UNITED STATES
                       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 March 31, 2004
                                       OR
[   ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

          For the transition period from ____________ to _____________

                                         Commission file number 0-23532

                          GLOBETEL COMMUNICATIONS CORP.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

 Delaware                                               88-0292161
---------------------------------------------  --------------------------------
(State or other jurisdiction of incorporation (IRS Employer Identification No.)
  or organization)

               9050 Pines Blvd. Suite 110 Pembroke Pines Fl 33024
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                  954-241-0590
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

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 ___ No __X___

As of May 9, 2004, we had issued 741,771,766 shares of common stock, of which
725,271,766 shares were outstanding.

Transitional Small Business Disclosure Format (Check one): Yes __ No X

<PAGE>


                                TABLE OF CONTENTS

                       PART I - FINANCIAL INFORMATION Page

Item 1. Financial Statements.                                             2
Item 2. Management's Discussion and Analysis or Plan of Operation.       12
Item 3. Controls and Procedures.                                         15

                                    PART II - OTHER INFORMATION

Item 1. Legal Proceedings.                                               16
Item 2. Changes in Securities.                                           17
Item 3. Default Upon Senior Securities.                                  17
Item 4. Submission of Matters to a Vote of Security Holders.             17
Item 5. Other Information.                                               17
Item 6. Exhibits and Reports on Form 8-K.                                17


















                                       1
<PAGE>


                         PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet - (Unaudited)                                  3
Consolidated Statements of Income (Loss) (Unaudited)                      4
Consolidated Statements of Cash Flows (Unaudited)                         5
Notes to Consolidated Financial Statements (Unaudited)                    6


















                                       2
<PAGE>


                  GLOBETEL COMMUNICATIONS CORP. AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEET (Unaudited)
                                 March 31, 2004

                                     ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                   $    333,917
   Accounts receivable, less allowance for doubtful
      accounts of $777,535                                        2,933,731
   Deposits on equipment                                            352,300
   Prepaid expenses                                                 245,300
   Inventory                                                         12,600
   Deferred tax asset, less valuation allowance of $2,138,847          -
                                                               ------------
         TOTAL CURRENT ASSETS                                     3,877,848

PROPERTY AND EQUIPMENT, less
   accumulated depreciation of $477,540                             387,313
                                                               ------------
OTHER ASSETS
   Deposits                                                          27,059
                                                               ------------
     TOTAL OTHER ASSETS                                              27,059
                                                               ------------
TOTAL ASSETS                                                   $  4,292,220
                                                               ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES

CURRENT LIABILITIES

   Accounts payable                                            $    592,678
   Notes payable, secured                                           248,701
   Current portion of capital lease obligations                      52,114
   Loan payable to related party - Charterhouse                     361,960
   Accrued expenses and other liabilities                            57,423
   Deferred revenues                                                 31,528
   Deferred revenue - related party                                  21,276
   Related party payables                                            57,500
                                                               ------------
     TOTAL CURRENT LIABILITIES                                    1,423,180
                                                               ------------

STOCKHOLDERS' EQUITY
  Preferred stock, Series A, $.001 par value,
     10,000,000 shares authorized;
     150,000 issued and outstanding                               2,224,200
  Common stock, $.00001 par value, 1,500,000,000 shares
    authorized; 741,771,766 shares issued and
    725,271,766 outstanding                                           7,417
  Additional paid-in capital                                     28,430,156
  Accumulated deficit                                           (27,792,733)
                                                               ------------
TOTAL STOCKHOLDERS' EQUITY                                        2,869,040
                                                               ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $  4,292,220
                                                               ============

See accompanying notes.


                                       3
<PAGE>

                  GLOBETEL COMMUNICATIONS CORP. AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

                                                For the Three Months Ended
                                                        March 31,
                                                   2004             2003
                                               ------------    ------------
                                                                 (Restated)

REVENUES EARNED                                $  3,210,333    $  3,013,067
COST OF REVENUES EARNED                           3,164,741       2,109,232
                                               ------------    ------------
     GROSS MARGIN                                    45,592         903,835
                                               ------------    ------------

EXPENSES
   Payroll and related taxes                         76,288          96,040
   Professional fees                                171,734         119,137
   Officers' salaries                               516,667         141,251
   Bad debts                                        398,748            -
   Consulting fees                                   22,671          30,060
   Other operating expenses                          48,691          42,748
   Telephone and communications                      15,876          18,067
   Travel and related expenses                       43,893          33,302
   Rents                                             13,991          10,892
   Insurance and employee benefits                   21,184          14,128
   Depreciation and amortization                     11,716          10,412
                                               ------------    ------------
     TOTAL EXPENSES                               1,341,459         516,037
                                               ------------    ------------

