<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
--------------------------------------------------------------------------------
                                   FORM 10-KSB

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
(Mark one)

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
    of 1934.

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
    of 1934.

                   For The Fiscal Year Ended December 31, 2000

                      GLOBAL TELEPHONE COMMUNICATION, INC.
              (Exact name of Small Business Issuer in Its Charter)


                NEVADA                                 87-0285729
    (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                Identification Number)

SUITE 1700, 355 BURRARD STREET, VANCOUVER, BC CANADA            V6C 2G8
(Address of principal executive offices)                       (Zip Code)

                                 1-877-901-4824
                           (Issuer's Telephone Number)

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

         Title of Each Class                 Name of Each Exchange on Which
         To be so Registered                 Each Class is to be Registered
         -------------------                 ------------------------------

                 n/a                                       n/a

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

                         COMMON EQUITY, PAR VALUE $.001
                                (Title of Class)


<PAGE>


         Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

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

         State the aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant. The aggregate market value
shall be computed by reference to the price at which the common equity was sold,
or the average bid and asked prices of such common equity, as of a specified
date within 60 days: $3,960,530 as of April 12, 2001.

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: As of April 12,
2001, there were 18,859,669 shares of common stock outstanding.


<PAGE>


                      GLOBAL TELEPHONE COMMUNICATION, INC.
                                   FORM 10-KSB
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

No.               Title                                                                              Page No.
<S>               <C>                                                                                <C>
                                                     PART I

Item 1.           Description of Business................................................................1
Item 2.           Description of Property................................................................9
Item 3.           Legal proceedings......................................................................9
Item 4.           Submission of Matters to a Vote of Security Holders....................................9

                                                    PART II

Item 5.           Market for Common Equity and Related Stockholder Matters..............................10
Item 6.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations...................................................15
Item 7.           Financial Statements..................................................................28
Item 8.           Changes in Disagreements with Accountants on Accounting
                  and Financial Disclosure..............................................................28

                                                    PART III

Item 9.           Directors, Executive Officers, Promoters and Control Persons;
                  Compliance With Section 16(a) of the Exchange Act.....................................29
Item 10.          Executive Compensation................................................................31
Item 11.          Security Ownership of Certain Beneficial Owners and Management........................33
Item 12.          Certain Relationships and Related Transactions........................................34
Item 13.          Exhibits, List and Reports on Form 8-K................................................35
                  Signatures............................................................................39

</TABLE>


<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         The Registrant was incorporated on March 10, 1970 for the purpose of
raising capital to develop and possibly put into production certain oil and
mineral deposits. The Registrant was unable to raise development money and the
Registrant's operations ceased and the mineral deposits were abandoned.

         On June 4, 1997 the Registrant acquired Krystar International Ltd.
(Krystar) in exchange for 6,000,000 shares of common stock. Krystar had
proprietary ownership of a technology that transported minerals using Boundary
Air/Laminar Flow Technology. On September 24, 1997, the Board of Directors of
the Registrant discontinued the operations of Krystar and the 6,000,000 shares
of common stock were cancelled.

         On June 23, 1997, the Registrant acquired all of the outstanding shares
of Chow's Consulting Corporation for 90,000 common shares of its common stock.
The only asset of Chow's was a mining claim that has since been deemed worthless
and Chow's was dissolved.

         On October 14, 1997 the Registrant changed its name from Dynasty Oil
and Minerals Corporation to Global Telephone Communication, Inc., in line with a
change in its strategic direction. The Registrant's current focus is to seek and
develop opportunities in the IT (Information Technology), telecommunications,
and Internet industries. To capitalize on management's industry experience and
relationships, the Registrant will favor opportunities in Southeast Asia, with
an emphasis on the People's Republic of China (China.)

         On February 9, 1998, the Registrant acquired all of the issued and
outstanding shares of an operating multimedia company, Planet City Graphics
Corp. (Planet City), a private company incorporated under the laws of British
Columbia, Canada, with offices in Vancouver, BC. The Registrant issued a total
of 1,500,000 common shares in exchange for all the issued and outstanding shares
of Planet City. This acquisition was rescinded on October 1, 1999 as of the date
of acquisition. The Registrant returned all shares of Planet City and received
back and cancelled the 1,500,000 shares previously issued.

         On February 9, 1998, the Registrant also acquired all of the issued and
outstanding shares of another operating multimedia company, Webworks Multimedia
Corporation (Webworks), a private company incorporated under the laws of British
Columbia, Canada, with offices in Vancouver, BC. The Registrant issued a total
of 500,000 common shares in exchange for all the issued and outstanding shares
of Webworks. This acquisition was rescinded on October 1, 1999 as of the date of
acquisition. The Registrant returned all shares of


                                       1
<PAGE>


Webworks and received back and cancelled the 500,000 shares previously issued.

         Both Planet City and Webworks are in the businesses of Web graphic
design and hosting and systems integration. However, these entities failed to
operate profitably and the Registrant has decided that these operations do not
complement its current business direction and thus, disposed of these
operations. (See Item 2 Management's Discussion and Plan of Operation for more
details.)

         On March 24, 1998, the Registrant changed its domicile from the State
of Utah to the State of Nevada.

         On April 16, 1998, the Registrant entered into a Share Exchange
Agreement (Regent Agreement) with Regent Luck Holdings Ltd. (Regent), a
corporation registered and headquartered in Hong Kong, whereby the Registrant
acquired all the issued and outstanding shares of Regent by issuing and
exchanging 4,950,000 common shares of the Registrant with the shareholders of
Regent, which constituted approximately 45% of the Registrant's then outstanding
shares.

Regent has a 90% interest in a joint venture company, Shenzhen Global Net
Computer Information Co. Ltd. (Shenzhen Global), organized under the laws of
China, which has an Exclusive Agency Agreement with Shenzhen Newsnet Co., Ltd.
(Newsnet), a wholly-owned subsidiary of China Telecom. The 10% minority owner is
Shenzhen Xin Yun Da Electronics Co. Ltd., a company owned by citizens of China.
At the time Shenzhen Global was formed, a nominal Chinese ownership interest in
the joint venture was statutorily required under applicable Chinese foreign
investment laws. The minority shareholders of Shenzhen Global have no approval
or veto rights and have no other rights other than minority voting rights.
Accordingly, such minority shareholders are not able to make any decisions or to
direct the management of Shenzhen Global in any way.

         The telecommunications business in China is highly regulated by the
central Government's Telecommunications Bureau. A Chinese company must get
authorization from many different levels of government before entering the
telecommunications business. The first step is to obtain Joint Venture approval
from the Foreign Merchant Investment Bureau. To qualify for this level of
approval, an applicant must provide a Joint Venture Feasibility Report, a Joint
Venture Contract, and a Joint Venture Corporate Charter. This approval, along
with all aforesaid documents are then forwarded to the National Industrial and
Commercial Administrative Bureau for a business license. Newsnet has granted the
necessary approvals to operate in the six cities in which it currently intends
to conduct business. Additional approvals will be sought at the time the
Registrant decides to expand to other cities.

         On June 8, 1998, the Shenzhen Global joint venture was given the
approvals in accordance with China Sino-Foreign Equity Joint Venture


                                       2
<PAGE>


Enterprise Law and by Shenzhen Foreign Investment Bureau (No. 1998 0520). The
business scope of this license includes computer software development, Internet
Protocol (IP) product development along with the related technical consulting,
computer systems integration and Internet service provider (ISP). The China
National Industrial and Commercial Administrate Bureau issued the Joint Venture
business license on July 28, 1998 effective for 12 years. The cost of the
license itself from the Chinese government was $200.

         Newsnet is a subsidiary of China Telecom and is the biggest ISP in the
city of Shenzhen with a subscriber base of over 60,000. Newsnet entered into an
exclusive agency agreement with Shenzhen Global, which gives Shenzhen Global the
rights to act as exclusive agents to conduct all of Shenzhen Newsnet's
telecommunications and internet business and services in Shenzhen, Guangdong
Province and in six of the biggest cities in China. The term of the agency
agreement is for 12 years with options to renew, subject to further
negotiations. Profits will be shared on a 69%-31% basis in favor of Shenzhen
Global for the first 18 months and 55%-45% thereafter. As part of the Regent
Agreement, the Registrant agreed to provide funds as capital for the Shenzhen
Global joint venture in the amount of $1,300,000. As of September 30, 1999, the
Registrant had provided approximately $975,000 and as of December 31, 1999, the
Registrant had provided the balance of $325,000 to Shenzhen Global. Such funds
were provided to Regent by the Registrant and were subsequently provided by
Regent to Shenzhen Global to satisfy applicable paid in capital requirements
under the Exclusive Agency Agreement in connection with the formation of the
Shenzhen Global joint venture. The Registrant and its subsidiaries have no
further financial obligation to Shenzhen Newsnet under the Exclusive Agency
Agreement or otherwise.

         With respect to the Shenzhen Global Joint Venture, the Registrant is
engaged in the delivery of web-based e-mail, voice over Internet Protocol,
systems integration, Internet access and content, and other information
technology Internet value added applications.

         These products and services will be delivered under licenses provided
directly from China Telecom, the dominant carrier in China, or through its
wholly owned subsidiaries. The services will be delivered to commercial,
residential and educational users through the Public Switched Telephone network
and will have their origin on Internet service platforms owned jointly or
independently by the Registrant.

         Currently, Newsnet is a leading Internet service provider in Southern
China with a 60% market share in the City of Shenzhen. On a national scale,
Newsnet holds a 2% market share. For all six cities, the major competition is
from the ISP arm of China Telecom (HK) Limited (China Telecom). Newsnet is
targeting an average market share of 30% for each city. Customers usually base
their purchase decisions on quality, timing and the range of services that are
offered.


                                       3
<PAGE>


         On March 9, 1999, the Registrant entered into a Share Exchange
Agreement providing for the acquisition of 51% of the issued and outstanding
shares of Pacific Asset International Ltd. (Pacific Asset), a Hong Kong
corporation, in exchange for 600,000 shares of the Registrant's common stock
representing approximately 4% of the Registrant's then issued common stock.
Pacific Asset was expected to provide the Registrant access to institutional and
banking e-commerce business in Asia and the Registrant planned to assist Pacific
Asset in the development of its business in the telecommunications and
information technology sector. Under the terms of the Share Exchange Agreement,
the Registrant had an enforceable right to receive an aggregate of 5,100 shares
of common stock of Pacific Asset and believed that it had obtained control of
Pacific Asset and that the transaction had for all intents and purposes been
legally consummated. However, the shareholders of Pacific Asset failed to
deliver such shares of its common stock to the Registrant in accordance with the
terms of the Share Exchange Agreement. In addition, the Registrant subsequently
determined the Registrant would not be able to provide such assistance and that
it would not be in the best interest of the Registrant to continue its
relationship with Pacific Asset. For the foregoing reasons, the exchange
transaction was rescinded pursuant to a Mutual Rescission Agreement dated as of
January 13, 2000 between the Registrant and the shareholders of Pacific Asset.

         On September 15, 1999, the Registrant entered into an agreement with
International Communications Enterprises Ltd. (ICE), a company operating and
incorporated in the United Kingdom, to provide funding for a Joint Venture
between ICE and First Telecom (FT) of Hong Kong. The primary purpose of the
Joint Venture was to originate and terminate telephone traffic in China. The
Registrant made an investment of approximately $243,500 to acquire 25% of the
gross revenue due to ICE from all activities generated by the ICE/FT venture on
a monthly basis. (See Item 2 Management Discussion and Plan of Operation for
more details).

         On October 21, 1999, the Registrant entered into a second joint venture
with ICE to assist it in the development and distribution of promotional
commemorative prepaid telephone calling cards relating to sports figures.
Initially the program was directed primarily towards the leading drivers of
Formula 1 race car teams. ICE had several contracts in place including one with
the Yamaha race car circuit. (See Item 2 Management Discussion and Plan of
Operation for more details). In addition, the Registrant loaned approximately
$200,000 to ICE pursuant to unsecured promissory notes which were payable on
July 4, 2000 bearing interest at an annual rate of 10% from July 1, 2000 to the
date of payment.

         On August 3, 2000, the directors of ICE declared voluntary bankruptcy.
ON AUGUST 29, 2000, AT THE FIRST MEETING OF CREDITORS, IT WAS PROVEN TO THE
SATISFACTION OF THE MEETING THAT ICE COULD NOT BY REASON OF ITS


                                       4
<PAGE>


LIABILITIES, CONTINUE ITS BUSINESS AND IT WAS ADVISABLE TO WIND UP THE EXISTING
BUSINESS AND ACCORDINGLY THAT ICE BE VOLUNTARILY WOUND UP. AT THE SAME MEETING,
JOINT LIQUIDATORS WERE APPOINTED FOR THE PURPOSE OF SUCH WINDING UP. (See Item 2
Management Discussion and Plan of Operation for more details).

         On January 28, 2000, the Registrant acquired 70% of the issued and
outstanding shares of capital stock of Nano Technology Limited (Nano), a British
Virgin Islands company. Nano owns 100% of the issued and outstanding capital
stock of Cyber 2000 Ltd. (Cyber 2000), a Hong Kong company. Nano's only activity
is to hold the Registrant's ownership interest in Cyber 2000. Cyber 2000 is
engaged in the business of developing Voice over Internet Protocol (VoIP) and is
expected to become a provider of VoIP re-sale services with major international
telephony carriers. The Registrant acquired its interest in Nano for an
aggregate purchase price of $2,600,000, of which $1,350,000 was payable in cash
and the balance was payable by delivery of 500,000 restricted shares of the
Registrant's common stock valued at $2.50 per share. As of the date hereof, a
portion of the purchase price in the amount of $850,000 has been paid in cash
and 500,000 restricted shares of the Registrant's common stock, representing
2.9% of the Registrant's then issued and outstanding common stock, have been
issued.

         On March 20, 2000, Cyber 2000, in cooperation with Teleinfo Co. Ltd.
(Teleinfo), a wholly owned subsidiary of China Telecom signed a Service
Agreement with AT&T Asia/Pacific Group (AT&T) in Hong Kong. Under this
Agreement, AT&T is expected to provide a number of professional and management
services to implement Cyber 2000's VoIP Program in China and the US, including
project management, global clearing house and MIS (Management Information)
services. AT&T will also provide and install gateways to the Company's network,
including international Internet Phone circuits from Hong Kong to the US. AT&T
is expected to be able to use its extensive project management expertise to help
Cyber 2000 to quickly establish a high performance International Internet Phone
Backbone Network in Asia and implement its planned expansion program in offering
various services to carriers and enterprises in China, the US and other
countries. Cyber 2000 has also established a cooperation arrangement with
Teleinfo pursuant to which Teleinfo will work with Cyber 2000 in this project to
provide various supports in marketing and technical programs.

         In September 2000, the Registrant's Shenzhen Global operation in China
completed construction of its web-based portal in conjunction with Szonline. In
October 2000, the Registrant launched 963.net as the free e-mail portal. The
portal contains free e-mail and content and will offer pay-for Unified Messaging
Services (UMS) to subscribers. As a subsidiary of China telecom, Szonline has
obtained the rights to the toll free 963 dial access code, which will provide
internet access throughout China.


                                       5
<PAGE>


         On December 12, 2000, the Registrant removed Messrs. Brandenburg,
Andresen, and Zapton from its Board of Directors, pursuant to a Consent
Stockholders' Resolution that was signed by stockholders who control more than
two-thirds of the Registrant's outstanding stock. The registrant's current Board
of Directors is comprised of Terry Wong and Thomas Kennedy. (See Management
Discussion and Plan of Operation for more details).

         On February 7, 2001, Messrs. Brandenburg and Andresen resigned as
officers of the Registrant pursuant to mutual settlement agreement that was
approved by the Board of Directors of the Registrant.

         On February 7, 2001, Mr. Terry Wong was appointed by the Board of
Directors as President and CEO of the Registrant.

On April 12, 2001, the Registrant signed a Letter of Intent to acquire
privately-held Apollo Communications International Corporation (Apollo). Apollo
is a niche international telecommunications carrier operating out of Seattle,
Washington and Shanghai, China. Apollo provides high quality network services,
data centers and telecommunication solutions between the United States and Asia.
Apollo is planning to build a point-to-point fiber optic network connecting both
Seattle, LA and Shanghai. Apollo has attained the Federal Communication
Commission (FCC) license that gives it the ability to resell international
telecom services and set up facilities to handle data traffic.

