<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, 2001

                      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)

984 West Broadway, Vancouver, BC, CANADA                       V5Z 4M6
(Address of principal executive offices)                     (Zip Code)

                                  604-834-3155
                           (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: $1,031,184 as of April 3, 2002.

         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 3, 2002,
there were 41,247,384 shares of common stock outstanding.




<PAGE>



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

<TABLE>
<CAPTION>

No.                 Title                                                                             Page No.
--                  -----                                                                             --------
                                     PART I

<S>               <C>                                                                                  <C>
Item 1.           Description of Business................................................................1
Item 2.           Description of Property...............................................................11
Item 3.           Legal proceedings.....................................................................11
Item 4.           Submission of Matters to a Vote of Security Holders...................................11

                                     PART II

Item 5.           Market for Common Equity and Related Stockholder Matters..............................12
Item 6.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.............................................................21
Item 7.           Financial Statements..................................................................27
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................................................................30
Item 11.          Security Ownership of Certain Beneficial Owners and Management........................31
Item 12.          Certain Relationships and Related Transactions........................................32
Item 13.          Exhibits, List and Reports on Form 8-K................................................33
                  Signatures............................................................................37

</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. The
Registrant changed its direction of business to telecommunications.

                                       1
<PAGE>
         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



                                       2
<PAGE>

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 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. 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,


                                       3
<PAGE>

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.


                                       4
<PAGE>
         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 7,000 shares of Nano 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.
Additionally, the Registrant committed to provide $1,000,000 in working capital
to Cyber 2000, $500,000 of which has been paid. The common stock issued
represents 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

                                       5
<PAGE>

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.

         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.

         Upon completion of its due

                                       6
<PAGE>

diligence the Registrant determined that it was not in the best interest of its
shareholders to complete this transaction.

         On December 14, 2001, The Board of Directors of the Registrant as well
as persons holding a majority of the outstanding shares determined that it is in
the best interest of the Registrant to enter into a Share Exchange Agreement,
whereby the Registrant will acquire 100% of the issued and outstanding shares of
SinoBull Financial Group, (SinoBull) a Hong Kong corporation, in exchange for
the shares representing approximately 76.32% of the total issued and outstanding
capital stock of the Company (See Share Exchange Agreement). The proposed
exchange is a private placement of restricted securities pursuant to Regulation
S and Rule 506 of Regulation D. Following the transaction, SinoBull will operate
as a wholly owned subsidiary of the Company. This transaction is a reverse
acquisition as the shareholders of SinoBull will be in control of the company
after the acquisition.

         SinoBull Financial Group develops financial technology, financial
operating platforms and Internet-based financial services. SinoBull's operating
companies include: Shanghai SinoBull Information Company Ltd., SinoBull Network
Technology (formerly Shandgi Networks), WindInfo Ltd., Financial Telecom Ltd.,
Fintel wireless Ltd., Ton Bo software, HCTV Financial TV channel Ltd. and
SinoBull Magazine Ltd. SinoBull.com is a financial information and stock trading
website. SinoBull Group and its strategic partners provide news, data and
analysis of financial information to the business community and media outlets.
Services include; real-time pricing, historical pricing, indicative data,
analysis of financial information and electronic communications. Clients include
China's investment institutions, commercial banks, government offices and
agencies, corporations, and news/media organizations.

         SinoBull Group is a financial technology developer and Internet service
provider. SinoBull's subsidiaries include: Beijing UAC Stock Exchange Online,
Shanghai Guo Mao Science & Technology, SinoBull Network Technology (formerly
Shangdi Networks), Financial Telecom (FTL), StreamingAsia and LogicSpace. In
addition to quality financial news, real-time market data, financial analysis
and commentary via the SinoBull portals.

         SinoBull currently offers online trading platform services that allow
users to trade online for shares listed on stock exchanges in Shenzhen and
Shanghai.

                                       7
<PAGE>

SinoBull has a financial portal, which offers a comprehensive range of Chinese
financial content coupled with an online trading platform service in the PRC.

Below is a brief overview of the operations of SinoBull:

    DIVISIONS

    1.  Content Management: Collection and analysis of comprehensive in-house
        Database of financial news and company reports.

    2.  Distribution Network: Distribute this content to customers via:

        a.  Business Terminals: using leased lines, broadband, satellite,
            Pagers, VBI.

        b.  Internet-Based: Web sites, wireless portals, SMS.

        c.  Cable TV Network: HCTV Financial TV.

    3.  Printed Media:  SinoBull Magazine

    4.  Technology Solutions: Providing technology support to ensure clients get
        the most efficient solution for their application.



                                       8
<PAGE>
OPERATING COMPANIES

1.   Financial Telecom Ltd: Manages and distributes content via terminals in
     Hong Kong. A 17 year-old company.

2.   Fintel Wireless Internet Ltd: Distributes content via pagers in Hong Kong
     and China.

3.   SinoBull Information Co., Ltd: Manages and distributes content via
     terminals in China. A 4-year old company with major banks and brokerages as
     clients.

4.   SinoBull Network Technology Co., Ltd: Manages the most popular financial
     portal in China, www.SinoBull.com. , which was awarded a medal in two
     consecutive years in Year 2000 & 2001 as one of the "Outstanding Chinese
     Financial Websites".

5.   Ton Bo Software Ltd: Provides technology solutions to financial
     institutions. Distributes the well-known Equis products of Reuters.

6.   HCTV Financial TV Channel Ltd: Will provide financial news and analysis via
     a network of cable TV in China (to be launched in 2002).

7.   SinoBull Magazine Ltd: Will publish a monthly magazine in financial news
     and analysis (to be launched in 2002).

                                       9
<PAGE>

         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 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 does not have any employees.

         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.



                                       10
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTIES.

             The Registrant's principal office is located at 8th Floor, 1285
West Broadway, Vancouver, BC, V6H 3X8. The Vancouver office occupies
approximately 700 square feet and the Registrant leases this space for $700 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.

             The Registrant did not submit any matters to a vote of Security
Holders.




                                       11
<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 3, 2002 was $.02 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>

                                          2000

         ----------------- ----------------- ---------------- --------------- ----------------
         QUARTER           HIGH BID          LOW BID          HIGH BID        LOW BID
         ----------------- ----------------- ---------------- --------------- ----------------
<S>                             <C>                 <C>            <C>              <C>
         MARCH                  $3.88               .88            .41              .13

         JUNE                   $2.00               .84            .25              .09

         SEPT.                  $1.35               .20            .15              .09

         DE.                      .99               .13            .09              .03
         ----------------- ----------------- ---------------- --------------- ----------------
</TABLE>

       HOLDERS:  The Registrant has approximately 382 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 Registrant and no
underwriters were utilized.



