*Table            of Contents*

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-KSB/A-1**

| x | ANNUAL                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934                For the fiscal year ended December 31,                2003 |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---|------------------------------------------------------------------------------------------------------------------|

**GlobalNet      Corporation**

| Nevada                                                                                       | 000-24962                               | 75-2863583                                       |
|----------------------------------------------------------------------------------------------|-----------------------------------------|--------------------------------------------------|
| (State                or Other Jurisdiction of Incorporation                or Organization) | (Commission                File Number) | (IRS                Employer Identification No.) |

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*Table            of Contents*

**TABLE      OF CONTENTS**

|                                                                                                                                                                 | **Page**   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| PART                I                                                                                                                                                | 4          |
| ITEM                1. DESCRIPTION OF BUSINESS                                                                                                                       | 4          |
| ITEM                2. DESCRIPTION OF PROPERTIES                                                                                                                     | 38         |
| ITEM                3. LEGAL PROCEEDINGS                                                                                                                             | 39         |
| ITEM                4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY                HOLDERS                                                                            | 39         |
|                                                                                                                                                                 |       |
| PART                II                                                                                                                                               | 40         |
| ITEM                5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED                STOCKHOLDER MATTERS                                                    | 40         |
| ITEM                6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                CONDITION AND RESULTS OF OPERATIONS                                          | 50         |
| ITEM                7. FINANCIAL STATEMENTS                                                                                                                          | [ATTACHED] |
| ITEM                8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                ACCOUNTING AND FINANCIAL DISCLOSURE                                           | 105        |
| ITEM                8A CONTROLS AND PROCEDURES                                                                                                                       | 106        |
|                                                                                                                                                                 |       |
| PART                III                                                                                                                                              | 107        |
| ITEM                9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL                PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE                ACT | 107        |
| ITEM                10. EXECUTIVE COMPENSATION                                                                                                                       | 113        |
| ITEM                11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                AND MANAGEMENT                                                                | 118        |
| ITEM                12. CERTAIN RELATIONSHIPS AND RELATED                TRANSACTIONS                                                                                | 119        |
|                                                                                                                                                                 |       |
| PART                IV                                                                                                                                               |       |
| ITEM                13. EXHIBITS                                                                                                                                     | 125        |
| ITEM                14. PRINCIPAL ACCOUNTANT FEES AND                SERVICES                                                                                        | 138        |

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*Table            of Contents*

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*Table          of Contents*

**PART      I**

**ITEM      1. DESCRIPTION OF BUSINESS.**

**Business      History**

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*Table          of Contents*

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*Embedded      Derivatives in Notes Payable and Certain Warrants*

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|   | - | exceptions                under EITF Issue No. 00-19, paragraphs 12 to 32, could not be met                with                respect to the Investors Notes (and more broadly, certain embedded                derivatives in its Series A Preferred Stock and the Other Notes),                and                accordingly, that the embedded derivatives qualified for liability                accounting; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | - | GAAP                generally does not permit the use of “blockage” factors in fair value                measurement.                Accordingly, although the number of common shares into which                the notes `payable may be converted is substantial relative to authorized                and                outstanding shares, no adjustment for such blockage factors is contained                in                the accompanying financial                statements; |
|--|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | - | Derivatives                Implementation Group (“DIG”) Issue A14: “Definition of a Derivative:                Derivative Treatment of Stock Purchase Warrants Issued by a Company                for Its Own Shares of Stock, Where the Subsequent Sale or Transfer                Is                Restricted” is not applicable to embedded conversion features because the                restriction                with respect to the transfer commences when the host instrument is                issued,                not when the conversion feature is exercised. However, while DIG                A14                is not applicable to the embedded derivatives, DIG A14 is applicable                to                the                warrants associated with the Investors                Notes. |
|--|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

*Embedded      Derivatives in Mandatorily Redeemable Preferred Stock *

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*Table          of Contents*

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*Table          of Contents*

*Change      to Recording of Shares to Iraq Consultants- *

*Change      to Recording of Other Consultants’ Stock- *

|                                                            |   |     |     | (in                000's) |   |       |   |     |   |
|-----------------------------------------------------------------|--------|----------|----------|---------------------------|--------|------------|--------|----------|--------|
|                                                            |   |     |     | Data                      |   |       |   |     |   |   |   |   |   |   |   |
|                                                            |   |     |     | Commun-                   |   | Network    |   | Selling  |   | G&A |   | Bad                Debt |   | Depreciation |   |
|                                                            |   | Revenues |     | ications                  |   | Operations |   | Expenses |   | Expenses |   | Expense |   | Amortization |   |
|                                                            |   |     |     |                      |   |       |   |     |   |   |   |   |   |   |   |
| As                originally presented, Year ended Dec.31, 2003 |   | $        | 102,214  |                      | $      | 96,276     |   | $        | 4,009  |   | $ | 815 |   | $ | 2,833 |   | $ | 71 |   | $ | 1,922 |   |
|                                                            |   |     |     |                      |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                         |   |     |     |                      |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                GlobalNet International (a)        |   |     | (101,669 | )                         |   | (95,928    | )      |     | (3,972 | ) |   | (515 | ) |   | (2,634 | ) |   | - |   |   | (1,521 | ) |
| Carrier                Services sales and costs of sales        |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Reverse                merger stepped up amortization           |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | (260 | ) |
| Beneficial                conversion feature interest           |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                            |   |     |     |                      |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                            |   |     |     |                      |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parent                stub period, removed, reverse merger      |   |     | 4,162    |                      |   | 3,810      |   |     | 15     |   |   | 237 |   |   | 1,589 |   |   | 9 |   |   | 178 |   |
| Accretion                of interest on bifurcated instruments  |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Derivatives                expense/(income)                     |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| (Gain)/loss                on extinguishments of debt           |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| (Gain)/loss                on conversions of debt               |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Loss                on equity investee                          |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Write-offs                of property, plant & equipment    |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Write-offs                of intangibles                        |   |     | -        |                      |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Reclassify                agent commissions against revenues    |   |     | (1,422   | )                         |   | (1,047     | )      |     | -      |   |   | (375 | ) |   | - |   |   | - |   |   | - |   |
| Miscellaneous                corrections and reclassifications  |   |     | 17       |                      |   | 208        |   |     | 337    |   |   | 43 |   |   | (485 | ) |   | 11 |   |   | 32 |   |
|                                                            |   |     |     |                      |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                restated, Year ended Dec. 31, 2003            |   | $        | 3,302    |                      | $      | 3,319      |   | $        | 389    |   | $ | 205 |   | $ | 1,303 |   | $ | 91 |   | $ | 351 |   |
|                                                            |   |     |     |                      |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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*Table          of Contents*

|                                                                |   |     |   | (in                000's) |   |                   |   |                   |   |
|---------------------------------------------------------------------|--------|----------|--------|---------------------------|--------|------------------------|--------|------------------------|--------|
|                                                                |   |     |   |                      |   | Loss                on |   | Loss                on |   | Loss                on |   |   |   |   |   |
|                                                                |   | Interest |   | Derivative                |   | Extinguishment         |   | Conversion             |   | Equity |   |   |   | Net                (Loss) |   |
| *Continued*                                                         |   | Expense  |   | Expense                   |   | of                Debt |   | of                Debt |   | Investee |   | Other |   | Income |   |
|                                                                |   |     |   |                      |   |                   |   |                   |   |   |   |   |   |   |   |
| As                originally presented, Year ended Dec.31, 2003 (a) |   | $        | 3,750  |                      | $      | -                      |   | $                      | -      |   | $ | - |   | $ | - |   | $ | - |   | $ | (7,462 | ) |
|                                                                |   |     |   |                      |   |                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                             |   |     |   |                      |   |                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                GlobalNet International (a)            |   | $        | (1,205 | )                         | $      | -                      |   | $                      | -      |   | $ | - |   | $ | - |   | $ | (5 | ) | $ | 4,111 |   |
| Carrier                Services sales and costs of sales            |   |     | -      |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Reverse                merger stepped up amortization               |   |     | -      |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | - |   |   | 260 |   |
| Beneficial                conversion feature interest               |   |     | (2,310 | )                         |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | - |   |   | 2,310 |   |
|                                                                |   |     |   |                      |   |                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                |   |     |   |                      |   |                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parent                stub period, removed, reverse merger          |   |     | 182    |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | 76 |   |   | (1,934 | ) |
| Accretion                of interest on bifurcated instruments      |   |     | 154    |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | - |   |   | (154 | ) |
| Derivatives                expense/(income)                         |   |     | -      |                      |   | 480,877                |   |                   | -      |   |   | - |   |   | - |   |   | - |   |   | (480,877 | ) |
| (Gain)/loss                on extinguishments of debt               |   |     | -      |                      |   | -                      |   |                   | 64,676 |   |   | - |   |   | - |   |   | - |   |   | (64,676 | ) |
| (Gain)/loss                on conversions of debt                   |   |     | -      |                      |   | -                      |   |                   | -      |   |   | 846 |   |   | - |   |   | - |   |   | (846 | ) |
| Loss                on equity investee                              |   |     | -      |                      |   | -                      |   |                   | -      |   |   | - |   |   | 49,414 |   |   | - |   |   | (49,414 | ) |
| Write-offs                of property, plant & equipment        |   |     | -      |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | 149 |   |   | (149 | ) |
| Write-offs                of intangibles                            |   |     | -      |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | 43 |   |   | (43 | ) |
| Reclassify                agent commissions against revenues        |   |     | -      |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Miscellaneous                corrections and reclassifications      |   |     | 136    |                      |   | -                      |   |                   | -      |   |   | - |   |   | - |   |   | (19 | ) |   | (246 | ) |
|                                                                |   |     |   |                      |   |                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                restated, Year ended Dec. 31, 2003                |   | $        | 707    |                      | $      | 480,877                |   | $                      | 64,676 |   | $ | 846 |   | $ | 49,414 |   | $ | 244 |   | $ | (599,120 | ) |
|                                                                     |   |     |   |                      |   |

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| (a) | includes                  corrections to initial recording of expenses between the Company                  and                  GlobalNet International. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Investors      Note 5*

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*Investors      Note 6*

*Investors      Note 7*

*Investors      Note 8*

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*Investors      Note 9*

*Investors      Note 10*

*Investors      Note 11*

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*Investors      Note 12*

*Investors      Note 13*

*Investors      Note 14*

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*“*
*”*

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*Table          of Contents*

*Settlement      of Certain Disputes with Officers *

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*Waiver      of Vesting Requirements*

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*Disposition      of Indebtedness, Sale of Assets, and Future Service      Obligations*

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*Other      Related Party Subsequent Events*

*Consulting      Payments to Former Officer and Director-*

*Unpaid      Wages Settlements-*

*Employment      Relationship with Former Officer-*

*Consulting      Arrangement with Director- *

**Business      Overview**

**Overview**

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*Table          of Contents*

***Emergence      of Internet Telephony.***

***Prepaid      Calling Card Industry.***

**Our      Telephone Service Products**

**Calling      Cards**

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***U.S.      Access.***

***World      Access.***

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***Low      Cost.***

***High      Quality Voice Transmissions.***

***Ease      of Use and Access.***

***One-Click      Online Calling.***

***Reliable/Flexible      Service.***

***Ease      of Payment and Online Account Access.***

***Customer      Support.***

***Product      Description.***

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**Wholesale      Carrier to Carrier Services**

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**Our      International Networks**

***Our      Enhanced Services Platform During 2003.***

***Our      Internet Gateway Network During 2003.***

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*Table          of Contents*

***Our      Leased Lines Network.***

***Our      Third Party Contracts.***

***Utilization      of International’s Network During 2004.***

**Growth      Strategy**

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| o | Promote                our services through direct sales and marketing and, through relationships                with resellers and leading Internet hardware, software and content                companies. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | Strengthen                and enhance our brand recognition by cooperatively marketing our                Internet                telephone communications services with leading companies in other                market                segments. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Sales      and Marketing**

***Internet      Advertising.***

**Customer      Support and Service**

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**Technology**

***Proprietary      Technology.***

***Commercially      Available Licensed Technology.***

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**Future      Products**

**Government      Regulation**

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**Competition**

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| o | price                and rates; |
|---|---------------------------------|

| o | quality                of transmission; |
|---|-----------------------------------------|

| o | product                accessibility and ease of use; |
|---|-------------------------------------------------------|

| o | customer                service; |
|---|----------------------------------|

| o | brand                recognition; |
|---|-----------------------------------|

| o | website                convenience and accessibility; |
|---|-------------------------------------------------------|

| o | targeted                marketing directly to probable users of the                services; |
|---|----------------------------------------------------------------------------------------------|

| o | quality                of search tools; and |
|---|---------------------------------------------|

| o | system                reliability. |
|---|------------------------------------|

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*Table          of Contents*

***FINANCING      PLANS.***

***POSSIBLE      GROWTH THROUGH ACQUISITIONS.***

***EMPLOYEES.***

**ITEM      2. DESCRIPTION OF PROPERTY.**

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**ITEM        3. LEGAL PROCEEDINGS.**

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

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*Table          of Contents*

**PART      II**

**ITEM      5. MARKET FOR COMMON EQUITY AND STOCKHOLDER      MATTERS.**

**Market      Information**

|                        |   |                       |   |                       |   |   |   |   |   |
|-----------------------------|--------|----------------------------|--------|----------------------------|--------|--------|--------|--------|--------|
|                        |   | Fiscal                2004 |   | Fiscal                2003 |   |
|                        |   | High                       |   | Low                        |   | High   |   | Low    |   |
| COMMON                STOCK |   |                       |   |                       |   |   |   |   |   |
|                        |   |                       |   |                       |   |   |   |   |   |
| 1st                Quarter  |   |                       | 0.19   |                       |   | 0.034  |   |   | 0.044  |   |   | 0.009 |   |
| 2nd                Quarter  |   |                       | 0.047  |                       |   | 0.011  |   |   | 0.017  |   |   | 0.0046 |   |
| 3rd                Quarter  |   |                       | 0.016  |                       |   | 0.0051 |   |   | 0.051  |   |   | 0.0024 |   |
| 4th                Quarter  |   |                       | 0.0172 |                       |   | 0.0035 |   |   | 0.24   |   |   | 0.017 |   |

**Description      of Our Capital Stock**

**Common      Stock**

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| o | all                secured liabilities, including any then outstanding secured debt                securities which we may have issued as of such                time, |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | all                unsecured liabilities, including any then outstanding unsecured debt                securities which we may have issued as of such time,                and |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | all                liquidation preferences on any then outstanding preferred                stock. |
|---|----------------------------------------------------------------------------------------------------|

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**Preferred        Stock**

***Correction      of Preferred Stock Issuances and Change to Conversion Option.***

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***Material      Modification to Conversion Option in March 2004.***

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*Table          of Contents*

***April      2004 Conversion Agreement.***

***GEF      Preferred Stock and Common Stock Surrender Agreement.***

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**Existing      Obligations to Issue Common Stock **

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|                                 |   |          |       | **Assumed**                      |   | **Conversion**                     |   | **Conversion**                 |     | **%                of**          |   |
|--------------------------------------|--------|---------------|------------|----------------------------------|--------|------------------------------------|--------|--------------------------------|----------|----------------------------------|--------|
| **Convertible**                      |   | **Principal** |       | **Mkt                Value**     |   | **Price                at**        |   | **Shares                at**   |     | **Outstanding**                  |   |
| **Instrument**                       |   | **Balance**   |       | **Per                Share (b)** |   | **Assumed                Mkt (c)** |   | **Assumed                Mkt** |     | **If                Issued (d)** |   |
|                                 |   |          |       |                             |   |                               |   |                           |     |                             |   |
| **Investors                Notes**   |   |          |       |                             |   |                               |   |                           |     |                             |   |
|                                 |   |          |       |                             |   |                               |   |                           |     |                             |   |
| Investors                Note 2      |   | $             | 21,787     |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 1,452,466,667 |   |   |   |   |
| Investors                Note 3      |   |          | 1,569,390  |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 104,626,000,000 |   |   |   |   |
| Investors                Note 4      |   |          | 3,800,000  |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 253,333,333,333 |   |   |   |   |
| Investors                Note 5      |   |          | 1,250,000  |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 83,333,333,333 |   |   |   |   |
| Investors                Note 6      |   |          | 1,750,000  |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 116,666,666,667 |   |   |   |   |
| Investors                Note 7      |   |          | 1,500,000  |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 100,000,000,000 |   |   |   |   |
| Investors                Note 8      |   |          | 1,200,000  |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 80,000,000,000 |   |   |   |   |
| Investors                Note 9      |   |          | 160,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 10,666,666,667 |   |   |   |   |
| Investors                Note 10     |   |          | 160,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 10,666,666,667 |   |   |   |   |
| Investors                Note 11     |   |          | 250,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 16,666,666,667 |   |   |   |   |
| Investors                Note 12     |   |          | 200,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 13,333,333,333 |   |   |   |   |
| Investors                Note 13     |   |          | 180,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 12,000,000,000 |   |   |   |   |
| Investors                Note 14     |   |          | 160,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 10,666,666,667 |   |   |   |   |
| Investors                Note 15     |   |          | 150,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 10,000,000,000 |   |   |   |   |
| Investors                Note 16     |   |          | 150,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 10,000,000,000 |   |   |   |   |
| Investors                Note 17     |   |          | 120,000    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 8,000,000,000 |   |   |   |   |
| Interest                Note         |   |          | 523,158    |                             |   | 0.0001                             |   |                           | 0.000015 |                             |   | 34,877,200,000 |   |   |   |   |
| Transferred                Debt (a)  |   |          | (3,000,000 | )                                |   | 0.0001                             |   |                           | 0.000015 |                             |   | (200,000,000,000 | ) |   |   |   |
| Total                Investors Notes |   | $             | 10,144,335 |                             |   |                               |   |                           |     |                             |   | 676,289,000,000 |   |   | 98.21 | % |
|                                 |   |          |       |                             |   |                               |   |                           |     |                             |   |   |   |   |   |   |

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| (a) | debt                transferred effective Dec. 31, 2006, see Subsequents                Events. |
|-----|-------------------------------------------------------------------------------------------------|

| (b) | assumes                lowest conversion price allowed on Pink                Sheets. |
|-----|---------------------------------------------------------------------------------------|

| (c) | variable                conversion factor, 15% of market, per underlying                instruments. |
|-----|------------------------------------------------------------------------------------------------------|

| (d) | assumes                no other instruments converted. |
|-----|--------------------------------------------------------|

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*Table          of Contents*

|                                  |   |         |        |           |   | **%                of**      |   |
|---------------------------------------|--------|--------------|-------------|----------------|--------|------------------------------|--------|
| **Convertible**                       |   |         |        | **Conversion** |   | **Outstanding**              |   |
| **Instrument**                        |   | **Warrants** |        | **Price**      |   | **If                Issued** |   |
|                                  |   |         |        |           |   |                         |   |
| **Investors                Warrants** |   |         |        |           |   |                         |   |
|                                  |   |         |        |           |   |                         |   |
| Investors                Notes 1-5    |   |         | 478,112,963 |           |   | 0.0036                       |   |   |   |   |
| Investors                Notes 6-7    |   |         | 2,570,000   |           |   | 0.0009                       |   |   |   |   |
| Investors                Notes 8-17   |   |         | 190,000,000 |           |   | 0.0002                       |   |   |   |   |
|                                  |   |         | 670,682,963 |           |   |                         |   |   | 5.17 | % |

|                      |   |          |    | (a)                          |   | (b)                            |   |                           |   | (c)                          |   |
|---------------------------|--------|---------------|---------|------------------------------|--------|--------------------------------|--------|--------------------------------|--------|------------------------------|--------|
|                      |   |          |    | **Assumed**                  |   | **Conversion**                 |   | **Conversion**                 |   | **%                of**      |   |
| **Convertible**           |   | **Principal** |    | **Mkt                Value** |   | **Price                at**    |   | **Shares                at**   |   | **Outstanding**              |   |
| **Instrument**            |   | **Balance**   |    | **Per                Share** |   | **Assumed                Mkt** |   | **Assumed                Mkt** |   | **If                Issued** |   |
|                      |   |          |    |                         |   |                           |   |                           |   |                         |   |
| Titan                Note |   |          | 875,000 |                         |   | 0.0001                         |   |                           | 0.0001 |                         |   | 8,750,000,000 |   |   | 41.57 | % |

----

| (a) | assumes                lowest conversion price allowed on Pink                Sheets. |
|-----|---------------------------------------------------------------------------------------|

| (b) | conversion                price is equal to market price, per                instrument. |
|-----|------------------------------------------------------------------------------------------|

| (c) | assumes                no other instruments converted. |
|-----|--------------------------------------------------------|

----

*Table            of Contents*

|                                   |   |          |       |         |                                                              | **Assumed**                      |   | **Conversion**                     |   | **Conversion**                 |   | **%                of**          |   |
|----------------------------------------|--------|---------------|------------|--------------|-------------------------------------------------------------------|----------------------------------|--------|------------------------------------|--------|--------------------------------|--------|----------------------------------|--------|
| **Convertible**                        |   | **Principal** |       |         |                                                              | **Mkt                Value**     |   | **Price                at**        |   | **Shares                at**   |   | **Outstanding**                  |   |
| **Instrument**                         |   | **Balance**   |       | **Warrants** |                                                              | **Per                Share (b)** |   | **Assumed                Mkt (c)** |   | **Assumed                Mkt** |   | **If                Issued (d)** |   |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |
| **Investors                Notes**     |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |
| Investors                Note 2        |   | $             | 21,787     |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 1,452,466,667 |   |   |   |   |
| Investors                Note 3        |   |          | 1,569,390  |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 104,626,000,000 |   |   |   |   |
| Investors                Note 4        |   |          | 3,800,000  |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 253,333,333,333 |   |   |   |   |
| Investors                Note 5        |   |          | 1,250,000  |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 83,333,333,333 |   |   |   |   |
| Investors                Note 6        |   |          | 1,750,000  |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 116,666,666,667 |   |   |   |   |
| Investors                Note 7        |   |          | 1,500,000  |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 100,000,000,000 |   |   |   |   |
| Investors                Note 8        |   |          | 1,200,000  |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 80,000,000,000 |   |   |   |   |
| Investors                Note 9        |   |          | 160,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 10,666,666,667 |   |   |   |   |
| Investors                Note 10       |   |          | 160,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 10,666,666,667 |   |   |   |   |
| Investors                Note 11       |   |          | 250,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 16,666,666,667 |   |   |   |   |
| Investors                Note 12       |   |          | 200,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 13,333,333,333 |   |   |   |   |
| Investors                Note 13       |   |          | 180,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 12,000,000,000 |   |   |   |   |
| Investors                Note 14       |   |          | 160,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 10,666,666,667 |   |   |   |   |
| Investors                Note 15       |   |          | 150,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 10,000,000,000 |   |   |   |   |
| Investors                Note 16       |   |          | 150,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 10,000,000,000 |   |   |   |   |
| Investors                Note 17       |   |          | 120,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 8,000,000,000 |   |   |   |   |
| Interest                Note           |   |          | 523,158    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | 34,877,200,000 |   |   |   |   |
| Transferred                Debt (a)    |   |          | (3,000,000 | )            |                                                              |                             |   |                               | 0.0001 |                           |   | 0.000015                         |   |   | (200,000,000,000 | ) |   |   |   |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
| Total                Investors Notes   |   | $             | 10,144,335 |         |                                                              |                             |   |                               |   |                           |   |                             |   |   | 676,289,000,000 |   |   | 98.21 | % |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
| Titan                Note              |   |          | 875,000    |         |                                                              |                             |   |                               | 0.0001 |                           |   | 0.0001                           |   |   | 8,750,000,000 |   |   | 41.57 | % |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
| Total                Note Convertibles |   | $             | 11,019,335 |         |                                                              |                             |   |                               |   |                           |   |                             |   |   | 685,039,000,000 |   |   |   |   |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
| **Investors                Warrants**  |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
| Investors                Notes 1-5     |   |          |       |         |                                                              | 478,112,963                      |   |                               |   |                           |   | 0.0036                           |   |   |   |   |   |   |   |
| Investors                Notes 6-7     |   |          |       |         |                                                              | 2,570,000                        |   |                               |   |                           |   | 0.0009                           |   |   |   |   |   |   |   |
| Investors                Notes 8-17    |   |          |       |         |                                                              | 190,000,000                      |   |                               |   |                           |   | 0.0002                           |   |   |   |   |   |   |   |
|                                   |   |          |       |         |                                                              |                             |   |                               |   |                           |   |                             |   |   |   |   |   |   |   |
|                                   |   |          |       |         |                                                              | 670,682,963                      |   |                               |   |                           |   |                             |   |   |   |   |   | 5.17 | % |
|                                   |   |          |       |         |                                                              |                             |   |                               |
|                                        |   |          |       |         | If                all convertible instruments converted, as above |                             | 98.24  | %                                  |
|                                   |   |          |       |         |                                                              |                             |   |                               |

----

| (a) | debt                transferred effective Dec. 31, 2006, see Subsequents                Events. |
|-----|-------------------------------------------------------------------------------------------------|

| (b) | assumes                lowest conversion price allowed on Pink                Sheets. |
|-----|---------------------------------------------------------------------------------------|

| (c) | variable                conversion factor, 15% of market, per underlying                instruments. |
|-----|------------------------------------------------------------------------------------------------------|

| (d) | assumes                no other instruments converted. |
|-----|--------------------------------------------------------|

----

*Table          of Contents*

**Dividends      and Dividend Policy**

**Recent      Sales of Unregistered Securities**

**Repurchase      of Securities**

----

*Table          of Contents*

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

----

*Table          of Contents*

----

*Table          of Contents*

----

*Table          of Contents*

**Liquidity      and Capital Resources**

----

*Table          of Contents*

----

*Table          of Contents*

***GlobalNet      International Acquisition and Subsequent Bankruptcy.***

----

*Table          of Contents*

***Consideration      Issued in Conjunction with GlobalNet International Acquisition and Funding      of      the Transaction.***

| - | the                Company issued a $1,500,000 principal amount promissory note to Titan                (the                "Titan Note"), of which $550,000 was paid during                2003; |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | the                Company paid $1,500,000 to Titan;                and |
|---|-------------------------------------------------------------------------|

| - | GEF                paid $500,000 to Titan, which was repaid during 4th Quarter 2003                by the                Company to GEF (see below). |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

**Year      Ended December 31, 2003**

***Net      Cash From (Used In) Operating Activities.***

***Net      Cash From (Used In) Investing Activities.***

----

*Table          of Contents*

***Net      Cash Provided By (Used In) Financing Activities.***

***Convertible      Debt Instruments- the Investors Notes.***

----

*Table          of Contents*

***Convertible      Debt Instruments- the Wood Notes.***

----

*Table          of Contents*

***Convertible      Debt Instruments- the GBLK Note.***

***Convertible      Debt Instruments- the Commission Note.***

***Convertible      Debt Instruments- the Mandatorily Redeemable Preferred      Stock.***

----

*Table          of Contents*

***Convertible      Debt Instruments- the Titan Note.***

----

*Table          of Contents*

***Issuances      of Company Common Stock.***

----

*Table          of Contents*

**Year      Ended December 31, 2004 versus Year Ended December 31,      2003**

***Net      Cash From (Used In) Operating Activities.***

----

*Table          of Contents*

***Net      Cash From (Used In) Investing Activities.***

***Net      Cash Provided By Financing Activities.***

***Convertible      Debt Instruments- the Investors Notes.***

----

*Table          of Contents*

***Convertible      Debt Instruments- the Mandatorily Redeemable Preferred Stock Convertible Debt      Instruments.***
*** ***

----

*Table          of Contents*

***Issuances      of Company Common Stock.***

----

*Table          of Contents*

----

*Table          of Contents*

----

*Table          of Contents*

***Increase        in Authorized Shares.***

**Results      of Operations**

**Year      Ended December 31, 2003**

***Revenue.***

***Data      Communications and Telecommunications Costs***
**.**

----

*Table          of Contents*

***Network      Operations Costs.***

***Selling      and Marketing Costs.***

***General      and Administrative Expenses.***

----

*Table          of Contents*

***Asset      Write-offs.***

***Interest      Expense.***

***Gain      on Extinguishments of Debt- the Wood Note.***

----

*Table          of Contents*

***Gain      (Losses) on Extinguishments of Debt- the Investors Notes.***

***Gain      (Losses) on Extinguishments of Debt- the Mandatorily Redeemable Preferred Stock.***

----

*Table          of Contents*

***Gain      (Losses) on Extinguishments of Debt- Other Debt.***

***Loss      on Debt Conversions- the Investors Notes.***

***Loss      on Debt Conversions- the Wood Note .***

----

*Table          of Contents*

***Derivatives      Expense.***

|                                    |   | (in                000's) |    |
|-----------------------------------------|--------|---------------------------|---------|
| **Convertible**                         |   | **Y2003**                 |    |
| **Instrument**                          |   | **Exp.(Inc.)**            |    |
|                                    |   |                      |    |
| Wood                Note                |   | $                         | 91,040  |   |
| Investors                Note 1         |   |                      | 21,350  |   |
| Investors                Note 2         |   |                      | 42,302  |   |
| Investors                Note 3         |   |                      | 150,534 |   |
| Investors                Notes Interest |   |                      | 13,077  |   |
| Commission                Note          |   |                      | 23,457  |   |
| GBLK                Note                |   |                      | 10,114  |   |
| Preferred                Stock          |   |                      | 129,003 |   |
|                                    |   | $                         | 480,877 |   |
|                                    |   |                      |    |   |

----

*Table          of Contents*

***Other      Expense.***

***Loss      on Unconsolidated Subsidiaries.***

***Income      Taxes.***

**Year      Ended December 31, 2004 Versus Year Ended December 31,      2003**

***Revenue.***

----

*Table          of Contents*

***Data      Communications and Telecommunications Costs***
**.**

***Network      Operations Costs.***

----

*Table          of Contents*

***Selling      and Marketing Costs.***

***General      and Administrative Expenses.***

----

*Table          of Contents*

***Asset      Write-offs.***

----

*Table          of Contents*

***Interest      Expense.***

***Gain      on Extinguishments of Debt- the Wood Note.***

----

*Table          of Contents*

***Gain      (Losses) on Extinguishments of Debt- the Investors Notes.***

----

*Table          of Contents*

***Gain      (Losses) on Extinguishments of Debt- the Mandatorily Redeemable Preferred Stock.***

----

*Table          of Contents*

***Gain      (Losses) on Extinguishments of Debt- Other Debt.***

***Gain(Loss)      on Debt Conversions- the Investors Notes.***

----

*Table          of Contents*

***Gain(Loss)      on Debt Conversions- the Other Notes.***

***Gain(Loss)      on Debt Conversions- the Mandatorily Redeemable Preferred Stock.***

***Derivatives      Expense.***

----

*Table          of Contents*

|                                    |   | (in                000's)              |     |
|-----------------------------------------|--------|----------------------------------------|----------|
|                                    |   | Year                Ended December 31, |     |
| **Convertible**                         |   | **2004**                               |     | **2003** |   |
| **Instrument**                          |   | **Exp.(Inc.)**                         |     | **Exp.(Inc.)** |   |
|                                    |   |                                   |     |   |   |
| Wood                Note                |   | $                                      | (72,343  | ) | $ | 91,040 |   |
| Investors                Note 1         |   |                                   | (19,212  | ) |   | 21,350 |   |
| Investors                Note 2         |   |                                   | (41,693  | ) |   | 42,302 |   |
| Investors                Note 3         |   |                                   | (148,197 | ) |   | 150,534 |   |
| Investors                Note 4         |   |                                   | 3,527    |   |   | - |   |
| Investors                Notes Interest |   |                                   | (11,944  | ) |   | 13,077 |   |
| Commission                Note          |   |                                   | (18,826  | ) |   | 23,457 |   |
| GBLK                Note                |   |                                   | (8,110   | ) |   | 10,114 |   |
| Preferred                Stock (a)      |   |                                   | (482,699 | ) |   | 129,003 |   |
|                                    |   | $                                      | (799,497 | ) | $ | 480,877 |   |
|                                    |   |                                   |     |   |   |   |   |