Under the terms of the Letter of Intent, 65% of the issued and outstanding stock
of GTCI will be exchanged for all the issued and outstanding stock of Apollo.
The closing of the acquisition is subject to certain conditions, including
satisfactory completion of due diligence and execution of a definitive agreement
and shareholder approval. The acquisition is expected to be completed during the
second quarter of 2001.

         The Internet and information technology industries are relatively new
and subject to rapid change. Regulatory and political issues in Asia pose many
potential problems. The size of the Asian market, and the low cost of entry into
these new industries are attracting an increasing number of new entrants.
Weaknesses in infrastructure further complicate the task of building reliable
and responsive systems. Intense competition from existing and potential
competitors with longer operating histories, greater brand name recognition,
larger customer bases and greater financial, technical and marketing resources,
may adversely affect the Registrant's ability to secure a viable position in the
marketplace.

         During 1998 and 1999 the Registrant publicly announced:

o        the marketing of Year 2000 software solutions;
o        its Global Positioning System (GPS) project;
o        its plans to acquire an ISP company and
o        various marketing agreements.


                                       6
<PAGE>


The Registrant has not pursued any of these due to the following reasons:

         In November of 1998 the Registrant's management team decided that it
would become a provider of Year 2000 (Y2K) software solutions for China.
Management believed that this was complimentary to the Registrant's core
information technology business. As a result of this business decision, on March
4, 1999 the Registrant entered into a Marketing Agreement with Planet City to
market Planet City's Y2K solutions (the Millennium Bug Compliance Kit) in China
and on April 21, 1999 the Registrant entered into two Agency Agreements with
Manful Commerce Co. Ltd. and Beijing JinXunDa Telecommunications Technology
Development Co. Ltd. to supply the Millennium Bug Compliance Kit to the Chinese
Government. Subsequently, the Y2K solution was sent to China for testing. After
failing the required tests, the Registrant terminated all contracts involving
this product, without penalty, and subsequently terminated its relationship with
Planet City.

         With respect to the GPS project, on June 10, 1999 the Registrant's
joint venture company, Beijing Global Net Communication Technology Co., Ltd.,
received Chinese governmental approval and the required business licenses to
provide GPS in China. However, the Registrant has elected to postpone further
efforts in this area due to limited resources.

         On June 14, 1999 the Registrant signed a conditional Memorandum of
Agreement to enter into a joint venture with Beijing Tian Guang Information
Communication Services Ltd. (BTGIC), a Chinese company with a valid permit from
the State Information Technologies Ministry to operate as an ISP in the cities
of Beijing, Shanghai and Guangzhou. The Registrant was to issue 1,200,000 shares
of its common stock for a 65% equity interest in BTGIC. After the Registrant's
management team completed its due diligence, it determined that this joint
venture would not be beneficial to the Registrant at the agreed upon terms and
conditions, and the agreement was terminated.

         On January 8, 1999 the Registrant announced that it had entered into a
teaming agreement with Veronex Technologies, Inc. to jointly pursue business
opportunities in China. On February 24, 1999 the Registrant announced that it
had entered into a marketing agreement with iBiz Technology Corp., to market
iBiz technology and products in the Pacific Rim. The anticipated business
opportunities have not yet developed sufficiently to pursue these projects.

         The Registrant has structured operations in accordance with current
local and foreign governmental regulations.

         While there can be no certainty, the Registrant believes that the
regulatory environment will continue to support the Registrant's current and
planned activities. However, any reversal of current government willingness to
continue


                                       7
<PAGE>


to approve such activities could have a serious material negative effect on the
business prospects of the Registrant.

         The Registrant has spent approximately $50,000 over the past two years
in developing relationships and opportunities and obtaining licenses and
approvals.

         The available telecommunication and information technology market is
substantial and underserved. The Registrant will not be reliant upon any small
number of major customers in any of its markets.

         The Registrant believes there is minimal, if any, cost to the
Registrant for compliance with current environmental laws.

         The Registrant currently employs 6 full time employees and expects the
total number of employees to reach fifteen or more within six months.

         The Registrant plans to market its products and services both directly
and indirectly. A direct sales force will be developed to market the
Registrant's services and products. Furthermore, the Registrant will use its
contacts and relationships in China to further develop and market the
Registrant's products as they are developed.

         The public may read and copy any materials filed with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. The address of that
site is (http://www.sec.gov). The Registrant's Internet address is
www.globaltci.com.


                                       8
<PAGE>


ITEM 2.      DESCRIPTION OF PROPERTIES.

             The Registrant's principal office is located at Suite 1700-355
Burrard Street, Vancouver, BC, V6C 2G8 and occupies approximately 2,500 square
feet. The Registrant leases this space for approximately $5,170 per month on a
three year lease that will expire on May 31, 2003.

             The Hong Kong office occupies approximately 1,000 square feet and
is located at 1601 Causeway Bay Plaza 1, 489 Hennessy Road, Hong Kong. The
Registrant leases this space for $800 per month on a month-to-month basis.

             The Shenzhen office occupies approximately 2,000 square feet and is
located at Room 201, Tower B, Fujian Building, Caitain South Road, Fujian
District, Shenzhen city, Quondong Province, China 518026. The Registrant leases
this space for $1,500 per month on a month to month basis.

ITEM 3.      LEGAL PROCEEDINGS.

             The Registrant is not involved in any legal proceedings.

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

         During November and December 2000, the Registrant solicited Consent
Stockholders' Resolutions removing Messrs. Brandenburg, Andresen and Zapton off
of the Registrant's Board of Directors. On December 12, 2000, the Registrant's
secretary certified that it had received Consent Stockholders' Resolutions that
were signed by stockholders controlling more than two-thirds of the Company's
outstanding shares. At the time the Registrant had 18,546,036 shares outstanding
and pursuant to the solicitation of the consent resolution, the Registrant
received votes representing 12,748,616 shares of the Registrant. The
Registrant's By-laws and Nevada Revised Statutes require two-thirds of these
shares to vote for removal of directors. The Registrant received 68.74% of the
voting shares. The current Board of Directors is comprised of Messrs. Wong and
Kennedy.


                                       9
<PAGE>


                                     PART II


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

(a)      MARKET INFORMATION: The Registrant's common stock trades on the NASDAQ
Over The Counter Bulletin Board under the symbol GTCI. The Registrant's common
stock price as of the close of business on April 12, 2001 was $.21 per share.

         PRICE RANGE: The following is the range of the high and low bids for
the Registrant's common stock for each quarter within the last two fiscal years
as determined by the over-the counter market. Quotations reflect inter-dealer
prices, without retail market, mark-down or commission and may not represent
actual transactions.

<TABLE>
<CAPTION>

                                       1999                           2000
                                       ----                           ----

         ----------------- -------------- -------------- ------------------ ---------------
              QUARTER         HIGH BID       LOW BID        HIGH BID           LOW BID
         ----------------- -------------- -------------- ------------------ ---------------
         <S>               <C>            <C>            <C>                <C>
         MARCH                1 31/32        1  3/32          $3.88                .88

         JUNE                 3 27/32        1 11/16          $2.00                .84

         SEPT.                2  7/16        1  1/2           $1.35                .20

         DEC.                 2  5/16        1 11/16            .99                .13
         ----------------- -------------- -------------- ------------------ ---------------

</TABLE>

         HOLDERS: The Registrant has approximately 330 common stock
shareholders.

DIVIDENDS: The Registrant has never paid a cash dividend. It is the present
policy of the Registrant to retain any extra profits to finance growth and
development of the business. Therefore, the Registrant does not anticipate
paying cash dividends on its common stock in the foreseeable future.

(b)      RECENT SALES OF SECURITIES: The Registrant had the following stock
issuances as described below. All such shares were sold by the officers and
directors of the Registrant and no underwriters were utilized.

         1.       On June 23, 1997, 90,000 shares of common stock were issued in
                  exchange for all of the issued and outstanding shares of
                  Chow's Consulting Corporation.


                                       10
<PAGE>


         2.       On October 23, 1997, 3,000,000 shares of common stock at $.01
                  per share pursuant to Regulation D, Rule 504 Offering for a
                  total offering of $30,000.

         3.       On January 16, 1998, 1,140,142 shares of common stock at $.50
                  per share pursuant to a Regulation D, Rule 504 Offering for a
                  total offering of $570,071. Of this offering, a total of
                  $180,800 was for cash and the balance of $389,271 was for the
                  cancellation of debt.

         4.       On February 9, 1998, 1,500,000 shares of common stock were
                  issued in exchange for all of the issued and outstanding
                  shares of Planet City Graphics Corp.

         5.       On February 9, 1998, 500,000 shares of common stock were
                  issued in exchange for all of the issued and outstanding
                  shares of Webworks Multimedia Corporation.

         6.       On April 16, 1998, 4,950,000 shares of common stock were
                  issued in exchange for all of the issued and outstanding
                  shares of Regent Luck Holdings Limited. The Share Exchange
                  Agreement called for the issuance of a total of 5,000,000
                  shares, but due to an oversight on the part of the
                  Registrant's Stock Transfer Agent, only 4,950,000 shares were
                  in fact issued.

         7.       On January 16, 1999, 700,000 shares of common stock at $.25
                  per share pursuant to a Regulation D, Rule 504 Offering for a
                  total offering of $175,000.

         8.       On January 20, 1999, 1,574,000 shares of common stock at $.50
                  per share pursuant to a Regulation D, Rule 504 Offering for a
                  total offering of $784,500.

         9.       On January 20, 1999, 80,000 shares of common stock pursuant to
                  Regulation D Rule, 504 Offering to settle $40,000 worth of
                  debt owed to Koo and Partners for the Company's legal fees for
                  1998.

         10.      On March 9, 1999, 600,000 shares of common stock were issued
                  in exchange for 51% of the issued and outstanding shares of
                  Pacific Asset International Ltd.

         11.      On March 15, 1999, 200,000 shares of common stock at $1.00 per
                  share for a total offering of $200,000.

         12.      On March 19, 1999, 200,000 shares of common stock at $1.00 per
                  share for a total offering of $200,000.


                                       11
<PAGE>


         13.      On March 26, 1999, 100,000 shares of common stock at $1.00 per
                  share for a total offering of $100,000.

         14.      On April 16, 1999, 200,000 shares of common stock at $1.00 per
                  share for a total offering of $200,000.

         15.      On June 14, 1999, 277,778 shares of common stock at $.72 for a
                  total offering of $200,000.

         16.      On June 28, 1999, 1,494,000 shares were issued as collateral
                  for a loan amount to be determined by the Registrant's trading
                  share price at the time of funding. The loan was not funded
                  and the collateral shares were cancelled on January 31, 2000.

         17.      On July 27, 1999, 69,444 shares of common stock at $.72 per
                  share for a total offering of $50,000.

         18.      On August 3, 1999, 69,445 shares of common stock at $.72 per
                  share for a total offering of $50,000.

         19.      On August 30, 1999, 25,000 shares of common stock at $2.00 per
                  share for a total offering of $50,000.

         20.      On September 20, 1999, 125,000 shares of common stock at $.80
                  per share for a total offering of $100,000.

         21.      On October 13, 1999, 100,000 shares of common stock at $1.00
                  per share for a total offering of $100,000.

         22.      On October 20, 1999, 212,766 shares of common stock at $.94
                  per share for a total offering of $200,000.

         23.      On November 29,1999, 1050,000 shares of common stock at $1.20
                  per share for a total offering of $1,260,000.

         24.      On December 20, 1999, 6,383 shares of common stock were issued
                  for stock offering costs.

         25.      On December 29, 1999, 250,000 shares of common stock at $1.00
                  per share for a total offering of $250,000.

         26.      On December 30, 1999, 52,524 shares of common stock were
                  issued for settlement of a promissory note of $86,665.

         27.      On December 31, 1999, 250,000 shares of common stock at $1.00
                  per share for a total offering of $250,000.


                                       12
<PAGE>


         28.      On January 14, 2000, 500,000 shares of common stock were
                  issued at $1.00 per share for a total offering of $500,000.

         29.      January 28, 2000, 500,000 shares of common stock were issued
                  for 70% of Cyber 2000 Limited.

         30.      On February 22, 2000, 400,000 shares of common stock were
                  issued at $1.00 per share for a total offering of $500,000.

         31.      On March 17, 2000, 200,000 shares of common stock were issued
                  at $1.00 per share for a total offering of $200,000.

         32.      On March 28, 2000, 100,000 shares of common stock were issued
                  at $1.00 per share for a total offering of $100,000.

         33.      On May 11, 2000, 50,000 shares of common stock were issued for
                  investor relations' services.

         34.      On September 9, 2000, 7,761 shares of common stock were issued
                  for investor relations' services.

         35.      October 2000, 600,000 shares of common stock were issued for
                  investor relations' services. As of the date hereof,
                  400,000 shares were cancelled and are being returned.

         36.      On November 7, 2000 8,000 shares of common stock were issued
                  at $0.25 per share for a total offering of $2,000.

         37.      On November 7, 2000, 20,000 shares of common stock were issued
                  at $0.25 per share for a total offering of $5,000.

         38.      On November 8, 2000, 28,000 shares of common stock were issued
                  at $0.25 per share for a total offering of $7,000.

         39.      On November 9, 2000, 131,579 shares of common stock were
                  issued at $0.19 per share for a total offering of $25,000.

         40.      On November 10, 2000, 263,158 shares of common stock were
                  issued at $0.19 per share for a total offering of $50,000.

         41.      On November 10, 2000, 131,579 shares of common stock were
                  issued at $0.19 per share for a total offering of $25,000.

         42.      On November 11, 2000, 20,000 shares of common stock were
                  issued at $0.25per share for a total offering of $5,000.

         43.      On November 14, 2000, 28,000 shares of common stock were
                  issued at $0.25 per share for a total offering of $7,000.

         44.      On November 14, 2000, 20,000 shares of common stock were
                  issued at $0.25 per share for a total offering of $5,000.


                                       13
<PAGE>


         45.      On November 11, 2000, 13,158 shares of common stock were
                  issued for commissions on financing activities.

         46.      On November 15, 2000, 3,100 shares of common stock were issued
                  for commissions on financing activities.

(b)      EXEMPTIONS FROM REGISTRATION:

         With respect to the issuance of the 3,000,000 common shares listed at
Item 5(b)2, the 1,140,142 shares listed at Item 5(b)3, the 700,000 common shares
listed at Item 5(b)7 and the 1,574,000 common share listed at Item 5(b)8, such
issuances were made in reliance on the private placement exemptions provided by
Section 4(2) of the Securities Act of 1933 as amended, (the "Act"), SEC
Regulation D, Rule 504 of the Act and Nevada Revised Statutes Sections 78.211,
78.215, 73.3784, 78.3785 and 78.3791 (collectively the "Nevada Statutes").

