<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark One)

[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
    1934 
For the quarterly period ended December 31, 1998
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _____ to _____

                             SEC File Number 0-24725

                          GLOBAL ELECTION SYSTEMS INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

British Columbia, Canada                         85-0394190
(State or Province of Incorporation)           (IRS Employer Identification No.)

                     1611 Wilmeth Road, McKinney, TX, 75069
                    (Address of Principal Executive Offices)

                                  972-542-6000
                (Issuer's Telephone Number, Including Area Code)

         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 [ ] (issuer not subject to filing requirements for past 90 days)

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of February 12, 1999, the
issuer had 18,483,672 shares of its common stock outstanding. Transitional Small
Business Disclosure Form (check one): Yes [ ] No [x]


<PAGE>   2

                                TABLE OF CONTENTS

Part 1.  FINANCIAL INFORMATION

         Item 1.    Financial Statements.

         Item 2.    Management's Discussion and Analysis.

Part 2.  OTHER INFORMATION

         Item 1.    Legal proceedings.

         Item 2.    Changes in Securities and Use of Proceeds.

         Item 3.    Defaults Upon Senior Securities.

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

         Item 5.    Other Information.

         Item 6.    Exhibits and Reports on Form 8-K


<PAGE>   3


Part 1.   FINANCIAL INFORMATION

     Item 1:   FINANCIAL STATEMENTS

         Summary of Significant Accounting Policies:

         The accounting policies as set forth in Global Election Systems Inc.'s
Form 10-SB/A, filed on September 18, 1998 have been adhered to in preparing the
accompanying interim consolidated financial statements. These statements are
unaudited, but include all adjustments, consisting of normal recurring
adjustments, that the Company considers necessary for a fair presentation of the
results for the interim period. Results for an interim period are not
necessarily indicative of results for a full year.

         a)   Foreign Currency Transactions

         The accounts of the Company are prepared in U.S. funds and the
Company's Canadian operations are translated into U.S. dollars as follows:

         Monetary assets and liabilities at quarter-end rates
         All other assets and liabilities at historical rates
         Revenue and expense items at the average rate of exchange prevailing
         during the quarter.

              Exchange gains and losses arising from these transactions are 
reflected in income or expense in the period.

              b)   Inventory

              Inventory of finished goods and work-in-progress is valued at the
lower of cost and net realizable value as estimated by management. Raw
materials, which consist of parts and components, are valued at average cost
less any allowances for obsolescence. Inventory of goods taken in trade is
valued at the lesser of trade-in value and net realizable value as estimated by
management.


<PAGE>   4
Global Election Systems, Inc.                                        Statement 1
Interim Consolidated Balance Sheet
As at 31 December
Prepared without audit in U.S. Funds

<TABLE>
<CAPTION>


ASSETS                                                                          1998              1997

-----------------------------------------------------------------------------------------------------------

<S>                                                                         <C>               <C>         
Current
  Cash and short term deposits                                              $    503,282      $    130,338
  Accounts receivable                                                          2,505,009         2,520,260
  Contracts receivable                                                         5,073,102         4,040,833
  Deposits and prepaid expenses                                                  228,505           124,418
  Inventory                                                                    6,861,627         2,116,176
  Current portion of agreements receivable                                       291,794           461,070
                                                                            ------------      ------------
                                                                              15,463,319         9,393,095
  Agreements Receivable                                                          351,900           544,139
  Capital Assets                                                                 415,526           492,860
  Other Assets                                                                   889,516         1,231,891
                                                                            ------------      ------------
                                                                            $ 17,120,261      $ 11,661,985

-----------------------------------------------------------------------------------------------------------

LIABILITIES

-----------------------------------------------------------------------------------------------------------

Current
  Accounts payable and accrued liabilities                                  $  2,401,388      $  2,227,625
  Deferred revenue                                                                25,427           172,219
  Current portion of loans payable                                             4,588,578         1,135,944
                                                                            ------------      ------------
                                                                               7,015,393         3,535,788

  Loans Payable                                                                   36,757            57,937
                                                                            ------------      ------------
                                                                               7,052,150         3,593,725