----

| (a) | net                  income effect is offset by losses on extinguishment of                  debt |
|-----|---------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

***Other      Expense.***

***Losses      on Related Party Receivable and Unconsolidated Subsidiaries.***

----

*Table          of Contents*

***Income      Taxes.***

**Off-Balance      Sheet Arrangements**

**Critical      Accounting Policies**

----

*Table          of Contents*

----

*Table          of Contents*

----

*Table          of Contents*

~~ ~~
~~ ~~

----

*Table          of Contents*

----

*Table          of Contents*

**OUTLOOK**

**Overview-      Factors That May Affect Future Results and Financial      Condition**

----

*Table          of Contents*

----

*Table          of Contents*

**Other      Risks Related to Investing in Our Company**

----

*Table          of Contents*

| o | our                failure to repay the principal or interest when                due, |
|---|----------------------------------------------------------------------------------------|

| o | our                failure to issue shares of common stock upon conversion by the                holder, |
|---|----------------------------------------------------------------------------------------------------------|

| o | our                failure to timely file a registration statement or have such registration                statement                declared effective, |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | breach                of any covenant, representation or warranty in the various agreements                we                have with the convertible debenture                holders, |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | the                assignment or appointment of a receiver to control a substantial                part of                our                property or business, |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | the                filing of a money judgment, writ or similar process against our company                in                excess                of $50,000, |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | the                commencement of a bankruptcy, insolvency, reorganization or liquidation                proceeding                against our company, or |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | the                delisting of our common stock. |
|---|---------------------------------------------------|

----

*Table          of Contents*

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*Table          of Contents*

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*Table          of Contents*

----

*Table          of Contents*

----

*Table          of Contents*

| o | the                amount of traffic we are able to sell to our customers, and their                decisions on whether to route traffic over our                network; |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | increased                competitive pricing pressure in the international long distance                market; |
|---|-----------------------------------------------------------------------------------------------------------------|

| o | the                percentage of traffic that we are able to carry over the Internet                rather                than over the more costly traditional public-switched telephone                network; |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | loss                of arbitrage opportunities resulting from declines in international                settlement rates or tariffs; |
|---|-------------------------------------------------------------------------------------------------------------------------------------|

| o | our                ability to negotiate lower termination fees charged by our local                providers                if our pricing deteriorates; |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | our                continuing ability to negotiate competitive costs to interconnect                ournetwork with those of other carriers and Internet backbone                providers; |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | capital                expenditures required to expand or upgrade our                network; |
|---|-----------------------------------------------------------------------------------------------|

| o | changes                in call volume among the countries to which we complete                calls; |
|---|------------------------------------------------------------------------------------------------------|

| o | the                portion of our total traffic that we carry over more attractive routes                could fall, independent of route-specific price, cost or volume                changes; |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | technical                difficulties or failures of our network systems or third party delays                in                expansion or provisioning system                problems; |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | our                ability to manage distribution arrangements and provision of retail                offerings, including card printing, marketing, usage tracking, web-based                offerings and customer service requirements, and resolution of associated                disputes; |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | our                ability to manage our traffic on a constant basis so that routes                are                profitable; and |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

| o | our                ability to collect from our                customers. |
|---|--------------------------------------------------------------------------|

----

*Table          of Contents*

| o | perceptions                that the quality of voice transmitted over the Internet is                low; |
|---|-----------------------------------------------------------------------------------------------------------|

| o | perceptions                that Internet telephony is                unreliable; |
|---|----------------------------------------------------------------------------------|

| o | our                inability to deliver traffic over the Internet with significant cost                advantages; |
|---|--------------------------------------------------------------------------------------------------------------------|

| o | development                of their own capacity on routes served by us;                and |
|---|---------------------------------------------------------------------------------------------|

| o | an                increase in termination costs of international                calls. |
|---|----------------------------------------------------------------------------------------|

----

*Table          of Contents*

***Vendors.***

***Parties      that Maintain Phone and Data Lines and Other Telecommunications      Services.***

***Local      Communications Service Providers.***

***Strategic      Relationships.***

----

*Table          of Contents*

----

*Table          of Contents*

----

*Table          of Contents*

**Risks      Related to the Internet and Internet Telephony Industry**

----

*Table          of Contents*

**ITEM      7. FINANCIAL STATEMENTS.**

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

----

*Table          of Contents*

| 1. | the                application of accounting principles to any specified transaction,                either                completed or proposed, or the type of audit opinion that might be                rendered                on the Company's financial statements, and neither a written report                was                provided to the Company nor oral advice was provided that De Leon                concluded was an important factor considered by the Company in reaching                a                decision as to the accounting, auditing or financial reporting issue;                or |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | any                matter that was either subject of disagreement or event, as defined                in                Item 304(a)(1)(iv)(A) of Regulation S-B and the related instruction                to                Item 304 of Regulation S-B, or a reportable event, as that term is                explained in Item 304(a)(1)(iv)(A) of Regulation                S-B. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      8A. CONTROLS AND PROCEDURES.**

----

*Table          of Contents*

**PART      III**

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

| **Name**                           |   | **Age** |   | **Position                with Company**                                              |
|------------------------------------|--------|---------|--------|---------------------------------------------------------------------------------------|
|                               |   |    |   |                                                                                  |
| Mark                Schaftlein (a) |   | 49      |   | President,                Director, Chairman of the Board of                Directors |

| **(During                2006)**   |
|------------------------------------|
| **Name**                           |   | **Age** |   | **Position                with Company** |
|                               |   |   |   |   |
| Mark                T. Wood (b)    |   | 46 |   | Chief                Executive Officer and Director |
| Thomas                P. Dunn ( c) |   | 51 |   | Chief                Financial Officer and Secretary |
| Mark                Schaftlein (a) |   | 48 |   | Director,                Chairman of the Board of Directors, Head of Audit                Committee |
| Klaus                Scholz (i)    |   | 57 |   | Chief                Operating Officer |

| **(During                2005)**       |
|----------------------------------------|
| **Name**                               |   | **Age** |   | **Position                with Company** |
|                                   |   |   |   |   |
| Mark                T. Wood (b)        |   | 45 |   | Chief                Executive Officer and Director |
| Thomas                P. Dunn ( c)     |   | 50 |   | Chief                Financial Officer and Secretary |
| Mark                Schaftlein (a)     |   | 47 |   | Director,                Chairman of the Board of Directors, Head of Audit                Committee |
| Thomas                G. Seifert (d)   |   | 33 |   | Chief                Financial Officer and Secretary |
| David                Halpern (e)       |   | 65 |   | Director |
| Oscar                de la Guardia (f) |   | 46 |   | Corporate                Legal Counsel and Director |

| **(During                2004)**       |
|----------------------------------------|
| **Name**                               |   | **Age** |   | **Position                with Company** |
|                                   |   |   |   |   |
| Mark                T. Wood (b)        |   | 44 |   | Chief                Executive Officer and Director |
| Thomas                G. Seifert (d)   |   | 32 |   | Chief                Financial Officer and Secretary |
| David                Halpern (e)       |   | 64 |   | Director |
| Oscar                de la Guardia (f) |   | 45 |   | Corporate                Legal Counsel and Director |
| David                Propis (h)        |   | 32 |   | President |
| David                Levy (g)          |   | 59 |   | President |
|                                   |   |   |   |   |

----

| (a) | appointed                Director by then-sole Director of the Company on May 2, 2005. On                January                5, 2007, our Board of Directors (consisting at that date of only                Mr.                Schaftlein) appointed Mr. Schaftlein as President of the                Company. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | resigned                as Chief Executive Officer and Director on August 4,                2006. |
|-----|---------------------------------------------------------------------------------------------------|

| (c) | appointed                Chief Financial Officer on August 16, 2005; resigned as Chief Financial                Officer on January 7, 2007. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| (d) | resigned                as Chief Financial Officer on August 3,                2005. |
|-----|--------------------------------------------------------------------------------------|

| (e) | resigned                as Director on April 11, 2005. |
|-----|--------------------------------------------------------|

| (f) | resigned                as Director on April 11, 2005. |
|-----|--------------------------------------------------------|

| (g) | resigned                as President effective May 3, 2004. |
|-----|-------------------------------------------------------------|

| (h) | resigned                as President effective February 29,                2004. |
|-----|----------------------------------------------------------------------------------|

| (i) | appointed                as Chief Operating Officer on July 6, 2006, resigned on September                12,                2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------|

***Mark      Schaftlein.***

***Mark      T. Wood.***

***Thomas      P. Dunn.***

----

*Table          of Contents*

***Thomas      G. Seifert.***

***David      Halpern.***

***Oscar      de la Guardia.***

***Klaus      Scholz.***

**ROLE      OF THE BOARD**

----

*Table          of Contents*

**2004      through 2006 BOARD MEETINGS **

**BOARD      COMMITTEES**

*Compensation      of the Board of Directors*

|                                  |   |     |   |       |   |      |   |       |   |       |   |                              |   | **Qualified                &** |   |                         |   |                         |   |
|---------------------------------------|--------|----------|--------|------------|--------|-----------|--------|------------|--------|------------|--------|-----------------------------------|--------|------------------------------------|--------|------------------------------|--------|------------------------------|--------|
|                                  |   |     |   |       |   |      |   | **Stock**  |   | **Option** |   | **Non-Equity**                    |   | **Non-Qualified**                  |   |                         |   |                         |   |
| **Name                and Principal** |   |     |   | **Salary** |   | **Bonus** |   | **Awards** |   | **Awards** |   | **Incentive                Plan** |   | **Deferred**                       |   | **All                Other** |   |
| **Position**                          |   | **Year** |   | **($)**    |   | **($)**   |   | **($)**    |   | **($)**    |   | **Comp                ($)**       |   | **Comp                ($)**        |   | **Comp                ($)**  |   | **Total                ($)** |   |
|                                  |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |
| Mark                Schaftlein (a)    |   |     | 2006   |       | $      | 107,000   |   |       |   |       |   | (a)                               |   |                               |   |                         |   |                         |   |   |   |   | $ | 5,619 |   | $ | 112,619 |   |
| Dir.,                Chair.BOD        |   |     | 2005   |       |   | 177,000   |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   | 1,318 |   |   | 178,318 |   |
|                                  |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| David                Halpern (b)      |   |     | 2005   |       |   | 9,500     |   |       |   |       |   | 41,641                            |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   | 51,141 |   |
| Director                              |   |     | 2004   |       |   | 15,003    |   |       |   |       |   | 656                               |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   | 15,659 |   |

**SECTION      16(A) BENEFICIAL OWNERSHIP COMPLIANCE**

----

*Table          of Contents*

| **Year                Ended December 31, 2006** |
|-------------------------------------------------|
|                                            |   |   |   | **#                of Late** |   | **Not                Timely** |   | **Known                Failure** |
| **Name**                                        |   | **Position                with Company** |   | **Reports** |   | **Reported** |   | **To                File Form** |
|                                            |   |   |   |   |   |   |   |   |
| Mark                T. Wood (a)                 |   | Chief                Executive Officer and Director |   | 0 |   | 0 |   | 1 |
| Klaus                Scholz (b)                 |   | Chief                Operating Officer |   | 1 |   | 0 |   | 1 |
|                                            |   |   |   |   |   |   |   |   |

| **Year                Ended December 31, 2005** |
|-------------------------------------------------|
|                                            |   |   |   | **#                of Late** |   | **Not                Timely** |   | **Known                Failure** |
| **Name**                                        |   | **Position                with Company** |   | **Reports** |   | **Reported** |   | **To                File Form** |
|                                            |   |   |   |   |   |   |   |   |
| Mark                T. Wood (a)                 |   | Chief                Executive Officer and Director |   | 0 |   | 0 |   | 2 |
| Mark                Schaftlein (c)              |   | Dir.,                Chairman of the BOD, Head of Audit Committee |   | 0 |   | 0 |   | 3 |
| Thomas                G. Seifert (d)            |   | Chief                Financial Officer and Secretary |   | 0 |   | 0 |   | 3 |
| David                Halpern (e)                |   | Director |   | 0 |   | 0 |   | 3 |
| Oscar                de la Guardia (f)          |   | Corporate                Legal Counsel and Director |   | 0 |   | 0 |   | 3 |
| Ocean                Avenue Advisors, LLC (g)   |   | 10%                Beneficial Owner |   | 0 |   | 0 |   | 2 |
| Growth                Enterprise Fund SA (h)    |   | 10%                Beneficial Owner |   | 1 |   | 5 |   | 0 |
|                                            |   |   |   |   |   |   |   |   |

| **Year                Ended December 31, 2004** |
|-------------------------------------------------|
|                                            |   |   |   | **#                of Late** |   | **Not                Timely** |   | **Known                Failure** |
| **Name**                                        |   | **Position                with Company** |   | **Reports** |   | **Reported** |   | **To                File Form** |
|                                            |   |   |   |   |   |   |   |   |
| Mark                T. Wood (a)                 |   | Chief                Executive Officer and Director |   | 1 |   | 5 |   | 0 |
| David                Halpern (e)                |   | Director |   | 0 |   | 0 |   | 1 |
| David                Propis (i)                 |   | President |   | 0 |   | 0 |   | 3 |
| David                Levy (j)                   |   | President |   | 0 |   | 0 |   | 4 |
| Growth                Enterprise Fund SA (h)    |   | 10%                Beneficial Owner |   | 1 |   | 4 |   | 0 |
| Ulisse                Sensi (k)                 |   | 10%                Beneficial Owner |   | 1 |   | 14 |   | 0 |
| Zahi                Salah (l)                   |   | 10%                Beneficial Owner |   | 1 |   | 5 |   | 0 |
| Shimon                Shimol (m)                |   | 10%                Beneficial Owner |   | 1 |   | 4 |   | 0 |

----

*Table          of Contents*

----

| (a) | Mr.                Wood reported five transactions, all dated May 3, 2004, on a Form                4                accepted for filing by the SEC on May 12, 2004. Mr. Wood was awarded                restricted stock grants on December 30, 2004, and did not file either                a                Form 4 or Form 5 to reflect this transaction. Mr. Wood resigned as                Chief                Executive Officer in 2006 and did not file a report to reflect his                exit                from reporting status. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Mr.                Scholz was appointed as Chief Operating Officer on July 6, 2006,                and                reported the appointment on Form 3 on August 11, 2006. Mr. Scholz                resigned                as Chief Operating Officer in 2006 and did not file a report to reflect                his exit from reporting status. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Mr.                Schaftlein did not report his May 2005 appointment as Director on                Form 3,                and did not report a pecuniary interest in OAA’s stock ownership. Mr.                Schaftlein did not file a Form 5 to report these                transactions. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Mr.                Seifert was awarded restricted stock grants on December 30, 2004,                and did                not file either a Form 4 or Form 5 to reflect this transaction. Mr.                Seifert resigned as Chief Financial Officer in 2005 and did not file                a                report to reflect his exit from reporting                status. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Mr.                Halpern was awarded restricted stock grants on December 30, 2004,                and did                not file either a Form 4 or Form 5 to reflect this transaction. Mr.                Halpern resigned as Director in 2005 and did not file a report to                reflect                his exit from reporting status. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Mr.                De La Guardia was awarded restricted stock grants on December 30,                2004,                and did not file either a Form 4 or Form 5 to reflect this transaction.                Mr. De La Guardia resigned as Director and General Counsel in 2005                and did                not file a report to reflect his exit from reporting                status. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g) | OAA                executed a binding agreement to purchase shares from GEF in 2005.                Although                transfer of the shares, comprising a greater than 10% holding in                the                Company’s common stock, has not occurred through the transfer agent, OAA                is deemed to be the beneficial owner and did not file either a Form                4 or                Form 5 to reflect this transaction. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h) | GEF                reported five transactions, all dated March 31, 2005, on Form 4 filed                on                June 17, 2005. GEF reported four 2004 transactions on Form 4 filed                on                March 11, 2005. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | Mr.                Propis did not file Form 3 upon appointment as an executive officer                in                2004 or Form 4 upon his resignation in 2004. Mr. Propis did not file                a                Form 5. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j) | Mr.                Levy did not file Form 3 upon appointment as an executive officer                in 2004                or Form 4 upon his resignation in 2004. Mr. Levy did not report receipt                of                certain shares from GEF, nor did Mr. Levy file a Form                5. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k) | Mr.                Sensi reported fourteen separate 2004 transactions, the latest dated                March                11, 2004, on Form 4 filed on June 4,                2004. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l) | Mr.                Salah reported five separate 2004 transactions, the latest dated                January                26, 2004, on Form 4 filed on June 9,                2004. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m) | Mr.                Shimol reported five separate 2004 transactions on Form 4 filed on                March                9, 2004. Four of the transactions were dated in January    2004. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

**CODE      OF ETHICS**

**ITEM      10.** **EXECUTIVE      COMPENSATION**

|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   | **Qualified                &** |   |                         |   |                         |   |
|-------------------------------------------------|--------|----------|--------|------------|--------|-----------|--------|------------|--------|------------|--------|-----------------------------------|--------|------------------------------------|--------|------------------------------|--------|------------------------------|--------|
|                                            |   |     |   |       |   |      |   | **Stock**  |   | **Option** |   | **Non-Equity**                    |   | **Non-Qualified**                  |   |                         |   |                         |   |
| **Name                and Principal**           |   |     |   | **Salary** |   | **Bonus** |   | **Awards** |   | **Awards** |   | **Incentive                Plan** |   | **Deferred**                       |   | **All                Other** |   |
| **Position**                                    |   | **Year** |   | **($)**    |   | **($)**   |   | **($)**    |   | **($)**    |   | **Comp                ($)**       |   | **Comp                ($)**        |   | **Comp                ($)**  |   | **Total                ($)** |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |
| Mark                Schaftlein (a)              |   | (a)      |   | (a)        |   | (a)       |   | (a)        |   | (a)        |   | (a)                               |   | (a)                                |   | (a)                          |   | (a)                          |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |
| Mark                T. Wood (b)                 |   |     | 2006   |       | $      | 126,144   |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   | $ | 8,307 |   | $ | 134,450 |   |
| Chief                Executive Officer and Dir. |   |     | 2005   |       |   | 279,076   |   |       |   |       |   | 105,000                           |   |                               |   |                         |   |                         |   |   |   |   |   | 17,035 |   |   | 401,111 |   |
|                                            |   |     | 2004   |       |   | 132,715   |   |       |   |       |   | 8,750                             |   |                               |   |                         |   |                         |   |   |   |   |   | 13,957 |   |   | 155,422 |   |
|                                            |   |     | 2003   |       |   | 138,278   |   |       |   |       |   | 126,584                           |   |                               |   |                         |   |                         |   |   |   |   |   | 11,601 |   |   | 276,463 |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| David                Levy ( c)                  |   |     | 2004   |       |   | 60,000    |   |       |   |       |   | 420,000                           |   |                               |   |                         |   |                         |   |   |   |   |   | 1,751 |   |   | 481,751 |   |
| President                                       |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| David                Propis (d)                 |   |     | 2004   |       |   | 134,615   |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   | 3,829 |   |   | 138,444 |   |
| President                                       |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| Thomas                P. Dunn (e)               |   |     | 2006   |       |   | 214,051   |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   | 12,731 |   |   | 226,782 |   |
| Chief                Financial Officer          |   |     | 2005   |       |   | 60,000    |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   | 4,901 |   |   | 64,901 |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| Thomas                G. Seifert (f)            |   |     | 2005   |       |   | 174,000   |   |       |   |       |   | 78,750                            |   |                               |   |                         |   |                         |   |   |   |   |   | 12,276 |   |   | 265,026 |   |
| Chief                Financial Officer          |   |     | 2004   |       |   | 201,212   |   |       |   |       |   | 6,563                             |   |                               |   |                         |   |                         |   |   |   |   |   | 12,245 |   |   | 220,020 |   |
|                                            |   |     | 2003   |       |   | 122,231   |   |       |   |       |   | 82,833                            |   |                               |   |                         |   |                         |   |   |   |   |   | 10,451 |   |   | 215,515 |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| Oscar                de la Guardia (g)          |   |     | 2005   |       |   | 66,750    |   |       |   |       |   | 283,500                           |   |                               |   |                         |   |                         |   |   |   |   |   | 5,162 |   |   | 355,412 |   |
| Corp.                Legal Counsel and Dir.     |   |     | 2004   |       |   | 151,750   |   |       |   |       |   | 7,875                             |   |                               |   |                         |   |                         |   |   |   |   |   | 8,256 |   |   | 167,880 |   |
|                                            |   |     |   |       |   |      |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| Brant                D. Maltby (h)              |   |     | 2006   |       |   | 120,000   |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   | 6,040 |   |   | 126,040 |   |
| Controller                                      |   |     | 2005   |       |   | 41,667    |   |       |   |       |   |                              |   |                               |   |                         |   |                         |   |   |   |   |   | 1,897 |   |   | 43,564 |   |

----

*Table          of Contents*

----

*Table          of Contents*

----

*Table          of Contents*

----

*Table          of Contents*

**OUTSTANDING      EQUITY AWARDS**

**EMPLOYMENT      AND OTHER AGREEMENTS**

***Mark      T. Wood.***

***Thomas      P. Dunn.***

***Thomas      G. Seifert.***

***Mark      Schaftlein and OAA.***

----

*Table          of Contents*

**INCENTIVE        STOCK PLAN**

**ITEM      11.** **SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

| o | each                person known by us to be the beneficial owner of more than 5% of                our                common stock; |
|---|--------------------------------------------------------------------------------------------------------------------------------------|

| o | each                of our directors; |
|---|---------------------------------------|

| o | each                of our executive officers; and |
|---|----------------------------------------------------|

| o | our                executive officers and directors as a                group. |
|---|--------------------------------------------------------------------------------|

| **Name                and Address of**              |   | **Number                of Shares**   |                           | **Percentage**  |   |
|-----------------------------------------------------|--------|---------------------------------------|--------------------------------|-----------------|--------|
| **Beneficial                Owner**                 |   | **Beneficially                Owned** |                           | **Outstanding** |   |
|                                                |   |                                  |                           |            |   |
| Ocean                Avenue Advisors, LLC           |   |                                  | 1,614,625,000                  |            |   | 13.12 | % |
| 2361                Campus Drive, Suite 101         |   |                                  |                           |            |   |   |   |
| Irvine,                California,92612             |   |                                  |                           |            |   |   |   |
|                                                |   |                                  |                           |            |   |   |   |
| Mark                Schaftlein (a)                  |   |                                  |                           |            |   |   |   |
| President,                Director., Chair. BOD     |   |                                  |       |            |   |        |   |
|                                                |   |                                  |                           |            |   |   |   |
| All                Executive Officers and Directors |   |                                  |                           |            |   |   |   |
| as                a Group (1 person)                |   |                                  | 1,614,625,000                  |            |   | 13.12 | % |
|                                                |   |                                  |                           |            |   |   |   |

----

| (a) | Mr.                Schaftlein’s agreement with OAA conveys to Mr. Schaftlein only a “profits”                interest” in OAA, and accordingly, Mr. Schaftlein disclaims any beneficial                interest in the stock owned by OAA. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

**ITEM      12.** **CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS**

*Due      to Related Parties- *

*Shareholder      Advances-*

*Shareholder      Advances, Wood Note-*

----

*Table          of Contents*

----

*Table          of Contents*

*Severance      Arrangements- *

*Settlement      of Certain Disputes with Officers *

----

*Table          of Contents*

*Waiver      of Vesting Requirements*

*Disposition      of Indebtedness, Sale of Assets, and Future Service      Obligations*

----

*Table          of Contents*

*Other      Related Party Subsequent Events*

*Sublease      Payments-*

*Consulting      Payments to Former Officer and Director-*

*Unpaid      Wages Settlements-*

*Employment      Relationship with Former Officer-*

*Consulting      Arrangement with Director- *

----

*Table          of Contents*

*Mandatorily      Redeemable Preferred Stock Adjustments-*

*Agreement      to Convert Preferred Stock- *

----

*Table          of Contents*

*Preferred      Stock and Common Stock Surrenders-*

*Investment      in Unconsolidated Entity- *

*Other-      *

**ITEM      13. EXHIBITS AND REPORTS ON FORM 8-K.**

| ExhibitNo. | Description                  of Exhibit |
|------------|-----------------------------------------|

|   |   |
|--------|--------|

| 2.1 | Articles                  of Merger merging a wholly owned subsidiary into iDial Networks,                  Inc.                  pursuant to Section 92A.180 of the Revised Statutes Annotated of                  the State                  of Nevada. (1) |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.2 | Stock                Purchase Agreement by and among GlobalNet Systems, Inc, GlobalNet,                Inc.                and The Titan Corporation dated May 20, 2003.                (3) |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.3 | Assignment                and Assumption of Stock Purchase Agreement dated August 21, 2003                between                GlobalNet Systems, Inc. and iDial Networks, Inc.                (3) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 2.4 | Securities                Purchase Agreement dated August 21, 2003 by and between iDial Networks,                Inc., Growth Enterprise Fund, S.A. and GlobalNet Systems, Inc.                (3) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.5 | Asset                Purchase Agreement dated August 7, 2003 by and between iDial Networks,                Inc. and GBLK Communications, LLC.                (3) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1 | Certificate                of Incorporation. (8) |
|-----|--------------------------------------------------|

| 3.2 | Certificate                of Amendment to the Certificate of Incorporation.                (9) |
|-----|-------------------------------------------------------------------------------------------------|

| 3.3 | Certificate                of Amendment to Articles of Incorporation as filed with the Nevada                Secretary of State 3.1 on April 20, 2004 and effective on April 21,                2004.(13) |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.4 | Certificate                of Amendment to Certificate of Designation of Series A Preferred                Stock as                filed with the Nevada Secretary of State on April 30, 2004                (13) |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.5 | Bylaws.                (12) |
|-----|-----------------------------|

| 4.1 | Agreement                dated March 2, 2004 between GlobalNet Corporation, The N.I.R. Group                LLC                and Growth Enterprise Fund S.A.                (12) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | Securities                Purchase Agreement dated August 21, 2003 between iDial Networks,                Inc. and                AJW Partners, LLC, AJW Offshore, Ltd, AJW Qualified Partners, LLC,                New                Millennium Capital Partners II, LLC and AJW Managed Account.                (3) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3 | Secured                Convertible Debenture with AJW Partners, LLC dated August 21, 2003.                (3) |
|-----|---------------------------------------------------------------------------------------------------------------|

| 4.4 | Secured                Convertible Debenture with AJW Offshore Ltd. dated August 21, 2003.                (3) |
|-----|---------------------------------------------------------------------------------------------------------------|

| 4.5 | Secured                Convertible Debenture with AJW Qualified Partners, LLC dated August                21,                2003. (3) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| 4.6 | Secured                Convertible Debenture with New Millennium Capital Partners II, LLC                dated                August 21, 2003. (3) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.7 | Secured                Convertible Debenture with AJW Managed Account dated August 21, 2003.                (3) |
|-----|-----------------------------------------------------------------------------------------------------------------|

| 4.8 | Security                Agreement dated August 21, 2003 between iDial Networks, Inc. and                AJW                Partners, LLC, AJW Offshore, Ltd, AJW Qualified Partners, LLC, New                Millennium Capital Partners II, LLC and AJW Managed Account.                (3) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.9 | Intellectual                Property Security Agreement dated August 21, 2003 between iDial Networks,                Inc. and AJW Partners, LLC, AJW Offshore, Ltd, AJW Qualified Partners,                LLC, New Millennium Capital Partners II, LLC and AJW Managed Account.                (3) |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.10 | Registration                Rights Agreement dated August 21, 2003 between iDial Networks, Inc.                and                AJW Partners, LLC, AJW Offshore, Ltd, AJW Qualified Partners, LLC,                New                Millennium Capital Partners II, LLC and AJW Managed Account.                (3) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.11 | Common                Stock Purchase Warrant with AJW Offshore, Ltd. dated February 6,                2003.                (10) |
|------|---------------------------------------------------------------------------------------------------------------------------------|

| 4.12 | Common                Stock Purchase Warrant with AJW Partners, LLC. dated February 6,                2003.                (10) |
|------|---------------------------------------------------------------------------------------------------------------------------------|

| 4.13 | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC dated February                6,                2003. (10) |
|------|------------------------------------------------------------------------------------------------------------------------------------------|

| 4.14 | Convertible                Debenture with AJW Offshore, Ltd. dated February 6, 2003.                (10) |
|------|----------------------------------------------------------------------------------------------------------|

| 4.15 | Convertible                Debenture with AJW Partners, LLC. dated February 6, 2003.                (10) |
|------|----------------------------------------------------------------------------------------------------------|

| 4.16 | Convertible                Debenture with AJW Qualified Partners, LLC. dated February 6, 2003.                (10) |
|------|--------------------------------------------------------------------------------------------------------------------|

| 4.17 | Securities                Purchase Agreement for the $750,000 financing entered on February                6, 2003.                (10) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------|

| 4.18 | Security                Agreement dated February 6, 2003.                (10) |
|------|-------------------------------------------------------------------------------|

| 4.19 | Intellectual                Property Security Agreement dated February 6, 2003.                (10) |
|------|-----------------------------------------------------------------------------------------------------|

| 4.20 | Registration                Rights Agreement dated February 6, 2003.                (10) |
|------|------------------------------------------------------------------------------------------|

| 4.21 | Guaranty                and Pledge Agreement by Mark T. Wood dated February 6, 2003.                (10) |
|------|----------------------------------------------------------------------------------------------------------|

| 4.22 | Note                Purchase Agreement entered between iDial Networks, Inc. and Mark                Wood                dated March 31, 2000. (10) |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.23 | Convertible                Promissory Note with Mark Wood dated March 31, 2000.                (10) |
|------|-----------------------------------------------------------------------------------------------------|

| 4.24 | Amendment                No. 1 to the Note Purchase Agreement dated February 4, 2003.                (10) |
|------|-----------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.25 | Convertible                Debenture with AJW Offshore, Ltd. dated February 21, 2003.                (11) |
|------|-----------------------------------------------------------------------------------------------------------|

| 4.26 | Convertible                Debenture with AJW Partners, LLC. dated February 21, 2003.                (11) |
|------|-----------------------------------------------------------------------------------------------------------|

| 4.27 | Convertible                Debenture with AJW Qualified Partners, LLC. dated February 21, 2003.                (11) |
|------|---------------------------------------------------------------------------------------------------------------------|

| 4.28 | Common                Stock Purchase Warrant with AJW Offshore, Ltd. dated February 21,                2003.                (11) |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 4.29 | Common                Stock Purchase Warrant with AJW Partners, LLC. dated February 21,                2003.                (11) |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 4.30 | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC. dated February                21, 2003. (11) |
|------|-----------------------------------------------------------------------------------------------------------------------------|

| 4.31 | Convertible                Debenture with AJW Offshore, Ltd. dated February 21, 2003.                (11) |
|------|-----------------------------------------------------------------------------------------------------------|

| 4.32 | Convertible                Debenture with AJW Partners, LLC. dated February 21, 2003.                (11) |
|------|-----------------------------------------------------------------------------------------------------------|

| 4.33 | Convertible                Debenture with AJW Qualified Partners, LLC. dated February 21, 2003.                (11) |
|------|---------------------------------------------------------------------------------------------------------------------|

| 4.34 | Common                Stock Purchase Warrant with AJW Offshore, Ltd. dated February 21,                2003.                (11) |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 4.35 | Common                Stock Purchase Warrant with AJW Partners, LLC. dated February 21,                2003.                (11) |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 4.36 | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC. dated February                21, 2003. (11) |
|------|-----------------------------------------------------------------------------------------------------------------------------|

| 4.37 | Securities                Purchase Agreement for the $3,000,000 financing entered on May 9,                2003.                (11) |
|------|--------------------------------------------------------------------------------------------------------------------------------------|

| 4.38 | Convertible                Debenture with AJW Qualified Partners, LLC. dated May 9, 2003.                (11) |
|------|---------------------------------------------------------------------------------------------------------------|

| 4.39 | Convertible                Debenture with AJW Offshore, Ltd. dated May 9, 2003.                (11) |
|------|-----------------------------------------------------------------------------------------------------|