         With respect to the issuance of the 90,000 common shares listed at
Item 5(b)1, the 1,500,000 common shares listed at Item 5(b)4, the 500,000
common shares listed at Item 5(b)5, the 4,950,000 common shares listed at
Item 5(b)6, the 80,000 shares listed at Item 5(b) 9, the 600,000 common
shares listed at Item 5(b)10, the 200,000 common shares listed at Item
5(b)11, the 200,000 common shares listed at Item 5(b)12, the 100,000 common
shares listed at Item 5(b)13, the 200,000 shares listed at Item 5(b)14 the
277,778 shares listed at Item 5(b)15, the 1,494,000.shares listed at Item
5(b)16, the 69,444 shares listed at Item 5(b)17, the 69,445 shares listed at
Item 5(b)18, the 25,000 shares listed at Item 5(b)19, the 125,000 shares
listed at Item 5(b)20, the 100,000 shares listed at Item 5(b)21, the 212,766
shares listed at Item 5(b)22, the 1,050,000 shares listed at Item 5(b)23, the
6,383 shares listed at Item 5(b)24, the 250,000 shares listed at Item5(b)25,
the 52,524 shares listed at Item 5(b)26, the 250,000 shares listed at Item
5(b)27, the 500,000 shares listed at Item 5(b)28, the 500,000 shares listed
at Item 5(b)29, the 400,000 shares listed at Item 5(b)30, the 200,000 shares
listed at Item 5(b)31, the 100,000 shares listed at Item 5(b)32, the 50,000
shares listed at Item 5(b)33, The 7,761 shares listed at Item 5(b)34, the
600,000 shares listed at Item 5(b)35, the 8,000 shares listed at Item 5(b)36,
the 20,000 shares listed at Item 5(b)37, the 28,000 shares listed at Item
5(b)38, the 131,579 shares listed at Item 5(b)39, the 263,158 shares listed
at Item 5(b)40, the 131,579 shares listed at item 5(b)41, the 20,000 shares
listed at Item 5(b)42, the 28,000 shares listed at Item 5(b)43, the 20,000
shares listed at Item 5(b)44, the 13,158 shares of listed at Item 5(b)45, and
the 3,1000 shares listed at Item 5(b)46 such issuances were made in reliance
upon the private placement exemptions provided by Section 4(2) and 4(6)of the
Act and the Nevada Statutes.

         In each instance, each of the purchasers of such shares had access to
sufficient information regarding the Registrant so as to make an informed
investment decision. More specifically, each purchaser signed either a written
Subscription Agreement, a Share Exchange Agreement, a Share Purchase


                                       14
<PAGE>


Agreement or a Collateral Loan Agreement, with respect to their financial status
and investment sophistication wherein they warranted and represented, among
other things, the following:

         1.       That they had the ability to bear the economic risks of
                  investing in the shares of the Registrant.

         2.       That they had sufficient knowledge in financial, business, or
                  investment matters to evaluate the merits and risks of the
                  investment.

         3.       That they had a certain net worth sufficient to meet the
                  suitability standards of the Registrant.

         4.       That the Registrant has made available to them, their counsel
                  and their advisors, the opportunity to ask questions and that
                  they have been given access to any information, documents,
                  financial statements, books and records relative to the
                  Registrant and an investment in the shares of the Registrant.


                                       15
<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

         From February 1998 through March of 1999, the Registrant made four
acquisitions pursuant to share exchange agreements. The first two of these
acquisitions, Planet City and Webworks were rescinded on October 1, 1999.


                                       16
<PAGE>


PACIFIC ASSET

         The acquisitions and rescissions of Planet City, Webworks and Pacific
Asset were accounted for as a purchase and sale. For the year ended December 31,
1999, the Registrant recorded a loss of $548,448 from discontinued


                                       17
<PAGE>


operations in connection with the disposition of Planet City, Webworks and
Pacific Asset. This loss was computed as follows:

         Investment in Planet City
         and Webworks:                                       $1,000,000

         ACCUMULATED EARNINGS OF

         Planet City and Webworks:                           $  708,448

         Investment in Pacific Asset:                        $  840,000
         (As disclosed in Note 11 of the audited
         financial statements for December 31, 1999.)
         Total cost:                                         $2,548,448

         Value of Shares received in
         Rescission:                                         $2,000,000
                                                             ----------

         Loss                                                $  548,448
                                                             ===========


                                       18
<PAGE>



         During the year ended December 31, 2000, the Registrant generated
revenues of $52,045 and operating expenses of $5,452,043, resulting in a net
loss of $5,399,998 from operations.

         General and administrative expenses increased to $5,043,696 in 2000
from $3,534,305 in 1999 and depreciation and amortization expenses decreased to
$408,347 in 2000 from $2,483,889 in 1999. The following is a breakdown of the
significant general and administrative expenses incurred in 2000:

         The Registrant's legal and accounting expenses increased to $ 639,799,
representing an increase of 173% in 2000. This increase in the legal and
accounting costs occurred as a result of the following factors:

                  1.       Legal and accounting costs associated with
                           compliance;

                  2.       Due diligence costs associated with acquisitions; and

                  3.       Costs associated with the rescission of prior
                           acquisitions.

         The Registrant's travel and entertainment expenses increased to
$448,639, representing an increase of 29% in 2000. This increase was due
primarily to increased travel requirements relating to the Registrant's
operations located in Europe and the Far East. In addition, an increase in the
number of professionally trained consultants and employees retained or hired by
the Registrant during this period to help develop its business resulted in
increased travel requirements and

----------------
(1) A public company currently trading on the OTC Electronic Pink Sheets,
unrelated to the Registrant's former subsidiary.

                                       19
<PAGE>


expenses for the purposes of due diligence and subsequent closing of the
Registrant's acquisitions.

In 2000, the Registrant had a total of 20 employees, five of whom were employed
by Regent Luck and six of whom were employed by Shenzhen Global. During 2000,
the Registrant also retained a total of 18 consultants to provide various
consulting services, including management consulting, business advisory services
and investor relations. As a result, the Registrant's consulting expenses
decreased from $1,417,008 in 1999 to $1,226,597 in 2000.

         The general and administrative costs for Regent Luck and Shenzhen
Global totaled $108,029 which included the salaries of 11 employees and the
costs relating to the day to day operations.

         General and administrative expenses incurred by the Registrant in 2000,
also include an aggregate of $485,813 paid by the Registrant to ICE pursuant to
the ICE Revenue Participation Agreement, including the amounts it is required to
pay as costs for prepaid phone cards. Such amounts have been expensed because
the Registrant has no history of being able to sell prepaid calling cards or
phone services and is unable to predict whether such sales will be possible in
the future or whether they will be profitable.

         The Registrant also had expenses of $952,000 in employee payroll &
benefits; $585,000 as the cost of options issued, $121,092 for office rent,
$101,130 for office & miscellaneous expenses, $86,250 for a finder's fee,
$50,500 as a bad debt reserve, $126,495 for investor relations and $112,352
representing an adjustment to stock valuation based on market price.

         The remaining expenses are made up of a reserve for bad debt of $49,500
and office rent of $62,000 and office expenses of $244,154.

         Depreciation and amortization expense decreased from $2,483,889 in 1999
to $408,347 in 2000. This decrease was due to the fact that the Registrant did
not write off any goodwill in the current fiscal year.

         During the second quarter of 2000, and in the course of implementing
changes to its business plan, new management of the Registrant identified a new
opportunity to use the existing funds within the framework of the existing
Shenzhen joint venture arrangement to engage in the business of providing
web-based e-mail, voice over Internet protocol, systems integration, Internet
access and content and other value-added internet technology applications. The
integration of these diversified services into the existing ISP are expected to
bring the future operations of this business in line with the Registrant's
current business plan and to provide future opportunities for growth and income.
The Registrant expects to use the existing subscriber base in Newsnet for the
e-commerce platform and has selected Sun Microsystems to provide the required
hardware for the Shenzhen e-commerce joint venture.


                                       20
<PAGE>


         Operations pursuant to the ISP Agency Agreement between Shenzhen Global
and Newsnet will commence in Shenzhen and then the Registrant intends to move
into five other cities (Beijing, Shanghai, Wuhan, Guangzhou and Chongquing). The
timing of the development will depend upon the success of the Shenzhen
operation. Each additional facility will cost approximately $1,300,000 to
commence operations.

         The strategic partnership with Newsnet is expected to give the
Registrant certain advantages in the marketplace over its competitors, including
a direct customer base of over 100,000, more favorable terms from China Telecom
in lease-line contracts and technical support.

         During the year ended December 31, 1999 the Registrant raised
$4,152,753 from the sale of equity securities and $544,921 from notes payable to
fund current operations. During the year ended December 31, 2000 the Registrant
raised $1,300,000 from the sale of equity securities and $2,077,324 from notes
payable to fund current operations.

         On September 15, 1999 the Registrant entered into an agreement with ICE
to provide funding for a joint venture between ICE and FT (ICE/FT Joint
Venture). Under the terms of the agreement, the Registrant was to receive
revenue participation in exchange for its investment in ICE. ICE was expected to
be a provider of telephony services to business customers, with a focus on
multinational companies in the European Union. The Registrant's objective was to
become a leading provider of such services in its areas of operations. ICE had
uncovered niche telephony products for this market that it believed represented
revenue opportunities. The Registrant anticipated that the ICE/FT Joint Venture
would allow ICE to deliver voice, fax and data traffic via earth stations owned
by FT in China for termination into China at competitive pricing. Until August
2000, the Registrant had made an investment of approximately $243,500 for 25% of
the gross revenue due to ICE from all activities generated by the ICE/FT Joint
Venture on a monthly basis. The Registrant was to receive this percentage for a
period of time beginning with the first month of revenue generation and ending
when ICE's revenue participation from the ICE/FT Joint Venture had exceeded
approximately $807,000 ((pound)500,000) per month for 12 individual months. The
Registrant's gross revenue participation was to decrease to 12 1/2% of the gross
revenue due to ICE from all activities generated by the ICE/FT Joint Venture, on
a monthly basis, for the duration of the ICE/FT Joint Venture.

         On October 21, 1999, the Registrant entered into a second joint venture
with ICE to assist it in the development and distribution of promotional
commemorative prepaid calling cards relating to sports figures. Initially the
program was directed primarily towards the leading drivers of Formula 1 race car
circuit. ICE had several contracts in place including one with the Yamaha race
car team. In addition, subsequent to December 31, 1999, the Registrant had
loaned approximately $200,000 to ICE pursuant to unsecured promissory notes


                                       21
<PAGE>


payable on July 4, 2000 bearing interest at an annual rate of 10% to commence on
July 1, 2000.

         The Registrant had also paid approximately $48,400 US ((pound)30,000)
for the right of first refusal on any and all such cards that ICE may choose to
market.

         The Registrant expected to invest approximately $121,000
((pound)75,000) per card for design, artwork, impression, printing, testing and
delivery of satisfactory network delivery and support capabilities. In exchange,
the Registrant was to receive 50% of ICE's gross revenue monthly until it has
received twice (2x) its original investment, and subsequently, 25% of gross
monthly revenues for as long as the contract was in force, including renewals.

         The Registrant completed its $121,000 ((pound)75,000) obligation to ICE
for the Yamaha contract.

         All funds invested in ICE were expensed when incurred due to the
uncertainty of the recoverability of the costs.

         On August 3, 2000, ICE declared voluntary bankruptcy. On August 29,
2000, at the First Meeting of Creditors, it was proven to the satisfaction of
the meeting that ICE could not by reason of its liabilities, continue its
business and it was advisable to wind up the existing business and accordingly
that ICE be wound up voluntarily. At the same meeting, Joint Liquidators were
appointed for the purpose of such winding up.

         ICE was viewed as a fully operating company with distributors and new
products but due to the initial set up and development costs, coupled with
losses from early contracts, it was insolvent. The company was unsuccessful in
locating a purchaser or an alternative source of funding and in the face of
mounting pressure from creditors, the directors decided to put the company into
Creditors Voluntary Liquidation. By August 29, 2000, ICE had assets of
approximately $27,500 and liabilities of approximately $2,600,000.

         On December 12, 2000, Messrs. Brandenburg, Andresen and Zapton were
removed from the Board of Directors of the Registrant, pursuant to a Consent
Stockholders' Resolution that was signed by stockholders controlling more than
two-thirds of the Company's outstanding shares. The current Board of Directors
is comprised of Messrs. Wong and Kennedy.

         Subsequently, on February 7, 2001, Messrs. Brandenburg and Andresen
resigned as officers of the Registrant pursuant to a mutual settlement agreement
that was approved by the Board of Directors of the Registrant. The settlement
offer entitles Mr. Brandenburg to retain the 1,000,000 stock options granted on
September 28, 1999 at an exercise price of $1.56 per share with an expiration
date of September 28, 2002. Mr. Andresen is also entitled to retain 500,000
stock options at an exercise price of $1.375 with an expiration date of January
10,


                                       22
<PAGE>


2003. The settlement offer also entitles them to $180,000 less any governmental
withholdings. The Registrant will pay a total of $50,000 to Messrs. Brandenburg
and Andresen within 90 days from February 7, 2001 with the balance being payable
on or before July 7, 2001.

         The current Board of Directors is comprised of Terry Wong and Thomas
Kennedy. Terry Wong is currently the President and CEO of the Registrant.

         There have been no seasonal aspects that caused any material changes in
the Registrant's financial statements.

         The Registrant's viability is contingent upon its ability to raise
additional funds to support development efforts. There is no assurance the
Registrant will obtain additional financing on terms it deems acceptable.

         The implementation and expansion of the Registrant's business is
expected to require a commitment of substantial funds. The Registrant is
currently seeking working capital to fund current operations. During 2000, the
Registrant completed a bridge financing.

         The Registrant received aggregate advances pursuant to a convertible
debenture totaling $1,236,076. The debenture bears interest at the rate of 9%
per year and is due on December 31, 2003. Terms provide that the holder is
entitled to convert $177,778 of principal and accrued interest upon issuance
(June 30, 2000) and a similar amount each month thereafter. The note is
convertible at the lower of $2.50 per share or 100% of the lowest daily
trading price for the XX tracking days prior to conversion. In connection
with the issuance of the debenture, the Registration issued warrants to
purchase 1,209,000 shares of common stock. The warrants expire June 30, 2002.

         On June 5, 2000, the Registrant issued a convertible note (the "Note")
for proceeds of $250,000, bearing interest at the rate of prime (as announced by


                                       23
<PAGE>


the Wall Street Journal ("WSJ")) plus 0.5% per year (8.5%) at December 31,
2000), compounded annually. The principal and all accrued interest is due on May
30, 2003; however, the holder may demand repayment at any time after May 30,
2002.

         The holder may at any time convert all or any portion of the
outstanding balance of the Note (but not less than $50,000 unless the remaining
balance of the Note is less than such amount), including accrued but unpaid
interest thereon, into shares of the Registrant's common stock. The conversion
price shall be the lower of (i) $1.30 per share, adjusted for stock splits and
reverse stock splits, and (ii) 80% of the five day trailing average of the
Registrant's common stock on the date notice of conversion is delivered to the
Registrant. The Registrant has recorded a financing cost attributable to the
beneficial conversion feature in the amount of $62,500. This amount has been
charged to interest expense.

         In connection with the issuance of the above note, the Registrant
issued warrants to purchase a number of shares of common stock.

         The number of warrant shares purchased shall be calculated as of the
date an exercise notice is delivered to the Registrant by the higher of (i)
500,000 (or the portion of such 500,000 exercised by holder evidenced by a duly
executed exercise notice for such portion) divided by $1.30, adjusted for any
stock splits or reverse stock splits of the Registrant, and (ii) the quotient
determined by dividing 500,000 or such lesser portion of the warrant the being
exercised, by 80% of the market price. For purposes of this warrant, "market
price" shall equal the five (5) trailing average of the Registrant's common
stock at the close of market for each day, ending on the date the Registrant
receives a duly completed and executed exercise notice.

         The warrant expires on June 5, 2005. The fair value of the warrant,
using the Black-Sholes option pricing model is $619,075. This amount has been
recorded as a deferred financing cost and is being charged to interest expense
over the life of the note.

         During August 2000, the Registrant issued 9 convertible promissory
notes for aggregate proceeds of $285,000. All of the notes are due in August
2003. The Registrant has also issued common stock purchase warrants in
connection with the issuance of the notes. The terms of the notes and warrants
are substantially the same as those described above, except that the highest
exercise or conversion price is $0.71 per share, as opposed to $1.30 per share,
and the warrants expire in August 2003. The Registrant has recorded a financing
cost attributable to the beneficial conversion feature in the amount of $78,492
charged to interest expense. The Registrant has recorded deferred financing
costs of $194,056, representing the fair value of the warrants, as determined by
the Black Sholes option-pricing model. This deferred financing cost is being
charged to interest expense over the life of the notes.


                                       24
<PAGE>


         Upon negotiating further funding, the Registrant expects to use a
portion of its financing to develop its Voice over Internet Protocol (VoIP) and
ISP projects and to make other acquisitions that it deems beneficial to the
continuation of its business.

         The Registrant believes that it will need funding sources to continue
the expansion of its operations and it intends to pursue additional funding in
the form of additional direct equity. The Registrant does not intend to develop
its own value-added products and services at this time. It will, instead,
purchase or license those products and services from third parties.