                                       12
<PAGE>

     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.

     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.

                                       13
<PAGE>

     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.

     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.

                                       14
<PAGE>

     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.

     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 $300,000.

     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.

                                       15
<PAGE>

     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.

     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.

     47.  On April 10, 2001, 47,058 shares of common stock were issued at .017
          per share for a total offering of $8,000.

     48.  On May 1, 2001, 951,174 shares of common stock were issued for cash.

     49.  On May 1, 2001, 590,541 shares of common stock were issued for the
          exercise of warrants.

     50.  On May 1, 2001, 606,838 shares were issued for the exercise of options
          granted in September 1999 under rule 701 priced at $.10.

     51.  On May 16, 2001, 100,000 shares were issued for the exercise of
          options granted in September 1999 under rule 701 priced at $.10.

                                       16
<PAGE>

     52.  On June 11, 2001, 500,000 shares were issued pursuant to rule 144 for
          services rendered priced at $.10.

     53.  On June 11, 2001, 2,200,000 shares were issued pursuant to an S8
          registration statement for employees and consultants. The shares were
          priced at $.10.

     54.  On May 25, 2001, 20,000 shares were issued pursuant to the exercise of
          warrants at a price of $.08 per share for a total offering of $1,600.

     55.  On June 27, 2001, 25,000 shares were issued pursuant to the exercise
          of warrants at a price of $.088 per shares for a total offering of
          $2,200.

     56.  On October 11, 2001, 4,470,000 shares were issued pursuant to an S8
          Registration Statement priced at $.05 per share.

     57.  On October 23, 2001, 244,680 shares were issued pursuant to the
          conversion of a promissory note including interest. The shares were
          issued in consideration for $20,000 at a price of $.088.

     58.  On October 23, 2001, 305,786 shares were issued pursuant to the
          conversion of a promissory note including interest. The shares were
          issued in consideration for $25,000 at a price of $.088.

     59.  On October 23, 2001, 305,786 shares were issued pursuant to the
          conversion of a promissory note including interest. The shares were
          issued in consideration for $25,000 at a price of $.088.

     60.  On October 23, 2001, 305,786 shares were issued pursuant to the
          conversion of a promissory note including interest. The shares were
          issued in consideration for $25,000 at a price of $.088.

     61.  On October 23, 2001, 489,090 shares were issued pursuant to the
          conversion of a promissory note including interest. The shares were
          issued in consideration for $50,000 at a price of $.088.

     62.  On October 23, 2001, 305,786 shares were issued pursuant to the
          conversion of a promissory note including interest. The shares were
          issued in consideration for $25,000 at a price of $.088.

     63.  On October 23, 2001, 305,786 shares were issued pursuant to the
          conversion of a promissory note including interest. The shares were
          issued in consideration for $25,000 at a price of $.088.

                                       17
<PAGE>
\
     64.  On November 28, 2001, 350,000 shares were issued pursuant to a
          settlement agreement with a former consultant. The shares were issued
          at $.10 per share for a consideration of $35,000.

     65.  On November 28, 2001, 690,000 shares were issued for settlement of
          accounts.

     66.  On November 28, 2001, 700,000 shares were issued for consulting
          services totaling $70,000. The shares were priced at $.10
          per share.

     67.  On November 28, 2001, 300,000 shares were issued at $.05 per share for
          a total offering of $15,000.

     68.  On November 28, 2001, 1,700,000 shares were issued for the purchase of
          equipment in China.

     69.  On November 28, 2001, 100,000 shares were issued at a price of $.10
          per share for a total offering of $10,000.

     70.  On November 28, 2001, 100,000 shares were issued for a settlement
          offer for a consultant.

     71.  On November 26, 2001, 581, 395 shares were issued at a price of $.086
          per share for a total offering of $50,000.

     72.  On November 17, 2002, 1, 785,714 shares were issued pursuant to
          conversion of promissory note priced at $.028 per share.

     73.  On February 21, 2002, 2,944,292 shares were issued pursuant to an S8
          Registration Statement at a price of 1.7 cents per share.

     74.  On March 15, 2002, 1,250,000 shares were issued for $10,000 at a price
          of 1.25 cents per share.

     75.  On April 4, 2002, 1,000,000 shares were issued pursuant to an S8
          Registration Statement at a price of 1.7 cents per share.

     (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

                                       18
<PAGE>
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 Item 5(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
listed at Item 5(b)45, the 3,100 shares listed at Item 5(b)46, the 47,058 shares
listed at Item 5(b)47, the 951,174 shares listed at Item 5(b)48, the 590,541
shares listed at Item 5(b)49, the 606,838 shares listed at Item 5(b)50, the
100,000 shares listed at Item 5(b)51, the 500,000 shares listed at Item 5(b)52,
the 2,200,000 shares listed at Item 5(b)53, the 20,000 shares listed at
Item 5(b)54, the 25,000 shares listed at Item 5(b)55, the 4,470,000 shares
listed at Item 5(b)56, the 244,680 shares listed at Item 5(b)57, the 305,786
shares listed at Item 5(b)58, the 305,786 shares listed at Item 5(b)59, the
305,786 shares listed at Item 5(b)60, the 489,090 shares listed at Item 5(b)61,
the 305,786 shares listed at Item 5(b)62, the 305,786 shares listed at
Item 5(b)63, the 350,000 shares listed at Item 5(b)64, the 690,000 shares listed
at Item 5(b)65, the 700,000 shares listed at Item 5(b)66, the 300,000 shares
listed at Item 5(b)67, the 1,700,000 shares listed at Item 5(b)68, the 100,000
shares listed at Item 5(b)69, the 100,000 shares listed at Item 5(b)70, the
581,395 shares listed at Item 5(b)71, 1,785,714 shares at Item 5(b)72, 2,944,292
at Item 5(b)73, 1,250,000 at Item 5(b)74, and 1,000,000 shares at Item 5(b)75,
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 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:

                                       19
<PAGE>

     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.






                                       20
<PAGE>

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

         During the year ended December 31, 2001, the Registrant generated
revenues of $50,424 and operating expenses of $2,365,267, resulting in a net
loss of $2,314,843 from operations.