| 4.40 | Convertible                Debenture with AJW Partners, LLC. dated May 9, 2003.                (11) |
|------|-----------------------------------------------------------------------------------------------------|

| 4.41 | Convertible                Debenture with New Millennium Capital Partners II, LLC dated May                9, 2003.                (11) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.42 | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC. dated May                9,                2003. (11) |
|------|--------------------------------------------------------------------------------------------------------------------------------------|

| 4.43 | Common                Stock Purchase Warrant with AJW Offshore, Ltd. dated May 9, 2003.                (11) |
|------|-------------------------------------------------------------------------------------------------------------|

| 4.44 | Common                Stock Purchase Warrant with AJW Partners, LLC dated May 9, 2003.                (11) |
|------|------------------------------------------------------------------------------------------------------------|

| 4.45 | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC                dated                May 9, 2003. (11) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.46 | Registration                Rights Agreement dated May 9, 2003.                (11) |
|------|-------------------------------------------------------------------------------------|

| 4.47 | Intellectual                Property Security Agreement dated May 9, 2003.                (11) |
|------|------------------------------------------------------------------------------------------------|

| 4.48 | Security                Agreement dated May 9, 2003. (11) |
|------|-----------------------------------------------------------|

| 4.49 | Convertible                Debenture with AJW Qualified Partners, LLC dated June 23, 2003.                (11) |
|------|----------------------------------------------------------------------------------------------------------------|

| 4.50 | Convertible                Debenture with AJW Offshore, Ltd. dated June 23, 2003.                (11) |
|------|-------------------------------------------------------------------------------------------------------|

| 4.51 | Convertible                Debenture with AJW Partners, LLC. dated June 23, 2003.                (11) |
|------|-------------------------------------------------------------------------------------------------------|

| 4.52 | Convertible                Debenture with New Millennium Capital Partners II, LLC dated June                23,                2003. (11) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------|

| 4.53 | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC. dated June                23,                2003. (11) |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| 4.54 | Common                Stock Purchase Warrant with AJW Offshore, Ltd. dated June 23, 2003.                (11) |
|------|---------------------------------------------------------------------------------------------------------------|

| 4.55 | Common                Stock Purchase Warrant with AJW Partners, LLC dated June 23, 2003.                (11) |
|------|--------------------------------------------------------------------------------------------------------------|

| 4.56 | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC                dated                June 23, 2003. (11) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.57 | Letter                Agreement dated June 23, 2003 entered between the Company and AJW                Partners, LLC, New Millennium Capital Partners II, LLC, AJW Offshore,                Ltd., and AJW Qualified Partners, LLC.                (11) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.58 | Letter                Agreement dated June 27, 2003 entered between the Company and AJW                Partners, LLC, New Millennium Capital Partners II, LLC, AJW Offshore,                Ltd., and AJW Qualified Partners, LLC.                (11) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.59 | Letter                Agreement dated October 20, 2004 entered by and between Growth Enterprise                Fund S.A. and GlobalNet Corporation.                (14) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.60 | Callable                Secured Convertible Note in the name of New Millennium Capital Partners                II, LLC dated October 27, 2004.                (14) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.61 | Callable                Secured Convertible Note in the name of AJW Qualified Partners, LLC                dated                October 27, 2004. (14) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.62 | Callable                Secured Convertible Note in the name of AJW Offshore, Ltd. dated                October                27, 2004. (14) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| 4.63 | Callable                Secured Convertible Note in the name of AJW Partners, LLC dated October                27, 2004. (14) |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| 4.64 | Stock                Purchase Warrant in the name of New Millennium Capital Partners II,                LLC                dated October 27, 2004. (14) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.65 | Stock                Purchase Warrant in the name of AJW Qualified Partners, LLC dated                October                27, 2004. (14) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------|

| 4.66 | Stock                Purchase Warrant in the name of AJW Offshore, Ltd. dated October                27, 2004.                (14) |
|------|------------------------------------------------------------------------------------------------------------------------------------|

| 4.67 | Stock                Purchase Warrant in the name of AJW Partners, LLC dated October 27,                2004.                (14) |
|------|-----------------------------------------------------------------------------------------------------------------------------------|

| 4.68 | Letter                Agreement dated October 27, 2004 between GlobalNet Corporation and                New                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,                AJW                Offshore, Ltd. and AJW Partners, LLC.                (14) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.68 | Securities                Purchase Agreement dated April 29, 2005 by and among the Company                and New                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,                AJW                Offshore, Ltd. and AJW Partners, LLC.                (15) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.69 | Form                of Callable Secured Convertible dated April 29, 2005.                (15) |
|------|-----------------------------------------------------------------------------------------------|

| 4.70 | Form                of Stock Purchase Warrant dated April 29, 2005.                (15) |
|------|-----------------------------------------------------------------------------------------|

| 4.71 | Registration                Rights Agreement dated April 29, 2005 by and among the Company and                New                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,                AJW                Offshore, Ltd. and AJW Partners, LLC.                (15) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.72 | Intellectual                Property Security Agreement dated April 29, 2005 by and among the                Company                and New Millennium Capital Partners II, LLC, AJW Qualified Partners,                LLC,                AJW Offshore, Ltd. and AJW Partners, LLC.                (15) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.73 | Security                Agreement dated April 29, 2005 by and among the Company and New Millennium                Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore,                Ltd.                and AJW Partners, LLC. (15) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.74 | Letter                Agreement dated April 29, 2005 by and among the Company and New Millennium                Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore,                Ltd.                and AJW Partners, LLC. (15) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.75 | Form                of Callable Secured Convertible dated May 16, 2005.                (16) |
|------|---------------------------------------------------------------------------------------------|

| 4.76 | Form                of Stock Purchase Warrant dated May 16, 2005.                (16) |
|------|---------------------------------------------------------------------------------------|

| 4.77 | Securities                Purchase Agreement dated June 21, 2005 by and among the Company and                New                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,                AJW                Offshore, Ltd. and AJW Partners, LLC.                (17) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.78 | Form                of Callable Secured Convertible dated June 21, 2005.                (17) |
|------|----------------------------------------------------------------------------------------------|

| 4.79 | Form                of Stock Purchase Warrant dated June 21, 2005.                (17) |
|------|----------------------------------------------------------------------------------------|

| 4.80 | Registration                Rights Agreement dated June 21, 2005 by and among the Company and                New                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,                AJW                Offshore, Ltd. and AJW Partners, LLC.                (17) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.81 | Intellectual                Property Security Agreement dated June 21, 2005 by and among the                Company                and New Millennium Capital Partners II, LLC, AJW Qualified Partners,                LLC,                AJW Offshore, Ltd. and AJW Partners, LLC.                (17) |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.82 | Security                Agreement dated June 21, 2005 by and among the Company and New Millennium                Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore,                Ltd.                and AJW Partners, LLC. (17) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.83 | Settlement                Agreement entered by and between the Company and Qwest Communications                Corp. dated June 23, 2005. (17) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.84 | Form                of Callable Secured Convertible dated September 1, 2005.                (18) |
|------|--------------------------------------------------------------------------------------------------|

| 4.85 | Form                of Stock Purchase Warrant dated September 1, 2005.                (18) |
|------|--------------------------------------------------------------------------------------------|

| 4.86 | Form                of Callable Secured Convertible Note dated October 24, 2005.                (19) |
|------|------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.87 | Form                of Stock Purchase Warrant dated October 24, 2005.                (19) |
|------|-------------------------------------------------------------------------------------------|

| 4.88 | Securities                Purchase Agreement dated December 12, 2005 by and among the Company                and                New Millennium Capital Partners II, LLC, AJW Qualified Partners,                LLC, AJW                Offshore, Ltd. and AJW Partners, LLC.                (20) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.89 | Form                of Callable Secured Convertible dated December 12, 2005.                (20) |
|------|--------------------------------------------------------------------------------------------------|

| 4.90 | Form                of Stock Purchase Warrant dated December 12, 2005.                (20) |
|------|--------------------------------------------------------------------------------------------|

| 4.91 | Registration                Rights Agreement dated December 12, 2005 by and among the Company                and New                Millennium Capital Partners II, LLC, AJW Qualified, LLC, AJW Offshore,                Ltd. and AJW Partners, LLC. (20) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.92 | Letter                Agreement dated December 15, 2005.                (20) |
|------|------------------------------------------------------------------------------|

| 4.93 | Securities                Purchase Agreement dated May 25, 2006 by and among the Company and                New                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,                AJW                Offshore, Ltd. and AJW Partners, LLC.                (21) |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.94 | Form                of Callable Secured Convertible Note.                (21) |
|------|-------------------------------------------------------------------------------|

| 4.95 | Form                of Stock Purchase Warrant. (21) |
|------|-----------------------------------------------------|

| 4.96 | Form                of Registration Rights Agreement by and among the Company and New                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,                AJW                Offshore, Ltd. and AJW Partners, LLC.                (21) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.97 | Form                of Callable Secured Convertible Note dated June 28, 2006.                (22) |
|------|---------------------------------------------------------------------------------------------------|

| 4.98 | Form                of Callable Secured Convertible Note dated August 4, 2006.                (23) |
|------|----------------------------------------------------------------------------------------------------|

| 4.99 | Form                of Callable Secured Convertible Note dated September 8, 2006.                (24) |
|------|-------------------------------------------------------------------------------------------------------|

| 4.100 | Callable                Secured Convertible Note dated October 5, 2006.                (25) |
|-------|---------------------------------------------------------------------------------------------|

| 4.101 | Securities                Purchase Agreement dated November 2, 2006 by and between the Company                and                AJW Offshore, Ltd.. (26) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.102 | Callable                Secured Convertible Note, dated November 2, 2006.                (26) |
|-------|-----------------------------------------------------------------------------------------------|

| 4.103 | Stock                Purchase Warrant dated November 2, 2006.                (26) |
|-------|-----------------------------------------------------------------------------------|

| 4.104 | Side                Letter Agreement entered by and between the Company and the Investors,                dated November 2, 2006. (26) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.105 | Securities                Purchase Agreement dated December 1, 2006 by and between the Company                and                AJW Offshore, Ltd.. (27) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.106 | Callable                Secured Convertible Note, dated December 1, 2006.                (27) |
|-------|-----------------------------------------------------------------------------------------------|

| 4.107 | Stock                Purchase Warrant dated December 1, 2006.                (27) |
|-------|-----------------------------------------------------------------------------------|

| 4.108 | Securities                Purchase Agreement dated January 5, 2007 by and between the Company                and                AJW Offshore, Ltd.. (28) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.109 | Callable                Secured Convertible Note, dated January 5, 2007.                (28) |
|-------|----------------------------------------------------------------------------------------------|

| 4.110 | Stock                Purchase Warrant dated January 5, 2007.                (28) |
|-------|----------------------------------------------------------------------------------|

| 4.111 | Securities                Purchase Agreement dated February 12, 2007 by and between the Company                and                AJW Offshore, Ltd.. (29) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.112 | Callable                Secured Convertible Note, dated February 12, 2007.                (29) |
|-------|------------------------------------------------------------------------------------------------|

| 4.113 | Stock                Purchase Warrant dated February 12, 2007.                (29) |
|-------|------------------------------------------------------------------------------------|

| 4.114 | Securities                Purchase Agreement dated March 9, 2007 by and between the Company                and AJW                Offshore, Ltd.. (30) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.115 | Callable                Secured Convertible Note, dated March 9, 2007 Callable Secured Convertible                Note, dated March 9, 2007. (30) |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.116 | Stock                Purchase Warrant dated March 9, 2007.                (30) |
|-------|--------------------------------------------------------------------------------|

| 4.117 | Securities                Purchase Agreement dated April 20, 2007 by and between the Company                and AJW                Offshore, Ltd.. (31) |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.118 | Callable                Secured Convertible Note, dated April 20, 2007.                (31) |
|-------|---------------------------------------------------------------------------------------------|

| 4.119 | Stock                Purchase Warrant dated April 20, 2007.                (31) |
|-------|---------------------------------------------------------------------------------|

| 4.120 | Securities                Purchase Agreement dated May 11, 2007 by and between the Company                and AJW                Offshore, Ltd. incorporated by reference to the Company's Form 8-K                Current                Report filed on May 16, 2007. (32) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.121 | Callable                Secured Convertible Note, dated May 11, 2007.                (32) |
|-------|-------------------------------------------------------------------------------------------|

| 4.122 | Stock                Purchase Warrant dated May 11, 2007.                (32) |
|-------|-------------------------------------------------------------------------------|

----

*Table          of Contents*

| 4.123 | Securities                Purchase Agreement, dated June 12, 2007 by and between the Company,                AJW                Partners, LLC, AJW Master Fund, Ltd., and New Millennium Capital                Partners                II, LLC. (33) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.124 | Callable                Secured Convertible Note, dated June 12, 2007, issued to AJW Partners,                LLC. (33) |
|-------|-------------------------------------------------------------------------------------------------------------------------|

| 4.125 | Callable                Secured Convertible Note, dated June 12, 2007, issued to AJW Master                Fund,                Ltd. (33) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------|

| 4.126 | Callable                Secured Convertible Note, dated June 12, 2007, issued to New Millennium                Capital Partners II, LLC. (33) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| 4.127 | Stock                Purchase Warrant dated, June 12, 2007, issued to AJW Partners, LLC.                (33) |
|-------|--------------------------------------------------------------------------------------------------------------|

| 4.128 | Stock                Purchase Warrant, dated June 12, 2007, issued to AJW Master Fund,                Ltd..                (33) |
|-------|---------------------------------------------------------------------------------------------------------------------------------|

| 4.129 | Stock                Purchase Warrant, dated June 12, 2007, issued to New Millennium Capital                Partners II, LLC. (33) |
|-------|------------------------------------------------------------------------------------------------------------------------------------|

| 4.130 | Securities                Purchase Agreement, dated August 6, 2007, by and between the Company,                AJW                Partners, LLC, AJW Master Fund, Ltd., and New Millennium Capital                Partners                II, LLC (34) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.131 | Callable                Secured Convertible Note, dated August 6, 2007, issued to AJW Partners,                LLC (34) |
|-------|-------------------------------------------------------------------------------------------------------------------------|

| 4.132 | Callable                Secured Convertible Note, dated August 6, 2007, issued to AJW Master                Fund,                Ltd. (34) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------|

| 4.133 | Callable                Secured Convertible Note, dated August 6, 2007, issued to New Millennium                Capital Partners II, LLC (34) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| 4.134 | Stock                Purchase Warrant, dated August 6, 2007, issued to AJW Partners, LLC                (34) |
|-------|--------------------------------------------------------------------------------------------------------------|

| 4.134 | Stock                Purchase Warrant, dated August 6, 2007, issued to AJW Master Fund,                Ltd.                (34) |
|-------|---------------------------------------------------------------------------------------------------------------------------------|

| 4.135 | Stock                Purchase Warrant, dated August 6, 2007, issued to New Millennium                Capital                Partners II, LLC (34) |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 10.1 | Settlement                Agreement and Release of Claims by and among The Titan Corporation,                GlobalNet Systems, Inc., GlobalNet Corporation and Growth Enterprise                Fund,                S.A. dated December 29, 2002. (2) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Amended                and Restated Convertible Note issued to The Titan Corporation dated                December 29, 2003. (2) |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Registration                Rights Agreement by and between The Titan Corporation and GlobalNet                Corporation dated December 29, 2002.                (2) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Lock-Up                Agreement by and among The Titan Corporation, GlobalNet Corporation                and                Growth Enterprise Fund, S.A. dated December 29, 2002.                (2) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | Assignment                and Assumption Agreement dated August 21, 2003 by and between The                Titan                Corporation and Growth Enterprise Fund, S.A.                (3) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Reimbursement                Agreement dated August 21, 2003 by and between The Titan Corporation                and                iDial Networks, Inc. (3) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Promissory                Note dated July 24, 2003 payable by GlobalNet, Inc. to The Titan                Corporation. (3) |
|------|----------------------------------------------------------------------------------------------------------------------------|

| 10.8 | Promissory                Note dated August 21, 2003 payable by iDial Networks, Inc. to The                Titan                Corporation. (3) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9 | Pledge                Agreement dated August 21, 2003 by and between The Titan Corporation                and                iDial Networks, Inc. (3) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | Promissory                Note dated August 21, 2003 payable by iDial Networks, Inc. to Growth                Enterprises Fund, S.A. (3) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | Employment                Agreement dated February 1, 2003, by and between iDial Networks,                Inc. and                Thomas G. Seifert. (12) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Settlement                Agreement and Mutual Release dated April 12, 2004, by and between                GlobalNet Corporation, Callflow Limited and John Molnar.                (12) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | Employment                Agreement dated August 16, 2005 by and between GlobalNet Corporation                and                Thomas Dunn. (35) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14 | Settlement                and Release Agreement dated September 14, 2005 by and between MCI                Network                Services, Inc. (f/k/a MCI Worldcom Network Services, Inc.), GlobalNet                International, LLC and GlobalNet Corporation incorporated by reference                to                the Company's Form 8-K Current Report filed on September 20, 2005.                (36) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| 10.15 | Settlement                Agreement and Release dated December 29, 2005 entered by and between                GlobalNet Corporation and Mark Wood.                (37) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16 | Settlement                Agreement and Release dated December 30, 2005 entered by and between                GlobalNet Corporation and Thomas Seifert.                (37) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17 | Amendment                to Agreement between the Company and Thomas Dunn.                (38) |
|-------|------------------------------------------------------------------------------------------------|

| 10.18 | Independent                Contractor Agreement by and between the Company and L.J. Alexander.                (39) |
|-------|--------------------------------------------------------------------------------------------------------------------|

| 10.19 | Asset                Purchase Agreement, dated as of January 5, 2007, by and between the                Company and Dibz International, Inc..                (40) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20 | Operating                Agreement, dated as of January 5, 2007, by and between the Company                and                Dibz International, Inc.. (40) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.1 | Code                of Ethics and Business Conduct of Officers, Directors and Employees.                (4) |
|------|-------------------------------------------------------------------------------------------------------------|

| 16.1 | Letter                from Lieberman, dated April 5, 2002.                (5) |
|------|-------------------------------------------------------------------------------|

| 16.2 | Letter                from Lieberman, dated March 29, 2002.                (6) |
|------|--------------------------------------------------------------------------------|

| 16.3 | Letter                from Lieberman, dated March 15, 2002.                (7) |
|------|--------------------------------------------------------------------------------|

| 16.4 | Letter                from Ehrhardt Keefe Steiner & Hottman PC incorporated by reference to                the Company's Form 8-K Current Report filed on August 2, 2005.                (41) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 21.1 | List                of Subsidiaries. |
|------|--------------------------------------|

| 31.1 | Certification                of Mark Schaftlein, principal executive officer and principal financial                officer, pursuant to Section 302 of the Sarbanes-Oxley Act of                2002. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification                by Mark Schaftlein, principal executive officer and principal financial                officer, pursuant to Section 906 of the Sarbanes-Oxley Act of                2002. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 99.1 | Press                release issued on or about July 1, 2004.                (42) |
|------|-----------------------------------------------------------------------------------|

| 99.2 | Press                Release dated May 16, 2005. (43) |
|------|-------------------------------------------------------|

| 99.3 | Press                Release dated June 2005.                (44) |
|------|-------------------------------------------------------------------|

| 99.4 | Press                Release dated August 16, 2005. (45) |
|------|----------------------------------------------------------|

| 99.5 | Press                Release dated February 16, 2006.                (46) |
|------|---------------------------------------------------------------------------|

----

*Table          of Contents*

----

| (1) | Incorporated                by reference to the Company's Form 8-K filed on December 29,                2003. |
|-----|---------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated                by reference to the Company's Form 8-K filed on January 2,                2004. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated                by reference to the Company's Form 8-K filed on September 5,                2003. |
|-----|---------------------------------------------------------------------------------------------------------------|

| (4) | Incorporated                by reference to the Company's Form 10-KSB for the fiscal year ended                December 31, 2002, filed on March 31,                2003. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated                by reference to the Company's Form 8-K/A filed on April 5,                2002. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (6) | Incorporated                by reference to the Company's Form 8-K/A filed on April 4,                2002. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (7) | Incorporated                by reference to the Company's Form 8-K filed on April 3, 2002. |
|-----|--------------------------------------------------------------------------------------------|

| (8) | Incorporated                by reference to the Company's Form 10-SB on April 13,                2000. |
|-----|--------------------------------------------------------------------------------------------------------|

| (9) | Incorporated                by reference to the Company's Schedule 14C filed on September 19,                2003. |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (10) | Incorporated                by reference to the Company's Form SB-2 filed on February 12,                2003. |
|------|----------------------------------------------------------------------------------------------------------------|

| (11) | Incorporated                by reference to the Company's Form SB-2 filed on July 2,                2003. |
|------|-----------------------------------------------------------------------------------------------------------|

| (12) | Incorporated                by reference to the Company's Form 10-KSB filed on April 19,                2004. |
|------|---------------------------------------------------------------------------------------------------------------|

| (13) | Incorporated                by reference to the Company's Form 10-QSB filed on May 20,                2004. |
|------|-------------------------------------------------------------------------------------------------------------|

| (14) | Incorporated                by reference to the Company's Form 8-K Current Report filed on November                2,                2004. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (15) | Incorporated                by reference to the Company's Form 8-K Current Report filed on May                4,                2005. |
|------|---------------------------------------------------------------------------------------------------------------------------------------|

| (16) | Incorporated                by reference to the Company's Form 8-K Current Report filed on May                19,                2005. |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| (17) | Incorporated                by reference to the Company's Form 8-K Current Report filed on June                29,                2005. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------|

| (18) | Incorporated                by reference to the Company's Form 8-K Current Report filed on September                9, 2005. |
|------|------------------------------------------------------------------------------------------------------------------------------|

| (19) | Incorporated                by reference to the Company's Form 8-K Current Report filed on October                28,                2005. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (20) | Incorporated                by reference to the Company's Form 8-K Current Report filed on December                16, 2005. |
|------|------------------------------------------------------------------------------------------------------------------------------|

| (21) | Incorporated                by reference to the Company's Form 8-K Current Report filed on June                1,                2006. |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| (22) | Incorporated                by reference to the Company's Form 8-K Current Report filed on July                6,                2006. |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| (23) | Incorporated                by reference to the Company's Form 8-K Current Report filed on August                9,                2006. |
|------|------------------------------------------------------------------------------------------------------------------------------------------|

| (24) | Incorporated                by reference to the Company's Form 8-K Current Report filed on September                12, 2006. |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| (25) | Incorporated                by reference to the Company's Form 8-K Current Report filed on October                10,                2006. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (26) | Incorporated                by reference to the Company's Form 8-K Current Report filed on November                6,                2006. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (27) | Iincorporated                by reference to the Company's Form 8-K Current Report filed on December                5,                2006. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------|

| (28) | Incorporated                by reference to the Company's Form 8-K Current Report filed on January                10,                2007. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (29) | Incorporated                by reference to the Company's Form 8-K Current Report filed on February                16, 2007. |
|------|------------------------------------------------------------------------------------------------------------------------------|

| (30) | Incorporated                by reference to the Company's Form 8-K Current Report filed on March                15,                2007. |
|------|------------------------------------------------------------------------------------------------------------------------------------------|

| (31) | Incorporated                by reference to the Company's Form 8-K Current Report filed on April                25,                2007. |
|------|------------------------------------------------------------------------------------------------------------------------------------------|

| (32) | Incorporated                by reference to the Company's Form 8-K Current Report filed on May                16,                2007. |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| (33) | Incorporated                by reference to the Company's Form 8-K Current Report filed on June                15,                2007. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------|

| (34) | Incorporated                by reference to the Company’s Form 8-K Current Report filed on August 13,                2007 |
|------|---------------------------------------------------------------------------------------------------------------------------------|

| (35) | Incorporated                by reference to the Company's Form 8-K Current Report filed on August                16,                2005. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------|

| (36) | Incorporated                by reference to the Company's Form 8-K Current Report filed on September                20, 2005. |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| (37) | Incorporated                by reference to the Company's Form 8-K Current Report filed on January                5,                2006. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------|

| (38) | Incorporated                by reference to the Company's Form 8-K Current Report filed on July                6,                2006. |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| (39) | Incorporated                by reference to the Company's Form 8-K Current Report filed on September                15, 2006. |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| (40) | Incorporated                by reference to the Company's Form 8-K Current Report filed on January                10,                2007. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (41) | Incorporated                by reference to the Company's Form 8-K Current Report filed on August                2,                2005. |
|------|------------------------------------------------------------------------------------------------------------------------------------------|

| (42) | Incorporated                by reference to the Company's Form 8-K Current Report filed on July                15,                2004. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------|

| (43) | Incorporated                by reference to the Company's Form 8-K Current Report filed on May                19,                2005. |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| (44) | Incorporated                by reference to the Company's Form 8-K Current Report filed on June                29,                2005. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------|

| (45) | Incorporated                by reference to the Company's Form 8-K Current Report filed on August                24,                2005. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------|

| (46) | Incorporated                by reference to the Company's Form 8-K Current Report filed on February                17, 2006. |
|------|------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

**ITEM      14. PRINCIPAL ACCOUNTANT FEES AND      SERVICES.**

|                              |   | Summary                By All Firms     |   |
|-----------------------------------|--------|-----------------------------------------|--------|
|                              |   | Years                Ended December 31, |   |
| **Fee                Category**   |   | **2006                (a)**             |   | **2005                (a)** |   | **2004** |   | **2003** |   |
|                              |   |                                    |   |   |   |   |   |   |   |
| Audit                Fees         |   | $                                       | -      |   | $ | - |   | $ | 619,034 |   | $ | 125,854 |   |
| Audit-Related                Fees |   |                                    | -      |   |   | - |   |   | 26,209 |   |   | 58,922 |   |
| Tax                Fees           |   |                                    | -      |   |   | - |   |   | 19,900 |   |   | 16,520 |   |
| All                Other Fees     |   |                                    | -      |   |   | - |   |   | - |   |   | - |   |
| Total                Fees         |   | $                                       | -      |   | $ | - |   | $ | 665,143 |   | $ | 201,296 |   |
|                              |   |                                    |   |   |   |   |   |   |   |   |   |   |   |

|                              |   | Ehrhardt                Keefe Steiner & Hottman PC Only |   |
|-----------------------------------|--------|-------------------------------------------------------------|--------|
|                              |   | Years                Ended December 31,                     |   |
| **Fee                Category**   |   | **2006**                                                    |   | **2005** |   | **2004** |   | **2003** |   |
|                              |   |                                                        |   |   |   |   |   |   |   |
| Audit                Fees         |   | $                                                           | -      |   | $ | - |   | $ | 108,106 |   | $ | 125,854 |   |
| Audit-Related                Fees |   |                                                        | -      |   |   | - |   |   | 26,209 |   |   | 58,922 |   |
| Tax                Fees           |   |                                                        | -      |   |   | - |   |   | 19,900 |   |   | 16,520 |   |
| All                Other Fees     |   |                                                        | -      |   |   | - |   |   | - |   |   | - |   |
| Total                Fees         |   | $                                                           | -      |   | $ | - |   | $ | 154,215 |   | $ | 201,296 |   |
|                              |   |                                                        |   |   |   |   |   |   |   |   |   |   |   |

|                              |   | De                Leon and Company, P.A. Only |   |
|-----------------------------------|--------|-----------------------------------------------|--------|
|                              |   | Years                Ended December 31,       |   |
| **Fee                Category**   |   | **2006**                                      |   | **2005** |   | **2004                (b)** |   | **2003** |   |
|                              |   |                                          |   |   |   |   |   |   |   |
| Audit                Fees         |   | $                                             | -      |   | $ | - |   | $ | 510,928 |   | $ | - |   |
| Audit-Related                Fees |   |                                          | -      |   |   | - |   |   | - |   |   | - |   |
| Tax                Fees           |   |                                          | -      |   |   | - |   |   | - |   |   | - |   |
| All                Other Fees     |   |                                          | -      |   |   | - |   |   | - |   |   | - |   |
| Total                Fees         |   | $                                             | -      |   | $ | - |   | $ | 510,928 |   | $ | - |   |
|                              |   |                                          |   |   |   |   |   |   |   |   |   |   |   |

----

| (a) | no                payments have been made for years                indicated; |
|-----|-------------------------------------------------------------------------------|

| (b) | billed                work encompassed work necessary to audit years ended December 31,                2004 and                2003, including review of amended quarterly reports, all filed on                this                Report on Form 10-KSB. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

***Audit      Fees.***

***Audit-Related      Fees.***

***Tax      Fees.***

***All      Other Fees.***

**POLICY      ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES      OF      INDEPENDENT AUDITORS**

----

*Table            of Contents*

**SIGNATURES**

----

----

----

*Table          of Contents*

**INDEX      TO FINANCIAL STATEMENTS**

| Report                  of Independent Registered Public Accounting                  Firm | F-2 |
|-------------------------------------------------------------------------------------------|-----|
| Consolidated                  Balance Sheets                                              | F-3 |
| Consolidated                  Statements of Operations                                    | F-4 |
| Consolidated                  Statements of Cash Flows                                    | F-5 |
| Statement                  of Stockholders’ Deficit                                 | F-7 |
| Notes                  to Consolidated Financial                  Statements              | F-8 |

----

*Table          of Contents*

REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM

----

*Table            of Contents*

Consolidated          Balance          Sheets

|                                                                                                                                                                 |   |                              |     |                              |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|-----------------------------------|--------|
| **ASSETS**                                                                                                                                                           |   |                              |     |                              |   |
|                                                                                                                                                                 |   |                              |     |                              |   |
|                                                                                                                                                                 |   | (in                  000's)       |     |
|                                                                                                                                                                 |   | **December                  31,** |     | **December                  31,** |   |
|                                                                                                                                                                 |   | **2004**                          |     | **2003**                          |   |
| Current                  assets:                                                                                                                                     |   |                              |     |                              |   |
| Cash                  and cash equivalents                                                                                                                           |   | $                                 | 221      |                              | $      | 43 |   |
| Accounts                  receivable, less allowance of $2 and $0, respectively                                                                                      |   |                              | 97       |                              |   | 27 |   |
| Prepaid                  expenses and other current assets                                                                                                           |   |                              | 35       |                              |   | 26 |   |
| Titan                  refinance fee                                                                                                                                 |   |                              | -        |                              |   | 250 |   |
| Total                  current assets                                                                                                                                |   |                              | 353      |                              |   | 346 |   |
|                                                                                                                                                                 |   |                              |     |                              |   |   |   |
| Property                  and equipment, net                                                                                                                         |   |                              | 622      |                              |   | 488 |   |
| Loan                  costs                                                                                                                                          |   |                              | 161      |                              |   | 116 |   |
| Receivable                  from related entity                                                                                                                      |   |                              | -        |                              |   | 21,000 |   |
| Total                  assets                                                                                                                                        |   | $                                 | 1,136    |                              | $      | 21,950 |   |
|                                                                                                                                                                 |   |                              |     |                              |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ DEFICIT**                                                                                                     |   |                              |     |                              |   |   |   |
|                                                                                                                                                                 |   |                              |     |                              |   |   |   |
| Current                  liabilities:                                                                                                                                |   |                              |     |                              |   |   |   |
| Accounts                  payable                                                                                                                                    |   | $                                 | 769      |                              | $      | 950 |   |
| Accrued                  liabilities                                                                                                                                 |   |                              | 99       |                              |   | 86 |   |
| Due                  to related parties                                                                                                                              |   |                              | 38       |                              |   | 161 |   |
| Payable                  to GlobalNet International, L.L.C., net                                                                                                     |   |                              | 2,128    |                              |   | 2,051 |   |
| Notes                  payable                                                                                                                                       |   |                              | 170      |                              |   | 27 |   |
| Accrued                  interest payable                                                                                                                            |   |                              | 476      |                              |   | 152 |   |
| Acquisition                  note payable                                                                                                                            |   |                              | 875      |                              |   | 1,200 |   |
| Mandatorily                  redeemable preferred stock                                                                                                              |   |                              | -        |                              |   | 260 |   |
| Derivative                  obligations                                                                                                                              |   |                              | 16,855   |                              |   | 565,547 |   |
| Liability                  to issue stock to GlobalNet International L.L.C.                  consultants                                                             |   |                              | -        |                              |   | 21,000 |   |
| Total                  current liabilities                                                                                                                           |   |                              | 21,410   |                              |   | 591,434 |   |
|                                                                                                                                                                 |   |                              |     |                              |   |   |   |
| Commitments                  and contingencies                                                                                                                       |   |                              |     |                              |   |   |   |
|                                                                                                                                                                 |   |                              |     |                              |   |   |   |
| Stockholders’                  deficit:                                                                                                                        |   |                              |     |                              |   |   |   |
| Common                  stock, $.005 par value, 20 billion and 1 billion shares authorized;                  4,502,070,532 and 595,159,276 outstanding, respectively |   |                              | 22,510   |                              |   | 2,976 |   |
| Common                  stock to be issued                                                                                                                           |   |                              | -        |                              |   | 23,726 |   |
| Additional                  paid-in-capital                                                                                                                          |   |                              | 123,188  |                              |   | 24,794 |   |
| Accumulated                  deficit                                                                                                                                 |   |                              | (165,972 | )                                 |   | (620,980 | ) |
| Total                  stockholders’ deficit                                                                                                                   |   |                              | (20,274  | )                                 |   | (569,484 | ) |
| Total                  liabilities and stockholders' deficit                                                                                                         |   | $                                 | 1,136    |                              | $      | 21,950 |   |
|                                                                                                                                                                 |   |                              |     |                              |   |   |   |
|                                                                                                                                                                 |   |                              |     |                              |   |   |   |

