,582,461        19,142,961
                                                            ------------      ------------      ------------
Costs and expenses:
 Cost of equipment sales                                       4,867,519         1,517,323        15,523,282
 Cost of service income                                          148,221           445,585           238,837
 General and administrative expenses                          19,261,352         6,643,924        11,397,741
 Research and development expenses                                    --                --         1,092,316
 Non-cash compensation expense                                 1,905,419                --                --
 Expenses associated with investments                          1,944,743           550,000                --
 Reversal of warranty, maintenance & commission accrual               --        (7,151,393)               --
 Special charges                                               2,156,205         2,485,660           400,024
 Amortization of intangibles                                     912,553            74,981                --
                                                            ------------      ------------      ------------
                                                              31,196,012         4,566,080        28,652,200
                                                            ------------      ------------      ------------

        Operating loss                                       (23,799,016)       (2,983,619)       (9,509,239)

Other:
 Interest expense                                             (5,948,347)          (74,684)          (11,954)
 Interest income                                                 655,194         1,060,229         2,251,055
 Equity in loss of nonconsolidated affiliates                (10,345,210)         (195,704)               --
 Gain on sale of assets                                               --           133,396                --
 Other income (expense)                                          (14,339)           61,252            10,179
                                                            ------------      ------------      ------------

        Net loss before minority interest                    (39,451,718)       (1,999,130)       (7,259,959)

 Minority interest                                             3,259,819          (376,705)               --
                                                            ------------      ------------      ------------

        Net loss                                            $(36,191,899)     $ (2,375,835)     $ (7,259,959)

Cumulative dividend on preferred stock                          (187,415)          (33,333)               --

Redemption of preferred stock                                    509,183                --                --
                                                            ------------      ------------      ------------

        Net loss attributable to common shareholders        $(35,870,131)     $ (2,409,168)     $ (7,259,959)
                                                            ============      ============      ============
Net loss per share: basic and diluted                       $      (3.64)     $      (0.30)     $      (0.82)
                                                            ============      ============      ============
Weighted average shares outstanding: basic and diluted         9,842,392         8,124,186         8,899,506
                                                            ============      ============      ============
</TABLE>
          See accompanying notes to consolidated financial statements.


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

    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                         CLASS A                CLASS B             SERIES A          SERIES C
                                                       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 October 31, 1997                     9,056,009   $ 90,561   1,244,445   $ 12,445       --    $ --        --    $ --
Issuance of common stock pursuant to
 bonus plan                                           93,864        939          --         --       --      --        --      --
Treasury stock purchases (844,667 shares)                 --         --          --         --       --      --        --      --
Comprehensive income (loss):                              --
  Unrealized gains on available for sale
   securities                                             --         --          --         --       --      --        --      --
  Net loss                                                --         --          --         --       --      --        --      --
                                                  ----------   --------  ----------   --------   ------    ----     -----    ----

Balance as of October 31, 1998                     9,149,873   $ 91,500   1,244,445   $ 12,445       --    $ --        --    $ --
Contribute to capital Class B shares held
 in escrow                                                --         --  (1,066,667)   (10,667)      --      --        --      --
Voluntary conversion of Class B shares to
 Class A shares                                      266,667      2,667    (177,778)    (1,778)      --      --        --      --
Exercise of stock options                              2,426         24          --         --       --      --        --      --
Treasury stock purchases (78,600 shares)                  --         --          --         --       --      --        --      --
Issue of Series A preferred stock                         --         --          --         --    3,000      30        --      --
Issue of Class A warrants                                 --         --          --         --       --      --        --      --
Compensation expense                                      --         --          --         --       --      --        --      --
Unearned compensation, net                                --         --          --         --       --      --        --      --
Equity attributable to minority interest                  --         --          --         --       --      --        --      --
Retirement of Treasury Stock                      (1,267,001)   (12,670)         --         --       --      --        --      --
Comprehensive income (loss):                              --
  Unrealized loss on available for sale
   securities                                             --         --          --         --       --      --        --      --
  Net loss                                                --         --          --         --       --      --        --      --
                                                  ----------   --------  ----------   --------   ------    ----     -----    ----

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          --   $     --       --    $ --     1,000    $ 10
                                                  ==========   ========  ==========   ========   ======    ====     =====    ====

                                                                       ACCUMULATED
                                                        ADDITIONAL        OTHER                                         TOTAL
                                                         PAID-IN      COMPREHENSIVE    ACCUMULATED      TREASURY     STOCKHOLDERS'
                                                         CAPITAL         INCOME          DEFICIT         STOCK          EQUITY
                                                         -------         ------          -------         -----          ------

Balance as of October 31, 1997                        $112,154,110     $        --    $ (76,022,773)   $        --   $ 36,234,343
Issuance of common stock pursuant to
 bonus plan                                                186,790              --               --             --        187,729
Treasury stock purchases (844,667 shares)                       --              --               --     (2,315,983)    (2,315,983)
Comprehensive income (loss):
  Unrealized gains on available for sale securities             --           6,754               --             --          6,754
  Net loss                                                      --              --       (7,259,959)            --     (7,259,959)
                                                      ------------     -----------    -------------    -----------   ------------

Balance as of October 31, 1998                        $112,340,900     $     6,754    $ (83,282,732)   $(2,315,983)  $ 26,852,884
Contribute to capital Class B shares held
 in escrow                                                  10,667              --               --             --             --
Voluntary conversion of Class B shares to
 Class A shares                                               (889)             --               --             --             --
Exercise of stock options                                    4,220              --               --             --          4,244
Treasury stock purchases (78,600 shares)                        --              --               --       (193,990)      (193,990)
Issue of Series A preferred stock                        4,079,970              --               --             --      4,080,000
Issue of Class A warrants                                  391,802              --               --             --        391,802
Compensation expense                                       120,320              --               --             --        120,320
Unearned compensation, net                                 (73,449)             --               --             --        (73,449)
Equity attributable to minority interest                (1,134,749)             --               --             --     (1,134,749)
Retirement of Treasury Stock                            (2,303,313)             --               --      2,315,983             --
Comprehensive income (loss):
  Unrealized loss on available for sale securities              --         (16,861)              --             --        (16,861)
  Net loss                                                      --              --       (2,375,835)            --     (2,375,835)
                                                      ------------     -----------    -------------    -----------   ------------

Balance as of June 30, 1999                           $113,435,479     $   (10,107)   $ (85,658,567)   $  (193,990)  $ 27,654,366
Exercise of stock options                                  563,386              --               --             --        564,709
Issuance of stock for purchase of Series Notes           1,647,812              --               --             --      1,653,626
Issuance of stock to officers and directors              2,669,495              --               --             --      2,684,938
Issuance of warrants and stock to third parties
 for services and in connection with financing           1,949,223              --               --             --      1,949,448
Treasury stock purchases                                        --              --               --     (1,394,960)    (1,394,960)
Issuance of Series C preferred stock                     9,847,405              --               --             --      9,847,415
Redemption of Series A preferred stock                  (3,570,787)             --               --             --     (3,570,817)
Conversion of Note Payable to TNCi common stock            399,800              --               --             --        399,800
Unit purchase options                                    2,109,430              --               --             --      2,111,119
TNCi purchase of outstanding warrants                     (296,036)             --               --             --       (296,036)
Advance under equity purchase agreement                    447,544              --               --             --        447,544
Net issuance of TNCi commitment shares associated
 with equity purchase agreement                            606,133              --               --             --        606,133
Beneficial conversion on convertible notes               4,000,000              --               --             --      4,000,000
Compensation expense related to stock option
 modifications                                             278,318              --               --             --        278,318
Issuance of warrants to related party                    2,324,195              --               --             --      2,324,195
Fractional shares paid for stock dividend                     (519)             --               --             --           (519)
Retirement of treasury stock                            (1,583,125)             --               --      1,588,950             --
Issuance of stock in legal settlements                     972,409              --               --             --        976,171
Equity attributable to minority interest                  (441,314)             --               --             --       (441,314)
Comprehensive income (loss):
  Gain/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                                                      --              --      (36,191,899)            --    (36,191,899)
                                                      ------------     -----------    -------------    -----------   ------------