(LOSS) INCOME BEFORE OTHER INCOME
  (EXPENSE) AND INCOME TAXES                     (1,295,867)        387,798
                                               ------------    ------------
OTHER INCOME (EXPENSE)
   Gain on forgiveness of debt                        3,515            -
   Gain on discontinued operations                     -             58,755
   Interest income                                      736             109
   Interest expense                                  (6,951)        (35,589)
                                               ------------    ------------
NET OTHER INCOME (EXPENSE)                           (2,700)        (23,275)
                                               ------------    ------------

(LOSS) INCOME BEFORE INCOME TAXES                (1,298,567)        411,073

INCOME TAXES
   Provision for income taxes                          -           (164,429)
   Tax benefits from utilization of
    net operating loss carryforwards                   -            164,429
                                               ------------    ------------
                                                       -               -
TOTAL INCOME TAXES                             ------------    ------------

NET INCOME (LOSS)                              $ (1,298,567)   $    411,073
                                               ============    ============

Weighted average number of common shares
         outstanding - Basic                    683,244,745     605,320,283
                                               ============    ============

Weighted average number of common shares
         outstanding - Diluted                  683,244,745     638,741,405
                                               ============    ============
Net income (loss) per share - Basic            $       0.00    $       0.00
                                               ============    ============
Net income (loss) per share - Diluted          $       0.00    $       0.00
                                               ============    ============

See accompanying notes.

                                       4
<PAGE>


                  GLOBETEL COMMUNICATIONS CORP. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                For the Three Months Ended
                                                         March 31,
                                                   2004            2003
                                               ------------    ------------
Cash Flows from Operating Activities:
   Net (loss) income                           $ (1,298,567)   $    411,073
   Adjustments to reconcile net (loss) income
   to net cash used by operating activities:
     Depreciation and amortization                   52,854          48,762
     Bad debt expense                               398,748            -
     Common stock issued for officer salary         425,000            -

   (Increase) decrease in assets:
     Accounts receivable                           (239,052)       (877,560)
     Prepaid expense                               (174,300)           -
     Inventory                                      (12,600)           -
     Deposits                                       (10,924)         (3,000)
     Deposit on equipment                           (50,000)           -

   Increase (decrease) in liabilities:
     Accounts payable                              (278,562)        146,742
     Accounts payable - paid with
         non-readily marketable securities             -                 49
     Accrued payroll and related taxes                 -             95,000
     Accrued expenses and other liabilities            -             14,808
     Deferred revenues                                 -             16,162
     Deferred revenues - related party                 -            (73,740)
                                               ------------    ------------
  Net Cash Used By Operating Activities          (1,187,403)       (221,704)
                                               ------------    ------------

Cash Flows From Investing Activities:
   Acquisition of property and equipment             (3,792)        (50,000)
                                               ------------    ------------

   Net Cash Provided by Investing Activities         (3,792)        (50,000)
                                               ------------    ------------
Cash Flows From Financing Activities:
   Sale of preferred stock                        1,132,060            -
   Payments on capital lease obligations             (1,195)         (1,196)
   Proceeds from notes payable and long-term debt   375,000         353,678
   Proceeds from related party payables                -            144,194
   Payments on notes payable and long-term debt    (200,000)           -
   Payments on related party payables                (5,747)        (88,707)
                                               ------------    ------------
   Net Cash Provided by Financing Activities      1,300,118         407,969
                                               ------------    ------------

Net increase in cash and cash equivalents           108,923         136,265
Cash and cash equivalents - Beginning               224,994         201,631
                                               ------------    ------------
Cash and cash equivalents - Ending             $    333,917    $    337,896
                                               ============    ============


SUPPLEMENTAL DISCLOSURES

Cash paid during the period for:
     Interest                                  $      6,951    $     35,589
                                               ============    ============
     Income taxes                                      -               -
                                               ============    ============
See accompanying notes.


                                       5

<PAGE>



                  GLOBETEL COMMUNICATIONS CORP. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                                 March 31, 2004
NOTE 1 - BASIS OF PRESENTATION

Interim financial statements

The accompanying unaudited financial statements reflect all adjustments, which,
in the opinion of management, are necessary for a fair presentation of the
financial position and the results of operations for the interim periods
presented. All adjustments are of a normal recurring nature, except as otherwise
noted below. The results of operations for the three months ended March 31,
2004, are not necessarily indicative of the results to be expected for the year
ending December 31, 2004.

Certain financial information and footnote disclosures which are normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America, but which are not
required for interim reporting purposes, have been condensed or omitted. The
accounting policies followed by the Company are set forth in Note 1 to the
Company's consolidated financial statements in its annual report on Form 10-KSB
for the year ended December 31, 2003. The accompanying financial statements
should be read in conjunction with the financial statements and notes.