----

*Table            of Contents*

Consolidated        Statements of Operations

|                                                                      |   | (in                  000's, except share and per share data) |           |
|---------------------------------------------------------------------------|--------|--------------------------------------------------------------|----------------|
|                                                                      |   | **Years                  Ended December 31,**                |           |
|                                                                      |   | **2004**                                                     |           | **2003** |   |
|                                                                      |   |                                                         |           |   |   |
| Revenue                                                                   |   | $                                                            | 81             |   | $ | 3,302 |   |
|                                                                      |   |                                                         |           |   |   |   |   |
| Operating                  expenses                                       |   |                                                         |           |   |   |   |   |
| Data                  communications and telecommunications               |   |                                                         | 92             |   |   | 3,319 |   |
| Network                  operations                                       |   |                                                         | 160            |   |   | 389 |   |
| Selling                  and marketing                                    |   |                                                         | 100            |   |   | 205 |   |
| General                  and administrative expenses                      |   |                                                         | 1,829          |   |   | 1,303 |   |
| Write-offs                  of property, plant and equipment              |   |                                                         | 256            |   |   | 149 |   |
| Intangibles                  write-off                                    |   |                                                         | -              |   |   | 43 |   |
| Bad                  debt expense                                         |   |                                                         | 21             |   |   | 91 |   |
| Depreciation                  and amortization                            |   |                                                         | 187            |   |   | 351 |   |
|                                                                      |   |                                                         |           |   |   |   |   |
| Operating                  loss                                           |   |                                                         | (2,564         | ) |   | (2,548 | ) |
|                                                                      |   |                                                         |           |   |   |   |   |
| Other                  Income (loss)                                      |   |                                                         |           |   |   |   |   |
| Interest                  expense, net                                    |   |                                                         | (1,690         | ) |   | (707 | ) |
| Derivatives                  (expense) income                             |   |                                                         | 799,497        |   |   | (480,877 | ) |
| Loss                  on extinguishments of debt                          |   |                                                         | (315,818       | ) |   | (64,676 | ) |
| Loss                  on conversions of debt                              |   |                                                         | (2,903         | ) |   | (846 | ) |
| Losses                on investment in and receivable from related entity |   |                                                         | (21,514        | ) |   | (49,414 | ) |
| Other                  income (expense), net                              |   |                                                         | -              |   |   | (52 | ) |
| Total                  other income (loss)                                |   |                                                         | 457,572        |   |   | (596,572 | ) |
|                                                                      |   |                                                         |           |   |   |   |   |
| Net                  (loss) income                                        |   | $                                                            | 455,008        |   | $ | (599,120 | ) |
|                                                                           |   |                                                         |           |   |   |   |   |
| Basic                  weighted average common shares outstanding         |   |                                                         | 4,054,850,184  |   |   | 318,464,746 |   |
| Basic                  income (loss) per share                            |   |                                                         | 0.11           |   |   | (1.88 | ) |
|                                                                      |   |                                                         |           |   |   |   |   |
| Diluted                  weighted average common shares outstanding       |   |                                                         | 17,844,508,921 |   |   | 318,464,746 |   |
| Diluted                  income (loss) per share                          |   |                                                         | 0.03           |   |   | (1.88 | ) |
|                                                                      |   |                                                         |           |   |   |   |   |
|                                                                      |   |                                                         |           |   |   |   |   |

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*Table            of Contents*

Consolidated          Statements of Cash Flows

|                                                                                                                                 |   | **(in                  000's)**                       |     |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|----------|
|                                                                                                                                 |   | **For                  the Years Ended December 31,** |     |
|                                                                                                                                 |   | **2004**                                              |     | **2003** |   |
|                                                                                                                                 |   |                                                  |     |   |   |
| Cash                  flows from operating activities:                                                                               |   |                                                  |     |   |   |
| Net                  income (loss)                                                                                                   |   | $                                                     | 455,008  |   | $ | (599,120 | ) |
| Adjustments                  to reconcile net income (loss) to net cash provided by (used                  in) operating activities: |   |                                                  |     |
| Depreciation                  and amortization                                                                                       |   |                                                  | 187      |   |   | 351 |   |
| Write-off                  of property, equipment and intangibles                                                                    |   |                                                  | 256      |   |   | 192 |   |
| Losses                  on investment and receivable from related entity                                                             |   |                                                  | 21,427   |   |   | 49,414 |   |
| Stock                  issued to consultants and employees                                                                           |   |                                                  | 818      |   |   | 382 |   |
| Derivative                  obligation (income) expense                                                                              |   |                                                  | (799,497 | ) |   | 480,877 |   |
| Loss                  on extinguishment of derivative instruments                                                                    |   |                                                  | 315,818  |   |   | 64,676 |   |
| Loss                  on conversions into common stock                                                                               |   |                                                  | 2,903    |   |   | 846 |   |
| Amortization                  of financing costs                                                                                     |   |                                                  | 424      |   |   | 135 |   |
| Change                  in assets and liabilities:                                                                                   |   |                                                  |     |   |   |   |   |
| Accounts                  receivable                                                                                                 |   |                                                  | (70      | ) |   | 118 |   |
| Titan                  prepaid costs                                                                                                 |   |                                                  | -        |   |   | (250 | ) |
| Accrued                  interest preferred stock                                                                                    |   |                                                  | 447      |   |   | 358 |   |
| Prepaid                  expenses and other current assets                                                                           |   |                                                  | (9       | ) |   | 83 |   |
| Accounts                  payable                                                                                                    |   |                                                  | (181     | ) |   | (148 | ) |
| Payable                  to GlobalNet International, net                                                                             |   |                                                  | 77       |   |   | 2,051 |   |
| Due                  to related parties                                                                                              |   |                                                  | (123     | ) |   | 11 |   |
| Deferred                  revenue                                                                                                    |   |                                                  | -        |   |   | (192 | ) |
| Accrued                  interest payable                                                                                            |   |                                                  | 324      |   |   | (82 | ) |
| Other                  changes in derivative obligations                                                                             |   |                                                  | 53       |   |   | 480 |   |
| Accrued                  Liabilities                                                                                                 |   |                                                  | 13       |   |   | (333 | ) |
| Other                                                                                                                                |   |                                                  | (73      | ) |   | (30 | ) |
| Net                  cash used by operating activities                                                                               |   |                                                  | (2,198   | ) |   | (181 | ) |
|                                                                                                                                 |   |                                                  |     |   |   |   |   |
| Cash                  flows from investing activities:                                                                               |   |                                                  |     |   |   |   |   |
| Acquisition                  of property and equipment, net                                                                          |   |                                                  | (500     | ) |   | (15 | ) |
| Proceeds                  from sales of property and equipment,                  net                                                 |   |                                                  | -        |   |   | 90 |   |
| Costs                  and transaction expenses paid in connection with                  acquisition                                 |   |                                                  | -        |   |   | (2,273 | ) |
| Net                  cash used in investing activities                                                                               |   |                                                  | (500     | ) |   | (2,198 | ) |
|                                                                                                                                 |   |                                                  |     |   |   |   |   |
| Cash                  flows from financing activities:                                                                               |   |                                                  |     |   |   |   |   |
| Proceeds                  from issuance of debt                                                                                      |   |                                                  | 3,800    |   |   | 3,000 |   |
| Redemptions                  of preferred stock and interest payments                                                                |   |                                                  | (346     | ) |   | - |   |
| Note                  and capital lease principal payments                                                                           |   |                                                  | (330     | ) |   | (349 | ) |
| Financing                  costs                                                                                                     |   |                                                  | (248     | ) |   | (251 | ) |
| Net                  cash provided by financing activities                                                                           |   |                                                  | 2,876    |   |   | 2,400 |   |
|                                                                                                                                 |   |                                                  |     |   |   |   |   |
| Net                  increase in cash and cash equivalents                                                                           |   |                                                  | 178      |   |   | 21 |   |
| Cash                  and cash equivalents at beginning of period                                                                    |   |                                                  | 43       |   |   | 22 |   |
| Cash                  and cash equivalents at end of period                                                                          |   | $                                                     | 221      |   | $ | 43 |   |
|                                                                                                                                 |   |                                                  |     |   |   |   |   |
|                                                                                                                                 |   |                                                  |     |   |   |   |   |

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*Table            of Contents*

|                                                                                                           |   | **(in                  000's)**                   |   |
|----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                                                                           |   | **For                  the Years Ended Dec. 31,** |   |
|                                                                                                           |   | **2004**                                          |   | **2003** |   |
|                                                                                                           |   |                                              |   |   |   |
| Supplemental                  disclosure of noncash financing                                                  |   |                                              |   |   |   |
| and                  investing activity:                                                                       |   |                                              |   |   |   |
| Conversion                  of convertible notes into equity                                                   |   | $                                                 | 8,288  |   | $ | - |   |
| Conversion                  of investor notes into common stock                                                |   |                                              | 2,726  |   |   | 1,160 |   |
| Conversion                  of shareholder notes into common stock                                             |   |                                              | 20,675 |   |   | 1,251 |   |
| Mandatorily                  redeemable preferred stock issued in business acquisition                         |   |                                              | -      |   |   | 15,600 |   |
| Stock                  issued in connection with business acquisition                                          |   |                                              | -      |   |   | 500 |   |
| Common                  stock to be issued in connection with business acquisition                             |   |                                              | -      |   |   | 23,726 |   |
| Stock                  issued for net assets acquired in connection with business                  acquisition |   |                                              | -      |   |   | 73 |   |
| Conversion                  of mandatorily redeemable preferred stock                                          |   |                                              | 13,214 |   |   | - |   |
| Surrender                  of mandatorily redeemable preferred stock                                           |   |                                              | 27,055 |   |   | - |   |
|                                                                                                           |   |                                              |   |   |   |   |   |
| Supplemental                  disclosure cash flow information:                                                |   |                                              |   |   |   |   |   |
| Cash                  paid:                                                                                    |   |                                              |   |   |   |   |   |
| Interest                                                                                                       |   |                                              | 440    |   |   | 20 |   |
| Income                  taxes                                                                                  |   | $                                                 | -      |   | $ | - |   |
|                                                                                                           |   |                                              |   |   |   |   |   |
|                                                                                                           |   |                                              |   |   |   |   |   |

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*Table            of Contents*

Statement        of Stockholders’ Deficit

|                                                                                                           |   | (in                  000's)   |       |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------------|------------|
|                                                                                                           |   | Common                  Stock |       | Acquisition                  Shares Issuable |   | AdditionalPaid-in |   | Accumulated |   | Total                  Stockholders’ |   |
|                                                                                                           |   | Shares                        |       | Amount |   | Shares |   | Amount |   | Capital |   | Deficit |   | Deficit |   |
|                                                                                                           |   |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31, 2002                                                                  |   |                          | 106,442    |   | $ | 532 |   |   | - |   | $ | - |   | $ | 18,060 |   | $ | (21,860 | ) | $ | (3,268 | ) |
|                                                                                                           |   |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                  of stock                                                                         |   |                          | (1,250     | ) |   | (6 | ) |   | - |   |   | - |   |   | 4 |   |   | - |   |   | (2 | ) |
| Conversion                  of convertible note to investors and others                                        |   |                          | 169,684    |   |   | 848 |   |   | - |   |   | - |   |   | 312 |   |   | - |   |   | 1,160 |   |
| Conversion                  of convertible note to stockholders                                                |   |                          | 96,588     |   |   | 482 |   |   | - |   |   | - |   |   | 769 |   |   | - |   |   | 1,251 |   |
| Issuances                  of stock to employees and consultants                                               |   |                          | 98,527     |   |   | 494 |   |   | - |   |   | - |   |   | (112 | ) |   | - |   |   | 382 |   |
| Issuances                  pursuant to acquisition                                                             |   |                          | 25,168     |   |   | 126 |   |   | - |   |   | - |   |   | (53 | ) |   | - |   |   | 73 |   |
| Shares                  issuable pursuant to investment in equity method investee                              |   |                          | -          |   |   | - |   |   | 4,845,232 |   |   | 24,226 |   |   | 5,814 |   |   | - |   |   | 30,040 |   |
| Shares                  issued pursuant to equity method acquisition                                           |   |                          | 100,000    |   |   | 500 |   |   | (100,000 | ) |   | (500 | ) |   | - |   |   | - |   |   | - |   |
| Net                  loss for the period                                                                       |   |                          | -          |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (599,120 | ) |   | (599,120 | ) |
|                                                                                                           |   |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31, 2003                                                                  |   |                          | 595,159    |   | $ | 2,976 |   |   | 4,745,232 |   | $ | 23,726 |   | $ | 24,794 |   | $ | (620,980 | ) | $ | (569,484 | ) |
|                                                                                                           |   |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of convertible note to investors and others                                        |   |                          | 390,091    |   |   | 1,950 |   |   | - |   |   | - |   |   | 9,064 |   |   | - |   | $ | 11,014 |   |
| Conversion                  of convertible note to stockholders                                                |   |                          | 658,736    |   |   | 3,294 |   |   | - |   |   | - |   |   | 17,381 |   |   | - |   |   | 20,675 |   |
| Conversion                  of mandatorily redeemable pref. Stock                                              |   |                          | 1,171,875  |   |   | 5,859 |   |   | - |   |   | - |   |   | 7,355 |   |   | - |   |   | 13,214 |   |
| Issuances                  of stock to employees and consultants                                               |   |                          | 440,978    |   |   | 2,205 |   |   | - |   |   | - |   |   | 20,039 |   |   | - |   |   | 22,244 |   |
| Shares                  issued pursuant to equity method acquisition obligation                                |   |                          | 4,745,232  |   |   | 23,726 |   |   | (4,745,232 | ) |   | (23,726 | ) |   | - |   |   | - |   |   | - |   |
| Surrender                  of common stock by majority shareholder                                             |   |                          | (3,500,000 | ) |   | (17,500 | ) |   | - |   |   | - |   |   | 17,500 |   |   | - |   |   | - |   |
| Surrender                  of mandatorily .redeemable preferred stock by majority                  Shareholder |   |                          | -          |   |   | - |   |   | - |   |   | - |   |   | 27,055 |   |   | - |   |   | 27,055 |   |
| Net                  income for the period                                                                     |   |                          | -          |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 455,008 |   |   | 455,008 |   |
|                                                                                                           |   |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31, 2004                                                                  |   |                          | 4,502,071  |   | $ | 22,510 |   |   | - |   | $ | - |   | $ | 123,188 |   | $ | (165,972 | ) | $ | (20,274 | ) |
|                                                                                                           |   |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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*Table            of Contents*

Notes          to Consolidated Financial Statements

**NOTE        (1) Organization and Description of Business**

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*Table            of Contents*

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*Table            of Contents*

**NOTE        (2) Summary of Significant Accounting Policies**

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**NOTE        (3) RESTATEMENTS**

*Embedded        Derivatives in Notes Payable and Certain Warrants*

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|   | - | exceptions                  under EITF Issue No. 00-19, paragraphs 12 to 32, could not be met                  with                  respect to the Investors Notes (and more broadly, certain embedded                  derivatives in its Series A Preferred Stock and the Other Notes),                  and                  accordingly, that the embedded derivatives qualified for liability                  accounting; |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | GAAP                  generally does not permit the use of “blockage” factors in fair value                  measurement. Accordingly, although the number of common shares                  into which                  the notes payable may be converted is substantial relative to authorized                  and outstanding shares, no adjustment for such blockage factors                  is                  contained in the accompanying financial                  statements; |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | - | Derivatives                  Implementation Group (“DIG”) Issue A14: “Definition of a Derivative:                  Derivative Treatment of Stock Purchase Warrants Issued by a Company                  for                  Its Own Shares of Stock, Where the Subsequent Sale or Transfer                  Is                  Restricted” is not applicable to embedded conversion features because the                  restriction with respect to the transfer commences when the host                  instrument is issued, not when the conversion feature is exercised.                  However, while DIG A14 is not applicable to the embedded derivatives,                  DIG                  A14 is applicable to the warrants associated with the Investors                  Notes.                  Accordingly, the Company has concluded that the excess should be                  immediately expensed at their                  inception. |
|--|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Change        to Extinguishment of Debt and Other Notes*

*Embedded        Derivatives in Mandatorily Redeemable Preferred Stock *

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*Table            of Contents*

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*Change        to Recording of Shares to Iraq Consultants: *

*Change        to Recording of Other Consultants Stock: *

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*Table            of Contents*

| (in                  000's)                                                                              |   |     |     | Data     |   |       |   |     |   |     |   |                      |   |         |   |
|----------------------------------------------------------------------------------------------------------|--------|----------|----------|----------|--------|------------|--------|----------|--------|----------|--------|---------------------------|--------|--------------|--------|
|                                                                                                     |   |     |     | Commun-  |   | Network    |   | Selling  |   | G&A  |   | Bad                  Debt |   | Depreciation |   |
|                                                                                                     |   | Revenues |     | ications |   | Operations |   | Expenses |   | Expenses |   | Expense                   |   | Amortization |   |
|                                                                                                     |   |     |     |     |   |       |   |     |   |     |   |                      |   |         |   |
| As                  originally                  presented, Year ended December                  31, 2003 |   | $        | 102,214  |     | $      | 96,276     |   | $        | 4,009  |     | $      | 815                       |   | $            | 2,833  |   | $ | 71 |   | $ | 1,922 |   |
| Remove:                                                                                                  |   |     |     |     |   |       |   |     |   |     |   |                      |   |         |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)                                               |   |     | (101,669 | )        |   | (95,928    | )      |     | (3,972 | )        |   | (515                      | )      |         | (2,634 | ) |   | - |   |   | (1,521 | ) |
| Carrier                  Services sales and costs of sales                                               |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| Reverse                  merger stepped up amortization                                                  |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | (260 | ) |
| Beneficial                  conversion feature interest                                                  |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
|                                                                                                     |   |     |     |     |   |       |   |     |   |     |   |                      |   |         |   |   |   |   |   |   |   |   |
| Add:                                                                                                     |   |     |     |     |   |       |   |     |   |     |   |                      |   |         |   |   |   |   |   |   |   |   |
| Parent                  stub period, removed, reverse merger                                             |   |     | 4,162    |     |   | 3,810      |   |     | 15     |     |   | 237                       |   |         | 1,589  |   |   | 9 |   |   | 178 |   |
| Accretion                  of interest on bifurcated instruments                                         |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| Derivatives                  expense/(income)                                                            |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| (Gain)/loss                  on extinguishments of debt                                                  |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| (Gain)/loss                  on conversions of debt                                                      |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| Loss                  on equity investee                                                                 |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| Write-offs                  of property, plant & equipment                                           |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| Write-offs                  of intangibles                                                               |   |     | -        |     |   | -          |   |     | -      |     |   | -                         |   |         | -      |   |   | - |   |   | - |   |
| Reclassified                  agent commissions against revenues                                         |   |     | (1,422   | )        |   | (1,047     | )      |     | -      |     |   | (375                      | )      |         | -      |   |   | - |   |   | - |   |
| Miscellaneous                  corrections and reclassifications                                         |   |     | 17       |     |   | 208        |   |     | 337    |     |   | 43                        |   |         | (485   | ) |   | 11 |   |   | 32 |   |
|                                                                                                     |   |     |     |     |   |       |   |     |   |     |   |                      |   |         |   |   |   |   |   |   |   |   |
| As                  restated, Year ended December 31, 2003                                               |   | $        | 3,302    |     | $      | 3,319      |   | $        | 389    |     | $      | 205                       |   | $            | 1,303  |   | $ | 91 |   | $ | 351 |   |

| (in                  000's)                                                                                  |   |     |   |       |   | Loss                  on |   | Loss                  on |   | Loss                  on |   |   |   |                        |   |
|--------------------------------------------------------------------------------------------------------------|--------|----------|--------|------------|--------|--------------------------|--------|--------------------------|--------|--------------------------|--------|--------|--------|-----------------------------|--------|
|                                                                                                         |   | Interest |   | Derivative |   | Extinguishment           |   | Conversion               |   | Equity                   |   | Other  |   | Net                  (Loss) |   |
| *Continued*                                                                                                  |   | Expense  |   | Expense    |   | of                  Debt |   | of                  Debt |   | Investee                 |   | (b)    |   | Income                      |   |
|                                                                                                         |   |     |   |       |   |                     |   |                     |   |                     |   |   |   |                        |   |
| As                  originally presented, Year ended December                  31,                  2003 (a) |   | $        | 3,750  |       | $      | -                        |   | $                        | -      |                     | $      | -      |   | $                           | -      |   | $ | - |   | $ | (7,462 | ) |
|                                                                                                         |   |     |   |       |   |                     |   |                     |   |                     |   |   |   |                        |   |   |   |   |   |   |   |   |
| Remove:                                                                                                      |   |     |   |       |   |                     |   |                     |   |                     |   |   |   |                        |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)                                                   |   | $        | (1,205 | )          | $      | -                        |   | $                        | -      |                     | $      | -      |   | $                           | -      |   | $ | (5 | ) | $ | 4,111 |   |
| Reverse                  merger stepped up amortization                                                      |   |     | -      |       |   | -                        |   |                     | -      |                     |   | -      |   |                        | -      |   |   | - |   |   | 260 |   |
| Beneficial                  conversion feature interest                                                      |   |     | (2,310 | )          |   | -                        |   |                     | -      |                     |   | -      |   |                        | -      |   |   | - |   |   | 2,310 |   |
|                                                                                                         |   |     |   |       |   |                     |   |                     |   |                     |   |   |   |                        |   |   |   |   |   |   |   |   |
| Add:                                                                                                         |   |     |   |       |   |                     |   |                     |   |                     |   |   |   |                        |   |   |   |   |   |   |   |   |
| Parent                  stub period, removed, reverse merger                                                 |   |     | 182    |       |   | -                        |   |                     | -      |                     |   | -      |   |                        | -      |   |   | 76 |   |   | (1,934 | ) |
| Accretion                  of interest on bifurcated instruments                                             |   |     | 154    |       |   | -                        |   |                     | -      |                     |   | -      |   |                        | -      |   |   | - |   |   | (154 | ) |
| Derivatives                  expense/(income)                                                                |   |     | -      |       |   | 480,877                  |   |                     | -      |                     |   | -      |   |                        | -      |   |   | - |   |   | (480,877 | ) |
| (Gain)/loss                  on extinguishments of debt                                                      |   |     | -      |       |   | -                        |   |                     | 64,676 |                     |   | -      |   |                        | -      |   |   | - |   |   | (64,676 | ) |
| (Gain)/loss                  on conversions of debt                                                          |   |     | -      |       |   | -                        |   |                     | -      |                     |   | 846    |   |                        | -      |   |   | - |   |   | (846 | ) |
| Loss                  on equity investee                                                                     |   |     | -      |       |   | -                        |   |                     | -      |                     |   | -      |   |                        | 49,414 |   |   | - |   |   | (49,414 | ) |
| Write-offs                  of property, plant & equipment                                               |   |     | -      |       |   | -                        |   |                     | -      |                     |   | -      |   |                        | -      |   |   | 149 |   |   | (149 | ) |
| Write-offs                  of intangibles                                                                   |   |     | -      |       |   | -                        |   |                     | -      |                     |   | -      |   |                        | -      |   |   | 43 |   |   | (43 | ) |
| Miscellaneous                  corrections and reclassifications                                             |   |     | 136    |       |   | -                        |   |                     | -      |                     |   | -      |   |                        | -      |   |   | (19 | ) |   | (246 | ) |
| As                  restated, Year ended December                  31,                  2003                 |   | $        | 707    |       | $      | 480,877                  |   | $                        | 64,676 |                     | $      | 846    |   | $                           | 49,414 |   | $ | 244 | (b)  | $ | (599,120 | ) |
|                                                                                                         |

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| (a)                  includes corrections to initial recording of expenses between the                  Company                  and GlobalNet International.                        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)                  includes write-offs                  of property, plant and equipment, Intangibles write-off, and other                  income                  (expense) net. |

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**NOTE        (4) GlobalNet International Business Acquisition and GBLK        Acquisition**

| - | the                  Company issued a $1,500,000 principal amount promissory note to                  Titan (the                  "Titan Note"), of which $550,000 was paid during                  2003; |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | the                  Company paid $1,500,000 to Titan;                  and |
|---|-----------------------------------------------------------------------------|

| - | GEF                  paid $500,000 to Titan, which was repaid during the fourth quarter                  of 2003                  by the Company. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                           |   |   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|
| Value                  of shares to be issued                                  |   | $      | 30,041 |   |
| Cash                  paid to Titan                                            |   |   | 1,500  |   |
| New                  note payable to Titan                                     |   |   | 1,500  |   |
| Note                  payble to GEF                                            |   |   | 500    |   |
| Assumed                  current liabilities                                   |   |   | 8,437  |   |
| Assumed                  long-term debt                                        |   |   | 8,448  |   |
| Transaction                  expenses                                          |   |   | 273    |   |
| Mandatorily                  redeemable preferred stock                        |   |   | 14,753 |   |
| Embedded                  derivative in mandatorily redeemable preferred stock |   |   | 847    |   |
|                                                                           |   | $      | 66,299 |   |
|                                                                           |   |   |   |   |

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|                                                           |   | (in                  000's) |   |
|----------------------------------------------------------------|--------|-----------------------------|--------|
|                                                           |   | August                  7,  |   |
|                                                           |   | **2003**                    |   |
|                                                           |   |                        |   |
| 25.2                  million shares, at $.0029 per share      |   | $                           | 73     |   |
| Accounts                  payable assumed                      |   |                        | 4      |   |
| Note                  payable assumed                          |   |                        | 27     |   |
| Embedded                  derivative, limited to value of note |   |                        | 118    |   |
| Total                  consideration                           |   | $                           | 222    |   |
|                                                           |   |                        |   |   |

**NOTE        (5) Property and Equipment**

|                                             |   | (in                  thousands) |   |
|--------------------------------------------------|--------|---------------------------------|--------|
|                                             |   | December                  31,   |   | December                  31, |   |
|                                             |   | **2004**                        |   | **2003** |   |
|                                             |   |                            |   |   |   |
|                                             |   |                            |   |   |   |
| Computer                  equipment and software |   | $                               | 26     |   | $ | 612 |   |
| Telephony                  equipment             |   |                            | 1,326  |   |   | 397 |   |
| Other                  equipment                 |   |                            | 1      |   |   | 69 |   |
| Furniture                  and fixtures          |   |                            | 19     |   |   | 19 |   |
|                                             |   | $                               | 1,372  |   | $ | 1,097 |   |
| Less:                  accumulated depreciation  |   |                            | (750   | ) |   | (609 | ) |
|                                             |   | $                               | 622    |   | $ | 488 |   |
|                                             |   |                            |   |   |   |   |   |

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*Table            of Contents*

**NOTE        (6) Notes Payable and Associated Derivatives Liabilities; Substantial        Modifications Of Debt**

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| ALL                  NOTES 2003 AND 2004                        |   | (in                  000's) |   |
|-----------------------------------------------------------------|--------|-----------------------------|--------|
|                                                            |   | Face                        |   | Note |   | Derivatives |   | Derivatives |   | (Gain)/Loss |   | (Gain)/Loss |   | Paid                  in |   |
|                                                            |   | Principal                   |   | Balance |   | Liability |   | (Income)                  Expense |   | Extinguishment |   | Conversion |   | Capital |   |
| Investors                  Note 1                               |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At                  origination                                 |   | $                           | 750    |   | $ | - |   | $ | 981 |   | $ | 231 |   | $ | - |   | $ | - |   | $ | - |   |
| Conversions                  to June 2003 Deemed Extinguishment |   |                        | (403   | ) |   | (15 | ) |   | (501 | ) |   | - |   |   | - |   |   | 442 |   |   | 501 |   |
| Accretion                  to Note                              |   |                        | -      |   |   | 56 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Effect                  of Deemed Extinguishment June 2003      |   |                        | -      |   |   | (41 | ) |   | 158 |   |   | - |   |   | 152 |   |   | - |   |   | - |   |
| Conversions                  to August 2003 Extinguishment      |   |                        | (95    | ) |   | - |   |   | (156 | ) |   | - |   |   | - |   |   | 95 |   |   | 156 |   |
| Effect                  of Deemed Extinguishment August 2003    |   |                        | -      |   |   | - |   |   | 300 |   |   | - |   |   | 300 |   |   | - |   |   | - |   |
| Mark                  derivatives to market                     |   |                        | -      |   |   | - |   |   | 21,119 |   |   | 21,119 |   |   | - |   |   | - |   |   | - |   |
| Totals                  at December 31, 2003                    |   | $                           | 252    |   | $ | - |   | $ | 21,901 |   | $ | 21,350 |   | $ | 452 |   | $ | 537 |   | $ | 657 |   |
|                                                            |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversions                                                     |   | $                           | (117   | ) |   | - |   | $ | (2,375 | ) | $ | - |   | $ | - |   | $ | 117 |   | $ | 2,375 |   |
| Accretion                  to Note                              |   |                        | -      |   |   | 14 |   |   |   |   |   | - |   |   | - |   |   |   |   |   |   |   |
| Mark                  derivatives to market                     |   |                        | -      |   |   | - |   |   | (19,212 | ) |   | (19,212 | ) |   | - |   |   | - |   |   | - |   |
| Totals                  at December 31, 2004                    |   | $                           | 135    |   | $ | 14 |   | $ | 314 |   | $ | (19,212 | ) | $ | - |   | $ | 117 |   | $ | 2,375 |   |
|                                                            |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investors                  Note 2                               |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At                  origination                                 |   | $                           | 500    |   | $ | - |   | $ | 809 |   | $ | 309 |   | $ | - |   | $ | - |   | $ | - |   |
| Effect                  of Deemed Extinguishment June 2003      |   |                        | -      |   |   | - |   |   | 113 |   |   | - |   |   | 150 |   |   | - |   |   | - |   |
| Conversions                  to Aug 2003 Deemed Extinguishment  |   |                        | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Effect                  of Deemed Extinguishment August 2003    |   |                        | -      |   |   | - |   |   | 596 |   |   | - |   |   | 640 |   |   | - |   |   | - |   |
| Mark                  derivatives to market                     |   |                        | -      |   |   | - |   |   | 41,993 |   |   | 41,993 |   |   | - |   |   | - |   |   | - |   |
| Totals                  at December 31, 2003                    |   | $                           | 500    |   | $ | - |   | $ | 43,511 |   | $ | 42,302 |   | $ | 790 |   | $ | - |   | $ | - |   |
|                                                            |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| Conversions                                                   |   | $      | (121   | )      | $      | -      |   | $      | (934     | )      | $      | -        |   | $      | -      |   | $      | 122    |   | $      | 934    |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Accretion                  to Note                            |   |   | -      |   |   | 40     |   |   | -        |   |   | -        |   |   | -      |   |   | -      |   |   | -      |   |
| Mark                  derivatives to market                   |   |   | -      |   |   | -      |   |   | (41,693  | )      |   | (41,693  | )      |   | -      |   |   | -      |   |   | -      |   |
| Totals                  at December 31, 2004                  |   | $      | 379    |   | $      | 40     |   | $      | 884      |   | $      | (41,693  | )      | $      | -      |   | $      | 122    |   | $      | 934    |   |
|                                                          |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Investors                  Note 3                             |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| At                  origination                               |   | $      | 1,750  |   | $      | -      |   | $      | 5,834    |   | $      | 4,084    |   | $      | -      |   | $      | -      |   | $      | -      |   |
| Mark                  derivatives to market                   |   |   | -      |   |   | -      |   |   | 146,450  |   |   | 146,450  |   |   | -      |   |   | -      |   |   | -      |   |
| Totals                  at December 31, 2003                  |   | $      | 1,750  |   | $      | -      |   | $      | 152,284  |   | $      | 150,534  |   | $      | -      |   | $      | -      |   | $      | -      |   |
|                                                          |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Accretion                  to Note                            |   | $      | -      |   | $      | 93     |   | $      | -        |   | $      | -        |   | $      | -      |   | $      | -      |   | $      | -      |   |
| Mark                  derivatives to market                   |   |   | -      |   |   | -      |   |   | (148,197 | )      |   | (148,197 | )      |   | -      |   |   | -      |   |   | -      |   |
| Totals                  at December 31, 2004                  |   | $      | 1,750  |   | $      | 93     |   | $      | 4,087    |   | $      | (148,197 | )      | $      | -      |   | $      | -      |   | $      | -      |   |
|                                                          |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Investors                  Note 4                             |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| At                  origination                               |   | $      | 3,800  |   | $      | -      |   | $      | 6,711    |   | $      | 2,911    |   | $      | -      |   | $      | -      |   | $      | -      |   |
| Effect                  of Deemed Extinguishment October 2004 |   |   | -      |   |   | -      |   |   | 3,110    |   |   | -        |   |   | 3,285  |   |   | -      |   |   | -      |   |
| Mark                  derivatives to market                   |   |   | -      |   |   | -      |   |   | 616      |   |   | 616      |   |   | -      |   |   | -      |   |   | -      |   |
| Totals                  at December 31, 2004                  |   | $      | 3,800  |   | $      | -      |   | $      | 10,437   |   | $      | 3,527    |   | $      | 3,285  |   | $      | -      |   | $      | -      |   |
|                                                          |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Investors                  Notes Interest                     |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Mark                  derivatives to market                   |   | $      | -      |   | $      | -      |   | $      | 13,077   |   | $      | 13,077   |   | $      | -      |   | $      | -      |   | $      | -      |   |
| Totals                  at December 31, 2003                  |   | $      | -      |   | $      | -      |   | $      | 13,077   |   | $      | 13,077   |   | $      | -      |   | $      | -      |   | $      | -      |   |
|                                                          |   |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Mark                  derivatives to market                   |   | $      | -      |   | $      | -      |   | $      | (11,944  | )      | $      | (11,944  | )      | $      | -      |   | $      | -      |   | $      | -      |   |
| Totals                  at December 31, 2004                  |   | $      | -      |   | $      | -      |   | $      | 1,133    |   | $      | (11,944  | )      | $      | -      |   | $      | -      |   | $      | -      |   |

