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

                                 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

 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934

                        Commission File Number: 00-24962

                              GlobalNet Corporation

                         (formerly iDial Networks, Inc.)
                 (Name of small business issuer in its charter)



       Nevada                                      75-2863583
(Jurisdiction of organization)        (I.R.S. Employer Identification No.)


                     18851 NE 29th Avenue, 7th Floor
                         Aventura, Florida 33180
                (Address of principal executive offices)

                       Issuer's telephone number:
                             (786) 541-0200


       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
                     Common Stock, par value $.005 per share

Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.) Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

The Issuer's revenues for the year ending December 31, 2003 were $102,214,126.

As of June 4, 2004 the number of shares outstanding of the Issuer's Common Stock
was 6,399,928,192.

As of June 4, 2004 the aggregate number of shares held by non-affiliates was
approximately 859,532,653.

As of June 4, 2004 the aggregate market value of the Issuer's common stock held
by non-affiliates was $18,909,718, based on the average bid and asked price of
$.022 per share as of June 3, 2004.

<PAGE>
                                     PART I

ITEM 1_  DESCRIPTION OF BUSINESS

ITEM 2_  DESCRIPTION OF PROPERTY

ITEM 3_  LEGAL PROCEEDINGS

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

                                     PART II

ITEM 5_  MARKET FOR COMMON EQUITY AND STOCKHOLDER MATTERS

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

ITEM 7_  FINANCIAL STATEMENTS

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

ITEM 8A_ CONTROLS AND PROCEDURES

                                    PART III

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

ITEM 10_ EXECUTIVE COMPENSATION

ITEM 11_ SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
         AND RELATED STOCKHOLDER MATTERS

ITEM 12_ CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ITEM 13_ EXHIBITS AND REPORTS ON FORM 8-K

ITEM 14_ PRINCIPAL ACCOUNTANT FEES AND SERVICES


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                                EXPLANATORY NOTE

This Annual Report on Form 10-KSB/A-1 has been filed by us to amend the Annual
Report on Form 10-KSB filed on April 19, 2004 to include the auditor's report of
Ehrhardt Keefe Steiner & Hottman PC for the 2002 financial statements of
GlobalNet, Inc., our wholly-owned subsidiary and such other information to
reflect material changes to our company since we filed our Form 10-KSB. There
were no material changes from the 2002 financial statements of GlobalNet, Inc.
filed with our Form 10-KSB and the 2002 financial statements financial
statements of GlobalNet, Inc. filed with this Form 10-KSB/A-1.


                           FORWARD LOOKING STATEMENTS

This annual report on Form 10-KSB and the documents incorporated by reference
contain forward-looking statements based on current expectations, estimates and
projections about GlobalNet's industry and management's beliefs and assumptions.
In some cases you can identify these statements by forward-looking words such as
"anticipate," "believe," "could," "estimate," "expect," "intend," "may,"
"should," "will," and "would" or similar words. You should read statements that
contain these words carefully because they discuss future expectations, contain
projections of future results of operations or of financial position or state
other "forward-looking" information. The important factors listed in the section
captioned "Risk Factors," as well as any cautionary language in this annual
report, provide examples of risks, uncertainties and events that may cause the
actual results to differ materially from the expectations described in these
forward-looking statements. You should be aware that the occurrence of the
events described in these risk factors and elsewhere in this annual report could
have an adverse effect on the business, results of operations and financial
position of GlobalNet. Any forward-looking statements in this annual report are
not guarantees of future performance, and actual results, developments and
business decisions may differ from those envisaged by these forward-looking
statements, possibly materially. GlobalNet disclaims any responsibility to
update any forward-looking statements, even if new information becomes available
or other events occur in the future after the filing of this annual report.