         General and administrative expenses decreased to $1,742,532 in 2001
from $5,043,696 in 2000 and depreciation and amortization expenses increased to
$622,735 in 2001 from $408,347 in 2000. The following is a breakdown of the
significant general and administrative expenses incurred in 2000:

         In 2001, legal and accounting expenses totaled approximately $73,550,
payroll costs totaled approximately $35,160, office and administrative expenses
totaled approximately $347,300, finance charges totaled approximately $858,000,
consulting costs totaled approximately $1,035,200, travel and entertainment
costs totaled approximately $36,950, rent totaled approximately $51,000.

         Depreciation and amortization expense increased from $408,347 in 2000
to $622,735 in 2001. This increase was due to the fact that the Registrant's
goodwill has been amortized for a full year in 2001.

         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. During the year ended December 31, 2001 the
Registrant raised $241,800 from the sale of equity securities and $0 from notes
payable to fund current operations.

         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, 2003. The settlement offer also entitles them to $180,000 less any
governmental




                                       21
<PAGE>

withholdings. The Registrant was expected to 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. At December 31, 2001, the Registrant
had not made any settlement payments to Messrs. Brandenburg and Andresen.

         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.

         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
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 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.

         The parties have agreed that the total amount due under the note at
December 27, 2001, including interest, is $285,000 and this amount is reflected
in the financial statements. In connection with the Sinobull transaction
described below, the parties have reached a settlement agreement pursuant to
which the

                                       22
<PAGE>

Registrant will pay $150,000 in full and final payment and settlement of the
note. The payment is comprised of $20,000 cash, 2,000,000 shares of common stock
valued at $100,000, and a promissory note in the amount of $30,000 due one year
after the closing of the Sinobull transaction. 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 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 (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.

         During 2001, notes in the principal amount of $235,000, plus accrued
interest of $14,149, were converted into 4,048,770 shares of common stock.

         The Registrant has received aggregate advances pursuant to a
convertible debenture totaling $1,149,838. 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

                                       23
<PAGE>

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 Registrant 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 Registrant 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.

         The parties have agreed that the total amount due under the note at
December 27, 2001, including interest, is $1,500,000 and this amount is
reflected in the financial statements. In connection with the Sinobull
transaction described below, the parties have reached a settlement agreement
pursuant to which the Company will pay $1,000,000 in full and final payment and
settlement of the note. The payment is comprised of $200,000 cash, 11,000,000
shares of common stock valued at $550,000, and a promissory note in the amount
of $250,000 due one year after the closing of the Sinobull transaction.

         The Registrant 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 held
$850,000 in a separate account as collateral for the advances under the line.
The line of credit was repaid in full in 2001 and was terminated.

         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.

         The acquisition was expected to be completed during the second quarter
of 2001. Upon completion of its due

                                       24
<PAGE>

diligence the Registrant determined that it was not in the best interest of its
shareholders to complete this transaction.

         On December 14, 2001, The Board of Directors of the Registrant as well
as persons holding a majority of the outstanding shares determined that it is in
the best interest of the Registrant to enter into a Share Exchange Agreement,
whereby the Registrant will acquire 100% of the issued and outstanding shares of
SinoBull Financial Group, (SinoBull) a Hong Kong corporation, in exchange for
shares representing approximately 76.32% of the total issued and outstanding
capital stock of the Company (See Share Exchange Agreement). The proposed
exchange is a private placement of restricted securities pursuant to Regulation
S and Rule 506 of Regulation D. Following the transaction, SinoBull will operate
as a wholly owned subsidiary of the Company.

         SinoBull Financial Group develops financial technology, financial
operating platforms and Internet-based financial services. SinoBull's operating
companies include: Shanghai SinoBull Information Company Ltd., SinoBull Network
Technology (formerly Shandgi Networks), WindInfo Ltd., Financial Telecom Ltd.,
Fintel wireless Ltd., Ton Bo software, HCTV Financial TV channel Ltd. and
SinoBull Magazine Ltd. SinoBull.com is a financial information and stock trading
website. SinoBull Group and its strategic partners provide news, data and
analysis of financial information to the business community and media outlets.
Services include; real-time pricing, historical pricing, indicative data,
analysis of financial information and electronic communications. Clients include
China's investment institutions, commercial banks, government offices and
agencies, corporations, and news/media organizations.

         SinoBull Group is a financial technology developer and Internet service
provider. SinoBull's subsidiaries include: Beijing UAC Stock Exchange Online,
Shanghai Guo Mao Science & Technology, SinoBull Network Technology (formerly
Shangdi Networks), Financial Telecom (FTL), StreamingAsia and LogicSpace. In
addition to quality financial news, real-time market data, financial analysis
and commentary via the SinoBull portals.


         SinoBull currently offers online trading platform services that allow
users to trade online for shares listed on stock exchanges in Shenzhen and
Shanghai. This trading platform is currently the only such trading platform


                                       25
<PAGE>

available in the PRC. SinoBull also has a financial portal which offers a
comprehensive range of Chinese financial content coupled with an online trading
platform service in the PRC.

         On December 11, 2001, China became a member of the World Trade
Organization (WTO). China's entry into the WTO is expected to expand China's
financial market and develop new models and new channels for using foreign
capital, and provide foreign enterprises with more business opportunities.

         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.

                                       26
<PAGE>

         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.

         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.


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 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 31, 2001:

<TABLE>
<CAPTION>

     NAME                                  AGE    POSITION                         TERM         SERVED SINCE
     ----                                  ---    --------                         ----         ------------
<S>                                        <C>                                     <C>             <C>
1.  Thomas J. Kennedy                      51     Secretary, Treasurer &           2yrs            10/97
                                                  Director
2.  Terry Wong                             42     Vice Chairman & Director         2 yrs           10/97
</TABLE>

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 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.

                                       29
<PAGE>

         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.

