UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

     (Mark One)

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

     For the fiscal year ended June 30, 2000

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

     For the transition period from _________ to _________

     Commission File No. 0-25703

                                GTC TELECOM CORP.
                 (Name of Small Business Issuer in Its Charter)

             NEVADA                                             88-0318246
(State or Other Jurisdiction of                               (IRS Employer
Incorporation or Organization)                            Identification Number)

    3151 AIRWAY AVE., SUITE P-3
      COSTA MESA, CALIFORNIA                                      92626
(Address of Principal Executive Offices)                        (Zip Code)

                                 (714) 549-7700
                           (Issuer's Telephone Number)
           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                     (None)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                         Common Stock, par value $0.001
                                (Title of Class)

     Check  whether  the  issuer  (1)  filed all reports required to be filed by
Section  13  or 15(d) of the Exchange Act during the past 12 months (or for such
shorter  period  that the registrant was required to file such reports); and (2)
has  been  subject  to  such  filing  requirements  for  the  past  90  days.

Yes  __X__     No  _____

     Check  if  there is no disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-B  is  not  contained  in this form, and no disclosure will 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-KSB
or  any  amendment  to  this  Form  10-KSB.  [  X  ]

     State  issuer's  revenues  for  its most recent fiscal year.     $4,696,087

     State  the  aggregate  market  value of voting and non-voting common equity
held  by  non-affiliates  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 the past 60 days.  (See definition of affiliate in
rule  12b-2  of  the  Exchange  Act.)  $7,147,788

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as  of  the  latest  practicable  date.  19,967,544

                       DOCUMENTS INCORPORATED BY REFERENCE

     If  the following documents are incorporated by reference, briefly describe
them  and  identify  the  part of the form 10-KSB (e.g., Part I, Part II, etc. )
into  which  the  document  is  incorporated:  (1) any annual report to security
holders;  (2)  any  proxy or information statement; and (3) any prospectus filed
pursuant to rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The  listed  documents  should  be clearly described for identification purposes
(e.g.,  annual  report  to  security  holders for fiscal year ended December 24,
1990).

None.

     Transitional  Small  Business  Disclosure  Format  (check  one):

Yes  ______  No___X___

<PAGE>
                                TABLE OF CONTENTS


                                     PART I

Item 1          Description of Business.

Item 2          Description of Property.

Item 3          Legal Proceedings.

Item 4          Submission of Matters to a Vote of Security Holders.

                                     PART II

Item 5          Market for Common Equity and Related Stockholder Matters.

Item 6          Management's Discussion and Analysis.

Item 7          Financial Statements.

Item 8          Changes In and Disagreements With Accountants on Accounting and
                  Financial Disclosure.

                                    PART III

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

Item 10         Executive Compensation.

Item 11         Security Ownership of Certain Beneficial Owners and Management.

Item 12         Certain Relationships and Related Transactions.

Item 13         Exhibits and Reports on Form 8-K.

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<PAGE>


                                INTRODUCTORY NOTE

This  Annual  Report  on  Form  10-KSB  may be deemed to contain forward-looking
statements  within  the meaning of Section 27A of the Securities Act of 1933 and
Section  21E  of  the Securities Exchange Act of 1934.  The Company intends that
such  forward-looking  statements be subject to the safe harbors created by such
statutes.  The  forward-looking  statements included herein are based on current
expectations  that involve a number of risks and uncertainties.  Accordingly, to
the extent that this Annual Report contains forward-looking statements regarding
the  financial  condition,  operating  results,  business prospects or any other
aspect  of  the  Company,  please be advised that the Company's actual financial
condition, operating results and business performance may differ materially from
that  projected  or estimated by the Company in forward-looking statements.  The
differences  may be caused by a variety of factors, including but not limited to
adverse  economic  conditions, intense competition, including intensification of
price  competition  and  entry of new competitors and products, adverse federal,
state  and local government regulation, inadequate capital, unexpected costs and
operating  deficits,  increases in general and administrative costs, lower sales
and revenues than forecast, loss of customers, customer returns of products sold
to  them by the Company, disadvantageous currency exchange rates, termination of
contracts,  loss  of  suppliers,  technological  obsolescence  of  the Company's
products,  technical  problems  with the Company's products, price increases for
supplies  and  components,  inability  to  raise  prices,  failure to obtain new
customers,  litigation and administrative proceedings involving the Company, the
possible  acquisition  of new businesses that result in operating losses or that
do  not  perform as anticipated, resulting in unanticipated losses, the possible
fluctuation  and  volatility  of  the  Company's  operating  results,  financial
condition  and  stock  price,  losses incurred in litigating and settling cases,
dilution  in the Company's ownership of its business, adverse publicity and news
coverage,  inability  to carry out marketing and sales plans, loss or retirement
of  key  executives,  changes in interest rates, inflationary factors, and other
specific  risks that may be alluded to in this Annual Report or in other reports
issued  by the Company.  In addition, the business and operations of the Company
are  subject to substantial risks which increase the uncertainty inherent in the
forward-looking  statements.  In light of the significant uncertainties inherent
in  the  forward-looking  information  included  herein,  the  inclusion of such
information  should  not  be  regarded as a representation by the Company or any
other  person  that  the  objectives  or  plans of the Company will be achieved.

                                     PART I

ITEM  1  -  DESCRIPTION  OF  BUSINESS

BACKGROUND  OF  THE  COMPANY

GTC  Telecom  Corp.  (the  "Company"  or  "GTC")  is  a  provider  of  various
Telecommunication  services, including long distance telephone, and calling card
services as well as various Internet related services including Internet Service
Provider  access  and  Web  Page  Hosting.  GTC Telecom Corp. was organized as a
Nevada  Corporation  on  May  17,  1994  and  is  currently based in Costa Mesa,
California.

On  August  31,  1998,  GTC  Telecom  Corp.  (which  at  the time was designated
Bobernco,  Inc.,  a  Nevada  corporation  ("Bobernco"))  acquired  all  of  the
outstanding  common stock of GenTel Communications, Inc., a Colorado corporation
("GenTel")  in a business combination described as a "reverse acquisition."  For
accounting  purposes, the acquisition was treated as the acquisition of Bobernco
(the  Registrant)  by  GenTel.

GenTel  Communications,  was  formerly  known  as  GenX,  LLC ("GenX").  GenX, a
Delaware  limited  liability  company  was  formed  on  May  29,  1997.  GenTel
Communications,  a  Colorado  corporation was formed on December 9, 1997 and was
inactive  until  its  reorganization  with  GenX.  Effective  February  3, 1998,
pursuant to a plan of  reorganization,  the  members  of  GenX  converted  their
members'  interest  into  8,786,950  shares  of  the  Common  Stock  of  GenTel.
Subsequently, GenX was dissolved.  At the time of its acquisition  by  Bobernco,
GenTel operated as  provider  of  long  distance  telephone  services.

Immediately  prior  to  the acquisition, Bobernco had 1,800,000 shares of Common
Stock  outstanding.  As  part of Bobernco's reorganization with GenTel, Bobernco
issued  8,986,950  shares  of  its Common Stock to the shareholders of GenTel in
exchange for 8,986,950 shares of GenTel Common Stock.  Immediately following the
merger,  Bobernco  changed  its  name  to  GTC.  Bobernco  had  no  significant
operations  prior  to  the  merger.  Subsequent  to  the acquisition, the former
shareholders of GenTel constituted 83.31% of the total outstanding shares of the
Common  Stock  of  the  Company  and  the  original  shareholders  of  Bobernco
constituted  16.69%  of  the total outstanding shares of the Common Stock of the
Company.  The  Company's  common stock currently trades on the NASD OTC Bulletin
Board  under  the  symbol  "GTCC."


                                        2
<PAGE>

BUSINESS  OF  THE  COMPANY

GTC  currently  offers  a  variety  of  services designed to meet its customers'
telecommunications  and Internet related needs.  The Company's services consists
of  the  following:

TELECOMMUNICATIONS  RELATED  SERVICES

GTC  is  currently  licensed  in every state (except Alaska) and the District of
Columbia  to  provide  long  distance  telecommunications services.  The Company
primarily  services  small and medium sized businesses and residential customers
throughout the United States and has positioned itself to be a low-cost provider
in the marketplace.  By offering low rates, the Company expects to add customers
at an accelerated  pace.  To date, the Company has operated as a  switchless(1),
nonfacilities-based  reseller  of  long  distance  services.  By  committing  to
purchase  large  usage volumes from carriers such as MCI/WorldCom, Inc. pursuant
to contract tariffs(2),  the  Company  has  been  able  to  procure  substantial
discounts  and  offer  low-cost,  high-quality  long  distance  services  to its
customers at rates  below  the  current  standard  industry  levels.

The  Company  provides long distance telephone service under a variety of plans.
These  include  outbound  service,  inbound  toll-free 800 service and dedicated
private line(3) service for  data.  The Company does not currently provide local
telephone service.  The Company's long distance services are billed on a monthly
basis either directly by the Company or by the Local Exchange Carrier(4) ("LEC")
through  the  services of Billing Concepts, Inc., dba U.S. Billing ("USBI").  If
these  services are billed directly by the Company, the customer has a choice of
paying  by credit card or sending payment to the Company.  If these services are
billed  by  the LEC, the LEC is responsible for collecting the amount billed and
remitting  the  proceeds  to the Company.  In addition, the Company has recently
obtained  licenses  in  the  states  of New York, New Jersey and South Dakota to
operate  as  a  Competitive  Local  Exchange Carrier ("CLEC").  As a result, the
Company  is also exploring the possibility of providing local telephone service.
Whether  the  Company  will  be  able  to  provide  local  telephone services is
dependent  on  its  ability to negotiate contracts with third-party providers of
local  telephone  service  on  favorable  terms.  The  Company  has  initiated
negotiations  with  certain  local  telephone  providers but has not reached any
agreements.  Therefore, there can be no assurances that the Company will be able
to  offer  local  telephone  service.

INTERNET  RELATED  SERVICES

The  Company  provides  international  PC-to-phone  telecommunication  services
through  its  wholly-owned subsidiary CallingPlanet.com, as well as a variety of
Internet  related  services.  These  services,  available  to  both consumer and
business users, include prepaid calling cards through the Company's wholly-owned
subsidiary ecallingcards.com web site; Internet Services Provider access through
dial-up(5), Digital Subscriber Line ("DSL")(6), and Wireless  T-1(7) methods and
Internet Web Page development and hosting services(8).  The  Company's  Internet
related services are billed using the same methods as those used for billing its
Telecommunication  services.  The  Company's Internet related services, with the
exception  of its prepaid calling cards, are provided pursuant to contracts with
third-party  providers, who remain competitors with the Company.  By contracting
with  third-party  providers  to purchase large quantities of usage volumes, the
Company is able to secure significant discounts which then allows the Company to
offer  these  services  to  its  end-users  at  rates  equal to or less than its
competitors.

------------------------------------
(1) Switchless  resellers of long distance services do not utilize any of their
     own lines,  or  switching  equipment.
(2) Contract tariffs are services and  rates based on contracts negotiated with
     individual  customers,  but  also  available  to  all  customers.
(3) Private Line uses circuits dedicated to a specific customer to connect that
     customer's  equipment  to  both  ends  of  the  line.
(4) A company  providing  local  telephone  service.
(5) Modem  access  via  traditional  telephone  lines.
(6) Digital Subscriber Line ("DSL") utilizes advanced technology to transmit
     data over copper lines at  speeds  up  to 1,000 times faster than Dial-Up
     service.
(7) Wireless T-1 services are Internet  connections  using  microwave  or radio
     frequencies, without the use of a cable connection, that can transfer data
     at speeds  up  to  1.5  million  bits-per-second.
(8) Web Page Hosting services  permits  customers  to  market  themselves on the
    Internet without having to invest significantly in technology infrastructure
    and operations  staff.

                                        3
<PAGE>

The  Company's Internet Service Provider Access service is currently provided on
a  nationwide  basis.  Dial-up  service  provides  unlimited Internet access and
several  related  services  using  conventional modems at access speeds up to 56
kbps  for a monthly fee of $9.95.  DSL service provides a faster, more efficient
method  for  communicating  digital  data  over telephone lines.  DSL speeds are
significantly  faster  than  conventional modem speeds (up to 1.1 Mbps versus 56
kbps for Dial-up service).  The monthly DSL service charge ranges from $59.95 to
$249.95  depending  on speed and service options.  A one-time set-up fee of $150
is  also  charged.

Currently,  the  Company's  Wireless  T-1  services  are  only  available in the
Southern  California  region.  Wireless  T-1  allows  businesses  to  utilize
connections at 1.5 Mbps without contracting for T-1 service from local telephone
companies.  Wireless  T-1  Service fees range from $299 to $899 per month with a
one-time  set-up  fee of $2,500.  The Company plans on expanding this service to
include  other regions.  Whether the Company is able to provide its Wireless T-1
services  to other regions depends on whether the Company will be able to secure
contracts  with  third-party  suppliers  on  favorable  terms.  There  can be no
assurance  that  the Company will be able to obtain such contracts and therefore
be  able  to  expand  its  Wireless  T-1  service  to  other  regions.
The  Company's  Internet  Web Page Hosting services are currently available on a
nationwide  basis.  Internet  Web  Page  Hosting  services provides space on the
Company's  Web  Server  computers  for customers to publish their own Web Pages.
Internet  Web Page Hosting fees are $29.95 per month, with a one-time set-up fee
of  $29.95.

TELECOMMUNICATIONS  INDUSTRY  BACKGROUND

The $94.4 billion U.S. long distance industry is dominated by the nation's three
largest  long  distance providers, AT&T, MCI/WorldCom and Sprint, which together
generated approximately 79.2% of the aggregate revenue of all U.S. long distance
interexchange  carriers  in  1998.  Other  long  distance  companies,  some with
national  capabilities,  accounted  for  the  remainder  of  the  market.

Based on published FCC(9) estimates  toll service revenues of U.S. long distance
interexchange carriers have grown from $38.8 billion in 1984 to $94.4 billion in
1998.  While  industry  revenues  have grown at a compounded annual rate of 6.6%
since  1984,  the  revenues of carriers other than AT&T, MCI/WorldCom and Sprint
have  grown  at a compounded rate of 32.1% during the same period.  As a result,
the  aggregate  market  share  of  all  interexchange  carriers other than AT&T,
MCI/WorldCom  and  Sprint  has grown from 2.6% in 1984 to 20.8% in 1998.  During
the  same  period,  the  market  share  of  AT&T  declined  from 90.1% to 43.1%.

Prior  to the Telecommunications Act, signed by President Clinton on February 8,
1996,  the long distance telecommunications industry had been principally shaped
by  a  court  decree  between  AT&T and the United States Department of Justice,
known  as the Modification of Final Judgment (the "Consent Decree") that in 1984
required  the divestiture by AT&T of its 22 Bell operating companies and divided
the  country into some 200 Local Access and Transport Areas, or "LATAs".  The 22
operating  companies,  which  were  combined  into seven Regional Bell Operating
Companies,  or "RBOCs", were given the right to provide local telephone service,
local  access  service  to  long  distance  carriers  and intraLATA toll service
(service  within  LATAs),  but  were prohibited from providing interLATA service
(service  between LATAs).  The right to provide interLATA service was maintained
by  AT&T  and  the  other  carriers.

To  encourage  the  development  of competition in the long distance market, the
Consent Decree and the FCC require most LECs to provide all carriers with access
to  local  exchange  services  that  is equal in type, quality and price to that
provided  to  AT&T and with the opportunity to be selected by customers as their
preferred  long  distance  carrier.  These  so-called  equal  access and related
provisions  are  intended  to  prevent  preferential  treatment  of  AT&T.

The Telecommunications  Act of  1996  (the "Act"), is intended to introduce more
competition  to  U.S.  telecommunications markets.  In addition to codifying the
provisions  of  the  Consent Decree, the Act codifies the LEC's equal access and
nondiscrimination  obligations  with  respect  to  the  local services market by
requiring LECs to permit interconnection(10) to their  networks and establishing
among other things, LEC obligations with respect to

---------------------------------
(9)  As published on the FCC's Website located at
      www.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/SOCC/98socc.pdf.
(10) Customer equipment (i.e. customer's telephone or modem) which connects to
      the service provider's equipment.

                                        4
<PAGE>

access, resale, number portability(11), dialing parity(12), access to rights-of-
way(13),  and  mutual  compensation.   In  essence,  the  Act codifies the LEC's
duty to provide to independent service providers (such as the Company) access to
the LEC's network under the same terms and restrictions which the LEC is subject
to.  The Act allows the Company  to  compete  with  previously  established long
distance  and  local  telephone providers under the same terms and conditions as
those providers are subject to.

Regulatory,  judicial  and  technological  factors  have  helped  to  create the
foundation  for smaller companies to emerge as competitive alternatives to AT&T,
MCI/WorldCom  and Sprint for long distance telecommunications services.  The FCC
requires  that  AT&T  not  restrict  the resale of its services, and the Consent
Decree  and  regulatory proceedings have ensured that access to LEC networks is,
in  most  cases,  available  to  all  long  distance  carriers.

DEVELOPMENT  AND  STRATEGY  OF  THE  COMPANY

The  Company's  telecommunication services are currently licensed in every state
(except  Alaska)  and  the  District  of  Columbia.

The  Company  plans to market its products and services using six important, but
very  distinct,  strategies  as  follows:

Independent  Affiliates

The  backbone  of  GTC's  overall  market  and development strategy involves the
pursuit  and  establishment  of  strategic affiliations and alliances with major
telecommunication  and  Internet  service  companies  through  partnerships  and
co-branding.  GTC  has  already  been  quite  successful  in  establishing these
alliances  with known companies, such as OnLineChoice.com, NewsMax, GetConnected
and  GlobalNet2000,  in  the  telecommunication and Internet service industries.

Internet  Use

The  second method of marketing the Company's products and services utilizes the
Internet.  The  Company currently markets and distributes its telecommunications
and  Internet  related  services  through  the  Internet  utilizing  its
www.gtctelecom.com  and  its  wholly-owned  subsidiary  www.ecallingcards.com
websites.  It  also markets international calling plans through its wholly-owned
subsidiary  www.CallingPlanet.com,  as  well  as  co-brand  calling  cards  and
advertise  domestic  long  distance  rates on the Internet.  Co-branding is done
through  joint  agreements such as Community Connect Inc.'s online community for
Asian  Americans,  www.AsianAvenue.com.

Regarding  CallingPlanet.com, GTC will focus on marketing through local partners
and vendors in each country. CallingPlanet.com will also target customers who do
not  have PC's or Internet connections by encouraging the local partners to open
Kiosks  equipped  with  PC's  and  Internet  hook-up.  Through  these  marketing
partners,  CallingPlanet.com's  goal is to be a household name worldwide and the
planet  calling  area.

GTC  will  leverage the use of the Internet to promote product lines and enhance
business  processes.

Company  Sales  Force

The  third  method  of  marketing  utilizes  the  Company's  own sales force and
independent  sales  agents.  A  sales  force  will be developed that consists of
properly  trained  professionals from within the industry who are looking for an
opportunity  to  sell  at  rates  that are lower than the industry standard. The
Company  has  already  engaged  in  discussions  with  many  such  potential
representatives  to  work  on  a  commission-only  basis.

------------------------------
(11) Number portability is  the  capability  of  individuals,  businesses,  and
      organizations  to  retain  their  existing  telephone  number(s)
(12) The duty to provide dialing  parity  to  competing  providers of telephone
      exchange service and telephone toll service, and the duty to permit all
      such providers  to  have  nondiscriminatory  access  to telephone numbers,
      operator services, directory assistance, and directory listing, with no
      unreasonable dialing  delays
(13) The duty to afford access to the poles, ducts, conduits, and rights-of-way
      of a LEC to competing providers of telecommunications services on same
      rates and terms afforded  to  the  LEC.

                                        5
<PAGE>

Many  of  these  professionals  will  come  from companies such as WorldCom, LCI
International,  TelCo and Frontier Communications where the average calling rate
is  10-12  cents  per  minute.  The  Company  Vice President of Sales comes from
WorldCom  with  an  extensive  sales  and  marketing  background  in  the
telecommunications  industry.

Advertising

GTC  will  employ  an  aggressive  concentrated  media  campaign that utilizes a
professional  advertising  agency as its fourth method of marketing. The Company
launched  its  first  media  campaign on March 1, 1999, utilizing television and
radio  advertisement  and  print media targeting Southern California, as well as
nationwide  audiences,  using  cable  television  advertisements.  The  Company
intends  to  continue  to utilize both broadcasting and print media campaigns in
the  future  given  sufficient  funds.

GTC  has  also been very successful in obtaining new customers through important
"word-of-mouth"  free  advertising.  Many customers are extremely satisfied with
the  service provided by the Company and inform relatives or friends about GTC's
excellent  rates and this invaluable free advertising for the Company results in
new  business.