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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

Business History

GlobalNet Corporation, a Nevada corporation ("GlobalNet" or the "Company"), was
formed in December 2003 as the surviving entity from a merger of GlobalNet, Inc.
and iDial Networks, Inc. ("iDial"). GlobalNet, Inc. merged with and into iDial
and iDial changed its name to GlobalNet Corporation.

iDial's Acquisition of GlobalNet in August 2003

iDial was a provider of telecommunication services to customers around the
world. These services included pre-paid telephone calling cards and reduced rate
telephone calls using the Internet. iDial was organized in May 1997 as a Nevada
limited liability company under the name WoodComm, LLC. In April 1999, WoodComm,
LLC was reorganized from a Nevada limited liability company into a Nevada
corporation, WoodComm International, Inc. ("WoodComm International"). In
December 1999, Desert Springs Acquisition Corporation, a Colorado corporation
("Desert Springs"), and WoodComm International effected a business combination
whereby Desert Springs acquired 100% of the issued and outstanding common stock
of WoodComm International in exchange for 30,903,000 shares of common stock of
Desert Springs. For financial reporting purposes, the business combination was
accounted for as an additional capitalization of WoodComm International (a
reverse acquisition with WoodComm International as the acquirer). WoodComm
International was treated as the surviving entity. In January 2000, WCI merged
with and into iDial Networks, Inc.

GlobalNet, Inc. was a provider of global telecommunications, including high
quality voice, fax and other value-added applications over an international
network. GlobalNet, Inc. was formed on May 30, 2000 as a result of a "reverse
merger" transaction, whereby GlobalNet International, Inc. ("GlobalNet
International") merged with and into a subsidiary of Rich Earth, Inc. ("Rich
Earth"), a non-operating public shell corporation with nominal assets. In early
2002, GlobalNet was acquired by The Titan Corporation, a New York Stock Exchange
corporation ("Titan"). After only a few months of ownership, Titan determined to
divest itself of GlobalNet and all other telecommunication assets and placed
GlobalNet for sale.

On May 20, 2003, Growth Enterprise Fund, S.A. ("GEF"), a Panamanian corporation,
and GlobalNet Systems, Inc. ("GNSI"), a wholly-owned subsidiary of GEF and a
Florida corporation, entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") with Titan and its wholly-owned subsidiary, GlobalNet, Inc.
In the Stock Purchase Agreement, GNSI agreed to acquire 100% of the issued and
outstanding common stock of GlobalNet, Inc. from Titan in exchange for the
assumption of certain liabilities of Titan, and certain cash payment totaling
approximately $1,100,000.

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Subsequently, on August 21, 2003, iDial entered into an Assignment and
Assumption of Stock Purchase Agreement by and among iDial, GEF, GNSI and Titan
(the "Assignment"), whereby GNSI transferred all of its rights and obligations
under the Stock Purchase Agreement, including the right to acquire all of the
issued and outstanding common stock of GlobalNet, to iDial (the "Acquisition").
Amendments were made to the Stock Purchase Agreement to reflect certain payments
to vendors made by GlobalNet after the date of the Stock Purchase Agreement. In
connection with the Stock Purchase Agreement and the Assignment, intra-company
debt, promissory notes and accrued interest payable in the aggregate amount of
approximately $15.6 million payable by GlobalNet, Inc. to Titan were assigned to
iDial (the "GlobalNet Notes"). The following transactions were effectuated on
August 21, 2003 as part of the closing of the Acquisition:

o iDial issued a $1,500,000 principal amount promissory note to Titan (the
"Titan Note");
o iDial pledged 100% of the stock of GlobalNet and the GlobalNet Notes to Titan
as collateral to secure payment of the Titan Note and certain assumed
liabilities
o iDial paid $1,500,000 in cash to Titan
o GEF paid $500,000 to Titan
o iDial issued to GEF a $500,000 principal amount promissory note
o iDial undertook to issue to GEF 100,000 shares of the its Series A Preferred
Stock and 100,000 shares of Series B Preferred Stock
o iDial undertook to issue to GEF shares of its common stock equal to 60% of the
outstanding shares of commons stock (on a fully diluted basis after giving
effect to such issuance and certain other issuances), which such issuance was
subject to the iDial amending its to increase the number of shares of authorized
common stock.

The shares of Series A Preferred Stock, as initially structured, carried limited
voting rights, had a stated value of $106 per share and paid cumulative
dividends at the rate of $5.30 per share per annum (5% of the stated value). The
shares of Series B Preferred Stock, as initially structured, carried no voting
rights, had a stated value of $50 per share and paid cumulative dividends at the
rate of $2.50 per share per annum (5% of the stated value). The terms of the
Series A Preferred Stock were later modified and the Series B Preferred Shares
were canceled, as described below.