         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, 2001:


                           SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
                                                  Annual Compensation                         Long-Term Compensation
                                          ----------------------------------   -----------------------------------------------------
                                                                                          AWARDS                     PAYOUTS
                                                                               --------------------------   ------------------------
                                                                     OTHER                     SECURITIES
                                                                     ANNUAL    RESTRICTED         UNDER-
                                                                     COMPEN-     STOCK           LYING                  ALL OTHER
                                           SALARY        BONUS       SATION     AWARD(S)         OPTIONS/      LTIP      COMPEN-
       NAME AND                     YEAR     ($)          ($)         ($)         ($)             SARS       PAYOUTS      SATION
  PRINCIPAL POSITION                                                                               (#)         ($)         ($)
--------------------------------- -------- ------------ --------- ------------- ------------  ------------- ----------- ----------
<S>                                <C>     <C>           <C>      <C>           <C>           <C>           <C>         <C>
Thomas Kennedy                      2001       0            0           0            0              0             0           0
Director
--------------------------------- -------- ------------ --------- ------------- -------------- ------------- ----------- -----------
Terry Wong                          2001       0            0           0            0              0             0           0
Director
--------------------------------- -------- ------------ --------- ------------- -------------- ------------- ----------- -----------
</TABLE>




                                       30
<PAGE>


                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
                                                                        PERCENT OF
                                                  NUMBER OF           TOTAL OPTIONS/
                                                  SECURITIES           SARS GRANTED
                                                  UNDERLYING          TO EMPLOYEES        EXERCISE OR
                                                  OPTIONS/SARS          IN FISCAL          BASE PRICE      EXPIRATION
                    NAME                          GRANTED (#)             YEAR              ($/SH)            DATE
--------------------------------------------- -------------------- ------------------- ----------------- ------------------
<S>                                           <C>                  <C>                 <C>               <C>
Terry Wong                                            0
---------------------------------------------- -------------------- ------------------- ----------------- ------------------
Thomas Kennedy                                        0
---------------------------------------------- -------------------- ------------------- ----------------- ------------------
</TABLE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information as to the 41,247,384 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.


                                       31
<PAGE>
<TABLE>
<CAPTION>

                                                  PRINCIPAL              NUMBER OF
     NAME                                      BENEFICIAL OWNER           SHARES       PERCENT
     ----                                     ------------------    ----------------   -------
<S>                                           <C>                   <C>                <C>
1. Terry Wong                                                        900,000              2%
2. 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.


                                       32
<PAGE>


ITEM 13.     INDEX TO EXHIBITS.


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

<TABLE>
<CAPTION>

       EXHIBIT NO.                                    DESCRIPTION
       -----------                                    -----------
<S>                                                   <C>
             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.
</TABLE>




                                       33
<PAGE>
<TABLE>
<CAPTION>

       EXHIBIT NO.                                    DESCRIPTION
       -----------                                    -----------
<S>                                                   <C>
          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.

</TABLE>


                                       34
<PAGE>
<TABLE>
<CAPTION>


       EXHIBIT NO.                                    DESCRIPTION
       -----------                                    -----------
<S>                                                   <C>
             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(1)                                  Consent on Stockholders' Resolution
      27                                              Financial Data Schedule
</TABLE>


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



                                       35
<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

<TABLE>
<CAPTION>

             NO.                                       DESCRIPTION
             ---                                       -----------
<S>                                                    <C>
             FS-1                                      Global Telephone Communication, Inc. and
                                                       Subsidiaries Consolidated Financial Statements for
                                                       Years Ended December 31, 2001 and 2000.

             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

</TABLE>


                                       36
<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 16, 2002                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 16, 2002
---------------------------------
Thomas J. Kennedy                    Director





                                       37

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

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


<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' (DEFICIT) EQUITY                  5 - 9

CONSOLIDATED STATEMENTS OF CASH FLOWS                                    10 - 11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                           12 - 27







<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 sheets of Global Telephone
Communication, Inc. and Subsidiaries (a Development Stage Company) as of
December 31, 2001 and 2000, and the related consolidated statements of
operations, comprehensive loss, stockholders' (deficit) equity and cash flows
for the years then ended and for the period from inception (March 10, 1970) to
December 31, 2001. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. 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 audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, based on our audits 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, 2001 and 2000, and the
consolidated results of its operations and its cash flows for the years then
ended, and for the period from March 10, 1970 (inception) to December 31, 2001
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 9 to the
accompanying consolidated financial statements, the Company has incurred
significant operating losses to date and had negative cash flow from operations.
Management's plans in regard to these matters are also described in Note 9.
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
February 21, 2002


<PAGE>


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

                                                                                                            December 31,
                                                                                                -----------------------------------
                                                                                                    2001                    2000
                                                                                                -------------          ------------
<S>                                                                                               <C>                  <C>
               ASSETS
      CURRENT ASSETS
           Cash and cash equivalents                                                             $      5,450           $   214,537
           Restricted cash                                                                                  -               850,000
           Other current assets                                                                             -                   286
                                                                                                 ------------           -----------
              Total current assets                                                                      5,450             1,064,823

      Property and equipment, net of accumulated
         depreciation of $121,157 and $34,028                                                         545,525               562,536

      Goodwill, net of accumulated amortization
         and impairment of $1,600,000 and $400,000                                                          -             1,200,000
      Deferred financing costs                                                                        903,188             1,729,131
      Other assets                                                                                     28,200                42,201
                                                                                                 ------------           -----------
      TOTAL ASSETS                                                                               $  1,482,363           $ 4,598,691
                                                                                                 ============           ===========

      LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
      CURRENT LIABILITIES
           Accounts payable                                                                      $    834,183           $   681,177
           Accrued expenses                                                                            50,342                 2,059
           Accrued interest                                                                           385,161               278,870
           Notes payable                                                                              250,000               718,889
           Due to related parties                                                                      21,366                10,649
                                                                                                  -----------           -----------
              Total current liabilities                                                             1,541,052             1,691,644
      Notes payable, less current portion                                                           1,199,838             1,684,838
                                                                                                  -----------           -----------
              Total liabilities                                                                     2,740,890             3,376,482
                                                                                                  -----------           -----------

      COMMITMENTS AND CONTINGENCIES                                                                         -                     -

      STOCKHOLDERS' (DEFICIT) EQUITY
        Preferred stock, $1.00 par value;
          100,000,000 shares authorized,
          no shares issued and outstanding
        Common stock, $0.001 par value;
          200,000,000 shares authorized, 36,793,386 and
          18,812,610 shares issued and outstanding                                                     36,793                18,813
        Additional paid-in capital                                                                 16,889,709            15,350,079
        Common stock subscribed                                                                        50,000                     -
        Other comprehensive loss                                                                        8,997                (1,395)
        Deficit accumulated during the development stage                                          (18,244,026)          (14,145,288)
                                                                                                  -----------          ------------
              Total stockholders' (deficit) equity                                                 (1,258,527)            1,222,209
                                                                                                  -----------          ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                       $  1,482,363          $  4,598,691
                                                                                                 ============          ============

</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,
                                                                           2001                    2000                    2001
                                                                      --------------          --------------          -------------