Direct  Marketing

The  fifth  method  of  marketing  the Company's products and services is direct
marketing.  The  Company  has  developed brochures for all products and services
that  can  be  used  as  a direct marketing tool and for product promotions.  In
addition,  GTC  is  considering  direct  mail  marketing for new target markets.

National  Recognition

The  Company  will  continue  to  pursue  and  capitalize  on  national  media
recognition,  as  it  has  done  with  Kiplinger  and Consumer Reports, to boost
consumer  awareness  in  the  marketplace.  GTC  will capitalize on this type of
recognition  through  strategic  press  releases  and other media opportunities.

The Company believes these six marketing methods will be adequate to sustain the
Company  now  and  for  the  foreseeable  future.

COMPETITION

Telecommunication  Services

The long distance telecommunications industry is highly competitive and affected
by  the  introduction  of  new  services by, and the market activities of, major
industry  participants,  including AT&T Corp., MCI/WorldCom, Sprint Corporation,
local  exchange  carriers such as Bell Atlantic, and other national and regional
interexchange carriers.  Competition in the long distance business is based upon
pricing,  customer service, billing services and perceived quality.  The Company
competes  against  various national and regional long distance carriers that are
composed  of  both  facilities-based  providers  (those that carry long distance
traffic on their own equipment) and switchless resellers (those that resale long
distance  carried  by  facilities-based providers) offering essentially the same
services as the Company.  Several of the Company's competitors are substantially
larger  and  have  greater  financial,  technical  and marketing resources.  The
Company  believes that it is able to compete with these competitors by providing
high  quality  service  at  the  lowest  price  possible.

The  Company  believes  that the  pricing  strategies and cost structures of the
major long distance carriers have resulted historically in their charging higher
rates  to the  small-to-medium sized  business customer.  Small-to- medium-sized
business  customers  typically  are  not  able  to  make  the volume commitments
necessary  to  negotiate  reduced  rates  under  individualized  contracts.  By
committing  to  large volumes of traffic, the Company is guaranteeing traffic to
the major long distance  carrier while relieving the major long distance carrier
of  the  administrative  burden  of  qualifying  and servicing  large numbers of
small-to-medium-sized accounts.  To be successful, the Company  believes that it
must have lower overhead costs and  be  able  to  efficiently  market  the  long
distance product, process orders, verify  credit and provide customer service to
a  large  number  of  accounts.  Although  the Company believes it has human and
technical resources to pursue its strategy and compete effectively

                                        6
<PAGE>

in  this  competitive  environment,  its  success will depend upon its continued
ability  to  profitably  provide  high  quality,  high  value services at prices
generally  competitive  with,  or  lower than, those charged by its competitors.
There can be no assurances that the Company will be able to compete successfully
in  these  markets.

The Company currently links its switching equipment with transmission facilities
and  services  purchased or leased from MCI/WorldCom and will continue to resell
services  obtained  from  MCI/WorldCom,  which  will  remain a competitor of the
Company for the provisioning of telecommunications services.  However, there can
be  no  assurances  that  the  Company  will  be able to continue to provide its
telecommunication  services  through  MCI/WorldCom.

The  Telecommunications  Act  is  intended to introduce more competition to U.S.
telecommunications  markets.  The legislation opens the local services market by
requiring  LECs  to  permit  interconnection to their networks and establishing,
among  other  things,  LEC  obligations  with  respect to access, resale, number
portability,  dialing  parity,  access to rights-of-way and mutual compensation.
The  legislation  also  codifies  the  LECs'  equal access and nondiscrimination
obligations  and  preempts  most inconsistent state regulation.  The legislation
also  contains  special  provisions  that  eliminate  restrictions  on the RBOCs
providing  long  distance  services,  which  means  that  the  Company will face
competition  for  providing  long  distance services from well capitalized, well
known  companies  that  prior  to  this  time could not compete in long distance
service.

The  RBOCs  have  been  prohibited  from  providing  interLATA  interexchange
telecommunications  services  under  the  terms  of  the  AT&T  decree.  The
Telecommunications  Act  authorizes  the  RBOCs  to  provide  certain  interLATA
interexchange  telecommunications  services  immediately  and  others  upon  the
satisfaction  of  certain  conditions.  Such  legislation  includes  certain
safeguards  against  anticompetitive  conduct  by  the RBOCs in the provision of
interLATA  service.  Anticompetitive  conduct  could  result  from,  among other
things,  a  RBOC's  access to all subscribers on its existing network as well as
its  potentially lower costs related to the termination and origination of calls
within  its territory.  It is impossible to predict whether such safeguards will
be  adequate  to  protect  against  anticompetitive conduct by the RBOCs and the
impact that any anticompetitive conduct would have on the Company's business and
prospects.  Because  of  the  name  recognition  that  the  RBOCs  have in their
existing  markets  and  the  established relationships that they have with their
existing  local  service customers, and their ability to take advantage of those
relationships,  as  well  as the possibility of favorable interpretations of the
Telecommunications  Act  by  the  RBOCs,  it  may  be  more  difficult for other
providers  of long distance services, such as the Company, to compete to provide
long  distance services to RBOC customers.  At the same time, as a result of the
Telecommunications  Act, RBOCs have become potential customers for the Company's
long  distance  services.

Internet  Related  Services

The  market  for  Internet-based  online  services  is relatively new, intensely
competitive and rapidly changing. Since the advent of commercial services on the
Internet, the number of Internet Service Providers and online services competing
for  users'  attention  and  spending  has  proliferated because of, among other
reasons,  the  absence of substantial barriers to entry, and the Company expects
that  competition will continue to intensify.  Many of the Company's current and
potential  competitors such as Earthlink, PsiNet, AOL, UUNET, Microsoft Network,
and  Prodigy  have  longer  operating  histories, larger customer bases, greater
brand  recognition  and  significantly  greater  financial,  marketing and other
resources.  These  competitors  may  be  able  to respond more quickly to new or
emerging technologies and changes in customer requirements and to devote greater
resources  to the development, promotion and sale of their products and services
than  the  Company.

The  Company  believes  that  its  Internet  Related  Services  are  marketed at
competitive  rates  and  provide  quality  and  services  comparable  to  its
competitors.  However,  the  Company's Internet Related Services are intended to
be a value-added service to attract customers to the Company's Telecommunication
Services  as  opposed  to  a  revenue-generating  service.  The  Company  offers
unlimited  dial-up  service for $9.95 per month and DSL service at rates ranging
from  $59.95  to  $249.95  per  month.  The  Company  anticipates  that  revenue
generated  exclusively  from  the  Company's  Internet  Related Services will be
immaterial  to the Company's results of operations.  Rather, the Company expects
to  derive  sufficient  revenue from its Telecommunication Services and Internet
related  advertising  revenue  to  pay  for  the  costs  of its Internet Related
Services.

                                        7
<PAGE>

CUSTOMER  ATTRITION

The Company believes that a high level of customer attrition is a characteristic
of  the  domestic  residential  long  distance  and Internet related industries.
Attrition  is attributable to a variety of factors, including the termination of
customers by the Company for non-payment and the initiatives of existing and new
competitors  as  they  engage  in,  among  other  things,  national  advertising
campaigns,  telemarketing  programs  and  the issuance of cash or other forms of
incentives.  Such  attrition  could  have  a  material  adverse  effect upon the
Company's  future  results  of  operations  and  financial  conditions.

DEPENDENCE  ON  KEY  CUSTOMERS

The Company is not dependent on any single customer for a significant portion of
its  annual sales.  The Company's customer base changes on a continuous basis as
new  customers  are  added  or  old  customers  removed.

MAJOR  SUPPLIERS

The  Company  does  not  own  its own long distance network, and pursuant to the
Company's  contract  with  MCI/WorldCom, the Company currently depends primarily
upon  MCI/WorldCom  to  provide  for  the  transmission  of  phone  calls by its
customers  and  to  provide the call detail records upon which the Company bases
its customers billings.  Under the terms of the three-year contract entered into
with  MCI/WorldCom  on  August  10,  1998  the Company is obligated to a minimum
monthly  commitment  of  $10,000 commencing March 1999.  The contract expires on
September  30,  2001.

In  August  1999,  the Company entered into negotiations with MCI/WorldCom in an
effort  to  lower  its  network  transmission  costs.  As  a  result  of  these
negotiations,  MCI/WorldCom  agreed  to  amend the existing contract between the
Company  and  MCI/WorldCom  whereby  MCI/WorldCom agreed to reduce the Company's
network  transmission costs by approximately 40%.  Additionally, under the terms
of  the  amendment,  the  minimum  monthly purchase requirement was increased to
$12,000  per  month  and  the  total  minimum  purchase requirement increased to
$288,000.  In  an  effort  to  continue  to  reduce  its  long  distance network
transmission  costs, the Company successfully negotiated an additional amendment
to  its  contract  with  MCI/WorldCom  in September 2000.  The amendment further
reduces  the  Company's  network  transmission  costs  by approximately 30%.  In
addition,  under  the terms of the amendment, the contract is extended to August
31,  2003 and the minimum monthly purchase requirement increased to $400,000 per
month  for the months August 2000 to January 2001 and then increases to $520,000
per  month  from  February  2001  to the end of the contract.  The total minimum
purchase  requirement  of  the contract increased to $18,000,000.  All remaining
material  terms  of  the  contract  remain  the  same.

Pursuant  to  the  terms of the contract with MCI/WorldCom, the Company must pay
liquidated  damages  in  an  amount  equal  to  the  aggregate  minimum  revenue
requirement for the remaining term of the contract if the Company terminates the
contract  prior  to the expiration date.  Although the Company believes that its
relationship  with  MCI/WorldCom  is  strong and should remain so with continued
contract  compliance,  the  termination  of  the  Company's  contract  with
MCI/WorldCom,  the loss of telecommunications services provided by MCI/WorldCom,
or  a reduction in the quality of service the Company receives from MCI/WorldCom
could have a material adverse effect on the Company's results of operations.  In
addition,  the  accurate  and  prompt  billing  of  the  Company's  customers is
dependent  upon  the  timeliness and accuracy of call detail records provided to
the  Company  by  MCI/WorldCom.  There  can  be  no  assurance  that  accurate
information  will  be provided by MCI/WorldCom on a timely basis, the failure of
which  would  have  a  material  adverse  effect  on  the  Company's  results of
operations.

On  April  30,  1999,  the  Company  entered  into  an  agreement  with Williams
Communications,  a  unit  of  Williams of Tulsa, Oklahoma ("Williams"), in which
Williams  was  to  design,  install  and  maintain a high speed, nationwide VoIP
network for the Company.  Subsequently, due to Williams inability to deliver the
VoIP  network  as  contracted  and  as  a  result  of  the  previously discussed
amendments  to  the MCI/WorldCom contract, the Company determined to discontinue
its agreement with Williams (Please refer to Item 6. Management's Discussion and
Analysis  or  Plan of Operation Long-Term Financing section of this document for
further  information).

In the event that  MCI/WorldCom were to  discontinue its service to the Company,
the Company believes, based upon discussions that the Company has had with other
long distance providers and based on such providers' published contract tariffs,
that it could negotiate and obtain contracts with other long distance providers
to resell long distance

                                        8
<PAGE>

services  at  rates  at  its current contract tariffs with MCI/WorldCom.  If the
Company were to enter into contracts with another provider, however, the Company
believes  it  would  take  approximately thirty (30) days to switch end users to
that  provider.  Although  the  Company  has  the  right  to  switch its current
customers  to  an alternate underlying carrier, the Company's customers have the
right  to  discontinue their service with the Company at any time.  Accordingly,
the  termination  or  non-renewal  of  the  Company's  contract  tariffs  with
MCI/WorldCom  or the loss of telecommunications services from MCI/WorldCom would
likely have a material adverse effect on the Company's results of operations and
financial  condition.  In  an  effort  to  minimize  the Company's dependence on
MCI/WorldCom,  the  Company  plans  on  either  purchasing  its  own  switching
facilities  or entering into additional provisioning agreements with alternative
long distance providers.  However, there can no assurances that the Company will
be  able  to  purchase  such  facilities  or  that  the  Company will be able to
negotiate  such  contracts  on  favorable  terms.

GTC  does  not  currently have its own Internet Network.  Currently, the Company
provides  its  Internet  Service Provider Access services pursuant to a one-year
agreement  with  Ziplink,  Inc.  for  the provisioning of the Company's Internet
Service  Provider  Access  service.  Pursuant  to  the Agreement, the Company is
subject  to a monthly minimum commitment of $500.  Although the Company believes
that its relationship with Ziplink is strong and should remain so with continued
contract compliance, the termination of the Company's contract with Ziplink, the
loss  of Internet services provided by Ziplink, or a reduction in the quality of
service  the  Company receives from Ziplink could have a material adverse effect
on  the  Company's  results  of  operations.  In  the event that Ziplink were to
discontinue  its  service  to  the  Company,  the  Company  believes, based upon
discussions that the Company has had with other Internet service providers, that
it  could  negotiate  and  obtain  contracts  with Internet service providers at
comparable  rates.

The  Company's  Wireless  T-1  services  are  currently  provided  pursuant to a
contract with Global Pacific Internet  ("Global").  Currently, the Company's T-1
services  are available only in the Southern California region.  Under the terms
of  its  contract  with  Global, the Company is not subject to a monthly minimum
commitment.  Although  the  Company  believes that its relations with Global are
strong  and  should  remain  so  with continued contract compliance, the loss of
Wireless  T-1  services  provided  by  Global,  or a reduction in the quality of
service the Company receives from Global could have a material adverse effect on
the  Company'  s  results  of operations.  The Company anticipates that it would
take  between thirty (30) to sixty (60) days to locate a replacement supplier in
the  event  that the Company's agreement with Global is terminated.  The Company
currently  plans to expand its Wireless T-1 services to other regions.  However,
there  can be no assurances that the Company will or will be able to expand this
service  to  other  regions.

REGULATION
The  Company's  provision  of  communications  services is subject to government
regulation.  Federal  law  regulates  interstate  and  international
telecommunications,  while states have jurisdiction over telecommunications that
originate  and terminate within the same state.  Changes in existing policies or
regulations  in  any  state  or by the FCC could materially adversely affect the
Company's  financial  condition  or results of operations, particularly if those
policies  make  it  more  difficult  for  the  Company  to  obtain  service from
MCI/WorldCom or other long distance companies at competitive rates, or otherwise
increase  the  cost  and  regulatory burdens of marketing and providing service.
There  can be no assurance that the regulatory authorities in one or more states
or  the  FCC  will  not  take action having an adverse effect on the business or
financial  condition  or  results  of  operations  of  the  Company.

Federal

The Company is classified by the FCC as a nondominant carrier.  After the recent
reclassification  of  AT&T  as  nondominant,  only  the  LECs  are classified as
dominant carriers among domestic carriers.  Because AT&T is no longer classified
as a  dominant  carrier, certain  pricing  restrictions that formerly applied to
AT&T have  been  eliminated, which could make it easier for AT&T to compete with
the Company  for low  volume long  distance subscribers.  The FCC generally does
not exercise  direct oversight over charges for service of nondominant carriers,
although it has the statutory power to do so.  Nondominant carriers are required
by statute  to offer interstate services under rates, terms, and conditions that
are just, reasonable  and  not  unreasonably  discriminatory.  The  FCC  has the
jurisdiction to act upon complaints filed by third parties, or  brought  on  the
FCC's own motion, against any  common  carrier, including  nondominant carriers,
for failure to comply with its  statutory obligations.  Nondominant carriers are
required  to  file  tariffs  listing the rates, terms and conditions of service,
which are filed pursuant to streamlined

                                        9
<PAGE>

tariffing  procedures.  The  FCC also has the authority to impose more stringent
regulatory  requirements on the Company and change its regulatory classification
from nondominant to dominant.  In the current regulatory atmosphere, the Company
believes,  however,  that  the  FCC  is  unlikely  to  do  so.

The  FCC  imposes  only minimal reporting requirements on nondominant resellers,
although  the  Company  is  subject  to  certain  reporting,  accounting  and
record-keeping  obligations.  Both  domestic  and  international  nondominant
carriers,  including  the  Company,  must maintain tariffs on file with the FCC.

At  present,  the  FCC exercises its regulatory authority to set rates primarily
with  respect to the rates of dominant carriers, and it has increasingly relaxed
its  control  in this area. Even when AT&T was classified as a dominant carrier,
the  FCC most recently employed a "price cap" system, which essentially exempted
most  of  AT&T's  services,  including  virtually  all of its commercial and 800
services,  from  traditional  rate of return regulation because the FCC believes
that  these  services  were  subject  to  adequate  competition.

State

The Company is subject to varying levels of regulation in the states in which it
currently provides intrastate telecommunications services.  The vast majority of
the  states require the Company to apply for certification to provide intrastate
telecommunications  services, or at least to register or to be found exempt from
regulation,  before  commencing intrastate service.  The vast majority of states
also require the Company to file and maintain detailed tariffs listing its rates
for  intrastate service.  Many states also impose various reporting requirements
and/or  require  prior  approval for transfers of control of certified carriers,
corporate  reorganizations,  acquisitions  of  telecommunications  operations,
assignments  of  carrier  assets,  including  subscriber  bases,  carrier  stock
offerings  and  incurrence  by  carriers  of  significant  debt  obligations.
Certificates  of  authority  can  generally  be conditioned, modified, canceled,
terminated or revoked by state regulatory authorities for failure to comply with
state  law  and  the  rules,  regulations  and  policies of the state regulatory
authorities.  Fines  and  other  penalties,  including  the return of all monies
received  for  intrastate  traffic from residents of a state, may be imposed for
such  violations.  In  certain states, prior regulatory approval may be required
for  acquisitions  of  telecommunications  operations.

As the Company expands its efforts to resell long distance services, the Company
will  have  to  remain attentive to relevant federal and state regulations.  FCC
rules  prohibit  switching  (also  commonly known as "Slamming") of a consumer's
long  distance  provider  without  the  consumer's  consent and specify how that
consent can be obtained.  Most states have consumer protection laws that further
define  the  framework  within  which the Company's marketing activities must be
conducted.  The  Company  intends to comply fully with all laws and regulations,
and  the  constraints of federal and state restrictions could impact the success
of  direct  marketing  efforts.

The  Company  is  not  currently subject to any State or Federal regulation with
respect  to  its Internet related services.  However, there can be no assurances
that  the  Company  will  not  be  subject  to  such  regulations in the future.
Additionally,  the  Company  is  not aware of any pending legislation that would
have  a  material  adverse  effect  on  the  Company's  operations.

PATENTS,  TRADEMARKS,  LICENSES

The  Company  does  not  depend  upon  any  patents or trademarks to conduct its
business; nor does the Company hold any such patents or trademarks.  The Company
is  required  to hold licenses with the Federal Communication Commission for the
operation  of  its  telecommunication services.  The Company is also required to
hold  licenses  in  the  states  in  which  it provides intrastate long distance
services.  Currently, the Company is licensed in every state (except Alaska) and
the  District of Columbia to provide intrastate services.  The Company's federal
and  state  telecommunication  licenses are of indefinite length and will remain
effective  so  long  as  the  Company  complies  with  all  Federal  and  State
regulations.

COST  OF  COMPLIANCE  WITH  ENVIRONMENTAL  REGULATIONS

The Company currently has no costs associated with compliance with environmental
regulations.  However,  there  can  be  no  assurances that the Company will not
incur  such  costs  in  the  future.

NUMBER  OF  EMPLOYEES

As of September 30, 2000, the Company employed approximately 74 people on a full
time  basis.

                                       10
<PAGE>

ITEM  2.  DESCRIPTION  OF  PROPERTY

Effective  June  1,  1998,  the Company began leasing approximately 2,712 square
feet  of  administrative  office  space  in  Costa Mesa, California at a monthly
rental  rate  of  $5,017  per  month.  This  facility  serves  as  the Company's
headquarters  and  primary place of business.  The monthly rental rate increased
to  $5,869  on  June  1,  2000.  The  lease  expires  on  May  31,  2001.

In  addition,  on  February  8,  1999, the Company entered into a month-to-month
lease  for  approximately  1,987  square  feet  of office space for its customer
service  operation,  at  a  monthly  rental  rate  of  $3,676  per month, at its
headquarters  building  in  Costa  Mesa.

On September 23, 1999, the Company entered into an addendum to its existing June
1,  1998  lease.  This  addendum  replaces  the  February  8, 1999 lease for its
customer  service  operation.  Beginning  October  1,  1999,  the  revised lease
obligates the Company to an additional lease for approximately 2,973 square feet
for  its  customer service operation, a monthly rental rate of $ 6,095 per month
and  for  the  Company  to  pay  the  first three months rent.  This addendum is
coterminous  with the Company's June 1, 1998 lease and will automatically expire
on  May 31, 2001, unless previously terminated by the Company or by Lessor given
ninety (90) days written notice.  The monthly rental rate increased to $6,434 on
June  30,  2000.