NOTE 2 - ACCOUNTS RECEIVABLE AND SALES - SIGNIFICANT CONCENTRATIONS OF CREDIT
RISK AND ECONOMIC DEPENDENCE

Three (3) customers accounted for 93% of the Company's sales for the three
months ended March 31, 2004, including 23% attributable to the Brazil network,
52% to the Mexico network, and 18% to the Philippine network. The Brazil and
Mexico customers account for 98% of the company's accounts receivable, including
48% attributable to the Brazil network and 50% to the Mexico network.

NOTE 3 - NON-READILY-MARKETABLE EQUITY SECURITIES, AVAILABLE FOR SALE

Network Sales - Charterhouse Investment Holdings, Ltd.

In May 2002, the Company entered into a Network Purchase Agreement with IP World
Ltd., (IPW) an Australian corporation to build as many as five (5) networks to
be located in different countries throughout the world. As payment for each
network the Company agreed to accept 64 million shares of IPW stock, at an
agreed-upon value of $ .10 (US) per share, in full payment of the promissory
note for the Brazil and Philippines networks. The IPW shares were not listed for
sale on the Australian Stock Exchange (ASX) or any other domestic or
international securities exchange. At the time, the Company was informed that
such listing was imminent, and the Company would be able to sell all or a
portion of the IPW shares.



                                       6
<PAGE>

The above agreements and transactions were facilitated by and through
Charterhouse Consultancy Service, Ltd, a Nevis corporation, and it's successor
corporation, Charterhouse Investment Holdings Ltd., a Malaysian corporation
(collectively known as "Charterhouse"), and Global VoIP, a Delaware Corporation,
of which Timothy Huff, the Company's current CEO was a 99% owner and officer.
Although Mr. Huff, by and through GVoIP, originally functioned as consultant to
Charterhouse, neither Mr. Huff nor GVoIP were directly compensated for
participating in the agreements and transactions described above and below.
Instead, Mr. Huff became an officer and a Director of the Company and assigned
any and all interest GVoIP had to the Company without compensation. GVoIP was
dissolved immediately thereafter.

In connection with agreements between Charterhouse and the Company, Charterhouse
paid for the two networks sold to date by the transfer of shares in IPW to the
Company. In that connection, Charterhouse maintained 70 million IPW shares in
escrow for the Company, and, accordingly, the Company was deemed beneficial
owner of the shares.

As of June 30, 2003, the Company had included in its current assets, $1,600,000
in non-readily marketable, available-for-sale equity securities, which represent
16 million shares of IPW unrestricted stock, valued at $.10 per share, held in
the company's name and $4,301,500 in non-readily marketable, available for sale
equity securities, due from a related party, Charterhouse, which represent 70
million shares of IPW restricted stock valued at $.06145 per share, held by
Charterhouse on the Company's behalf.

As of September 30, 2003, IPW was in liquidation and was no longer listed in the
Australian Exchange. The Company is still transacting with IPW to move out of
liquidation and be relisted in the Australian Exchange. However, the outcome of
the transaction can not be determined, therefore, the company has written off
$4,301,500 in stock receivable as well as the $1,600,000 in stock it had in its
name.

NOTE 4 - DEPOSIT ON EQUIPMENT

In September 2003, the Company entered into an agreement with Advantage
Telecommunications Ltd. (ATC), an Australian telecommunications corporation
where, for a strategic investment of $1.2 million, the Company would own up to
50% of the stock of ATC, and would have control of the board of directors of
ATC. ATC had operations in England and Hong Kong and had points of presence in
over 15 countries. The agreement was subsequently modified to where the
investment of $1.2 million would be for the purchase of ATC's telecommunication
equipment and network operations in Hong Kong and England.

As of March 31, 2004, the Company had remitted $352,300 to ATC and ATC's
assignee as partial payment towards the completion of the transaction. The
Company issued 16,500,000 shares of the Company's restricted common stock to
complete the transaction. The shares are being held by the Company pending the
transfer by ATC of the title to the Company. The issuance of the shares, based
on an average of $.0544 per share, or $897,700 completes the Company's purchase
of ATC's assets totaling $1.2 million.

                                       7
<PAGE>

NOTE 5 - LETTERS OF CREDIT AND NOTES PAYABLE

The Company has available up to $500,000 for letters of credit with
CommerceBank, N.A., which is guaranteed by Florida Export Finance Corporation
(FEFC). As of December 31, 2002, a $200,000 letter of credit was issued to the
Mexican telecom provider that provides local connectivity. In March 2003, the
Company issued another $100,000 to the same Mexican telecom provider. The
remaining $200,000 was used by the Company as collateral for its $200,000 loan
with CommerceBank, N.A., the funds of which were used to purchase the telecom
equipment used in the Brazil operations.