<S>                                                                   <C>                      <C>                     <C>
Revenue                                                               $       50,424           $      52,045           $    107,174
                                                                      --------------           -------------           ------------
Operating Expenses
     General and administrative                                            1,742,532               5,043,696             11,873,808
     Depreciation and amortization                                           622,735                 408,347              3,515,344
                                                                      --------------           -------------           ------------
        Total operating expenses                                           2,365,267               5,452,043             15,389,152
                                                                      --------------           -------------           ------------
Loss from operations                                                      (2,314,843)             (5,399,998)           (15,281,978)
                                                                      --------------           -------------           ------------
Other income (expense)
     Interest income                                                           5,948                  17,417                 30,368
     Financing costs                                                        (858,000)             (1,416,320)            (2,274,320)
     Interest expense                                                       (265,176)               (668,695)              (951,219)
     Impairment of goodwill                                                 (666,667)                      -               (666,667)
                                                                      --------------           -------------           ------------
        Total other income (expense)                                      (1,783,895)             (2,067,598)            (3,861,838)
                                                                      --------------           -------------           ------------

Loss  from continuing operations
  Before income taxes                                                     (4,098,738)             (7,467,596)           (19,143,816)
Provision for income taxes                                                         -                       -                      -
                                                                      --------------           -------------           ------------
Loss from continuing operations                                           (4,098,738)             (7,467,596)           (19,143,816)
                                                                      --------------           -------------           ------------
Discontinued operations:
Gain from discontinued operations                                                  -                       -                847,638
Recovery (loss) from disposal of discontinued operations                           -                 600,600                 52,152
                                                                      --------------           -------------           ------------
     Total discontinued operations                                                 -                 600,600                899,790
                                                                      --------------           -------------           ------------
Net loss                                                              $   (4,098,738)          $  (6,866,996)          $(18,244,026)
                                                                      ==============           =============           ============

Net loss per common share - Basic and Diluted
Continuing operations                                                 $        (0.15)          $       (0.41)
Discontinued operations                                                            -                    0.03
                                                                      --------------           -------------
     Net loss per share                                               $        (0.15)          $       (0.38)

                                                                      ==============           =============
Weighted average number
  of shares outstanding                                                   26,682,210              18,185,114
                                                                      ==============           =============
</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
                                                                                                     March 10, 1970
                                                            For the Years Ended                         Through
                                                                December 31,                          December 31,
                                                 -------------------------------------------
                                                      2001                       2000                     2001
                                                 ----------------          -----------------       -------------------
<S>                                                  <C>                      <C>  <C>                 <C>  <C>
Net loss                                             $ (4,098,738 )           $ (  6,866,996 )         $  ( 18,244,026 )

Foreign currency translation adjustment                    10,392                          7                     8,997
                                                 ----------------          -----------------       -------------------

Comprehensive loss                                   $ (4,088,346 )           $ (  6,866,989 )         $  ( 18,235,029 )
                                                 ================          =================       ===================
</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
                                                                                Additional       Comprehensive        During
                                                       Common Stock              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
                                                                              Additional      Comprehensive          During
                                                     Common Stock              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
                                                                                Additional      Comprehensive          During
                                                       Common Stock              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 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, 2000                        18,812,610         18,813      15,350,079              (1,395)       (14,145,288)

Shares issued for cash
  April 10, 2001                                      47,058             47           7,953                   -                  -
  May 1, 2001                                        951,174            951         104,049                   -                  -
  May 30, 2001                                       100,000            100           9,900                   -                  -
  August 30, 2001                                    300,000            300          14,700                   -                  -
  November 26, 2001                                  581,395            581          49,419                   -                  -

Exercise of warrants for cash
  May 16, 2001                                        45,000             45           3,755                   -                  -

Shares issued in settlement of accounts
  payable, March 1, 2001                             690,000            690          85,560                   -                  -

Exercise of options for services
  April 27, 2001                                     555,000            555          54,945                   -                  -
  May 16, 2001                                       100,000            100           9,900                   -                  -

Shares issued for services -
  March 1, 2001                                      350,000            350          34,650                   -                  -
  April 27, 2001                                      51,838             52           6,428                   -                  -
  June 1 - 8, 2001                                 3,400,000          3,400         383,600                   -                  -
  October 9, 2001                                  4,470,000          4,470         263,730                   -                  -

Shares issued in conversion of debt
  May 16 - 18, 2001                                2,263,056          2,263         196,886                   -                  -
  November 1, 2001                                 1,785,714          1,786          48,214                   -                  -

Exercise of warrants, May 1, 2001                    590,541            590            (590)                  -                  -

Shares issued for equipment
  October 1, 2001                                  1,700,000          1,700          83,300                   -                  -

Issuance of options for services                           -              -          93,000                   -                  -

Issuance of warrants for services                          -              -          90,231                   -                  -

Foreign currency translation adjustment                    -              -               -              10,392                  -

Net loss                                                   -              -               -                   -         (4,098,738)
                                             ---------------   ------------   -------------  ------------------   ----------------
Balance, December 31, 2001                        36,793,386       $ 36,793     $16,889,709             $ 8,997       $(18,244,026)
                                             ===============   ============   =============  ==================   ================

</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

<TABLE>
<CAPTION>
                                                                                                   Inception on
                                                                      For the Years Ended         March 10, 1970
                                                                          December 31,               Through
                                                                  ---------------------------      December 31,
                                                                     2001            2000              2001
                                                                  -----------     -----------     --------------
<S>                                                              <C>              <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
OPERATING ACTIVITIES
     Net loss                                                     $(4,098,738)    $(7,467,596)      $(19,143,816)
     Adjustments to reconcile net loss to net cash
        used by operating activities:
        Depreciation expense                                           89,403          24,803            123,653
        Allowance for bad debts                                            --          50,500            100,000
        Beneficial conversion expense                                      --         140,992            140,992
        Interest paid with stock                                       14,149              --             14,149
        Common stock and options
          issued for services and expense                             945,411       1,853,877          4,294,352
        Amortization of financing costs                               825,943         361,530          1,187,473
        Goodwill amortization and impairment                        1,200,000         400,000          5,075,000
        Foreign currency translation adjustment                        23,000               7             21,605
     Changes in operating assets and liabilities:
        (Increase) decrease in restricted cash                        131,111              --           (718,889)
        (Increase) decrease in other current assets                       286           2,371                 --
        (Increase) decrease in accounts receivable                         --              --            (89,315)
        (Increase) decrease in other assets                            14,001         (40,706)          (120,404)
        Increase (decrease) in deposits for 504                            --              --               (785)
        Increase (decrease) in accounts payable                       239,256         729,936          1,146,177
        Increase (decrease) in accrued expenses                       154,574        (164,752)           161,398
        Increase in related party payable                              10,717          10,649             21,366
                                                                  -----------     -----------       ------------
           Net cash used by continuing operations                    (450,887)     (4,098,389)        (7,787,044)
                                                                  ===========     ===========       ============
DISCONTINUED OPERATIONS
     Net gain                                                              --         600,600            889,790
     Adjustments to reconcile net gain to net cash
       provided by operating activities:
        Deprecation                                                                        --             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
        (Increase) decrease in accounts receivable                         --              --                 80
        (Increase) decrease in other assets                                --              --            (87,174)
        Increase (decrease) in accounts payable                            --              --            (25,971)
        Increase (decrease) in accrued expenses                            --              --            110,236
                                                                  -----------     -----------       ------------
           Net cash provided by discontinued operations                    --              --            437,705
                                                                  -----------     -----------       ------------
           Net cash used by operating activities                    $(450,887)    $(4,098,389)       $(7,349,339)
                                                                  ===========     ===========       ============