Beginning  January  17, 2000, the Company leased an additional 2,934 square feet
for  continued  expansion  of its customer service operation at a monthly rental
rate  of  $6,295  and for the Company to pay the first three and one-half months
rent.  The  addendum  is  coterminous  with the Company's June 1, 1998 lease and
will  automatically  expire on May 31, 2001, unless previously terminated by the
Company  or  by  the  lessor given ninety (90) days written notice.  The monthly
rental  rate  increased  to  $6,347  on  June  30,  2000.

With  this  addendum,  the Company leases a total of 8,621 square feet of office
space  for  its  headquarters  and  customer  service  operations in Costa Mesa,
California  at  a  monthly  rental  rate  of  $18,650.

Due  to  anticipated  growth,  the  Company is in the process of looking for new
space  for  its  headquarters  and  customer  service  operations.  The  Company
believes  that  it  will  be  able  to locate such space at reasonable rates and
terms.

ITEM  3.  LEGAL  PROCEEDINGS

The  Company  may  from  time  to  time be involved in various claims, lawsuits,
disputes with third parties, actions involving allegations of discrimination, or
breach  of  contract  actions  incidental to the operation of its business.  The
Company is not currently involved in any such litigation which it believes could
have  a  materially  adverse  effect  on  its  financial condition or results of
operations.

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

There  were no matters submitted to a vote of security holders during the fourth
quarter  of  the  year  ended  June  30,  2000.


                                       11
<PAGE>
                                     PART II

ITEM  5.      MARKET  FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
              MATTERS

MARKET  INFORMATION

The  following  table  sets  forth the high and low bid prices for shares of the
Company  Common  Stock  for the periods noted, as reported by the National Daily
Quotation  Service  and  the  NASDAQ  Bulletin  Board.  Quotations  reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.  The Company's Common Stock was not listed on the
NASDAQ  Bulletin  Board  during  1997.  On  April 21, 1998, the Company's Common
Stock  began  listing  on  the  NASDAQ  exchange  under the trading symbol BBRI.
However,  the  Company's  Common  Stock  did  not  begin trading until after the
Company  acquired  GenTel  on August 31, 1998 wherein the trading symbol for the
Company's  Common  Stock  changed  to  GTCC.



        CALENDAR                                   BID  PRICES
          YEAR         PERIOD                   HIGH         LOW
--------------------------------------------------------------------------------
          1998         First Quarter            n/a          n/a
                       Second  Quarter          n/a          n/a
                       Third  Quarter           4.75         4.50
                       Fourth  Quarter          4.41         3.33

          1999         First  Quarter          11.125        3.25
                       Second  Quarter          8.625        3.56
                       Third  Quarter           4.937        2.00
                       Fourth  Quarter          3.8125       1.75

          2000         First  Quarter           3.75         1.71875
                       Second  Quarter          2.09375      0.7188
                       Third  Quarter           0.8438       0.50


On  September  30,  2000, the last sales price per share of the Company's common
stock,  as  reported  by  the  NASDAQ  Bulletin  Board,  was  $0.50.

NUMBER  OF  SHAREHOLDERS

The number of beneficial holders of record of the Common Stock of the Company as
of  the  close of business on September 30, 2000 was approximately 203.  Many of
the  shares  of  the  Company's  Common  Stock  are  held in a "street name" and
consequently  reflect  numerous  additional  beneficial  owners.

DIVIDEND  POLICY

To  date,  the  Company  has declared no cash dividends on its Common Stock, and
does  not expect to pay cash dividends in the next term.  The Company intends to
retain  future earnings, if any, to provide funds for operation of its business.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

During fiscal year 2000, the Company completed a  private  offering of 2,825,000
shares  of  the Company's "restricted" Common Stock resulting in net proceeds to
the Company of approximately $2,536,605, net of offering costs of $288,395 to 44
"accredited"  investors  at  a  price  of  $1.00  per  share.  The  offering was
conducted  without  general  solicitation  or  advertising  and  offered only to
"accredited"  investors  pursuant  to Rule 506 of Regulation D of the Securities
Act  of  1933.

In September 1999, the Company issued 50,000 shares of "restricted" Common Stock
valued at $50,000 to Dan Baer in consideration for deferment of rent owed by the
Company  from  April  1999  to  September 1999 for its headquarters and customer
service  operations  in Costa Mesa, CA.  The Company was required to pay a total
of  $42,360  deferred  rent  in  nine payments beginning January 1, 2000 through
September  1,  2000  in  addition  to  its regular rent due each month under its
lease.  The issuance was an isolated transaction not involving a public offering
pursuant  to  section  4(2)  of  the  Securities  Act  of  1933.

In September 1999, the Company issued  15,000 shares of "restricted" Common
Stock  valued  at $15,000  to  the  Cutler Law  Group,  the Company's securities
counsel in  exchange for  legal  services  rendered.  The issuance was an

                                       12
<PAGE>

isolated transaction not involving a public offering pursuant to section 4(2) of
the  Securities  Act  of  1933.

In  September  1999,  the  Company issued an aggregate of 67,675 shares to seven
consultants  of  the  Company and the Cutler Law Group, the Company's securities
counsel, in exchange for consultation and legal services provided to the Company
valued  at  approximately $271,247.  The transactions were isolated transactions
not  involving  a public offering pursuant to Section 4(2) of the Securities Act
of  1933.  These  shares were subsequently registered on Form S-8 filed with the
Securities  and  Exchange  Commission  on  October  6,  1999.

In  October  1999, the Company issued 25,000 shares of "restricted" Common Stock
valued  at  $25,000  to an outside consultant in exchange for investor relations
services  rendered.  The  issuance  was  an isolated transaction not involving a
public  offering  pursuant  to  section  4(2)  of  the  Securities  Act of 1933.

In  December  1999,  the  Company  issued  an  aggregate  of  282,575  shares to
consultants  and  attorneys  in  exchange  for  consultation  and legal services
provided to the Company valued at approximately $539,666.  The transactions were
isolated  transactions  not involving a public offering pursuant to Section 4(2)
of  the  Securities  Act of 1933.   These shares were subsequently registered on
Form  S-8 filed with the Securities and Exchange Commission on January 19, 2000.

In  January  2000, the Company issued 7,000 shares of the Company's common stock
valued  at  approximately  $13,118  in  exchange for consultation services.  The
issuance was an isolated transaction not involving a public offering pursuant to
section  4(2)  of  the  Securities  Act of 1933.  These shares were subsequently
registered  on Form S-8 filed with the Securities and Exchange Commission on May
19,  2000.

In  January  2000,  the Company issued 200,000 shares of restricted common stock
valued  at approximately $200,000 in lieu of rent owed by the Company from April
1999  through June 2000 for its headquarters and Customer Services operations in
Costa  Mesa, California.  The issuance was an isolated transaction not involving
a  public  offering  pursuant  to  section  4(2)  of the Securities Act of 1933.

In  January  2000,  the  Company  entered  into  an  agreement  with  an outside
consultant  for  investor  and  public  relations  services.  Pursuant  to  the
agreement,  the  Company  issued  56,637  shares  of  common  stock  valued  at
approximately $199,943 for one year's services.  In addition, the Company issued
options  to  purchase 60,000 shares of the Company's common stock as follows: 1)
20,000  shares  at  100% of the closing bid price on January 28, 2000, 2) 20,000
shares  at  200%  of  the  closing  bid price on January 28, 2000; and 3) 20,000
shares  at  300% of the closing bid price on January 28, 2000.  The options were
valued  at  $157,800  using  the  Black  Scholes method and recorded as investor
relations  expense in January 2000.  The transactions were isolated transactions
not  involving  a public offering pursuant to Section 4(2) of the Securities Act
of  1933.  As  of  September  30,  2000,  no  options  have  been  exercised.

In January 2000, the  Company  issued  55,000  shares  of  restricted  common
stock  pursuant  to  the conversion of a note payable with a principal amount of
$50,000  and $5,000 of interest.  This issuance was conducted under an exemption
under  Section  4(2)  of  the  Securities  Act  of  1933.

In  May  2000,  the Company issued an aggregate of 456,833 shares to consultants
and  attorneys  in  exchange for consultation and legal services provided to the
Company  valued  at  approximately  $682,000.  The  transactions  were  isolated
transactions  not  involving  a  public offering pursuant to Section 4(2) of the
Securities  Act  of 1933.  These shares were subsequently registered on Form S-8
filed  with  the  Securities  and  Exchange  Commission  on  May  19,  2000.

In May 2000, the Company issued 15,000 shares of "restricted" Common Stock
valued at $15,000  to the Cutler Law  Group, the Company's securities counsel in
exchange for legal services  rendered.  The issuance was an isolated transaction
not involving a public offering pursuant to section 4(2) of the Securities Act
of 1933.

In  May  2000,  the  Company  issued  250,000  shares of restricted common stock
resulting  in proceeds to the Company of $250,000 to "accredited" investors at a
price  of  $1.00  per  share.  The  offering  was  conducted  without  general
solicitation  or advertising and offered only to "accredited" investors pursuant
to  Rule  506  of  Regulation  D  of  the  Securities  Act  of  1933.

During  fiscal  year 2000, Paul Sandhu ("Mr. Sandhu"), the Company's President &
CEO, Eric Clemons ("Mr. Clemons"), the Company's Chief Operating Officer, Gerald
DeCiccio,  the  Company's  Chief  Financial  Officer, and other employees of the
Company,  exercised  options  (previously  granted  pursuant to their employment
contracts)  to  purchase a total of 375,000 shares of the Company's common stock
in  lieu  of  salary  for  $72,250.

During  fiscal  year  2000,  Mr.  Sandhu  and  Mr.  Clemons canceled 619,848 and
154,962,  respectively,  shares  of  the  Company's common stock held by each of
them.  It  was  determined  that  these  shares  were  not cancelled in a timely
matter.  As  a  result,  these cancellations are reflected as a reduction in the
outstanding  shares  as  of  July  1,  1998.


                                       13
<PAGE>

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

The  following  discussion  contains certain forward-looking statements that are
subject  to  business  and  economic  risks and uncertainties, and the Company's
actual  results  could  differ materially from those forward-looking statements.
The  following  discussion  regarding  the  financial  statements of the Company
should  be  read in conjunction with the financial statements and notes thereto.

GENERAL  OVERVIEW

The  Company's  principal line of business is to provide long distance telephone
and  value-added  services for small and medium-sized businesses and residential
customers  throughout  the  United  States.  The  Company's strategy has been to
build  a  subscriber  base without committing capital or management resources to
construct  its  own  network  and  transmission  facilities.  This  strategy has
allowed  the  Company  to  add  customers  without  being  limited  by capacity,
geographic coverage, or configuration of any particular network that the Company
might  have  developed.

Recently, the Company began providing a number of Internet related services such
as:  the  sale  of  electronic  calling cards on its ecallingcards.com web site;
Internet  access  via  Dial-Up,  Wireless  T-1,  and  DSL; and Internet Web Page
Hosting services.  However, the Company's Internet related services are intended
to  be  a  value-added  service  to  attract  customers  to  the  Company's
Telecommunication  services  as  opposed  to  a  revenue  generating  service.

The  Company's  services  are marketed nationwide through broadcasting and print
media,  telemarketing,  independent  sales  agents  and  its  own  sales  force.

The  Company's  revenues consist of revenues from telecommunication and Internet
related  services.  These  revenues  are  generated  when  customers  make  long
distance  telephone  calls  from  their business or residential telephones or by
using  the  Company's  telephone calling cards.  Proceeds from prepaid telephone
calling  cards  are  recorded as deferred revenues when the cash is received and
recognized  as  revenue  as  the telephone service is utilized.  The reserve for
deferred  revenues  is  carried  on  the  balance sheet as an accrued liability.
Internet  related services are typically billed at a flat rate and are billed in
advance.  Revenues  are  recognized  in  the  period  earned.

Cost  of  Sales  consists  of  telecommunications service costs and the costs of
providing internet access.  Telecommunications service costs paid by the Company
are based on the Company's customers' long distance usage.  The Company pays its
carriers  based  on  the  type  of  call,  time  of  call, duration of call, the
terminating  telephone  number, and terms of the Company's contract in effect at
the  time  of the call.  General and administrative expenses consist of the cost
of  customer  acquisition  (including  costs paid for third-party verification),
customer service, billing, cost of information systems and personnel required to
support  the  Company's  operations  and  growth.

The  Company,  depending  on  the  extent  of  its future growth, may experience
significant  strain  on its management, personnel, and information systems.  The
Company  will  need  to  implement  and  improve  operational,  financial,  and
management  information  systems.  In  addition, the Company is implementing new
information  systems  that  will provide better record-keeping, customer service
and  billing.  However,  there can be no assurance that the Company's management
resources  or information systems will be sufficient to manage any future growth
in  the  Company's  business,  and  the  failure  to do so could have a material
adverse  effect  on  the Company's business, results of operations and financial
condition.


                                       14
<PAGE>

RESULTS  OF  OPERATIONS  OF  THE  COMPANY
FISCAL  YEAR  ENDED  JUNE  30,  2000 COMPARED TO FISCAL YEAR ENDED JUNE 30, 1999

REVENUES  -  Revenues  increased  by $4,407,075 from $289,012 for the year ended
June  30, 1999 to $4,696,087 for the year ended June 30, 2000.  The increase was
due  primarily  to the increase in telecommunications revenues of $4,365,910 and
internet  revenues of $41,165.  During the year ended June 30, 1999, the Company
began  selling  its  services  pursuant  to  its business plan which resulted in
revenues  comprised  primarily  of  $183,116 for web development and hosting and
$105,896  from telecommunication services.  As of June 30, 2000, the Company had
approximately  65,555  telecommunication  customers, with usage of long distance
services of approximately 74,033,000 minutes for the year ended June 30, 2000 as
compared  with  approximately  2,023  telecommunication customers, with usage of
long  distance  services  of  approximately 1,709,000 minutes for the year ended
June  30,  1999.

COST  OF SALES - Cost of sales increased by $3,932,674 from $99,913 for the year
ended  June  30,  1999  to  $4,032,587  for  the  year ended June 30, 2000.  The
increase  was primarily due to the increase in carrier costs associated with the
cost  of  long  distance service of $3,655,785 for the year ended June 30, 2000.
In addition, the Company incurred $276,889 of costs associated with its Internet
services  for the year ended June 30, 2000.  As a percentage of revenue, cost of
sales was 85.9% and 34.6% resulting in a gross margin of 14.1% and 65.4% for the
years  ended  June  30, 2000 and 1999, respectively.  In an effort to reduce the
monthly  minimum  usage  fees  of  internet service provider access, the Company
entered  into a one year agreement with a company which directly ties these fees
to  the  internet  subscriber  base.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES  -  Selling,  general  and
administrative  ("S,G&A")  expenses  increased  by  $4,143,320  or  116.6%  from
$3,553,512  for  the  year  ended June 30, 1999 to $7,696,832 for the year ended
June  30,  2000.  For the year ended June 30, 2000, the Company began to realize
sales  from its telecommunications customers, thereby resulting in significantly
increased  S,G&A  expenses  primarily  from  its customer service operations and
internet  support  costs.  S,G&A  expenses for the year ended June 30, 2000 were
comprised  primarily  of  shares  valued  at  approximately $250,000 issued to a
vendor for deferment of rent; options valued at approximately $121,790 issued to
employees  and  directors of the Company; stock and options valued at $1,918,774
issued  in  exchange  for  services;  approximately  $2,388,276  in salaries and
related  taxes  paid  to employees; advertising expenses of $1,004,103; Internet
support  costs  of  $667,913;  bad  debts  of $475,241; the costs of third party
verification  for  newly  acquired  customers  of  $260,247;  depreciation  and
amortization  expense  of  $173,946;  and  $436,542 of other operating expenses,
primarily  investor  relations, legal, consulting, audit services, and LEC fees.
S,G&A  expenses  for  the  year  ended June 30, 1999 were comprised primarily of
options  valued  at approximately $352,630 granted to a director of the Company;
advertising  expenses  of  $271,916;  options  valued  at  $596,000 issued to an
investor  relations  company  ($522,500)  and  a  marketing company ($73,498) in
exchange for services; shares valued at approximately $238,600 issued to vendors
in  exchange  for  services  and  rent; provision for bad debts of approximately
$268,200; stock and options valued at approximately $39,875 issued to supplement
compensation  to  certain key employees; approximately $705,000 in salaries paid
to  employees; and $1,081,291 of other operating expenses, primarily rent, legal
and  audit  services,  investor  relations,  and  the  costs  of  third  party
verification  for  newly  acquired  customers.  Net  loss  was  $7,180,991  and
$3,361,676  for  the  years  ended  June  30,  2000  and  1999,  respectively.

ASSETS  AND  LIABILITIES - Assets increased by $852,584 from $660,069 as of June
30,  1999  to $1,512,653 as of June 30, 2000.  The increase was due primarily to
increases  in  accounts  receivables  of $615,662, cash of $230,836, deposits of
$143,490 and decreases in other assets of $137,404, associated with the increase
in  customer  usage.  Liabilities  increased by $2,829,156 from $1,087,063 as of
June 30, 1999 to $3,916,219 as of June 30, 2000.  The increase was due primarily
to increases in accounts payable and accrued expenses of $1,924,157, payroll and
payroll  related  liabilities  of  $706,705,  notes  payable  of  $113,939,  and
increases  in other liabilities of $148,987, offset primarily by the decrease in
capitalized  lease  obligations  of $14,632 and the conversion of a note payable
into common stock of $50,000, associated with the increase in telecommunications
service  costs,  internet  service  provider  access  fees  and customer service
operations  as  a  result  of  the  increase  in  customers.

STOCKHOLDERS'  DEFICIT  -  Stockholders'  deficit increased by $(1,976,572) from
$(426,994)  as  of  June  30,  1999  to  ($2,403,566)  as of June 30, 2000.  The
increase  was  attributable  to  the current year net loss of $7,180,991, offset
primarily  by  the fair market value of stock issued for services of $2,010,974;
the fair market value of options granted to consultants for services rendered of
$157,800;  the  fair  market value of options granted to directors and employees
for  compensation  of  $121,790;  the  exercise of stock options of $72,250; the
conversion  of a note payable of $50,000, amounts raised in the Company's recent
private  offerings  of  its common stock of $2,536,605, net of offering costs of
$288,395;  sale  of  common  stock  for  $250,000  and  interest accrued on debt
converted  of  $5,000.

                                       15
<PAGE>

LIQUIDITY  AND  CAPITAL  RESOURCES
GENERAL  -  Overall,  the  Company had positive cash flows of $230,836 in fiscal
year  2000 resulting from $2,845,726 of cash provided by the Company's financing
activities,  offset  by  $2,585,704  of  cash  used  in operating activities and
$29,186  of  cash  used  in  investing  activities.

CASH FLOWS FROM OPERATIONS - Net cash used in operating activities of $2,585,704
in  fiscal year 2000 was primarily due to a net loss of $7,180,991, increases in
accounts  receivable of $629,112 and an increase in deposits of $143,490; offset
partially  by  the  increases  in  operating  liabilities,  principally accounts
payable  and  accrued  expenses  of  $2,014,343,  payroll  and  related taxes of
$778,955,  and deferred income of $98,987; the fair market value of stock issued
for  services  of  $2,010,974;  the  fair  market  value of options and warrants
granted  to consultants for services rendered of $157,800; the fair market value
of  options  granted  to  directors  and employees for compensation of $121,790,
depreciation  and  amortization  expense  of  $173,946; and other items totaling
$11,094.

CASH  FLOWS FROM INVESTING - Net cash used in investing activities of $29,186 in
fiscal  year  2000  funded  purchases  of property and equipment of $156,686 and
issuance  of  a  note  receivable of $22,500 offset partially by the decrease in
long-term  deposits  of  $150,000.

CASH  FLOWS  FROM  FINANCING  -  Net  cash  provided  by financing activities of
$2,845,726  in  fiscal year 2000 was primarily due to the proceeds from sales of
the Company's common stock of $2,786,605, net of offering costs of $288,395; net
borrowings  of  short  term  debt  of $73,753; offset primarily by repayments on
capitalized  lease  obligations  of  $14,632.

SHORT-TERM  FINANCING  -  On  September  23,  2000,  the  Company entered into a
promissory  note  with  an  unaffiliated accredited shareholder resulting in net
proceeds to the Company in the amount of $200,000.  Pursuant to the terms of the
promissory  note,  the  balance and simple interest in the amount of 12% are due
and  payable  to the noteholder on March 25, 2001 and the note is secured by the
Company's  receivables.  In  addition,  the  Company  agreed  to  issue  to  the
noteholder  warrants to purchase up to 40,000 shares of the Company's restricted
Common  Stock  at  an  exercise  price  of  $0.50  per  share.  The warrants are
exercisable  for  a  period  of two (2) years from the date of issue and contain
piggy-back  registration  rights.