SHAREHOLDERS' EQUITY

-----------------------------------------------------------------------------------------------------------
Share Capital
  Authorized:
   100,000,000 common voting shares, without par value
   200,000,000 convertible voting preferred shares, without par value
  Issued and fully paid:
   18,483,672 common shares (1997 - 15,689,440)                               10,126,865         9,910,235
Deficit - Statement 2                                                            (58,754)       (1,841,975)
                                                                            ------------      ------------
                                                                              10,068,111         8,068,260
                                                                            ------------      ------------
                                                                            $ 17,120,261      $ 11,661,985
-----------------------------------------------------------------------------------------------------------
</TABLE>


ON BEHALF OF THE BOARD



/s/ HOWARD T. VAN PELT           Director
--------------------------------,

/s/ CLINTON H. RICKARDS          Director
--------------------------------,

<PAGE>   5
Global Election Systems Inc.                                         Statement 2
Interim Consolidated Statement of Changes in Shareholders' Equity
For the Period Ended 31 December
Prepared without audit in U.S. Funds

<TABLE>
<CAPTION>
                                                                     Common        Amount        Retained          Total
                                                                     Shares                      Earnings
                                                                                                 (Deficit)
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>            <C>             <C>
Balance - 31 December 1993                                         13,527,237   $  8,419,336   $ (1,164,452)   $  7,254,884
Issuance of shares for name and operating assets of 
     Lynro Manufacturing Corporation ($1.74 per share)                250,000        434,626             --         434,626
Issuance of shares for expenses ($0.83 per share)                      58,334         48,694             --          48,594
Issuance of shares on exercise of options ($0.48 per share)            50,000         23,904             --          23,904
Loss for the year                                                          --             --     (1,508,214)     (1,508,214)
                                                                   --------------------------------------------------------   

Balance - 31 December 1994                                         13,885,571      8,926,460     (2,672,666)      6,253,794
Issuance of shares on exercise of warrants ($0.77 per share)          203,869        156,538             --         156,538
Issuance of shares on exercise of options ($0.56 per share)           100,000         55,777             --          55,777 
Loss for the year                                                          --             --     (1,042,042)     (1,042,042)
                                                                   --------------------------------------------------------

Balance - 31 December 1995                                         14,189,440      9,138,775     (3,714,708)      5,424,067
Issuance of shares on exercise of options ($0.47 per share)           500,000        235,422             --         235,422
Loss for the year                                                          --             --     (1,736,657)     (1,736,657)
                                                                   --------------------------------------------------------

Balance - 31 December 1996                                         14,689,440      9,374,197     (5,451,365)      3,922,832
Net income for the period                                                  --             --      2,053,512       2,053,512 
                                                                   --------------------------------------------------------

Balance - 30 June 1997                                             14,689,440      9,374,197     (3,397,853)      5,976,344
Issuance of shares for name and operating assets of I-Mark             
     Systems, Inc. ($0.55 per share)                                1,000,000        536,038             --         536,038
Net loss for the period                                                    --             --      1,555,878       1,555,878
                                                                   --------------------------------------------------------

Balance - 31 December 1997                                         15,689,440      9,910,235     (1,841,975)      8,068,260

Issuance of performance shares from escrow ($0.06 per share)        2,738,000        167,672             --         167,672
Issuance of shares on exercise of options ($0.89 per share)            30,000         28,632             --          26,632 
Issuance of shares on exercise of options ($0.85 per share)            25,000         21,328             --          21,328
Net income for the period                                                  --             --      2,481,668       2,481,668 
                                                                   --------------------------------------------------------

Balance - 30 June 1998                                             18,482,440     10,125,867        639,693      10,765,560      
Issuance of shares on exercise of options ($0.81 per share)             1,232            998             --             998
Net loss for the period                                                    --             --       (698,447)       (698,447)
                                                                   --------------------------------------------------------

Balance - 31 December 1998                                         18,483,672   $ 10,126,865   $    (58,754)   $ 10,068,111  
                                                                   --------------------------------------------------------
</TABLE>
<PAGE>   6
Global Election Systems Inc.                                         Statement 3
Interim Consolidated Statement of Income (Loss)
For the Six Months Ended 31 December
Prepared without audit in U.S. Funds