Balance as of June 30, 2000                           $135,358,848     $84,157,758    $(121,850,466)   $        --   $ 97,770,102
                                                      ============     ===========    =============    ===========   ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-5
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                          TRANSITION
                                                                        YEAR ENDED      PERIOD ENDED      YEAR ENDED
                                                                          JUNE 30,         JUNE 30,       OCTOBER 31,
                                                                           2000             1999             1998
                                                                       ------------     ------------     ------------
<S>                                                                    <C>              <C>              <C>
Cash flows from operating activities:
 Net loss                                                              $(36,191,899)    $ (2,375,835)    $ (7,259,959)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation and amortization                                           2,080,472          394,317        1,338,017
  Provision for doubtful accounts                                                --           30,092            9,869
  Change in inventory valuation allowance                                        --         (892,010)              --
  Equity in loss of nonconsolidated affiliate                            10,345,210          195,704               --
  Non-cash expenses associated with investments                           1,944,743          550,000               --
  Loss applicable to minority interest                                   (3,259,819)         376,705               --
  Special charges                                                         2,156,205        2,365,340         (606,507)
  Gain on sale of Johnny Valet, Inc.                                             --         (133,396)              --
  Loss on sale of assets held for sale                                       37,893               --               --
  Loss on sale of furniture                                                  44,300               --               --
  Non-cash compensation expense                                           1,905,419          139,649               --
  Non-cash expenses                                                       5,729,936               --               --
  Loss on disposals of property and equipment                                    --               --        1,006,531
  Reversal of warranty, maintenance and commission accruals                      --       (7,151,393)              --
 Changes in assets and liabilities, net of acquisition:
  (Increase) decrease in accounts receivable                                 72,538         (560,439)       4,505,074
  (Increase) decrease in inventories                                       (957,625)       1,897,437        5,105,334
  Increase in note receivable                                                    --               --         (447,939)
  Increase in prepaid expenses, other current assets and other assets    (1,907,400)        (152,919)        (532,338)
  Increase (decrease) in accounts payable                                 7,763,641       (1,218,791)      (4,284,167)
  Increase (decrease) in accrued liabilities                                531,826          153,682         (892,345)
  Increase in deferred revenue                                              374,234        1,138,048       (1,930,882)
  Increase (decrease) in accrued product warranties                         141,796               --          758,321
  Decrease in accrued litigation settlement                                (125,000)
                                                                       ------------     ------------     ------------
        Net cash used in operating activities                          $ (9,313,531)    $ (5,243,809)    $ (3,230,991)
                                                                       ------------     ------------     ------------
Cash flows (for) from investing activities:
 Maturities of investment securities                                      1,450,079        1,049,995        2,468,880
 Purchases of investment securities                                      (1,839,643)      (3,891,176)      (4,015,616)
 Sales of investment securities                                           4,994,422        1,913,768               --
 Investments in consolidated affiliates                                 (10,988,268)      (7,572,409)              --
 Payments received on related party note receivable                          42,381          509,391               --
 Issuance of related party note receivable                                       --          (75,000)              --
 Purchases of property and equipment                                    (18,254,276)         (56,255)         (77,013)
 Proceeds from sale of equipment                                            799,638            7,200            3,620
 Proceeds from sale of Donativos                                          1,216,155               --               --
 Proceeds from sale of assets held for sale                                 762,107               --               --
 Decrease (Increase) in restricted cash                                     645,988         (373,425)      (1,039,311)
 Purchase of Johnny Valet, Inc.                                                  --               --         (688,736)
 Proceeds from sale of Johnny Valet, Inc.                                        --          750,000               --
 Payments to purchase Series A, D and E notes                              (610,000)              --               --
                                                                       ------------     ------------     ------------
        Net cash used in investing activities                          $(21,781,417)    $ (7,737,911)    $ (3,348,176)
                                                                       ------------     ------------     ------------
Cash flows from financing activities:
 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)        (193,990)      (2,315,983)
 Payments on capital lease obligations                                           --               --          (80,753)
 Payments on notes payable                                                 (790,092)        (201,840)              --
 Net borrowings under Secured Credit Facility                             6,327,730               --               --
 Issuance of stock to directors and officers                              2,684,938               --               --
 Advances under equity purchase agreement                                   500,000               --               --
 Re-purchase of outstanding warrants                                       (296,040)              --               --
 Advances from related party                                                800,000
 Proceeds from issuance of common stock                                          --            4,244               --
 Employee stock option purchases                                            564,710               --               --
 Proceeds from sale of series A 8% Convertible preferred stock, net              --          980,030               --
                                                                       ------------     ------------     ------------
        Net cash provided by (used in) financing activities            $ 20,581,588     $    588,444     $ (2,396,736)
                                                                       ------------     ------------     ------------

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

        Net decrease in cash and cash equivalents                       (11,759,974)     (12,393,276)      (8,975,903)

Cash and cash equivalents at beginning of period                         15,521,275       27,914,551       36,890,454
                                                                       ------------     ------------     ------------

Cash and cash equivalents at end of period                             $  3,761,301     $ 15,521,275     $ 27,914,551
                                                                       ============     ============     ============
</TABLE>
          See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

(a) DESCRIPTION OF BUSINESS

     Global   Technologies,   Ltd.   (formerly   known  as  Interactive   Flight
Technologies,  Inc.), and subsidiaries (the "Company" or "Global" or "GTL") is a
diversified  technology-oriented  operating  company that  develops and operates
investments  in the  areas  of  networking  solutions,  e-commerce,  interactive
entertainment,  telecommunications  and  gaming.  The  most  significant  of the
Company's subsidiaries is The Network Connection,  Inc. ("TNCi").  TNCi designs,
manufactures,   installs  and  maintains  advanced,  high-end,  high-performance
computer  servers and  interactive,  broad-band  information  and  entertainment
systems,  and procures and provides the content  available  through the systems.
TNCi's targeted  markets for its products are hotels and time-share  properties,
cruise ships,  educational  institutions  and  corporate  training and passenger
trains.  TNCi was acquired by the Company  effective May 18, 1999.  (May 1, 1999
for accounting  purposes).  Prior to the Transaction with TNCi, the consolidated
financial   statements  for  all  periods  presented  included  the  results  of
operations of the Company's Interactive  Entertainment  Division ("IED"),  which
was the primary business of the Company.

(b) PRINCIPLES OF CONSOLIDATION

     The  consolidated  financial  statements  include  the  accounts  of Global
Technologies,  Ltd. and its  wholly-owned  subsidiaries:  GTL Subco,  Inc.,  GTL
Lottoco,  Inc., GTL Investments,  GlobalTech  Holdings  Limited,  GTL Management
Limited, GTL Leasing Limited, Lottery Sales Company Limited,  Interactive Flight
Technologies  (Gibraltar)  Limited,  and MTJ Corp.; and the  majority-owned  and
controlled  subsidiary TNCi. The ownership interest of minority  shareholders in
TNCi  is  recorded  as  "minority  interest"  on the  accompanying  consolidated
financial  statements.  All significant  intercompany  accounts and transactions
have been eliminated.

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

     The 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,  has 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

                                      F-7
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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) CHANGE IN FISCAL YEAR END

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

(e) STOCK SPLITS AND STOCK DIVIDENDS

     On January 5, 2000, the Board of Directors  approved a three-for-two  stock
split to be effected by way of a stock dividend of one share for each two shares
of the Company's  Class A Common Stock held by  stockholders of record as of the
close of business February 15, 2000. The dividend was paid on February 29, 2000;
fractional shares have been paid out in cash.

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

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

(f) 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.

(g) INVESTMENT SECURITIES

     Investment  securities  consist of  corporate  equity  securities  and debt
securities with a maturity greater than three months at the time of purchase. 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 as  available-for-sale  and carried at fair
value,  based on quoted market  prices.  The net  unrealized  gains or losses on
these   investments  are  reported  in   stockholders'   equity.   The  specific
identification  method is used to compute the  realized  gains and losses on the
investment securities.

(h) INVENTORIES

     Inventories  consisting principally of entertainment network components are
stated at the lower of cost (first-in,  first-out  method) or market. As of June
30, 1999, inventories consisted of $1.4 million of finished goods.

(i) INTANGIBLES

     Intangibles  consist of goodwill and  trademarks.  Goodwill  represents the
excess of the purchase price over the fair value of the net assets  acquired and
is amortized over 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. (See Note 20(e)).  Goodwill amortization expense was
$896,287 and $73,986 in the year ended June 30, 2000 and the  Transition  period
ended June 30, 1999, respectively.  Had the Company assumed a five-year life for
goodwill   amortization   at  the  Transition   date,   additional   expense  of
approximately  $593,000  (unaudited) would have been recorded for the year-ended
June 30, 2000, and approximately  $712,000 (unaudited) for each of the remaining
years.

                                      F-8
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

     The company  continually  evaluates whether events and  circumstances  have
occurred that indicate the remaining  estimated  useful lives of intangibles may
warrant  revision or that the remaining  balances may not be  recoverable.  When
factors  indicate that 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.

(j) 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.  Guest pay  interactive  systems consist of equipment and related costs of
installation.  Construction in progress  consists of purchased and  manufactured
parts of partially installed guest pay interactive systems.

(k) REVENUE RECOGNITION

     The Company's  revenue derived from sales and  installation of equipment is
recognized upon  installation and acceptance by the customer.  Fees derived from
servicing  installed systems 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 is 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 is recognized ratably over the warranty
period.

(l) DEFERRED REVENUE

     Deferred revenue  represents cash received on advance billings of equipment
sales as allowed under installation and extended warranty contracts.

(m) RESEARCH AND DEVELOPMENT

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

(n) WARRANTY COSTS

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

(o) 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.

                                      F-9
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(p) 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.

(q) 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 the period.  Weighted shares for purposes of the loss per share  calculation
do not include  1,500,000 shares of common stock issuable upon the conversion of
Series A 8% Convertible  Preferred Stock ("Series A Stock") at June 30, 1999 due
to their subsequent redemption, nor 1,600,000 shares placed in escrow at October
31, 1998 due to their contingent issuance and subsequent cancellation. All stock
options and warrants outstanding at June 30, 2000, June 30, 1999 and October 31,
1998  have been  excluded  from the  weighted  average  number of common  shares
outstanding because their inclusion would have been anti-dilutive.

     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 must be
added back to net loss to arrive at net loss  available  to common  shareholders
for  determining  basic net loss per share.  If the  Company had  recorded  this
adjustment in previous quarters, basic and diluted net loss per share would have
been $(.61)  (unaudited) for the three months ended December 31, 1999 and $(.83)
(unaudited) for the three months ended March 31, 2000.