NOTE 6 - LOAN PAYABLE TO RELATED PARTY - CHARTERHOUSE

In January 2003, the Company received a $50,000 loan from Charterhouse. This
loan payable as well as the previous $311,960 payable are unsecured,
non-interest bearing and have no formal repayment terms.

NOTE 7 - CONSULTING AND INVESTMENT BANKING AGREEMENTS

In October 2003, the Company entered into an agreement with Fordham Financial to
raise $2,500,000 resulting in issuance of circular offering dated October 17,
2003. Fordham Financial agreed to receive 10% commission for the raising of the
funds. Fordham Financial had subscriptions of $1,092,140 as of December 31,
2003, and had raised the full $2,500,000 as of January 31, 2004.

NOTE 8 - ALLOWANCE FOR DOUBTFUL ACCOUNTS

During the period ended March 31, 2004, the Company increased its allowance for
doubtful accounts by $398,748, predominantly for the receivables from the Mexico
and Brazil networks, representing a percentage of amounts receivable older than
90 days which have not been received as of the date of this report.

NOTE 9 - EARNINGS (LOSS) PER SHARE

Per share information is computed based on the weighted average number of common
shares outstanding (basic and diluted) during the period.

                                       8
<PAGE>

NOTE 10 - STOCK OPTIONS

During the year ended December 31, 2003, the Company issued the following
options to acquire common stock:

<TABLE>
<CAPTION>
<S>                        <C>              <C>                          <C>             <C>

Date Issued                Shares           Consideration              Valuation        Relationship
September 26, 2003         2,206,667        Satisfaction of debt       33,100           Former President
September 26, 2003        17,600,000        Accrued salary             264,200          Former President
September 26, 2003         8,944,467        Accrued salary             134,167          Chief Executive Officer
September 26, 2003         7,444,467        Accrued salary             111,667          Chief Operating Officer
September 26, 2003         7,444,467        Accrued salary             111,667          Chief Financial Officer
September 26, 2003         4,111,133        Accrued salary              61,667          Controller
December 18, 2003          6,666,667        Officer salary             100,000          Former President
December 18, 2003          5,333,333        Officer salary              80,000          Chief Operating Officer
December 18, 2003          3,333,333        Salary                      50,000          Controller
December 18, 2003          1,000,000        Officer salary              15,000          President
December 18, 2003          1,666,667        Accounting services         25,000          Accountants
December 18, 2003          2,666,667        Network services            40,000          Vendor

</TABLE>

According to option agreements in connection with the above shares, the option
prices were the lower of $ .015 per share or one-half of the closing market
price on the last reported sale or closing price on the date of the agreement.
The above options were issued at $.015 per share and were issued in "cashless
exercises". Accordingly, the option shares actually issued were reduced by the
number of shares required to pay for the options as $ .015 per share. All of the
stock options were subsequently exercised in January 2004.

NOTE 11 - PREFERRED STOCK

In October 2003, the Company entered into an agreement with Fordham Financial
Management Inc. to raise funds to finance the ATC transaction. In accordance
with the agreement, the investors will receive preferred shares convertible into
common stock upon investment. An Offering Circular was made available to
investors on October 17, 2003. As part of the offering, the Company agreed to
pay its investment banking consultant, Fordham Financial Management, Inc. a 10%
commission.

The offering was for maximum of 150,000 shares ("Shares") of Series A
Convertible Redeemable Preferred Stock, par value $.001 per share ("Series A
Preferred"). The shares have a liquidation preference of $16.67 per share and
each share is convertible into a number of shares of common stock determined by
dividing the number of shares of common stock outstanding as of the date of
conversion by three, and dividing the result of that calculation by 250,000. The
Company may redeem the Shares at $.001 per share at any time after the second
anniversary of the date of issuance. Such redemption would be effectively
require the investor to convert his shares at that time or lose the entire
amount of his investment.

The full amount of $2,500,000 has been subscribed as of January 31, 2004, and
the funds, less commission of $250,000 and legal and incidental costs of
$25,800, were received as of February 6, 2004.

                                       9
<PAGE>

NOTE 12 - SUBSEQUENT EVENTS

In March 2004, the Company entered into a binding letter of intent to purchase
substantially all of the assets of Sanswire Technologies, Inc. and its
subsidiary, Sanswire, Inc. (collectively, "Sanswire"), a company that is
developing a National Wireless Broadband Network utilizing high-altitude
airships called Stratellites that will be used to provide wireless voice, video,
and data services. The definitive purchase agreement was signed on April 15,
2004.