The Company borrows funds from the Company's President & CEO for working capital
purposes.  The  borrowings  accrue interest at 10% and are due on demand.  As of
June 30, 2000, the note payable to the Company's President & CEO was $2,149.  No
interest  was  accrued  or  paid  as  of  June  30,  2000  and  1999.

The  funds from the promissory note as described above will be used to fund  the
Company's  ongoing  operations.

LONG-TERM  FINANCING  -  The  Company  believes  that its anticipated funds from
operations  will  be  insufficient  to  fund  its  capital expenditures, working
capital, and other cash requirements through at least June 2001.  Therefore, the
Company  will be required to seek additional funds either through debt or equity
financing  to finance its long-term operations ("Additional Funds").  Should the
Company  fail  to raise the Additional Funds, the Company will have insufficient
funds  for  the  Company's  intended operations and capital expenditures for the
next  12  months  which  may  have  a  material  adverse effect on the Company's
long-term  results  of  operations.

CONTINGENT  LIABILITIES  -  On  April  30,  1999,  the  Company  entered into an
agreement  with  Williams  Communications, a unit of Williams of Tulsa, Oklahoma
("Williams"),  in  which  Williams  was  to  design, install and maintain a high
speed,  nationwide  VoIP network for the Company.  Subsequently, due to Williams
inability  to  deliver  the  VoIP  network  as contracted and as a result of the
previously  discussed  amendments  to  the  MCI/WorldCom  contract,  the Company
determined  to  discontinue  its  agreement  with  Williams.  As a result of the
Company's  discontinuation  of  its  contract  with Williams, the Company may be
subject  to  accrued  costs  of  $600,110.  The  Company is in negotiations with
Williams  to  modify  or eliminate these charges.  However, no assurances can be
made  that  such  negotiations  will  result  in  a  favorable  outcome.

The  Company  has  recorded an accrual for past due payroll taxes as of June 30,
2000  due  to  the under-reporting of the Company's payroll tax liability.  As a
result,  the Company has accrued approximately $650,000 (including approximately
$85,000  of  penalties  and interest) under accrued payroll and related taxes in
the accompanying balance sheet at June 30, 2000.  The Company anticipates having
this  matter  settled  by  June  30,  2001.

                                       16
<PAGE>

CAPITAL  EXPENDITURES

The  Company  expects to purchase approximately $200,000 of additional equipment
in connection with the expansion of its business.  Because the Company presently
does  not  have  the  capital for such expenditures, it will have to raise these
funds.  (See  Long-Term  Financing  in  this  section).

SUBSIDIARIES

The Company has formed three wholly owned subsidiaries that offer different
products and services.  They are managed separately because each business
requires different technology and/or marketing strategies.

The three subsidiaries are: CallingPlanet.com, Inc., ecallingcards.com, Inc. and
U.S. Main Corporation.

CallingPlanet.com,  Inc.  offers  international  calling  using  a  PC  to phone
connection.  ecallingcards.com, Inc. offers prepaid calling cards purchased over
the  internet  and U.S. Main Corporation offers private label telecommunications
and  Internet  related  needs.

GOING  CONCERN

The  Company's  independent  certified  public  accountants have stated in their
report  included  in  this  Form 10-KSB, that the Company has incurred operating
losses  in  the  last two years, has a working capital deficit and a significant
stockholders  deficit.  These  conditions  raise  substantial  doubt  about  the
Company's  ability  to  continue  as  a  going  concern.

INFLATION
Management  believes  that  inflation  has  not  had  a  material  effect on the
Company's  results  of  operations.

EMPLOYMENT

As  of  September  30,  2000,  the  Company  had  74  full  time  employees.

ITEM  7.   FINANCIAL  STATEMENTS

The  consolidated  financial  statements and supplementary financial information
which  are  required  to  be  filed under this item are presented under Item 13.
Exhibits,  Financial  Statement  Schedules  and  Reports  on Form 10-KSB in this
document,  and  are  incorporated  herein  by  reference.

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

There  have  been  no disagreements between Corbin & Wertz LLP and Management of
the  type  required  to  be  reported  under this Item 8 since the date of their
engagement.

                                       17
<PAGE>

                                    PART III

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

The  following  table sets forth the names and ages of the current directors and
executive  officers of the Company, the principal offices and positions with the
Company  held  by  each  person  and  the  date such person became a director or
executive  officer  of  the  Company.  The executive officers of the Company are
elected  annually by the Board of Directors.  The directors serve one year terms
until  their  successors are elected.  The executive officers serve terms of one
year  or  until  their  death, resignation or removal by the Board of Directors.
There  are  no  family  relationships between any of the directors and executive
officers.  In  addition,  there  was no arrangement or understanding between any
executive officer and any other person pursuant to which any person was selected
as  an  executive  officer.

The  directors  and  executive  officers  of  the  Company  are  as  follows:

Name                   Age     Position(s)
--------------------------------------------------------------------------------

Paul  Sandhu            39     Chief Executive Officer, President, and Chairman
                                of the  Board

Eric  Clemons           29     Director,  Chief Operating Officer, Secretary
                                and  Treasurer

Gerald DeCiccio         42     Chief  Financial  Officer

Mark  Fleming           42     Executive  Vice  President

John  M.  Eger          60     Director

Clay  T.  Whitehead     61     Director


PAUL  SANDHU  is  currently the Company's President and Chief Executive Officer.
Mr.  Sandhu  has  been with GenTel since its inception.  Mr. Sandhu has over ten
(10)  years  experience with start-up and emerging growth companies.  Mr. Sandhu
was  Co-Founder,  President  and  Co-Owner  of  Maximum  Security ("Maximum"), a
Security  and  surveillance  company  he started in 1992.  While at Maximum, Mr.
Sandhu  actively managed a staff of over 200 employees.  In 1997 Mr. Sandhu sold
the business to his partner.  Mr. Sandhu graduated from the University of Punjab
in  India  with  a  degree  in  Engineering.

ERIC  CLEMONS  is  currently the Company's Chief Operating Officer.  Mr. Clemons
has  been  with  GTC  since its inception.  Mr. Clemons has over eight (8) years
experience  with  sales  and marketing organizations.  Mr. Clemons most recently
was  Vice  President  of  Marketing  for  Intelligent  Electronic Communications
managing  a  staff of 50 employees.  Mr. Clemons has attended The Wharton School
of  Business  executive  management  programs.

Between 1989 and 1994, Mr. Clemons was a licensed NASD broker.  As a broker, Mr.
Clemons  was subject to three claims related to such engagement and subsequently
an  administrative  action by the NASD related to his work as a licensed broker.
Mr.  Clemons  was  found liable for an award of $4,000 on one of the actions and
subsequently  in  April 1997, was fined $65,000 and barred from association with
any  NASD  member  with the ability for re-application following a period of two
years.

GERALD DECICCIO joined the Company in January  1999 as Chief Financial  Officer.
Mr. DeCiccio has over eighteen years experience in the financial and  accounting
field.  Prior to joining GTC, Mr. DeCiccio was the Vice President of Finance and
Administration  for  National Telephone &  Communications, Inc., ("NT&C") a $150
million inter- exchange carrier  and provider  of  communications  products  and
services.  While at NT&C, Mr. DeCiccio managed NT&C's finance, accounting, human
resources and  legal departments.  Between  1995 and  1997, Mr. DeCiccio was the
Corporate  Controller for Newport  Corporation,  a $140  million  multi-national
manufacturer / distributor  of laser  and optics  products.  Prior  to that, Mr.
DeCiccio was the Director of Audit and  Quality  Systems  for  Sunrise  Medical,
Inc.,

                                       18
<PAGE>

a  $750  million  multi-national  manufacturer  /  distributor  of  health  care
products.  From  1980  to 1984, Mr. DeCiccio was a Supervising Senior Accountant
for  Ernst  and  Young.  Mr.  DeCiccio  received  his  Bachelor  of  Science  in
Accounting from Loma Linda University, and his Masters of Science in Finance and
Systems  Technology from the University of Southern California.  Mr. DeCiccio is
a  Certified  Public  Accountant  in  the  State  of  California.

MARK  FLEMING  joined  the  Company in October 1998 as Executive Vice President.
Mr.  Fleming  has  sixteen  years  of  business strategy, planning, and analysis
experience  within the competitive consumer products / services industries.  For
the  past  seven  years,  Mr. Fleming worked in the telecommunications industry,
holding  several finance and marketing management positions at MCI.  Some of the
key business / operational issues that Mr. Fleming managed while at MCI included
pricing strategy, market positioning, new product development, sales channel and
customer  service  performance reviews, capital investment decisions and overall
business  planning  /  analysis  for  Residential  Markets  and  Local  Services
divisions.  Mr.  Fleming  received  his  Bachelor  of  Arts  degree  in Business
Administration  from  Principia  College  in  1980,  and attained his Masters in
Business  Administration, with honors from the University of Southern California
in  1986.

JOHN  M.  EGER  is  a  telecommunication  lawyer  and  former  counsel  to  the
international  law firm Morrison and Forester and is currently the holder of the
prestigious Lionel Van Deerlin Endowed Chair of Communications and Public Policy
at  San  Diego  State University.  He is also the President and CEO of the World
Foundation  for  Smart  Communities,  a non-profit, non-governmental educational
program  dedicated  to  helping  communities  understand  the  importance  of
information  technology as a catalyst for transforming life and work in the 21st
Century.  Professor  Eger  formerly headed CBS Broadcast International, which he
established,  and  was  Senior  Vice President of the CBS Broadcast Group.  From
1971  through  1973,  Professor  Eger was legal assistant to the chairman of the
Federal  Communications  Commission,  and  from  1974  through  1976  served  as
Telecommunications Advisor to Presidents Nixon and Ford and was also the Head of
the  White  House  Office  of  Telecommunications  Policy (OTP).  Earlier in his
career,  Professor  Eger  served  as a data communications specialist and design
director of information systems for the Bell System.  From 1976 through 1981, he
was  a  Washington,  DC  based  telecommunications  attorney.  Until  recently,
Professor  Eger  served  as  Chairman  of  the Board of the San Diego Processing
Corporation,  Chairman  of  San  Diego  Mayor Susan Golding's City of the Future
Advisory  Committee and Chairman of Governor Pete Wilson's California Commission
on  Information  Technology.

CLAY  T.  WHITEHEAD  is  currently  President  of  Clay  Whitehead Associates, a
strategic  consulting and business development company which concentrates on the
telecommunications  and  media  industries.  Clay Whitehead Associates primarily
works  with  large  companies  to  develop  business  projects  in  the areas of
telecommunications  and  television.  Mr.  Whitehead  has  participated  in  the
formation,  strategy  development, regulatory posture, and financing of a number
of  telecommunications businesses in the United States and internationally.  Mr.
Whitehead has also served as a special assistant to President Nixon, with policy
responsibility  for NASA, the Atomic Energy Commission, and the National Science
Foundation.  From  1971  to  1974,  he  was  director  of  the  U.S.  Office  of
Telecommunications  Policy.  From  1979  to  1983, Mr. Whitehead founded and was
president  of  Hughes  Communications,  Inc.,  a  subsidiary  of Hughes Aircraft
Company.  Mr.  Whitehead  also  currently  serves  on the board of directors for
Prudential  Funds.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

Section  16(a)  of  the  Securities  Exchange Act of 1934 requires the Company's
directors  and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the SEC initial
reports  of  ownership  and  reports of changes in ownership of Common Stock and
other  equity  securities  of the Company.  Officers, directors and greater than
ten  percent shareholders are required by SEC regulations to furnish the Company
with  copies  of  all Section 16(a) forms they file. To the Company's knowledge,
based  solely  on  the review of copies of such reports furnished to the Company
and  written representations that no other reports were required and to the best
of  its knowledge, during the year ended June 30, 2000, all Section 16(a) filing
requirements  applicable  to  the Company's officers, directors and greater than
ten  percent  shareholders  were  complied  with.

                                       19
<PAGE>

ITEM  10.  EXECUTIVE  COMPENSATION

On  December 1, 1998, the Company entered into an Employment Agreement with Paul
Sandhu,  the  Company's President and CEO, whereby the Company agreed to pay Mr.
Sandhu  an  annual  salary  of $84,000.  Pursuant to the Agreement, Mr. Sandhu's
salary  shall increase to $168,000 should the Company either maintain a positive
cash  flow  for  two consecutive months, or the Company successfully completes a
Form  SB-2  registered  offering  of  its  securities.  On  January 15, 1999 the
Company  voluntarily  agreed to increase his salary to $168,000.  In addition to
his  annual  salary,  the  Agreement  confirmed the prior issuance of options to
purchase  200,000  shares  of the Company's Common Stock at an exercise price of
$0.2375  previously  granted  to  Mr. Sandhu pursuant to an employment agreement
between  Mr. Sandhu and GenTel dated January 5, 1998.  These options vested upon
execution of the Agreement.  The Agreement may be canceled at any time by either
the  Company  or  Mr.  Sandhu.  However, if the Company terminates the Agreement
without  cause,  as  defined in the Agreement, the Company shall be obligated to
pay  Mr.  Sandhu  25%  of  his  annual  salary  as  severance.

On  December 1, 1998, the Company entered into an Employment Agreement with Eric
Clemons,  the  Company's  Chief  Operating  Officer ("COO"), whereby the Company
agreed  to  pay  Mr.  Clemons  an  annual  salary  of  $76,000.  Pursuant to the
Agreement,  Mr.  Clemons'  salary  shall increase to $152,000 should the Company
either  maintain a positive cash flow for two consecutive months, or the Company
successfully  completes  a  Form SB-2 registered offering of its securities.  On
January  15,  1999 the Company voluntarily increased his salary to $152,000.  In
addition  to  his  annual  salary, the Agreement confirmed the prior issuance of
options  to purchase 100,000 shares of the Company's Common Stock at an exercise
price  of  $0.2375  previously  granted to Mr. Clemons pursuant to an employment
agreement  between  Mr. Clemons and GenTel dated January 5, 1998.  These options
vested  upon  execution  of the Agreement.  The Agreement may be canceled at any
time  by  either the Company or Mr. Clemons.  However, if the Company terminates
the  Agreement  without cause, as defined in the Agreement, the Company shall be
obligated  to  pay  Mr.  Clemons  25%  of  his  annual  salary  as  severance.

On  December  1,  1998,  the  Company  entered into an Employment Agreement with
Gerald  DeCiccio,  the  Company's  Chief  Financial Officer, whereby the Company
agreed  to  pay  Mr.  DeCiccio  an  annual  salary of $105,000.  Pursuant to the
Agreement,  Mr.  DeCiccio's salary shall increase to $144,000 should the Company
either  maintain a positive cash flow for two consecutive months, or the Company
successfully  completes  a  Form SB-2 registered offering of its securities.  On
December  23, 1999 the Company voluntarily increased his salary to $144,000.  In
addition  to  his  annual  salary,  the Agreement grants Mr. DeCiccio options to
purchase  150,000  shares  of  the Company's Common Stock.  Twenty-five thousand
(25,000) of the options are set to vest six (6) months from the execution of the
Agreement  at  an  exercise price of $.01, expiring three years from the date of
vesting  if  not exercised.  The remaining 125,000 options are scheduled to vest
in  1/3  increments  each  following year provided that Mr. DeCiccio is employed
with  the  Company.  The  Agreement  may  be  canceled at any time by either the
Company  or  Mr.  DeCiccio.  However,  if  the  Company terminates the Agreement
without  cause,  as  defined in the Agreement, the Company shall be obligated to
pay  Mr.  DeCiccio  25%  of  his  annual  salary  as  severance.

On  October 14, 1998, the Company entered into an Employment Agreement with Mark
Fleming,  the  Company's Executive Vice-President, whereby the Company agreed to
pay  Mr.  Fleming  an  annual salary of $70,000.  Pursuant to the Agreement, Mr.
Fleming's salary shall increase to $107,000 should the Company either maintain a
positive  cash  flow  for  two  consecutive  months, or the Company successfully
completes  a  Form  SB-2  registered offering of its securities.  On January 23,
2000  the  Company voluntarily increased his salary to $130,000.  In addition to
his  annual salary, the Agreement grants Mr. Fleming options to purchase 100,000
shares  of the Company's Common Stock.  Ten thousand (10,000) of the options are
set  to  vest  six (6) months from the execution of the Agreement at an exercise
price  of  $.01, expiring three years from the date of vesting if not exercised.
The  remaining  90,000  options  are  scheduled  to  vest in 1/3 increments each
following  year  provided  that  Mr.  Fleming is employed with the Company.  The
Agreement  may  be  canceled  at  any time by either the Company or Mr. Fleming.
However,  if  the  Company terminates the Agreement without cause, as defined in
the  Agreement,  the  Company  shall  be obligated to pay Mr. Fleming 25% of his
annual  salary  as  severance.

                                       20
<PAGE>

SUMMARY  COMPENSATION  TABLE

The  Summary  Compensation  Table  shows  certain  compensation  information for
services  rendered  in  all capacities for the fiscal years ended June 30, 2000,
1999,  and  1998.  Other than as set forth herein, no executive officer's salary
and  bonus  exceeded  $100,000  in  any  of the applicable years.  The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.

<TABLE>
<CAPTION>

                                       SUMMARY COMPENSATION TABLE

                                          ANNUAL  COMPENSATION                LONG  TERM  COMPENSATION
                                         ----------------------                AWARDS           PAYOUTS
                                                                            -------------------------------
                                                           OTHER          RESTRICTED  SECURITIES              ALL
NAME AND                                                   ANNUAL         STOCK       UNDERLYING    LTIP      OTHER
PRINCIPAL                      SALARY        BONUS         COMPENSATION   AWARDS      OPTIONS       PAYOUTS   COMPESATION
POSITION             YEAR      ($)           ($)           ($)            ($)         SARS (#)      ($)       ($)
----------------     --------  ------------  --------      -------------  ----------  -----------  ---------  -----------
<S>                  <C>       <C>             <C>             <C>            <C>         <C>         <C>        <C>

Paul Sandhu          2000
(President, CEO)    (6/30)       126,000       -0-             -0-            -0-       217,500       -0-        -0-

                     1999
                    (6/30)        85,500       -0-             -0-            -0-         -0-         -0-        -0-

                     1998
                    (6/30)        40,000       -0-             -0-           76,000     200,000       -0-        -0-
----------------     --------  ------------  --------      -------------  ----------  -----------  ---------  -----------
Eric Clemons         2000
(COO)               (6/30)       133,000       -0-             -0-            -0-       167,500       -0-        -0-

                     1999
                    (6/30)        90,836       -0-             -0-            -0-         -0-         -0-        -0-

                     1998
                    (6/30)        40,500       -0-             -0-           19,000     100,000       -0-        -0-
----------------     --------  ------------  --------      -------------  ----------  -----------  ---------  -----------
Gerald DeCiccio      2000
(CFO)               (6/30)       139,708       -0-             -0-             -0-       75,000       -0-        -0-

                     1999
                    (6/30)        54,102       -0-             -0-             -0-      150,000       -0-        -0-

                     1998
                    (6/30)          -0-        -0-             -0-             -0-         -0-        -0-        -0-
----------------     --------  ------------  --------      -------------  ----------  -----------  ---------  -----------
Mark Fleming         2000
(VP)                (6/30)       121,042       -0-             -0-             -0-       75,000       -0-        -0-

                     1999
                    (6/30)        62,083       -0-             -0-             -0-      100,000       -0-        -0-

                     1998
                    (6/30)          -0-        -0-             -0-             -0-         -0-        -0-        -0-
-------------------------------------------------------------------------------------------------------------------------

</TABLE>

<TABLE>
<CAPTION>

                                     OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                              (INDIVIDUAL GRANTS)


                                               PERCENT OF TOTAL
                  NUMBER OF SECURITIES       OPTIONS/SAR'S GRANTED
                       UNDERLYING            TO EMPLOYEES IN FISCAL   EXERCISE OF BASE PRICE
NAME             OPTIONS/SAR'S GRANTED (#)            YEAR                   ($/SH)            EXPIRATION DATE
---------------  -------------------------  -----------------------  ------------------------  ---------------
<S>              <C>                        <C>                      <C>                       <C>
Paul Sandhu                      17,500(1)                       1%  $                   0.01           5/1/03
---------------  -------------------------  -----------------------  ------------------------  ---------------
                                  5,000(2)                      <1%  $                   1.25           5/1/04
                                  5,000(2)                      <1%  $                   1.25           5/1/05
                                  5,000(2)                      <1%  $                   1.25           5/1/06
                                  5,000(2)                      <1%  $                   1.25           5/1/07
                                  5,000(2)                      <1%  $                   1.25           5/1/08
                                 25,000(3)                     1.4%  $                   1.25           5/1/10
                                 30,000(4)                     1.7%  $                   1.10         10/18/05
                                 30,000(4)                     1.7%  $                   1.10         10/18/06
                                 30,000(4)                     1.7%  $                   1.10         10/18/07
                                 30,000(4)                     1.7%  $                   1.10         10/18/08
                                 30,000(4)                     1.7%  $                   1.10         10/18/09
Eric Clemons                     17,500(5)                       1%  $                   0.01           5/1/03
---------------  -------------------------  -----------------------  ------------------------  ---------------
                                  5,000(2)                      <1%  $                   1.25           5/1/04
                                  5,000(2)                      <1%  $                   1.25           5/1/05
                                  5,000(2)                      <1%  $                   1.25           5/1/06
                                  5,000(2)                      <1%  $                   1.25           5/1/07
                                  5,000(2)                      <1%  $                   1.25           5/1/08
                                 25,000(3)                     1.4%  $                   1.25           5/1/10
                                 20,000(4)                     1.7%  $                   1.10         10/18/05
                                 20,000(4)                     1.7%  $                   1.10         10/18/06
                                 20,000(4)                     1.7%  $                   1.10         10/18/07
                                 20,000(4)                     1.7%  $                   1.10         10/18/08
                                 20,000(4)                     1.7%  $                   1.10         10/18/09
Gerald DeCiccio                  25,000(3)                     1.4%  $                   1.25           5/1/10
---------------  -------------------------  -----------------------  ------------------------  ---------------
                                 50,000(4)                     2.8%  $                   1.10         10/18/10
Mark Fleming                     25,000(3)                     1.4%  $                   1.25           5/1/10
---------------  -------------------------  -----------------------  ------------------------  ---------------
                                 50,000(4)                     2.8%  $                   1.10         10/18/10
</TABLE>

(1) Represents  options  issued  on 5/1/00  pursuant  to Mr. Sandhu's Director
     Compensation  agreement.
(2) Represents  options issued on 5/1/00 outside of the 2000 Stock Option Plan.
(3) Represents options issued on 5/1/00 in accordance with the 2000 Stock Option
     Plan.  In  the event that the trading price of the Company's Common Stock
     closes at or above $5.00 per share for a minimum of five (5) consecutive
     trading days, the  Options shall become fully vested.  The options are
     exercisable through May 2010.
(4) Represents  options  issued  on  10/18/99 in accordance with the 2000 Stock
     Option  Plan.
(5) Represents  options  issued  on  5/1/00  pursuant  to Mr. Clemon's Director
     Compensation  agreement.