(r) 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.

(s) RECLASSIFICATIONS

     Certain  reclassifications have been made to the 1998 and 1999 consolidated
financial statements to conform to the 2000 presentation.

(t) RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivatives  and Similar  Financial  Instruments and for Hedging
Activities",  to establish  accounting  and reporting  standards for  derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives  as either  assets or  liabilities  on the balance sheet and measure
those instruments at fair value.  This new standard,  as amended by related SFAS
Nos. 137 and 138,  will be effective  for the Company for its fiscal year ending
June 30, 2001. The Company is currently evaluating the impact of SFAS No. 133.

                                      F-10
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In March  2000,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No. 44,  Accounting  for Certain  Transactions  Involving  Stock
Compensation (an  interpretation of APB No. 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  is effective July 1, 2000 and is not expected to
have a material effect on the Company's consolidated financial statements.

(u)  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 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.  For the year ended June 30,  2000,  the
Company  recognized a foreign  currency  transaction loss of $246,938 in general
and administrative  expenses related to a U.S. dollar denominated  obligation of
its UK subsidiary, GTL Leasing, Ltd.

(v)  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 3,000,000 shares of U.S. Wireless  Corporation  Common Stock, which
trades on the Nasdaq National Market. Concentrations of credit risk with respect
to accounts  receivable  result from the Company's current exposure to a limited
customer base.

(w)  MINORITY INTEREST

     Minority  interest in  consolidated  subsidiaries  represents  the minority
shareholders'  proportionate  share of the  equity  in TNCi.  Income  or loss is
allocated  to  minority   interest  based  on  the  weighted   average  minority
shareholders' percentage ownership throughout the period and equity is allocated
based on the ownership  percentage at year-end.  Any difference is recorded as a
reallocation   of  minority   interest  in  the   Consolidated   Statements   of
Stockholders' Equity and Comprehensive Income.

(x) COMPREHENSIVE INCOME

     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) ACQUISITION OF THE NETWORK CONNECTION, INC.

     On May 11, 1999, the Company  acquired from The Shaar Fund, Ltd.  ("Shaar")
1,500 shares of Series B 8% Convertible  Preferred Stock of TNCi, par value $.01
per share,  stated  value $1,000 per share (the "TNCi Series B Shares") and cash
in the amount of $980,000  (net of $50,000 of legal  fees) in  exchange  for (a)
3,000 shares of the Company's Series A 8% Convertible Preferred Stock, par value
$.01 per share,  stated value  $1,000 per share with an estimated  fair value of
$4,080,000 and (b) warrants to purchase  131,250 shares of the Company's Class A

                                      F-11
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common Stock, par value $.01 per share, at an exercise price of $2.00 per share.
In connection with this acquisition,  the Company also received an assignment of
(a) certain  registration  rights under a Registration  Rights  Agreement  dated
October 23, 1998 between TNCi and Shaar (the  "Registration  Rights  Agreement")
and (b) certain  rights of first  refusal  held by Shaar with  respect to future
TNCi financings.

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

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

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

     On May 9, 2000,  pursuant to the  indemnification  provisions  of the Asset
Purchase and Sale  Agreement,  Global  notified  TNCi of several  violations  of
representation and warranties contained in the Agreement,  including undisclosed
liabilities.  Accordingly,  previously  recognized  fixed assets and  unrecorded
liabilities  were recorded  with an  adjustment  to goodwill of $490,702.  These
violations  require  additional  shares be issued to Global as compensation.  On
September  27,  2000 TNCi  agreed to issue an  additional  270,081  unregistered
shares to Global in consideration of the indemnification provisions.

     The Company has  consolidated  the results of  operations  of TNCi from the
date of acquisition.  TNCi is a  majority-owned  subsidiary of the Company whose
ownership,  through a combination  of the  Transaction  described  above and the
Company's purchase of TNCi's Series B Shares and 110,000 shares of TNCi's common
stock from third party  investors,  approximates  79% of TNCi on an if-converted
common stock basis.

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

                                      F-12
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       Purchase Price:
        Cash                                                        $ 4,250,000
        Net liabilities of IED contributed                           (4,012,430)
                                                                    -----------
              Total                                                     237,570
                                                                    -----------
       Assets acquired and liabilities assumed:
        Historical book value of net liabilities                     (2,457,723)
       Fair value adjustments:
        Inventory                                                    (1,280,847)
        Property                                                     (1,246,146)
        Other Assets                                                   (430,567)
        Liabilities                                                    (672,506)
                                                                    -----------
             Total fair value of liabilities assumed                 (6,087,789)
                                                                    -----------
       Excess of fair value of TNCi Series B
        8% Preferred Stock and Series C
        8% Preferred Stock over its recorded value                   (1,501,000)
       Purchase of Common Stock of TNCi                                (254,658)
                                                                    -----------
        Excess of purchase price over fair value of net
        Liabilities assumed (goodwill)                              $ 7,605,877
                                                                    ===========

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

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

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

                                           TRANSITION
                                          PERIOD ENDED         YEAR ENDED
                                          JUNE 30, 1999     OCTOBER 31, 1998
                                          -------------     ----------------
       Revenue                             $ 1,566,000        $24,146,000
       Net loss                            $11,578,000        $17,590,000
       Net loss per share                  $      1.43        $      1.97

(3) INVESTMENT SECURITIES

     Investments are classified according to the applicable accounting method at
June 30, 2000 and 1999.  Market  value  reflects  the price of  publicly  traded
securities  at the close of business at the  respective  date.  Unrealized  gain
(loss)  reflects the excess  (deficit) of market  value over  carrying  value of
publicly traded securities classified as available for sale.

                                      F-13
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                        GROSS         GROSS
                                                      UNREALIZED    UNREALIZED
                                       AMORTIZED       HOLDING       HOLDING         FAIR
                                          COST          GAINS        LOSSES          VALUE
                                      -----------    -----------    ---------     -----------
<S>                                   <C>            <C>            <C>           <C>
     JUNE 30, 2000
     Available-for-sale:
       Corporate equity securities    $ 3,037,269    $61,087,731    $      --     $64,125,000
                                      ===========    ===========    =========     ===========
     JUNE 30, 1999
     Available-for-sale:
       Corporate debt securities      $ 4,604,858    $        --    $ (10,107)    $ 4,594,751
                                      ===========    ===========    =========     ===========
</TABLE>

     Corporate equity  securities  consist of 3,000,000 shares of U.S.  Wireless
Corporation  Common Stock.  Corporate debt securities consist of corporate bonds
with a maturity greater than three months at the time of purchase.

     The following summarizes the Company's non-current investments at:

                                                              JUNE 30,
                                                   -----------------------------
                                                      2000               1999
                                                   ----------         ----------
     Equity Affiliates (Approx. ownership %)
       Inter Lotto (UK) Ltd. (27.5%)               $       --         $1,050,775
       Donativos S.A. de C.V. (24.5%)                      --          1,664,555
                                                   ----------         ----------
                                                   $       --         $2,715,330
     Cost Affiliates
       U.S. Wireless Corporation                   $       --         $3,037,269
       Shop4cash.com                               $   75,000         $       --
                                                   ----------         ----------
     Total Non-Current Investments                 $   75,000         $5,752,599
                                                   ==========         ==========

(a) U.S. WIRELESS CORPORATION

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

     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 has not been
registered  under the  Securities  Act of 1934 and any sales by the  Company are
subject to the limitations of Rule 144.

     Due to the expiration of the one-year holding period,  the Company can sell
its shares of U.S.  Wireless Common Stock under Rule 144. As the Company intends
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 are 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.  Changes in the market  price of U.S.  Wireless  Common  Stock will
result in future  adjustments to unrealized  gains or losses on this investment.
As of  September  25, 2000,  the market price per common share of U.S.  Wireless
Common Stock was $16.81, resulting in a fair market value of $50.4 million.

                                      F-14
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(b) INTER LOTTO (UK) LIMITED

     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 accounts for this
investment under the equity method. The balance of the shares of Inter Lotto are
owned by seven shareholders.

     Inter Lotto has a license  granted by the Gaming Board for Great Britain to
operate daily  lotteries on behalf of charities  throughout  the UK.  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  manages the  operations  of the  lotteries  and Inter Lotto  retains
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 operates the lottery,  including selecting
the game and managing the network. In exchange, GTL Management retains a portion
of the revenues generated from lottery ticket sales.

     In December  1999, the Company  determined  that it retains the majority of
the financial risk related to Inter Lotto and, accordingly, has 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.  As
such, 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. (See Note 6.)

     During the year ended June 30, 2000 and the  Transition  Period  ended June
30, 1999, the Company recorded its proportionate  share of losses of Inter Lotto
and Equity Goodwill amortization of $10,204,125 and $167,493 respectively, which
have  been  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  Gibraltar,  other  partners in the  venture  included  Regal  Gaming and
Entertainment,  Inc., a Minnesota corporation ("Regal Gaming"), 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.

     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

                                      F-15
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 and the  Transition  Period  ended June
30, 1999, the Company  recorded its  proportionate  share of losses of Donativos
and Equity Goodwill  amortization of $141,085 and $28,211,  respectively,  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 is being
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  is seeking  additional
financing for working  capital  purposes of $300,000 from a group of its current
stockholders,  which  includes the Company.  It plans to raise these  additional
funds through the sale of common stock and has 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.