Sanswire's assets consist primarily of its intellectual property and its
proprietary rights in its intellectual property. The Strattelite that they are
developing is similar to a satellite, but it is stationed in the stratosphere
rather than in orbit. Sanswire is a development stage company and as of May 3,
2004, the Stratellites are in the initial development stage. GlobeTel has placed
all of Sanswire's asset into Sanswire Networks, LLC, its Florida-based,
wholly-owned subsidiary ("Sanswire-FL").

As consideration for the sale of the assets, the Company has agreed to issue 28
million shares ("Shares") of its common stock ("Common Stock") to Sanswire at
the closing and the shares will be held in escrow pending delivery of the
audited financial statements, defined in and in accordance with Section 1.2(d)
of the purchase agreement. An additional 200 million shares will be issued
pursuant to the terms and conditions of the "successful commercial launch" of a
commercial communications platform aboard an airship by the December 31, 2005
closing date.

For purposes of the purchase agreement, a "successful commercial launch" will be
deemed to have occurred if all the conditions in the Agreement have been
satisfied and all other conditions deemed material by GlobeTel are satisfied, as
determined by GlobeTel in its sole discretion. A "successful commercial launch"
will occur if (i) an airship (dirigible) is flown for a period of 90 consecutive
days at an approximate altitude of 70,000 feet, without technical difficulty,
(ii) a customer is able to receive both voice and Internet services at the same
time when it uses the "Stratellite service", at a customer-premises equipment
(CPE) cost of approximately $100, and (iii) at least 250,000 paying customers
must be able to use the Stratellite service based on agreed upon engineering
specifications. For purposes hereof, it is also assumed that the cost of each
airship used in the Stratellite service will not exceed $3 million, the cost of
each tracking earth station will not exceed $7 million and that each earth
station (if more than one) will have the ability to cover several deployed
airships at one time. If the cost of any airship or earth station exceeds $3
million or $7 million, respectively, at the time that the "commercial launch" is
being implemented, the project will not be deemed to be commercially viable and
a "successful commercial launch" will not have occurred.



                                       10
<PAGE>

The Company also entered into employment agreements with four former Sanswire
executives. Michael Molen, Jairo Rivera, Brian Keith and Jane Molen will serve
as the Chief Executive Officer, Chief Financial Officer; Chief Operating Officer
and Comptroller of Sanswire-FL, respectively. All of these employment agreements
are for three-year terms. Mr. Molen will also receive an earn-out which will be
based on value of Sanswire-FL compared to the Company (exclusive of
Sanswire-FL). If the value of Sanswire-FL is more than 24% of the value of the
Company, Mr. Molen will be entitled to receive stock equal to 10% of GlobeTel
common stock outstanding on the date of valuation. Mr. Molen has the right to
select the valuation date and a mutually agreeable third party will evaluate the
value of Sanswire-FL compared to GlobeTel.

On April 27, 2004, the Company agreed to sell 1,000 shares of Series B Preferred
Stock of GlobeTel Communications Corp. ("GTEL") to Caterham Financial
Management, Ltd., a Malaysian company ("Caterham"), for a total of $15 million
investment. The Company intends to use $5 million of this investment for working
capital and $10 million to purchase two Stored Value Card Data switches.

With respect to the $5 million in working capital, Caterham has agreed to
advance $1 million to GTEL on May 7, July 1, September 1, November 1 and
December 31. The Agreement provides that Caterham has a 10 day grace period, in
which to make any scheduled payments. With respect to the Master Card Data
switches, Caterham has agreed to advance an aggregate of $5 million to GTEL to
purchase a Stored Value Card Data Switch, which will be located in Miami,
Florida and subsequently a second switch will be installed in the Company's Hong
Kong operations.

Except for voting rights and conversion rights, each share of Series B Preferred
Stock shall have rights that are identical to shares of the Company's common
stock. The Series B Preferred Stock issued to Caterham and its nominees will
have voting rights equal to 50% plus one share of the Company's authorized
shares of common stock for a period of three years beginning on the first
closing date an ending three years thereafter, provided that Caterham and/or its
nominee have not converted more than 15% of its/their Series B Preferred Stock
into the Company's common stock during this time period.

Beginning on the first anniversary after the first closing date and expiring two
years thereafter, Caterham and its nominees may convert (in whole or in part)
its Series B Preferred Stock into GlobeTel common stock. The 1,000 shares of
Series B Preferred Stock, as a class, issued to Caterham and its nominees shall
be convertible into that number of shares of the Company's common stock equal to
35% of GlobeTel then issued and outstanding shares (the "Aggregate Conversion
Shares") as determined on the date in which Caterham, or one of its nominees,
first converts its Series B Preferred Stock into the Company's common stock (the
"First Conversion Date"). Each holder of the Series B Preferred Stock will
receive shares of GlobeTel aggregate conversion shares based on his pro-rata
ownership of the Series B Preferred Stock. Three years after the first closing
date, all of the shares of GlobeTel's Series B Preferred Stock which have not
converted into GTEL common stock will be automatically converted into shares of
GlobeTel's common stock.