         On April 12, 2001, the Registrant signed a Letter of Intent to acquire
privately-held Apollo Communications International Corporation (Apollo). Apollo
is a niche international telecommunications carrier operating out of Seattle,
Washington and Shanghai, China. Apollo provides high quality network services,
data centers and telecommunication solutions between the United States and Asia.
Apollo is planning to build a point-to-point fiber optic network connecting both
Seattle and Shanghai. Apollo has attained the Federal Communication Commission
(FCC) license that gives it the ability to resell international telecom services
and set up facilities to handle data traffic.

         Under the terms of the Letter of Intent, 65% of the issued and
outstanding stock of GTCI will be exchanged for all the issued and outstanding
stock of Apollo. The closing of the acquisition is subject to certain
conditions, including satisfactory completion of due diligence and execution of
a definitive agreement and shareholder approval. The acquisition is expected to
be completed during the second quarter of 2001.

         On November 15, 1999 China signed a trade agreement with the United
States that lifts trade barriers. The pact obligates China to cut tariffs an
average of 23% which promises greater access for telecommunications firms. But
China must still sign agreements with several other nations including the
European Union before it can be admitted to the World Trade Organization (WTO),
which will take additional time to resolve.

         Socio-political factors and other variables will have a significant
impact the Registrant's future financial condition. Among other things, China is
seeking entry into the WTO and if it is successful, the liberalization of its
telecom markets to foreigners will have a direct effect on the Registrant's and
its subsidiaries business operations. Some of these factors are, the lowering of
tariff and non-tariff barriers for information technology products and services;
more transparency and clearer rules and regulations with respect to the telecom
industry; an increase in globalization and the free flow of information among
trading partners; access to more reliable market data; and other multilateral
arrangements and market reforms that are prerequisites for entry into the WTO.


                                       25
<PAGE>


         Present indications from Beijing point to the liberalization of foreign
investment in China's Internet sector. The liberalization of the telecom sector
would allow the Registrant to provide capital and investment in other
value-added products and services within the information technology/Internet
sector such as IP Telephony and Long Distance Calling Cards that are presently
prohibited from foreign participation.

         In the meantime, there are inherent risks in operating in this sector
where the rules and regulations are still uncertain. Opening of the information
technology/Internet sector to foreign participation will also mean an increase
in competition from multinational telecommunications companies in China. The
degree to which it will affect the Registrant's future operations and financial
results is uncertain and will depend on the competency of the management team in
executing its business plan and carrying out an effective implementation of the
core operations of the joint ventures.

         As a result of conducting overseas operations, the Registrant is
vulnerable to foreign exchange fluctuations. This is especially true in Asia
where currency fluctuations and devaluations are not only determined by market
forces but are also affected by the monetary and fiscal policies of foreign
governments. There are also risks associated with the laws and regulations that
apply to the repatriation of capital from overseas operations.

         The success of the Registrant and its subsidiaries' operations in China
is subject to the political and economic uncertainties of that region. These
unknowns are characterized by unexpected changes in rules and regulations;
tariffs or other barriers; policy changes regarding foreign asset ownership;
changes in tax laws for foreign companies; unexpected changes in monetary or
fiscal policies; market reforms; austerity programs enacted by the government;
government subsidies that are anti-competitive in nature; currency exchange
regulations and lack of transparency in the financial markets. These and other
factors could have an adverse impact on the Registrant's business and financial
results in the future or require the Registrant to modify its current business
practices.

         The market for information technology products and services is
characterized by rapidly changing technology, frequent introductions of new
products and evolving industry standards that result in product obsolescence and
short product life cycles. Accordingly, the Registrant's success is dependent
upon its ability to anticipate technological changes in the industry and to
continually identify, obtain and successfully market new products and services
that satisfy evolving technologies, customer preferences and industry
requirements within the markets that the Registrant and its subsidiaries
operate.

         There can be no assurance that competitors will not market products and
services in the Chinese markets that have certain competitive advantages over
those of the Registrant and its subsidiaries.


                                       26
<PAGE>


         There are also uncertainties and risks attributable to the immature and
volatile nature of the Chinese information technology market. This market is
still in its nascent stage where sufficient data and market studies are not
available for any thorough analysis in determining the viability of the
Registrant's business plan. The Registrant and its subsidiaries mainly have to
rely on the experiences of its local joint venture partners and of its own
management team to make strategic decisions with respect to its operations. This
lack of clear and reliable market information dramatically increases the risk of
the Registrant making incorrect market assumptions.

         The Registrant believes that the size of the emerging market in China
contributes positively to its prospects for success and that the current
availability of capital seems to support present and future needs of the
Registrant's operations. Any material change in the regulatory climate in China
could be materially damaging to the Registrant's future prospects for success.

         In December 1998, the Registrant signed consulting contracts with Lions
Peak Capital Ltd. and Milan Financial Inc. These two companies have been working
with the Registrant to provide consulting services with respect to investor
relations, marketing and business development. The Registrant has recently
retained or is presently seeking new management with significant experience in
areas that are expected to contribute to the implementation of its current
operating plan.

         Effective January 1, 2000, Mr. Brandenburg became CEO of the
Registrant. The Registrant is now seeking a qualified individual to serve in
this position. In addition, on March 2, 2000, the Registrant appointed Robert J.
Andresen to serve as President. On December 12, 2000, the Registrant removed
Messrs. Brandenburg, Andresen, and Zapton from its Board of Directors, pursuant
to a Consent Stockholders' Resolution that was signed by stockholders who
control more than two thirds of the Registrant's outstanding stock.


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         Financial Statements are referred to in Item 13, listed in Part F/S and
filed and included elsewhere herein as a part of this Annual Report on Form
10-KSB.


                                       27
<PAGE>


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

         As of December 31, 2000, the Registrant's principal independent
accountant had not resigned, declined to stand for re-election, nor were they
dismissed. The principal accountant's report on the financial statements for the
last two years contains no adverse opinion or disclaimer of opinion, nor were
they modified as to uncertainty, audit scope, or accounting principles. There
have been no disagreements with any former accountants or any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.

As of February 6, 2001, the Registrant's independent accountants, HJ &
Associates, who were previously engaged as the principal accountants to audit
the Registrant's financial statements were dismissed. The principal accountants
report on the financial statements for either of the past two years did not
contain an adverse opinion or a disclaimer of opinion or any qualification as to
uncertainty, audit scope or accounting principles.

There were no disagreements with HJ & Associates on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure during the Registrant's two most recent fiscal years period or the
subsequent period through February 6, 2001.

The Registrant engaged Merdinger, Fruchter, Rosen & Corso, P.C. as its new
independent accountants as of February 6, 2001. During the two most recent
fiscal years and through February 6, 2001, the Registrant has not consulted with
Merdinger, Fruchter, Rosen & Corso, P.C. regarding either (i) the application of
accounting principles to a specified transaction, either completed or proposed;
or the type of audit opinion that might be rendered on the Registrant's
financial statements or (ii) any matter that was either the subject of a
disagreement, as that term is defined in Item 304 (a) (1) (iv) of Regulation S-K
and the related instructions to Item 304 of the Regulation S-K, or a reportable
event, as that term is defined in Item 304 (a) (1) (iv) of Regulation S-K.

The decision to change accountants was approved by the Board of Directors of the
Registrant.


                                       28
<PAGE>


                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

             The following table sets forth information regarding the directors,
executive officers, promoters and control persons of the Registrant as of
December 18, 2000:

<TABLE>
<CAPTION>

     NAME                                  AGE    POSITION                         TERM         SERVED SINCE
     ----                                  ---    --------                         ----         ------------
<S>                                        <C>    <C>                              <C>          <C>
1.  Thomas C. Brandenburg(1)               65     CEO                              2yrs            10/99
2.  Robert Andresen(2)                     54     President & Chief Operating      2yrs            10/97
                                                  Officer
3.  Thomas J. Kennedy                      50     Secretary, Treasurer &           2yrs            10/97
                                                  Director
4.  Terry Wong(3)                          40     Vice Chairman & Director         2 yrs           10/97
5.  Daniel Zapton(4)                              Director                         6 mos           08/00

</TABLE>

On December 18, 2000, Messrs. Brandenburg, Andresen and Zapton were removed from
the Board of Directors of the Registrant, pursuant to a Consent Stockholders'
Resolution that was signed by stockholders controlling more than two-thirds of
the Registrant's outstanding shares. On February 6, 2001 Messrs. Brandenburg and
Andresen resigned as officers of the Registrant.

THOMAS C. BRANDENBURG

         Mr. Brandenburg became a director of the Registrant on October 1, 1999.
He served as interim CEO of the Registrant from October 1, 1999 until December
31, 1999 and has served as CEO since January 1, 2000.

         Prior to joining the Registrant, Mr. Brandenburg founded US Network
Corporation Inc., the first company to negotiate territory wide term and volume
based resale contracts with any US Regional Bell Operating Company (RBOC)


----------------
(1) On December 12 2000, Mr. Brandenburg was removed from the Board of Directors
of the Registrant, pursuant to a Consent Stockholders' Resolution that was
signed by stockholders controlling more than two-thirds of the Company's
outstanding shares. On February 6, 2000, Mr. Brandenburg resigned as the CEO of
the Registrant.

(2) On December 12 2000, Mr. Andresen was removed from the Board of Directors of
the Registrant, pursuant to a Consent Stockholders' Resolution that was signed
by stockholders controlling more than two-thirds of the Company's outstanding
shares. On February 7, 2000, Mr. Andresen resigned as the President of the
Registrant.

(3) On February 7, 2001, Mr. Terry Wong was appointed as the President and CEO
of the Registrant.

(4) On December 12, 2000, Mr. Zapton was removed from the Board of Directors of
the Registrant, pursuant to a Consent Stockholders' Resolution that was signed
by stockholders controlling more than two-thirds of the Company's outstanding
shares.


                                       29
<PAGE>


concluding contracts with Nynex and Ameritech. Prior to his five-year
involvement with that firm, he was the founding chairman of Litel, Inc. from
1984-1988. He commenced his involvement in the communications industry in 1978,
providing equity to an MCI reseller, United Networks Corp. in Dallas and
subsequently selling the company to US Tel. From 1974-1978 Mr. Brandenburg
served as President and CEO of Rocky Mountain Industries managing and operating
oil ventures in California and Canada, an auto leasing company, a specialty
steel company and land development activities. Prior to this, he was the Senior
Vice President of Graham Loving & Company, a private brokerage firm. He held a
ten year position as Senior Superintendent for Zurich American Insurance Group
from 1960 to 1970.

         Mr. Brandenburg holds a Bachelors and Masters of Art in Literature from
the University of Notre Dame.

ROBERT J. ANDRESEN

         Mr. Andresen has served as Director and Chief Operating Officer of the
Registrant since January 10, 2000 and as President since March 2, 2000.

         Prior to joining the Registrant, Mr. Andresen served as Regional Vice
President for two major voice/data network companies, WILTEL from 1991 to 1993
and WANG LABS from 1987 to 1991, and as General Manager for US Network Inc., a
major reseller of local RBOC services from 1995 to 1997. He was recruited by the
Registrant, away from Focal Communications, a competitive local exchange carrier
where he was responsible for the sales and customer support in the New York
Metro territory. He has directed the design and implementation of major computer
and telecom systems for municipalities and private sector firms representing
long-term projects of up to $15 million.

         Robert Andresen holds a Master of Business Administration in Finance
from Long Island University and a Bachelor of Arts in Psychology from Brooklyn
College. He is a Certified Electronics Technician of the U.S. Marine Corps.

TERRY WONG

         Mr. Wong has been a Director of the Registrant since March 1998, and
has served as President of the Registrant from March 1998 until March 2, 2000,
when he became Vice Chairman.

         Mr. Wong was the President of Fortune Maple Capital Ltd. (Hong
Kong/Canada) from 1989 to 1997. During this time he was instrumental in setting
up major telecommunications projects in North Eastern China and developing a
strategic joint-venture partnership with China's Post and Telecom real estate
development projects in Canada and China in excess of $80 million. He was also
involved in investments in high-growth, high-technology companies in both Asia
and North America. From 1984 to 1994, he held the position of


                                       30
<PAGE>


director of sales and marketing for Tak Kee Stevedoring and Shipping (Hong Kong)
where he was responsible for increasing sales for the company at an annual
average rate of 65% during the ten year period and opened major markets for the
company in both China and Malaysia. Mr. Wong received a BA Commerce degree, with
a focus on finance, from Simon Fraser University, Vancouver, BC in 1982 and was
enrolled in the Master of Economics program the following year.

THOMAS J. KENNEDY

         Mr. Kennedy has served as a Director and Secretary and Treasurer of the
Registrant since March 1998.

         Mr. Kennedy has been practicing as a barrister, solicitor and
management consultant since 1991. Between 1981 and 1991, Mr. Kennedy was Vice
Chairman of the Workers Compensation Review Board. Prior to this, he served as a
prosecutor for the Canadian Department of Justice, Vancouver regional office.
From 1991 to present, he has held the position of Director for three public
companies: Global Tree Technologies Inc., Rock Resources Inc. and Nu-Lite
Industries Ltd. Mr. Kennedy received a Bachelor of Commerce and Business
Administration degree in 1973 and a Bachelor of Law degree in 1974 from the
University of BC in Vancouver and was admitted to the Law Society of BC in 1975.

ITEM 10. EXECUTIVE COMPENSATION.

         Mr. Brandenburg served as interim CEO from October 1, 1999 to December
31, 1999. Effective January 1, 2000, Mr. Brandenburg became CEO. Mr. Andresen
became President effective March 2, 2000.

         The following sets forth information concerning all cash and non-cash
compensation awarded to the Registrant's executive officers in excess of
$100,000 for the year ended December 31, 2000:


                                       31
<PAGE>


                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                   Annual Compensation                        Long-Term Compensation
                                           -----------------------------------------------------------------------------------------
                                                                                        AWARDS                PAYOUTS
                                                                                ----------------------------------------------------
                                                                     OTHER        RESTRICTED   SECURITIES
                                                                     ANNUAL         STOCK      UNDERLYING     LTIP       ALL OTHER
           NAME AND                           SALARY      BONUS   COMPENSATION     AWARD(S)   OPTIONS/SARS   PAYOUTS   COMPENSATION
      PRINCIPAL POSITION            YEAR        ($)        ($)         ($)           ($)           (#)         ($)          ($)
--------------------------------- -------- ------------ --------- ------------- ------------- ------------ ----------- -------------
<S>                               <C>      <C>          <C>       <C>           <C>           <C>          <C>         <C>
(1) Thomas C. Brandenburg, CEO      2000     294,953      58,333                      0             0            0           0
--------------------------------- -------- ------------ --------- ------------- ------------- ------------ ----------- -------------
(2) Robert J. Andresen,             2000     160,900      50,000
    President
--------------------------------- -------- ------------ --------- ------------- ------------- ------------ ----------- -------------
Thomas Kennedy                      2000           0           0        0             0             0            0           0
Director
--------------------------------- -------- ------------ --------- ------------- ------------- ------------ ----------- -------------
(3) Terry Wong Director             2000           0           0        0             0             0            0           0
--------------------------------- -------- ------------ --------- ------------- ------------- ------------ ----------- -------------
(4) Daniel Zapton                   2000           0           0        0             0             0            0           0
--------------------------------- -------- ------------ --------- ------------- ------------- ------------ ----------- -------------

</TABLE>


----------------
(1) On December 12 2000, Mr. Brandenburg was removed from the Board of Directors
of the Registrant, pursuant to a Consent Stockholders' Resolution that was
signed by stockholders controlling more than two-thirds of the Company's
outstanding shares. On February 7, 2000, Mr. Brandenburg resigned as CEO of the
Registrant.

(2) On December 12 2000, Mr. Andresen was removed from the Board of Directors of
the Registrant, pursuant to a Consent Stockholders' Resolution that was signed
by stockholders controlling more than two-thirds of the Company's outstanding
shares. On February 7, 2000, Mr. Andresen resigned as the President & COO of the
Registrant.

(3) On February 7, 2001, Mr. Terry Wong was appointed as the President and CEO
of the Registrant.