(4) RESTRICTED CASH

     At June 30, 2000 and 1999, the Company held restricted cash of $766,748 and
$1,412,736,  respectively. The Company held $475,915 and $446,679 as of June 30,
2000 and 1999, respectively, in a trust fund for payments, which may be 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 a
lease for the Company's  offices in New York. At June 30, 1999,  restricted cash
also  included  $52,612  held in trust for  severance  payments to three  former
executives of the Company and $913,445  held in a certificate  of deposit with a
commercial bank as collateral for a letter of credit issued to secure  repayment
of gaming  equipment  purchased by IFT  Gibraltar  and leased to  Donativos.  In
February 2000, the Company paid for the equipment  purchases in full,  cancelled
the letter of credit and had the restricted cash returned to the Company.

                                      F-16
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) ASSETS HELD FOR SALE

     In  connection  with the  acquisition  of TNCi,  the Company  relocated the
corporate  offices and production  capabilities of TNCi to its Phoenix,  Arizona
offices. Accordingly, as of June 30, 1999, certain assets were recorded at their
net realizable  value and classified as assets held for sale. In September 1999,
TNCi sold one of its two buildings in Alpharetta,  Georgia.  The net proceeds of
approximately  $390,000 from the sale,  plus  additional  cash of  approximately
$80,000,  was used by the Company to repay a note payable due April 2001, in the
principal  amount of  $470,000.  The sale of the  second  building  occurred  in
November  1999.  The net proceeds of  approximately  $367,000 from the sale were
used to retire a note payable due 2009 in the principal amount of $220,508.

 (6) PROPERTY AND EQUIPMENT

     Property and equipment consist of the following:

                                                          JUNE 30,
                                             --------------------------------
                                                 2000                1999
                                             ------------        ------------
     Leasehold improvements                  $    831,388        $    261,668
     Purchased software                           188,476             149,703
     Furniture                                    414,890             173,460
     Equipment                                 15,090,614           1,700,462
     Guest Pay Interactive Systems:
      Installed                                   467,885                  --
      Construction in progress:
       System components                          967,215                  --
       Work in progress                         1,009,907                  --
                                             ------------        ------------
                                               18,970,375           2,285,293
     Less accumulated depreciation
      and amortization                         (1,747,418)           (915,901)
                                             ------------        ------------
                                             $ 17,222,957        $  1,369,392
                                             ============        ============

     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  Agreements  between GTL Management  and Inter Lotto.  The Company has
continued use of the Inter Lotto lottery license through  December 31, 2000, and
is  currently  evaluating  strategic  alternatives  for the  use of the  lottery
network.  The network  consists of a central  computer system and  approximately
3,000 gaming terminals placed with third party retailers  remotely  connected to
the  central  system  via  wireless  equipment.  The base cost of the system was
approximately  $12.3 million,  of which approximately $2.9 million has yet to be
paid as of June 30, 2000. The balance outstanding is accruing interest at a rate
of one and  one-half  percent  per month.  Pending  its review of its  strategic
alternatives  for the network,  the Company is evaluating  the carrying value of
the network  equipment.  During the fiscal first  quarter  ending  September 30,
2000,  the Company may be required to record an  impairment  loss and adjust the
carrying value of the equipment to fair value.  The  impairment  loss may have a
material effect on the financial statements.

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

                                      F-17
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) INTANGIBLES

     Intangibles consist of the following:

                                                          JUNE 30,
                                             --------------------------------
                                                 2000                1999
                                             ------------        ------------
     Goodwill                                 $ 7,605,876         $ 7,115,174
     Trademarks                                    79,613              79,613
                                              -----------         -----------
                                                7,685,489           7,194,787
     Less accumulated amortization               (987,534)            (74,981)
                                              -----------         -----------
                                              $ 6,697,955         $ 7,119,806
                                              ===========         ===========

 (8) ACCRUED LIABILITIES

     Accrued liabilities consist of the following:

                                                          JUNE 30,
                                             --------------------------------
                                                 2000                1999
                                             ------------        ------------

     Due to related parties (See Note 15)     $1,419,716          $1,891,123
     Other accrued expenses                    2,096,296             401,486
                                              ----------          ----------
                                              $3,516,012          $2,292,609
                                              ==========          ==========

                                      F-18
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(9) NOTES PAYABLE

     Notes payable consists of the following:

<TABLE>
<CAPTION>
                                                                                            JUNE 30,
                                                                                  ---------------------------
                                                                                     2000             1999
                                                                                  -----------     -----------
<S>                 <C>                                                           <C>             <C>
     Secured Credit Facility due on demand, interest
      at LIBOR plus 1.25%                                                         $ 6,309,385     $        --
     Secured Convertible Notes due December 7, 2001, interest
      at 6%, convertible into common stock of the Company                           4,000,000              --
     Series A, D and E Notes                                                               --       2,386,048
     Note payable due September 5, 1999, interest at 7%, convertible into
      TNCi common stock at the option of the Company                                       --         400,000
     Note payable due in varying installments through 2009, interest at
      Prime plus 2%, collateralized by certain certain commercial property
      and personally guaranteed by two shareholders                                        --         220,508
     Note payable due and payable April 19, 2001, interest at 16% payable
      monthly, collateralized by certain commercial property                               --         470,000
     Notes payable due in varying installments through 2000, interest ranging
      from 6.9% to 11% collateralized by vehicles                                       4,744          14,880
                                                                                  -----------     -----------
             Total                                                                 10,314,129       3,491,436
     Less current portion                                                           6,314,129          24,391
                                                                                  -----------     -----------
                                                                                  $ 4,000,000     $ 3,467,045
                                                                                  ===========     ===========
</TABLE>

     Aggregate maturities of notes payable as of June 30, 2000 are as follows:

              2001                      $ 6,314,129
              2002                        4,000,000
                                        -----------
                                        $10,314,129
                                        ===========

(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)  (7.214% at June
30, 2000) plus 1.25%,  are payable upon demand by Merrill Lynch.  As of June 30,
2000,  approximately  $6.3  million was  outstanding  under the  Secured  Credit
Facility.  To secure such  borrowing,  the Company has 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

                                      F-19
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.
As of September 25, 2000, the outstanding balance of the Secured Credit Facility
was approximately  $7.0 million,  and Mr. Gross'  collateral  remains 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 $1,526,527  for the year ended June 30,
2000,  related to the  estimated  fair  value of the  warrants  granted  for the
collateral pledged as of June 30, 2000.

(b) 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  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.

     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
four-year  term and an  exercise  price  of $4.00  per  share.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(c) SERIES NOTES

     The Series A, D and E Notes  ("Series  Notes")  were issued by TNCi in 1998
prior to the  Transaction.  The  Series  Notes all had  original  maturities  of
approximately  135 days with interest at approximately 7% to 8% per annum.  TNCi
could  choose to repay such Notes in cash  subject to a payment  charge equal to
approximately  7% of the face  amount of the Note or TNCi could elect to convert
the Series  Notes into TNCi  preferred  stock which is  convertible  into common
stock at various  discounts.  In July and August 1999, the Company purchased all
of the  Series  A and E Notes  and the  Series  D Notes  respectively,  from the
holders of such  notes.  Concurrent  with such  purchase  by the  Company,  TNCi
executed several  allonges to the Secured  Promissory Note, which cancelled such
Series Notes and rolled the principal balance, plus accrued interest,  penalties
and  redemption  premiums on the Series Notes into the principal  balance of the
Secured  Promissory Note.  Subsequent to May 18, 1999,  Global had also advanced
working  capital to TNCi in the form of intercompany  advances.  In August 1999,
TNCi  executed  an  allonge to the  Secured  Promissory  Note  which  rolled the
intercompany  advances into the principal balance of the Secured Promissory Note
and granted Global the ability to convert the Secured  Promissory  Note directly
into shares of TNCi's  Common Stock,  without first  converting to TNCi Series C
share, as an administrative convenience.

     On August 24, 1999,  the Board of Directors  approved the conversion of the
Secured Promissory Note into shares of the TNCi's Common Stock at a 33% discount
to the  market  price of the common  stock.  Such  conversion,  to the extent it
exceeded  approximately  one million shares of the TNCi's Common Stock on August
24, 1999, was contingent  upon  receiving  shareholder  approval to increase the
authorized  share capital of the TNCi. This increase in authorized share capital
was  subsequently  approved at the September 17, 1999 Special  Meeting of TNCi's
shareholders. Accordingly, in December 1999, TNCi issued 4,802,377 shares of its
Common Stock to Global based on the conversion date of August 24, 1999.

(d) OTHER NOTES PAYABLE

     In October  1999,  the  convertible  note payable due September 5, 1999 was
converted into 200,000 shares of TNCi's common stock at $2 per share.

     In  September  1999,  TNCi  sold one of its two  buildings  in  Alpharetta,
Georgia.  The net  proceeds  of  approximately  $390,000  from  the  sale,  plus
additional cash of approximately  $80,000,  was used by the Company to repay the
note payable due April 2001,  in the principal  amount of $470,000.  The sale of
the second building occurred in November 1999. The net proceeds of approximately
$367,000  from the sale  were used to retire  the note  payable  due 2009 in the
principal amount of $220,508.

(10) 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%.  The
Trusts are  controlled by the Company's  Chairman and Chief  Executive  Officer,
Irwin L. Gross.

     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 mature on December 31, 2000 and bear interest at
9.0%.

     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 $136,743 was amortized
into interest expense for the year ended June 30, 2000.