</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)
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)


<TABLE>
<CAPTION>

                                                                                                        Inception on
                                                                          For the Years Ended          March 10, 1970
                                                                             December 31,                 Through
                                                                       -------------------------        December 31,
                                                                         2001            2000               2001
                                                                       ---------     -----------      ----------------
<S>                                                                    <C>           <C>                <C>
CASH FLOWS FROM INVESTING ACTIVITIES
     Continuing Operations
     Purchase of fixed assets                                          $      --     $  (550,294)       $  (814,473)
                                                                       ---------     -----------        -----------
        Net cash (used) by continuing operations                              --        (550,294)          (814,473)
                                                                       ---------     -----------        -----------

     Discontinuing Operations
     Purchase of fixed assets                                                 --              --            (10,600)
                                                                       ---------     -----------        -----------
        Net cash used by discontinued operations                              --              --            (10,600)
                                                                       ---------     -----------        -----------
NET CASH USED BY INVESTING ACTIVITIES                                         --        (550,294)          (825,073)
                                                                       ---------     -----------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES
     Continuing Operations
     Increase in notes payable                                                --       2,077,324          3,134,082
     Common stock subscribed                                              50,000              --             50,000
     Common stock issued for cash                                        191,800       1,300,000          6,327,855
                                                                       ---------     -----------        -----------
        Net cash provided by continuing operations                       241,800       3,377,324          9,511,937
                                                                       ---------     -----------        -----------
     Discontinued Operations
     Repayment of notes payable                                               --              --            (96,028)
     Related party lending                                                    --              --         (1,236,047)
                                                                       ---------     -----------        -----------
        Net cash provided by discontinued operations                          --              --         (1,332,075)
                                                                       ---------     -----------        -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                241,800       3,377,324          8,179,862
                                                                       ---------     -----------        -----------

NET (DECREASE) INCREASE IN
 CASH AND CASH EQUIVALENTS                                              (209,087)     (1,271,359)             5,450
CASH AND CASH EQUIVALENTS - BEGINNING                                    214,537       1,485,894                 --
                                                                       ---------     -----------        -----------
CASH AND CASH EQUIVALENTS - ENDING                                     $   5,450     $   214,535        $     5,450
                                                                       =========     ===========        ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the year for-
        Interest paid                                                  $  24,557     $    26,898
                                                                       =========     ===========
        Income taxes paid                                              $      --     $        --
                                                                       =========     ===========

SCHEDULE OF NON-CASH ACTIVITIES:
     Common stock, options and warrants issued for services
       and expense                                                     $ 945,411     $ 3,396,413
     Beneficial conversion feature                                            --         140,922
     Financing cost - stock sold below market                                 --         899,034
     Common stock issued for subsidiaries                                     --       1,250,000
     Common stock rescinded for subsidiaries                                  --        (600,000)
     Debt principal converted to stock                                   235,000         131,000
     Common stock issued for equipment                                    85,000              --
     Common stock issued for accounts payable                             86,250              --

</TABLE>


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

                                     - 11 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



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 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.

                                     - 12 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Nature of Operations (continued)

         On January 13, 2000, the share exchange agreement was rescinded
         pursuant to a Mutual Recession Agreement. The shareholders of PAI
         signed the Mutual Rescission 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.

         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 goodwill has been completely
         impaired at December 31, 2001 through a charge to impairment expense of
         $666,667.

         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.



                                     - 13 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         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 was 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.

         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.



                                     - 14 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         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. The goodwill has been completely impaired at December 31,
         2001.

         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>





                                     - 15 -
<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Stock-Based Compensation

         SFAS No. 123, "Accounting for Stock-Based Compensation", encourages,
         but does not require companies to record compensation cost for
         stock-based employee compensation plans at fair value. The Company has
         chosen to continue to account for stock-based compensation using the
         intrinsic value method prescribed in Accounting Principles Board
         Opinion No. 25, "Accounting for Stock Issued to Employees", and related
         interpretations. Accordingly, compensation cost for stock options is
         measured as the excess, if any, of the quoted market price of the
         Company's stock at the date of the grant over the amount an employee
         must pay to acquire the stock.

         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, 2001, the Company had the following potentially
         dilutive securities outstanding:

<TABLE>
<CAPTION>
<S>                                                           <C>
         Options                                                  1,620,000
         Warrants                                                 2,965,310
                                                               ------------
                                                                  4,585,310
</TABLE>

         Advertising Costs

         Advertising costs are expensed as incurred and included in selling,
         general and administrative expenses. For the years ended December 31,
         2001 and 2000, 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 fully reserved the balance of the note at
         December 31, 2000.

         During the year ended December 31, 2000, a director of the Company
         loaned the Company $10,649. These advances increased to $21,366 at
         December 31, 2001. The advances will be paid as soon as cash flow
         permits. The advances bears no interest.


                                     - 16 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                              December 31,
                                                                   --------------     --------------
                                                                        2001               2000
                                                                   --------------     --------------
         <S>                                                       <C>                <C>
         Computer equipment                                              $578,527          $ 533,929
         Office Equipment                                                  88,154             62,635
                                                                   --------------     --------------
                                                                          666,682            596,564
         Accumulated depreciation                                         121,157             34,028
                                                                   --------------     --------------

         Net property and equipment                                      $545,525          $ 562,536
                                                                   ==============     ==============
</TABLE>


         Depreciation expense for the years ended December 31, 2001 and 2000 was
         $89,403 and $24,803.