<TABLE>
<CAPTION>
                                                                              For the Quarter Ended       For the Six Months Ended
                                                                                   31 December                 31 December
                                                                              1998             1997       1998               1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>              <C>          <C>              <C>
Revenues
   Sales and operating income                                            $  2,373,729     $ 4,490,922  $ 6,646,192      $ 8,163,160
   Other income                                                                76,006          63,043       85,031           72,784
                                                                          ----------------------------------------------------------
                                                                            2,449,735       4,553,965    6,731,223        8,235,944
                                                                          ----------------------------------------------------------
Costs and Expenses
   Cost of sales and operating expenses                                     1,369,130       2,264,149    3,204,569        4,001,665
   Selling, administrative and general expenses                             1,514,702       1,221,339    3,037,037        2,248,821
   Research and development expenses                                          234,299         112,390      609,270          219,353
   Amortization                                                                80,714         110,724      206,245          160,997
   Interest                                                                    74,068          48,468      110,199           49,230
                                                                          ----------------------------------------------------------
                                                                            3,272,913       3,757,070    7,167,320        6,680,066
                                                                          ----------------------------------------------------------

Income (Loss) Before the Undernoted                                          (823,178)        796,895     (436,097)       1,555,878
   Revaluation of used equipment                                              131,175            --        262,350             --
                                                                          ----------------------------------------------------------

Net Income (Loss) for the period                                             (954,353)        796,895     (698,447)       1,555,878
                                                                          ----------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Earnings (Loss) Per Share - U.S. Funds
   Basic                                                                  $     (0.05)    $      0.05  $     (0.04)     $      0.10
   Fully Diluted                                                          $       N/A     $      0.04  $       N/A      $      0.09

------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Number of
   Common Shares Outstanding                                                                            18,483,264       15,519,577

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   7
Global Election Systems Inc.
Interim Consolidated Statement of Cash Flow
For the Six Months Ended 31 December                                 Statement 4
Prepared without audit in U.S. Funds

<TABLE>
<CAPTION>

                                                For the Quarter Ended         For the Six Months Ended
                                                     31 December                    31 December
                                                1998            1997            1998           1997
-------------------------------------------------------------------------------------------------------
<S>                                          <C>           <C>            <C>            <C>
OPERATING ACTIVITIES
 Net income (loss) for the period            $   (954,353)  $   796,895   $   (698,447)   $   1,555,878
 Item not affecting cash 
  Amortization                                     80,714       110,724        206,245          160,997
                                             ----------------------------------------------------------

                                                 (873,639)      907,619       (492,202)       1,716,875
 Changes in non-cash working capital           (1,865,167)   (2,008,799)    (2,946,997)      (1,476,847)
                                             ----------------------------------------------------------

                                               (2,738,806)   (1,101,180)    (3,439,199)         240,028 
                                             ----------------------------------------------------------
INVESTING ACTIVITIES
 Capital assets acquired                              171       (14,656)       (51,576)      (1,029,231)
 Loans receivable                                 266,481       279,075        310,071          306,220
                                             ----------------------------------------------------------

                                                  266,652       264,419        258,495         (723,011)
                                             ----------------------------------------------------------
FINANCING ACTIVITIES
 Loans payable                                  2,912,998       503,828      3,344,361          535,491
                                             -----------------------------------------------------------

NET INCREASE (DECREASE) IN CASH                   440,844      (332,933)       163,657           52,508 
 Cash position - Beginning of period               62,438       463,271        339,625           77,830 
                                             ----------------------------------------------------------

CASH POSITION - END OF PERIOD                $    503,282   $   130,338   $    503,282    $     130,338 
                                             ----------------------------------------------------------
</TABLE>



<PAGE>   8


     Item 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS

              The discussion and analysis of the operating results and the 
         financial position of the Company should be read in conjunction with
         the Company's Interim Financial Statements and the notes to them. See
         "Interim Consolidated Financial Statements". The financial statements
         have been prepared in United States dollars in accordance with
         Canadian GAAP. Certain of the information discussed in this report
         contains forward-looking statements regarding future events or the
         future financial performance of the Company, and is subject to a
         number of risks and other factors which could cause the actual results
         to differ materially from those contained in any forward-looking
         statements. Among those factors are: general business and economic
         conditions: customer acceptance and demand for the company's products;
         the Company's overall ability to design, test and introduce new
         products on a timely basis; the nature of the markets addressed by the
         Company's products; the interaction with governmental entities in the
         United States and world-wide which purchase the Company's products;
         the unknown and unforeseen effects of potential "Year 2000" problems
         encountered by the Company, its suppliers, customers and others; and
         other risk factors listed from time to time in documents filed by the
         Company with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

QUARTER ENDED DECEMBER 31, 1998 COMPARED TO QUARTER ENDED DECEMBER 31, 1997.