                                       11
<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation

This Form 10-QSB and other statements issued or made from time to time by
GlobeTel contain statements which may constitute "Forward-Looking Statements"
within the meaning of the Securities Act of 1933, as amended and the Securities
Exchange Act of 1934 by the Private Securities Litigation Reform Act of 1995, 15
U.S.C.A. Sections 77Z-2 and 78U-5 (SUPP. 1996). Those statements include
statements regarding our intent, belief or current expectations, our officers
and directors and the officers and directors of our subsidiaries as well as the
assumptions on which such statements are based. Prospective investors are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results and the
timing of certain events may differ materially from those contemplated by such
forward-looking statements.

Forward-looking statements include, but are not limited to, statements about our
plans, objectives, expectations, intentions and assumptions and other statements
that are not historical facts. Words like "expect", "anticipate", "intend",
"plan", "believe", "seek", "estimate" and similar expressions identify
forward-looking statements.

Overview

GlobeTel Communications Corp. (Globetel), a Delaware corporation established in
July 2002, is engaged in the business of providing telecommunication services,
primarily involving Internet telephony using Voice over Internet Protocol
("VoIP") equipment. The Company is authorized to issue up to 1,500,000,000
shares of Common Stock, par value $0.00001 per share, and 10,000,000 shares of
Preferred Stock, par value $0.001. The preferred stock is a so-called "blank
check" preferred, meaning that its terms such as dividends, liquidation and
other preferences, are to be fixed by the Company's Board of Directors at the
time of issuance.

Results of Operations - Comparison of Three Months Ended March 31, 2004 and 2003

Revenues. During the three-month period ended March 31, 2004, our sales were
$3,210,333 compared to sales of $3,013,067 during the same period last year, or
an increase of 6.5%. Our revenues continue to be predominantly from
telecommunications minutes going through our Mexico and Brazil networks.
However, during this period, we started running telecommunications traffic to
the Philippines and United Kingdom.

Cost of Sales. Our cost of sales consists primarily of the wholesale cost of
buying bandwidth purchased by us for resale, costs of telecommunication
equipment and technical service. We had cost of sales of $3,164,741 for the
three months ended March 31, 2004, compared to cost of sales of $2,109,232
during the three months ended March 31, 2003. We expect cost of sales to
increase in future periods only to the extent that our sales volume increases.


                                       12
<PAGE>

Gross Margin. The gross margin decreased to $45,592 for the three months ended
March 31, 2004 compared to the same period last year when the gross margin was
$903,835, or a decrease of 95%. The decrease in gross margin is attributable to
the increased cost of the minutes to terminate, especially the Mexico network,
where our margin is less than two percent. We expect to derive higher margins
once we formally take over the operations of our customer's Mexico network as
described in Part II, Item 1 "Legal Proceedings."

Operating Expenses. Our operating expenses consist primarily of payroll and
related taxes, expenses for executive and administrative personnel, facilities
expenses, professional and consulting service expenses, travel and other general
corporate expenses. Our operating expenses for the three months ended March 31,
2004, was $1,341,459, an increase of $825,422 from the same period in 2003. Our
operating expenses are higher in this period as we wrote off some bad debts from
our Mexico and Brazil operations. Our expenses in the future may increase in
absolute dollars as we continue to expand our network termination locations
worldwide and incur additional costs related to the growth of our business and
being a public company.

Income (Loss) from Operations. We had a net ordinary loss of ($1,295,867) for
the three months ended March 31, 2004, compared to net ordinary income of
$387,798 for the three months ended March 31, 2003. The loss was a result of
reduced margin and higher operating costs. We expect that we will continue to
have higher operating costs as we increase our staffing and start expanding our
operations in Europe and Asia.

Other Income (Expense). Interest income (expense) consists of interest expense
on our borrowings and interest income earned on our cash and cash equivalents
and, for the prior period, receivables from related parties. We recorded
interest income of $736 during the three months ended March 31, 2004, compared
to $109 during the same period in the prior year. Interest expenses during the
three months ended March 31, 2004, were $6,951 compared to $35,589 during the
same period in the prior year.

Net Income (Loss). Our net loss for the three months ended March 31, 2004, was
($1,298,567) compared to a net income of $411,073, during the three months ended
March 31, 2003.