In order to fund the costs of the Acquisition, on August 21, 2003, iDial entered
into a Securities Purchase Agreement with unrelated investors, in which the
investors provided funding in the amount of $1,750,000. In exchange for such
investment, the investors received convertible debentures bearing interest at
12% per year, mature two years from the date of issuance, and convertible into
iDial's common stock, at a rate of $.0016 per share; however, if at any time the
market price of iDial's common stock is below $.0016, then the conversion price
will be equal to the lesser of (i) $.0016, or (ii) the average of the lowest 3
intra-day trading prices during the 20 trading days immediately prior to the
conversion date discounted by 60%.

Further, in connection with the acquisition of GlobalNet, several iDial
stockholders were required to restructure their existing debt, including
agreeing to convert such debt to shares of common stock at a fixed conversion
price of $.0016 per share.

The shares of iDial's common stock and mandatorily redeemable preferred stock
issued, or to be issued, in connection with the acquisition of GlobalNet were
not registered under the Securities Act of 1933, as amended (the "Securities
Act") and were issued in the reliance upon the exemption from registration
provided by section 4(2) of the Securities Act, on the basis that the
acquisition is a transaction not involving a public offering. All certificates
evidencing these securities bear a customary form of investment legend and may
not be sold, pledged, hypothecated or otherwise transferred unless first
registered under the Securities Act or pursuant to an available exemption from
such registration requirements.

Subsequent Changes to the Acquisition Terms

In the months that followed the August 21, 2003 Assignment The Company made
several changes to the terms of the Acquisition and finalized the merger of
iDial and GlobalNet:

o In December 2003, we issued 100,000 shares of our Series A Preferred Stock,
with the newly amended terms, to GEF. Each share of Series A Preferred Stock is
entitled to a cumulative annual dividend of $7.80, which must be paid before we
can pay any dividends to our common shareholders. While the Series A Preferred
Stock is outstanding, we will pay GEF $175,000 per month, which will pay the
accrued dividend; and the excess will redeem Series A Preferred Stock at $156
per share. In lieu of such cash payment, we can deliver to GEF a promissory
note, which would contain substantially the same provisions as the Series A
Preferred Stock. In the event of liquidation, we must redeem the outstanding
Series A Preferred Stock at $156 per share before we may pay our common
shareholders.

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We have not paid any dividends on the Series A Preferred Stock since issuance.
On March 2, 2004, GEF waived in writing any and all defaults by GlobalNet and
its subsidiaries under the terms of the Preferred Stock, without penalty, and
agreed that unpaid Preferred Stock dividends accrued to such date will be added
to the face amount of the Preferred Stock. We also agreed to change the
conversion rate of GEF's Series A Preferred Stock to $.0016 per share of common
stock. Each share of Series A Preferred Stock is convertible into 97,500 shares
of our common stock, subject to certain anti-dilution provisions. Each share of
Series A Preferred Stock is entitled to vote along with our common shareholders
as if the Series A Preferred Stock had been converted. This means that each
share of Series A Preferred Stock is entitled to 97,500 votes.

GEF subsequently agreed to convert all unpaid Preferred Stock dividends and
required principle redemption payments through June 30, 2004 into 1,171,875,000
shares of the Company's common stock at the new $0.0016 conversion rate
contemplated in the amendment to the certificate of designation for the
Preferred Stock filed on April 30, 2004.

o GloblaNet paid $500,000 in principal on the Titan Note per its terms, and the
balance of $1,000,000 was due December 17, 2003, but the Company did not pay the
balance at that time. Rather, on December 29, 2003, GlobalNet entered into a
Settlement Agreement and Release of Claims with Titan, pursuant to which we
replaced the original note with the Amended and Restated Convertible Note in the
principal amount of $1,250,000. The amended note is without interest.