     SALES AND OPERATING INCOME.

         Sales and other income decreased 46.2%, or $2,104,000, to $2,450,000 in
the second quarter ended December 31, 1998 from $4,554,000 in the second quarter
ended December 31, 1997. The sales decrease was largely attributable to delay in
receipt of an order expected in the later quarter (which the Company has not
received as of the date of this report but still anticipates) and to the
cyclical effect of elections, in which primary and general election quarters
typically have fewer sales than comparable quarters of other years in which
fewer elections are held and during which preparatory purchases are being made.

     COST OF SALES AND OPERATING EXPENSES.

         Cost of sales and operating expenses decreased 39.5%, or $895,000, to
$1,369,000 in the Second quarter of fiscal 1999 from $2,264,000 in the second
quarter of fiscal 1998. This decrease resulted in part from the decrease in
sales and in part from the Company's continued efforts to efficiently utilize
labor and reduce cost of parts.


<PAGE>   9

     SELLING, ADMINISTRATIVE AND GENERAL EXPENSES.

         In the second quarter ended December 31, 1998 selling, administrative
and general expenses increased 24.0%, or $294,000, to $1,515,000, from
$1,221,000, due to election support provided during the November, 1998 primary
and general elections and an increase in manpower and associated costs in the
sales, field support and administrative areas.

     RESEARCH AND DEVELOPMENT EXPENSES.

         Research and development expenses increased 108.5%, or $122,000, to
$234,000 in the second quarter of fiscal 1999 from $112,000 in fiscal 1998. 
The increase was due to providing enhancements to software for the AccuTouch
system. The Company continues to fund research and development in order to offer
leading edge products to the market place.

     AMORTIZATION.

         Amortization decreased 27.1%, or $30,000, to $81,000 in the second
quarter of fiscal 1999 from $111,000 in fiscal 1998 because some fixed assets
were not purchased as anticipated.

     INTEREST.

         Interest expense increased 52.8% or $25,000, to $74,000 in the
second quarter of fiscal 1999 from $49,000 in the second quarter of fiscal
1998. The increase was within the Company's operating plan and resulted from
interest on increased U.S. bank loans.

     REVALUATION OF USED EQUIPMENT.

         During fiscal 1999 the Company instituted a conservative policy of
writing down trade-in inventory. The trade-in inventory write off amounted to 
$131,000 in the second quarter of fiscal 1999. The trade-in inventory write 
down will continue for the next six consecutive quarters, at the end of which 
value of the trade-in inventory is anticipated to be $0.


<PAGE>   10

     EARNINGS (LOSS) PER SHARE.

         The Company's loss for the second quarter ended December 31, 1998 was 
$823,000 or $(0.04) per share before a write down of $131,000 for trade-in
inventory. The loss for the second quarter ended December 31, 1998 after the
trade-in inventory write down was $954,000 or $(0.05) per share compared to a
profit of $797,000 or $0.05 per share for the same period for fiscal 1998. The
decrease in earnings per share for the 1999 fiscal period as compared to the
1998 fiscal period was due to a decrease in sales, and increases in selling,
administrative and general expense, research and development expense, and
interest expense, along with the write down of the trade-in inventory.

YEAR TO DATE DECEMBER 31, 1998 COMPARED TO YEAR TO DATE DECEMBER 31, 1997.

     SALES AND OPERATING INCOME.

         Year to date sales and other income for the six months ended December
31, 1998 decreased 18.3% or $1,505,000, to $6,731,000 from $8,236,000 for the
six months ended December 31, 1997. The sales decrease was largely attributable
to delay in receipt of an order expected in the second quarter of fiscal 1999
(which the Company has not received as of the date of this report, but still
anticipates) and to the cyclical effect of elections, in which primary and
general election periods like the second quarter of fiscal 1999 typically have
fewer sales than comparable periods of other years in which fewer elections are
held and during which preparatory purchases are being made.