(4) On December 12, 2000, Mr. Zapton was removed from the Board of Directors of
the Registrant, pursuant to a Consent Stockholders' Resolution that was signed
by stockholders controlling more than two-thirds of the Company's outstanding
shares.


                                       32
<PAGE>

<TABLE>
<CAPTION>

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (INDIVIDUAL GRANTS)
---------------------------------------------- -------------------- ------------------- ----------------- ------------------
                                                                        PERCENT OF
                                                    NUMBER OF         TOTAL OPTIONS/
                                                   SECURITIES          SARS GRANTED
                                                   UNDERLYING          TO EMPLOYEES       EXERCISE OR
                                                  OPTIONS/SARS          IN FISCAL          BASE PRICE
                    NAME                           GRANTED (#)             YEAR              ($/SH)        EXPIRATION DATE
---------------------------------------------- -------------------- ------------------- ----------------- ------------------
<S>                                            <C>                  <C>                 <C>               <C>
Thomas C. Brandenburg                               1,000,000             55.56%              $1.56            09/23/2002
---------------------------------------------- -------------------- ------------------- ----------------- ------------------
Terry Wong                                            200,000             11.11%              $1.25            09/28/2002
---------------------------------------------- -------------------- ------------------- ----------------- ------------------
Robert Andresen                                       500,000             27.78%              $1.375           01/10/2003
---------------------------------------------- -------------------- ------------------- ----------------- ------------------
Thomas Kennedy                                        100,000              5.55%              $1.25            09/28/2002
---------------------------------------------- -------------------- ------------------- ----------------- ------------------

</TABLE>

         Under the terms of his employment agreement with the Company, Mr.
Brandenburg received a one-time signing bonus of $95,000, of which $58,333 was
paid in 2000. Mr. Brandenburg was entitled to receive base annual compensation
of not less than $360,000 during the three year term of his employment agreement
with the Registrant, and received his base compensation from January 1, 2000 to
October 15, 2000. In addition, the Board of Directors of the Company approved a
grant to Mr. Brandenburg of options to acquire 1,000,000 shares of common stock,
which are exercisable at an exercise price of $1.56 per share and expire on
September 23, 2002. Such options are required to be granted under an incentive
stock option plan that qualifies under Section 422A of the Internal Revenue Code
to be adopted by the Registrant subject to any required stockholder approval.
The Registrant has not adopted such a plan as of the date hereof.

         Under his employment agreement with the Registrant, Mr. Andresen
received a one-time signing bonus of $50,000 in 2000. Mr. Andresen was entitled
to receive base annual compensation of not less than $200,000 during the three
year term of his employment agreement, and received his base compensation from
January 10, 2000 to October 31, 2000. In addition, the Board of Directors of the
Company approved a grant to Mr. Andresen of warrants or nonqualified options to
acquire 500,000 shares of common stock. Such warrants or nonqualified options
may be exercisable at $1.375 per share.

         On December 12, 2000, Messrs. Brandenburg, Andresen and Zapton were
removed from the Board of Directors of the Registrant, pursuant to a Consent
Stockholders' Resolution that was signed by stockholders controlling more than
two-thirds of the Company's outstanding shares. The current Board of Directors
is comprised of Messrs. Wong and Kennedy.


                                       33
<PAGE>


        On February 7, 2001, Messrs. Brandenburg and Andresen resigned as
officers of the Registrant pursuant to a mutual settlement agreement that was
approved by the Board of Directors of the Registrant. The settlement offer
entitles Messrs. Brandenburg and Andresen to retain their stock options and
warrants as outlined above. It also entitles them to $180,000 less any
governmental withholdings. The Registrant will pay a total of $50,000 to Messrs.
Brandenburg and Andresen within 90 days from February 7, 20001 with the balance
being payable on or before July 7, 2001.

        On February 7, 2001, Mr. Terry Wong was appointed as the President and
Chief Operating Officer of the Registrant. As of the date hereof, the current
officers and Board of Directors of the Registrant have received no compensation.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information as to the 18,859,669 shares
of common stock owned as of December 31, 2000:

         I.       Each person who beneficially owns so far as the Registrant has
                  been able to ascertain, more than 5% of the outstanding shares
                  of the Registrant.

         II.      Each director.

         III.     Each of the officers named in the summary compensation table.

         IV.      All the directors and officers as a group unless otherwise
                  indicated in the footnotes below on the table is subject to
                  community property laws where applicable, the persons as to
                  whom the information is given has sole investment power over
                  the shares of common stock.


                                       34
<PAGE>

<TABLE>
<CAPTION>
     NAME                                     PRINCIPAL BENEFICIAL OWNER       NUMBER OF SHARES          PERCENT
     ----                                     --------------------------       ----------------          -------
<S>                                           <C>                              <C>                       <C>
1.       Sino Concourse Limited (2)           Mr. Yip & Mr. Lum                    1,875,000                9.9
2.       Sinoway Technology Ltd. (3)          Mr. Joseph Li                        1,825,000                9.7
3.       Ricky Ming Wah Ng                                                         1,250,000                6.6
4.       Terry Wong                                                                  588,000                3.1
5.       Thomas J. Kennedy                                                             -0-                    0

</TABLE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Until May 2000, the Registrant leased office space in Vancouver B.C.
from one of its officers and directors, Thomas Kennedy. The Registrant leased
this space for approximately US$3,300 per month. As of the date hereof, there
were no other transactions during the last two years, or proposed transactions,
to which the Registrant was or is to be a party, in which any director,
executive officer, nominee for directorship, security holder or immediate family
member had a direct or indirect material interest as defined by Rule 404 of
Regulation S-B.







----------------
(2) Sino Concourse Limited, is a Hong Kong limited liability company of which
Mr. Yip owns 80% and Mr. Lum owns 20%.

(3) Mr. Joseph Li is 100% owner of the issued and outstanding shares of Sinoway
Technology Ltd., a Hong Kong limited liability company.


                                       35
<PAGE>


ITEM 13. INDEX TO EXHIBITS.


         The following list describes the exhibits filed as part of this Annual
Report Form 10-KSB.

       EXHIBIT NO.                  DESCRIPTION
       -----------                  -----------

          2  *                      Charter and By-Laws

          2.1*                      Articles of Merger Merging Global Telephone
                                    Communication, Inc. (a Utah Corporation)
                                    into Global Telephone Communication, Inc. (a
                                    Nevada Corporation)

          2.2*                      Articles of Incorporation of Global
                                    Telephone Communication, Inc.

          2.3*                      Articles of Amendment and Restatement to
                                    Articles of Incorporation of Dynasty TMT
                                    Corp.

          2.4*                      Articles of Amendment to Articles of
                                    Incorporation of Dynasty TMT Corp.

          2.5*                      Articles of Amendment to the Articles of
                                    Incorporation of Dynasty TMT Corp.

          2.6*                      Articles of Incorporation of Dynasty Ore and
                                    Minerals Corporation

          2.7*                      By-Laws of Global Telephone Communication,
                                    Inc.


                                       36
<PAGE>


       EXHIBIT NO.                  DESCRIPTION
       -----------                  -----------

       None                         Instruments Refining the rights of Security
                                    Holders

       None                         Voting Trust Agreements

          6  *                      Material Contracts

          6.1*                      Share Exchange Acknowledgement - of Webworks
                                    Multimedia Corp.

          6.2*                      Share Exchange Acknowledgements - Planet
                                    City Graphics Corp.

          6.3*                      Share Exchange Agreement with Regent Luck
                                    Holdings Ltd.

          6.4*                      Amendment of Share Exchange Agreement with
                                    Regent Luck Holdings Ltd.

          6.5*                      Joint Venture Agreement between Shenzhen Xun
                                    Yun Yun Da Electronics Co. Ltd. and Regent
                                    Luck Holdings Ltd. for Shenzhen Global Net
                                    Computer Information Co. Ltd.

          6.6*                      Agency Agreement between Shenzhen Newsnet
                                    Information Co. and Shenzhen Global Net
                                    Computer Information Co. Ltd.

          6.7*                      Telecommunication Business Operation
                                    Approval of Peoples Republic of China for
                                    Shenzhen Newsagent Co. Ltd.

          6.8*                      Share Exchange Agreement with Pacific Asset
                                    International Ltd.


                                       37
<PAGE>


       EXHIBIT NO.                  DESCRIPTION
       -----------                  -----------

          6.9*                      Consulting Agreement with Lions Peak Capital
                                    Ltd.

          6.10*                     Consulting Agreement with Milan Financial
                                    Inc.

          6.11*                     Revenue Participation and Option to Purchase
                                    Agreement

          6.12*                     Mutual Rescission Agreement Between Global
                                    Telephone Communication, Inc. and Planet
                                    City Graphics Corp.

          6.13*                     Mutual Rescission Agreement Between Global
                                    Telephone Communication, Inc. and Webworks
                                    Multimedia Corporation

          6.14*                     Yamaha Promotional Calling Card Program

          6.15*                     First Continental Capital L.P. Revenue
                                    Participation Agreement

          6.16*                     Employment Agreement with Robert J. Andresen

          6.17*                     Employment Agreement with Thomas C.
                                    Brandenburg

          6.18*                     15% Convertible Promissory Note

          6.19                      Mutual settlement Agreement between Global
                                    Telephone Communication, Inc. and Messrs.
                                    Brandenburg and Andresen

          6.20                      Consent on Stockholders' Resolution

----------------
(*) All of the above documents have been Incorporated by reference the above
Exhibits have been filed with the Form 10-SB


                                       38
<PAGE>


Reports on Form 8-K

None.

                                    PART F/S

             The following financial statements are submitted pursuant to the
information required by Item 310 of Regulation S-B:

                              FINANCIAL STATEMENTS

             NO.                    DESCRIPTION
             ---                    -----------

             FS-1                   Global Telephone Communication, Inc. and
                                    Subsidiaries Consolidated Financial
                                    Statements for Years Ended December 31, 2000
                                    and 1999.

             FS-2                   Planet City Graphics Corporation Financial
                                    Statements for the Year Ended December 31,
                                    1997.

             FS-3                   Webworks Multimedia Corporation Financial
                                    Statements for the Year Ended December 31,
                                    1997.

             FS-4                   Regent Luck Holdings Limited Financial
                                    Statements for the Year Ended December 31,
                                    1997

             FS-5                   Pacific Asset International Limited
                                    Financial Statements for the Year Ended
                                    February 28, 1999

             FS-6                   Cyber 2000 Limited Financial Statements for
                                    the Year Ended December 31, 1999

             FS-7                   Nano Technology Ltd. Financial Statements
                                    for the Year Ended December 31, 1999


                                       39
<PAGE>


                                   SIGNATURES


         In accordance with Section 13 or 15 (d) of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.



                                                    GLOBAL TELEPHONE
                                                    COMMUNICATION INC.



Dated:       April 12, 2001                     BY: /s/ Terry Wong
                                                   -----------------------------
                                                      TERRY WONG
                                                      President & CEO

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

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


/s/ Thomas J. Kennedy           Secretary, Treasurer, and      April 12, 2001
---------------------------     Director
Thomas J. Kennedy


                                       40
<PAGE>


                      GLOBAL TELEPHONE COMMUNICATION, INC.
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


<PAGE>


                      GLOBAL TELEPHONE COMMUNICATION, INC.
                                AND SUBSIDIARIES
                          (A Development Stage Company)

                        CONSOLIDATED FINANCIAL STATEMENTS






                                    CONTENTS

                                                                       PAGE

INDEPENDENT AUDITORS' REPORT                                             1

CONSOLIDATED BALANCE SHEETS                                              2

CONSOLIDATED STATEMENTS OF OPERATIONS                                    3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS                            4

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY                         5 - 8

CONSOLIDATED STATEMENTS OF CASH FLOWS                                  9 - 10

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                        11 - 25


<PAGE>


                          INDEPENDENT AUDITORS' REPORT


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES:

We have audited the accompanying consolidated balance sheet of Global Telephone
Communication, Inc. and Subsidiaries (a Development Stage Company) as of
December 31, 2000 and the related consolidated statements of operations,
comprehensive loss, stockholders' equity and cash flows for the year then ended
and for the period from inception (March 10, 1970) to December 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The Company's financial statements as of and for the year ended
December 31, 1999, and for the period March 10, 1970 (inception) through
December 31, 1999 were audited by other auditors whose report, dated April 11,
2000, expressed an unqualified opinion on those statements. The financial
statements for the period March 10, 1970 (inception) through December 31, 1999
reflect total revenues and net loss of $4,705 and $7,278,292, respectively, of
the related totals. The other auditors' report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for such prior period, is
based solely on the report of such other auditors.

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

In our opinion, based on our audit and the report of the other auditors, such
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Global Telephone
Communication, Inc. and Subsidiaries as of December 31, 2000 and the
consolidated results of its operations and its cash flows for the year then
ended, and for the period from March 10, 1970 (inception) to December 31,
2000 in conformity with accounting principles generally accepted in the
United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the company will continue as a going concern. As described in Note 10 to
the accompanying consolidated financial statements, the Company has incurred
significant operating losses to date and has negative cash flow from operations.
Management's plans in regard to these matters are also described in Note 10.
These consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.


                                    MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
                                    Certified Public Accountants

Los Angeles, California
March 16, 2001


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                        December 31,
                                                                                ----------------------------
                                                                                    2000            1999
                                                                                ------------    ------------
<S>                                                                             <C>             <C>
        ASSETS
CURRENT ASSETS
     Cash and cash equivalents                                                  $    214,537    $  1,485,896
     Restricted cash                                                                 850,000         850,000
     Note receivable - related party, net of allowance of
      $100,000 and $49,500                                                                --          50,500
     Other current assets                                                                286           2,657
                                                                                ------------    ------------
     Total current assets                                                          1,064,823       2,389,053

Property and equipment, net of accumulated
     depreciation of $34,028 and $9,445                                              562,536          36,825

Goodwill, net of accumulated amortization
   of  $400,000 and $-0-                                                           1,200,000              --
Deferred financing costs                                                           1,729,131              --
Other assets                                                                          42,201           1,495
                                                                                ------------    ------------

        TOTAL ASSETS                                                            $  4,598,691    $  2,427,373
                                                                                ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                                                           $    873,819    $    143,883
     Accrued expenses                                                                  2,059         166,811
     Notes payable                                                                   718,889         543,631
     Due to related parties                                                           10,649           1,289
                                                                                ------------    ------------
        Total current liabilities                                                  1,605,416         855,614

Notes payable, less current portion                                                1,771,066              --
                                                                                ------------    ------------

Total liabilities                                                                  3,376,482         855,614
                                                                                ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Preferred stock, $1.00 par value;
    5,000,000 shares authorized,
    no shares issued and outstanding
  Common stock, $0.001 par value;
    25,000,000 shares authorized, 18,812,610 and
    16,788,725 shares issued and outstanding                                          18,813          16,788
  Additional paid-in capital                                                      15,350,079       8,834,665
  Other comprehensive loss                                                            (1,395)         (1,402)
  Deficit accumulated during the development stage                               (14,145,288)     (7,278,292)
                                                                                ------------    ------------
     Total stockholders' equity                                                    1,222,209       1,571,759
                                                                                ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $  4,598,691    $  2,427,373
                                                                                ============    ============

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      - 2 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                                            From
                                                                                                         Inception on
                                                                            For the Years Ended         March 10, 1970
                                                                                December 31,                Through
                                                                        ----------------------------     December 31,
                                                                            2000            1999            2000
                                                                        ------------    ------------    ------------
<S>                                                                     <C>             <C>             <C>
Revenue                                                                 $     52,045    $       --      $     56,750
                                                                        ------------    ------------    ------------

Operating Expenses
     General and administrative                                            5,043,696       3,534,305      10,131,276
     Depreciation and amortization                                           408,347       2,483,889       2,892,609
                                                                        ------------    ------------    ------------
        Total operating expenses                                           5,452,043       6,018,194      13,023,855
                                                                        ------------    ------------    ------------

Loss from operations                                                      (5,399,998)     (6,018,194)    (12,967,135)
                                                                        ------------    ------------    ------------