                                       13
<PAGE>

Liquidity and Capital Resources. As of March 31, 2004, we had $333,917 of cash
and cash equivalents compared to $337,896 as of March 31, 2003.

Our accounts receivable were $2,933,731 as of March 31, 2004, compared to
$2,625,278 during the same time period in 2003. An estimated 98% or $2,875,056
of the March 2004 receivables were attributable to two (2) customers, including
an 48% or $1,408,191 related to the Brazil network and 50% or $1,466,865 related
to the Mexico network. We have increased our allowance for doubtful accounts by
$398,748 for the period for these two customers.

We had current assets totaling $3,877,848 as of March 31, 2004, compared to
$4,563,275 as of March 31, 2003. The decrease was attributable to the write-off
of receivables in the prior year as discussed in note 2 to the financial
statements. Total assets decreased to $4,292,220 as of March 31, 2004, from
$9,362,947 in the same period in 2003. Likewise, the decrease is attributable to
write-off of long-term receivables as discussed in note 2 to the financial
statements.

Our total current liabilities decreased to $1,423,180 as of March 31, 2004, from
$4,738,005 as of March 31, 2003. The decrease is principally due to payments of
notes payable, accrued officers' salaries and related party payables. Total
liabilities decreased to $1,423,180 as of March 31, 2004, from $4,793,005 as of
March 31, 2003.

Our cash used in operating activities was $1,187,403 for the three months ended
March 31, 2004, compared to $221,704 during the same period in the prior year.
Our investing activities during the three months ended March 31, 2003 totaled
$3,792 compared to $50,000 in the prior year. Cash provided by financing
activities was $1,300,118, principally from the sale of preferred stock, for the
three months ended March 31, 2004, as compared to $407,969 for the same period
in the prior year.

We do not have existing capital resources or credit lines available that are
sufficient to fund our operations and capital requirements as presently planned
over the next twelve months. We are actively pursuing additional funds through
the issuance of debt and/or equity instruments. Item 3. Controls and Procedures



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Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company carried out an evaluation under the
supervision and with the participation of the Company's management, including
the Chief Executive Officer and President and the Chief Financial Officer, of
the effectiveness of the Company's disclosure controls and procedures as of
March 31, 2004. In designing and evaluating the Company's disclosure controls
and procedures, the Company and its management recognize that there are inherent
limitations to the effectiveness of any system of disclosure controls and
procedures, including the possibility of human error and the circumvention or
overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of
achieving their desired control objectives. Additionally, in evaluating and
implementing possible controls and procedures, the Company's management was
required to apply its reasonable judgment. Furthermore, in the course of this
evaluation, management considered certain internal control areas, including
those discussed below, in which we have made and are continuing to make changes
to improve and enhance controls. Based upon the required evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that as of March 31,
2004, the Company's disclosure controls and procedures were effective (at the
"reasonable assurance" level mentioned above) to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.

From time to time, the Company and its management have conducted and will
continue to conduct further reviews and, from time to time put in place
additional documentation, of the Company's disclosure controls and procedures,
as well as its internal control over financial reporting. The Company may from
time to time make changes aimed at enhancing their effectiveness, as well as
changes aimed at ensuring that the Company's systems evolve with, and meet the
needs of, the Company's business. These changes may include changes necessary or
desirable to address recommendations of the Company's management, its counsel
and/or its independent auditors, including any recommendations of its
independent auditors arising out of their audits and reviews of the Company's
financial statements. These changes may include changes to the Company's own
systems, as well as to the systems of businesses that the Company has acquired
or that the Company may acquire in the future and will, if made, be intended to
enhance the effectiveness of the Company's controls and procedures. The Company
is also continually striving to improve its management and operational
efficiency and the Company expects that its efforts in that regard will from
time to time directly or indirectly affect the Company's disclosure controls and
procedures, as well as the Company's internal control over financial reporting.

For the year ended December 31, 2003, the Company's independent auditors, Dohan
and Company, CPA's, P.A. ("Dohan") advised management and the Board of Directors
by a letter dated March 30, 2004 that, in connection with its audit of the
Company's consolidated financial statements for the year ended December 31,
2003, it noted certain matters involving internal control and its operation that
it considered to be a material weakness under standards established by the
American Institute of Certified Public Accountants. Reportable conditions are
matters coming to an independent auditors' attention that, in their judgment,
relate to significant deficiencies in the design or operation of internal
control and could adversely affect the organization's ability to record,
process, summarize, and report financial data consistent with the assertions of
management in the financial statements. Further, a material weakness is a
reportable condition in which the design or operation of one or more internal
control components does not reduce to a relatively low level the risk that
errors or fraud in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. Dohan
advised management and the Board of Directors that it considered the following
to constitute material weaknesses in internal control and operations: (i) the
Company's failure to adequately staff its finance group to effectively control
the increased level of transaction activity, address the complex accounting
matters and manage the increased financial reporting complexities and (ii) the
Company's current monthly close process does not mitigate the risk that material
errors could occur in the books, records and financial statements, and does not
ensure that those errors would be detected in a timely manner by the Company's
employees in the normal course of performing their assigned functions. Dohan
noted that these matters were considered by it during its audit and did not
modify the opinion expressed in its independent auditor's report dated March 30,
2004.