Under the terms of the amended note, GlobalNet committed to pay Titan $25,000
per week in reduction of principal, with the balance due in a balloon payment on
March 31, 2004. Titan may convert any portion or the entire outstanding
principal balance of the amended note into shares of GlobalNet's common stock
commencing after a registration statement registering the resale of the common
stock issuable upon conversion of the amended note is declared effective by the
SEC. The note is convertible at the then-current market value of GlobalNet's
common stock. The proceeds from the sale of the shares will reduce the amount of
the amended note dollar for dollar. Since the number of shares into which the
Titan amended note will be converted depends on the market price of GlobalNet's
common stock at various dates in the future, the Company cannot know as of today
how many shares of our common stock it will eventually issue on conversion of
the amended note.

Because of the time it took to complete GlobalNet's Information Statement
related to the increase of the number of the Company's authorized common stock,
GlobalNet was unable to register the appropriate shares in the timeframe
originally contemplated. Neither did GlobalNet pay Titan the balance due -
approximately $875,000 - under the amended note on March 31, 2004 as required by
the terms of the amended note. Therefore, the Company is currently in default
under the amended note. GlobalNet completed the Information Statement in late
March 2004 and the increase in the Company's authorized common stock was
effective on April 21, 2004. GlobalNet is negotiating with Titan to cure the
default and to extend the maturity date of the amended note but there are no
assurances that this will be accomplished.

Our principal executive offices are located at 18851 NE 29th Avenue, 7th Floor,
Aventura, Florida 33180 and our telephone number is (786) 541-0200. As used in
this annual report, the terms "we," "us", "our", "GlobalNet" and the "Company"
refer to GlobalNet Corporation and its subsidiaries.

Business Overview

GlobalNet provides international voice, data, fax and Internet services on a
wholesale basis over a private Internet Protocol ("IP") network to international
carriers and other communication service providers in the United States and
internationally. GlobalNet's state-of-the-art IP network, utilizing the
convergence of voice and data networking, offers customers economical pricing,
global reach and an intelligent platform that guarantees fast delivery of
value-added services and applications. GlobalNet `s principal focus is providing
service from the U.S. to Latin America, with 75% of its traffic terminating in
Mexico. However, it has established relationships with affiliates worldwide,
giving it the ability to carry traffic to more than 240 countries.

GlobalNet is one of the top 10 U.S. service providers of outbound traffic to
Latin America and counts among its customers more than 30 Tier 1 and Tier 2
carriers as well as a host of other well known global service providers and
major international telecommunications provider organizations. Management has
been successful in establishing and maintaining relationships with these
customers as a result of its ability to provide consistent, cost effective and
high quality service in the capacity constrained telecommunications corridors
linking Latin America and the United States. This has been accomplished through
the development of partnerships with several Mexican telecommunications
companies, including Protel, Marcatel, Bestel and Alestra.

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During the fourth quarter of 2003 we introduced new retail prepaid services. The
new services consist of retail calling cards targeted primarily at the domestic
U.S. market and prepaid mobile satellite services targeted at specific
international opportunities where we obtained licenses to operate. Our entry
into the retail prepaid service business is based on our strategy to leverage
our existing international IP network with additional enhanced services that
have the potential to deliver higher margins than our wholesale international
telecommunications services. In addition, the retail prepaid services business
typically has a faster cash collection cycle than wholesale international
telecommunications services. While revenues for these services were not material
in 2003, we expect that our retail prepaid services will, in the future, become
a significant portion of our revenues.

International Telecommunications Services Industry Background

International Telecom Services Market

The international telecommunications industry is undergoing a period of
fundamental change that is expected to continue to result in significant growth
in international telecommunications traffic and revenues. Numerous factors are
driving the growth in demand for international telecommunications products and
services. Those factors include:

o The globalization of the world's economies;
o The worldwide trend toward deregulation of the telecommunications sector;
o Declining prices and a wider selection of products and services driven by
greater competition resulting from deregulation;
o Increased telephone accessibility resulting from technological advances and
greater investment in telecommunications infrastructure, including deployment of
wireless networks;
o Increased international business and leisure travel; and
o Growth of packetized transmission of voice and data information.