Other income (expense)
     Interest income                                                          17,417           7,003          24,420
     Financing costs                                                      (1,416,320)           --        (1,416,320)
     Interest expense                                                       (668,695)         (9,198)       (686,043)
                                                                        ------------    ------------    ------------
        Total other income (expense)                                      (2,067,598)         (2,195)     (2,077,943)
                                                                        ------------    ------------    ------------

Loss  from continuing operations
  Before income taxes                                                     (7,467,596)     (6,020,389)    (15,045,078)

Provision for income taxes                                                        --              --              --
                                                                        ------------    ------------    ------------
Loss from continuing operations                                           (7,467,596)     (6,020,389)    (15,045,078)
                                                                        ------------    ------------    ------------

Discontinued operations:
Gain from discontinued operations                                                 --         848,891         847,638
Recovery (loss) from disposal of discontinued operations                     600,600        (548,448)         52,152
                                                                        ------------    ------------    ------------
     Total discontinued operations                                           600,600         300,443         899,790
                                                                        ------------    ------------    ------------
Net loss                                                                $ (6,866,996)   $ (5,719,946)   $(14,145,288)
                                                                        ============    ============    ============

Net loss per common share - Basic and Diluted
Continuing operations                                                   $      (0.41)   $      (0.60)

Discontinued operations                                                         0.03             0.03
                                                                        ------------    -------------
     Net loss per share                                                 $      (0.38)   $       (0.57)
                                                                        ============    =============

Weighted average number
  of shares outstanding                                                   18,185,114        9,964,098
                                                                        ============    =============

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      - 3 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

<TABLE>
<CAPTION>

                                                                                                          From
                                                                                                      Inception on
                                                               For the Years Ended                   March 10, 1970
                                                                   December 31,                         Through
                                                      ---------------------------------------         December 31,
                                                         2000                       1999                  2000
                                                      --------------          ---------------      ----------------
<S>                                                     <C>                     <C>                  <C>
Net loss                                                $ (6,866,996)           $ (5,719,946)        $  (14,145,288)

Foreign currency translation adjustment                            7                  (1,402)                (1,395)
                                                      --------------          ---------------      ----------------

Comprehensive loss                                      $ (6,866,989)           $ (5,721,348)        $  (14,146,683)
                                                      ==============          ===============      ================

</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                      - 4 -
<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENT OF STOCK HOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                                                         Deficit
                                                                                                       Other           Accumulated
                                                        Common Stock              Additional       Comprehensive         During
                                                 -------------------------------    Paid In           Income           Development
                                                     Shares            Amount       Capital           (Loss)              Stage
                                                 ---------------  -------------- --------------  ------------------ ----------------
<S>                                              <C>              <C>            <C>             <C>                <C>
Balance at March 10, 1970                                     -          $    -        $     -             $     -  $             -

Common Stock issued for cash at
  $16.00 per share during 1970                            1,906               2         30,498                   -                -

Common stock issued for services
  rendered at $6.40 per share during 1970                 1,578               1         10,099                   -                -

Common stock issued for cash at
  $32.00 per share during 1971                            4,075               4        130,396                   -                -

Common stock issued for services
  rendered at $6.40 per share during
  the period of inception through 1983                   11,641              12        180,581                   -                -

Common stock issued for services
   rendered at $6.40 per share during 1988                2,817               3         18,027                   -                -

Net Loss from inception on
   March 10, 1970 through
   December 31, 1991                                          -               -              -                   -         (369,623)
                                                 ---------------  -------------- --------------  ------------------ ----------------

Balance, December 31, 1991                               22,017              22        369,601                   -         (369,623)

Net loss for the year ended
  December 31, 1992                                           -               -              -                   -             (552)
                                                 ---------------  -------------- --------------  ------------------ ----------------

Balance, December 31, 1992                               22,017              22        369,601                   -         (370,175)

Net loss for the year ended
  December 31,1993                                            -               -              -                   -             (100)
                                                 ---------------  -------------- --------------  ------------------ ----------------

Balance, December 31, 1993                               22,017              22        369,601                   -         (370,275)

Common stock issued for services
   rendered at $6.40 per share on
   August 1, 1994                                        43,750              44        279,956                   -                -

Net loss for the year ended
   December 31, 1994                                          -               -              -                   -         (280,100)
                                                 ---------------  -------------- --------------  ------------------ ----------------

Balance, December 31, 1994                               65,767         $    66      $ 649,557            $      -     $   (650,375)
                                                 ---------------  -------------- --------------  ------------------ ----------------

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                      - 5 -
<PAGE>


             GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES.
                          (A Development Stage Company)
           CONSOLIDATED STATEMENT OF STOCK HOLDERS' EQUITY (Continued)

<TABLE>
<CAPTION>

                                                                                                                        Deficit
                                                                                                      Other           Accumulated
                                                        Common Stock              Additional      Comprehensive         During
                                                 -------------------------------    Paid In          Income           Development
                                                     Shares            Amount       Capital          (Loss)              Stage
                                                 ---------------  -------------- -------------- ------------------ ----------------
<S>                                              <C>              <C>            <C>            <C>                <C>
Balance, December 31, 1994                               65,767            $  66       $649,557            $     -      $ (650,375)

Net loss for the ended
  December 31, 1995                                           -                -              -                  -          (4,053)
                                                 ---------------  -------------- -------------- ------------------ ----------------

Balance, December 1995                                   65,767               66        649,557                  -        (654,428)

Expenses paid on the Company's
  behalf by a shareholder                                     -                -            716                  -               -

Common stock issued for cash at
  $0.04 per share on July 23, 1996                    1,000,000            1,000         39,000                  -               -

Fractional shares issued in conjunction
  with a 1-for-80 reverse stock split                        33                -              -                  -               -

Fractional shares issued in conjunction
  with a 3-for-1 forward  stock split                        34                -              -                  -               -

Net loss for the year ended
  December 31, 1996                                           -                -              -                  -        (347,222)
                                                 ---------------  -------------- -------------- ------------------ ----------------

Balance at December 31, 1996                          1,065,834            1,066        689,273                  -      (1,001,650)

Common stock issued to acquire
  Chow's Consulting Corporation on
   April 30, 1997 recorded at
   Predecessors cost of $0.00                            90,000               90            (90)                 -               -

Fractional shares canceled in conjunction
  with a 1-for-6 reverse stock split                        (41)               -              -                  -               -

Common stock issued for cash at
  $0.01 per share                                     3,000,000            3,000         28,000                  -               -

Net loss for the year ended
  December 31, 1997                                           -                -              -                  -        (134,071)
                                                 ---------------  -------------- -------------- ------------------ ----------------

Balance at December 31, 1997                          4,155,793          $ 4,156      $ 717,183           $      -      $(1,135,721)
                                                 ---------------  -------------- -------------- ------------------ ----------------

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                      - 6 -
<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
           CONSOLIDATED STATEMENT OF STOCK HOLDERS' EQUITY (Continued)

<TABLE>
<CAPTION>

                                                                                                                         Deficit
                                                                                                       Other           Accumulated
                                                        Common Stock              Additional       Comprehensive         During
                                                 -------------------------------    Paid In           Income           Development
                                                     Shares            Amount       Capital           (Loss)              Stage
                                                 ---------------  -------------- --------------  ------------------ ----------------
<S>                                              <C>              <C>            <C>             <C>                <C>
Balance, December 31, 1997                             4,155,793        $  4,156       $ 717,183          $       -     $(1,135,721)

Common stock issued to acquire
  subsidiaries valued at $0.50 per share               6,950,000           6,950       3,468,050                  -               -

Common stock issued for cash at
  $0.50 per share                                      1,140,142           1,140         568,931                  -               -

Net loss for the year ended
  December 31, 1998                                            -               -               -                  -        (422,625)
                                                   --------------  -------------  -------------- ------------------  ---------------

Balance, December 31, 1998                            12,245,935          12,246       4,754,164                  -      (1,558,346)

Common stock issued to acquire
  subsidiaries at $1.40 per share                        600,000             600         839,400                  -               -

Common stock issued for cash from $0.50
  to $2.00 ($0.78 average) per share                   5,483,433           5,483       4,204,017                  -               -

Stock offering costs paid                                  6,383               6         (56,753)                 -               -

Rescinded acquisitions                                (2,000,000)         (2,000)     (1,998,000)                 -               -

Debt converted to equity at $1.65 per share               52,524              53          86,612                  -               -

Discount on options                                            -               -         505,625                  -               -

Common stock issued for services at
  $1.25 per share                                        400,000             400         499,600                  -               -

Foreign currency translation adjustment                        -               -               -             (1,402)              -

Net loss for the year ended
  December 31, 1999                                            -               -               -                  -      (5,719,946)
                                                   --------------  -------------  -------------- ------------------  ---------------

Balance, December 1999                                16,788,275        $ 16,788      $8,834,665            $(1,402)   $ (7,278,292)
                                                   --------------  -------------  -------------- ------------------  ---------------

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      - 7 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
           CONSOLIDATED STATEMENT OF STOCK HOLDERS' EQUITY (Continued)

<TABLE>
<CAPTION>

                                                                                                                         Deficit
                                                                                                       Other           Accumulated
                                                        Common Stock              Additional       Comprehensive         During
                                                 -------------------------------    Paid In           Income           Development
                                                     Shares            Amount       Capital           (Loss)              Stage
                                                 ---------------  -------------- --------------  ------------------ ----------------
<S>                                              <C>              <C>            <C>             <C>                <C>
Balance, December 31, 1999                           16,788,275       $ 16,788      $8,834,665           $(1,402)      $(7,278,292)


Common stock issued for acquisition
  January 14, 2000                                      500,000            500       1,249,500                 -                 -

Exercise of warrants - February 22, 2000                300,000            300         299,700                 -                 -

Sale of shares for cash - February 22, 2000             500,000            500         499,500                 -                 -

Exercise of warrants                                    400,000            400         499,600                 -                 -

Shares issued for services - May 11 2000                 50,000             50          69,950                 -                 -

Recission of acquisition - June 26, 2000               (600,000)          (600)       (599,400)                -                 -

Shares issued for services -
  September 7, 2000                                       7,761              8           8,529                 -                 -

Shares issued for services -
  October 26, 2000                                      200,000            200         119,800                 -                 -

Conversion of debt to equity -
  November, 2000                                        650,316            650         130,350                 -                 -

Shares issued for services -
  November 15, 2000                                      16,258             17           5,527                 -                 -

Options issued to employee                                    -              -         585,000                 -                 -

Financing cost attributable to beneficial
  conversion feature                                          -              -         140,992                 -                 -

Financing costs attributable to warrants                      -              -         516,671

Warrants issued in connection with debt                       -              -       2,090,661                 -                 -

Financing costs attributable
  to shares sold below market                                 -              -         899,034                 -                 -

Foreign currency translation adjustment                       -              -               -                 7                 -

Net loss                                                      -              -               -                 -        (6,866,996)
                                                 ---------------  -------------- --------------  ------------------ ----------------
Balance, December 31, 2000                           18,812,610       $ 18,813     $15,350,079           $(1,395)    $ (14,145,288)
                                                 ===============  ============== ==============  ================== ================
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      - 8 -


<PAGE>



              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                          Inception on
                                                              For the Years Ended        March 10, 1970
                                                                  December 31,              Through
                                                          ----------------------------    December 31,
                                                              2000            1999            2000
                                                          ------------    ------------    ------------
<S>                                                       <C>             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
OPERATING ACTIVITIES
     Net loss                                             $ (7,467,596)   $ (6,020,389)    (15,045,078)
     Adjustments to reconcile net loss to net cash
     used by operating
        activities:
        Depreciation expense                                    24,803           9,072          34,248
        Allowance for bad debts                                 50,500          49,500         100,000
        Beneficial conversion expense                          140,992            --           140,992
        Common stock and options
          issued for services and expense                    1,853,877       1,005,625       3,348,941
        Amortization of financing costs                        361,530            --           361,530
        Goodwill amortization                                  400,000       3,475,000       3,875,000
        Foreign currency translation adjustment                      7          (1,402)         (1,395)
     Changes in operating assets and liabilities:
        (Increase) decrease in restricted cash                    --          (850,000)       (850,000)
        (Increase) decrease in other current assets              2,371          (2,657)           (286)
        (Increase) decrease in stock offering costs               --              --              --
        (Increase) decrease in accounts receivable                --          (100,000)        (89,315)
        (Increase) decrease in other assets                    (40,706)           --          (134,405)
        Increase (decrease) in deposits for 504                   --              (785)           (785)
        Increase (decrease) in accounts payable                729,936         (11,658)        906,921
        Increase (decrease) in accrued expenses               (164,752)        164,179           6,824
        Increase in related party payable                       10,649            --            10,649
                                                          ------------    ------------    ------------

           Net cash used by continuing
                         operations                         (4,098,389)     (2,283,515)     (7,336,159)
                                                          ------------    ------------    ------------

DISCONTINUED OPERATIONS
     Net gain                                                  600,600         300,443         889,790
     Adjustments to reconcile net gain to net cash
     provided by operating activities:
        Deprecation                                               --            41,717          99,180
        Recovery of shares                                    (600,600)           --          (600,600)

        Disposal of assets                                        --              --            15,456
     Changes in operating assets and liabilities:
        Increase (decrease) in marketable securities              --            36,708          36,708
        (Increase) decrease in accounts receivable                --            16,693              80
        (Increase) decrease in other assets                       --              --           (87,174)
        Increase (decrease) in accounts payable                   --             4,524         (25,971)
        Increase (decrease) in accrued expenses                   --           104,572         110,234
                                                          ------------    ------------    ------------
           Net cash provided by discontinued operations           --           504,657         437,705
                                                          ------------    ------------    ------------

           Net cash used by operating activities          $ (4,098,389)   $ (1,778,858)   $ (6,898,454)
                                                          ------------    ------------    ------------
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                      - 9 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

<TABLE>
<CAPTION>

                                                                                            Inception on
                                                                For the Years Ended        March 10, 1970
                                                                     December 31,             Through
                                                              ---------------------------    December 31,
                                                                  2000           1999           2000
                                                              ------------   ------------   ------------
<S>                                                           <C>            <C>            <C>
     CASH FLOWS FROM INVESTING ACTIVITIES
           Continuing Operations
     Purchase of fixed assets                                 $  (550,294)   $   (39,685)   $  (814,473)
                                                              -----------    -----------    -----------
        Net cash (used) by continuing operations                 (550,294)       (39,685)      (814,473)
                                                              -----------    -----------    -----------

     Discontinuing Operations
     Purchase of fixed assets                                        --          (10,600)       (10,600)
                                                              -----------    -----------    -----------
        Net cash used by discontinued operations                     --          (10,600)       (10,600)
                                                              -----------    -----------    -----------

NET CASH USED BY INVESTING ACTIVITIES                            (550,294)       (50,285)      (825,073)
                                                              -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
     Continuing Operations
     Increase in notes payable                                  2,077,324        544,921      3,134,082
     Common stock issued for cash                               1,300,000      4,152,753      6,136,055
                                                              -----------    -----------    -----------
        Net cash provided by continuing operations              3,377,324      4,697,674      9,270,137
                                                              -----------    -----------    -----------

     Discontinued Operations
     Repayment of notes payable                                      --          (44,371)       (96,028)

     Related party lending                                           --       (1,354,656)    (1,236,047)
                                                                             -----------    -----------
        Net cash provided by discontinued operations                 --       (1,399,027)    (1,332,075)
                                                              -----------    -----------    -----------

NET CASH PROVIDED BY FINANCING ACTIVITES                        3,377,324      3,298,647      7,938,062
                                                              -----------    -----------    -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                      (1,271,359)     1,469,504        214,535

CASH AND CASH EQUIVALENTS - BEGINNING                           1,485,894         16,390           --
                                                              -----------    -----------    -----------

CASH AND CASH EQUIVALENTS - ENDING                            $   214,535    $ 1,485,894    $   214,535
                                                              ===========    ===========    ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the year for-
        Interest paid                                         $    26,898    $     9,198
                                                              ===========    ===========    ===========
        Income taxes paid                                            --      $      --
                                                              ===========    ===========    ===========

SCHEDULE OF NON-CASH ACTIVITIES:

     Common stock, options and warrants issued for services
       and expense                                            $ 3,396,413    $ 1,005,625

     Beneficial conversion feature                                140,922           --

     Financing cost - stock sold below market                     899,034

     Common stock issued for subsidiaries                       1,250,000        840,000

     Common stock rescinded for subsidiaries                     (600,000)    (2,000,000)

     Debt  principal converted to stock                           131,000         86,665
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.