                                      F-21
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(11) 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.  As of June 30, 2000,  338,875
stock options under the 1994 Plan  remained  available for grant.  During fiscal
1999 no stock options were granted under the Plan.

     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
provides the Board of Directors  with the  discretion to determine  when options
granted  thereunder  shall become  exercisable.  During  fiscal  2000,  no stock
options were granted  under the 1997 Plan.  As of June 30, 2000,  108,313  stock
options  under the 1997 Plan remained  available for grant.  During fiscal 1999,
316,047  stock  options  with up to a four-year  vesting  period were granted at
exercise prices ranging from $1.125 to $1.917.

     On February  10,  1998,  the Company  adopted a plan to reduce the exercise
price on the stock options under the Company's  1994 and 1997 Plans on specified
dates to $1.75 provided the holder was still an active employee on the repricing
date. The exercise price on one-half of each  outstanding  option was reduced to
$1.75 on October  10,  1998  pursuant to the plan.  A similar  reduction  in the
exercise price for the remaining half of the options occurred on April 10, 1999,
provided the option holder was still employed by the Company at that time.

     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 15.)

     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 would have been increased to the pro forma amounts indicated below:

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                                 TRANSITION
                                                YEAR ENDED      PERIOD ENDED      YEAR ENDED
                                                 JUNE 30,          JUNE 30,       OCTOBER 31,
                                                   2000              1999            1998
                                               ------------      -----------      -----------
<S>                                            <C>               <C>              <C>
     Net loss:
       As reported                             $(35,870,135)     $(2,409,168)     $(7,259,959)
                                               ============      ===========      ===========
       Pro forma (unaudited)                   $(38,330,112)     $(2,880,868)     $(7,666,463)
                                               ============      ===========      ===========
     Basic and diluted net loss per share:
       As reported                             $      (3.64)     $     (0.30)     $     (0.82)
                                               ============      ===========      ===========
       Pro forma (unaudited)                   $      (3.89)     $     (0.35)     $     (0.86)
                                               ============      ===========      ===========
</TABLE>

     Pro forma net losses  reflect only options  granted  during the fiscal year
ended 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.

     For  purposes of the SFAS No. 123 pro forma net loss and net loss per share
calculations,  the fair value of each option  grant is  estimated on the date of
grant  using  the   Black-Scholes   option-pricing   model  with  the  following
weighted-average  assumptions  used for grants in the year ended June 30,  2000,
the Transition Period ended June 30, 1999 and the year ended October 31, 1998:

                                                   TRANSITION
                                  YEAR ENDED      PERIOD ENDED      YEAR ENDED
                                   JUNE 30,          JUNE 30,       OCTOBER 31,
                                     2000              1999            1998
                                 ------------      -----------      -----------
     Dividend yield                    0%                0%               0%
     Expected volatility           169.7%            100.0%            71.6%
     Risk free interest rate        6.02%             5.67%            5.65%
     Expected lives (years)          5.0               5.0              5.0

     Activity related to the stock option plans is summarized below:

<TABLE>
<CAPTION>
                                                                             TRANSITION
                                                       YEAR ENDED           PERIOD ENDED             YEAR ENDED
                                                     JUNE 30, 2000          JUNE 30, 1999         OCTOBER 31, 1998
                                                  --------------------   --------------------   --------------------
                                                              WEIGHTED               WEIGHTED               WEIGHTED
                                                   NUMBER     AVERAGE      NUMBER    AVERAGE     NUMBER     AVERAGE
                                                     OF       EXERCISE       OF      EXERCISE      OF       EXERCISE
                                                   SHARES      PRICE       SHARES     PRICE      SHARES      PRICE
                                                   ------      -----       ------     -----      ------      -----
<S>                                               <C>         <C>        <C>         <C>        <C>         <C>
     Balance at the beginning of year period      1,123,719   $ 8.49     1,028,415   $11.61     1,066,076   $16.10
      Granted                                     2,075,000     2.26       316,046     1.29       360,748     2.01
      Exercised                                    (132,306)    2.49        (2,425)    1.75            --       --
      Cancelled/Forfeited                          (264,953)   14.28      (218,317)   14.79      (398,409)   14.62
                                                 ----------             ----------             ----------
     Balance at the end of year                   2,801,460     3.45     1,123,719     8.49     1,028,415    11.61
                                                 ==========             ==========             ==========
     Exercisable at the end of year                 788,725     6.60       539,210    15.35       639,467    16.47
                                                 ==========             ==========             ==========
     Weighted-average fair value of option
      granted during the period                  $     2.15             $      .93             $     1.27
                                                 ==========             ==========             ==========
</TABLE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The following table  summarizes the status of outstanding  stock options as
of June 30, 2000:

<TABLE>
<CAPTION>
                                OPTIONS OUTSTANDING                OPTIONS EXERCISABLE
                       --------------------------------------    ----------------------
                                        WEIGHTED
                                        AVERAGE      WEIGHTED                  WEIGHTED
                        NUMBER OF      REMAINING     AVERAGE      NUMBER OF    AVERAGE
        RANGE OF         OPTIONS      CONTRACTUAL    EXERCISE      OPTIONS     EXERCISE
     EXERCISE PRICES   OUTSTANDING    LIFE (YEARS)   PRICE       EXERCISABLE    PRICE
     ---------------   -----------    ------------   -----       -----------    -----
<S>                    <C>              <C>         <C>           <C>         <C>
     $ 1.13 - $ 4.58    2,567,460        8.67        $ 2.13        589,725     $ 2.04
     $11.00 - $16.38       35,500        9.71         16.30            500      11.00
     $19.75               150,000        6.17         19.75        150,000      19.75
     $22.00 - $28.75       48,500        5.63         22.84         48,500      22.84
                        ---------                                 --------
                        2,801,460                                  788,725
                        =========                                 ========
</TABLE>

     At the  discretion  of the  Board  of  Directors,  the  Company  may  allow
optionees to elect to receive shares equal to the market value of the option, in
lieu of delivery of the exercise  price in cash.  The market value of the shares
issued is charged to compensation  expense.  There were no cashless exercises of
options during the year ended June 30, 2000.

(12) 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,  2000,  the  Transition
Period ended June 30, 1999, nor the year ended October 31, 1998.

(13) STOCKHOLDERS' EQUITY

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

(a) COMMON 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.

     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 connection with a stock  repurchase  program  authorized by the Board of
Directors  on December  17,  1997,  the Company  purchased a total of  1,267,000
shares of the  Company's  Class A Common  Stock in open market  activities  at a
total cost of  $2,315,983  through  October 31, 1998.  On October 30, 1998,  the
Board of Directors authorized another repurchase program whereby the Company may
repurchase  up to  1,000,000  shares  of its  Class A  Common  Stock on the open
market. On January 11, 1999, the Company retired all 1,267,000 shares of Class A
Common Stock  described  above. As of June 30, 1999, the Company had repurchased

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

an additional 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 totaling $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.  As of September 25, 2000 the Series C Stock represented
approximately  6.2% of the  common  stock of the  Company  on a fully  converted
basis.

(c) ESCROW SHARES

     As a condition of the Company's  initial public offering in March 1995, the
underwriter  required  that an aggregate of  1,600,000  shares of the  Company's
Class B common stock be designated as escrow  shares.  The escrow shares are not
assignable or transferable  until certain earnings or market price criteria have
been met. As of January 31, 1999,  such criteria had not been met and the shares
were cancelled.

(d) 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.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     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.

(e) WARRANTS

     The following table summarizes warrant activity for the year ended June 30,
2000 and the Transition Period ended June 30, 1999:

<TABLE>
<CAPTION>
                                                           CLASS A      CLASS B     CLASS C    CLASS D     CLASS E
                                                           -------      -------     -------    -------     -------
<S>                                                    <C>            <C>          <C>        <C>       <C>
     Outstanding as of October 31, 1998                           --          --      82,500    82,500       100,000
     Issued in connection with consulting services            75,000          --          --        --            --
     Issued in connection with The Transaction               131,250          --          --        --            --
                                                        ------------   ---------   ---------   -------   -----------
     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
                                                        ============   =========   =========   =======   ===========
     Exercise price                                     $1.92-17.835   $      --   $      --   $    --   $3.00-16.00
                                                        ============   =========   =========   =======   ===========
</TABLE>

     Class A, Class C, Class D and Class E  warrants  entitle  the holder to one
share of Class A common stock. With the exception of the 75,000 Class A warrants
issued in connection with  consulting  services that vest over a 24-month period
ending in April 2001, all  outstanding  warrants are  exercisable as of June 30,
2000.

     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 $8,150 was
amortized into interest expense for the year ended June 30, 2000.

     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.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     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.

     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  and $19,328 as  compensation
expense for the years ended June 30, 2000 and 1999, respectively.

     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. The Company  recorded a special charge of
$120,320 during the Transition Period for this repricing. (See Note 15.)

(f) PROCEEDS FROM EXERCISE OF COMMON STOCK OPTIONS

     During the year ended June 30, 2000 and the  Transition  Period  ended June
30, 1999,  current and former  employees  and directors  exercised  common stock
options  for the  purchase  of  132,306  and 2,426  respectively,  resulting  in
proceeds of $564,710 and $4,244, respectively.