By eroding the traditional monopolies held by major international
telecommunications providers, deregulation is affording U.S.-based providers the
opportunity to negotiate more favorable agreements with both the traditional
administrations and emerging foreign providers. In addition, deregulation in
certain foreign countries is enabling U.S.-based providers to establish local
switching and transmission facilities to terminate their own traffic and carry
international long distance traffic originating in those countries.
Deregulation, privatization, the expansion of the resale market and other trends
influencing the international telecommunications market are resulting in
decreased termination costs, a proliferation of routing options and increased
competition. Advances in technology have created multiple ways for carriers to
provide customer access to their networks and services.

Overall, these changes have resulted in a trend towards bypassing traditional
international long distance operating agreements as international long distance
companies seek to operate more efficiently. In markets that have not deregulated
or are in the process of implementing deregulation, international long distance
carriers have used advances in technology to develop innovative alternative
methods to meet customer demand.

Recent legislation and World Trade Organization membership among numerous
countries are expected to lead to increased liberalization of the majority of
the world's telecommunication markets. Specifically, the World Trade
Organization has created a framework under which 69 countries committed to
liberalize their telecommunications laws to permit increased competition and, in
most cases, foreign ownership in their telecommunications markets, beginning in
1998.

Latin American Telecom Services Market

The vast majority of Latin America has yet to develop adequate communications
infrastructure, making Latin America an attractive and growing market for
telecommunications service providers. Currently, countries such as Mexico and
Brazil bear exceptionally low telephone densities for countries with
progressively rising standards of living, at 14% and 19%, respectively. Mexico,
GlobalNet's primary market, has seen line penetration increase 9% annually from
1996 to 2002. According to the Telecommunications Industry Association, the
Latin American telecommunications market (excluding Mexico) is projected to grow
from $62.0 billion in 2000 to $128.1 billion in 2004, representing a compounded
annual growth rate of 19.9%.

GlobalNet believes that Latin American traffic, including traffic between the
United States and Latin America, will continue to grow faster than the overall
international telecommunications market as a result of:

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o Underlying economic growth within Latin America;
o Growth of regional trade as a result of free trade initiatives such as NAFTA,
Mercosur and the Andean Pact;
o Deregulation and privatization of telecommunications carriers in the region;
o Projected regional increases in telephone density; and
o Increasing demand for bandwidth-intensive applications.

As a rule, Latin American countries have historically suffered from extremely
low telephone density, and the markets have been subject to characteristically
inefficient, poor-quality service, as well as the unavailability of new and
innovative systems and services. In addition, the Latin American markets in
which GlobalNet offers services, or in which GlobalNet seeks to compete, are
generally characterized by a lack of fiber optic cable capacity. Existing
satellite-based capacity offers limited capability to meet the increasing demand
for bandwidth-intensive applications in GlobalNet's targeted countries.
GlobalNet believes that there is a growing demand for high-quality
telecommunications services and applications such as data and Voice Over
Internet Protocol ("VoIP") throughout Latin America.

Mexican Telecommunications Market

Mexico's communications services market, estimated at $13.7 billion in 2000, is
among the largest in Latin America, ranking second only to Brazil. According to
Pyramid Research, Mexico's communications services revenues are projected to
grow at a compounded annual growth rate of 12.4% to $30.1 billion by year-end
2005. Pyramid estimates that 88% of international long distance cross-border
traffic calls originating in Mexico terminate in the U.S. Total international
long distance outbound traffic is estimated to increase from 1.68 billion
minutes in 2000 to 2.82 billion minutes in 2004.

The VoIP Services Market

According to TeleGeography, international long distance traffic is expected to
grow from 132.7 billion minutes in 2000 to 248.7 billion minutes in 2004, a
compound annual growth rate of 17%. The continuing rise of international voice
traffic has been propelled by two broader trends: liberalization of
international markets and growth of mobile telephony. International VoIP
traffic, in particular, is growing very rapidly. Approximately 6% of
international voice call volume travels over the Internet instead of traditional
telephone networks. VoIP traffic tripled in 2000, increasing from 1.6 billion
minutes in 1999 to 5.3 billion minutes in 2000, and is estimated to have reached
9.6 billion minutes in 2001. Approximately 32% of international VoIP traffic in
2000 was bound for Latin America and the biggest route for international VoIP
traffic is the U.S. to Mexico, accounting for approximately 12% of international
VoIP traffic.