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|                                                           |   |      |   |    |   |        |   | (in                  000's)       |    |           |   |        |   |                     |   |
|----------------------------------------------------------------|--------|-----------|--------|---------|--------|-------------|--------|-----------------------------------|---------|----------------|--------|-------------|--------|--------------------------|--------|
|                                                           |   | Face      |   | Note    |   | Derivatives |   | Derivatives                       |    | (Gain)/Loss    |   | (Gain)/Loss |   | Paid                  in |   |
|                                                           |   | Principal |   | Balance |   | Liability   |   | (Income)                  Expense |    | Extinguishment |   | Conversion  |   | Capital                  |   |
| Wood                  Note                                     |   |      |   |    |   |        |   |                              |    |           |   |        |   |                     |   |
| At                  12/31/02                                   |   | $         | 1,363  |    | $      | -           |   | $                                 | 865     |           | $      | -           |   | $                        | -      |   | $ | - |   | $ | - |   |
| Effect                  of Deemed Extinguishment February 2003 |   |      | -      |    |   | (1,363      | )      |                              | 1,246   |           |   | -           |   |                     | (359   | ) |   | - |   |   | - |   |
| Effect                  of Deemed Extinguishment August 2003   |   |      | -      |    |   | -           |   |                              | (246    | )              |   | -           |   |                     | (288   | ) |   | - |   |   | - |   |
| Conversions                                                    |   |      | (309   | )       |   | 309         |   |                              | (943    | )              |   | -           |   |                     | -      |   |   | 309 |   |   | 943 |   |
| Mark                  derivatives to market                    |   |      | -      |    |   | -           |   |                              | 91,040  |           |   | 91,040      |   |                     | -      |   |   | - |   |   | - |   |
| Totals                  at December 31, 2003                   |   | $         | 1,054  |    | $      | (1,054      | )      | $                                 | 91,962  |           | $      | 91,040      |   | $                        | (647   | ) | $ | 309 |   | $ | 943 |   |
|                                                           |   |      |   |    |   |        |   |                              |    |           |   |        |   |                     |   |   |   |   |   |   |   |   |
| Conversions                                                    |   | $         | (1,054 | )       | $      | 1,054       |   | $                                 | (19,619 | )              | $      | -           |   | $                        | -      |   | $ | 1,054 |   | $ | 19,619 |   |
| Mark                  derivatives to market                    |   |      | -      |    |   | -           |   |                              | (72,343 | )              |   | (72,343     | )      |                     | -      |   |   | - |   |   | - |   |
| Totals                  at December 31, 2004                   |   | $         | -      |    | $      | -           |   | $                                 | -       |           | $      | (72,343     | )      | $                        | -      |   | $ | 1,054 |   | $ | 19,619 |   |

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*Table            of Contents*

|                                         |   |      |   |    |   |        |   | (in                  000's)       |   |           |   |        |   |                     |   |
|----------------------------------------------|--------|-----------|--------|---------|--------|-------------|--------|-----------------------------------|--------|----------------|--------|-------------|--------|--------------------------|--------|
|                                         |   | Face      |   | Note    |   | Derivatives |   | Derivatives                       |   | (Gain)/Loss    |   | (Gain)/Loss |   | Paid                  in |   |
|                                         |   | Principal |   | Balance |   | Liability   |   | (Income)                  Expense |   | Extinguishment |   | Conversion  |   | Capital                  |   |
|                                         |   |      |   |    |   |        |   |                              |   |           |   |        |   |                     |   |
| Erdberg                  Note                |   |      |   |    |   |        |   |                              |   |           |   |        |   |                     |   |
| At                  origination              |   | $         | 118    |    | $      | (118        | )      | $                                 | 161    |           | $      | 43          |   | $                        | -      |   | $ | - |   | $ | - |   |
| Mark                  derivatives to market  |   |      | -      |    |   | -           |   |                              | 10,071 |           |   | 10,071      |   |                     | -      |   |   | - |   |   | - |   |
| Totals                  at December 31, 2003 |   | $         | 118    |    | $      | (118        | )      | $                                 | 10,232 |           | $      | 10,114      |   | $                        | -      |   | $ | - |   | $ | - |   |
|                                         |   |      |   |    |   |        |   |                              |   |           |   |        |   |                     |   |   |   |   |   |   |   |   |
| Conversions                                  |   | $         | (118   | )       | $      | 1           |   | $                                 | (2,122 | )              | $      | -           |   | $                        | -      |   | $ | 118 |   | $ | 2,122 |   |
| Accretion                  to Note           |   |      | -      |    |   | 117         |   |                              | -      |           |   | -           |   |                     | -      |   |   | - |   |   | - |   |
| Mark                  derivatives to market  |   |      | -      |    |   | -           |   |                              | (8,110 | )              |   | (8,110      | )      |                     | -      |   |   | - |   |   | - |   |
| Totals                  at December 31, 2004 |   | $         | -      |    | $      | -           |   | $                                 | -      |           | $      | (8,110      | )      | $                        | -      |   | $ | 118 |   | $ | 2,122 |   |
|                                              |   |      |   |    |   |        |   |                              |   |           |   |        |   |                     |   |   |   |   |   |   |   |   |

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*Table            of Contents*

**period        end**

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*Table            of Contents*

~~ ~~

**NOTE        (7) Mandatorily Redeemable Preferred Stock and Associated Derivatives        Liabilities**

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*Table            of Contents*

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*Table            of Contents*

| (in                  000's)                                        |   | Face      |    | Note    |   | Derivatives |   | Derivatives                       |     | (Gain)/Loss    |   | (Gain)/Loss |   | Paid                  in |    |
|--------------------------------------------------------------------|--------|-----------|---------|---------|--------|-------------|--------|-----------------------------------|----------|----------------|--------|-------------|--------|--------------------------|---------|
|                                                               |   | Principal |    | Balance |   | Liability   |   | (Income)                  Expense |     | Extinguishment |   | Conversion  |   | Capital                  |    |
| Preferred                  Stock                                   |   |      |    |    |   |        |   |                              |     |           |   |        |   |                     |    |
| At                  origination                                    |   | $         | 15,600  |    | $      | -           |   | $                                 | 847      |           | $      | -           |   | $                        | -       |   | $ | - |   | $ | - |   |
| Effect                  of Deemed Extinguishment December 2003     |   |      | -       |    |   | -           |   |                              | 78,946   |           |   | -           |   |                     | 64,095  |   |   | - |   |   | - |   |
| Accretion                  for Deemed Extinguishment December 2003 |   |      | -       |    |   | 98          |   |                              | -        |           |   | -           |   |                     | -       |   |   | - |   |   | - |   |
| Effect                  of Deemed Extinguishment December 2003     |   |      | -       |    |   | (98         | )      |                              | -        |           |   | -           |   |                     | -       |   |   | - |   |   | - |   |
| Mark                  derivatives to market                        |   |      | -       |    |   | -           |   |                              | 129,003  |           |   | 129,003     |   |                     | -       |   |   | - |   |   | - |   |
| Totals                  at December 31, 2003                       |   | $         | 15,600  |    | $      | -           |   | $                                 | 208,796  |           | $      | 129,003     |   | $                        | 64,095  |   | $ | - |   | $ | - |   |
| Effect                  of Deemed Extinguishment, March 2004       |   | $         | -       |    | $      | -           |   | $                                 | 308,549  |           | $      | -           |   | $                        | 308,549 |   | $ | - |   | $ | - |   |
| Redemptions                                                        |   |      | (346    | )       |   | -           |   |                              | (1,184   | )              |   | -           |   |                     | (838    | ) |   | - |   |   | - |   |
| Conversions                                                        |   |      | (1,225  | )       |   | -           |   |                              | (6,465   | )              |   | -           |   |                     | 4,875   |   |   | 1,225 |   |   | 11,340 |   |
| Surrender                                                          |   |      | (14,029 | )       |   | -           |   |                              | (26,998  | )              |   | -           |   |                     | -       |   |   | - |   |   | 26,998 |   |
| Mark                  derivatives to market                        |   |      | -       |    |   | -           |   |                              | (482,698 | )              |   | (482,698    | )      |                     | -       |   |   | - |   |   | - |   |
| Totals                  at December 31, 2004                       |   | $         | -       |    | $      | -           |   | $                                 | -        |           | $      | (482,698    | )      | $                        | 312,586 |   | $ | 1,225 |   | $ | 38,338 |   |

**NOTE        (8) Operating and Capital Leases**

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*Table            of Contents*

**NOTE        (9)- Litigation and Contingencies**

*Accrued        Telecommunication Payables: *

*Development        of Carrier: *

**NOTE        (10) Income Taxes**

----

*Table            of Contents*

|                                                                              |   | [in                  000's]   |     |
|-----------------------------------------------------------------------------------|--------|-------------------------------|----------|
|                                                                              |   | December                  31, |     |
| Deferred                  tax amounts at 34%:                                     |   | 2004                          |     | 2003 |   |
|                                                                              |   |                          |     |   |   |
| Current                  year tax effected NOL                                    |   |                          | 9,424    |   |   | 1,932 |   |
| Tax                  effected NOL carryforward                                    |   |                          | 6,851    |   |   | 4,920 |   |
| Goodwill                                                                          |   |                          | 3,594    |   |   | 3,680 |   |
| PPE                                                                               |   |                          | 392      |   |   | 362 |   |
| Depreciation                  and amortization                                    |   |                          | (230     | ) |   | (55 | ) |
| Net                  deferred tax asset                                           |   |                          | 20,031   |   |   | 10,839 |   |
| Valuation                  allowance                                              |   |                          | (20,031  | ) |   | (10,839 | ) |
|                                                                              |   |                          | -        |   |   | - |   |
|                                                                              |   |                          |     |   |   |   |   |
| Book                  net income (loss)                                           |   |                          | 455,008  |   |   | (599,120 | ) |
| Equity                  investee net book loss                                    |   |                          | (26,214  | ) |   | (61,543 | ) |
| Tax                  depreciation and amortization                                |   |                          | (677     | ) |   | 812 |   |
| Reverse:                  write-off of intangibles                                |   |                          | -        |   |   | 57,305 |   |
| Reverse:                  write-off of investment & related entity receivable |   |                          | 21,514   |   |   | 49,414 |   |
| Reverse:                  derivative items                                        |   |                          | (480,622 | ) |   | 546,580 |   |
| Stock                  compensation                                               |   |                          | 3,204    |   |   | 463 |   |
| Other                                                                             |   |                          | 70       |   |   | 407 |   |
| Taxable                  Loss                                                     |   |                          | (27,717  | ) |   | (5,682 | ) |
| Effective                  rate                                                   |   |                          | 34       | % |   | 34 | % |
| Tax                  Effected NOL                                                 |   |                          | 9,424    |   |   | 1,932 |   |

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*Table            of Contents*

**NOTE        (11) Stockholders’ Deficit**

**in**

----

*Table            of Contents*

|                                        |   |                             |   |           |   | (in                  000's) |   |                               |      |                                    |   |                           |   |
|---------------------------------------------|--------|----------------------------------|--------|----------------|--------|-----------------------------|--------|------------------------------------|-----------|-----------------------------------------|--------|--------------------------------|--------|
|                                        |   |  Number                  of |   |  Original |   |  Revised               |   | Original                  Exercise |      |  Revised                  Exercise |   |  Date                  of |   |
|                                        |   | Warrants                         |   | Expiration     |   | Expiration                  |   | Price                              |      | Price                                   |   | Change                         |   |
|                                        |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |
| 2003                  Financings            |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |
|                                        |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |
| Investors                  Note 1           |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |
| Tranche                  1                  |   |                             | 750    |           |   | 2/6/2008                    |   |                               | 4/29/2010 |                                    | $      | 0.05                           |   | $ | 0.0036 |   |   | 4/29/2005 |   |
| Tranche                  2                  |   |                             | 750    |           |   | 2/21/2008                   |   |                               | 4/29/2010 |                                    | $      | 0.05                           |   | $ | 0.0036 |   |   | 4/29/2005 |   |
| Tranche                  3                  |   |                             | 750    |           |   | 2/24/2008                   |   |                               | 4/29/2010 |                                    | $      | 0.05                           |   | $ | 0.0036 |   |   | 4/29/2005 |   |
|                                        |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |
| Investors                  Note 2           |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |
| Tranche                  1                  |   |                             | 750    |           |   | 5/9/2008                    |   |                               | 4/29/2010 |                                    | $      | 0.01                           |   | $ | 0.0036 |   |   | 4/29/2005 |   |
| Tranche                  2                  |   |                             | 750    |           |   | 6/23/2008                   |   |                               | 4/29/2010 |                                    | $      | 0.01                           |   | $ | 0.0036 |   |   | 4/29/2005 |   |
| Total                  at December 31, 2003 |   |                             | 3,750  |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |
|                                        |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |
| 2004                  Financings            |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |
|                                        |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |
| Investors                  Note 4           |   |                             |   |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |
| Tranche                  1                  |   |                             | 3,900  |           |   | 5/21/2009                   |   |                               | 4/29/2010 |                                    | $      | 0.02                           |   | $ | 0.0036 |   |   | 4/26/2005 |   |
| Tranche                  2                  |   |                             | 3,900  |           |   | 6/21/2009                   |   |                               | 4/29/2010 |                                    | $      | 0.02                           |   | $ | 0.0036 |   |   | 4/26/2005 |   |
| Tranche                  3                  |   |                             | 3,600  |           |   | 10/29/2009                  |   |                               | 4/29/2010 |                                    | $      | 0.02                           |   | $ | 0.0036 |   |   | 4/26/2005 |   |
| Total                  at December 31, 2004 |   |                             | 15,150 |           |   |                        |   |                               |      |                                    |   |                           |   |   |   |   |   |   |   |

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*Table            of Contents*

|                                                    |   |                          |   |                                   |   | (in                  000's)           |   |         |   |             |   |
|---------------------------------------------------------|--------|-------------------------------|--------|----------------------------------------|--------|---------------------------------------|--------|--------------|--------|------------------|--------|
|                                                    |   | Share                  Grants |   | Expense                  Recorded 2004 |   | **Expense                  Recorded** |   |
|                                                    |   | **Vested**                    |   | **Unvested**                           |   | **Vested**                            |   | **Unvested** |   | **2005Unvested** |   |
|                                                    |   |                          |   |                                   |   |                                  |   |         |   |             |   |
| Granted                  to:                            |   |                          |   |                                   |   |                                  |   |         |   |             |   |
|                                                    |   |                          |   |                                   |   |                                  |   |         |   |             |   |
| Parent                  company employees               |   |                          | 7,639  |                                   |   | 130,417                               |   | $            | 32     |             | $      | - |   | $ | 496 |   |
| Parent                  company directors               |   |                          | 156    |                                   |   | 10,000                                |   |         | 1      |             |   | - |   |   | 38 |   |
| Total                  Parent Company Grants            |   |                          | 7,795  |                                   |   | 140,417                               |   | $            | 33     |             | $      | - |   | $ | 534 |   |
|                                                    |   |                          |   |                                   |   |                                  |   |         |   |             |   |   |   |   |   |   |
| Employees                  of unconsolidated subsidiary |   |                          | 4,766  |                                   |   | 24,064                                |   | $            | 20     |             | $      | - |   | $ | 91 |   |
| Outside                  consultants                    |   |                          | 1,667  |                                   |   | 10,000                                |   |         | 7      |             |   | - |   |   | 38 |   |
| Total                  Unconsolidated Subsidiary Grant  |   |                          | 6,433  |                                   |   | 34,064                                |   | $            | 27     |             | $      | - |   | $ | 129 |   |

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*Table            of Contents*

|                                                                                                                        |   | (in                  000's)        |   |                               |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
|                                                                                                                        |   | December                  31, 2004 |   | December                  31, 2003 |   |   |   |
| Expense                  summary, unrelated to unconsolidated subsidiary:                                                   |   |
|                                                                                                                        |   |                               |   |                               |   |   |   |
| Parent                  company employees                                                                                   |   | $                                  | 457    |                               | $      | 59 |   |  (a)(b) |   |
| Parent                  company directors                                                                                   |   |                               | 1      |                               |   | - |   |   |   |   |
| Executive                  consultants                                                                                      |   |                               | 360    |                               |   | - |   |   |   |   |
| Other                  outside consultants                                                                                  |   |                               | -      |                               |   | 35 |   |   |   |   |
| Total                  salary and consulting expense                                                                        |   | $                                  | 818    |                               | $      | 94 |   |   |   |   |
|                                                                                                                             |   |                               |   |                               |   |   |   |   |   |   |
| Unconsolidated                  sub investment & related entity receivable write-offs:                                  |   |                               |   |
| Iraq                  consultants                                                                                           |   | $                                  | 21,000 |                               | $      | - |   |   |   |   |
| Telecom                  consultants                                                                                        |   |                               | 407    |                               |   | - |   |   |   |   |
| Employees                  of unconsolidated subsidiary                                                                     |   |                               | 20     |                               |   | - |   |   |   |   |
| Severance                  to employees of unconsolidated subsidiary                                                        |   |                               | -      |                               |   | - |   |   |   |   |
| Total                  investment & related entity receivable write-offs related to stock                  compensation |   | $                                  | 21,427 |                               | $      | - |   |   |   |   |
|                                                                                                                        |   |                               |   |                               |   |   |   |   |   |   |
|                                                                                                                             |   |                               |   |

----

| (a) | Does                    not include approximately $98,000 of accrued compensation in                    2003 to executive officers, later voluntarily converted to common                    stock. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Does                    not include approximately $58,000 of accrued bonus payable                    from 2002, including $53,000 payable to executive officers, converted                    to common stock in 2003. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                   |   | (in                  000's)   |   |
|------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                   |   | December                  31, |   | December                  31, |   |
|                                                                   |   | **2004**                      |   | **2003** |   |
| Expense                  summary, unrelated to equity investee:        |   |
|                                                                   |   |                          |   |   |   |
| Network                  Operations                                    |   | $                             | 5      |   | $ | 15 |   |
| Selling                  and Marketing                                 |   |                          | -      |   |   | 11 |   |
| General                  and Administrative                            |   |                          | 813    |   |   | 68 |   |
| Total                  salary and consulting expense                   |   | $                             | 818    |   | $ | 94 |   |
|                                                                   |   |                          |   |   |   |   |   |
| Investment                  & related entity receivable write-offs |   | $                             | 21,427 |   | $ | - |   |

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*Table            of Contents*

**NOTE        (12)- Related Parties**

***Due        to Related Parties -***

*Shareholder        Advances- *

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*Table            of Contents*

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*Table            of Contents*

***Severance        Agreements***

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*Table            of Contents*

**NOTE        (13)- CREDIT AND BUSINESS CONCENTRATIONS**

**NOTE        (14)- GEOGRAPHIC AND BUSINESS SEGMENT INFORMATION**

----

*Table            of Contents*

|                                          |   |     |   |     |   | (in                  000's)    |   |   |   |   |   |
|-----------------------------------------------|--------|----------|--------|----------|--------|--------------------------------|--------|--------|--------|--------|--------|
|                                          |   |     |   | Vietnam/ |   |                           |   |   |   |   |   |
|                                          |   | Thailand |   | Laos     |   | United                  States |   | Other  |   | Total  |   |
| Year                  ended December 31, 2004 |   |     | -      |     |   | -                              |   |   | 81     |   |   | - |   |   | 81 |   |
| Year                  ended December 31, 2003 |   | $        | 2,001  |     |   | 475                            |   |   | 312    |   |   | 514 |   | $ | 3,302 |   |

**NOTE        (15)- SUBSEQUENT EVENTS**

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*Table            of Contents*

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*Table            of Contents*

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*Table            of Contents*

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*Table            of Contents*

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*Table            of Contents*

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*Table            of Contents*

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*Table            of Contents*

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*Table            of Contents*

*Settlement        of Certain Disputes with Officers *

*Waiver        of Vesting Requirements*

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*Table            of Contents*

*Disposition        of Indebtedness, Sale of Assets, and Future Service        Obligations*

*Other        Related Party Subsequent Events*

*Consulting        Payments to Former Officer and Director-*

*Unpaid        Wages Settlements-*

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*Table            of Contents*

*Employment        Relationship with Former Officer-*

*Consulting        Arrangement with Director- *

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*Table            of Contents*

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*Table            of Contents*

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*Table            of Contents*

| **ASSETS**                                                                                               |   |                                  |    |                              |   |
|----------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|-----------------------------------|--------|
|                                                                                                     |   | (in                  000's)           |    |
|                                                                                                     |   | Debtor                  in Possession |    |                              |   |
|                                                                                                     |   | **December                  31,**     |    | **December                  31,** |   |
|                                                                                                     |   | **2004**                              |    | **2003**                          |   |
| Current                  assets:                                                                         |   |                                  |    |                              |   |
| Cash                  and cash equivalents                                                               |   | $                                     | 205     |                              | $      | 362 |   |
| Accounts                  receivable, less allowance of $1,129 and $1,000,                  respectively |   |                                  | 1,035   |                              |   | 3,002 |   |
| Prepaid                  expenses and other current assets                                               |   |                                  | 95      |                              |   | 331 |   |
| Carrier                  deposits                                                                        |   |                                  | 275     |                              |   | 344 |   |
| Receivable                  from parent and parent's subsidiary, net                                     |   |                                  | 2,121   |                              |   | 2,051 |   |
| Deferred                  asset, consultant services                                                     |   |                                  | -       |                              |   | 10,063 |   |
| Total                  current assets                                                                    |   |                                  | 3,731   |                              |   | 16,153 |   |
| Property                  and equipment, net                                                             |   |                                  | 686     |                              |   | 2,355 |   |
| Deferred                  asset, consultant services                                                     |   |                                  | -       |                              |   | 10,500 |   |
| Total                  Assets                                                                            |   | $                                     | 4,417   |                              | $      | 29,008 |   |
|                                                                                                     |   |                                  |    |                              |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ DEFICIT**                                         |   |                                  |    |                              |   |   |   |
|                                                                                                     |   |                                  |    |                              |   |   |   |
| Current                  liabilities:                                                                    |   |                                  |    |                              |   |   |   |
| Current                  liabilities not subject to compromise:                                          |   |                                  |    |                              |   |   |   |
| Accounts                  payable                                                                        |   | $                                     | 1,239   |                              | $      | 3,024 |   |
| Accounts                  payable due to MCI                                                             |   |                                  | 53      |                              |   | 9,850 |   |
| Accrued                  liabilities                                                                     |   |                                  | -       |                              |   | 270 |   |
| Current                  portion of note due to MCI                                                      |   |                                  | -       |                              |   | 3,682 |   |
| Deferred                  revenue                                                                        |   |                                  | 122     |                              |   | 33 |   |
| Restructuring                  reserve                                                                   |   |                                  | -       |                              |   | 138 |   |
| Capital                  lease obligations                                                               |   |                                  | -       |                              |   | 2,749 |   |
| Notes                  payable and accrued interest- parent                                              |   |                                  | -       |                              |   | 385 |   |
| Total                  current liabilities not subject to compromise                                     |   | $                                     | 1,414   |                              | $      | 20,131 |   |
|                                                                                                     |   |                                  |    |                              |   |   |   |
| Current                  liabilities subject to compromise:                                              |   |                                  |    |                              |   |   |   |
| Accounts                  payable                                                                        |   |                                  | 1,464   |                              |   | - |   |
| Accounts                  payable due to MCI                                                             |   |                                  | 14,747  |                              |   | - |   |
| Accrued                  liabilities                                                                     |   |                                  | 108     |                              |   | - |   |
| Note                  due to MCI                                                                         |   |                                  | 2,664   |                              |   | - |   |
| Capital                  lease obligations                                                               |   |                                  | 6       |                              |   | - |   |
| Notes                  payable and accrued interest- parent                                              |   |                                  | 40,052  |                              |   | - |   |
| Total                  current liabilities subject to compromise                                         |   |                                  | 59,041  |                              |   | - |   |
| Total                  current liabilities                                                               |   |                                  | 60,455  |                              |   | 20,131 |   |
|                                                                                                     |   |                                  |    |                              |   |   |   |
| Capital                  lease obligations, net of current portion                                       |   |                                  | -       |                              |   | 6 |   |
| Notes                  payable to parent                                                                 |   |                                  | -       |                              |   | 39,122 |   |
| Total                  Liabilities                                                                       |   |                                  | 60,455  |                              |   | 59,259 |   |
|                                                                                                     |   |                                  |    |                              |   |   |   |
| Commitments                  and contingencies                                                           |   |                                  | -       |                              |   | - |   |
|                                                                                                     |   |                                  |    |                              |   |   |   |
| Stockholders’                  deficit:                                                            |   |                                  |    |                              |   |   |   |
| Common                  stock                                                                            |   |                                  | -       |                              |   | - |   |
| Additional                  paid-in capital                                                              |   |                                  | 31,719  |                              |   | 31,292 |   |
| Accumulated                  deficit                                                                     |   |                                  | (87,757 | )                                 |   | (61,543 | ) |
| Total                  stockholders’ deficit                                                       |   |                                  | (56,038 | )                                 |   | (30.251 | ) |
| Total                  liabilities and stockholders' deficit                                             |   | $                                     | 4,417   |                              | $      | 29,008 |   |

----

*Table            of Contents*

|                                                         |   | (in                  000's)                                      |    |
|--------------------------------------------------------------|--------|------------------------------------------------------------------|---------|
|                                                         |   | Debtor                  in Possession                            |    |   |   |
|                                                         |   | **Year                  Ended****December                  31,** |    | **Period                  From****August                  26, 2003****to                  December 31,** |   |
|                                                         |   | **2004**                                                         |    | **2003** |   |
|                                                         |   |                                                             |    |   |   |
| Revenue                                                      |   | $                                                                | 68,135  |   | $ | 32,422 |   |
|                                                         |   |                                                             |    |   |   |   |   |
| Operating                  expenses                          |   |                                                             |    |   |   |   |   |
| Data                  communications and telecommunications  |   |                                                             | 66,913  |   |   | 31,477 |   |
| Network                  operations                          |   |                                                             | 3,519   |   |   | 1,482 |   |
| Selling                  and marketing                       |   |                                                             | 21,447  |   |   | 664 |   |
| General                  and administrative expenses         |   |                                                             | 2,283   |   |   | 1,046 |   |
| Write-offs                  of property, plant and equipment |   |                                                             | 366     |   |   | 99 |   |
| Goodwill                  and intangibles write-off          |   |                                                             | -       |   |   | 57,305 |   |
| Bad                  debt expense                            |   |                                                             | 180     |   |   | 37 |   |
| Depreciation                  and amortization               |   |                                                             | 879     |   |   | 1,288 |   |
|                                                         |   |                                                             |    |   |   |   |   |
| Operating                  loss                              |   |                                                             | (27,452 | ) |   | (60,976 | ) |
|                                                         |   |                                                             |    |   |   |   |   |
| Interest                  on note to parent                  |   |                                                             | (546    | ) |   | (385 | ) |
| Interest                  expense, net                       |   |                                                             | (170    | ) |   | (182 | ) |
| Gain                  on extinguishments of debt             |   |                                                             | 1,954   |   |   | - |   |
| Net                  loss                                    |   | $                                                                | (26,214 | ) | $ | (61,543 | ) |