     COST OF SALES AND OPERATING EXPENSES.

         Year to date cost of sales and operating expenses for fiscal period
1999 decreased 19.9% or $797,000, to $3,205,000 from $4,002,000 for fiscal
1998. In fiscal 1999, year to date cost of sales and operating expense as a
percentage of gross revenues decreased to 47.6% from 48.6% in fiscal 1998.
This decrease resulted in part from the decrease in sales and in part from the
Company's continued efforts to efficiently utilize labor and reduce cost of
parts.

     SELLING, ADMINISTRATIVE AND GENERAL EXPENSES.

         Year to date selling, administrative and general expenses for fiscal
1999 increased 35.1% or $788,000, to $3,037,000 from $2,249,000 for fiscal 1998.
The increase was due largely to election support provided during the November,
1998 primary and general elections and an increase in manpower and associated
costs in the sales, field support and administrative areas. In addition,
expenses relating to the I-Mark asset acquisition were incurred for the whole
1999 fiscal period, whereas in the 1998 fiscal period expenses were incurred for
only five months.


<PAGE>   11


     RESEARCH AND DEVELOPMENT EXPENSES.

         Year to date research and development expenses for fiscal 1999
increased by 177.8%, or $390,000, to $609,000 from $219,000 for fiscal 1998.
The increase was due to providing enhancements to software for the AccuTouch
system. The Company continues to fund research and development in order to offer
leading edge products to the market place.

     AMORTIZATION.

         Year to date amortization for fiscal 1999 increased 28.1%, or 
$45,000, to $206,000 from $161,000 in fiscal 1998. This increase was due
primarily to amortization of I-Mark goodwill.

     INTEREST.

         Year to date interest expense for fiscal 1999 increased 123.8% or 
$61,000, to $110,000 from $49,000 in fiscal 1998. The increase was within the
Company's operating plan and resulted from interest on U.S. increased bank
loans.

     REVALUATION OF USED EQUIPMENT.

         Year to date trade-in inventory write off for fiscal 1999 increased to
$262,000 from $ nil in fiscal 1999. The trade-in inventory write down will
continue for the next six consecutive quarters at the end of which value of the 
trade-in inventory is anticipated to be $0.

     EARNINGS (LOSS) PER SHARE.

         The Company's year to date loss for fiscal 1999 was $436,000 or 
$(0.02) per share before a write down of $262,000 for trade-in inventory. The
year to date loss for fiscal 1999 after the trade-in inventory write down was 
$698,000 or $(0.04) per share compared to a profit of $1,556,000 or $0.10 
per share for the same period for fiscal 1998. The decrease in earnings per 
share for the 1999 fiscal period as compared to the 1998 fiscal period was due
to a decrease in sales, and increases in selling, administrative and general
expense, research and development expense, amortization and interest expense,
along with the write down of the trade-in inventory.


<PAGE>   12



     LIQUIDITY AND CAPITAL RESOURCES.

         The Company uses a combination of internally generated funds and bank
borrowings to finance its acquisitions, working capital requirements, capital
expenses and operations.

         During the period ended December 31, 1998, the Company generated most
of its funding through cash flow.

         At December 31, 1998, the Company's cash totaled $503,282, an increase
of $441,000 from September 30, 1998. Accounts and contracts receivable
decreased to $7,578,000 at December 31, 1998 from $8,621,000 at September 30,
1998. Due to the nature of the Company's business, timing of payments on large
contracts may vary significantly, causing significant variances from period to
period in the mix of cash, other liquid funds, accounts receivable and contracts
receivable. Inventory figures may vary significantly, depending upon delivery
dates for voting systems. At December 31, 1998, inventory amounted to 
$6,861,000, an increase of $1,139,000 from September 30, 1998. Inventory has
increased due to the addition of the AccuTouch system, a new product introduced
in fiscal 1999.

         The Company has contractual arrangements with customers whereby credit
terms may be extended for the amounts due for voting systems. At December 31,
1998, agreements receivable less current portion amounted to $352,000, a
decrease of $15,000 from September 30, 1998. These agreements are repaid at
varying terms and with varying interest rates determined on a case by case
basis. Historically, the Company has not experienced any default in connection
with agreements due from customers. 