Our Products and Services

The GlobalNet network is comprised of high performance telephony applications
running on a carrier class network. This powerful combination produces unique
products and services that enable customers to communicate effectively and
efficiently with high reliability and performance. Our services give customers
the flexibility and convenience of communicating anywhere in the world. These
benefits are available to our customers through the development of a proprietary
solution for multiple carrier interconnectivity, with the successful testing of
VoIP gateways and their interoperability across different VoIP vendors. The
impact of this interoperability will allow GlobalNet to extend its worldwide
reach into new countries and open the door for opportunities with affiliates
that use a variety of VoIP gateway switches.

International Wholesale Termination. GlobalNet provides international wholesale
voice and fax termination to Mexico, Central and South America. GlobalNet
operates two Lucent Excel IP gateway switches. The New York switch serves as a
gateway for refile and carrier exchange traffic. The San Antonio switch serves
as the gateway to Latin America. GlobalNet's competitive advantage to these
destinations is the result of unique, bilateral relationships, which it has
cultivated with emerging carriers and major international telecommunications
providers in the respective countries. GlobalNet competes in other worldwide
destinations through aggressively managed carrier traffic exchange agreements.
High volume, active network management and aggressive acquisition and sale of
international routes have all been key elements to the success of the
international wholesale carrier program. By offering additional high quality
VoIP routes to Latin America, GlobalNet will continue to grow the wholesale
carrier program by executing new interconnection agreements with domestic U.S.
and international carriers.
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Bi-Directional Switched Voice and Fax. GlobalNet provides international voice
and data services over a private IP network to international carriers and
service providers throughout Mexico and Central and South America. GlobalNet is
able to offer international carriers the ability to route international voice
and fax calls over its IP backbone to the United States and worldwide at reduced
costs while providing reliable, high quality service via new technology. Many
carrier customers have become strategic partners of GlobalNet, allowing
GlobalNet to gain access to its partners' networks, which cut its costs for
international traffic termination.

Consumer VoIP Retail Products. GlobalNet is currently rolling out its consumer
VoIP product to the Latin American marketplace. The company announced on
February 5, 2004 "it has achieved extremely gratifying results in the test
launch of its new SIP [Session Initiation Protocol] based VoIP service in Latin
America". GlobalNet has an exclusive agreement to provide private-labeled VoIP
services to a major multimedia cable operator with a high speed cable network
reaching 1.7 million homes, including more than 118,000 broadband subscribers.
GlobalNet was selected to provide advanced telecommunications services over this
network, inclusive of local USA numbers, SIP telephones and voicemail. Our
"Private-Label Solution," powered by GlobalNet's "Carrier Class Next Generation
SIP Network," reached 1,426 subscribers by the end of initial month of test
service.

Through alliances and partnerships with ISPs (Internet Service Providers) and
cable providers, GlobalNet is leading the way with new telephony services
accessed through a broadband Internet connection. GlobalNet's core product is a
complete turnkey solution for ISPs and cable companies which includes
private-labeling GlobalNet's Broadband Communications Solution. ISPs and cable
companies can enhance their current line of products and services without any
investment or build outs of costly infrastructure. By utilizing GlobalNet's
comprehensive turnkey solution, companies can expand offerings and strengthen
brand building, while creating additional revenue. Through GlobalNet's Broadband
Communication solution, companies will be able to attract, own and maintain
important customer relationships while GlobalNet provides the network
experience, high quality service and network support.

Utilizing GlobalNet's private IP network and proprietary platform, customers can
make high-quality, low cost telephone calls over GlobalNet's VoIP network to any
telephone in the world. GlobalNet's broadband phone service provides inbound and
outbound calling capabilities via an internet connection so customers can place
and receive local, long distance and international calls while talking through a
traditional telephone set. GlobalNet's crystal clear voice services are accessed
via any type of Broadband or dialup Internet connection.