----

*Table            of Contents*

|                                                                                                                                 |   | (in                  000's)                     |    |                          |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|-------------------------------|--------|
|                                                                                                                                 |   | December                  31,                   |    | December                  31, |   |
|                                                                                                                                 |   | Debtor                    in Possession**2004** |    | **2003**                      |   |
|                                                                                                                                 |   |                                            |    |                          |   |
| Cash                  flows from operating activities:                                                                               |   |                                            |    |                          |   |
| Net                  income (loss)                                                                                                   |   | $                                               | (26,214 | )                             | $      | (61,543 | ) |
| Adjustments                  to reconcile net income (loss) to net cash provided by (used                  in) operating activities: |
| Depreciation                  and amortization                                                                                       |   |                                            | 879     |                          |   | 1,288 |   |
| Write-off                  of property, equipment and intangibles                                                                    |   |                                            | 366     |                          |   | 99 |   |
| Write-off                  of Goodwill and identifiable intangibles                                                                  |   |                                            | -       |                          |   | 57,305 |   |
| Provision                  for doubtful accounts                                                                                     |   |                                            | 180     |                          |   | 37 |   |
| Noncash                  stock issued for consulting and employees                                                                   |   |                                            | 20,563  |                          |   | 437 |   |
| Gain                  on extinguishment                                                                                              |   |                                            | (1,954  | )                             |   | - |   |
| Change                  in assets and liabilities:                                                                                   |   |                                            | -       |                          |   | - |   |
| Accounts                  receivable                                                                                                 |   |                                            | 1,787   |                          |   | 66 |   |
| Prepaid                  expenses and other current assets                                                                           |   |                                            | 236     |                          |   | 596 |   |
| Carrier                  deposits                                                                                                    |   |                                            | 69      |                          |   | 178 |   |
| Receivable                  from GlobalNet Corporation, net                                                                          |   |                                            | 1,042   |                          |   | (1,666 | ) |
| Accounts                  payable                                                                                                    |   |                                            | (993    | )                             |   | 1,970 |   |
| Accounts                  payable to MCI                                                                                             |   |                                            | 4,950   |                          |   | 4,259 |   |
| Accrued                  Liabilities                                                                                                 |   |                                            | 265     |                          |   | (1,230 | ) |
| MCI                  note current                                                                                                    |   |                                            | -       |                          |   | - |   |
| Deferred                  revenue                                                                                                    |   |                                            | 89      |                          |   | (9 | ) |
| Restructuring                  reserve                                                                                               |   |                                            | (138    | )                             |   | (111 | ) |
| Capital                  lease                                                                                                       |   |                                            | 14      |                          |   | - |   |
| Other                                                                                                                                |   |                                            | (4      | )                             |   | (1 | ) |
| Net                  cash provided by operating activities                                                                           |   |                                            | 1,137   |                          |   | 1,675 |   |
|                                                                                                                                 |   |                                            |    |                          |   |   |   |
| Cash                  flows from investing activities:                                                                               |   |                                            |    |                          |   |   |   |
| Acquisition                  of property and equipment                                                                               |   |                                            | (139    | )                             |   | (53 | ) |
| Proceeds                  from sales of property and equipment                                                                       |   |                                            | -       |                          |   | - |   |
| Cash                  and transaction expenses paid in connection with                  acquisition                                  |   |                                            | -       |                          |   | - |   |
| Net                  cash used in investing activities                                                                               |   |                                            | (139    | )                             |   | (53 | ) |
|                                                                                                                                 |   |                                            |    |                          |   |   |   |
| Cash                  flows from financing activities:                                                                               |   |                                            |    |                          |   |   |   |
| Proceeds                  from issuance of debt                                                                                      |   |                                            | -       |                          |   | - |   |
| Note                  and capital lease principal payments                                                                           |   |                                            | (1,155  | )                             |   | (2,010 | ) |
| Financing                  costs                                                                                                     |   |                                            | -       |                          |   | - |   |
| Net                  cash used in financing activities                                                                               |   |                                            | (1,155  | )                             |   | (2,010 | ) |
|                                                                                                                                 |   |                                            |    |                          |   |   |   |
| Net                  decrease in cash and cash equivalents                                                                           |   |                                            | (157    | )                             |   | (388 | ) |
| Cash                  and cash equivalents at beginning of period                                                                    |   |                                            | 362     |                          |   | 750 |   |
| Cash                  and cash equivalents at end of period                                                                          |   | $                                               | 205     |                          | $      | 362 |   |
|                                                                                                                                 |   |                                            |    |                          |   |   |   |
| Supplemental                  disclosure cash flow information:                                                                      |   |                                            |    |                          |   |   |   |
| Interest                  paid:                                                                                                      |   | $                                               | 128     |                          | $      | 197 |   |

----

*Table            of Contents*

| **ASSETS**                                                                                                                                                                                                                                                |   |                                                 |    |                          |   |         |   |                          |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|---------|-------------------------------|--------|--------------|--------|-------------------------------|----------|
|                                                                                                                                                                                                                                                      |   | (in                  000's) except per share amounts |    |
|                                                                                                                                                                                                                                                      |   | (unaudited)                                          |    | (unaudited)                   |   | (unaudited)  |   |                          |     |
|                                                                                                                                                                                                                                                      |   | **March                  31,**                       |    | **June                  30,** |   | **Sept.30,** |   | **Dec.                  31,** |     |
|                                                                                                                                                                                                                                                      |   | **2003**                                             |    | **2003**                      |   | **2003**     |   | **2003**                      |     |
| Current                  assets:                                                                                                                                                                                                                          |   |                                                 |    |                          |   |         |   |                          |     |
| Cash                  and cash equivalents                                                                                                                                                                                                                |   | $                                                    | -       |                          | $      | 106          |   | $                             | 42       |   | $ | 43 |   |
| Accounts                  receivable, less allowance of $0, $0, $3 and $0,                  respectively                                                                                                                                                  |   |                                                 | 221     |                          |   | 191          |   |                          | 181      |   |   | 27 |   |
| Prepaid                  expenses and other current assets                                                                                                                                                                                                |   |                                                 | 174     |                          |   | 115          |   |                          | 46       |   |   | 26 |   |
| Titan                  refinance fee                                                                                                                                                                                                                      |   |                                                 | -       |                          |   | -            |   |                          | -        |   |   | 250 |   |
| Total                  current assets                                                                                                                                                                                                                     |   |                                                 | 395     |                          |   | 412          |   |                          | 269      |   |   | 346 |   |
| Property                  and equipment, net                                                                                                                                                                                                              |   |                                                 | 714     |                          |   | 522          |   |                          | 671      |   |   | 488 |   |
| Intangible                  assets, net                                                                                                                                                                                                                   |   |                                                 | 75      |                          |   | 65           |   |                          | 54       |   |   | - |   |
| Deposit                  on acquisition                                                                                                                                                                                                                   |   |                                                 | 331     |                          |   | 331          |   |                          | -        |   |   | - |   |
| Loan                  costs                                                                                                                                                                                                                               |   |                                                 | 84      |                          |   | 51           |   |                          | 132      |   |   | 116 |   |
| Investment                  in and receivable from GlobalNet, Inc.                                                                                                                                                                                        |   |                                                 | -       |                          |   | -            |   |                          | 48,738   |   |   | 21,000 |   |
| Total                  assets                                                                                                                                                                                                                             |   | $                                                    | 1,599   |                          | $      | 1,381        |   | $                             | 49,864   |   | $ | 21,950 |   |
|                                                                                                                                                                                                                                                      |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ DEFICIT**                                                                                                                                                                                          |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
| Current                  liabilities:                                                                                                                                                                                                                     |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
| Accounts                  payable                                                                                                                                                                                                                         |   | $                                                    | 1,078   |                          | $      | 1,134        |   | $                             | 1,045    |   | $ | 950 |   |
| Accrued                  liabilities                                                                                                                                                                                                                      |   |                                                 | 473     |                          |   | 516          |   |                          | 159      |   |   | 86 |   |
| Due                  to related parties                                                                                                                                                                                                                   |   |                                                 | 171     |                          |   | 169          |   |                          | 171      |   |   | 161 |   |
| Deferred                  revenue                                                                                                                                                                                                                         |   |                                                 | 106     |                          |   | 109          |   |                          | 103      |   |   | - |   |
| Payable                  to GlobalNet International, L.L.C., net                                                                                                                                                                                          |   |                                                 | -       |                          |   | -            |   |                          | 436      |   |   | 2,051 |   |
| Current                  portion of notes payable                                                                                                                                                                                                         |   |                                                 | 39      |                          |   | 31           |   |                          | 29       |   |   | 27 |   |
| Current                  portion of capital lease obligations                                                                                                                                                                                             |   |                                                 | 19      |                          |   | 2            |   |                          | -        |   |   | - |   |
| Accrued                  interest payable                                                                                                                                                                                                                 |   |                                                 | 28      |                          |   | 75           |   |                          | 76       |   |   | 152 |   |
| Notes                  payable to stockholders                                                                                                                                                                                                            |   |                                                 | 54      |                          |   | -            |   |                          | -        |   |   | - |   |
| Notes                  payable to investors and others                                                                                                                                                                                                    |   |                                                 | 39      |                          |   | -            |   |                          | -        |   |   | - |   |
| Acquisition                  note payable to stockholders                                                                                                                                                                                                 |   |                                                 | -       |                          |   | -            |   |                          | 500      |   |   | - |   |
| Acquisiion                  note payable                                                                                                                                                                                                                  |   |                                                 | -       |                          |   | -            |   |                          | 1,500    |   |   | 1,200 |   |
| Current                  portion of mandatorily redeemable preferred stock                                                                                                                                                                                |   |                                                 | -       |                          |   | -            |   |                          | 1,481    |   |   | 260 |   |
| Derivative                  obligations                                                                                                                                                                                                                   |   |                                                 | 3,503   |                          |   | 4,090        |   |                          | 102,210  |   |   | 565,547 |   |
| Liability                  to issue stock to GlobalNet International L.L.C.                  consultants                                                                                                                                                  |   |                                                 | -       |                          |   | -            |   |                          | -        |   |   | 21,000 |   |
| Total                  current liabilities                                                                                                                                                                                                                |   |                                                 | 5,510   |                          |   | 6,126        |   |                          | 107,710  |   |   | 591,434 |   |
|                                                                                                                                                                                                                                                      |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
| Mandatorily                  redeemable preferred stock                                                                                                                                                                                                   |   |                                                 | -       |                          |   | -            |   |                          | 13,308   |   |   | - |   |
| Total                  Liabilities                                                                                                                                                                                                                        |   |                                                 | 5,510   |                          |   | 6,126        |   |                          | 121,018  |   |   | 591,434 |   |
|                                                                                                                                                                                                                                                      |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
| Commitments                and contingencies                                                                                                                                                                                                              |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
|                                                                                                                                                                                                                                                      |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
| Stockholders’                  deficit:                                                                                                                                                                                                             |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
| Common                  stock, $.005 par value, 500 million, 500 million, 1 billion, and                  1 billion                  shares authorized; 153,003,343, 268,186,976, 495,159,276, and 595,159,276                  outstanding, respectively |   |                                                 | 765     |                          |   | 1,341        |   |                          | 2,476    |   |   | 2,976 |   |
| Common                  stock to be issued in connection with business acquisition with                  $.005 par                  value                                                                                                                 |   |                                                 | -       |                          |   | -            |   |                          | 24,226   |   |   | 23,726 |   |
| Additional                  paid-in-capital                                                                                                                                                                                                               |   |                                                 | 18,363  |                          |   | 18,604       |   |                          | 24,794   |   |   | 24,794 |   |
| Accumulated                  deficit                                                                                                                                                                                                                      |   |                                                 | (23,039 | )                             |   | (24,690      | )      |                          | (122,650 | ) |   | (620,980 | ) |
| Total                  stockholders’ deficit                                                                                                                                                                                                        |   |                                                 | (3,911  | )                             |   | (4,745       | )      |                          | (71,154  | ) |   | (569,484 | ) |
| Total                  liabilities and stockholders' deficit                                                                                                                                                                                              |   | $                                                    | 1,599   |                          | $      | 1,381        |   | $                             | 49,864   |   | $ | 21,950 |   |
|                                                                                                                                                                                                                                                      |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |
|                                                                                                                                                                                                                                                      |   |                                                 |    |                          |   |         |   |                          |     |   |   |   |   |

----

*Table            of Contents*

| **ASSETS**                                                                                                                                                                                                                                                     |   |                                           |     |                          |   |         |   |                          |     |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|----------|-------------------------------|--------|--------------|--------|-------------------------------|----------|
|                                                                                                                                                                                                                                                           |   |                                           |     |                          |   |         |   |                          |     |
|                                                                                                                                                                                                                                                           |   | (in                  000's, except share data) |     |
|                                                                                                                                                                                                                                                           |   | (unaudited)                                    |     | (unaudited)                   |   | (unaudited)  |   |                          |     |
|                                                                                                                                                                                                                                                           |   | **March                  31,**                 |     | **June                  30,** |   | **Sept.30,** |   | **Dec.                  31,** |     |
|                                                                                                                                                                                                                                                           |   | **2004**                                       |     | **2004**                      |   | **2004**     |   | **2004**                      |     |
| Current                  assets:                                                                                                                                                                                                                               |   |                                           |     |                          |   |         |   |                          |     |
| Cash                  and cash equivalents                                                                                                                                                                                                                     |   | $                                              | 34       |                          | $      | 1,743        |   | $                             | 519      |   | $ | 221 |   |
| Accounts                  receivable, less allowance of $0, $0, $0 and $2,                  respectively                                                                                                                                                       |   |                                           | 25       |                          |   | 83           |   |                          | 51       |   |   | 97 |   |
| Prepaid                  expenses and other current assets                                                                                                                                                                                                     |   |                                           | 21       |                          |   | 39           |   |                          | 53       |   |   | 35 |   |
| Total                  current assets                                                                                                                                                                                                                          |   |                                           | 80       |                          |   | 1,865        |   |                          | 623      |   |   | 353 |   |
| Property                  and equipment, net                                                                                                                                                                                                                   |   |                                           | 426      |                          |   | 208          |   |                          | 88       |   |   | 622 |   |
| Loan                  costs                                                                                                                                                                                                                                    |   |                                           | 101      |                          |   | 292          |   |                          | 259      |   |   | 161 |   |
| Investment                  in GlobalNet, Inc.                                                                                                                                                                                                                 |   |                                           | -        |                          |   | -            |   |                          | -        |   |   | - |   |
| Total                  assets                                                                                                                                                                                                                                  |   | $                                              | 607      |                          | $      | 2,365        |   | $                             | 970      |   | $ | 1,136 |   |
|                                                                                                                                                                                                                                                           |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ DEFICIT**                                                                                                                                                                                               |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |
|                                                                                                                                                                                                                                                           |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |
| Current                  liabilities:                                                                                                                                                                                                                          |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |
| Accounts                  payable                                                                                                                                                                                                                              |   | $                                              | 779      |                          | $      | 778          |   | $                             | 713      |   | $ | 769 |   |
| Accrued                  liabilities                                                                                                                                                                                                                           |   |                                           | 159      |                          |   | 70           |   |                          | 146      |   |   | 99 |   |
| Due                  to related parties                                                                                                                                                                                                                        |   |                                           | 158      |                          |   | 108          |   |                          | 63       |   |   | 38 |   |
| Payable                  to GlobalNet International, L.L.C., net                                                                                                                                                                                               |   |                                           | 2,691    |                          |   | 2,486        |   |                          | 2,390    |   |   | 2,128 |   |
| Current                  portion of notes payable                                                                                                                                                                                                              |   |                                           | 26       |                          |   | 23           |   |                          | 22       |   |   | 22 |   |
| Accrued                  interest payable                                                                                                                                                                                                                      |   |                                           | 217      |                          |   | 269          |   |                          | 348      |   |   | 476 |   |
| Notes                  payable to stockholders, subject to derivative obligations                                                                                                                                                                              |   |                                           | -        |                          |   | -            |   |                          | -        |   |   | - |   |
| Notes                  payable to investors and others, subject to derivative                  obligation                                                                                                                                                      |   |                                           | 1        |                          |   | 6            |   |                          | 26       |   |   | 148 |   |
| Acquistion                  note payable                                                                                                                                                                                                                       |   |                                           | 875      |                          |   | 875          |   |                          | 875      |   |   | 875 |   |
| Current                  portion of mandatorily Redeem. pref. stock, subject to derivative                  obligations                                                                                                                                        |   |                                           | 455      |                          |   | -            |   |                          | -        |   |   | - |   |
| Derivative                  obligations                                                                                                                                                                                                                        |   |                                           | 355,980  |                          |   | 100,729      |   |                          | 51,185   |   |   | 16,855 |   |
| Liability                  to issue stock to GlobalNet International L.L.C.                  consultants                                                                                                                                                       |   |                                           | -        |                          |   | 93           |   |                          | 433      |   |   | - |   |
| Total                  current liabilities                                                                                                                                                                                                                     |   |                                           | 361,341  |                          |   | 105,437      |   |                          | 56,201   |   |   | 21,410 |   |
| Total                  Liabilities                                                                                                                                                                                                                             |   |                                           | 361,341  |                          |   | 105,437      |   |                          | 56,201   |   |   | 21,410 |   |
|                                                                                                                                                                                                                                                           |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |
| Stockholders’                  deficit:                                                                                                                                                                                                                  |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |
| Common                  stock, $.005 par value, 1 billion, 20 billion, 20 billion, and                  20 billion                  shares authorized; 904,110,857, 7,594,802,472, 7,587,303,192, and                  4,502,070,532 outstanding, respectively |   |                                           | 4,521    |                          |   | 37,974       |   |                          | 37,937   |   |   | 22,510 |   |
| Common                  stock to be issued in conjunction with business acquisition with                  a $.005                  par value                                                                                                                   |   |                                           | 23,726   |                          |   | 747          |   |                          | 747      |   |   | - |   |
| Additional                  paid-in-capital                                                                                                                                                                                                                    |   |                                           | 44,893   |                          |   | 77,629       |   |                          | 78,084   |   |   | 123,188 |   |
| Accumulated                  deficit                                                                                                                                                                                                                           |   |                                           | (433,874 | )                             |   | (219,422     | )      |                          | (171,999 | ) |   | (165,972 | ) |
| Total                  stockholders’ deficit                                                                                                                                                                                                             |   |                                           | (360,734 | )                             |   | (103,072     | )      |                          | (55,231  | ) |   | (20,274 | ) |
| Total                  liabilities and stockholders' deficit                                                                                                                                                                                                   |   | $                                              | 607      |                          | $      | 2,365        |   | $                             | 970      |   | $ | 1,136 |   |
|                                                                                                                                                                                                                                                                |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |
|                                                                                                                                                                                                                                                                |   |                                           |     |                          |   |         |   |                          |     |   |   |   |   |