                                       21
<PAGE>


<TABLE>
<CAPTION>


                                   AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                                               AND FY-END OPTION/SAR VALUES


                 NUMBER OF UNEXERCISED   VALUE OF UNEXERCISED IN
                 SECURITIES UNDERLYING   THE-MONEY OPTION/SARS
                 SHARES ACQUIRED ON      VALUE                     OPTIONS/SARS AT FY-END (#)  AT FY-END ($)
NAME             EXERCISE (#)            REALIZED ($)              EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE
---------------  ----------------------  ------------------------  --------------------------  --------------------------
<S>              <C>                     <C>                       <C>                         <C>
Paul Sandhu                     200,000                   329,000            17,500 / 200,000                  14,592 / 0
Eric Clemons                    100,000                   181,750            17,500 / 150,000                  14,592 / 0
Gerald DeCiccio                  25,000                    42,500            41,667 / 158,333                       0 / 0
Mark Fleming                          0                       n/a            40,000 / 135,000                       0 / 0
</TABLE>

COMPENSATION  OF  DIRECTORS

For  the  fiscal  years  ended  1996,  1997  and  1998, and the six months ended
December 31, 1998, Directors of the Company received no compensation.  Beginning
with  the  third quarter of fiscal year 1999, Directors receive $1,500 and 2,500
options  to  purchase  the  Company's  Common  Stock  per  quarter.

1999  STOCK  OPTION  PLAN

On September 20, 1999, the Company's Board of Directors approved the GTC Telecom
Corp.  Omnibus Stock Option Plan (the "Option Plan"), effective October 1, 1999.
The  Option  Plan  was approved and ratified by the shareholders on December 13,
1999 at the Company's 1999 annual shareholder's meeting.  Under the terms of the
Option Plan, the Board of Directors has the sole authority to determine which of
the  eligible  persons  shall receive options, the number of shares which may be
issued upon exercise of an option, and other terms and conditions of the options
granted  under  the Plan to the extent they don't conflict with the terms of the
Plan.  An  aggregate of 750,000 shares of common stock are reserved for issuance
under  the Plan during the year October 1, 1999 to September 30, 2000.  For each
subsequent  year beginning October 1, 2000, there shall be reserved for issuance
under  the  Plan that number of shares equal to 5%  of the outstanding shares of
common  stock  on  July  1  of  that year.  The exercise price for all statutory
options  granted  under  the  Plan shall be 100% of the fair market value of the
Company's  common stock on the date of grant, unless the recipient is the holder
of  more than 10% of the already outstanding securities of the Company, in which
case  the exercise price shall be 110% of the fair market value of the Company's
common  stock  on  the  date of grant.  The exercise price for all non-statutory
options  granted  under the Plan shall be between 25% to 100% of the fair market
value  on  the  date  of grant.  All options shall vest equally over a period of
five  years  from  the  date of issuance.  The Company registered 750,000 shares
underlying  the options pursuant to its 1999 Stock Option Plan on Form S-8 filed
with  the  Securities  and  Exchange  Commission  on  October  6,  1999.

On  October  18,  1999,  the  Company's  Board  of  Directors ("Board") granted,
pursuant  to the Option Plan, an aggregate of 73,000 Incentive Stock Options (as
defined by the Plan), exercisable at $2.9375 per share (the fair market value of
the  Company's  Common  Stock  on  the day of grant) to certain employees of the
Company  and  an aggregate of 360,000 Non-statutory Stock Options (as defined by
the  Option  Plan),  exercisable  at  $1.10  per  share,  to the officers of the
Company,  resulting  in  $661,500 of compensation expense charged to the Company
over  a five year period beginning in fiscal year 2001 through fiscal year 2005.
During fiscal year  2000,  an  aggregate  of  94,000 additional Incentive  Stock
Options (as defined by the Plan) were granted,  exercisable  at  an  average  of
$1.37 per share (each  issuance priced at the fair market value of the Company's
Common Stock on the day of grant) to certain employees of the Company. On May 1,
2000,  the  Board  granted,  pursuant  to  the  Option  Plan,  an  aggregate  of
194,100 Non-statutory Stock Options (as defined by  the Plan),  exercisable  at
$1.25 per share (the fair market value of the Company's Common Stock  on the day
of grant) to  certain  employees  and officers of the Company.  However,  in the
event that the  trading  price  of the Company's Common Stock closes at or above
$5.00  per  share  for  a  minimum  of five (5)  consecutive  trading days, the
Options shall become  fully  vested.

                                       22
<PAGE>

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

The  following  table  sets forth, as of September 30, 2000, certain information
with  respect to the Company's equity securities owned of record or beneficially
by  (i)  each  Officer  and  Director  of the Company; (ii) each person who owns
beneficially  more  than  5%  of  each class of the Company's outstanding equity
securities;  and  (iii)  all  Directors  and  Executive  Officers  as  a  group.

<TABLE>
<CAPTION>
                                                            COMMON STOCK  PERCENT OF
TITLE OF CLASS         NAME AND ADDRESS OF BENEFICIAL OWNER  OUTSTANDING  OUTSTANDING
----------------------- -----------------------------        ----------   ------------
<S>                     <C>                                  <C>             <C>
                        Paul Sandhu(1)
                        3151 Airway Avenue, Suite P-3
Common Stock            Costa Mesa, CA 92626.                4,021,308      20.14%
----------------------- -----------------------------        ----------   ------------

                        Eric Clemons(2)
                        3151 Airway Avenue, Suite P-3
Common Stock            Costa Mesa, CA 92626.                1,139,344       5.71%
----------------------- -----------------------------        ----------   ------------
                        Mark Fleming(3)
                        3151 Airway Avenue, Suite P-3
Common Stock            Costa Mesa, CA 92626.                   70,000       0.35%
----------------------- -----------------------------        ----------   ------------
                        Gerald A. DeCiccio(4)
                        3151 Airway Avenue, Suite P-3
Common Stock            Costa Mesa, CA 92626.                   61,667       0.31%
----------------------- -----------------------------        ----------   ------------
                        John M. Eger(5)
                        3151 Airway Avenue, Suite P-3
Common Stock            Costa Mesa, CA 92626.                  531,000       2.66%
----------------------- -----------------------------        ----------   ------------
                        Clay T. Whitehead(6)
                        3151 Airway Avenue, Suite P-3
Common Stock            Costa Mesa, CA 92626.                  543,816       2.72%
----------------------- -----------------------------        ----------   ------------
                        Reet Trust(7)
                        21520 Yorba Linda,Suite 6227
Common Stock            Yorba Linda, CA 92887                2,000,000       10.02%
----------------------- -----------------------------        ----------   -------------

All Directors and
Officers as a
Group (6
Persons in total)                                            6,367,135       31.89%
----------------------- -----------------------------        ----------   -------------
<FN>


(1)     Includes 17,500 options to acquire shares of Company common stock in
accordance with Mr. Sandhu's director compensation agreement.  Does not include
an aggregate of 200,000 unvested options to acquire shares of Company common
stock granted in accordance with the Company's employee benefit plan.

(2)     Includes 17,500 options to acquire shares of Company common stock in
accordance with Mr. Clemons' director compensation agreement.  Does not include
an aggregate of 150,000 unvested options to acquire shares of Company common
stock in accordance with the Company's employee benefit plan.

(3)     Includes an aggregate of 70,000 options to acquire shares of Company
common stock in accordance with Mr. Fleming's employment agreement.  Does not
include an aggregate of 105,000 unvested options to acquire shares of Company
common stock in accordance with the Company's employee benefit plan.

(4)     Includes an aggregate of 41,667 options to acquire shares of Company
common stock in accordance with Mr. DeCiccio's employment agreement.  Does not
include an aggregate of 158,333 unvested options to acquire shares of Company
common stock in accordance with the Company's employee benefit plan.

(5)     Includes an aggregate of 531,000 options to acquire shares of Company
common stock in accordance with Mr. Eger's director compensation agreement.
Does not include an aggregate of 25,000 unvested options to acquire shares of
Company common stock in accordance with the Company's benefit plan.

(6)     Includes an aggregate of 17,500 options to acquire shares of Company
common stock in accordance with Mr. Whitehead's director compensation agreement.
Does not include an aggregate of 25,000 unvested options to acquire shares of
Company common stock in accordance with the Company's benefit plan.

(7)     The  trustee  of  the  Reet  Trust is Teg Sandhu, father of Paul Sandhu.
However,  Paul  Sandhu  disclaims any beneficial ownership to the shares held by
the  Reet  Trust.

</TABLE>

                                       23
<PAGE>

The  Company  believes  that  the  beneficial owners of securities listed above,
based  on  information furnished by such owners, have sole investment and voting
power  with  respect  to  such  shares, subject to community property laws where
applicable.  Beneficial  ownership is determined in accordance with the rules of
the Commission and generally includes voting or investment power with respect to
securities.  Shares  of  stock  subject  to  options  or  warrants  currently
exercisable,  or exercisable within 60 days, are deemed outstanding for purposes
of  computing the percentage of the person holding such options or warrants, but
are not deemed outstanding for purposes of computing the percentage of any other
person.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

The Company borrows funds from the Company's President & CEO for working capital
purposes.  The  borrowings accrue interest at 10% and are due on demand.  During
fiscal 2000 and 1999, the Company borrowed $48,500 and $25,000 and made payments
in  the amount of $71,351 and none, respectively.  As of June 30, 2000, the note
payable to the Company's President & CEO was $2,149.  No interest was accrued or
paid  as  of  June  30,  2000  and  1999.

On October 6, 1999, the Company registered on Form S-8 filed with the Securities
and  Exchange  Commission,  67,675  shares  of  Common Stock held by consultants
valued  at  approximately  $270,700; 411,000 options held by employees valued at
approximately  $1,184,000; and 750,000 options pursuant to its 1999 Stock Option
Plan.

During  fiscal  year 2000, Paul Sandhu ("Mr. Sandhu"), the Company's President &
CEO, Eric Clemons ("Mr. Clemons"), the Company's Chief Operating Officer, Gerald
DeCiccio,  the  Company's  Chief  Financial  Officer, and other employees of the
Company,  exercised  options  (previously  granted  pursuant to their employment
contracts)  to  purchase a total of 375,000 shares of the Company's common stock
in  lieu  of  salary  for  $72,250.

During  fiscal  year  2000,  Mr.  Sandhu  and  Mr.  Clemons canceled 619,848 and
154,962,  respectively,  shares  of  the  Company's common stock held by each of
them.  It  was  determined  that  these  shares  were  not cancelled in a timely
matter.  As  a  result,  these cancellations are reflected as a reduction in the
outstanding  shares  as  of  July  1,  1998.

On  May 4, 1999, the Company issued 526,316 shares of "restricted" (as that term
is defined under Rule 144 of the Securities Act of 1933) Common Stock to Clay T.
Whitehead,  a  director  of the Company, pursuant to an option agreement entered
into  between  the  Company  and  Mr. Whitehead in April, 1999.  Pursuant to the
Option  Agreement, Mr. Whitehead had the option to purchase up to 526,316 shares
of  the Company's Common Stock at an exercise price of $0.475 per share.  In May
1999,  Mr.  Whitehead  exercised all 526,316 options.  As a result of the option
agreement,  a  total  of  approximately  $352,632  of  compensation  expense was
recorded  at  the  date  of  grant in April 1999.  The issuance was exempt under
Section  4(2)  of  the  Securities  Act  of  1933.

On  October  20, 1999, the Company granted options to purchase 526,000 shares of
restricted  Common Stock, at an exercise price of $1.00 per share, to John Eger,
a  director  of the Company (the fair market value of the Company's Common Stock
on  the  day  of  grant).  The  issuance  was  exempt  under Section 4(2) of the
Securities  Act  of  1933. The options are  exercisable  through  October  2002.

                                       24
<PAGE>

ITEM  13.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

INDEX  TO  FINANCIAL  STATEMENTS
                                                                         Page

Report  of  Independent  Auditors                                         F-1

Consolidated  balance  sheet  at  June  30,  2000                         F-2

Consolidated statements of operations for the years ended
  June 30, 2000 and 1999                                                  F-3

Consolidated statements of stockholders' deficit for the years ended
  June 30, 2000 and 1999                                                  F-4

Consolidated  statements  of  cash  flows  for  the  years  ended
  June 30, 2000 and 1999                                                  F-6

Notes  to  consolidated  financial  statements                            F-8

All other schedules are omitted as the required information is not present or is
not  present  in  amounts  sufficient  to require submission of the schedule, or
because  the  information  required  is  included in the financial statements or
notes  thereto.

INDEX  TO  EXHIBITS

The Company undertakes to furnish to any shareholder so requesting a copy of any
of  the  following  exhibits upon payment to the Company of the reasonable costs
incurred  by  the  Company  in  furnishing  any  such  exhibit.

EXHIBIT  NO.       DESCRIPTION

*(2)               Agreement  and  Plan of Reorganization dated August 1998
                   between  Bobernco,  Inc.  and  GenTel  Communications,  Inc.

*(3.1)             Articles  of  Incorporation

*(3.2)             Certificate  of  Amendment  of  Articles  of Incorporation,
                   filed with the Nevada Secretary of State on March 30,  1998

*(3.3)             Certificate of Amendment of Articles of Incorporation filed
                   with the  Nevada  Secretary  of  State on September 3, 1998

  3.4              Certificate of Amendment of Articles of Incorporation filed
                   with the  Nevada  Secretary  of  State on February 23, 2000

  3.5              Restated Bylaws of GTC Telecom Corp. adopted on September
                   20,  1999

*(4.1)             GTC  Telecom  Corp.  1999  Omnibus  Stock  Incentive  Plan

*(10.2)            One  Plus  Billing  and  Information  Management,  Service
                   Agreement, dated  September  8, 1998,  including  addendum

*(10.3)            MCI/WorldCom  Telecommunication  Resale  Contracts

                   *(10.3.1)  Program  Enrollment

                   *(10.3.2)  Rate  and  Discount  Schedule

                   *(10.3.3)  Service  Schedule

                   *(10.3.4)  Telecommunications  Service  Agreement

                    (10.3.5)  Amendment  dated  September  14,  2000

*(10.5)            Employment  Agreement  by and between GTC Telecom, a
                   Nevada corporation and Mark  Fleming, dated October 14, 1998

*(10.6)            Employment  Agreement  by and between GTC Telecom, a
                   Nevada corporation and Eric Clemons, dated December 1, 1998

*(10.7)            Employment  Agreement  by and between GTC Telecom, a
                   Nevada corporation and Jerry DeCiccio, dated December 1, 1998

*(10.8)            Employment  Agreement  by and between GTC Telecom, a
                   Nevada  corporation  and  Paul SandhU, dated December 1, 1998


                                       25
<PAGE>
*(10.10)           Lease  dated February 5, 1999 between Southern California
                   Sunbelt Developers, Inc., and GTC Telecom, a Nevada
                   corporation; Eric Clemons; and Paul Sandhu Jointly and
                   Severally as Tenant ("Tenant") relating to premises at Suite
                   K-104 The John Wayne Executive Guild Center, 3151 Airway
                   Avenue, Costa Mesa,  California  92626

*(10.11)           Global Pacific Internet Reseller Agreement between Global
                   Pacific Internet and GTC Telecom, dated January 25, 1999

*(10.12)           Telecommunications  Service  Agreement  by  and  between
                   International Telephone and Electronics, LLC and GTC Telecom

*(10.16)           Lease  dated  May  22,  1998  between Southern California
                   Sunbelt Developers, Inc., and GenTel Communications, Inc.,
                   a  Colorado Corporation; Eric Clemons; and Paul Sandhu
                   Jointly and Severally as Tenant ("Tenant") relating to
                   premises at Suite P-3 The John Wayne Executive Guild Center,
                   3151 Airway  Avenue,  Costa  Mesa,  CA  92626

*(10.22)           Addendum  to  Lease  dated  May  21, 1998 by and between GTC
                   Telecom and SunBelt  Developers,  Inc.

21.1               Subsidiaries of the Registrant

23.1               Consent of independent auditors

27.1               Financial data schedule (Article 5 of regulations S-X)

------------------------------
*  Previously  filed

REPORTS  ON  FORM  8-K

None.

                                       26
<PAGE>


                                   SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the  registrant  has duly caused this report to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.


Dated:  October  4,  2000

                                GTC TELECOM CORP.
                                  (Registrant)

By:  /s/  PAUL  SANDHU
          PAUL  SANDHU        President and Chief Executive Officer and Director

By:  /s/  ERIC  CLEMONS
          ERIC  CLEMONS       Chief  Operating  Officer  and  Director

By:  /s/  GERALD  DECICCIO
          GERALD  DECICCIO    Chief  Financial  Officer

Pursuant to 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                Capacity          Date
------------------------------------------------------------
/s/  CLAY  WHITEHEAD     Director          October  4,  2000
  CLAY  WHITEHEAD

/s/  JOHN  EGER          Director          October  4,  2000
  JOHN  EGER



                                       27
<PAGE>

INDEPENDENT  AUDITORS'  REPORT

To  the  Board  of  Directors  and  Shareholders  of
GTC  Telecom  Corp.

We have audited the accompanying consolidated balance sheet of GTC Telecom Corp.
(the  "Company")  and  subsidiaries  as  of  June  30,  2000  and  the  related
consolidated  statements of operations, stockholders' deficit and cash flows for
each of the years in the two-year period then ended.  These financial statements
are  the  responsibility  of the Company's management.  Our responsibility is to
express  an  opinion  on  these  financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States.  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, the consolidated financial statements referred to above present
fairly,  in  all  material  respects, the consolidated financial position of GTC
Telecom  Corp. at June 30, 2000 and the consolidated results of their operations
and their cash flows for each of the years in the two-year period then ended, in
conformity  with  accounting principles generally accepted in the United States.

The  accompanying  consolidated financial statements have been prepared assuming
that  the Company will continue as a going concern.  As disclosed in Note 1, the
Company  has  incurred operating losses in the last two years, and has a working
capital deficit of $2,820,167, liabilities  from  the  underpayment  of  payroll
taxes  and  contingent  liabilities from cancelled contracts and a stockholders'
deficit  of  $2,403,566 at June 30, 2000.  These factors,  among  others,  raise
substantial doubt about  the  Company's  ability to continue as a going concern.
Management's  plans  in  regard  to  these  matters  are  described in Note 1.
The consolidated financial statements do  not include any adjustments  that  may
result  from  the outcome of this uncertainty.