Global Mobile Satellite Service. GlobalNet continues to develop technologies by
which countries with limited Telecommunications resources can have access to
affordable Telecommunications services. The company announced three initial
projects with Iraq, Libya and Cuba. Both Libya and Cuba are still being
evaluated by the DoD (Department of Defense) and will begin when approval from
the DoD is received by the Company. The Iraqi project is already underway with
initial distribution of Satellite Phones and SIMs (Subscriber Identity Modules)
cards being sent out within days of this report. The announcement of the
successful testing and launch of the Iraqi project stated that the "Pre-Paid
Mobile Satellite System serves Turkey, and areas to the south and east,
including the eastern Mediterranean, Egypt, Lebanon and Iraq. This technology,
when combined with GlobalNet's VoIP network, enables subscribers to feel the
advantage of having access to some of the lowest costs for termination in and
out of countries worldwide. Initially, GlobalNet intends to focus its efforts on
Iraq in an attempt to service as many of the estimated 16 million residents and
Coalition servicemen that do not have access to a stable communication network.
This project will serve as a template to carry all the voice traffic from the
countries currently in negotiations or awaiting approval from either the DoD or
State Department."

As the global economy expands, the demands for reliable forms of worldwide
communication alternatives is ever increasing. Demand coupled with the leaps in
technology has positioned GlobalNet to be the leading provider of mobile
satellite services in remote regions of the world at affordable rates. GlobalNet
merges satellite communication with mobile/cellular technology to provide
reliable, high quality voice, data, messaging and voicemail services for
customers that live, work and play outside the range of traditional cellular
services.

Pre-paid calling cards. GlobalNet has a long history of good relationships with
pre-paid calling card companies as well as distribution of its own popular
Mexico Prepaid Cards. The exclusive agreement grants GlobalNet a 1-year contract
and can be renewed for additional years if the project is successful. Beta tests
were performed over the past months and all signs point towards a successful
launch and overall project success.

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Business and Growth Strategy

Expand Network Facilities. GlobalNet intends to continue expanding its U.S. and
Latin American network by acquiring and building additional switching facilities
for providing voice, video, data and Internet services. GlobalNet also intends
to deploy local and long distance facilities where appropriate and the
investment is justified. GlobalNet's objectives in making these investments are
to: (i) provide "on-net" capacity to allow growth in its voice services
business; (ii) increase profitability for switched services by reducing the
amount of traffic terminated by other long distance carriers pursuant to resale
arrangements; and (iii) use the expanded network as a platform to support
advanced, bandwidth intensive data and Internet applications.

Expand Sales to Existing Customers. GlobalNet plans to expand sales to its
existing customer base through more targeted and aggressive marketing of its
services, by leveraging the efficiencies generated from growing network traffic
to provide more competitive pricing on existing routes and by expanding its
network to additional destinations to obtain greater volume of traffic from
existing customers.

Expand GlobalNet Network to Other Latin American Countries. GlobalNet plans to
expand its network to additional Latin American territories, including Brazil,
Argentina, Chile, Colombia, Peru, Uruguay, Guatemala, El Salvador and Puerto
Rico and is currently in discussions with a number of in-country carriers to
establish interconnection agreements and expand its presence into these markets.
GlobalNet believes that by building more routes to support "on-net" traffic, it
will be able to acquire a greater portion of the traffic to these Latin American
destinations while providing more competitive pricing and increasing margins for
these routes.

Network Description

The GlobalNet network is a combination of (i) IP-based VPNs (Virtual Private
Networks) with service level agreements to assure the highest levels of
performance, (ii) the public Internet that expands geographic coverage beyond
the reach of private networks and (iii) fixed cost point-to-point fiber optic
facilities for domestic and international private line transport. GlobalNet is
expanding its international connection points with the establishment of
additional contracts with international carriers. GlobalNet has also internally
developed a VoIP interoperabitity gateway that enables communications between
VoIP networks without causing deterioration in call quality. The deployment of
these IP gateway devices are facilitating quicker customer connections on a
global basis.