         The Company currently has four loans outstanding, three with Western
Bank, Albuquerque, New Mexico, and one loan with Hibernia National Bank of
Texas, McKinney, Texas. One loan in the amount of  $361,700 is secured by a loan
receivable amounting to $401,442. This loan  bears an interest rate of Western
Bank of Albuquerque Prime Rate and was due January 6, 1999 which has been
extended until January 2000. Two other loans in the amounts of $55,135 maturing
in increments due July 1, 1999, July 1, 2000, and July 1, 2001 and $1,508,500
payable by June, 1999, respectively, are secured by specific Global USA
contracts in the amounts of  $66,940 and $2,155,312 and bear interest at bank
prime and 10.5% respectively.  The final loan with Hibernia National Bank of
Texas in the amount of  $2,700,000, is secured by a blanket assignment of
accounts receivable, bears interest at The Wall Street Journal Prime Rate and
matures on October 12, 1999. The loans are used for working capital.

         During the Company's current and two most recently ended fiscal years,
the Company has not experienced any material impact from inflation or changing
prices on its net sales and revenues or on income from continuing operations.

         Management anticipates that financial resources, including internally
generated funds and available bank line of credit and borrowings will be
sufficient to finance the Company's current operations and capital expenditures,
excluding acquisitions, for the next twelve months.


<PAGE>   13


     SUBSEQUENT EVENT.

         On January 7, 1999, the Company entered into a letter of intent with
BRELSH Holdings Ltd. pursuant to which they have agreed to negotiate the terms
of a formal agreement providing for the merger of the company into BRELSH, or a
subsidiary of BRELSH created for the purpose of consummating the merger. Under
the merger, which would be undertaken by way of a plan of arrangement, BRELSH
would acquire all the outstanding common shares of the Company by paying its
shareholders $50,000,000 (US), or approximately $2.71 (US) per share, and by
BRELSH issuing a right to Company's shareholders enabling them to acquire, for
no further consideration, .05 of a share of BRELSH for each outstanding common
share of the Company. To the extent that certain presently outstanding options
or warrants are exercised, a further 1,640,435 common shares of the Company may
be issued before the closing of the merger. If these common shares are issued,
the per share cash purchase price to be paid under the merger would decrease.
The rights to acquire BRELSH shares will only become exercisable if the public
market capitalization of BRELSH exceeds $200,000,000 (US). They would be
exercisable for a two year period, following the date they become exercisable.
If the rights do not become exercisable within seven years of the completion of
the merger, they will expire.

         The plan of arrangement between the two companies would be required to
be approved by 75% of the total number of votes of the Company's common
shareholders represented at an extraordinary general meeting of the Company.
Under the letter of intent, this meeting would be required to be held on or
before May 4, 1999. The closing of the merger will be contingent on the receipt
of all necessary securities regulatory approvals, compliance by the parties with
the Hart-Scott-Rodino Antitrust Improvements Act (if necessary), the absence of
any pending or threatened litigation regarding the merger, the satisfactory
completion of each parties' due diligence, and on Howard Van Pelt, the Company's
President, entering into a satisfactory employment agreement with BRELSH. If the
merger is approved, it is contemplated that Howard Van Pelt would become a
director of BRELSH.

         The Company and BRELSH have agreed to consider alternative procedures
to consummate the transaction, including a takeover bid, if an alternative
procedure is determined to be more efficient and economical.

         The parties have agreed that transactions contemplated by the letter of
intent must be closed on or before the later of June 1, 1999 or 40 days after
the filing of any required notification under the Hart-Scott-Rodino Act. The
Company has the right to terminate the obligations specified in the letter of
intent by paying BRELSH the sum of $750,000 (US).

         Mr. David Brown, the Company's Chairman of the Board, Mr. Howard Van
Pelt, and Mr. Clinton Rickards, a director of the Company, have each agreed with
BRELSH to vote their shares in favor of the merger at the Company's
extraordinary general meeting.


<PAGE>   14


         Kalamazoo, based BRELSH Holdings, Inc. owns Business Forms Group, Inc.,
doing business as Doubleday Bros. & Co., a 100 year old supplier of electoral,
governmental, educational and business printing products that services
communities throughout the United States. Additionally, BRELSH owns Vista
Business Forms, Inc., Oshtemo, Michigan, a 33 year old company that manufactures
business forms and services its 500 distributors nationally. The addition of the
Company will enhance BRELSH's printing and packaging of election equipment
products throughout the world.