                                                 /s/  CORBIN  &  WERTZ



Irvine,  California

September  21,  2000, except for Note 14,
as to which the date is September 25, 2000


                                      F-1
<PAGE>

<TABLE>
<CAPTION>




                                  GTC TELECOM CORP. AND SUBSIDIARIES
                                      CONSOLIDATED BALANCE SHEET
                                             JUNE 30, 2000


<S>                                                               <C>

ASSETS
Current assets:
Cash                                                              $      231,336
Accounts receivable, net of allowance for
  doubtful accounts of $13,450                                           632,551
Deposits                                                                 178,990
Note receivable                                                           22,500
Prepaid expenses and other current assets                                 30,675

                                                                  ______________
Total current assets                                                   1,096,052

Property and equipment, net of accumulated
depreciation of $181,633                                                 372,365

Other assets                                                              44,236
                                                                  ______________
Total assets                                                      $    1,512,653
                                                                  ==============

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable and accrued expenses                           $    2,612,335
Accrued payroll and related taxes                                        874,213
Obligation under capital lease                                           179,263
Notes payable                                                            138,939
Deferred revenue                                                         111,469
                                                                  ______________

Total current liabilities                                              3,916,219
                                                                  ______________
Commitments

Stockholders' deficit:
Preferred stock, $0.001 par value; 10,000,000 shares authorized;
  none issued and outstanding                                                 --
Common stock, $0.001 par value; 50,000,000 shares authorized;
  19,967,544 shares issued and outstanding                                19,968
Additional paid-in-capital                                             8,652,020
Accumulated deficit                                                  (11,075,554)
                                                                  ______________

Total stockholders' deficit                                           (2,403,566)
                                                                  ______________

Total liabilities and stockholders' deficit                       $    1,512,653
                                                                  ==============
</TABLE>


                      See independent auditors' report and
            accompanying notes to consolidated financial statements.

                                      F-2
<PAGE>
<TABLE>
<CAPTION>







                       GTC TELECOM CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                 Year  Ended  June  30,
                                               --------------------------
                                                   2000          1999
                                               --------------------------
<S>                                                <C>           <C>
Revenues:
  Telecommunications                           $ 4,654,922   $   289,012
  Internet services                                 41,165            --
                                               ------------  ------------

    Net revenues                                 4,696,087       289,012

Cost of sales:
  Telecommunications                           $ 3,755,698   $    99,913
  Internet services                                276,889            --
                                               ------------  ------------

    Total cost of sales                          4,032,587        99,913
                                               ------------  ------------

Gross profit                                       663,500       189,099

Selling, general and administrative expenses     7,696,832     3,553,512
                                               ------------  ------------

Operating loss                                  (7,033,332)   (3,364,413)

Interest income/(expense)                         (142,441)        3,537
                                               ------------  ------------

Loss before provision for income taxes          (7,175,773)   (3,360,876)

Provision for income taxes                           5,218           800
                                               ------------  ------------

Net loss                                       $(7,180,991)  $(3,361,676)
                                               ============  ============

Net loss available to common shareholders
   per common share                            $     (0.42)  $     (0.27)
                                               ============  ============

Basic and diluted weighted average
common shares outstanding                       17,105,139    12,647,347
                                               ============  ============

</TABLE>

                      See independent auditors' report and
            accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>

<TABLE>
<CAPTION>


                             GTC TELECOM CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                        FOR THE TWO-YEAR PERIOD ENDED JUNE 30, 2000



                                                     Additional
                                     Common Stock     Paid-in    Accumulated   Total Stockholders'
                                  Shares     Amount   Capital     Deficit          Deficit
                                ------------------------------------------------------------------
<S>                             <C>         <C>       <C>         <C>           <C>

BALANCE AT JULY 1, 1998          8,986,950  $ 8,987  $  507,910  $  (532,887)  $   (15,990)

Acquisition of Bobernco          1,800,000    1,800       1,200           --         3,000
Estimated fair market value
 of options and warrants
 granted to a director and
 consultants for services
 rendered                               --       --     948,630           --       948,630
Estimated fair market value
 of options granted to
 employees for
 compensation                           --       --      34,650           --        34,650
Estimated fair market value
 of restricted stock issued
 for services rendered             162,000      162     161,838           --       162,000
Estimated fair market value
 of stock issued for services
 rendered                           16,050       16      76,584           --        76,600
Estimated fair market value
 of restricted stock issued
 to employees for
 compensation                       11,000       11       5,214           --         5,225
Issuance of common stock
 pursuant to private
 placements, net of offering
 costs of $333,603
 (including 23,500 shares
 for placement agents)           1,681,500    1,682   1,322,715           --     1,324,397
Issuance of restricted
 common stock for
 conversion of note payable         40,000       40      79,960           --        80,000
Issuance of restricted stock
 for stock options and
 warrants exercised              2,589,324    2,589     313,581           --       316,170
Net loss                                --       --          --   (3,361,676)   (3,361,676)
                                ----------  -------  ----------  ------------  ------------
BALANCE AT JUNE 30, 1999        15,286,824   15,287   3,452,282   (3,894,563)     (426,994)
                                ----------  -------  ----------  ------------  ------------

</TABLE>

                      See independent auditors' report and
            accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                            GTC TELECOM CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                        FOR THE TWO-YEAR PERIOD ENDED JUNE 30, 2000
                                        (CONTINUED)

                                                     Additional
                                     Common Stock     Paid-in    Accumulated   Total Stockholders'
                                  Shares     Amount   Capital     Deficit          Deficit
                                ------------------------------------------------------------------
<S>                            <C>         <C>        <C>          <C>            <C>
Issuance of common stock
 pursuant to private
 placements, net of offering
 costs of $288,395              2,825,000    2,825   2,533,780            --     2,536,605
Sale of common stock for
 cash                             250,000      250     249,750            --       250,000
Estimated fair market value
 of stock issued for services
 rendered                       1,175,720    1,176   2,009,798            --     2,010,974
Estimated fair market value
 of options granted to
 consultants for services
 rendered                              --       --     157,800            --       157,800
Estimated fair market value
 of options granted to
 directors and employees
 for compensation                      --       --     121,790            --       121,790
Cashless exercise of stock
 options                          375,000      375      71,875            --        72,250
Issuance of restricted
 common stock for
 conversion of note payable        55,000       55      54,945            --        55,000
Net loss                               --       --          --    (7,180,991)   (7,180,991)
                               ----------  -------  ----------  -------------  ------------

BALANCE AT JUNE 30, 2000       19,967,544  $19,968  $8,652,020  $(11,075,554)  $(2,403,566)
                               ==========  =======  ==========  =============  ============
</TABLE>

                      See independent auditors' report and
            accompanying notes to consolidated financial statements.



                                      F-5
<PAGE>
<TABLE>
<CAPTION>



                         GTC TELECOM CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                            Year  Ended  June  30,
                                                              2000          1999
                                                          --------------------------
<S>                                                       <C>           <C>
Cash flows from operating activities:
Net loss                                                  $(7,180,991)  $(3,361,676)
Adjustments to reconcile net loss to net cash
used in operating activities:
Estimated fair market value of stock issued for services    2,010,974       243,825
Estimated fair market value of options and warrants
granted to consultants for services rendered                  157,800       948,630
Estimated fair market value of options granted to
directors and employees for compensation                      121,790        34,650
Interest accrued on notes payable converted to stock            5,000            --
Depreciation and amortization                                 173,946        35,250
Allowance for doubtful accounts                                13,450            --
Changes in operating assets and liabilities:
Accounts receivable                                          (629,112)      (40,208)
Deposits                                                     (143,490)      (35,500)
Prepaid expenses and other current assets                      (7,356)           --
Accounts payable and accrued expenses                       2,014,343       680,628
Accrued payroll and related taxes                             778,955        97,508
Deferred revenue                                               98,987        12,482
                                                          ------------  ------------

Net cash used in operating activities                      (2,585,704)   (1,384,411)
                                                          ------------  ------------

Cash flows from investing activities:
Purchases of property and equipment                          (156,686)     (186,023)
Purchase of other assets                                           --       (73,500)
(Payment for) reimbursements of deposits                      150,000      (150,000)
Issuance of notes receivable                                  (22,500)           --
                                                          ------------  ------------

Net cash used in investing activities                         (29,186)     (409,523)
                                                          ------------  ------------

Cash flows from financing activities:
Proceeds from sale of common stock, net of
offering costs of $288,395 and $333,603, respectively       2,786,605     1,446,372
Principal borrowings on note payable to stockholder            48,500        25,000
Principal repayments on notes payable to stockholder          (71,351)           --
Principal payments under capital lease                        (14,632)           --
Principal borrowings on notes payable                         310,000            --
Principal repayments on notes payable                        (213,396)           --
Proceeds from exercise of stock options                            --       316,170
                                                          ------------  ------------

Net cash provided by financing activities                   2,845,726     1,787,542
                                                          ------------  ------------

Increase (Decrease) in cash                                   230,836        (6,392)

Cash, beginning of year                                           500         3,892

Cash from acquisition                                              --         3,000
                                                          ------------  ------------

Cash, end of year                                         $   231,336   $       500
                                                          ============  ============

</TABLE>
                      See independent auditors' report and
            accompanying notes to consolidated financial statements.



                                      F-6
<PAGE>


                       GTC TELECOM CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)



Supplemental  disclosure  of  cash  flow  information:
                                                          Year  Ended  June  30,
                                                            2000          1999
                                                         ---------    ---------
     Cash  paid  during  the  year  for:
          Interest                                       $ 127,621    $   1,965
          Income  taxes                                      5,218        1,600

Supplemental  disclosure  on  non-cash  investing  and  financing  activities:

During  the  year  ended  June  30,  2000,  the  Company issued 55,000 shares of
restricted  common  stock  pursuant  to  the conversion of a note payable with a
principal  amount  of  $50,000  and  accrued  interest  of  $5,000.

During  the  year ended June 30, 2000, the Company converted $90,189 of accounts
payable  into  a  promissory  note  (see  Note  6).

During  the  year  ended  June  30, 2000, certain employees exercised options to
purchase  375,000  shares  of  the  Company's  Common Stock in lieu of salary of
$72,250.

During  the  year  ended  June  30,  1999,  the  Company  incurred capital lease
obligations  in  the  amount  of  $193,895  for  the acquisition of property and
equipment.

During  the  year  ended  June  30,  1999,  the  Company issued 40,000 shares of
restricted  common  stock  pursuant  to  the conversion of a note payable in the
amount  of  $80,000.

See  accompanying  notes to consolidated financial statements for other non-cash
items.




                      See independent auditors' report and
            accompanying notes to consolidated financial statements.



                                      F-7
<PAGE>


                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000

NOTE  1  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

ORGANIZATION  AND OPERATIONS - GTC Telecom Corp. and subsidiaries (the "Company"
or  "GTC")  provide  various Telecommunication services, including long distance
telephone and calling card services as well as various Internet related services
including  Internet  Service  Provider access and Web Page Hosting.  GTC Telecom
Corp.  was  organized  as  a Nevada Corporation on May 17, 1994 and is currently
based  in  Costa  Mesa,  California.

On  August  31,  1998,  GTC  Telecom  Corp.  (which  at  the time was designated
Bobernco,  Inc.,  a  Nevada  corporation  ("Bobernco"))  acquired  all  of  the
outstanding  common stock of GenTel Communications, Inc., a Colorado corporation
("GenTel")  in a business combination described as a "reverse acquisition."  For
accounting  purposes,  the  acquisition  has  been treated as the acquisition of
Bobernco  by  GenTel.

GenTel  Communications,  was  formerly  known  as  GenX,  LLC ("GenX").  GenX, a
Delaware  limited  liability  company,  was  formed on May 29, 1997.  GenTel was
formed  on December 9, 1997 and was inactive until its reorganization with GenX.
Effective  February  3,  1998, pursuant a plan of reorganization, the members of
GenX converted their members' interest into 8,786,950 shares of the Common Stock
of GenTel.  Subsequently, GenX was dissolved.  At the time of its acquisition by
Bobernco,  GenTel  operated  as  a provider of long distance telephone services.

Immediately  prior  to  the acquisition, Bobernco had 1,800,000 shares of Common
Stock  outstanding.  As part of Bobernco's reorganization with GenTel,  Bobernco
issued  8,986,950  shares  of  its Common Stock to the shareholders of GenTel in
exchange for 8,986,950 shares of GenTel Common Stock.  Immediately following the
acquisition,  Bobernco  changed  its  name  to GTC.  Bobernco had no significant
operations  prior  to  the  merger.

GOING  CONCERN  -  The  accompanying consolidated financial statements have been
prepared  assuming  the  Company  will  continue  as  a  going  concern,  which
contemplates,  among other things, the realization of assets and satisfaction of
liabilities  in the normal course of business.  The Company has negative working
capital  of  $2,820,167, liabilities from the underpayment of payroll taxes (see
Note  12),  contingent  liabilities  from  cancelled  contracts (see note 12), a
stockholders'  deficit  of  $2,403,566,  losses from operations through June 30,
2000  and  a  lack  of  operational  history,  among  other  matters, that raise
substantial doubt about its ability to continue as a going concern.  The Company
hopes  to  continue  to  increase  revenues  from additional revenue sources and
increased  margins  as  a result of amending its contract with MCI/WorldCom (see
Note  12)  and  other  cost  cutting  measures.  In  the  absence of significant
revenues  and profits, the Company intends to fund operations through additional
debt  and  equity  financing  arrangements  which  management  believes  may  be
insufficient  to  fund its capital expenditures, working capital, and other cash
requirements  for  the fiscal year ending June 30, 2001.  Therefore, the Company
may  be  required  to seek additional funds to finance its long-term operations.
The  successful  outcome  of future activities cannot be determined at this time
and  there  are no assurances that if achieved, the Company will have sufficient
funds  to  execute  its  intended  business  plan or generate positive operating
results.

These  circumstances  raise  substantial  doubt  about  the Company's ability to
continue as a going concern.  The accompanying consolidated financial statements
do  not  include  any  adjustments  that  might  result from the outcome of this
uncertainty.

PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial statements
include  the  accounts  of  GTC Telecom Corp. and its wholly owned subsidiaries.
All  significant  intercompany balances 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
disclosures  of  contingent  assets and liabilities at the date of the financial
statements,  as well as the reported amounts of revenues and expenses during the
reporting.  Actual  results  could  differ  from  those  estimates.  Significant
estimates  made  by  management  are,  among  others,  provisions  for losses on
accounts  receivable  and  estimates  for  income  tax  valuations.

RISKS AND UNCERTAINTIES - The Company has limited operating history and is
subject to the substantial business risks and uncertainties inherent to such an
entity, including the potential risk of business failure.

                                      F-8
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


CONCENTRATION  OF  CREDIT  RISK  -  The  Company sells its telephone and network
services  to  individuals  and small businesses throughout the United States and
does  not  require collateral.  Reserves for uncollectible amounts are provided,
which  management  believes  are  sufficient.

DEPENDENT ON KEY CUSTOMERS - The Company is not dependent on any single customer
for  a  significant  portion  of  its annual sales.  The Company's customer base
changes  on  a  continuous  basis  as  customers  are  added  or  removed.

MAJOR  SUPPLIERS  -  The Company does not own its own long distance network, and
pursuant  to  the  Company's  contract  with MCI/WorldCom, the Company currently
depends  primarily  upon  MCI/WorldCom  to provide for the transmission of phone
calls  by  its  customers  and to provide the call detail records upon which the
Company  bases  its  customers  billings.  Under  the  terms  of  the three-year
contract  entered  into  with  MCI/WorldCom  on  August 10, 1998, the Company is
obligated to a minimum monthly commitment of $10,000 which commenced March 1999.
The contract expires on September 30, 2001.  In August 1999, the Company entered
into  negotiations  with  MCI/WorldCom  in  an  effort  to  lower  its  network
transmission  costs.  As  a result of these negotiations, MCI/WorldCom agreed to
amend  the  existing  contract  between  the  Company  and  MCI/WorldCom whereby
MCI/WorldCom  agreed  to  reduce  the  Company's  network  transmission costs by
approximately  40%.  Additionally, under the terms of the amendment, the minimum
monthly  purchase  requirement  was increased to $12,000 per month and the total
minimum purchase requirement increased to $288,000.  In an effort to continue to
reduce  its  long  distance network transmission costs, the Company successfully
negotiated  an  additional  amendment  to  its  contract  with  MCI/WorldCom  in
September  2000.  The  amendment  further  reduces  the  Company's  network
transmission  costs  by  approximately 30%.  In addition, under the terms of the
amendment,  the  contract is extended to August 31, 2003 and the minimum monthly
purchase  requirement increased to $400,000 per month for the months August 2000
to  January  2001 and then increases to $520,000 per month from February 2001 to
the end of the contract.  The total minimum purchase requirement of the contract
increased  to  $18,000,000.  All remaining material terms of the contract remain
the  same.

Pursuant  to  the  terms of the contract with MCI/WorldCom, the Company must pay
liquidated  damages  in an amount equal to the aggregate minimum requirement for
the  remaining term of the contract if the Company terminates the contract prior
to  the  expiration  date.  Although  the Company believes that its relationship
with  MCI/WorldCom  is  strong  and  should  remain  so  with continued contract
compliance,  the  termination  of  the Company's contract with MCI/WorldCom, the
loss  of telecommunications services provided by MCI/WorldCom, or a reduction in
the  quality  of  service  the  Company  receives from MCI/WorldCom could have a
material  adverse  effect  on the Company's results of operations.  In addition,
the accurate and prompt billing of the Company's customers is dependent upon the
timeliness  and  accuracy  of  call  detail  records  provided to the Company by
MCI/WorldCom.

PROPERTY AND EQUIPMENT - Property and equipment is stated at cost.  Depreciation
is computed using the straight-line method over the useful life of 3 to 5 years.
During  the  year  ended  June 30, 2000 and 1999, total depreciation expense was
$149,447  and  $30,485,  respectively.

Betterments,  renewals,  and  extraordinary repairs that extend the lives of the
assets  are  capitalized;  other repairs and maintenance charges are expensed as
incurred.  The  cost  and  related accumulated depreciation applicable to assets
retired  are  removed  from the accounts, and the gain or loss on disposition is
recognized  in  current  operations.

LONG-LIVED  ASSETS  -  The  Company  has  adopted  issued Statement of Financial
Accounting  Standards  No.  121  ("SFAS 121"), "Accounting for the Impairment of
Long-Lived  Assets  and  for Long-Lived Assets to be Disposed Of" which requires
that  long-lived assets and certain identifiable intangibles to be held and used
by  an  entity  be  reviewed  for  impairment  whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of  an  asset  may  not be
recoverable.  In  accordance  with  the  provisions  of  SFAS  121,  the Company
regularly  reviews  long-lived  assets  and  intangible  assets  for  impairment
whenever events or changes in circumstances indicate that the carrying amount of
the  assets  may  not  be  recoverable.  Based  on  this  analysis,  the Company
management  believes  that no impairment of the carrying value of its long-lived
assets  existed  at  June  30,  2000.

REVENUE AND RELATED COST RECOGNITION - The Company recognizes revenue during the
month  in  which  services  or  products  are  delivered,  as  follows:

                                      F-9
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


TELECOMMUNICATIONS  RELATED  SERVICES

The  Company's  long  distance telecommunications service revenues are generated
when  customers  make  long  distance  telephone  calls  from  their business or
residential telephones or by using any of the Company's telephone calling cards.

Telecommunication  services  cost  of  sales  includes the cost of long distance
service  provided  by  MCI/WorldCom  and  other  carriers.

INTERNET  RELATED  SERVICES

Internet  service  revenues  consist  of monthly fees charged to subscribers for
Internet  access  and  are  recognized in the period service access is provided.

Internet  service  cost of sales includes the cost of providing internet access.

DEFERRED  REVENUE  -  Deferred revenue represent proceeds from prepaid telephone
calling  cards which are recorded as deferred revenue when the cash is received.
The  Company  recognizes  the  revenue  in  the  statement  of operations as the
telephone  service  is  utilized.

ADVERTISING  COSTS  Advertising  costs  are  expensed  as incurred.  Advertising
expense  was  $1,004,103  and  $271,915  for fiscal 2000 and 1999, respectively.

INCOME  TAXES  -  The  Company  accounts  for  income  taxes  under Statement of
Financial  Accounting  Standards  No.  109  ("SFAS 109"), "Accounting for Income
Taxes."  Under  SFAS 109, deferred tax assets and liabilities are recognized for
the  future  tax  consequences attributable to differences between the financial
statement  carrying  amounts  of  existing  assets  and  liabilities  and  their
respective  tax  bases.  Deferred  tax assets and liabilities are measured using
enacted  tax  rates  expected  to  apply to taxable income in the years in which
those  temporary  differences  are  expected  to  be  recovered  or  settled.  A
valuation  allowance  is provided for significant deferred tax assets when it is
more  likely  than  not  that  such  assets  will  not  be  recovered.