(14) INCOME TAXES

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

<TABLE>
<CAPTION>
                                                   2000              1999           1998
                                                ------------      ---------      -----------
<S>                                             <C>               <C>            <C>
     Computed expected tax benefit              $(12,305,247)     $ 807,784      $ 2,468,386
     Change in federal valuation Allowance       (13,007,270)      (687,890)      (2,127,293)
     Non-deductible payments                              --       (119,894)        (416,498)
     Other                                           873,386             --           75,405
                                                ------------      ---------      -----------
                                                $(24,439,131)     $      --      $        --
                                                ============      =========      ===========
</TABLE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

                                                     2000              1999
                                                 ------------      ------------
     Deferred tax assets:
      Net operating loss carryforward            $ 39,581,215      $ 29,108,815
      Property and equipment                          988,826           843,204
      Deferred start-up costs                         178,944           568,973
      Issuance of stock options and warrants        1,211,868           819,219
      Allowance for bad debts                       4,327,939         1,517,086
      Provision for inventory valuation             3,491,625         3,092,828
      Accrued liabilities                           1,194,894           829,398
      Deferred revenue                                     --           146,398
      Other                                                --           906,293
                                                 ------------      ------------
                                                   50,975,311        37,832,214
     Less:
      Valuation allowance                         (26,536,180)      (28,628,714)
      Valuation allowance related to the
       TNCi acquisition                                    --        (9,203,500)
                                                 ------------      ------------
                                                 $ 24,439,131      $         --
                                                 ============      ============

     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.  Prior to this fiscal year,
Management  had  provided a valuation  allowance  for 100% of the  deferred  tax
assets, as the likelihood of realization could not be determined. In March 2000,
Management  determined  that the  realization  of a portion of the  deferred tax
asset was likely given the realizable gains on its investments in U.S.  Wireless
and TNCi.

     As  of  June  30,  2000,  the  Company  has  a  net  operating  loss  (NOL)
carryforward  for federal  income tax  purposes of  approximately  $104,521,723,
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.

(15) RELATED PARTY TRANSACTIONS

     Prior to the Transaction,  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.

                                      F-28
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     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.

     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
secured   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
(9.5% at June 30, 2000) plus 3%. The Facility  matures in September  2001.  TNCi
paid an origination  fee of $50,000 to Global and will pay an unused line fee of
0.5% per  annum.  The  Facility  is  secured by all of the assets of TNCi and is
convertible  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  of
$1,850,000 of the Facility into 1,233,333  shares of TNCi Common Stock.  At June
30, 2000 the balance on the Facility was $2,350,000.  The outstanding balance on
the  Facility  and  the  related   interest  income  earned  are  eliminated  in
consolidation.

     The Facility and any other  intercompany  balances have been  eliminated in
consolidation  at June 30,  2000.  The  Secured  Promissory  Note and any  other
intercompany balances were eliminated in consolidation of June 30, 1999.

     The  Company's  Chief  Executive  Officer is a  principal  of Ocean  Castle
Investments, LLC ("Ocean Castle") which maintains administrative offices for the
Company's  Chief Executive  Officer,  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 by utilized. Accordingly, TNCi recorded a charge to general
and   administrative   expenses  in  the  Transition   Period  of  $1.6  million
representing  the balance due under such  contracts.  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 will issue 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

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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  granted  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 fair
market  value  has not yet been  determined  and the  options  have not yet been
issued.

     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%.  The
Trusts are  controlled by the Company's  Chairman and Chief  Executive  Officer,
Irwin L. Gross.

     In August and  September  2000 the Trusts  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 mature on December 31, 2000 and bear interest at
9.0%.

     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 155,781  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 $136,743 was amortized
into interest expense for the year ended June 30, 2000.

     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 shares 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.
As of September 25, 2000, the outstanding balance of the Secured Credit Facility
was approximately  $7.0 million,  and Mr. Gross'  collateral  remains 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 $1,526,527  for the year ended June 30,
2000,  related to the  estimated  fair  value of the  warrants  granted  for the
collateral pledged as of June 30, 2000.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     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. To date, the Company has incurred  approximately $106,085
for such costs and expenses.

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

     In June 1999,  the Company  loaned to a vice  president of TNCi $75,000 for
the purpose of assisting in a corporate relocation to the Company's headquarters
in Phoenix, Arizona. TNCi also added other outstanding advances totaling $42,000
to the  principal  amount of the note.  Such  loan is  secured  by assets of the
employee.  The note  matures  in  August  2009 and  bears  an  interest  rate of
approximately 5%.

     The  Company 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. The
Company paid FortuNet  $100,000  during each of the years ended October 31, 1998
and 1997.  As of October 31,  1998,  the  remaining  commitment  of $400,000 was
included in accrued liabilities in the consolidated  balance sheet. TNCi assumed
this  liability in connection  with the  Transaction.  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 exercise  period of
certain warrants and options held by FortuNet and its principal  shareholder,  a
former  director  of the  Company.  The  Company  recorded  a special  charge of
$120,320 during the Transition Period for such repricing.  During the Transition
Period, TNCi had revised its estimated accrual to $200,000, which is included in
accrued  liabilities  at June 30,  1999.  During the year  ended June 30,  2000,
actual  costs  associated  with  this  settlement  were  $43,150  less  than the
estimate.  Accordingly,  TNCi reversed the liability and reduced  administrative
expense.

     During the year ended October 31, 1998, the Company  extended by one year a
consulting  agreement with a former officer of the Company pursuant to which the
Company will pay $55,000 for services  received  during the period November 1999
through October 2000. TNCi assumed the liability for the consulting agreement in
the amount of $55,000 in connection with the  Transaction.  As of June 30, 2000,
$18,000  remained  to be paid,  and is included  in accrued  liabilities  in the
consolidated balance sheet.

     In October 1998, the Company entered into a consulting agreement with First
Lawrence Capital Corp.  (First Lawrence) to perform various  financial  advisory
services  related to ongoing  business  development and  management.  The former
managing  director  of First  Lawrence is also a director  of the  Company.  The
Company retained, on a full time basis as President and Chief Operating Officer,
the  services  of the  former  managing  director  of First  Lawrence  effective
December 12, 1998. Accordingly,  the Company entered into an employment contract
with such  individual.  During the year ended October 31, 1998, the Company paid
$11,846 under the First Lawrence consulting agreement. The Company also executed
a consulting  agreement with the Whitestone  Group,  LLC, a shareholder of First
Lawrence,  and  pursuant  to  the  agreement,  the  Company  paid  $250,000  for
consulting  services  received during fiscal 1998.  During the Transition Period
ended June 30, 1999, the Company also paid $35,803 for office  expenses and rent
of First Lawrence under the terms of the agreement during the Transition Period.
During  the year  ended  June 30,  2000,  the  Company  paid  $43,064  for these
expenses.

     During the year ended October 31, 1998, the Company executed  severance and
consulting  agreements with three former officers  pursuant to which the Company
paid the  former  officers  and set aside  restricted  funds in the  amounts  of
$3,053,642 and $735,000,  respectively. The consulting agreements all expired in
September 1999. Payments totaling $735,000 were made from restricted cash of the
Company through September 1999.  Expenses  associated with these agreements were
charged to general and  administrative  expenses  in the year ended  October 31,
1998.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(16) COMMITMENTS AND CONTINGENCIES

(a) LITIGATION

     FIDELITY AND GUARANTY INSURANCE COMPANY V. INTERACTIVE FLIGHT TECHNOLOGIES,
INC., United States District Court for the District of Minnesota, CV No. 99-410.
This is a reformation action in which the Company's insurer is seeking to reform
an umbrella  policy in the amount of $10.0  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. Plaintiffs 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. The Court has not yet ruled
on the summary judgment motion.

     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  Swissair  MD-11
aircraft involved in the crash was equipped with an entertainment network system
that had been sold to  Swissair  by Global's  predecessor  company,  Interactive
Flight  Technologies,  Inc.  Estates  of the  victims  of the crash  have  filed
lawsuits  throughout  the United States  against  Swissair,  Boeing,  Dupont and
various other parties,  including  Global and TNCi, which has been named in some
of the lawsuits filed on a successor  liability theory. TNCi and Global deny all
liability  for the crash.  TNCi and Global are being  defended  by our  aviation
insurer.

     On September 1, 1999,  SAir Group invited the Company to  participate  in a
conciliation  hearing  before the  Justice of the Peace in Kloten,  Switzerland,
which is the  customary  manner  in  which  civil  litigation  is  initiated  in
Switzerland. The document informing us of the proceeding states that the request
has been filed in connection  with the crash of Swissair Flight 111 primarily in
order to avoid the expiration of any applicable  statutes of limitations  and to
reserve the right to pursue further claims.  The document states that the relief
sought is "possibly  the  equivalent  of CHF  342,000,000  - in a currency to be
designated  by the court;  each plus 5% interest  with effect from  September 3,
1998; legal costs and a participation to the legal fees (of the plaintiff) to be
paid by the defendant."

     BRYAN R. CARR V. THE  NETWORK  CONNECTION,  INC.  AND GLOBAL  TECHNOLOGIES,
LTD.,  Superior Court of Georgia,  Civil Action No.  99-CV-1307.  Bryan R. Carr,
TNCi's 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
TNCi.  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.  TNCi and we 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.
The Company's  motion was granted on August 9, 2000.  As of this date,  Mr. Carr
has not filed an arbitration claim against TNCi or Global,  but on September 20,
2000,  Mr.  Carr sent a letter to the  Company  stating  his demands in hopes of
settlement.