         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 - ACQUISITIONS

         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.




                                     - 17 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE 4 - ACQUISITIONS (Continued)

         The purchase price was allocated as follows:

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

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

         Allocated to cash held by Nano                     $  1,000,000
         Goodwill                                           $  1,600,000

</TABLE>

         Proforma information for 2000 as if the acquisition of Nano and Cyber
         2000 had occurred at January 1, 2000 is presented as follows:

<TABLE>
<S>                                                         <C>
         Revenue                                            $     52,045
         Net loss                                             (7,000,329)
         Loss per share                                            (0.38)
</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

     o   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.






                                     - 18 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE 5 -  LONG-TERM DEBT (Continued)

          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.

          The parties have agreed that the total amount due under the note at
          December 27, 2001, including interest, is $285,000 and this amount is
          reflected in the financial statements. In connection with the Sinobull
          transaction described in Note 11, the parties have reached a
          settlement agreement pursuant to which the Company will pay $150,000
          in full and final payment and settlement of the note. The payment is
          comprised of $20,000 cash, 2,000,000 shares of common stock valued at
          $100,000, and a promissory note in the amount of $30,000 due one year
          after the closing of the Sinobull transaction.

          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.

     o    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.

                                     - 19 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 5 -  LONG-TERM DEBT (Continued)

          During 2001, notes in the principal amount of $235,000, plus accrued
          interest of $14,149, were converted into 4,048,770 shares of common
          stock.

     o    The Company has received aggregate advances pursuant to a convertible
          debenture totaling $1,149,838. 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.

          The parties have agreed that the total amount due under the note at
          December 27, 2001, including interest, is $1,500,000 and this amount
          is reflected in the financial statements. In connection with the
          Sinobull transaction described in Note 11, the parties have reached a
          settlement agreement pursuant to which the Company will pay $1,000,000
          in full and final payment and settlement of the note. The payment is
          comprised of $200,000 cash, 11,000,000 shares of common stock valued
          at $550,000, and a promissory note in the amount of $250,000 due one
          year after the closing of the Sinobull transaction.

     o    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 held $850,000 in a separate account as
          collateral for the advances under the line. The line of credit was
          repaid in full in 2001 and was terminated.

          Long-term debt is summarized as follows:


<TABLE>
<CAPTION>

                                                                          2001              2000
                                                                      -----------       -----------

<S>                                \                                 <C>                <C>
          Convertible note due May 30, 2002                           $   250,000       $   250,000
          Convertible notes due August 2003                                50,000           285,000
          Convertible debenture due December 31, 2003                   1,149,838            11,498
          Line of credit                                                        -           718,889
                                                                      -----------       -----------
          Total                                                         1,449,838         2,403,727
          Less current portion                                            250,000           718,889
                                                                      -----------       -----------
          Long-term debt                                              $ 1,199,838       $ 1,684,838
                                                                      ===========       ===========

</TABLE>

                                     - 20 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 5 -  LONG-TERM DEBT (Continued)

          Long term debt matures as follows:

<TABLE>
<CAPTION>

                                                                   2001
                                                               ------------
<S>                                                            <C>
          2002                                                 $    250,000
          2003                                                    1,199,838
                                                               ------------
                                                               $  1,449,838
                                                               ============
</TABLE>

NOTE 6 -  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.

          The Company's option activity is as follows:

<TABLE>
<CAPTION>
                                                                        2001             2000
                                                                   -------------    -------------
<S>                                                                  <C>              <C>
          Options outstanding - beginning of year                    2,275,000        2,175,000

          Canceled                                                    (775,000)               -
          Issued                                                       775,000          500,000
          Exercised                                                   (655,500)        (400,000)
                                                                     ---------        ---------
          Options outstanding - December 31,                         1,620,000        2,275,000
                                                                     =========        =========

          Options exercisable - December 31,                         1,620,000        2,275,000

</TABLE>

          In March of 2001, the Company canceled certain outstanding options and
          reissued them with a lower exercise price. The individuals were issued
          these options in their capacity as consultants or non-employees. They
          have, therefore, been accounted for pursuant to the provision of SFAS
          No. 123, and compensation cost of $93,000 has been recorded in the
          financial statements.






                                     - 21 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 6 -  STOCK OPTION PLAN (Continued)

          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, 2001 and 2000 has been estimated as of the date of
          grant using the Black-Scholes option pricing model with the following
          assumptions:

<TABLE>
<CAPTION>

                                                                                          2001             2000
                                                                                     -------------    -------------
<S>                                                                                  <C>              <C>
          Risk free interest rate                                                            5.5%             5.5%
          Life of the options                                                             2 years          3 years
          Expected dividend yield                                                              0%               0%
          Expected volatility                                                                254%             225%
          Weighted fair value of options granted                                      $     0.12       $     2.46
</TABLE>

          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>
                                                                                 2001                  2000
                                                                          ---------------        --------------
<S>                                                                         <C>                    <C>
          Net loss                                                          $  (4,567,276)         $ (7,513,330)
          Net loss per basic share                                          $       (0.17)         $      (0.41)

          Weighted average option price per share
              Granted                                                       $        0.10          $       1.38
              Exercised                                                              0.10                  1.14
              Cancelled                                                              1.25                     -
              Outstanding at end of period                                           1.40                  1.41
              Exercisable at end of period                                           1.40                  1.41
          Weighted average remaining life
              of options outstanding                                            10 months             22 months

</TABLE>

NOTE 7 -  COMMITMENTS AND CONTINGENCIES

     o    The Company conducted its operations from offices located in
          Vancouver, BC, pursuant to a lease expiring May 31, 2003. The Company
          vacated the premises during 2001.



                                     - 22 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 7 -  COMMITMENTS AND CONTINGENCIES (Continued)

          The Company's offices in Hong Kong and Shenzen are leased on a
          month-to-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, 2001 and 2000 is $69,200 and $121,092,
          respectively.

     o    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.

NOTE 8 -  COMMON STOCK

          During the year ended December 31, 2001:

     o    2,024,627 shares of common stock were issued for cash proceeds of
          $191,800.

     o    690,000 shares of common stock were issued to settle accounts payable
          of $86,200.

     o    655,000 shares of common stock were issued through the exercise of
          options. The consideration for the shares issued was a reduction in
          accrued fees due to the individuals, aggregating $65,500.

     o    8,271,838 shares of common stock were issued for services. These
          shares have been valued at $696,680, the fair value of the stock
          issued.

     o    4,048,770 shares of common stock were issued upon conversion of
          $249,149 of debt plus accrued interest.

     o    590,541 shares of common stock were issued upon the cashless exercise
          of warrants.

     o    1,700,000 shares of common stock, valued at $85,000, were issued for
          the purchase of equipment.