STOCK-BASED  COMPENSATION  -  The  Company accounts for stock-based compensation
issued  to  employees  using  the  intrinsic value based method as prescribed by
Accounting  Principles  Board  Opinion  No. 25 ("APB 25"), "Accounting for Stock
Issued  to  Employees."  Under the intrinsic value based method, compensation is
the  excess,  if  any, of the fair value of the stock at the grant date or other
measurement  date  over  the  amount  an employee must pay to acquire the stock.
Compensation, if any, is recognized over the applicable service period, which is
usually  the  vesting  period.

The  Financial  Accounting  Standards  Board  issued  Statement  of  Financial
Accounting  Standards  No.  123  ("SFAS  123"),  "Accounting  for  Stock-Based
Compensation."  This  standard,  if  fully  adopted,  changes  the  method  of
accounting  for  employee stock-based compensation plans to the fair value based
method.  For  stock  options  and  warrants,  fair  value is determined using an
option  pricing model that takes into account the stock price at the grant date,
the  exercise  price,  the expected life of the option or warrant and the annual
rate  of  quarterly dividends.  Compensation expense, if any, is recognized over
the  applicable  service  period,  which  is  usually  the  vesting  period.

The  adoption  of  the  accounting  methodology  of SFAS 123 is optional and the
Company  has  elected to continue accounting for stock-based compensation issued
to  employees  using  APB  25; however, pro forma disclosures, as if the Company
adopted  the  cost  recognition  requirements under SFAS 123, are required to be
presented  (see  Note  8).

LOSS PER SHARE - The Company has adopted Statement of Financial Accounting
Standards No. 128 ("SFAS 128"), "Earnings Per Share."  Under SFAS 128, basic
earnings per share is computed by dividing income available to common
shareholders by the weighted-average number of common shares assumed to be
outstanding during the period of computation.  Diluted earnings per share is
computed similar to basic earnings per share except that the

                                      F-10
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


denominator  is increased to include the number of additional common shares that
would  have  been outstanding if the potential common shares had been issued and
if  the  additional  common  shares were dilutive.  Pro forma per share data has
been  computed  using  the  weighted average number of common shares outstanding
during  the  period  assuming  the  Company was a C corporation since inception.
Because  the  Company  has incurred net losses, basic and diluted loss per share
are  the  same  as  additional  potential  common shares would be anti-dilutive.

START-UP  ACTIVITIES  -  The  Company has adopted Statement of Position No. 98-5
("SOP  98-5"),  "Reporting the Costs of Start-Up Activities."  SOP 98-5 requires
that  all  non-governmental  entities  expense the costs of start-up activities,
including  organization costs as those costs are incurred.  The adoption of this
standard  did not have a material effect on the Company's results of operations,
financial  position  or  cash  flows.

COMPUTER  SOFTWARE  -  The  Company has adopted Statement of Position 98-1 ("SOP
98-1") "Accounting for the Cost of Computer Software Development or Obtained for
Internal Use."  The adoption of this Standard  did not have a material impact on
the  Company's  results  of  operations,  financial  position  or  cash  flows.

FAIR  VALUES  OF  FINANCIAL  INSTRUMENTS  - Financial Accounting Standards Board
("FASB")  issued  Statement  of  Financial  Accounting  Standards No. 107 ("SFAS
107"),  "Disclosures  About  Fair  Value  of  Financial  Instruments."  SFAS 107
requires  disclosure  of fair value information about financial instruments when
it  is practicable to estimate that value.  The carrying amount of the Company's
cash,  receivables,  trade  payables,  accrued  expenses  and  notes  payable
approximates  their  estimated  fair  values due to the short-term maturities of
those  financial  instruments.  The fair value of note payable to stockholder is
not  determinable  as  these  borrowings  are  with  a  related  party.

COMPREHENSIVE  INCOME  -  The Company had adopted Financial Accounting Standards
No.  130  ("SFAS  130"), "Reporting Comprehensive Income."  SFAS 130 establishes
standards  for  reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements.  The adoption of SFAS 130
has  not  materially  impacted  the  Company's  financial position or results of
operations  as  the  Company  has  no  items  of  comprehensive  income.

SEGMENTS  OF  AN  ENTERPRISE  AND  RELATED INFORMATION - The Company had adopted
Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosures about Segments
of  an  Enterprise  and  Related  Information."  SFAS 131 changes the way public
companies  report  information  about segments of their business in their annual
financial statements and requires them to report selected segment information in
their  quarterly  reports  issued to shareholders.  It also requires entity-wide
disclosures  about  the  products  and services an entity provides, the material
countries in which it holds assets and reports revenues and its major customers.
As  approximately  99%  of  the  Company's  revenues,  loss  from operations and
identifiable assets are from the telecommunications segment, the Company has not
made  segment  disclosures  in  the  accompanying  financial  statements.

RECLASSIFICATIONS  -  Certain  reclassifications  have  been  made to prior year
amounts  to  conform  to  current  year  presentation.

RECENT ACCOUNTING PRONOUNCEMENTS:

DERIVATIVE  INSTRUMENTS  AND  HEDGING ACTIVITIES - In June 1998, the FASB issued
Statement  of  Financial  Accounting Standards No. 133 ("SFAS 133"), "Accounting
for  Derivative  Instruments  and  Hedging  Activities."  SFAS  133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative  instruments embedded in other contracts, and for hedging activities.
It  requires  that  an  entity  recognize  all  derivatives  as either assets or
liabilities  on  the  balance  sheet  at  their  fair value.  This statement, as
amended  by  SFAS  137,  is  effective  for  financial statements for all fiscal
quarters  of  all  fiscal years beginning after June 15, 2000.  The Company does
not  expect  the  adoption  of  this  standard  to have a material impact on its
results of operations, financial position or cash flows as it currently does not
engage  in  any  derivative  or  hedging  activities.

ACCOUNTING FOR WEB SITE DEVELOPMENT COSTS - In March 2000, the Emerging Issues
Task Force reached a consensus on Issue No. 00-2, "Accounting for Web Site
Development Costs" ("EITF 00-2") to be applicable to all web site development
costs incurred for the quarter beginning after June 30, 2000.  The consensus
states that for specific web site development costs, the accounting for such
costs should be accounted for under AICPA Statement

                                      F-11
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


of  Position  98-1  ("SOP 98-1"), "Accounting for the Costs of Computer Software
Developed  or  Obtained  for  Internal  Use."  The  Company  does not expect the
adoption  of  EITF  00-2  to have a material effect on its financial statements.

ACCOUNTING  FOR  CERTAIN  TRANSACTIONS  INVOLVING  STOCK COMPENSATION - In March
2000,  the FASB issued Interpretation No. 44 ("FIN 44"), "Accounting for Certain
Transactions Involving Stock Compensation, an Interpretation of APB 25".  FIN 44
clarifies  the  application  of  APB  25  for (a) the definition of employee for
purposes  of  applying  APB  25, (b) the criteria for determining whether a plan
qualifies  as a noncompensatory plan, (c) the accounting consequence for various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for  an  exchange  of  stock  compensation awards in a business
combination.  FIN  44  is  effective  July 1, 2000, but certain provisions cover
specific  events that occur after either December 15, 1998, or January 12, 2000.
The  adoption  of  certain other provisions of FIN 44 prior to June 30, 2000 did
not  have  a  material effect on the financial statements.  The Company does not
expect that the adoption of the remaining provisions will have a material effect
on  the  financial  statements.

REVENUE  RECOGNITION  - In December 1999, the Securities and Exchange Commission
issued  Staff  Accounting Bulletin 101 ("SAB 101"), "Revenue Recognition," which
outlines  the  basic  criteria that must be met to recognize revenue and provide
guidance  for  presentation  of  revenue  and  for disclosure related to revenue
recognition  policies  in  financial  statements  filed  with the Securities and
Exchange  Commission.  The  effective  date  of this pronouncement is the fourth
quarter  of  the  fiscal  year  beginning  after December 15, 1999.  The Company
believes  that adopting SAB 101 will not have a material impact on its financial
position  and  results  of  operations.

NOTE  2  - ACQUISITION

Pursuant  to  an Agreement and Plan of Reorganization dated August 31, 1998, the
Company  completed  an  acquisition  with  and  into  Bobernco,  Inc.  (the
"Acquisition").  Under the terms of the tax-free reorganization and acquisition,
all  of the Company's common stock was converted to 8,986,950 shares of Bobernco
common  stock  and, as a result, the separate corporate existence of the Company
ceased  and  Bobernco  continued  as  the  surviving  corporation.  Thus,  all
additional  subsequent  events  are  disclosed  in  Bobernco's  separate audited
financial  statements.  The  directors  and  officers of the Company immediately
prior  to  the  acquisition became the directors and officers of Bobernco, which
subsequently  changed  its corporate name to GTC Telecom Corp.  ("GTC").  Due to
Bobernco  having no operations for the two months ended July and August 1998, no
proforma  financial  statements  are presented for the year ended June 30, 1999.

                                      F-12
<PAGE>

NOTE  3  -  PROPERTY  AND  EQUIPMENT

Property  and  equipment  consist  of  the  following  as  of  June  30,  2000:

Computer  equipment                    $431,736
Furniture  and  office  equipment        58,238
Telephone  equipment                     64,024
                                       --------
                                        553,998
Less  accumulated  depreciation        (181,633)
                                       --------
                                       $372,365
                                       ========

NOTE  4  -  OTHER  ASSETS

Other  assets  consist  of PUC carrier certifications the Company must obtain in
order  to provide interstate and intrastate telephone service.  Other assets are
recorded at cost and are being amortized using the straight-line method over the
useful  life of 3 years.  Amortization expense for the years ended June 30, 2000
and  1999  is  $24,499  and  $4,765,  respectively.

                                      F-13
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000

NOTE  5  -  OBLIGATION  UNDER  CAPITAL  LEASE

The  Company is a lessee of certain property and equipment under a capital lease
that  is  to  expire  in  April  2002  (see below).  Terms of the lease call for
monthly  payments  of  $6,738.  The asset and liability under capital leases are
recorded  at the lower of the present value of the minimum lease payments or the
fair  market  value  of  the  related  assets. The asset is depreciated over its
estimated  useful  life.

Future  minimum  annual  commitments  under  lease  arrangements are as follows:

                    Years  Ending
                      June  30,
                       ______

                        2001                              $142,119
                        2002                                67,376
                                                          --------

Total  minimum  future  lease  payments                    209,495

Less:  Amounts  representing  interest                     (30,232)
                                                          --------
Present  value  of  net  minimum  lease  payments         $179,263
                                                          ========

The  Company  has  not  made  the  monthly  lease payments pursuant to the lease
agreement  since  September 1999.  As a result, the Company is delinquent in its
lease  payments in the amount of $46,566, plus accrued interest of $14,702 which
is  included  in accrued expenses, in the accompanying balance sheet at June 30,
2000.  Due to the lessor having the right to demand payment in full, the Company
has  classified  the  entire lease obligation in current liabilities at June 30,
2000.

The  following is an analysis of the leased equipment under capital leases as of
June  30,  2000,  which  is  included  in  property  and  equipment  (Note  3).

Computer  equipment                        $  205,416
Less:  Accumulated  depreciation              (74,178)
                                           ----------
                                           $  131,238
                                           ==========

Interest  incurred  pursuant  to  the  capital  lease obligation was $19,653 and
$1,965  for  fiscal  years  2000  and  1999,  respectively.

NOTE  6 - NOTES  PAYABLE

In January 2000, the Company borrowed $200,000 for working capital purposes from
a third party.  The note was due February 28, 2000 plus accrued interest of
$20,000.  If all unpaid principal and interest was not paid by February 28,
2000, the aggregate balance is to accrue interest at 2% per month with no
predetermined due date.  On April 11, 2000, the Company repaid $100,000 of the
principal balance and is in the process of renegotiating the terms of the note.
The principal balance outstanding was $100,000, plus accrued interest of $32,585
which is included in accrued expenses in the accompanying balance sheet at June
30, 2000.

The  Company  borrows  funds  from  the  Company's President and Chief Executive
Officer for working capital purposes.  The borrowings accrue interest at 10% and
are  due  on  demand.  As  of  June  30, 2000, the note payable to the Company's
President  and  Chief  Executive Officer was $2,149.  No interest was accrued or
paid  as  of  June  30,  2000  and  1999.

On  February  3,  2000,  the  Company  terminated its agreement with Level 3 and
signed  a  promissory  note  for  amounts  owed of $90,189.  The promissory note
requires  the Company to make nine monthly installment payments of approximately
$10,000  per month beginning February 15, 2000 through October 15, 2000.  If the
Company  fails  to  make  an  installment  payment,  then  the unpaid balance is
immediately  due  and  payable.  As  of  June  30,  2000, the balance due on the
promissory  note  was  $36,790.  The promissory note is personally guaranteed by
the  Company's  President and Chief Executive Officer.  In addition, the Company
is  relieved  of  its  minimum  usage obligations subsequent to February 3, 2000
through  the  end  of  the  contract.


                                      F-14
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


NOTE  7 - CONVERTIBLE  NOTES  PAYABLE

The  Company  borrowed  $50,000 for working capital purposes from a third party.
The  note,  which  accrued interest at 10% per annum, was due on August 6, 1999.
During  fiscal  2000,  the  noteholder  converted  the  note payable and accrued
interest, totaling $55,000 into 55,000 shares of the Company's restricted common
stock  at  $1.00 per share (estimated to be the fair market value on the date of
conversion  based  on  the  price  per  share  of  the current private placement
memorandum).

NOTE  8 - STOCK  OPTIONS

On September 20, 1999, the Company's Board of Directors approved the GTC Telecom
Corp.  1999  Omnibus Stock Option Plan (the "Option Plan"), effective October 1,
1999.  An  aggregate of 750,000 shares of common stock are reserved for issuance
under  the Plan during the year October 1, 1999 to September 30, 2000.  For each
subsequent  year beginning October 1, 2000, there shall be reserved for issuance
under  the  Plan that number of shares equal to 10% of the outstanding shares of
common  stock  on July 1 of that year.  The exercise price for each option shall
be equal to 25% to 100% of the fair market value of the common stock on the date
of  grant,  as  defined,  and  shall  vest over a five-year period.  The Company
registered  750,000  shares  underlying  the  options pursuant to its 1999 Stock
Option  Plan  on  Form  S-8 filed with the Securities and Exchange Commission on
October  6,  1999.

On  October  18, 1999, the Company's Board of Directors granted, pursuant to the
Option  Plan,  an aggregate of 73,000 Incentive Stock Options (as defined by the
Plan),  exercisable at $2.9375 per share (the fair market value of the Company's
Common  Stock  on  the  day of grant) to certain employees of the Company and an
aggregate  of  360,000  Non-statutory  Stock  Options  (as defined by the Option
Plan), exercisable at $1.10 per share, to the officers of the Company, resulting
in  $661,500  of compensation expense to be charged to the Company over the five
year  vesting  period  beginning  in  fiscal year 2001 through fiscal year 2005.
During  fiscal  year  2000,  an  aggregate  of 94,000 additional Incentive Stock
Options  (as  defined  by the Plan) were granted, exercisable at $1.37 per share
(each  issuance priced at the fair market value of the Company's Common Stock on
the  day  of  grant)  to  certain  employees  of  the  Company.  The options are
exercisable  through  October  2009.

From time to time, the Company issues non-plan stock options pursuant to various
agreements  and  other compensatory arrangements to employees and third parties.

During  fiscal  2000  and  1999,  the  Company  entered  into various employment
agreements  wherein the Company has agreed to supplement compensation to certain
key  employees  in  the  form of stock options.  Pursuant to the agreements, the
Company  issued  options  to  purchase  75,000  and 390,000 shares of restricted
common  stock  during  fiscal  2000  and  1999, respectively, at exercise prices
ranging from $.01 per share to $5.00 per share and vesting over a period ranging
from  six  months  to  three years from date of grant.  A total of approximately
$85,165  of  compensation  expense  will  be recorded over the vesting period of
which,  $50,490  and  $34,650  was  recognized  during  fiscal  2000  and  1999,
respectively.  The  options  are  exercisable  through  October  2004.

During  fiscal 1999, pursuant to various consulting and outside service provider
agreements,  the Company issued to directors and consultants options to purchase
1,276,316  shares  of the Company's restricted common stock at an exercise price
ranging  from  $0.01  to  $1.00 per share (the Company estimated the fair market
value per share to be $1.00 on the date of each grant).  The options vest on the
date of grant over a pre-determined vesting schedule and are exercisable through
November  2004.  Total  expense  of  $426,132  was  recognized at June 30, 1999.

In  January  2000,  the  Company  entered  into  an  agreement with  an  outside
consultant  for  investor  and  public  relations  services.  Pursuant  to  the
agreement, the  Company issued  56,637 shares of common stock valued at $199,943
for services (see Note 10).  In addition, the Company issued options to purchase
60,000 shares of the

                                      F-15
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


Company's  common  stock as follows: 1) 20,000 shares at 100% of the closing bid
price  on January 28, 2000, 2) 20,000 shares at 200% of the closing bid price on
January  28,  2000  and,  3)  20,000  shares at 300% of the closing bid price on
January  28,  2000.  The options were valued at $157,800 using the Black Scholes
method  and  recorded  as  investor relations expense under Selling, General and
Administrative  expense  in  the  accompanying  Statement  of Operations.  As of
September 30, 2000, no options have been exercised.  The options are exercisable
through  December  2001.

In  January  2000,  the  Company entered into an agreement with a third party to
market  the Company's products and services.  The agreement requires the Company
to  pay a monthly commission for each customer minute charged and collected from
the third party's efforts.  In addition, the Company agreed to issue warrants to
purchase  up  to  1,000,000  shares  of  the Company's Common Stock at $1.88 per
share,  at  the  rate  of  one share per customer  brought to the Company by the
marketing  company, subject to a minimum of 250,000 customers.  No warrants have
been  earned  or  granted  as  of  the  date  of  this  filing.

On  May  1,  2000,  the  Board issued options to purchase an aggregate of 57,500
shares  of  the Company's Common Stock, at an exercise price of $0.01, valued at
$71,300  to  the  members  of  the Board pursuant to their agreement of director
compensation.  The  options  are  exercisable  through  May  2003.

On  May 1, 2000, the Board granted, pursuant to the Option Plan, an aggregate of
194,100  Non-statutory  Stock  Options  (as defined by the Plan), exercisable at
$1.25  per share (the fair market value of the Company's Common Stock on the day
of  grant)  to  certain employees and officers of the Company.  In addition, the
Board  granted options to purchase 100,000 shares of restricted Common Stock, at
an  exercise  price  of  $1.25 per share (the fair market value of the Company's
Common  Stock on the day of grant) to the members of the Board.  However, in the
event  that  the  trading price of the Company's Common Stock closes at or above
$5.00  per share for a minimum of five (5) consecutive trading days, the Options
shall  become  fully  vested.  The  options  are  exercisable  through May 2010.

On  October  20, 1999, the Company granted options to purchase 526,000 shares of
restricted  Common Stock, at an exercise price of $1.00 per share, to a director
of  the  Company (the fair market value of the Company's Common Stock on the day
of  grant).  The  options  are  exercisable  through  October  2002.

A  following  is  a status of the stock options outstanding at June 30, 2000 and
1999  and  the  changes  during  the  years  then  ended:

                                          2000                  1999
                                                   Wtd Avg               Wtd Avg
                                      Options     Ex Price     Options  Ex Price
                                      -----------  -------  -----------  -------
Outstanding, beginning of year           765,000   $1.7577     300,000   $0.2375
       Granted                         1,779,000    1.4189   1,666,316    0.9995
       Exercised                        (375,000)   0.1920  (1,172,316)   0.2576
       Expired/Forfeited                 (12,500)   4.1750     (29,000)   3.1052
                                      -----------  -------  -----------  -------
Outstanding, end of year               2,156,500   $1.7365     765,000   $1.7577
                                      ===========  =======  ===========  =======
Exercisable at end of year             1,089,401   $1.5578     439,000   $0.4000
                                      ===========  =======  ===========  =======
Wtd avg fair value of options granted              $  1.39               $  1.00
                                                   =======               =======


702,000 of the options outstanding at June 30, 2000 have exercise prices between
$0.01 and  $1.00, with a weighted average exercise price of $0.90 and a weighted
average  remaining  contractual life of 3.9 years.  702,000 of these options are
exercisable  at  June 30, 2000.  983,000  of the options outstanding at June 30,
2000  have  exercise prices  between $1.01 and  $2.00, with  a  weighted average
exercise price of $1.16 and a weighted average remaining contractual life of 9.6
years.  239,400  of  these  options  are  exercisable  at  June  30,  2000.  The
remaining 471,500 options have exercise prices between $2.72  and $10.59, with a
weighted average exercise  price of  $4.17  and  a  weighted  average  remaining
contractual life of 8.0 years.  148,001 of these options are exercisable at June
30, 2000.