                                     - 10 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         ORGANIZATION

         Global Telephone Communication, Inc. (the "Company") is currently a
         development stage enterprise under the provisions of Statement of
         Financial Accounting Standards ("SFAS") No. 7. The Company was
         incorporated under the laws of the State of Utah on March 10, 1970. On
         March 24, 1998, the Company changed its domicile from the State of Utah
         to the State of Nevada.

         NATURE OF OPERATIONS

         The Company was incorporated with the original purpose of raising
         capital to develop and possibly mine certain oil and mineral deposits.
         The Company was unable to raise development money and the Company's
         operations ceased and the mineral deposits were abandoned. The Company
         has been seeking new business opportunities believed to hold a
         potential profit. The Company changed its name to Global Telephone
         Communication, Inc. on October 14, 1997.

         The Company is currently focusing on the development and implementation
         of voice over Internet Protocol and Internet services in Asia.

         On February 9, 1998, the Company acquired all of the issued and
         outstanding shares of an operating multimedia company, Planet City
         Graphics Corp. ("Planet City"), a private company incorporated under
         the laws of British Columbia, Canada, having its office in Vancouver,
         B.C. The Company issued a total of 1,500,000 common shares (valued at
         $0.50 per share) in exchange for all the issued and outstanding shares
         of Planet City. There was no cash consideration and the Company
         accounted for the acquisition as a purchase. There was no adjustment to
         the carrying value of the assets or liabilities of Planet City as they
         approximate fair value. The excess was recorded as goodwill. The
         acquisition was rescinded on October 1, 1999 and the goodwill was
         expensed. The operations of Planet City are included in the financial
         statements as discontinued operations.

         On February 9, 1998, the Company acquired all of the issued and
         outstanding shares of an operating multimedia company, Webworks
         Multimedia Corporation ("Webworks"), a private company incorporated
         under the laws of British Columbia, Canada, having its office in
         Vancouver, B.C. The Company issued a total of 500,000 common shares
         (valued at $0.50 per share) in exchange for all the issued and
         outstanding shares of Webworks. There was no cash consideration and the
         Company accounted for the acquisition as a purchase. There was no
         adjustment to the carrying value of the assets or liabilities of
         Webworks as they approximate fair value. The excess was recorded as
         goodwill. The acquisition was rescinded on October 1, 1999 and the
         goodwill was expensed. The operations of Webworks are included in the
         financial statements as discontinued operations.

         On October 1, 1999, the Company sold Planet City and Webworks back to
         the original shareholders of the respective companies. The Company
         returned to the shareholders all the issued and outstanding shares of
         common stock of each Company in exchange for the shares of the
         Company's common stock held by the shareholders. There was no cash
         consideration and the Company accounted for the disposition of all the
         shares of Planet City and Webworks as discontinued operations. The
         statements of operations of the Company have been adjusted to reflect
         the disposition of the subsidiaries as discontinued operations.

                                     - 11 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         NATURE OF OPERATIONS (CONTINUED)

         On April 16, 1998, the Company entered into a Share Exchange Agreement
         with Regent Luck Holdings Limited ("Regent"), a Hong Kong Corporation,
         with offices in Hong Kong, whereby the Company acquired all the issued
         and outstanding shares of Regent by issuing and exchanging 4,950,000
         shares (valued at $0.50 per share) of the Company to the shareholders
         of Regent for a total consideration of $2,475,000.

         Regent has a ninety percent (90%) ownership and interest in a joint
         venture company, Shenzhen Global Net Computer Information Co. Ltd.
         ("SGNCI"), organized under the laws of The Peoples Republic of China,
         with Shenzhen Newsnet Co. Ltd. ("Shenzhen Newsnet").

         Shenzhen Newsnet has obtained the Telecommunications Business Operation
         Approval (No. GDSZ P90007) which allows it to carry out computer
         information internet service. Shenzhen Newsnet and SGNCI have entered
         into an exclusive agency agreement which allows SGNCI to act as the
         exclusive agent to conduct all telecommunications and internet business
         and services in Shenzhen, Guangdong Province, PRC for Shenzhen Newsnet.

         The Company accounted for the acquisition of all the shares of Regent
         as a purchase. There was no adjustment to the carrying value of the
         assets or liabilities of Regent. The excess of the purchase price was
         recorded as goodwill.

         On March 7, 1999, the Company entered into a share exchange agreement
         with Pacific Asset International Ltd. (PAI), a Hong Kong Corporation,
         whereby the Company acquired 51% of the outstanding shares of PAI by
         issuing and exchanging 600,000 shares of the Company's common stock to
         the shareholder's of PAI.

         On January 13, 2000, the share exchange agreement was rescinded
         pursuant to a Mutual Recession Agreement. The shareholders of PAI
         signed the Mutual Recission Agreement on April 15, 2000. On June 26,
         2000 the shares subject to the agreement were legally canceled and
         removed from the shareholders list.

         On January 28, 2000 the Company's wholly owned subsidiary, Global
         Telephone Communication (BVI) Inc., ("GTCI (BVI)"), a British Virgin
         Islands company, arranged to acquire 70% of the shares of Nano
         Technology Ltd. ("Nano"), a British Virgin Island company. Nano owns
         100% of the issued and outstanding capital stock of Cyber 2000 Ltd.
         ("Cyber 2000"), a Hong Kong company (acquired for a consideration of
         $1,910 which was expensed as organization costs). Nano's only activity
         is to hold ownership interest in Cyber 2000.

                                     - 12 -


<PAGE>

              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         NATURE OF OPERATIONS (CONTINUED)

         7,000 shares of Nano were acquired from existing shareholders in
         exchange for $350,000 cash and 500,000 shares of the Company's common
         stock valued at $1,250,000 for total consideration of $1,600,000. This
         amount has been allocated to goodwill and is being amortized over a
         three year life using the straight-line method. Additionally, the
         Company committed to provide $1,000,000 in working capital to Cyber
         2000, $500,000 of which has been paid.

         The consolidated financial statements include the accounts of Global
         Telephone Communications, Inc., Global Telephone Communication (BVI)
         Inc., Shenzhen Global Net Computer Information Co., Ltd., Regent Luck
         Holdings Limited, Nano Technology Ltd., and Cyber 2000 Limited. No loss
         has been attributed to the minority shareholders of the subsidiaries
         because they have no basis in their investment.

         All references herein to GTCI or the "Company" included the
         consolidated results of GTCI and its subsidiaries.

         All significant intercompany accounts and transactions have been
         eliminated in consolidation.

         USE OF ESTIMATES

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

         REVENUE RECOGNITION

         The Company currently has no significant source of revenues. Revenue
         from the sale of goods or services is recognized when the significant
         risks and rewards of ownership have been transferred to the buyer. The
         Company's discontinued operations recognized revenues upon delivery of
         services or products to the customer.

         CASH AND CASH EQUIVALENTS

         Cash equivalents include short-term, highly liquid investments with
         maturities of three months or less at the time of acquisition. The
         Company has classified as restricted cash $850,000 which is held in
         segregated accounts as collateral for a promissory bank note.

         CONCENTRATION OF CREDIT RISK

         The Company places its cash in what is believes to be credit worthy
         financial institutions. However, cash balances may exceed FDIC or CDIC
         insured levels at various times during the year.

                                     - 13 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost. Depreciation is provided for
         in amounts sufficient to relate the cost of depreciable assets to
         operations over their estimated service lives, primarily on a
         straight-line basis. The estimated lives used in determining
         depreciation are five to seven years for furniture, fixtures and
         computer equipment.

         Maintenance and repairs are charged to expense as incurred; additions
         and betterments are capitalized. Upon retirement or sale, the cost and
         related accumulated depreciation of the disposed assets are removed and
         any resulting gain or loss is credited or charged to operations.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         The Company's financial instruments consist of cash, and cash
         equivalents, note receivable, accounts payable and accrued expenses and
         short-term debt. The carrying amounts of the Company's financial
         instruments approximate fair value due to the relatively short
         maturities of the instruments and market value interest rates on debt.

         LONG-LIVED ASSETS

         Long lived assets to be held and used are reviewed for impairment
         whenever events or changes in circumstances indicate that the related
         carrying amounts may not be recoverable. When required, impairment
         losses on assets to be held and used are recognized based on fair value
         of the assets and long-lived assets to be disposed of are reported at
         the lower of carrying amount or fair value less cost to sell.

         INCOME TAXES

         Income taxes are provided for based on the liability method of
         accounting pursuant to SFAS No. 109, "Accounting for Income Taxes." The
         liability method requires the recognition of deferred tax assets and
         liabilities for the expected future tax consequences of temporary
         differences between the reported amount of assets and liabilities and
         their tax bases.

         OFFERING COSTS

         Offering costs consist primarily of professional fees. These costs are
         charged against the proceeds of the sale of common stock in the periods
         in which they occur.

         GOODWILL

         Goodwill generated from the purchase of subsidiaries is amortized over
         a three-year life using the straight-line method. The Company evaluates
         the recoverability of the goodwill whenever events occur which may
         indicate an impairment of the goodwill but at a minimum the
         recoverability is evaluated annually. Any impairment of goodwill is
         reported in the financial statements in the period that it is
         recognized.


                                     - 14 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         GOODWILL (CONTINUED)

         The excess of the purchase price over the fair market value of the
         assets and liabilities acquired in the purchase of PAI and Regent has
         been recorded as goodwill. At December 31, 1999 the Company recognized
         an impairment of the goodwill and expensed it in full. The PAI goodwill
         of $840,000 was recorded as a loss on discontinued operations at
         December 31, 1999 (see Note 6). The Regent goodwill of $2,475,000 was
         included in amortization expense at December 31, 1999. The $1,000,000
         goodwill recorded on the purchase of Planet City and Webworks was
         charged as a cost of discontinued operations at December 31, 1999.

         The recoverability of the goodwill is measured using undiscounted,
         estimated future cash flows. If an impairment of the goodwill is
         determined to exist the carrying value of the goodwill is adjusted down
         to fair value as determined by estimated discounted future cash flows.

         TRANSLATION OF FOREIGN CURRENCY

         The Company translates the foreign currency financial statements of its
         foreign subsidiaries in accordance with the requirements of SFAS No.
         52, "Foreign Currency Translation." Assets and liabilities are
         translated at current exchange rates and related revenues and expenses
         are translated at average exchange rates in effect during the period.
         Resulting translation adjustments are recorded as a separate component
         in stockholders' equity. Foreign currency transaction gains and losses
         are included in determining net income.

<TABLE>
<CAPTION>
              Functional                                        Nature of
              Currency                   Company                 Business               Location               Local
         ---------------------    -------------------------    ----------------    -----------------------    ------------
           <S>                    <C>                          <C>                 <C>                        <C>
           RMB                    Shenzhen                     Internet            Shenzhen                   RMB

           HK$                    Regent Luck                  Holding Co.         Hong Kong                  HK$

           US$                    Global Telephone             Head Office         Chicago, IL                US$
                                                                                   Vancouver, BC              CDN$
</TABLE>

         STOCK BASED COMPENSATION

         The Company uses the intrinsic value method of accounting for
         stock-based compensation in accordance with Accounting Principles Board
         Opinion ("APB) No. 25 and related interpretations.


                                     - 15 -

<PAGE>

              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         EARNINGS PER SHARE

         SFAS No. 128, "Earnings Per Share", requires presentation of basic
         earnings per share ("Basic EPS") and diluted earnings per share
         ("Diluted EPS"). The computation of basic earnings per share is
         computed by dividing income available to common stockholders by the
         weighted average number of outstanding common shares during the period.
         Diluted earnings per share gives effect to all dilutive potential
         common shares outstanding during the period. The computation of diluted
         earnings per share does not assume conversion, exercise or contingent
         exercise of securities that would have an anti-dilutive effect on
         losses. At December 31, 2000, the Company had 4,490,000 potentially
         dilutive securities outstanding.

         ADVERTISING COSTS

         Advertising costs are expensed as incurred and included in selling,
         general and administrative expenses. For the years ended December 31,
         2000 and 1999, the Company had no material advertising expense.


NOTE 2 - RELATED PARTY TRANSACTIONS

         On May 11, 1999 the Company loaned $300,000 to a Company controlled by
         former officers and directors of the Company. $200,000 of the loan was
         repaid in 1999. The balance of $100,000 is secured by shares in a
         publicly traded company. However, in 2000 the collateral shares were
         delisted. The Company has fully reserved the note at December 31, 2000.

         During the year ended December 31, 2000, a director of the Company
         loaned the Company $10,649. The loan will be paid as soon as cash flow
         permits, which the Company believes will be the second quarter of 2001.
         The advance bears no interest.


NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment consist of the following

<TABLE>
<CAPTION>
                                                                              December 31,
                                                                -----------------------------------------
                                                                        2000               1999
                                                                   ---------------    ---------------
         <S>                                                              <C>               <C>
         Computer equipment                                               465,373           $ 31,668
         Office Equipment                                                  62,635             14,602
                                                                   ---------------    ---------------
                                                                          528,008             46,270
         Accumulated depreciation                                         (34,028)            (9,445)
                                                                   ---------------    ---------------

         Net property and equipment                                       562,536           $ 36,825
                                                                   ===============    ===============
</TABLE>

                                     - 16 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 3 - PROPERTY AND EQUIPMENT (Continued)

         Depreciation expense for the years ended December 31, 2000 and 1999 was
         $24,803 and $8,889.

         Depreciation is computed using the straight-line method over the
         estimated useful lives as follows:

                Computer equipment                              5 years

                Office equipment                                7 years

NOTE 4 - AQUISITIONS

         On January 28, 2000 the Company's wholly owned subsidiary, Global
         Telephone Communication (BVI) Inc., ("GTCI (BVI)"), a British Virgin
         Islands company, arranged to acquire 70% of the shares of Nano
         Technology Ltd. ("Nano"), a British Virgin Island company. Nano owns
         100% of the issued and outstanding capital stock of Cyber 2000 Ltd.
         ("Cyber 2000"), a Hong Kong company (acquired for a consideration of
         $1,910 which was expensed as organization costs). Nano's only activity
         is to hold ownership interest in Cyber 2000. The operations of Nano and
         Cyber have been included in the financial statements from the date of
         acquisition.

         7,000 shares of Nano were acquired from existing shareholders in
         exchange for $350,000 cash and 500,000 shares of the Company's common
         stock valued at $1,250,000 for total consideration of $1,600,000.

         The purchase price was allocated as follows:

<TABLE>
<CAPTION>
                    <S>                                       <C>
                    Purchase price                            $  1,600,000
                    Working capital                              1,000,000
                                                              ------------

                    Total cost                                $  2,600,000
                                                              ============

                    Allocated as to cash held by Nano         $  1,000,000
                    Goodwill                                  $  1,600,000
</TABLE>


                                     - 17 -


<PAGE>


                    GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 4 - ACQUISITIONS (Continued)

         Proforma information as it if the acquisition of Nano and Cyber 2000
         had occurred at the beginning of the periods presented is as follows:

<TABLE>
<CAPTION>
                                                    December 31,
                                   -----------------------------------------------
                                             2000                  1999
                                       -----------------      ----------------
         <S>                                  <C>                     <C>
         Revenue                              $  52,045               $     -
         Net loss                            (7,000,329)           (5,944,138)
         Loss per share                           (0.38)                (0.58)
</TABLE>



         On March 9, 1999, the company entered into a stock purchase and sales
         agreement ("Agreement") with Pacific Asset International, Ltd. ("PAI").
         The Agreement called for the Company to purchase 51% of the outstanding
         stock of PAI for 600,000 shares of its common stock. The shares were
         valued at the trading price on the date the agreement was signed of
         $1.40 per share. The operations of PAI are included in the consolidated
         financial statements from April 1, 1999 to December 31, 1999. The
         acquisition of PAI by the Company was accounted for as a purchase. The
         purchase generated goodwill of $840,000. The goodwill was all expensed
         in 1999 because the acquisition was rescinded. A Mutual Rescission
         Agreement to rescind the acquisition of PAI was effective on January
         13, 2000. The shares were cancelled in June 2000 and the value of the
         shares has been credited to discontinued operations.