                                     - 23 -


<PAGE>


              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 8 -  COMMON STOCK (Continued)

          During the year ended December 31, 2000:

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

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

     o    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.

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

     o    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.

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

NOTE 9 -  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 $18,244,026 since inception, has a working capital deficit
          of $1,535,602 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 has agreed to acquire another company in a reverse acquisition
          (see Note 11).

NOTE 10 - SEGMENT INFORMATION

          Substantially all of the Company's tangible assets are located in
          Asia. Approximately 13% and 8% of the Company's net loss for 2001 and
          2000 is attributable to its Asian operations.



                                     - 24 -


<PAGE>
              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 11 - PROPOSED BUSINESS COMBINATION

     On December 14, 2001, the Board of Directors of the Company, as well as
     persons holding a majority of its outstanding shares determined that it is
     in the best interest of the Company to enter into a Share Exchange
     Agreement, whereby the Company will acquire 100% of the issued and
     outstanding shares of the SinoBull Financial Group ("SinoBull"), a Hong
     Kong corporation, in exchange for shares representing approximately 76.32%
     of the total issued and outstanding capital stock of the Company. The
     proposed exchange is a private placement of restricted securities pursuant
     to Regulation S and Rule 506 of Regulation D. Following the transaction,
     SinoBull will operate as a wholly owned subsidiary of the Company. The
     transaction will be accounted for as a reverse acquisition.

     SinoBull Financial Group develops financial technology, financial operating
     platforms and Internet-based financial services. SinoBull's operating
     companies include: Shanghai SinoBull Information Company Ltd., SinoBull
     Network Technology (formerly Shandgi Networks), WindoInfo Ltd., Financial
     Telecom Ltd., Fintel Wireless Ltd., Ton Bo Software, HCTV Financial TV
     Channel Ltd. and SinoBull Magazine Ltd. SinoBull.com is a financial
     information and stock trading website. SinoBull and its strategic partners
     provide news, data and analysis of financial information to the business
     community and media outlets. Services include: real-time pricing,
     historical pricing, indicative data, analysis of financial information and
     electronic communications. Clients include China's investment institutions,
     commercial banks, government offices and agencies, corporations, and
     news/media organizations.

NOTE 12 - NEW ACCOUNTING PRONOUNCEMENTS

     In June 2001, SFAS No. 141, "Business Combinations," and SFAS No. 142,
     "Goodwill and Other Intangible Assets," were issued. SFAS No. 141 requires
     that all business combinations initiated after June 30, 2001 be accounted
     for using the purchase method of accounting, and that identifiable
     intangible assets acquired in a business combination be recognized as an
     asset apart from goodwill, if they meet certain criteria. The impact of the
     adoption of SFAS No. 141 on our reported operating results, financial
     position and existing financial statement disclosure is not expected to be
     material.

     SFAS No. 142 applies to all goodwill and identified intangible assets
     acquired in a business combination. Under the new standard, all goodwill
     and indefinite-lived intangible assets, including that acquired before
     initial application of the standard, will not be amortized but will be
     tested for impairment at least annually. The new standard is effective for
     fiscal years beginning after December 15, 2001. The Company recorded
     $533,333 goodwill amortization expense and $666,667 of impairment expense
     in 2001.

                                     - 25 -


<PAGE>
              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 12 -- NEW ACCOUNTING PRONOUNCEMENTS (Continued)

     In July 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations,"
     was issued which requires the recognition of a liability for an asset
     retirement obligation in the period in which it is incurred. When the
     liability is initially recorded, the carrying amount of the related
     long-lived asset is correspondingly increased. Over time, the liability is
     accreted to its present value and the related capitalized charge is
     depreciated over the useful life of the asset. SFAS No. 143 is effective
     for fiscal years beginning after June 15, 2002. The impact of the adoption
     of SFAS No. 143 on the Company's reported operating results, financial
     position and existing financial statement disclosure is not expected to be
     material.

     In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
     Long-Lived Assets," was issued. This statement addresses the financial
     accounting and reporting for the impairment or disposal of long-lived
     assets and broadens the definition of what constitutes a discontinued
     operation and how results of a discontinued operation are to be measured
     and presented. The provisions of SFAS No. 144 are effective for financial
     statements issued for fiscal years beginning after December 15, 2001. The
     impact of the adoption of SFAS No. 144 on our reported operating results,
     financial position and existing financial statement disclosure is not
     expected to be material.

NOTE 13 - INCOME TAXES

     The components of the provision for income taxes are as follows:

<Table>
<Caption>
                                                December 31,
                                             ------------------
                                             2001          2000
                                             ----          ----
<S>                                          <C>           <C>
Current Tax Expense
  U.S. Federal                               $ --          $ --
  State and Local                              --            --
                                             ----          ----
Total Current                                  --            --
                                             ====          ====

Deferred Tax Expense
  U.S. Federal                                 --            --
  State and Local                              --            --
                                             ----          ----
Total Deferred                                 --            --
                                             ====          ====
</Table>

     The reconciliation of the effective income tax rate to the Federal
statutory rate is as follows:

<Table>
<Caption>
                                                 December 31,
                                              ------------------
                                              2001          2000
                                              ----          ----
<S>                                          <C>           <C>
Federal Income tax Rate                      (34.0)%       (34.0)%
Effect of Valuation Allowance                 34.0%         34.0%
                                             ------        ------
Effective Income tax Rate                      0.0%           0.0%
                                             ======        ======
</Table>

                                     - 26 -


<PAGE>
              GLOBAL TELEPHONE COMMUNICATION, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 13 -- INCOME TAXES (Continued)

     Because of the current uncertainty of realizing the benefit of the
     carry-forward of net operating losses, a valuation allowance equal to the
     tax benefit for deferred taxes has been established. The full realization
     of the tax benefit associated with the carry-forwards depends predominantly
     upon the Company's ability to generate taxable income during the
     carry-forward period. Utilization of net operating loss carry-forwards is
     subject to IRC Section 382 change of control limitations.

NOTE 14 - SUBSEQUENT EVENTS

     The Company has issued 4,453,998 shares of common stock. 1,250,000 shares
     were issued for cash and 3,203,998 shares have been issued for services. An
     additional 740,294 shares are to be issued for services.

                                     - 27 -