                                      F-16
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000

SFAS  123  Proforma  Information:

The fair market value of each option granted in 2000 and 1999 to consultants and
other  third  parties is estimated using the Black-Scholes option pricing method
per  SFAS  123.  The  Black-Scholes  option-pricing  model  used  the  following
assumptions  for  the  years  ended June 30, 2000 and 1999, respectively: (i) no
dividend  yield  for  each  year, (ii) average volatility of 152 percent and 127
percent,  (iii)  weighted-average  risk-free interest rate of approximately 6.25
percent  and  6.5  percent,  and  (iv)  expected  life  of  1  year.

Had  compensation  cost  for  the  Company's  2000  and  1999 options granted to
employees  been  determined consistent with SFAS 123, the Company's net loss and
net  loss  per share for the year ended June 30, 2000 and 1999 would approximate
the  pro  forma  amounts  below:

                                         Years ended June 30,
                                 ----------------------------------
                                 2000                          1999
                     ---------------------------------------------------------
                      As Reported     Pro Forma     As Reported    Pro Forma
                     ------------   ------------   ------------   ------------
Net loss             $ (7,180,991)  $ (7,455,503)  $ (3,361,676)  $ (3,361,676)
  Basic and diluted
   loss per share    $      (0.42)  $      (0.44)  $      (0.27)  $      (0.27)


NOTE  9 - WARRANTS

From  time  to  time, the Company issues warrants pursuant to various consulting
agreements.

During  fiscal  1999,  pursuant  to an agreement with an outside consultant, the
Company  issued  warrants to purchase 281,042 shares of the Company's restricted
common  stock at an exercise price of $0.01 per share (the Company estimated the
fair  market  value  on  the date of grant to be $1.00 per share).  The warrants
vested  based on a formula and as of June 30, 1999, all warrants were vested and
exercised.  Total  consulting expense of $522,498 (including vesting of warrants
granted  in  fiscal  1998)  was  recognized  as  of  June  30,  1999.

No  warrants  were  granted  or  issued  during  fiscal  2000.

The  following represents a summary of the warrants outstanding at June 30, 2000
and  1999  and  changes  during  the  years  then  ended:

                                                           Wtd Avg
                                            Warrants       Ex Price
                                         --------------------------
    Outstanding, July 1, 1998               1,135,966        $0.01
      Granted                                 281,042         0.01
      Exercised                            (1,417,008)        0.01
      Expired/Forfeited                            --           --
                                         ------------- ------------
    Outstanding, June 30, 1999 and 2000            --           --
                                         ==========================


The  fair  value  of  each  warrant  granted  during 1999 is estimated using the
Black-Scholes  option-pricing  model  on  the  date of grant using the following
assumptions:  (i)  no  dividend  yield,  (ii) average volatility of 127 percent,
(iii) weighted-average risk-free interest rate of approximately 6.5 percent, and
(iv)  expected  life  of  1  year.


                                      F-17
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000



NOTE  10 - COMMON  STOCK  ISSUANCES

On August 31, 1998, the Company (which at the time was designated Bobernco,
Inc., a Nevada corporation) acquired all of the outstanding common stock of
GenTel Communications, Inc., a Colorado corporation in a business combination
described as a "reverse acquisition."  As part of the reorganization, the
Company issued 8,986,950

shares  of its Common Stock to the shareholders of GenTel in exchange for all of
the  outstanding  shares  of  Common  Stock  of GenTel.  Such shares include the
shares  owned  by  officers  and  directors  of  the  Company.

During the fiscal year ended June 30, 1999, the Company issued 162,000 shares of
restricted  common  stock,  valued  at  $162,000 (estimated by the Company to be
$1.00  per  share)  to  outside  consultants  for  services  rendered.

During  the fiscal year ended June 30, 1999, the Company issued 16,050 shares of
common stock, valued at $76,600 (based on the market value on the date of grant)
to  outside  consultants  for  services  rendered.

During  the fiscal year ended June 30, 1999, the Company issued 11,000 shares of
restricted common stock, valued at $5,225 (estimated by the Company to be $0.475
per  share)  to  employees  in  lieu  of  salary.

In  October  1998,  the  Company issued 40,000 shares of restricted common stock
pursuant  to  the  conversion  of  a  note  payable  in  the  amount of $80,000.

During  the  fiscal  year  ended  June  30,  1999,  the Company issued 1,558,500
(including  23,500  shares for offering costs) shares of restricted common stock
pursuant  to a private placement memorandum of $1,215,947, net of offering costs
of  $319,053.

During  fiscal  1999,  the  Company issued 2,589,324 shares of restricted Common
Stock  in  connection  with  the  exercise of options and warrants for $316,170.

On  April  21,  1999,  the  Company  issued  a  confidential  private  placement
memorandum of 2,000,000 shares of the Company's restricted common stock at $3.00
per  share.  As  of  June  30,  1999,  the  Company  had only sold 41,000 shares
pursuant  to this offering, resulting in cash of $108,450, net of offering costs
of  $14,550.  On  July  20,  1999,  the  Company  replaced  this offering with a
confidential  private  placement  offering  of 3,000,000 shares of the Company's
restricted  common  stock  at  a  price  of $1.00.  As a result, the Company has
agreed  to  issue  an  additional  82,000 shares to these participants which are
included  in  the  Statement  of  Stockholders'  Deficit as of June 30, 1999.

During  the fiscal year ended June 30, 2000, the Company issued 2,825,000 shares
of  restricted  common  stock pursuant to the above private placement memorandum
for  $2,536,605,  net  of  offering  costs  of  $288,395.  The private placement
memorandum  was  closed  as  of  June  2000.

During the fiscal year ended June 30, 2000, the Company issued 250,000 shares of
restricted  Common  Stock  for  $250,000  to  two unaffiliated  investors.

During the fiscal year ended June 30, 2000, the Company issued 305,000 shares of
restricted  common  stock,  valued  at  $305,000 (estimated by the Company to be
$1.00  per  share)  to  outside  consultants  and vendors for services rendered.

In  September  1999, the Company issued 67,675 shares of common stock, valued at
$271,247  (based  on  the  market  value on the date of grant) to consultants in
exchange  for  consultation  and  legal  services  rendered.

In  December  1999, the Company issued 282,575 shares of common stock, valued at
$539,666  (based  on  the  market  value on the date of grant) to consultants in
exchange  for  consultation  and  legal  services  rendered.

In  January  2000, the Company issued 7,000 shares of the Company's common stock
valued  at  $13,118 (based on the market value on the date of grant) in exchange
for  consultation  services.

In  January  2000,  the  Company  entered  into  an  agreement  with  an outside
consultant  for  investor  and  public  relations  services.  Pursuant  to  the
agreement,  the  Company issued 56,637 shares of common stock valued at $199,943
(based  on  the  market  value  on  the  date  of  grant)  for  services.

During  fiscal  year 2000, the Company issued 55,000 shares of restricted common
stock  pursuant  to  the conversion of a note payable with a principal amount of
$50,000  and  accrued  interest  of  $5,000.

In  May  2000,  the  Company  issued  456,833  shares of common stock, valued at
$682,000  (based  on  the  market  value on the date of grant) to consultants in
exchange  for  consultation  and  legal  services  rendered.

                                      F-18
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


During  fiscal  year  2000, the Company's President and Chief Executive Officer,
Chief  Operating Officer, Chief Financial Officer, and certain other employees ,
exercised  options to purchase a total of 375,000 shares of the Company's common
stock  in  lieu  of  salary  for  $72,250.

CANCELLATION  OF CERTAIN SHARES OF STOCK HELD BY MANAGEMENT - During fiscal year
2000,  Mr.  Sandhu  and  Mr. Clemons canceled 619,848 and 154,962, respectively,
shares  of  the  Company's common stock held by each of them.  It was determined
that  these  shares  were  not cancelled in a timely matter.  As a result, these
cancellations  are reflected as a reduction in the outstanding shares as of July
1,  1998.

NOTE  11 - INCOME  TAXES

The tax effects of temporary differences that give rise to deferred taxes are as
of  June  30,  2000:

Deferred tax asset:
   Net operating loss carryforward                        $ 4,347,000
   Expense recognized for granting options and warrants       115,000
   Other, net                                                   6,218
                                                          -----------
   Total gross deferred tax asset                           4,468,218

   Less valuation allowance                                (4,468,218)
                                                          -----------
   Net deferred asset                                     $        --
                                                          ===========

The  valuation  allowance  increased by approximately $2,919,218 during the year
ended  June  30,  2000.  No  current  provision for income taxes for the periods
ended  June 30, 2000 and 1999 is required, except for minimum state taxes, since
the  Company  incurred  taxable  losses  during  such  years.

The  provision  for  income  taxes for fiscal 2000 and 1999 was $800 and differs
from the amount computed by applying the U.S.  Federal income tax rate of 34% to
loss  before  income  taxes  as  a  result  of  the  following  as  of:

                                                              June  30,

                                                            2000     1999

Computed tax benefit at federal statutory rate      $ (2,440,000)  $ (1,143,000)
  State income tax benefit, net of federal effect       (474,000)      (191,200)
  Increase in valuation allowance                      2,919,218      1,335,000
  Other, net                                                  --             --
                                                     -----------   ------------
                                                    $      5,218   $        800
                                                     ===========   ============


As  of  June  30,  2000,  the  Company  had  net operating loss carryforwards of
approximately  $11,500,000  and  $5,000,000  for  federal  and  state income tax
reporting  purposes,  which  begin  expiring  in  2013  and  2003, respectively.

In  the  event  the  Company  were  to  experience  a greater than 50% change in
ownership  as  defined  in  Section  382  of  the  Internal  Revenue  Code,  the
utilization  of the Company's net operating loss carryforwards could be severely
restricted.


                                      F-19
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


NOTE  12  -  COMMITMENTS  AND  CONTINGENCIES

On  April  30,  1999,  the  Company  entered  into  an  agreement  with Williams
Communications,  a  unit  of  Williams of Tulsa, Oklahoma ("Williams"), in which
Williams  was  to  design,  install  and  maintain a high speed, nationwide VoIP
network  for  the  Company.  Subsequently, due to Williams' inability to deliver
the  VoIP  network  as  contracted  and  as a result of the previously discussed
amendments  to  the MCI/WorldCom contract, the Company determined to discontinue
its  agreement  with  Williams.  As a result of the Company's discontinuation of
its contract with Williams, the Company may be subject to $600,110 in fees.  The
Company  is  in negotiations with Williams to modify or eliminate these charges.
However,  no  assurances  can  be  made  that such negotiations will result in a
favorable outcome.  No amounts have been recorded related to the discontinuation
of this contract as of June  30,  2000.

The  Company  has  recorded an accrual for past due payroll taxes as of June 30,
2000  due  to  the under-reporting of the Company's payroll tax liability.  As a
result,  the Company has accrued approximately $650,000 (including approximately
$85,000  of  penalties  and interest) under accrued payroll and related taxes in
the  accompanying  balance  sheet  at  June  30, 2000.  The Company expects this
matter  to  be  settled  and  the  related  accrual  paid  by  June  30,  2001.

LEASE  AGREEMENTS  -  The  Company  leases  its facilities for its corporate and
operations  offices  under  a  non-cancelable  lease  expiring  in  May  2001.

Future  minimum  annual  commitments  under  lease  arrangements are as follows:

                     Years Ending            Operating
                       June 30,                Leases
                     -------------           ----------
                         2001                $ 205,150
                                             ==========

Rent  expense for the fiscal years ended June 30, 2000 and 1999 was $322,880 and
$148,666,  respectively.

EMPLOYMENT AGREEMENTS - In fiscal  1999,  the  Company  entered  into employment
agreements  with  certain  officers.  Under the  terms  of  the  agreements, the
officers will  receive an  annual salary  and options to purchase Company common
stock (see Note 8).  The Company has no long-term employment agreements.

CONTRACTS  AND  AGREEMENTS  -  On  June  17,  1998,  the Company entered into an
agreement  with  The  Michelson  Group,  Inc.  ("Michelson"),  whereby Michelson
performed  corporate development services such as, but not limited to, selecting
key  employees,  attracting  capital investors, providing advice on stock option
plans  and  maintaining an ongoing stock market support system.  Pursuant to the
agreement,  the Company paid Michelson a monthly fee of $6,500 though June 2000.
In  addition,  the  Company  agreed to issue Michelson warrants to purchase that
number  of  shares  of  common  stock of the Company which would, upon exercise,
result  in  Michelson  holding  9.9% of the outstanding shares of the Company (a
total of 1,417,008 shares) upon the completion of a proposed bridge financing at
an  exercise  price  of $0.01 per share.  As of June 30, 1999, all warrants were
vested  and  exercised  (see  Note  9).

In  connection with the Company's private placement, the Company entered into an
Investment  Banking  Agreement  with  Transglobal Capital Corporation ("TCC"), a
licensed  NASD  broker,  on  November  19, 1998.  As part of this Agreement, TCC
agreed to provide the Company with consulting services and to assist the Company
in  raising  capital.  In  return,  the Company agreed to compensate TCC with an
initial  fee of 50,000 shares of the Company's restricted Common Stock valued at
$50,000  and  charged  as  commission  expense  plus  a  13% commission on gross
proceeds  received  in  connection  with  the February 12, 1999 private offering
(totaling  $130,000).  In  addition,  the Company agreed to issue TCC options to
purchase  600,000  shares  of the Company's Common Stock at an exercise price of
$0.01  per  share pursuant to a pre-determined performance schedule.  During the
year  ended  June 30, 1999, TCC met all requirements for the granting of 600,000
options  resulting in an offering cost charge of $594,000.  As of June 30, 1999,
all  600,000  options  have  been  exercised  at  $.01  per  share.



                                      F-20
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


In  December  1999,  the  Company entered into a one-year agreement with a third
party for the Company's Internet Service Provider Access service.  The agreement
requires  the  Company  to pay the greater of actual incurred usage or a minimum
monthly fee of $500.  Total amount paid pursuant to this agreement was $1,042 as
of  June  30,  2000.

On  December  9,  1999,  the  Company entered into a consulting agreement with a
third  party  to  assist  the Company in its marketing efforts.  Pursuant to the
Agreement,  the  Company  is  subject  to  the  following:

1.     Payment  for  consulting  services  of:  (i)  $8,000  each  month for the
calendar  months  of December 1999 and January 2000, (ii) $10,000 each month for
calendar  months  February and March 2000, (iii) $12,000 each month for calendar
months  April  and  May  2000,  and  (iv) $1.00 retainer for each calendar month
thereafter  through  January  2001.  The  payment for consulting services may be
terminated  by  the  Company  or by the marketing company given thirty (30) days
written  notice.

2.     Issue  to  the  marketing  company  up  to 20,000 shares of the Company's
Common  Stock  at  a  rate  of one share for each billed customer brought to the
Company  by  the marketing company by February 29, 2000, subject to a minimum of
5,000  customers.  No  shares  have  been  issued  or  earned  pursuant  to this
agreement  through  the  date  of  the  report.

3.     In  addition, the Company may issue an additional 20,000 shares of Common
Stock  and  grant  warrants  to  purchase 200,000 shares of the Company's Common
Stock at $2.57 per share if certain customer thresholds are met, as defined.  As
of  September  8,  2000,  no additional shares have been issued or earned and no
additional  warrants  have  been  granted  or  earned.

This  consulting  agreement  was  terminated on September 8, 2000.  For the year
ended  June 30, 2000, the Company recognized $99,536 in expense pursuant to this
agreement.

On  November  13,  1999,  the Company entered into an agreement with an Internet
Services  Provider  ("ISP") whereby the ISP will provide Digital Subscriber Line
("DSL") services for the Company.  The agreement provides for no minimum monthly
revenue  commitment and shall continue for one year and is automatically renewed
on  a  month-to-month basis unless terminated by the Company or by the ISP given
thirty  (30) days written notice.  For the year ended June 30, 2000, the Company
has  paid  $3,902  pursuant  to  this  agreement.

In connection with the Company's confidential private placement memorandum dated
July  20, 1999,  the Company entered into a revised Investment Banking Agreement
with  TCC  on  August 1, 1999.  As part of this Agreement, TCC agreed to provide
the  Company  with  consulting  services  and  to  assist the Company in raising
capital.  In  return, the Company agreed to compensate TCC with a 13% commission
on gross proceeds received in connection with the July 20, 1999 offering.  Total
commissions  of  $294,345  were  paid  to  TCC  pursuant  to  this offering.  In
addition,  the  Company  agreed  to  issue TCC options to purchase up to 300,000
shares  of  the  Company's  Common Stock at an exercise price of $1.10 per share
based upon 10% of the total proceeds raised by TCC.  Options to purchase 239,400
shares  of  the  Company's restricted Common Stock at an exercise price of $1.10
per share were granted and are exercisable through April 2003.  The options were
estimated  to  be $220,248 using the Black-Scholes option pricing model per SFAS
123  and  were  recorded  as  Offering  Costs  in  Stockholder's  deficit.

Beginning  in  August  1999,  the  Company  entered  into  negotiations  with
MCI/WorldCom  ("MCI/WorldCom")  in  an  effort to lower its network transmission
costs.  As  a  result  of  these  negotiations, MCI/WorldCom agreed to amend the
existing  contract  whereby MCI/WorldCom  agreed to reduce the Company's network
transmission costs by

                                      F-21
<PAGE>

                       GTC TELECOM CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        FOR THE YEARS ENDED JUNE 30, 2000


approximately 40%.  Additionally, under the terms of the amendment, the minimum
monthly  purchase  requirement  was increased to $12,000 per month and the total
minimum purchase requirement increased to $288,000.  In an effort to continue to
reduce  its  long  distance network transmission costs, the Company successfully
negotiated  an  additional  amendment  to  its contract  in September 2000.  The
amendment  further  reduces  the  Company's  network  transmission  costs  by
approximately  30%.  In addition, under the terms of the amendment, the contract
is  extended  to  August  31,  2003 and the minimum monthly purchase requirement
increased  to  $400,000 per month for the months August 2000 to January 2001 and
then  increases  to  $520,000  per  month  from  February 2001 to the end of the
contract.  The  total  minimum purchase requirement of the contract increased to
$18,000,000.  All remaining material terms of the contract remain the same.  For
the years ended June 30, 2000 and 1999, the Company paid $2,239,778 and $53,557,
respectively,  pursuant  to  this  agreement.


                                      F-22
<PAGE>
In  September 1998, the Company entered into an agreement with a billing company
who  provides  processing  services  for  customer  billing and collections.  In
addition the billing company will provide financing through a third-party lender
for  amounts  up  to  60% of eligible accounts receivable, as defined.   For the
years  ended  June  30,  2000  and  1999,  the Company paid $121,043 and $6,715,
respectively,  in  fees  to  the  billing  company  pursuant  to this agreement.

In October 1998, the Company entered into an agreement to become a licensed user
of  a  telecommunications  management  and  accounting  software  program.  The
agreement,  which expires in October 2003, unless terminated by the Company, has
a  five-year  renewal  feature  and  provides  for the Company to pay $1,425 per
month.  For the years ended June 30, 2000 and 1999, the Company paid $17,309 and
$7,627,  respectively,  pursuant  to  this  agreement.

NOTE  13  EARNINGS  PER  SHARE

The  following  is  a  reconciliation  of the numerators and denominators of the
basic  and  diluted  earnings  per  share  computations:

                                                       Years Ended June 30,
                                                          2000       1999
                                                    ------------   ------------

Numerator for basic and diluted earnings per share:
  Net loss charged to common stockholders           $ (7,180,991)  $ (3,361,676)

Denominator for basic and diluted earnings per share:
  Weighted average shares                             17,105,139     12,647,347

    Basic and diluted earnings per share            $      (0.42)  $      (0.27)



NOTE  14  -  SUBSEQUENT  EVENTS:

On  September  25,  2000,  the  Company  entered  into  a promissory note with a
shareholder  in the amount of $200,000. The note, which accrues interest at 12%,
is  due  on  March  25,  2001  and  is secured by the Company's receivables.  In
addition,  the Company agreed to issue to the noteholder warrants to purchase up
to  40,000  shares of the Company's restricted Common Stock at an exercise price
of  $0.50  per share valued at approximately $13,500 (based on the Black-Scholes
pricing model).  The warrants are exercisable for a period of two (2) years from
the  date  of  issuance  and  contain  piggy-back  registration  rights.

                                      F-23
<PAGE>