NOTE 5 - LONG TERM DEBT

      -  On June 5, 2000, the Company issued a convertible note (the "Note") for
         proceeds of $250,000, bearing interest at the rate of prime (as
         announced by the Wall Street Journal ("WSJ")) plus 0.5% per year
         (9%) at December 31, 2000), compounded annually. The principal and
         all accrued interest is due on May 30, 2003; however, the holder may
         demand repayment at any time after May 30, 2002.

         The holder may at any time convert all or any portion of the
         outstanding balance of the Note (but not less than $50,000 unless the
         remaining balance of the Note is less than such amount), including
         accrued but unpaid interest thereon, into shares of the Company's
         common stock. The conversion price shall be the lower of (i) $1.30 per
         share, adjusted for stock splits and reverse stock splits, and (ii) 80%
         of the five day trailing average of the Company's common stock on the
         date notice of conversion is delivered to the Company. The Company has
         recorded a financing cost attributable to the beneficial conversion
         feature in the amount of $62,500. This amount has been charged to
         interest expense.



                                     - 18 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 5 - LONG TERM DEBT (Continued)

         In connection with the issuance of the above note, the Company issued
         warrants to purchase a number of shares of common stock.

         The number of warrant shares purchased shall be calculated as of the
         date an exercise notice is delivered to the Company by the higher of
         (i) 500,000 (or the portion of such 500,000 exercised by holder
         evidenced by a duly executed exercise notice for such portion) divided
         by $1.30, adjusted for any stock splits or reverse stock splits of the
         Company, and (ii) the quotient determined by dividing 500,000 or such
         lesser portion of the warrant the being exercised, by 80% of the market
         price. For purposes of this warrant, "market price" shall equal the
         five (5) trailing average of the Company's common stock at the close of
         market for each day, ending on the date the Company receives a duly
         completed and executed exercise notice.

         The warrant expires on June 5, 2005. The fair value of the warrant,
         using the Black-Sholes option pricing model is $619,075. This amount
         has been recorded as a deferred financing cost and is being charged to
         interest expense over the life of the note.

      -  During August 2000, the Company issued 9 convertible promissory notes
         for aggregate proceeds of $285,000. All of the notes are due in August
         2003. The Company has also issued common stock purchase warrants in
         connection with the issuance of the notes. The terms of the notes and
         warrants are substantially the same as those described above, except
         that the highest exercise or conversion price is $0.71 per share, as
         opposed to $1.30 per share, and the warrants expire in August 2003. The
         Company has recorded a financing cost attributable to the beneficial
         conversion feature in the amount of $78,492 charged to interest
         expense. The company has recorded deferred financing costs of $194,056,
         representing the fair value of the warrants, as determined by the Black
         Sholes option-pricing model. This deferred financing cost is being
         charged to interest expense over the life of the notes.

      -  The Company has received aggregate advances pursuant to a convertible
         debenture totaling $1,236,076. The debenture bears interest at the rate
         of 9% per year and is due on December 31, 2003. Terms provide that the
         holder is entitled to convert $177,778 of principal and accrued
         interest upon issuance (June 30,2000) and a similar amount each month
         thereafter. The note is convertible at the lower of $2.50 per share or
         100% of the lowest daily trading price for the 20 tracking days prior
         to conversion. In connection with the issuance of the debenture, the
         Company issued warrants to purchase 1,209,000 shares of common stock,
         exercisable at prices ranging from $2.24 to $3.75 per share. The
         warrants expire June 30, 2002. The Company has recorded a deferred
         financing cost of $1,277,530, representing the fair value of the
         warrants as determined by the Black-Sholes option-pricing model. This
         deferred financing cost is being charged to interest expense over the
         life of the note.

                                     - 19 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 5 - LONG TERM DEBT (Continued)

      -  The Company has received advances pursuant to a line of credit with the
         Bank of Communication. These advances aggregate $718,889 at December
         31, 2000 and are due on demand. The line of credit provides for up to
         $850,000 in advances and provides for an interest rate of 6.435% per
         year. The bank holds $850,000 in a separate account as collateral for
         the advances under the line.

         Long-term debt is summarized as follows:

<TABLE>
<CAPTION>
              <S>                                                   <C>
              Convertible note due May 30, 2002                     $   250,000
              Convertible notes due August 2003                         285,000
              Convertible debenture due December 31, 2003             1,236,076
              Line of credit                                            718,889
                                                                    -----------

              Total                                                   2,489,965
              Less current portion                                      718,889
                                                                    -----------

              Long-term debt                                        $ 1,771,076
                                                                    ===========

              Long term debt matures as follows:

              2001                                                  $   718,889
              2002                                                      250,000
              2003                                                    1,521,076
                                                                    -----------
                                                                    $ 2,489,965
                                                                    ===========
</TABLE>

NOTE 6 - INCOME (LOSS) FROM DISCONTINUED OPERATIONS

         On October 1, 1999, the Board of Directors of the Company decided to
         rescind the acquisitions of Planet City and Webworks. On December 31,
         1999, the Board of Directors decided to rescind the acquisition of PAI.
         The following is the summary of the income (loss) from the discontinued
         operations.

<TABLE>
<CAPTION>
                                    Planet                            December 31,
                                     City        Webworks     PAI        1999
                                   ---------    ---------    ------   ---------
         <S>                       <C>          <C>          <C>      <C>
         Sales                     $  65,476    $  34,445    $ --     $  99,921
         Operating Expenses          (46,257)     (66,160)     --      (112,447)
         Other Income                569,010      406,162      --       975,172
         Income tax Expense          (44,905)     (68,850)     --      (113,755)
                                   ---------    ---------    ------   ---------

              Income (loss) from
              discontinued
              operations           $ 543,324    $ 305,567    $ --     $ 848,891
                                   =========    =========    ======   =========
</TABLE>

                                     - 20 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 6 - INCOME (LOSS) FROM DISCONTINUED OPERATIONS

         The Company retains no assets which were attributable to prior
         operations. No income tax expense or benefit has been attributed to the
         gain from the discontinued operations.

         The loss on discontinued operations was computed as shown in the
         following table:

<TABLE>
<CAPTION>
            <S>                                                    <C>
            Investment in Planet City and Webworks:                $  1,000,000

            Accumulated earnings of Planet City and Webworks:           708,448

            Investment in Pacific Asset:                                840,000
                                                                   ------------

            Total Cost                                                2,548,448
                                                                   ------------

            Value of shares received in rescission:                   2,000,000
                                                                   ------------

            Loss                                                   $   (548,448)
                                                                   ============
</TABLE>


NOTE 7 - STOCK OPTION PLAN

         On October 14, 1997, the Company adopted the 1997 Stock Option Plan
         (the "Plan"), initially reserving an aggregate of 166,667 shares of the
         Company's common stock (the "Available Shares") for issuance pursuant
         to the exercise of stock options ("Options") which may be granted to
         employees, officers, and directors of the company and consultants to
         the Company. The Plan provides for annual adjustment in the number of
         Available Shares, commencing December 31, 1997, to a number equal to
         10% of the number of shares outstanding on December 31 of the preceding
         year or 166,667 shares, whichever is greater. No options have been
         granted as of December 31, 2000 or 1999 from the 1997 Stock Option
         Plan. In 1999 the Company issued options that were at a discount from
         the market price on the date issued. Accordingly the Company has
         recorded an expense for the discount. The discount on Company's
         outstanding options is as follows:

<TABLE>
<CAPTION>
                                                                                    Fair Market
                              Expiration                  Option      Expected     At date of
          Date of Grant          Date         Shares       Price      Proceeds        Grant       Discount
         ----------------   --------------- ------------ ---------- ------------- -------------- ------------
         <S>                <C>               <C>           <C>       <C>            <C>            <C>
         September 28,      September 28,
         1999               2002              1,000,000     $ 1.56    $1,560,000     $1,625,000     $ 65,000

         September 28,      September 28,
         1999               2002              1,575,000       1.25     1,468,750      1,909,375      440,625
                                                                                                 ------------

                                                                                                    $505,625
                                                                                                 ============
</TABLE>


                                     - 21 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 7 - STOCK OPTION PLAN (Continued)

         The Company's option activity for the year ended December 31, 2000 is
         as follows:

<TABLE>
<CAPTION>
         <S>                                              <C>
         Options outstanding - beginning of year          2,575,000

         Issued                                             500,000
         Expired                                           (100,000)
         Exercised                                         (700,000)
                                                        -----------

         Options outstanding - December 31, 2000          2,275,000
                                                        ===========

         Options exercisable - December 31, 2000          2,275,000
</TABLE>


         In January 2000, the Company granted options to purchase 500,000 shares
         of common stock. The options are exercisable at $1.38 per share, vest
         immediately and expire in three years.

         Pursuant to APB 25, the Company recorded compensation expense related
         to these options of $585,000 during the year ended December 31, 2000,

         The Company accounts for its stock option transactions under the
         provisions of APB No. 25. The following pro forma information is based
         on estimating the fair value of grants based upon the provisions of
         SFAS No. 123. The fair value of each option granted during the year
         ended December 31, 2000 has been estimated as of the date of grant
         using the Black-Scholes option pricing model with the following
         assumptions:

<TABLE>
<CAPTION>
         <S>                                                          <C>
         Risk free interest rate                                         5.5%
         Life of the options                                          3 years
         Expected dividend yield                                           0%
         Expected volatility                                             225%
         Weighted fair value of options granted                        $2.46
</TABLE>

                                     - 22 -

<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 7 - STOCK OPTION PLAN (Continued)

         Accordingly, the Company's pro forma net loss and net loss per share
         assuming compensation cost was determined under SFAS No. 123 would have
         been the following:

<TABLE>
<CAPTION>
         <S>                                                      <C>
         Net loss                                                 $(7,513,330)
         Net loss per basic share                                 $     (0.41)

         Weighted average option price per share
             Granted                                              $       1.38
             Exercised                                                    1.14
             Cancelled                                                    1.25
             Outstanding at end of period                                 1.41
             Exercisable at end of period                                 1.41
         Weighted average remaining life
             of options outstanding                                  22 months
</TABLE>


NOTE 8 - COMMITMENTS AND CONTINGENCIES

      -  The Company conducts its operation from offices located in Vancouver,
         BC, pursuant to a lease expiring May 31, 2003. Minimum annual lease
         payments are as follows:

                   2001                           $36,500
                   2002                            36,500
                   2003                            15,200

         The Company's offices in Hong Kong and Shenzhen are leased on a
         month-month basis with monthly rents of $800 and $1,500, respectively.

         Rent expense included in the statement of operations for the year ended
         December 31, 2000 is $121,092.

      -  An individual has presented an invoice to the Company for alleged
         consulting services aggregating $343,260. The Company maintains that it
         did not enter into any agreement with the individual and that the
         alleged services have not been provided. The Company does not have a
         signed agreement and the individual has been unable to provide one. The
         Company disclaims any liability to this individual and feels that any
         possibility of payment of this invoice is remote. Therefore, the
         Company has not recorded a liability for this amount in the financial
         statements.

      -  The Company reached a settlement in March 2001 regarding certain fees
         owed for financial services. The settlement provides for the payment of
         $86,250 through the issuance of 690,000 shares of common stock. This
         amount has been recorded in the financial statements at December 31,
         2000.


                                     - 23 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)

      -  The Company has issued 600,000 shares of common stock, valued at
         $360,000, for financial services. The parties were in dispute as to the
         services that were provided and the validity of the payment. In April
         2001, the parties settled this dispute and 400,000 shares, valued at
         $240,000, will be returned to the Company and cancelled. This
         settlement has been reflected in the financial statements at December
         31, 2000 and 400,000 shares have not been recorded as issued and
         outstanding at that date.

         Shenzhen Newsnet is a subsidiary of China Telecom and is an ISP in the
         city of Shenzhen Guangdong Province, PRC. Shenzhen Newsnet entered into
         an exclusive agency agreement with SGNCI, which gives SGNCI the rights
         to act as the exclusive agent to conduct all of Shenzhen Newsnet's
         telecommunications and internet business and services in Shenzhen, and
         six other cities in China.

         The Shenzhen Newsnet license expires on July 28, 2010. The related
         agency agreement expires on that same date. Under the terms of the
         agency agreement, the Company and its subsidiaries have no further
         financial obligations to Shenzhen Newsnet.

      -  On September 15, 1999 the Company entered into an agreement with
         International Communications Enterprises, LTD ("ICE") to provide
         funding for a joint venture between ICE and First Telecom ("ICE/FT
         Joint Venture"). Under the terms of the agreement, the Company was to
         receive a revenue participation in exchange for the funding. ICE was
         expected to be a provider of telephony services to business customers
         with a focus on multinational companies in the European Union.

         On October 21, 1999, the Company entered into a second joint venture
         with ICE as a financial partner to assist it in the development and
         distribution of promotional commemorative prepaid calling cards
         relating to sports figures. Initially the program was directed
         primarily towards the leading drivers of Formula 1 race car teams. ICE
         had several contracts in place including one with the Yamaha race car
         team.

         All funds invested in ICE were expensed when incurred due to the
         uncertainty of the recoverability of the costs.

         On August 3, 2000, ICE declared voluntary bankruptcy. On August 29,
         2000, at the First Meeting of Creditors, it was proven to the
         satisfaction of the meeting that ICE could not, by reason of its
         liabilities, continue its business and it was advisable to wind up the
         existing business and, accordingly, that ICE be wound up voluntarily.
         At the same meeting, Joint Liquidators were appointed for the purpose
         of such winding up.


                                     - 24 -


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              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 9 - COMMON STOCK

         During the year ended December 31, 2000:

      -  500,000 shares of common stock, valued at $1,250,000, were issued in
         connection with an acquisition.

      -  700,000 shares of common stock were issued upon the exercise of
         options.

      -  500,000 shares of common stock were sold for cash. As a condition of
         the sale, 500,000 stock purchase warrants, valued at $516,671 were
         issued to the purchaser. This value has been recorded as a financing
         cost.

      -  600,000 shares of common stock, valued at $600,000, were cancelled,
         pursuant to a recission of an acquisition.

      -  274,019 shares of common stock, valued at $204,081, were issued for
         services. An additional 400,000 shares have been issued. Pursuant to a
         settlement agreement, those shares will be cancelled in 2001 and are
         not reflected as issued and outstanding in these financial statements.

      -  650,316 shares of common stock were issued in conversion of debt
         aggregating $131,000.



NOTE 10 - GOING CONCERN

         The accompanying financial statements have been prepared in conformity
         with generally accepted accounting principles, which contemplate
         continuation of the Company as a going concern. However, the Company
         has no established source of revenue, has experienced net operating
         losses of $14,145,288 since inception, has a working capital deficit of
         $540,593 and has negative cash flow from operations. These factors
         raise substantial doubt about the Company's ability to continue as a
         going concern.

         The Company's viability is contingent upon its ability to raise funds
         in the form of debt and equity to support development efforts. The
         Company expects to use a portion of its financing to develop its Voice
         over Internet protocol (VolP) and ISP projects. The Company is also
         actively seeking strategic partnerships and acquisitions to accelerate
         its commitment to growth.



NOTE 11 - SEGMENT INFORMATION

         Substantially all of the Company's tangible assets are located in
         Asia. Approximately 8% of the Company's net loss is attributable to
         its Asian operations.



NOTE 12 - SUBSEQUENT EVENTS

         Subsequent to December 31, 2000:

         - The Company entered into various settlement agreements as described
           in Note 8.

         - The Company sold approximately 900,000 shares of common stock for
           proceeds of approximately $112,000.

         - The Company reached an agreement to acquire all of the issued and
           outstanding common stock of an unrelated entity. Terms of the
           proposed transaction call for the Company to issue a number of shares
           of common stock which will constitute 65% of the total issued and
           outstanding common stock of the Company after completion of the
           transaction. This transaction would result in a change in control of
           the Company.

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