----

*Table            of Contents*

|                                                                        |   | (in                  000's, except share and per share data) |        |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------------------|-------------|
|                                                                        |   | **Three                  Months Ended,**                     |        |
|                                                                        |   | **(unaudited)**                                              |        | **(unaudited)** |   | **(unaudited)** |   | **(unaudited)** |   | Year                  Ended |   |
|                                                                        |   | **March                  31**                                |        | **June                  30** |   | **Sept.                  30** |   | **Dec.                  31** |   | **Dec.                  31** |   |
|                                                                        |   | **2003**                                                     |        | **2003** |   | **2003** |   | **2003** |   | **2003** |   |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |
| Revenue                                                                     |   | $                                                            | 1,165       |   | $ | 1,147 |   | $ | 822 |   | $ | 168 |   | $ | 3,302 |   |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                                         |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Data                  communications and telecommunications                 |   |                                                         | 1,067       |   |   | 1,121 |   |   | 805 |   |   | 326 |   |   | 3,319 |   |
| Network                  operations                                         |   |                                                         | 120         |   |   | 143 |   |   | 93 |   |   | 33 |   |   | 389 |   |
| Selling                  and marketing                                      |   |                                                         | 139         |   |   | 43 |   |   | 32 |   |   | (9 | ) |   | 205 |   |
| General                  and administrative expenses                        |   |                                                         | 375         |   |   | 399 |   |   | 329 |   |   | 200 |   |   | 1,303 |   |
| Write-offs                  of property, plant and equipment                |   |                                                         | -           |   |   | 71 |   |   | - |   |   | 78 |   |   | 149 |   |
| Goodwill                  and intangibles write-off                         |   |                                                         | -           |   |   | - |   |   | - |   |   | 43 |   |   | 43 |   |
| Bad                  debt expense                                           |   |                                                         | 6           |   |   | 6 |   |   | 9 |   |   | 70 |   |   | 91 |   |
| Depreciation                  and amortization                              |   |                                                         | 92          |   |   | 86 |   |   | 84 |   |   | 89 |   |   | 351 |   |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                                             |   |                                                         | (634        | ) |   | (722 | ) |   | (530 | ) |   | (662 | ) |   | (2,548 | ) |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense, net                                      |   |                                                         | (108        | ) |   | (78 | ) |   | (103 | ) |   | (418 | ) |   | (707 | ) |
| Derivatives                  expense                                        |   |                                                         | (762        | ) |   | (196 | ) |   | (95,528 | ) |   | (384,391 | ) |   | (480,877 | ) |
| Gain                  (loss) on extinguishments of debt                     |   |                                                         | 438         |   |   | (279 | ) |   | (711 | ) |   | (64,124 | ) |   | (64,676 | ) |
| Loss                  on conversions of debt                                |   |                                                         | (116        | ) |   | (326 | ) |   | (404 | ) |   | - |   |   | (846 | ) |
| Losses                  on investment in and receivable from related entity |   |                                                         | -           |   |   | - |   |   | (676 | ) |   | (48,738 | ) |   | (49,414 | ) |
| Other                  expense                                              |   |                                                         | 2           |   |   | (50 | ) |   | (8 | ) |   | 3 |   |   | (53 | ) |
| Other                  income                                               |   |                                                         | 1           |   |   | - |   |   | - |   |   | - |   |   | 1 |   |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Loss                                                   |   | $                                                            | (1,179      | ) | $ | (1,651 | ) | $ | (97,960 | ) | $ | (498,330 | ) | $ | (599,120 | ) |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |
| Basic                  weighted average shares outstanding                  |   |                                                         | 120,910,756 |   |   | 204,021,434 |   |   | 403,247,883 |   |   | 541,898,406 |   |   | 318,464,746 |   |
| Basic                  loss per share                                       |   | $                                                            | (0.01       | ) | $ | (0.01 | ) | $ | (0.24 | ) | $ | (0.92 | ) | $ | (1.88 | ) |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |
| Diluted                  weighted average shares outstanding                |   |                                                         | 120,910,756 |   |   | 204,021,434 |   |   | 403,247,883 |   |   | 541,898,406 |   |   | 318,464,746 |   |
| Diluted                  loss per share                                     |   | $                                                            | (0.01       | ) | $ | (0.01 | ) | $ | (0.24 | ) | $ | (0.92 | ) | $ | (1.88 | ) |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                                                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                        |   | (in                  000's, except share and per share data) |           |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------------------|----------------|
|                                                                        |   | **Three                  Months Ended,**                     |           |   |   |
|                                                                        |   | **(unaudited)**                                              |           | **(unaudited)** |   | **(unaudited)** |   | **(unaudited)** |   | **Year                  Ended** |   |
|                                                                        |   | **March                  31**                                |           | **June                  30** |   | **Sept.                  30** |   | **Dec.                  31** |   | **Dec.                  31** |   |
|                                                                        |   | **2004**                                                     |           | **2004** |   | **2004** |   | **2004** |   | **2004** |   |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |
| Revenue                                                                     |   | $                                                            | 56             |   | $ | 1 |   | $ | 7 |   | $ | 17 |   | $ | 81 |   |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                                         |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Data                  communications and telecommunications                 |   |                                                         | 82             |   |   | - |   |   | 10 |   |   | - |   |   | 92 |   |
| Network                  operations                                         |   |                                                         | 15             |   |   | 11 |   |   | 54 |   |   | 80 |   |   | 160 |   |
| Selling                  and marketing                                      |   |                                                         | -              |   |   | 61 |   |   | 8 |   |   | 31 |   |   | 100 |   |
| General                  and administrative expenses                        |   |                                                         | 213            |   |   | 660 |   |   | 335 |   |   | 621 |   |   | 1,829 |   |
| Write-offs                  of property, plant and equipment                |   |                                                         | -              |   |   | 156 |   |   | 86 |   |   | 14 |   |   | 256 |   |
| Goodwill                  and intangibles write-off                         |   |                                                         | -              |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Bad                  debt expense                                           |   |                                                         | (26            | ) |   | 3 |   |   | 37 |   |   | 7 |   |   | 21 |   |
| Depreciation                  and amortization                              |   |                                                         | 62             |   |   | 62 |   |   | 35 |   |   | 28 |   |   | 187 |   |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                                             |   |                                                         | (290           | ) |   | (952 | ) |   | (558 | ) |   | (764 | ) |   | (2,564 | ) |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense, net                                      |   |                                                         | (528           | ) |   | (271 | ) |   | (497 | ) |   | (394 | ) |   | (1,690 | ) |
| Derivatives                  income                                         |   |                                                         | 517,486        |   |   | 223,266 |   |   | 48,037 |   |   | 10,708 |   |   | 799,497 |   |
| Gain                  (loss) on extinguishments of debt                     |   |                                                         | (308,548       | ) |   | (4,823 | ) |   | 838 |   |   | (3,285 | ) |   | (315,818 | ) |
| Loss                  on conversions of debt                                |   |                                                         | (14            | ) |   | (2,676 | ) |   | (90 | ) |   | (123 | ) |   | (2,903 | ) |
| Losses                  on investment in and receivable from related entity |   |                                                         | (21,000        | ) |   | (93 | ) |   | (306 | ) |   | (115 | ) |   | (21,514 | ) |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                 |   | $                                                            | 187,106        |   | $ | 214,451 |   | $ | 47,424 |   | $ | 6,027 |   | $ | 455,008 |   |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                  weighted average common shares outstanding           |   |                                                         | 900,828,611    |   |   | 4,679,006,842 |   |   | 7,611,906,022 |   |   | 5,327,107,623 |   |   | 4,054,850,184 |   |
| Basic                  income per share                                     |   | $                                                            | 0.21           |   | $ | 0.05 |   | $ | 0.01 |   | $ | 0.00 |   | $ | 0.11 |   |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                  weighted average common shares outstanding         |   |                                                         | 18,911,706,738 |   |   | 19,402,980,972 |   |   | 20,597,494,219 |   |   | 12,494,393,645 |   |   | 17,844,508,921 |   |
| Diluted                  income per share                                   |   | $                                                            | 0.01           |   | $ | 0.01 |   | $ | 0.00 |   | $ | 0.00 |   | $ | 0.03 |   |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                                                         |           |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                                                                                 |   | (in                  000's)              |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                                                                                 |   | For                  the Quarters Ended, |   |
|                                                                                                                                 |   | (unaudited)                              |   | (unaudited) |   | (unaudited) |   | (unaudited) |   |
|                                                                                                                                 |   | **March                  31, 2003**      |   | **June                  30, 2003** |   | **Sept.30,                  2003** |   | **Dec.                  31, 2003** |   |
| Cash                  flows from operating activities:                                                                               |   |                                     |   |   |   |   |   |   |   |
| Net                  loss                                                                                                            |   | $                                        | (1,179 | ) | $ | (1,651 | ) | $ | (97,960 | ) | $ | (498,330 | ) |
| Adjustments                  to reconcile net income (loss) to net cash provided by (used                  in) operating activities: |
| Depreciation                  and amortization                                                                                       |   |                                     | 92     |   |   | 86 |   |   | 84 |   |   | 89 |   |
| Write-off                  of property, equipment and intangibles                                                                    |   |                                     | -      |   |   | 71 |   |   | - |   |   | 121 |   |
| Losses                  on investment in and receivable from related entity                                                          |   |                                     | -      |   |   | - |   |   | 676 |   |   | 48,738 |   |
| Stock                  issued to consultants and employees                                                                           |   |                                     | 9      |   |   | 142 |   |   | 231 |   |   | - |   |
| Derivative                  obligation income (expense)                                                                              |   |                                     | 762    |   |   | 196 |   |   | 95,528 |   |   | 384,391 |   |
| Loss                  on extinguishment of derivative instruments                                                                    |   |                                     | (438   | ) |   | 279 |   |   | 711 |   |   | 64,124 |   |
| Loss                  on conversions into common stock                                                                               |   |                                     | 116    |   |   | 326 |   |   | 404 |   |   | - |   |
| Amortization                  of financing costs                                                                                     |   |                                     | 4      |   |   | 96 |   |   | 21 |   |   | 14 |   |
| Change                  in assets and liabilities:                                                                                   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable                                                                                                 |   |                                     | (76    | ) |   | 30 |   |   | 10 |   |   | 154 |   |
| Titan                  prepaid costs                                                                                                 |   |                                     | -      |   |   | - |   |   | - |   |   | (250 | ) |
| Accrued                  interest preferred stock                                                                                    |   |                                     | -      |   |   | - |   |   | 101 |   |   | 257 |   |
| Prepaid                  expenses and other current assets                                                                           |   |                                     | (65    | ) |   | 59 |   |   | 69 |   |   | 20 |   |
| Accounts                  payable                                                                                                    |   |                                     | (2     | ) |   | 38 |   |   | (43 | ) |   | (141 | ) |
| Payable                  to GlobalNet International, net                                                                             |   |                                     | -      |   |   | - |   |   | 436 |   |   | 1,615 |   |
| Due                  to related parties                                                                                              |   |                                     | 21     |   |   | (2 | ) |   | 2 |   |   | (10 | ) |
| Deferred                  revenue                                                                                                    |   |                                     | (86    | ) |   | 3 |   |   | (6 | ) |   | (103 | ) |
| Accrued                  interest payable                                                                                            |   |                                     | (206   | ) |   | 47 |   |   | 1 |   |   | 76 |   |
| Other                  changes in derivative obligations                                                                             |   |                                     | 242    |   |   | (70 | ) |   | (29 | ) |   | 337 |   |
| Accrued                  Liabilities                                                                                                 |   |                                     | 54     |   |   | 43 |   |   | (91 | ) |   | (339 | ) |
| Other                                                                                                                                |   |                                     | 81     |   |   | (39 | ) |   | (80 | ) |   | 8 |   |
| Net                  cash (used in) provided by operating activities                                                                 |   |                                     | (671   | ) |   | (346 | ) |   | 65 |   |   | 771 |   |
|                                                                                                                                 |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from investing activities:                                                                               |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition                  of property and equipment                                                                               |   |                                     | -      |   |   | (15 | ) |   | - |   |   | - |   |
| Proceeds                  from sales of property and equipment                                                                       |   |                                     | -      |   |   | 60 |   |   | - |   |   | 30 |   |
| Expenses                  paid in connection with acquisition                                                                        |   |                                     | -      |   |   | - |   |   | (1,773 | ) |   | (500 | ) |
| Net                  cash (used in) provided by                  investing                  activities                               |   |                                     | -      |   |   | 45 |   |   | (1,773 | ) |   | (470 | ) |
|                                                                                                                                 |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                                                                               |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from issuance of debt                                                                                      |   |                                     | 750    |   |   | 500 |   |   | 1,750 |   |   | - |   |
| Redemptions                  of preferred stock and interest payments                                                                |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
| Note                  and capital lease principal payments                                                                           |   |                                     | (13    | ) |   | (30 | ) |   | (6 | ) |   | (300 | ) |
| Financing                  costs                                                                                                     |   |                                     | (88    | ) |   | (63 | ) |   | (100 | ) |   | - |   |
| Net                  cash (used in) provided by                  financing                  activities                               |   |                                     | 649    |   |   | 407 |   |   | 1,644 |   |   | (300 | ) |
|                                                                                                                                 |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Net                  increase (decrease) in cash and cash equivalents                                                                |   |                                     | (22    | ) |   | 106 |   |   | (64 | ) |   | 1 |   |
| Cash                  and cash equivalents at beginning of period                                                                    |   |                                     | 22     |   |   | - |   |   | 106 |   |   | 42 |   |
| Cash                  and cash equivalents at end of period                                                                          |   | $                                        | -      |   | $ | 106 |   | $ | 42 |   | $ | 43 |   |
|                                                                                                                                 |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                                                                                 |   | (in                  000's)              |         |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------------|
|                                                                                                                                 |   | For                  the Quarters Ended, |         |
|                                                                                                                                 |   | (unaudited)                              |         | (unaudited) |   | (unaudited) |   | (unaudited) |   |
|                                                                                                                                 |   | **March                  31,**           |         | **June                  30,** |   | **Sept.30,** |   | **Dec.                  31,** |   |
|                                                                                                                                 |   | **2004**                                 |         | **2004** |   | **2004** |   | **2004** |   |
| Cash                  flows from operating activities:                                                                               |   |                                     |         |   |   |   |   |   |   |
| Net                  income                                                                                                          |   | $                                        | 187,106      |   | $ | 214,451 |   | $ | 47,424 |   | $ | 6,027 |   |
| Adjustments                  to reconcile net income (loss) to net cash provided by (used                  in) operating activities: |
| Depreciation                  and amortization                                                                                       |   |                                     | 62           |   |   | 62 |   |   | 35 |   |   | 28 |   |
| Write-off                  of property, equipment and intangibles                                                                    |   |                                     | -            |   |   | 156 |   |   | 86 |   |   | 14 |   |
| Losses                  on investment in and receivable from related entity                                                          |   |                                     | 21,000       |   |   | 93 |   |   | 219 |   |   | 115 |   |
| Stock                  issued to consultants and employees                                                                           |   |                                     | -            |   |   | 420 |   |   | 125 |   |   | 273 |   |
| Derivative                  obligation income (expense)                                                                              |   |                                     | (517,486     | ) |   | (223,266 | ) |   | (48,037 | ) |   | (10,708 | ) |
| Loss                  on extinguishment of derivative instruments                                                                    |   |                                     | 308,548      |   |   | 4,823 |   |   | (838 | ) |   | 3,285 |   |
| Loss                  on conversions into common stock                                                                               |   |                                     | 14           |   |   | 2,676 |   |   | 90 |   |   | 123 |   |
| Amortization                  of financing costs                                                                                     |   |                                     | 266          |   |   | 26 |   |   | 3 |   |   | 129 |   |
| Change                  in assets and liabilities:                                                                                   |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable                                                                                                 |   |                                     | 2            |   |   | (58 | ) |   | 32 |   |   | (46 | ) |
| Titan                  prepaid costs                                                                                                 |   |                                     | -            |   |   | - |   |   | - |   |   | - |   |
| Accrued                  interest preferred stock                                                                                    |   |                                     | 195          |   |   | 195 |   |   | - |   |   | 57 |   |
| Prepaid                  expenses and other current assets                                                                           |   |                                     | 5            |   |   | (18 | ) |   | (14 | ) |   | 18 |   |
| Accounts                  payable                                                                                                    |   |                                     | (171         | ) |   | (1 | ) |   | (65 | ) |   | 56 |   |
| Payable                  to GlobalNet International, net                                                                             |   |                                     | 640          |   |   | (205 | ) |   | (96 | ) |   | (262 | ) |
| Due                  to related parties                                                                                              |   |                                     | (3           | ) |   | (50 | ) |   | (45 | ) |   | (25 | ) |
| Deferred                  revenue                                                                                                    |   |                                     | -            |   |   | - |   |   | - |   |   | - |   |
| Accrued                  interest payable                                                                                            |   |                                     | 65           |   |   | 52 |   |   | 79 |   |   | 128 |   |
| Other                  changes in derivative obligations                                                                             |   |                                     | -            |   |   | - |   |   | 49 |   |   | 4 |   |
| Accrued                  Liabilities                                                                                                 |   |                                     | 73           |   |   | (89 | ) |   | 76 |   |   | (47 | ) |
| Other                                                                                                                                |   |                                     | 1            |   |   | 5 |   |   | - |   |   | (79 | ) |
| Net                  cash (used                  in) provided by                  operating activities                               |   |                                     | 317          |   |   | (728 | ) |   | (877 | ) |   | (910 | ) |
|                                                                                                                                 |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from investing activities:                                                                               |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Acquisition                  of property and equipment                                                                               |   |                                     | -            |   |   | - |   |   | - |   |   | (500 | ) |
| Proceeds                  from sales of property and equipment                                                                       |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Expenses                  paid in connection with acquisition                                                                        |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                 |   |                                     |    |   |   |    |   |   |     |   |   |    |   |
| Net                  cash used in investing activities                                                                               |   |                                     | -            |   |   | - |   |   | - |   |   | (500 | ) |
|                                                                                                                                 |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                                                                               |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from issuance of debt                                                                                      |   |                                     | -            |   |   | 2,600 |   |   | - |   |   | 1,200 |   |
| Redemptions                  of preferred stock and interest payments                                                                |   |                                     | -            |   |   | - |   |   | (346 | ) |   | - |   |
| Note                  and capital lease principal payments                                                                           |   |                                     | (326         | ) |   | (3 | ) |   | (1 | ) |   | - |   |
| Financing                  costs                                                                                                     |   |                                     | -            |   |   | (160 | ) |   | - |   |   | (88 | ) |
|                                                                                                                                 |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Net                  cash (used                  in) provided by                  financing activities                               |   |                                     | (326         | ) |   | 2,437 |   |   | (347 | ) |   | 1,112 |   |
|                                                                                                                                 |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Net                  increase (decrease) in cash and cash equivalents                                                                |   |                                     | (9           | ) |   | 1,709 |   |   | (1,224 | ) |   | (298 | ) |
| Cash                  and cash equivalents at beginning of period                                                                    |   |                                     | 43           |   |   | 34 |   |   | 1,743 |   |   | 519 |   |
| Cash                  and cash equivalents at end of period                                                                          |   | $                                        | 34           |   | $ | 1,743 |   | $ | 519 |   | $ | 221 |   |
|                                                                                                                                 |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                                     |         |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                                                           |   | (in                  000's)              |   |
|----------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                                                           |   | For                  the Quarters Ended, |   |
|                                                                                                           |   | (unaudited)                              |   | (unaudited) |   | (unaudited) |   | (unaudited) |   |
|                                                                                                           |   | **March                  31,**           |   | **June                  30,** |   | **Sept.30,** |   | **Dec.                  31,** |   |
|                                                                                                           |   | **2003**                                 |   | **2003** |   | **2003** |   | **2003** |   |
| Supplemental                  disclosure of noncash financing                                                  |   |                                     |   |   |   |   |   |   |   |
| and                  investing activity:                                                                       |   |                                     |   |   |   |   |   |   |   |
| Conversion                  of convertible notes into equity                                                   |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
| Conversion                  of investor notes into common stock                                                |   |                                     | 228    |   |   | 676 |   |   | 256 |   |   | - |   |
| Conversion                  of shareholder notes into common stock                                             |   |                                     | -      |   |   | - |   |   | 1,251 |   |   | - |   |
| Mandatorily                  redeemable preferred stock issued in business acquisition                         |   |                                     | -      |   |   | - |   |   | 15,600 |   |   | - |   |
| Stock                  issued in connection with business acquisition                                          |   |                                     | -      |   |   | - |   |   | - |   |   | 500 |   |
| Common                  stock to be issued in connection with business acquisition                             |   |                                     | -      |   |   | - |   |   | 23,726 |   |   | - |   |
| Stock                  issued for net assets acquired in connection with business                  acquisition |   |                                     | -      |   |   | - |   |   | 73 |   |   | - |   |
| Conversion                  of mandatorily redeemable preferred stock                                          |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
| Surrender                  of mandatorily redeemable preferred stock                                           |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
|                                                                                                           |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental                  disclosure cash flow information:                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  paid:                                                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                                                       |   |                                     | 3      |   |   | 7 |   |   | 5 |   |   | 5 |   |
| Income                  taxes                                                                                  |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
|                                                                                                           |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                                                           |   | (in                  000's)              |   |
|----------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                                                           |   | For                  the Quarters Ended, |   |
|                                                                                                           |   | (unaudited)                              |   | (unaudited) |   | (unaudited) |   | (unaudited) |   |
|                                                                                                           |   | **March                  31,**           |   | **June                  30,** |   | **Sept.30,** |   | **Dec.                  31,** |   |
|                                                                                                           |   | **2004**                                 |   | **2004** |   | **2004** |   | **2004** |   |
| Supplemental                  disclosure of noncash financing                                                  |   |                                     |   |   |   |   |   |   |   |
| and                  investing activity:                                                                       |   |                                     |   |   |   |   |   |   |   |
| Conversion                  of convertible notes into equity                                                   |   |                                     | -      |   |   | 8,288 |   |   | - |   |   | - |   |
| Conversion                  of investor notes into common stock                                                |   |                                     | 644    |   |   | 1,026 |   |   | - |   |   | 1,056 |   |
| Conversion                  of shareholder notes into common stock                                             |   |                                     | -      |   |   | 20,675 |   |   | - |   |   | - |   |
| Mandatorily                  redeemable preferred stock issued in business acquisition                         |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
| Common                  stock to be issued in connection with business acquisition                             |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
| Stock                  issued for net assets acquired in connection with business                  acquisition |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
| Conversion                  of mandatorily redeemable preferred stock                                          |   |                                     | -      |   |   | 12,801 |   |   | 413 |   |   | - |   |
| Surrender                  of mandatorily redeemable preferred stock                                           |   |                                     | -      |   |   | - |   |   | - |   |   | 27,055 |   |
|                                                                                                           |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental                  disclosure cash flow information:                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  paid:                                                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                                                       |   |                                     | 2      |   |   | 1 |   |   | 374 |   |   | 63 |   |
| Income                  taxes                                                                                  |   |                                     | -      |   |   | - |   |   | - |   |   | - |   |
|                                                                                                           |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                                                              |   | (in                  000's)   |               |
|-------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------------------|
|                                                                                                              |   | Common                  Stock |               | Acquisition |   | Additional |   | Accumulated |   | Total |   |
|                                                                                                              |   | Shares                        |               | Amount |   | Shares |   | Amount |   | Paid-in                  Capital |   | Deficit |   | Deficit |   |
| Balance                  at December 31, 2002                                                                     |   |                          | 106,442            |   | $ | 532 |   |   |   |   |   |   |   | $ | 18,060 |   | $ | (21,860 | ) | $ | (3,268 | ) |
| Cancellation                  of stock                                                                            |   |                          | (1,250             | ) |   | (6 | ) |   |   |   |   |   |   |   | 4 |   |   |   |   |   | (2 | ) |
| Conversion                  of convertible note to investors and others                                           |   |                          | 16,911             |   |   | 84 |   |   |   |   |   |   |   |   | 144 |   |   |   |   |   | 228 |   |
| Issuances                  of stock to employees and consultants                                                  |   |                          | 900                |   |   | 5 |   |   |   |   |   |   |   |   | 5 |   |   |   |   |   | 10 |   |
| Deposit                  on GBLK acquisition                                                                      |   |                          | 30,000             |   |   | 150 |   |   |   |   |   |   |   |   | 150 |   |   |   |   |   | 300 |   |
| Net                  loss for the period                                                                          |   |                          |               |   |   |    |   |   |    |   |   |   |   |   |    |   |   | (1,179 | ) |   | (1,179 | ) |
| Balance                  at March 31, 2003 (unaudited)                                                            |   |                          | 153,003            |   | $ | 765 |   |   | - |   | $ | - |   | $ | 18,363 |   | $ | (23,039 | ) | $ | (3,911 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of convertible note to investors and others                                           |   |                          | 89,469             |   |   | 447 |   |   |   |   |   |   |   |   | 229 |   |   |   |   |   | 676 |   |
| Issuances                  of stock to employees and consultants                                                  |   |                          | 25,715             |   |   | 129 |   |   |   |   |   |   |   |   | 12 |   |   |   |   |   | 141 |   |
| Net                  loss for the period                                                                          |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,651 | ) |   | (1,651 | ) |
| Balance                  at June 30, 2003 (unaudited)                                                             |   |                          | 268,187            |   | $ | 1,341 |   |   | - |   | $ | - |   | $ | 18,604 |   | $ | (24,690 | ) | $ | (4,745 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of convertible note to investors and others                                           |   |                          | 63,304             |   |   | 317 |   |   |   |   |   |   |   |   | (61 | ) |   |   |   |   | 256 |   |
| Conversion                  of convertible note to stockholders                                                   |   |                          | 96,588             |   |   | 482 |   |   |   |   |   |   |   |   | 769 |   |   |   |   |   | 1,251 |   |
| Issuances                  of stock to employees and consultants                                                  |   |                          | 71,912             |   |   | 360 |   |   |   |   |   |   |   |   | (129 | ) |   |   |   |   | 231 |   |
| Completion                  of GBLK acquisition                                                                   |   |                          | (4,832             | ) |   | (24 | ) |   |   |   |   |   |   |   | (203 | ) |   |   |   |   | (227 | ) |
| GlobalNet,                  Inc. acquisition, issuances subject to increase in authorized                  shares |   |                          |               |   |   |   |   |   | 4,845,232 |   |   | 24,226 |   |   | 5,814 |   |   |   |   |   | 30,040 |   |
| Net                  loss for the period                                                                          |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (97,960 | ) |   | (97,960 | ) |
| Balance                  at September 30, 2003 (unaudited)                                                        |   |                          | 495,159            |   | $ | 2,476 |   |   | 4,845,232 |   | $ | 24,226 |   | $ | 24,794 |   | $ | (122,650 | ) | $ | (71,154 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GlobalNet,                  Inc. acquisition, partial issuances of committed shares                               |   |                          | 100,000            |   |   | 500 |   |   | (100,000 | ) |   | (500 | ) |   | - |   |   |   |   |   | - |   |
| Net                  loss for the period                                                                          |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (498,330 | ) |   | (498,330 | ) |
| Balance                  at December 31, 2003 (restated)                                                          |   |                          | 595,159            |   | $ | 2,976 |   |   | 4,745,232 |   | $ | 23,726 |   | $ | 24,794 |   | $ | (620,980 | ) | $ | (569,484 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of convertible note to investors and others                                           |   |                          | 8,952              |   |   | 45 |   |   |   |   |   |   |   |   | 599 |   |   |   |   |   | 644 |   |
| Issuances                  of stock to employees and consultants                                                  |   |                          | 300,000            |   |   | 1,500 |   |   |   |   |   |   |   |   | 19,500 |   |   |   |   |   | 21,000 |   |
| Net                  Income for the period                                                                        |   |                          |     |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 187,106 |   |   | 187,106 |   |
| Balance                  at March 31, 2004 (unaudited)                                                            |   |                          | 904,111            |   | $ | 4,521 |   |   | 4,745,232 |   | $ | 23,726 |   | $ | 44,893 |   | $ | (433,874 | ) | $ | (360,734 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of convertible note to investors and others                                           |   |                          | 305,266            |   |   | 1,526 |   |   |   |   |   |   |   |   | 7,788 |   |   |   |   |   | 9,314 |   |
| Conversion                  of convertible note to stockholders                                                   |   |                          | 658,736            |   |   | 3,294 |   |   |   |   |   |   |   |   | 17,381 |   |   |   |   |   | 20,675 |   |
| Conversion                  of mandatorily redeemable pref. stock                                                 |   |                          | 1,115,875          |   |   | 5,579 |   |   |   |   |   |   |   |   | 7,222 |   |   |   |   |   | 12,801 |   |
| Issuances                  of stock to employees and consultants                                                  |   |                          | 15,000             |   |   | 75 |   |   |   |   |   |   |   |   | 345 |   |   |   |   |   | 420 |   |
| GlobalNet,                  Inc. acquisition, completion of issuances of committed                  shares        |   |                          | 4,595,815          |   |   | 22,979 |   |   | (4,595,815 | ) |   | (22,979 | ) |   |   |   |   |   |   |   | - |   |
| Net                  Income for the period                                                                        |   |                          |          |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 214,451 |   |   | 214,451 |   |
| Balance                  at June 30, 2004 (unaudited)                                                             |   |                          | 7,594,803          |   | $ | 37,974 |   |   | 149,417 |   | $ | 747 |   | $ | 77,629 |   | $ | (219,423 | ) | $ | (103,073 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of mandatorily redeemable pref. stock                                                 |   |                          | 56,000             |   |   | 280 |   |   |   |   |   |   |   |   | 133 |   |   |   |   |   | 413 |   |
| Issuances                  of stock to employees and consultants                                                  |   |                          | 500                |   |   | 3 |   |   |   |   |   |   |   |   | 2 |   |   |   |   |   | 5 |   |
| Surrender                  of common stock by majority shareholder                                                |   |                          | (63,999            | ) |   | (320 | ) |   |   |   |   |   |   |   | 320 |   |   |   |   |   | (0 | ) |
| Net                  Income for the period                                                                        |   |                          |          |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 47,424 |   |   | 47,424 |   |
| Balance                  at September 30, 2004 (unaudited)                                                        |   |                          | 7,587,304          |   | $ | 37,937 |   |   | 149,417 |   | $ | 747 |   | $ | 78,084 |   | $ | (171,999 | ) | $ | (55,231 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of convertible note to investors and others                                           |   |                          | 75,873             |   |   | 379 |   |   |   |   |   |   |   |   | 677 |   |   |   |   |   | 1,056 |   |
| Issuances                  of stock to employees and consultants                                                  |   |                          | 125,478            |   |   | 627 |   |   |   |   |   |   |   |   | 192 |   |   |   |   |   | 819 |   |
| Surrender                  of common stock by majority shareholder                                                |   |                          | (3,436,001         | ) |   | (17,180 | ) |   |   |   |   |   |   |   | 17,180 |   |   |   |   |   | - |   |
| Surrender                  of mand.redeem. pref. stock by maj. Shareholder                                        |   |                          |               |   |   |   |   |   |   |   |   |   |   |   | 27,055 |   |   |   |   |   | 27,055 |   |
| GlobalNet,                  Inc. acquisition, completion of issuances of committed                  shares        |   |                          | 149,417            |   |   | 747 |   |   | (149,417 | ) |   | (747 | ) |   |   |   |   |   |   |   | - |   |
| NetIncome                  for the period                                                                         |   |                          |          |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 6,027 |   |   | 6,027 |   |
| Balance                  at December 31, 2004                                                                     |   |                          | 4,502,071          |   | $ | 22,510 |   |   | - |   | $ | - |   | $ | 123,188 |   | $ | (165,972 | ) | $ | (20,274 | ) |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |                          |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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*Table            of Contents*

----

*Table            of Contents*

|                                                                                                     |   | (unaudited)                    |   | (unaudited)                   |   | (unaudited)                    |   | (unaudited)                           |    | (unaudited)                    |   | (unaudited)                   |   |
|----------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|-------------------------------|--------|--------------------------------|--------|---------------------------------------|---------|--------------------------------|--------|-------------------------------|--------|
|                                                                                                     |   |                           |   |                          |   |                           |   | Debtor                  in Possession |    |
| **ASSETS**                                                                                               |   | **Sept.                  30,** |   | **Dec.                  31,** |   | **March                  31,** |   | **June                  30,**         |    | **Sept.                  30,** |   | **Dec.                  31,** |   |
|                                                                                                     |   | **2003**                       |   | **2003**                      |   | **2004**                       |   | **2004**                              |    | **2004**                       |   | **2004**                      |   |
| Current                  assets:                                                                         |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |
| Cash                  and cash equivalents                                                               |   | $                              | 262    |                          | $      | 362                            |   | $                                     | 884     |                           | $      | 258                           |   | $ | 917 |   | $ | 205 |   |
| Accounts                  receivable, less allowance of $1,129 and $1,000,                  respectively |   |                           | 3,440  |                          |   | 3,002                          |   |                                  | 3,891   |                           |   | 2,028                         |   |   | 842 |   |   | 1,035 |   |
| Prepaid                  expenses and other current assets                                               |   |                           | 438    |                          |   | 331                            |   |                                  | 180     |                           |   | 259                           |   |   | 122 |   |   | 95 |   |
| Carrier                  deposits                                                                        |   |                           | 522    |                          |   | 344                            |   |                                  | 80      |                           |   | 65                            |   |   | 275 |   |   | 275 |   |
| Receivable                  from parent and parent's subsidiary, net                                     |   |                           | 436    |                          |   | 2,051                          |   |                                  | 2,691   |                           |   | 2,487                         |   |   | 2,390 |   |   | 2,121 |   |
| Deferred                  asset, consultant services                                                     |   |                           | -      |                          |   | 10,063                         |   |                                  | -       |                           |   | -                             |   |   | - |   |   | - |   |
| Total                  current assets                                                                    |   |                           | 5,098  |                          |   | 16,153                         |   |                                  | 7,726   |                           |   | 5,097                         |   |   | 4,546 |   |   | 3,731 |   |
| Property                  and equipment, net                                                             |   |                           | 2,624  |                          |   | 2,355                          |   |                                  | 2,238   |                           |   | 1,911                         |   |   | 1,643 |   |   | 686 |   |
| Deferred                  asset, consultant services                                                     |   |                           |   |                          |   | 10,500                         |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Intangible                  assets, net                                                                  |   |                           | 10,639 |                          |   | -                              |   |                                  | -       |                           |   | -                             |   |   | - |   |   | - |   |
| Goodwill                                                                                                 |   |                           | 47,396 |                          |   | -                              |   |                                  | -       |                           |   | -                             |   |   | - |   |   | - |   |
| Total                  Assets                                                                            |   | $                              | 65,757 |                          | $      | 29,008                         |   | $                                     | 9,964   |                           | $      | 7,008                         |   | $ | 6,189 |   | $ | 4,417 |   |
|                                                                                                     |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ EQUITY (DEFICIT)**                                |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
|                                                                                                     |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Current                  liabilities:                                                                    |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Current                  liabilities not subject to compromise:                                          |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Accounts                  payable                                                                        |   | $                              | 3,219  |                          | $      | 3,024                          |   | $                                     | 2,166   |                           | $      | -                             |   | $ | 476 |   | $ | 1,239 |   |
| Accounts                  payable due to MCI                                                             |   |                           | 5,591  |                          |   | 9,850                          |   |                                  | 14,428  |                           |   | -                             |   |   | 358 |   |   | 53 |   |
| Accrued                  liabilities                                                                     |   |                           | 379    |                          |   | 270                            |   |                                  | 407     |                           |   | -                             |   |   | - |   |   | - |   |
| Current                  portion of note due to MCI                                                      |   |                           | 2,450  |                          |   | 3,682                          |   |                                  | 2,524   |                           |   | -                             |   |   | - |   |   | - |   |
| Deferred                  revenue                                                                        |   |                           | 51     |                          |   | 33                             |   |                                  | 43      |                           |   | -                             |   |   | - |   |   | 122 |   |
| Restructuring                  reserve                                                                   |   |                           | 221    |                          |   | 138                            |   |                                  | 77      |                           |   | -                             |   |   | - |   |   | - |   |
| Capital                  lease obligations                                                               |   |                           | 3,053  |                          |   | 2,749                          |   |                                  | 2,626   |                           |   | -                             |   |   | - |   |   | - |   |
| Notes                  payable and accrued interest- parent                                              |   |                           | 108    |                          |   | 385                            |   |                                  | 657     |                           |   | -                             |   |   | - |   |   | - |   |
| Total                  current liabilities not subject to compromise                                     |   |                           | 15,072 |                          |   | 20,131                         |   |                                  | 22,928  |                           |   | -                             |   |   | 834 |   |   | 1,414 |   |
|                                                                                                     |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Current                  liabilities subject to compromise:                                              |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Accounts                  payable                                                                        |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | 4,168                         |   |   | 4,168 |   |   | 1,464 |   |
| Accounts                  payable due to MCI                                                             |   |                           |   |                          |   |                           |   |                                  |    |                           |   | 14,747                        |   |   | 14,747 |   |   | 14,747 |   |
| Accrued                  liabilities                                                                     |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | 172                           |   |   | 97 |   |   | 108 |   |
| Note                  due to MCI                                                                         |   |                           |   |                          |   |                           |   |                                  |    |                           |   | 2,664                         |   |   | 2,664 |   |   | 2,664 |   |
| Deferred                  revenue                                                                        |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | 30                            |   |   | 21 |   |   | - |   |
| Restructuring                  reserve                                                                   |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | 47                            |   |   | 17 |   |   | - |   |
| Capital                  lease obligations                                                               |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | 19                            |   |   | 10 |   |   | 6 |   |
| Notes                  payable and accrued interest- parent                                              |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | 40,052                        |   |   | 40,052 |   |   | 40,052 |   |
| Total                  current liabilities subject to compromise                                         |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | 61,899                        |   |   | 61,776 |   |   | 59,041 |   |
| Total                  current liabilities                                                               |   |                           | 15,072 |                          |   | 20,131                         |   |                                  | 22,928  |                           |   | 61,899                        |   |   | 62,610 |   |   | 60,455 |   |
|                                                                                                     |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Capital                  lease obligations, net of current portion                                       |   |                           | 223    |                          |   | 6                              |   |                                  | 5       |                           |   | -                             |   |   | - |   |   | - |   |
| Note                  payable to MCI                                                                     |   |                           | 1,831  |                          |   | -                              |   |                                  | 550     |                           |   | -                             |   |   | - |   |   | - |   |
| Notes                  payable to parent                                                                 |   |                           | 18,122 |                          |   | 39,122                         |   |                                  | 39,122  |                           |   | -                             |   |   | - |   |   | - |   |
| Total                  Liabilities                                                                       |   |                           | 35,248 |                          |   | 59,259                         |   |                                  | 62,605  |                           |   | 61,889                        |   |   | 62,610 |   |   | 60,455 |   |
|                                                                                                     |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Stockholders’                  equity (deficit):                                                   |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
| Common                  stock                                                                            |   |                           | -      |                          |   | -                              |   |                                  | -       |                           |   | -                             |   |   | - |   |   | - |   |
| Additional                  paid-in capital                                                              |   |                           | 31,292 |                          |   | 31,292                         |   |                                  | 31,292  |                           |   | 31,385                        |   |   | 31,605 |   |   | 31,719 |   |
| Accumulated                  deficit                                                                     |   |                           | (783   | )                             |   | (61,543                        | )      |                                  | (83,933 | )                              |   | (86,276                       | )      |   | (88,026 | ) |   | (87,757 | ) |
| Total                  stockholders’ equity (deficit)                                              |   |                           | 30,509 |                          |   | (30,251                        | )      |                                  | (52,641 | )                              |   | (54,891                       | )      |   | (54,421 | ) |   | (56,038 | ) |
| Total                  liabilities and stockholders' equity (deficit)                                    |   | $                              | 65,757 |                          | $      | 29,008                         |   | $                                     | 9,964   |                           | $      | 7,008                         |   | $ | 6,189 |   | $ | 4,417 |   |
|                                                                                                     |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |
|                                                                                                     |   |                           |   |                          |   |                           |   |                                  |    |                           |   |                          |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                      |   | (in                  000's)                                            |   |
|-----------------------------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                                      |   |                                                                   |   |   |   |   |   | Three                  Months Ended, |   |   |   |
|                                                      |   |                                                                   |   |   |   |   |   |   |   | Debtor                  in Possession |   | Debtor                  in Possession |   | Debtor                  in Possession |   | Debtor                  in Possession |   |
| **(unaudited)**                                           |   | **Period                  From August 26, 2003 to September 30, 2003** |   | **Three                  Months Ended December 31, 2003** |   | **Period                  From August 26, 2003 to December 31, 2003** |   | **March                  31,****2004** |   | **June                  30,****2004** |   | **Sept.                  30,****2004** |   | **Dec.                  31,****2004** |   | **Year                  Ended December 31, 2004** |   |
|                                                      |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                                   |   | $                                                                      | 11,668 |   | $ | 20,754 |   | $ | 32,422 |   | $ | 20,335 |   | $ | 21,798 |   | $ | 12,302 |   | $ | 13,700 |   | $ | 68,135 |   |
|                                                      |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                       |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Data                  communications and telecom          |   |                                                                   | 11,128 |   |   | 20,349 |   |   | 31,477 |   |   | 19,547 |   |   | 21,348 |   |   | 12,209 |   |   | 13,809 |   |   | 66,913 |   |
| Network                  operations                       |   |                                                                   | 460    |   |   | 1,022 |   |   | 1,482 |   |   | 972 |   |   | 984 |   |   | 835 |   |   | 728 |   |   | 3,519 |   |
| Selling                  and marketing                    |   |                                                                   | 60     |   |   | 604 |   |   | 664 |   |   | 20,812 |   |   | 280 |   |   | 238 |   |   | 117 |   |   | 21,447 |   |
| General                  and administrative expenses      |   |                                                                   | 295    |   |   | 751 |   |   | 1,046 |   |   | 776 |   |   | 715 |   |   | 459 |   |   | 333 |   |   | 2,283 |   |
| Write-offs                  of property, plant and equip. |   |                                                                   | -      |   |   | 99 |   |   | 99 |   |   | 13 |   |   | 106 |   |   | 51 |   |   | 196 |   |   | 366 |   |
| Goodwill                  and intangibles write-off       |   |                                                                   | -      |   |   | 57,305 |   |   | 57,305 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Bad                  debt expense                         |   |                                                                   | -      |   |   | 37 |   |   | 37 |   |   | 9 |   |   | 132 |   |   | 36 |   |   | 3 |   |   | 180 |   |
| Depreciation                  and amortization            |   |                                                                   | 334    |   |   | 954 |   |   | 1,288 |   |   | 226 |   |   | 230 |   |   | 224 |   |   | 199 |   |   | 879 |   |
|                                                      |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                           |   |                                                                   | (609   | ) |   | (60,367 | ) |   | (60,976 | ) |   | (22,020 | ) |   | (1,997 | ) |   | (1,750 | ) |   | (1,685 | ) |   | (27,452 | ) |
|                                                      |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  on note to parent               |   |                                                                   | (108   | ) |   | (277 | ) |   | (385 | ) |   | (273 | ) |   | (273 | ) |   | - |   |   | - |   |   | (546 | ) |
| Interest                  expense, net                    |   |                                                                   | (66    | ) |   | (116 | ) |   | (182 | ) |   | (97 | ) |   | (73 | ) |   | - |   |   | - |   |   | (170 | ) |
| Gain                  on extinguishments of debt          |   |                                                                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,954 |   |   | 1,954 |   |
|                                                      |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  (loss) income                        |   | $                                                                      | (783   | ) | $ | (60,760 | ) | $ | (61,543 | ) | $ | (22,390 | ) | $ | (2,343 | ) | $ | (1,750 | ) | $ | 269 |   | $ | (26,214 | ) |
|                                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                                                                                 |   | (in                  000's)              |               |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------------------|
|                                                                                                                                 |   | For                  the Quarters Ended, |               |
|                                                                                                                                 |   | (unaudited)                              |               | (unaudited) |   | (unaudited) |   | (unaudited) |   | (unaudited) |   | (unaudited) |   |
|                                                                                                                                 |   | **Sept.30,****2003**                     |               | **Dec.                  31,****2003** |   | **March                  31, 2004** |   | **June                  30,****2004** |   | **Sept.30,****2004** |   | **Dec.                  31,****2004** |   |
| Cash                  flows from operating activities:                                                                               |   |                                     |               |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                                                                                                   |   |                                     | (783               | ) |   | (60,760 | ) | $ | (22,390 | ) | $ | (2,343 | ) | $ | (1,750 | ) | $ | 269 |   |
| Adjustments                  to reconcile net income (loss) to net cash provided by (used                  in) operating activities: |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and amortization                                                                                       |   |                                     | 334                |   |   | 954 |   |   | 226 |   |   | 230 |   |   | 224 |   |   | 199 |   |
| Write-off                  of property, equipment and intangibles                                                                    |   |                                     | -                  |   |   | 99 |   |   | 13 |   |   | 106 |   |   | 51 |   |   | 196 |   |
| Write-off                  of Goodwill and identifiable intangibles                                                                  |   |                                     |               |   |   | 57,305 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision                  for doubtful accounts                                                                                     |   |                                     | -                  |   |   | 37 |   |   | 9 |   |   | 132 |   |   | 36 |   |   | 3 |   |
| Noncash                  stock issued for consulting and employees                                                                   |   |                                     | -                  |   |   | 437 |   |   | 20,563 |   |   | - |   |   | - |   |   | - |   |
| Gain                  on extinguishment                                                                                              |   |                                     | -                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (1,954 | ) |
| Change                  in assets and liabilities:                                                                                   |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable                                                                                                 |   |                                     | (335               | ) |   | 401 |   |   | (898 | ) |   | 1,731 |   |   | 1,150 |   |   | (196 | ) |
| Prepaid                  expenses and other current assets                                                                           |   |                                     | 489                |   |   | 107 |   |   | 151 |   |   | (79 | ) |   | 137 |   |   | 27 |   |
| Carrier                  deposits                                                                                                    |   |                                     | -                  |   |   | 178 |   |   | 264 |   |   | 15 |   |   | (210 | ) |   | - |   |
| Receivable                  from GlobalNet Corporation, net                                                                          |   |                                     | (328               | ) |   | (1,338 | ) |   | (368 | ) |   | 477 |   |   | 97 |   |   | 836 |   |
| Accounts                  payable                                                                                                    |   |                                     | 2,165              |   |   | (195 | ) |   | (858 | ) |   | (624 | ) |   | 476 |   |   | 13 |   |
| Accounts                  payable to MCI                                                                                             |   |                                     | -                  |   |   | 4,259 |   |   | 4,578 |   |   | 319 |   |   | 358 |   |   | (305 | ) |
| Accrued                  Liabilities                                                                                                 |   |                                     | (1,121             | ) |   | (109 | ) |   | 137 |   |   | (142 | ) |   | 145 |   |   | 125 |   |
| MCI                  note current                                                                                                    |   |                                     |               |   |   |   |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Deferred                  revenue                                                                                                    |   |                                     | 9                  |   |   | (18 | ) |   | 10 |   |   | (13 | ) |   | (9 | ) |   | 101 |   |
| Restructuring                  reserve                                                                                               |   |                                     | (28                | ) |   | (83 | ) |   | (61 | ) |   | (30 | ) |   | (30 | ) |   | (17 | ) |
| Capital                  lease                                                                                                       |   |                                     |               |   |   |   |   |   | - |   |   | 14 |   |   | - |   |   | - |   |
| Other                                                                                                                                |   |                                     | -                  |   |   | (1 | ) |   | - |   |   | 2 |   |   | (5 | ) |   | (1 | ) |
| Net                  cash (used in) provided by operating activities                                                                 |   |                                     | 402                |   |   | 1,273 |   |   | 1,376 |   |   | (205 | ) |   | 670 |   |   | (704 | ) |
|                                                                                                                                 |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from investing activities:                                                                               |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition                  of property and equipment                                                                               |   |                                     | -                  |   |   | (53 | ) |   | (122 | ) |   | (11 | ) |   | (2 | ) |   | (4 | ) |
| Proceeds                  from sales of property and equipment                                                                       |   |                                     | -                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Cash                  and transaction expenses paid in connection with                  acquisition                                  |   |                                     |     |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |
| Net                  cash used in investing activities                                                                               |   |                                     | -                  |   |   | (53 | ) |   | (122 | ) |   | (11 | ) |   | (2 | ) |   | (4 | ) |
|                                                                                                                                 |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                                                                               |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from issuance of debt                                                                                      |   |                                     | -                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Note                  and capital lease principal payments                                                                           |   |                                     | (890               | ) |   | (1,120 | ) |   | (732 | ) |   | (410 | ) |   | (9 | ) |   | (4 | ) |
| Financing                  costs                                                                                                     |   |                                     |               |   |   |   |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                                                 |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  cash used in financing activities                                                                               |   |                                     | (890               | ) |   | (1,120 | ) |   | (732 | ) |   | (410 | ) |   | (9 | ) |   | (4 | ) |
|                                                                                                                                 |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  (decrease) increase in cash and cash equivalents                                                                |   |                                     | (488               | ) |   | 100 |   |   | 522 |   |   | (626 | ) |   | 659 |   |   | (712 | ) |
| Cash                  and cash equivalents at beginning of period                                                                    |   |                                     | 750                |   |   | 262 |   |   | 362 |   |   | 884 |   |   | 258 |   |   | 917 |   |
| Cash                  and cash equivalents at end of period                                                                          |   | $                                        | 262                |   | $ | 362 |   | $ | 884 |   | $ | 258 |   | $ | 917 |   | $ | 205 |   |
|                                                                                                                                 |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental                  disclosure cash flow information:                                                                      |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  paid:                                                                                                      |   |                                     | 81                 |   |   | 116 |   |   | 97 |   |   | 31 |   |   | - |   |   | - |   |
|                                                                                                                                 |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                 |   |                                     |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