         The directors feel that the merger offers a favorable price to
shareholders, a strong ongoing company that permits the continued participation
of the Company's employees with a complementary product line and continuity of
excellent service to customers for which the Company is noted.

         COMMITMENTS

         Under the terms of a lease agreement dated December 8, 1998, the
Company is committed to minimum annual lease payments of $18,165 plus its share
of common area costs. The lease is for a five year term to December 31, 2003,
with a 5 year renewal option at an annual lease amount to be negotiated. The
lease commitment is $9,083 for the year ending June 30, 1999.

YEAR 2000 ISSUE.

         DESCRIPTION OF THE ISSUE:

         The Y2K issue refers to the ability of certain date-sensitive computer
chips, software, and systems to recognize a two-digit data field as belonging to
the 21st century. This is a significant issue for most, if not all companies,
with far reaching implications, some of which cannot be anticipated or predicted
with any degree of certainty. The Y2K issue may create unforeseen risks to the
Company from its internal computer systems as well as from computer systems of
third parties with which it deals. Failures of the Company's and/or third
parties' computer systems could have a material adverse impact on the Company's
ability to conduct its business.

         YEAR 2000 ASSESSMENT:

         Management of the Company has been assessing the magnitude of the Y2K
issue with respect to the Company's products, business, suppliers and customers.
In conjunction with the Company's assessment of Y2K issues which might affect
it, the Company has been formulating plans to address the Y2K issue, including
contingencies to address unforeseen problems.

         INTERNAL BUSINESS:

         Management is currently reviewing all internal business computer
systems to ensure that these systems either will be Y2K ready, or will be
modified or replaced by Y2K systems.


<PAGE>   15


         SUPPLIERS:

         The major suppliers to the Company are component parts distributors.
Often the Company sources its products and manufacturing services from multiple,
competing vendors. The Company is currently conducting reviews of all suppliers
to ensure Y2K readiness of as many vendors as possible. There can be no
assurance that the systems of other companies on which the Company relies will
be Y2K ready on a timely basis and will not have an adverse effect on the
operations of the Company. In the instances where the Company is unable to
determine that its vendors have taken appropriate steps to minimize disruption
due to non - Y2K readiness, the Company will consider contingency plans,
including moving to currently identified alternate sources, or developing new
alternative sources of supply.

         PRODUCTS:

         The Company has conducted a reality-based review of its election
equipment product line for the purpose of determining the impact of Y2K. The
Company's perspective on Y2K issues derives from real-world, practical
experience in meeting the needs of our customers who operate in an event-driven
environment. As such the Company's election tabulation hardware has been
determined to be functional in the Year 2000 and beyond. The Company's recent
development effort in application software has also ensured functionality in the
election processing environment for the Year 2000 and beyond. 

         COSTS:

         The Company does not expect the cost of its Y2K assessment, including
both incremental spending and reallocated resources, to be material. The current
assessment does not include potential costs related to any customer or other
claims or the cost of internal software and hardware being replaced in the
normal course of business. This assessment is subject to change because there is
no uniform definition of "readiness for Y2K". All customer situations cannot be
anticipated, particularly those involving third party products; therefore, the
Company may see claims as a result of the Y2K transition. These claims, if
successful, could have a material adverse impact on future results.

         CUSTOMERS:

         The Company has not yet assessed the extent to which its governmental
unit customers are Y2K compliant, although it believes that, particularly in the
United States, governmental units are aware of and are addressing the issues.
The Company cannot predict the effect of a lack of Y2K compliance by its
customers on the Company. The inability of a governmental unit to generate data
needed in order to conduct elections or to interface with the Company's voting
systems, or other problems, could prevent the customer from using the Company's
systems or could result in disruption of the election process. The Company is
unable to predict the impact this could have on its business and revenues or the
extent of any liability to third parties the Company might incur, although the
impact or liability could be materially adverse to the Company and its business.