                                       15
<PAGE>

The Company is still in the process of assessing the findings of its independent
auditors. As noted above, however, the Company has made and is continuing to
make changes in its controls and procedures, including its internal control over
financial reporting, aimed at enhancing their effectiveness and ensuring that
the Company's systems evolve with, and meet the needs of, the Company's
business. As further noted above, the Company is also continually striving to
improve its management and operational efficiency and the Company expects that
its efforts in that regard will from time to time directly or indirectly affect
the Company's controls and procedures, including its internal control over
financial reporting. For example, the Company is attempting to add two more
employees to its accounting staff.

Changes in Internal Control Over Financial Reporting

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the evaluation.

                           PART II - OTHER INFORMATION
Item 1. Legal Proceedings

We are a defendant in a lawsuit file by Matthew Milo and Joseph Quattrocchi, two
former consultants, filed in the Supreme Court of the State of New York
(Richmond County, Case no. 12119/00 and 12118/00). This lawsuit relates to
consulting services that were provided by Mr. Milo and Mr. Quattrocchi and a
$50,000 loan advanced by these individuals, dated May 14, 1997, of which $35,000
has been repaid.

We entered into an agreement with Mr. Milo and Mr. Quattrocchi as consultants on
June 25, 1998. The agreement was amended on August 15, 1998. On November 30,
1998, both Mr. Milo and Mr. Quattrocchi resigned from their positions as
consultants to our company without fulfilling all of their obligations under
their consulting agreement. We issued 3 million shares each to Mr. Milo and Mr.
Quattrocchi as consideration under the consulting agreement. We have taken the
position that Mr. Milo and Mr. Quattrocchi received compensation in excess of
the value of the services that they provided and the amounts that they advanced
as loans.

Mr. Milo and Mr. Quattrocchi disagreed with our position and have commenced an
action against us that is pending in the Supreme Court of the State of New York.
Mr. Milo and Mr. Quattrocchi claim that they are entitled to an additional
24,526,000 shares of our common stock as damages under the consulting agreement
and to the repayment of the loan balance. We believe that we have meritorious
defenses to the Milo and Quattrocchi action, and we have counterclaims against
Mr. Milo and Mr. Quattrocchi. However, we cannot project an outcome with any
certainty. We have not entered into any settlement negotiations with Mr. Milo
and Mr. Quattrocchi and we do not believe that we would be materially adversely
affected by the outcome of this proceeding.

                                       16
<PAGE>

There is presently an outstanding claim against us related to an equipment lease
which approximates $53,311 and is reflected as part of capital lease
obligations, current portion. As of May 14, 2004, the lessor has not commenced
any legal action against us and we believe that we may be able to enter into
settlement agreement. We do not believe that we will be materially adversely
affected by these liabilities.

We are in the process of taking legal actions against our associate and customer
in Mexico for non-payment of the amount they owe us. This customer has
substantial assets, including telecommunications equipment, existing working
networks and Mexico tax refunds which they have proposed to turn over to us. The
motion filed in the Mexican courts was necessary to formally request that
Globetel become the assigned payee of the tax refund receivable and formally
secure the equipment and to take over the operations of the existing networks.


Item 2. Changes in Securities

Not Applicable

Item 3. Defaults upon Senior Securities

None

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

There were no matters brought to a vote of security holders during the quarter
ended March 31, 2004.

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit No.       Document Description
   31.1           Certification of the Chief Executive Officer, pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002
   31.2           Certification of the Chief Financial Officer, pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002
   32.1           Certification of the Chief Executive Officer  pursuant to
                  18 U.S.C. Section 1350, as adopted pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002
   32.2           Certification of the Chief Financial Officer pursuant to
                  18 U.S.C. Section 1350, as adopted pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002


(b) Form 8-K.

   None


                                       17
<PAGE>



                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

GLOBETEL COMMUNICATIONS CORP.


Registrant
/s/ Timothy Huff
Timothy Huff, Chief Executive Officer

Date: May 17, 2004


/s/ Thomas Y. Jimenez
Thomas Y. Jimenez, Chief Financial Officer

Date: May 17, 2004


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