     In September of 1999, the Company 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.  Barington's New York suit
has been stayed pending resolution of the Arizona action. The Company denies all
liability and that any sums are owed to Barington.

     GLOBAL  TECHNOLOGIES,  LTD. V. XCEL CAPITAL,  LLC,  United States  District
Court for the Eastern District of Pennsylvania,  Case No. 00-CV-505.  On January
27, 2000,  the Company filed an action  against XCEL  Capital,  LLC ("XCEL") for

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

specific  performance and breach of contract.  In the action, the Company sought
to compel XCEL to tender  112,500  shares of Global  Class A Common Stock to the
Company at $3.17 per share in accordance with XCEL's  obligations  pursuant to a
put/call  agreement  entered into  between the parties on August 12, 1999.  XCEL
filed  counterclaims.  On September 14, 2000, the Company  settled the action by
agreeing  to issue an  additional  25,000  shares to XCEL and to  register  such
shares for resale  (subject to certain  restrictions on the volume and timing of
sales) by October 31, 2000. No money is being paid to XCEL.

     A  suit  captioned  LODGENET  ENTERTAINMENT   CORPORATION  V.  THE  NETWORK
CONNECTION,  INC.  was filed April 5, 2000 in the  Circuit  Court for the Second
Judicial  Circuit of the State of South  Dakota.  The action arose out of TNCi's
hiring  of  Theodore  P.  Racz,  a  former  LodgeNet  Entertainment  Corporation
employee,  as its Senior Vice  President of the Hotels &  Hospitality  division.
LodgeNet alleged tortious  interference with contract and tortious  interference
with  business  relationships.  LodgeNet  sought to prohibit Mr. Racz from being
employed  by  TNCi,  as well as  damages,  and  fees and  costs.  This  case was
voluntarily  dismissed  without  prejudice  by  LodgeNet  because  there  was no
jurisdiction in South Dakota.

     FIRST  LAWRENCE  CAPITAL  CORP. V. JAMES FOX,  IRWIN GROSS AND  INTERACTIVE
FLIGHT TECHNOLOGIES,  INC., Supreme Court of the State of New York, No. 7196/99.
This is a claim made against the Company  arising from the hiring by the Company
of James Fox, a former First  Lawrence  employee.  First  Lawrence  asserts that
business  opportunities  of First Lawrence were diverted to the Company by James
Fox and the  Company.  This  case has been  settled  for  375,000  shares of the
Company's  common stock.  Additionally,  in connection with the settlement,  the
Company  entered  into a two  year  consulting  agreement  with  First  Lawrence
beginning  February 1, 2000 whereby the Company is paying  $41,667 per month and
in exchange,  First Lawrence will be available to perform management  consulting
services to GTL  Holdings,  Ltd.  (UK).  The Company  accrued  $1.8 million as a
special charge for this settlement during the Transition Period.

     A suit captioned AVNET, INC. V. THE NETWORK CONNECTION, INC., was filed May
17, 2000 in Maricopa County Superior Court,  CV2000-009416.  The suit relates to
invoices for  inventory  purchased  by TNCi in late 1998 and early 1999.  Avnet,
Inc. seeks payment of the invoices,  interest and legal fees.  TNCi has not paid
for the  inventory  purchased  primarily  for  the  following  reasons:  (i) the
inventory  purchased  did not meet  specifications  and thus was not accepted by
TNCi's customer,  and (ii) TNCi is currently  pursuing a separate warranty claim
against Avnet regarding certain other inventory purchased from Avnet.

     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, 2000,  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 March 2010. The future minimum lease commitments
under these leases are as follows:

               YEAR ENDING                 OPERATING
                 JUNE 30,                   LEASES
               -----------                 ---------
                   2001                    1,563,571
                   2002                    1,668,694
                   2003                    1,561,779
                   2004                    1,523,994
                   2005                    1,493,249
                Thereafter                 4,441,619
                                         -----------
                                         $12,252,906
                                         ===========

     Rental  expense  under  operating  leases  totaled  $616,081,  $338,082 and
$960,745 for the year ended June 30, 2000, the Transition  Period ended June 30,
1999, and the year ended October 31, 1998, respectively.

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

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

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

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

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

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Pursuant to an agreement  with  Debonair,  the Company was to  manufacture,
install,  operate,  and  maintain  the  entertainment  network  on six  Debonair
aircraft for a period of eight years from  installation.  In February  1998, the
Company and Debonair signed a Termination Agreement. Pursuant to the Termination
Agreement,  Debonair removed the entertainment network from its aircraft and the
Company  paid  Debonair  $134,235  as full and  final  settlement  of all of its
obligations with Debonair.

     In  connection  with these  agreements  with  Swissair and Debonair and the
absence of any new entertainment  network orders,  the Company recorded property
and equipment  write-downs of $1,006,532  during fiscal 1998, which are included
in special charges on the consolidated statement of operations.

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

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

(d) LETTERS OF CREDIT

     In June  1999,  the  Company  granted a letter  of credit in the  amount of
$913,445 as security for the payment of certain  equipment  purchases made by an
affiliate  of the  Company.  To secure  this  letter of credit,  the Company was
required to provide cash  collateral  with a commercial  bank. In February 2000,
the Company paid for the  equipment  purchases in full,  cancelled the letter of
credit and had the cash collateral returned to the Company.

     In September  1999, the Company granted a letter of credit in the amount of
$290,833 as a security deposit for a lease for the Company's office in New York.
To secure this  letter of credit,  the  Company  was  required  to provide  cash
collateral with a commercial bank.

(e) 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
is $12.3 million,  of which  approximately $2.9 million has yet to be paid as of
June 30, 2000. The balance  remains  outstanding  and is accruing  interest at a
rate of one and one-half percent per month. In addition,  in September 1999, GTL
Management entered into an eight-year  facilities management agreement with ILTS
to  provide  operational  and  technology  support  for the  system.  Under this
agreement,  GTL Management is 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 has  guaranteed the  obligations of GTL Leasing  Limited and GTL
Management Limited under these agreements.

(17) 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.

                                      F-35
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     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,  2000,  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 fair value of current investments is $64,125,000, and represents the
market value of U.S.  Wireless  Common  Stock.  The fair value of the  Company's
non-current  investments  is $75,000,  and  represents  the carrying cost of its
investment  in  Shop4cash.com.  (See Note 3.) 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.

(18) SUPPLEMENTAL FINANCIAL INFORMATION

     Supplemental disclosure of cash flow information is as follows:

<TABLE>
<CAPTION>
                                                                                       TRANSITION
                                                                      YEAR ENDED      PERIOD ENDED       YEAR ENDED
                                                                     JUNE 30, 2000    JUNE 30, 1999    OCTOBER 31, 1998
                                                                     -------------    -------------    ----------------
<S>                                                                   <C>              <C>                 <C>
     Cash paid for interest                                           $   75,126       $   35,624          $ 11,954
     Non-cash investing and financing activities:
      Acquisition:
        Fair value of assets (liabilities) acquired                           --       $ (314,658)         $813,736
        Fair value of preferred stock issued                                  --       $4,080,000          $     --
        Note payable                                                          --       $3,467,045          $125,000
      Modifications to stock option awards                            $  278,318       $       --          $     --
      Issuance of warrants to related party for collateral pledges    $2,324,195       $       --          $     --
      Issuance of warrants for services and in connection with
        financing                                                     $1,949,448       $       --          $     --
      Issuance of stock for services                                  $       --       $       --          $187,729
      Issuance of stock for legal settlements                         $  976,171       $       --          $     --
      Conversion of note payable to TNCi common stock                 $  400,000       $       --          $     --
      Beneficial conversion on Secured Convertible Note               $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       $       --          $     --
</TABLE>

(19) 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
and general  corporate  operations.  TNCi  designs,  manufactures,  installs and
maintains advanced, high-end, high-performance computer servers and interactive,
broad-band  information and entertainment systems, and procures and provides the
content  available  through the systems.  TNCi's systems provide users access to
information, entertainment and a wide array of service options such as movies on
demand,  music  videos,  shopping  for goods and  services,  computer  games and
Internet  access.   General  corporate  operations  consist  of  developing  and
operating affiliate companies,  most of which are engaged in telecommunications,
e-commerce, networking solutions and gaming.

                                      F-36
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Sales of  entertainment  networks by the Company  are  typically  made to a
relatively few number of customers.  This  concentration of business among a few
customers  exposes the Company to significant  risk. For the year ended June 30,
2000, one customer  accounted for 72% of the Company's sales. For the Transition
Period  ended June 30,  1999 and the year ended  October 31,  1998,  a different
customer  accounted  for  91%  and  98% of the  Company's  sales,  respectively.
Outstanding  receivables  from each of the customers  were zero at June 30, 2000
and June 30, 1999.