<PAGE>   16


         COST ESTIMATES:

         The Company has not been required to incur costs for Y2K remedial work
and has not set aside any contingency fund to deal with any contingencies which
may arise. The costs for Y2K compliance are based upon management's best
estimates, which were derived from numerous assumptions about future events,
including third-party modification plans and other factors. However, the Company
cannot guarantee that those estimates will be accurate and actual results could
differ materially from those plans. Specific factors that might cause material
differences include, but are not limited to, the availability and cost of
personnel trained in this area and the ability to identify and correct all
relevant computer codes.

PART II. OTHER INFORMATION

     Item 1.   Legal Proceedings

               On August 21, 1998, Election Systems and Software, Inc. ("ES&S")
         filed a suit against the Registrant's wholly-owned subsidiary, Global
         Election Systems, Inc., a Delaware corporation, (Global USA") in the
         United States District Court for the District of Nebraska. Information
         about this suit, which the Company is vigorously defending, may be
         found in the Company's Form 10-qsb for the quarter ended September 30,
         1998.

               Except for the ES&S lawsuit, the Registrant is not a party to any
         material pending legal proceedings and is not aware of any proceeding
         that a governmental authority is contemplating.

     Item 2.   Changes in Securities

               None

     Item 3.   Defaults Upon Senior Securities

               None

<PAGE>   17

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

               The following items were submitted to a vote and approved at the
               Annual General Meeting held on October 28, 1998. 4,935,286 shares
               of the Company's common stock were represented in person and by
               proxy. In keeping with Canadian law, matters are voted upon by
               show of hands rather than by ballot.

                    Minutes of last meeting.

                    Financial Statements and Auditor's Report for the Company's
                    fiscal year ended June 30, 1998.

                    Determine the number of the Board of Directors of the 
                    Company at five.

                    Election of Directors

                         David H. Brown
                         George H. Cobbe
                         P. Nicholas M. Glass
                         Clinton H. Rickards
                         Howard T. Van Pelt

                    Appointment of Auditor

                         Staley, Okada, Chandler & Scott, Chartered Accountants

                    Incentive Stock Options

                         The grant of options exercisable into an aggregate of
                         350,000 common shares in the capital of the Company.

     Item 5.   Other Information

               None


<PAGE>   18


     Item 6.   Exhibits and Reports on Form 8-K

               A.      Exhibits

               03.1    Memorandum and Articles of Incorporation, as amended.*

               04.1    Parts 7, 10 , 12, and 27 of the Memorandum and Articles
                       of Incorporation, as amended, set forth in Exhibit 3.1**

               10.1    Lease agreement between Akira Industries Co. Ltd. and 
                       Global Election Systems Inc., dated December 8, 1998.

               11.1    Computation of per-share income Treasury Stock Method of
                       Global Election Systems Inc.

               27      Financial Data Schedule

*   Incorporated by reference to Exhibit 2(1) to the Company's Form 10-SB
    filed July 31, 1998.

**  Incorporated by reference to Exhibit 3(1) to the Company's Form 10-SB
    filed July 31, 1998.

               B.      Reports on Form 8-K

     The Company filed no reports on Form 8-K during the second quarter of
Fiscal 1999.


<PAGE>   19


                                    Signature

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on behalf by the undersigned, hereunto duly authorized.

Dated:  February 16, 1999

                          Global Election Systems Inc.

                           By: /s/ Howard T. Van Pelt
                               ----------------------
                        Howard T. Van Pelt, President and
                             Chief Financial Officer


<PAGE>   20


                                  EXHIBIT INDEX
<TABLE>
<S>            <C>
               03.1    Memorandum and Articles of Incorporation, as amended.*

               04.1    Parts 7, 10 , 12, and 27 of the Memorandum and Articles
                       of Incorporation, as amended, set forth in Exhibit 3.1**

               10.1    Lease agreement between Akira Industries Co. Ltd. and 
                       Global Election Systems Inc., dated December 8, 1998.
                       Filed Electronically Herewith.

               11.1    Computation of per-share income Treasury Stock Method of
                       Global Election Systems Inc. Filed Electronically 
                       Herewith.

               27      Financial Data Schedule. Filed Electronically Herewith.
</TABLE>

*   Incorporated by reference to Exhibit 2(1) to the Company's Form 10-SB
    filed July 31, 1998.

**  Incorporated by reference to Exhibit 3(1) to the Company's Form 10-SB
    filed July 31, 1998.