----

*Table            of Contents*

|                                                                   |   | Quarter                  Ended March 31, 2003 (in 000's) |   |
|------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                     |   | Data |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                     |   | Commun- |   | Network |   | Selling |   | G&A |   | Bad                  Debt |   | Depreciation |   |
|                                                                   |   | Revenues                                                 |   | ications |   | Operations |   | Expenses |   | Expenses |   | Expense |   | Amortization |   |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended March 31, 2003 |   | $                                                        | 1,625  |   | $ | 1,522 |   | $ | - |   | $ | - |   | $ | 629 |   | $ | - |   | $ | 100 |   |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Miscellaneous                  corrections and reclassifications       |   |                                                     | -      |   |   | 5 |   |   | 120 |   |   | 139 |   |   | (254 | ) |   | 6 |   |   | (8 | ) |
| Reclassify                  agent commissions against revenues         |   |                                                     | (460   | ) |   | (460 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended March 31, 2003             |   | $                                                        | 1,165  |   | $ | 1,067 |   | $ | 120 |   |   | 139 |   | $ | 375 |   |   | 6 |   | $ | 92 |   |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                   |   | Quarter                  Ended March 31, 2003 (in 000's) |   |
|------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                     |   |   |   | Loss                  on |   | Loss                  on |   | Loss                  on |   |   |   |   |   |
|                                                                   |   | Interest                                                 |   | Derivative |   | Extinguishment |   | Conversion |   | Investment/ |   |   |   | Net                  (Loss) |   |
| *Continued*                                                            |   | Expense                                                  |   | Expense |   | of                  Debt |   | of                  Debt |   | Receivable |   | Other |   | Income |   |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended March 31, 2003 |   | $                                                        | 177    |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | (803 | ) |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beneficial                  conversion feature interest                |   |                                                     | (135   | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 135 |   |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accretion                  of interest on bifurcated instruments       |   |                                                     | 46     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (46 | ) |
| Derivatives                  expense/(income)                          |   |                                                     | -      |   |   | 762 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (762 | ) |
| (Gain)/loss                  on extinguishments of debt                |   |                                                     | -      |   |   | - |   |   | (438 | ) |   | - |   |   | - |   |   | - |   |   | 438 |   |
| (Gain)/loss                  on conversions of debt                    |   |                                                     | -      |   |   | - |   |   | - |   |   | 116 |   |   | - |   |   | - |   |   | (116 | ) |
| Miscellaneous                  corrections and reclassifications       |   |                                                     | 20     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (3 | ) |   | (25 | ) |
|                                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended March 31, 2003             |   | $                                                        | 108    |   | $ | 762 |   | $ | (438 | ) | $ | 116 |   | $ | - |   | $ | (3 | ) | $ | (1,179 | ) |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                  |   | Quarter                  Ended June 30, 2003 (in 000's) |   |
|-----------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |   | Data |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |   | Commun- |   | Network |   | Selling |   | G&A |   | Bad                  Debt |   | Depreciation |   |
|                                                                  |   | Revenues                                                |   | ications |   | Operations |   | Expenses |   | Expenses |   | Expense |   | Amortization |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended June 30, 2003 |   | $                                                       | 1,734  |   | $ | 1,717 |   | $ | - |   | $ | - |   | $ | 662 |   | $ | - |   | $ | 104 |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                               |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beneficial                  conversion feature interest               |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Miscellaneous                  corrections and reclassifications      |   |                                                    | -      |   |   | (9 | ) |   | 143 |   |   | 43 |   |   | (263 | ) |   | 6 |   |   | (18 | ) |
| Reclassify                  agent commissions against revenues        |   |                                                    | (587   | ) |   | (587 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended June 30, 2003             |   | $                                                       | 1,147  |   | $ | 1,121 |   | $ | 143 |   | $ | 43 |   | $ | 399 |   | $ | 6 |   | $ | 86 |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| *Continued*                                                           |   | Quarter                  Ended June 30, 2003 (in 000's) |   |
|-----------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |   |   |   | Loss                  on |   | Loss                  on |   | Loss                  on |   |   |   |   |   |
|                                                                  |   | Interest                                                |   | Derivative |   | Extinguishment |   | Conversion |   | Investment/ |   |   |   | Net                  (Loss) |   |
|                                                                  |   | Expense                                                 |   | Expense |   | of                  Debt |   | of                  Debt |   |  Receivable |   | Other |   | Income |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended June 30, 2003 |   | $                                                       | 440    |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | 26 |   | $ | (1,215 | ) |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                               |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beneficial                  conversion feature interest               |   |                                                    | (389   | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 389 |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accretion                  of interest on bifurcated instruments      |   |                                                    | 10     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (10 | ) |
| Derivatives                  expense/(income)                         |   |                                                    | -      |   |   | 196 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (196 | ) |
| (Gain)/loss                  on extinguishments of debt               |   |                                                    | -      |   |   | - |   |   | 279 |   |   | - |   |   | - |   |   | - |   |   | (279 | ) |
| (Gain)/loss                  on conversions of debt                   |   |                                                    | -      |   |   | - |   |   | - |   |   | 326 |   |   | - |   |   | - |   |   | (326 | ) |
| Write-offs                  of property. Plant & Equipment        |   |                                                    | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 71 |   |   | (71 | ) |
| Miscellaneous                  corrections and reclassifications      |   |                                                    | 17     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 24 |   |   | 57 |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended June 30, 2003             |   | $                                                       | 78     |   | $ | 196 |   | $ | 279 |   | $ | 326 |   | $ | - |   | $ | 121 |   | $ | (1,651 | ) |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                   |   | Quarter                  Ended September 30, 2003 (in 000's) |    |
|------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|
|                                                                   |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                         |    | Data |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                         |    | Commun- |   | Network |   | Selling |   | G&A |   | Bad                  Debt |   | Depreciation |   |
|                                                                   |   | Revenues                                                     |    | ications |   | Operations |   | Expenses |   | Expenses |   | Expense |   | Amortization |   |
|                                                                   |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended Sept. 30, 2003 |   | $                                                            | 27,161  |   | $ | 25,490 |   | $ | 1,063 |   | $ | 225 |   | $ | 675 |   | $ | 1 |   | $ | 486 |   |
|                                                                   |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International                 |   |                                                         | (26,808 | ) |   | (25,256 | ) |   | (1,049 | ) |   | (120 | ) |   | (556 | ) |   |   |   |   | (376 | ) |
| Reverse                  merger stepped up amortization                |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (68 | ) |
| Beneficial                  conversion feature interest                |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                   |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parent                  stub period, removed, reverse merger           |   |                                                         | 803     |   |   | 570 |   |   | 15 |   |   | 238 |   |   | 298 |   |   | 8 |   |   | 42 |   |
| Miscellaneous                  corrections and reclassifications       |   |                                                         | -       |   |   | 1 |   |   | 64 |   |   | 23 |   |   | (88 | ) |   | - |   |   | - |   |
| Reclassify                  agent commissions against revenues         |   |                                                         | (334    | ) |   |   |   |   |   |   |   | (334 | ) |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended Sept. 30, 2003             |   | $                                                            | 822     |   | $ | 805 |   | $ | 93 |   | $ | 32 |   | $ | 329 |   | $ | 9 |   | $ | 84 |   |
|                                                                   |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                        |   | Quarter                  Ended September 30, 2003 (in 000's) |   |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                                                                        |   |                                                         |   |   |   | Loss                  on |   | Loss                  on |   | Loss                  on |   |   |   |   |   |
|                                                                        |   | Interest                                                     |   | Derivatives |   | Extinguishment |   | Conversion |   | Investment/ |   |   |   | Net                  (Loss) |   |
| *Continued*                                                                 |   | Expense                                                      |   | Exp/(Inc.) |   | of                  Debt |   | of                  Debt |   | Receivable |   | Other |   | Income |   |
|                                                                        |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended Sept. 30, 2003      |   | $                                                            | 2,199  |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | 1 |   | $ | (2,979 | ) |
|                                                                        |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                     |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International                      |   |                                                         | (316   | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | (1 | ) |   | 866 |   |
| Reverse                  merger stepped up amortization                     |   |                                                         | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 68 |   |
| Beneficial                  conversion feature interest                     |   |                                                         | (1,786 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,786 |   |
|                                                                        |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                        |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parent                  stub period, removed, reverse merger                |   |                                                         | 34     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (402 | ) |
| Accretion                  of interest on bifurcated instruments            |   |                                                         | 37     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (37 | ) |
| Derivatives                  expense/(income)                               |   |                                                         | -      |   |   | 95,528 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (95,528 | ) |
| (Gain)/loss                  on extinguishments of debt                     |   |                                                         | -      |   |   | - |   |   | 711 |   |   | - |   |   | - |   |   | - |   |   | (711 | ) |
| (Gain)/loss                  on conversions of debt                         |   |                                                         | -      |   |   | - |   |   | - |   |   | 404 |   |   | - |   |   | - |   |   | (404 | ) |
| Losses                  on investment in and receivable from related entity |   |                                                         | -      |   |   | - |   |   | - |   |   | - |   |   | 676 |   |   | - |   |   | (676 | ) |
| Miscellaneous                  corrections and reclassifications            |   |                                                         | (65    | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | 8 |   |   | 57 |   |
|                                                                        |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended Sept. 30, 2003                  |   | $                                                            | 103    |   | $ | 95,528 |   | $ | 711 |   | $ | 404 |   | $ | 676 |   | $ | 8 |   | $ | (                  97,960 | ) |
|                                                                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of Contents*

|                                                                   |   | Quarter                  Ended March 31, 2004 (in 000's) |    |
|------------------------------------------------------------------------|--------|----------------------------------------------------------|---------|
|                                                                   |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                     |    | Data |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                     |    | Commun- |   | Network |   | Selling |   | G&A |   | Bad                  Debt |   | Depreciation |   |
|                                                                   |   | Revenues                                                 |    | ications |   | Operations |   | Expenses |   | Expenses |   | Expense |   | Amortization |   |
|                                                                   |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended March 31, 2004 |   | $                                                        | 20,382  |   | $ | 19,626 |   | $ | 960 |   | $ | 255 |   | $ | 871 |   | $ | (26 | ) | $ | 637 |   |
|                                                                   |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)             |   |                                                     | (20,326 | ) |   | (19,547 | ) |   | (960 | ) |   | (245 | ) |   | (743 | ) |   |   |   |   | (368 | ) |
| Reverse                  merger stepped up amortization                |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (202 | ) |
| Beneficial                  conversion feature interest                |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                   |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Miscellaneous                  corrections and reclassifications       |   |                                                     | -       |   |   | 3 |   |   | 15 |   |   | (10 | ) |   | 85 |   |   | - |   |   | (5 | ) |
|                                                                   |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended March 31, 2004             |   | $                                                        | 56      |   | $ | 82 |   | $ | 15 |   | $ | - |   | $ | 213 |   | $ | (26 | ) | $ | 62 |   |
|                                                                   |   |                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                        |   | Quarter                  Ended March 31, 2004 (in 000's) |   |
|-----------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                        |   |                                                     |   |   |   | Loss                  on |   | Loss                  on |   | Loss                  on |   |   |   |   |   |
|                                                                        |   | Interest                                                 |   | Derivative |   | Extinguishment |   | Conversion |   | Investment/ |   |   |   | Net                  (Loss) |   |
| *Continued*                                                                 |   | Expense                                                  |   | Expense |   | of                  Debt |   | of                  Debt |   | Receivable |   | Other |   | Income |   |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended March 31, 2004      |   | $                                                        | 1,163  |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | 17,700 |   | $ | (20,804 | ) |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)                  |   |                                                     | (97    | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,634 |   |
| Reverse                  merger stepped up amortization                     |   |                                                     | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 202 |   |
| Beneficial                  conversion feature interest                     |   |                                                     | (597   | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 597 |   |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accretion                  of interest on bifurcated instruments            |   |                                                     | 1      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (1 | ) |
| Derivatives                  expense/(income)                               |   |                                                     | -      |   |   | (517,486 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | 517,486 |   |
| (Gain)/loss                  on extinguishments of debt                     |   |                                                     | -      |   |   | - |   |   | 308,548 |   |   | - |   |   | - |   |   | - |   |   | (308,548 | ) |
| (Gain)/loss                  on conversions of debt                         |   |                                                     | -      |   |   | - |   |   | - |   |   | 14 |   |   | - |   |   | - |   |   | (14 | ) |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Losses                  on investment in and receivable from related entity |   |                                                     | -      |   |   | - |   |   | - |   |   | - |   |   | 21,000 |   |   | (17,700 | ) |   | (3,300 | ) |
| Miscellaneous                  corrections and reclassification             |   |                                                     | 58     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (146 | ) |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended March 31, 2004                  |   | $                                                        | 528    |   | $ | (517,486 | ) | $ | 308,548 |   | $ | 14 |   | $ | 21,000 |   | $ | - |   | $ | 187,106 |   |
|                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (a) | includes                    corrections to initial recording of expenses between the Company                    and                    GlobalNet International. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|                                                                  |   | Quarter                  Ended June 30, 2004 (in 000's) |    |
|-----------------------------------------------------------------------|--------|---------------------------------------------------------|---------|
|                                                                  |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |    | Data |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                    |    | Commun- |   | Network |   | Selling |   | G&A |   | Bad                  Debt |   | Depreciation |   |
|                                                                  |   | Revenues                                                |    | ications |   | Operations |   | Expenses |   | Expenses |   | Expense |   | Amortization |   |
|                                                                  |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended June 30, 2004 |   | $                                                       | 21,778  |   | $ | 21,349 |   | $ | 1,002 |   | $ | 280 |   | $ | 1,363 |   |   | - |   | $ | 643 |   |
|                                                                  |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                               |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)            |   |                                                    | (21,778 | ) |   | (21,349 | ) |   | (1,002 | ) |   | (226 | ) |   | (779 | ) |   | - |   |   | (375 | ) |
| Reverse                  merger stepped up amortization               |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (203 | ) |
|                                                                  |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                  |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Miscellaneous                  corrections and reclassifications      |   |                                                    | 1       |   |   | - |   |   | 11 |   |   | 7 |   |   | 76 |   |   | 3 |   |   | (3 | ) |
|                                                                  |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended June 30, 2004             |   | $                                                       | 1       |   | $ | - |   | $ | 11 |   | $ | 61 |   | $ | 660 |   | $ | 3 |   | $ | 62 |   |
|                                                                  |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                        |   | Quarter                  Ended June 30, 2004 (in 000's) |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                        |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                                                    |   |   |   | Loss                  on |   | Loss                  on |   | Loss                  on |   |   |   |   |   |
|                                                                        |   | Interest                                                |   | Derivative |   | Extinguishment |   | Conversion |   | Investment/ |   |   |   | Net                  (Loss) |   |
| *Continued*                                                                 |   | Expense                                                 |   | Expense |   | of                  Debt |   | of                  Debt |   | Receivable |   | Other |   | Income |   |
|                                                                        |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended June 30, 2004       |   | $                                                       | 2,787  |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | (5,646 | ) |
|                                                                        |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                     |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)                  |   |                                                    | (73    | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2,026 |   |
| Reverse                  merger stepped up amortization                     |   |                                                    | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 203 |   |
| Beneficial                  conversion feature interest                     |   |                                                    | (2,493 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2,493 |   |
|                                                                        |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                        |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accretion                  of interest on bifurcated instruments            |   |                                                    | 6      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (6 | ) |
| Derivatives                  expense/(income)                               |   |                                                    | -      |   |   | (223,266 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | 223,266 |   |
| (Gain)/loss                  on extinguishments of debt                     |   |                                                    | -      |   |   | - |   |   | 4,875 |   |   | - |   |   | - |   |   | - |   |   | (4,875 | ) |
| (Gain)/loss                  on conversions of debt                         |   |                                                    | -      |   |   | - |   |   | - |   |   | 2,676 |   |   | - |   |   | - |   |   | (2,676 | ) |
| Losses                  on investment in and receivable from related entity |   |                                                    | -      |   |   | - |   |   | - |   |   | - |   |   | 93 |   |   | - |   |   | (93 | ) |
| Write-offs                  of property, plant & equipment              |   |                                                    | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 156 |   |   | (156 | ) |
| Miscellaneous                  corrections and reclassifications            |   |                                                    | 44     |   |   | - |   |   | (52 | ) |   | - |   |   | - |   |   | - |   |   | (85 | ) |
|                                                                        |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended June 30, 2004                   |   | $                                                       | 271    |   | $ | (223,266 | ) | $ | 4,823 |   | $ | 2,676 |   | $ | 93 |   | $ | 156 |   | $ | 214,451 |   |
|                                                                        |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (a) | includes                    corrections to initial recording of expenses between the Company                    and                    GlobalNet International. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

|                                                                       |   | Quarter                  Ended September 30, 2004 (in 000's) |    |     |   |       |   |     |   |
|----------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|----------|--------|------------|--------|----------|--------|
|                                                                       |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |
|                                                                       |   |                                                         |    | Data     |   |       |   |     |   |   |   |   |   |   |   |
|                                                                       |   |                                                         |    | Commun-  |   | Network    |   | Selling  |   | G&A |   | Bad                  Debt |   | Depreciation |   |
|                                                                       |   | Revenues                                                     |    | ications |   | Operations |   | Expenses |   | Expenses |   | Expense |   | Amortization |   |
|                                                                       |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended September 30, 2004 |   | $                                                            | 12,378  |     | $      | 12,290     |   | $        | 766    |   | $ | 99 |   | $ | 671 |   | $ | - |   | $ | 512 |   |
|                                                                       |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                    |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)                 |   |                                                         | (12,297 | )        |   | (12,209    | )      |     | (730   | ) |   | (106 | ) |   | (439 | ) |   | - |   |   | (244 | ) |
| Carrier                  Services sales and costs of sales                 |   |                                                         | (78     | )        |   | (71        | )      |     | -      |   |   | - |   |   | - |   |   | - |   |   |   |   |
| Reverse                  merger stepped up amortization                    |   |                                                         | -       |     |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   | (203 | ) |
|                                                                       |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                       |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Carrier                  Services sales treated as commissions             |   |                                                         | 7       |     |   | -          |   |     | -      |   |   | - |   |   | - |   |   | - |   |   |   |   |
| Stock                  based compensation, original unrecorded             |   |                                                         | -       |     |   | -          |   |     | -      |   |   | - |   |   | 120 |   |   | - |   |   | - |   |
| Miscellaneous                  corrections and reclassifications           |   |                                                         | (3      | )        |   | -          |   |     | 18     |   |   | 15 |   |   | (17 | ) |   | 37 |   |   | (30 | ) |
|                                                                       |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  restated, Quarter ended September 30, 2004             |   | $                                                            | 7       |     | $      | 10         |   | $        | 54     |   | $ | 8 |   | $ | 335 |   | $ | 37 |   | $ | 35 |   |
|                                                                       |   |                                                         |    |     |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                        |   | Quarter                  Ended September 30, 2004 (in 000's) |   |       |   |                     |   |                     |   |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|------------|--------|--------------------------|--------|--------------------------|--------|
|                                                                        |   |                                                         |   |       |   |                     |   |                     |   |   |   |   |   |   |   |
|                                                                        |   |                                                         |   |       |   | Loss                  on |   | Loss                  on |   | Loss                  on |   |   |   |   |   |
|                                                                        |   | Interest                                                     |   | Derivative |   | Extinguishment           |   | Conversion               |   | Investment/ |   |   |   | Net                  (Loss) |   |
| *Continued*                                                                 |   | Expense                                                      |   | Expense    |   | of                  Debt |   | of                  Debt |   | Receivable |   | Other |   | Income |   |
|                                                                        |   |                                                         |   |       |   |                     |   |                     |   |   |   |   |   |   |   |
| As                  originally presented, Quarter ended September 30, 2004  |   | $                                                            | 2,268  |       | $      | -                        |   | $                        | -      |   | $ | - |   | $ | - |   | $ | 2,357 |   | $ | (6,585 | ) |
|                                                                        |   |                                                         |   |       |   |                     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remove:                                                                     |   |                                                         |   |       |   |                     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deconsolidate                  GlobalNet International (a)                  |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | 1,431 |   |
| Carrier                  Services sales and costs of sales                  |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | (7 | ) |
| Reverse                  merger stepped up amortization                     |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | 203 |   |
| Benef                  conversion feature interest                          |   |                                                         | (1,409 | )          |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | 1,409 |   |
| Orig                  treatment of GEF share retirement                     |   |                                                         | (627   | )          |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | 627 |   |
| Orig                  write-off of reverse merger intangibles               |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | (2,357 | ) |   | 2,357 |   |
|                                                                        |   |                                                         |   |       |   |                     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                        |   |                                                         |   |       |   |                     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Carrier                  Services sales treated as commissions              |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | 7 |   |
| Stock                  based compensation, original unrecorded              |   |                                                         |        |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | (120 | ) |
| Accretion                  of interest on bifurcated instruments            |   |                                                         | 20     |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | (20 | ) |
| Derivatives                  expense/(income)                               |   |                                                         | -      |       |   | (48,037                  | )      |                     | -      |   |   | - |   |   | - |   |   | - |   |   | 48,037 |   |
| (Gain)/loss                  on extinguishments of debt                     |   |                                                         | -      |       |   | -                        |   |                     | (838   | ) |   | - |   |   | - |   |   | - |   |   | 838 |   |
| (Gain)/loss                  on conversions of debt                         |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | 90 |   |   | - |   |   | - |   |   | (90 | ) |
| Losses                  on investment in and receivable from related entity |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | - |   |   | 306 |   |   | - |   |   | (306 | ) |
| Write-offs                  of property, plant & equipment              |   |                                                         | -      |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | 86 |   |   | (86 | ) |
| Miscellaneous                corrections and reclassifications              |   |                                                         | 245    |       |   | -                        |   |                     | -      |   |   | - |   |   | - |   |   | - |   |   | (271 | ) |
| As                  restated, Quarter ended September 30, 2004              |   | $                                                            | 497    |       | $      | (48,037                  | )      | $                        | (838   | ) | $ | 90 |   | $ | 306 |   | $ | 86 |   | $ | 47,424 |   |
|                                                                        |   |                                                         |

----

| (a) | includes                    corrections to initial recording of expenses between the Company                    and                    GlobalNet International. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

**Item        2. Management's Discussion and Analysis of Financial Condition and Results        **
**of        Operations**

**Results        of Operations**

----

*Table            of Contents*

**Quarter        Ended March 31, 2003**

***Revenue.***

***Data        Communications and Telecommunications Costs***
**.**

***Network        Operations Costs.***

***Selling        and Marketing Costs.***

***General        and Administrative Expenses.***

***Interest        Expense.***

***Gain        on Extinguishments of Debt.***

----

*Table            of Contents*

***Gain(Loss)        on Debt Conversions.***

***Derivatives        Expense.***

***Income        Taxes***

**Quarter        Ended June 30, 2003**

***Revenue.***

***Data        Communications and Telecommunications Costs***
**.**

----

*Table            of Contents*

***Network        Operations Costs.***

***Selling        and Marketing Costs.***

***General        and Administrative Expenses.***

***Asset        Write-offs.***

***Interest        Expense.***

----

*Table            of Contents*

***Gain        on Extinguishments of Debt.***

***Gain(Loss)        on Debt Conversions.***

***Derivatives        Expense.***

***Other        Expense.***

***Income        Taxes***

**Quarter        Ended September 30, 2003**

***Revenue.***

----

*Table            of Contents*

***Data        Communications and Telecommunications Costs***
**.**

***Network        Operations Costs.***

***Selling        and Marketing Costs.***

***General        and Administrative Expenses.***

***Interest        Expense.***

----

*Table            of Contents*

***Gain        on Extinguishments of Debt.***

***Gain(Loss)        on Debt Conversions.***

***Derivatives        Expense.***

----

*Table            of Contents*

***Loss        on Unconsolidated Subsidiaries.***

***Income        Taxes***

**Quarter        Ended March 31, 2004 vs Quarter Ended March 31, 2003**

***Revenue.***

***Data        Communications and Telecommunications Costs***
**.**

***Network        Operations Costs.***

***Selling        and Marketing Costs.***

----

*Table            of Contents*

***General        and Administrative Expenses.***

***Interest        Expense.***

***Gain        on Extinguishments of Debt.***

***Gain(Loss)        on Debt Conversions***

----

*Table            of Contents*

***Derivatives        Expense.***

***Loss        on Related Entity Receivable and Investment in equity method investee.***

***Income        Taxes***

**Quarter        Ended June 30, 2004 vs Quarter Ended June 30, 2003**

***Revenue.***

----

*Table            of Contents*

***Data        Communications and Telecommunications Costs***
**.**

***Network        Operations Costs.***

***Selling        and Marketing Costs.***

***General        and Administrative Expenses.***

***Asset        Write-offs.***

***Interest        Expense.***

----

*Table            of Contents*

***Gain        on Extinguishments of Debt***

***Gain(Loss)        on Debt Conversions.***

***Derivatives        Expense.***

----

*Table            of Contents*

***Loss        on Unconsolidated Subsidiaries.***

***Income        Taxes***

**Quarter        Ended September 30, 2004 vs Quarter Ended September 30,        2003**

***Revenue.***

***Data        Communications and Telecommunications Costs***
**.**

***Network        Operations Costs.***

***Selling        and Marketing Costs.***

----

*Table            of Contents*

***General        and Administrative Expenses.***

***Asset        Write-offs.***

***Interest        Expense.***

***Gain        on Extinguishments of Debt.***

----

*Table            of Contents*

***Gain(Loss)        on Debt Conversions.***

***Derivatives        Expense.***

----

*Table            of Contents*

***Loss        on investment in equity method investee.***

***Income        Taxes***

**Liquidity        and Capital Resources**

----

*Table            of Contents*

**Quarter        Ended March 31, 2003**

***Net        Cash From (Used In) Operating Activities.***

***Net        Cash From (Used In) Investing Activities.***

***Net        Cash Provided By (Used In) Financing Activities.***

***Convertible        Debt Instruments.***

----

*Table            of Contents*

***Issuances        of Company Common Stock.***

**Quarter        Ended June 30, 2003**

***Net        Cash From (Used In) Operating Activities.***

***Net        Cash From (Used In) Investing Activities.***

***Net        Cash Provided By (Used In) Financing Activities.***

***Convertible        Debt Instruments.***

----

*Table            of Contents*

***Issuances        of Company Common Stock.***

**Quarter        Ended September 30, 2003**

***GlobalNet        International Acquisition and Subsequent Bankruptcy.***

----

*Table            of Contents*

***Consideration        Issued in Conjunction with GlobalNet International Acquisition and Funding        of        the Transaction.***

| - | the                  Company issued a $1,500,000 principal amount promissory note to                  Titan (the                  "Titan Note"), of which $550,000 was paid during                  2003; |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | the                  Company paid $1,500,000 to Titan;                  and |
|---|-----------------------------------------------------------------------------|

| - | GEF                  paid $500,000 to Titan, which was repaid during 4th Quarter 2003                  by the                  Company to GEF (see below). |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

***Net        Cash From (Used In) Operating Activities.***

***Net        Cash From (Used In) Investing Activities.***

***Net        Cash Provided By (Used In) Financing Activities.***

***Convertible        Debt Instruments- the Investor Notes.***

----

*Table            of Contents*

***Convertible        Debt Instruments- the Wood Note.***

***Convertible        Debt Instruments- the GBLK Note.***

***Convertible        Debt Instruments- the Commission Note.***

***Convertible        Debt Instruments- the Mandatorily Redeemable Preferred        Stock.***

----

*Table            of Contents*

***Convertible        Debt Instruments- the Titan Note.***

----

*Table            of Contents*

***Issuances        of Company Common Stock.***

**Quarter        Ended March 31, 2004 versus Quarter Ended March 31,        2003**

***Net        Cash From (Used In) Operating Activities.***

----

*Table            of Contents*

***Net        Cash From (Used In) Investing Activities.***

***Net        Cash Provided By (Used In) Financing Activities.***

***Convertible        Debt Instruments- the Mandatorily Redeemable Preferred Stock Convertible        Debt        Instruments.***
*** ***

***Issuances        of Company Common Stock.***

----

*Table            of Contents*

**Quarter        Ended June 30, 2004 versus Quarter Ended June 30, 2003**

***Net        Cash From (Used In) Operating Activities.***

***Net        Cash From (Used In) Investing Activities.***

***Net        Cash Provided By (Used In) Financing Activities.***

***Convertible        Debt Instruments- the Investors Notes.***

----

*Table            of Contents*

***Convertible        Debt Instruments- the Mandatorily Redeemable Preferred Stock Convertible        Debt        Instruments.***

***Increase        in Authorized Shares and Issuances of Company Common Stock.***

----

*Table            of Contents*

**Quarter        Ended September 30, 2004 versus Quarter Ended September 30,        2003**

***Net        Cash From (Used In) Operating Activities.***

***Net        Cash From (Used In) Investing Activities.***

***Net        Cash Provided By (Used In) Financing Activities.***

***Convertible        Debt Instruments- the Mandatorily Redeemable Preferred Stock Convertible        Debt        Instruments; Common Stock Surrender Agreement.***
*** ***

----

*Table            of Contents*

----