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

<TABLE>
<CAPTION>
                                                               TRANSITION
                                            YEAR ENDED        PERIOD ENDED        YEAR ENDED
                                           JUNE 30, 2000      JUNE 30, 1999    OCTOBER 31, 1998
                                           -------------      -------------    ----------------
<S>                                       <C>                <C>               <C>
Revenue
      TNCi                                 $   7,091,660      $     958,607      $  18,816,962
      Other                                      305,336            623,854            325,999
                                           -------------      -------------      -------------
                                               7,396,996          1,582,461         19,142,961
     Gross profit (loss)(a)
      TNCi                                     2,162,163           (559,196)         3,279,891
      Other                                      219,093            178,748            100,951
                                           -------------      -------------      -------------
                                               2,381,256           (380,448)         3,380,842
     Operating income (loss)
      TNCi                                   (11,739,631)         2,338,326         (7,232,321)
      Other                                  (12,059,385)        (5,321,945)        (2,276,918)
                                           -------------      -------------      -------------
                                             (23,799,016)        (2,983,619)        (9,509,239)
     General corporate operations
      Gain on sale of assets                          --            133,396                 --
      Equity in loss of non-consolidated
       affiliate                             (10,345,210)          (195,704)                --
      Net interest                            (5,293,153)           985,545          2,239,101
      Other income (expenses)                    (14,339)            61,252             10,179
      Minority interest                        3,259,819           (376,705)                --
                                           -------------      -------------      -------------
                                             (12,392,883)           607,784          2,249,280
                                           -------------      -------------      -------------
     Net loss                              $ (36,191,899)     $  (2,375,835)     $  (7,259,959)
                                           =============      =============      =============
     Total assets
      TNCi                                    13,468,699         14,752,462          4,238,030
      General corporate                      108,257,232         24,660,159         34,026,172
                                           -------------      -------------      -------------

     Total Assets                          $ 121,725,931      $  39,412,621      $  38,264,202
                                           =============      =============      =============
</TABLE>

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

          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
include net property plant and equipment and intangibles  totaling  $10,272,236.
Long-lived  assets located in Europe include net property plant and equipment of
$13,648,676. As of June 30, 1999 and October 31, 1998 all long-lived assets were
located in North America.

                                      F-37
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(20) SUBSEQUENT EVENTS

(a) CONVERSION TNCI SERIES D PREFERRED STOCK

     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.

(b) ISSUANCES OF NOTES PAYABLE AND WARRANTS

     On September 22, 2000,  the Board of Directors  authorized  the issuance of
common  stock  purchase  warrants to purchase  198,318  shares of the  Company's
Common Stock which have been divided  equally  between two trusts  controlled by
Irwin L.  Gross,  the  Chairman  and Chief  Executive  Officer of the Company as
compensation  for various  working  capital  advances  made to the Company  from
August and  September  2000  totaling  $800,000.  On  September  22,  2000,  the
Company's Board of Directors also approved the conversion of these advances into
promissory  notes  from the  Company.  The  number of  warrants  issued for each
advance was based upon the amount  advanced  divided by the closing market price
of the Company's Common Stock on the date of each advance.  The warrants have an
exercise price based upon the closing market price of the Company's Common Stock
on the date of the advance and a term of five years from such date.

     On  September  22, 2000 the Board of Directors  authorized  the issuance of
warrants to purchase  553,978  shares of Class A Common  Stock of the Company to
Irwin L.  Gross,  the  Chairman  and Chief  Executive  Officer of the Company as
compensation for pledging  additional  collateral to secure various  maintenance
calls by Merrill Lynch on the Secured  Credit  Facility.  The number of warrants
issued for each pledge is based upon the amount advanced  divided by the closing
market  price of the  Company's  Common Stock on the date of each  advance.  The
warrants  have an  exercise  price based upon the  closing  market  price of the
Company's  Common Stock on the date of the advance and a term of five years from
such date. The Company recorded  non-cash interest expense of $1,526,527 for the
year ended June 30, 2000,  related to the  estimated  fair value of the warrants
granted for the collateral pledged as of June 30, 2000.

     On September 12, 2000,  the Board of Directors  authorized  the issuance of
common stock purchase warrants to purchase 311,560 shares of TNCi's Common Stock
which have been divided equally between two trusts controlled by Irwin L. Gross,
the  Chairman and Chief  Executive  Officer of the Company as  compensation  for
various working  capital  advances made to TNCi from May 2000 through July 2000.
As of June 30,  2000,  advances  totaled  $800,000  and  additional  advances of
$250,000 have been made  subsequent  to year end. On September 12, 2000,  TNCi's
Board  of  Directors  also  approved  the  conversion  of  these  advances  into
promissory  notes from TNCi. The number of warrants  issued for each advance was
based upon the amount  advanced  divided by the closing  market  price of TNCi's
Common Stock on the date of each advance.  The warrants  have an exercise  price
based upon the closing  market  price of TNCi's  Common Stock on the date of the
advance and a term of five years from such date. The Company  recorded  deferred
financing  cost of $797,668,  of which  $136,743  was  amortized  into  interest
expense for the year ended June 30, 2000.

(c) INTER LOTTO EQUITY TRANSFER

     On August 18, 2000 the  Company  transferred  its equity  interest in Inter
Lotto back to the other 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.  As such,  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. (See Note 3(b).)

                                      F-38
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(d) ISSUANCES OF COMMON STOCK

     In August 2000,  the Company,  on behalf of TNCi,  issued 279,028 shares of
Class A Common  Stock to settle an  outstanding  obligation  with two  principal
stockholders of the Company related to consulting agreements originally executed
by Ocean Castle  during the year ended  October 31,  1998.  TNCi had assumed the
rights and  obligations of Ocean Castle under the agreements in connection  with
the  Transaction.  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,  and  accordingly,  recorded a charge to general  and  administrative
expenses in the Transition  Period of $1.6 million  representing the balance due
under  such  contracts.  As of June 30,  2000  the  outstanding  obligation  was
approximately  $1.3 million.  TNCi will issue 411,146 shares of its common stock
as reimbursement to Global for such settlement.

     On  September  14, 2000,  the Company  settled a specific  performance  and
breach of  contract  action it filed  against  XCEL  Capital,  LLC  ("XCEL")  by
agreeing  to issue an  additional  25,000  shares to XCEL and to  register  such
shares for resale  (subject to certain  restrictions on the volume and timing of
sales) by October 31, 2000. No money is being paid to XCEL. The Company recorded
non-cash  compensation  expense of $125,000 for the year ended June 30, 2000 for
the issuance of the shares.

(e) CARNIVAL AGREEMENT

     In  September  1998,  the Company  entered  into a Turnkey  Agreement  (the
"Carnival  Agreement") with Carnival Corporation  ("Carnival") for the purchase,
installation and maintenance of its advanced cabin  entertainment and management
system for the cruise industry  ("CruiseView(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 in  operational  use from October 1999 through  March 2000.  Under the
terms of the agreement,  the Company 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 the  Company'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 are 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,  the Company had
experienced costs in excess of those  recoverable under the Carnival  Agreement.
Given these costs, and ongoing technical  issues,  the Company notified Carnival
of its desire to renegotiate the Carnival  Agreement.  During these discussions,
Carnival notified the Company 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, the Company entered into a Master Settlement
Agreement and Mutual  Release with Carnival (the  "Settlement  Agreement").  The
Settlement  Agreement  specifies  that the Company and  Carnival  agree:  (i) to

                                      F-39
<PAGE>
                   GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

terminate the Carnival Agreement;  (ii) to negotiate in good faith to enter into
a New  Agreement;  (iii)  that the  Company  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 the Company all networking  equipment  aboard the two ships and the Company
shall retain ownership of all other equipment.

     Based on the above,  the Company  recorded  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 the Company was not required
to return to  Carnival  for  warranty  accruals  for  which the  Company  has no
continuing  obligation.  Certain in-cabin  equipment removed from Carnival which
may  be   re-deployed   to   other   customers   has  been   reclassified   into
Construction-In-Progress at June 30, 2000 (approximately $681,000).

     Pursuant to the  Settlement  Agreement,  the Company and Carnival  continue
discussions  with respect to a New Agreement which would cover the  installation
of the Company's  latest  CruiseView(TM)  technology on the "Fantasy" class ship
discussed  above,  and contractual  terms more favorable to the Company than the
Carnival Agreement,  including a longer-term and multiple ship arrangement.  The
Company  believes its new  technology  improves the Company's  ability to create
multiple  new content and  commerce-based  revenue  streams,  and to establish a
business relationship  providing  appropriate returns to each partner.  However,
while the Company is  optimistic  about the  discussions,  there is no assurance
that  the  Company  will be  successful  in  reaching  a  mutually  satisfactory
resolution  of the  Carnival  Agreement  and in securing a new,  more  favorable
long-term  contract  with  Carnival.  Notwithstanding  the  above,  the  Company
continues to operate its CruiseView(TM) system aboard one Carnival Fantasy class
ship  on a  month-to-month  basis  and  will  continue  to do so as  long as the
economics are beneficial to the Company and Carnival.

(f) ISSUANCE OF SECURED CONVERTIBLE NOTES

     On  October 3, 2000,  The  Company  issued an  additional  $7.0  million of
secured  convertible  notes to Advantage Fund II Ltd. and Koch Investment Group,
Ltd. The notes bear interest at 8% per annum and are convertible  after 120 days
into shares of our 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 is  obligated to register  its shares of common  stock.  To
secure such  borrowing,  the Company  pledged  866,538  shares of U.S.  Wireless
common  stock to the  holders of the notes.  The  Company can redeem the secured
convertible notes at any time for a premium.

     In connection with this issuance,  on October 5, 2000, the Company redeemed
$1.0 million of the principal amount of the Secured  Convertible Notes issued on
June 8, 2000, for cash of $1.2 million plus the issuance of 62,500 shares of the
Company's  Class A Common Stock, as required under the notes. As a result of the
redemption,  the note  holders  released to the Company  250,000  shares of U.S.
Wireless common stock previously held as collateral.

                                      F-40