GlobalNet currently manages its own telecommunications network and utilizes the
transmission capacity of several carriers. GlobalNet is increasing the
percentage of traffic it carries on its network or "on-net," enabling it to
increase margins and profitability while ensuring quality. In addition,
GlobalNet's use of multiple carriers increases cost efficiencies by establishing
additional routing capability and enables GlobalNet to obtain sufficient
capacity to support rapid growth. GlobalNet's IP network currently serves more
than 19 countries with over 250 points of presence.

On August 27, 2003, GlobalNet made a $60 million revenue commitment to MCI for a
period of two years commencing September 1, 2003 (the "Revenue Commitment"). The
Revenue Commitment contains a price protection mechanism that allows GlobalNet
to terminate the Revenue Commitment by paying off the outstanding balance of the
Note in the event that MCI's sell rates to GlobalNet become less competitive
than the sell rates available from other telecom providers.

In February 2004, the Company entered negotiations with MCI, the Company's
largest vendor, to settle past due balances due them. On March 11, 2004 the
Company entered into a temporary agreement that required a $1,000,000 minimum
payment per week through March 26, 2004 for current traffic and required the
Company to provide MCI with a new payment proposal by March 29, 2004 to settle
the past due balances due MCI. The Company's first proposal was not accepted.
While the Company is preparing a new proposal, the Company and MCI have extended
through July 9, 2004, the temporary arrangement that requires a $1,000,000
minimum payment per week for current traffic. There are no assurances that an
agreement can be reached with MCI and any service disruption or termination
could cause serious harm to the Company, its revenues and ability to continue
operations. However, because of the uncertainty with MCI, the Company is
simultaneously working to add redundant capacities to terminate service to in
the case of a disruption or termination.

GlobalNet's present network uses the Internet, fixed cost point-to-point fiber
optic facilities and other international private line capacity for physical
transport. GlobalNet is expanding its network by installing additional IP
transmission and switching equipment in its targeted U.S. and Latin American
markets to provide more cost efficiencies and savings by routing an increasing
portion of traffic "on-net."
                                       10
<PAGE>
GlobalNet owns and operates two Lucent Excel Exchange Plus IP gateway switches
with a total capability of 28,800 Dynamic Server Object (DSO) ports. The New
York switch serves as a gateway for refile and carrier exchange traffic and the
San Antonio switch serves as the gateway to Central and South America and can
provide prepaid calling card services. Lucent's MaxTNT and Cisco 5350 VoIP
gateways are also used between the GlobalNet switches and international
destinations in the network, providing GlobalNet with a scaleable solution that
allows the transport of voice, data and Internet traffic as well as QoS (Quality
of Service) assurances. The GlobalNet network also includes backbone connections
and routing and gateway equipment in Miami, FL, McAllen, TX, and Reynosa,
Monterey and Mexico City, Mexico.

Customers

A significant portion of GlobalNet's revenues are concentrated among a few large
customers. For the years ended December 31, 2003 and December 31, 2002,
GlobalNet's largest customer represented 48% and 62% of total revenue, while the
next three largest customers represented 33% and 19% of total revenue,
respectively. Further, for the six month period ended June 28, 2003, the largest
four customers represented 80% of the total revenue, while the largest customer
represented 50% of the total revenue. The loss of any of the foregoing customers
would have a significant adverse impact on GlobalNet.

Network Management and Information Systems

GlobalNet's network management and information systems enable it to:

o Economically and efficiently route traffic over the GlobalNet network and the
networks of other carriers;

o Offer reliable services with high call completion rates and voice quality; and

o Manage an advanced voice and data multi-service IP platform.

These systems, particularly their ability to provide flexible, high quality
service to international destinations, provide GlobalNet with a competitive
advantage relative to many other providers of telecommunications services.
GlobalNet monitors its network and initiates changes to the overall switch
network and traffic routing where appropriate using SS7 and ISDN signaling to
optimize routing and minimize costs. Because a substantial portion of the
traffic carried terminates internationally and completions vary by carrier,
GlobalNet monitors the completion efficiencies of its suppliers.

GlobalNet's proprietary systems management software, known as DSS (Decision
Support System), seamlessly integrates data access for sales, operations and
traffic analysis functions and significantly enhances customer service. The DSS
system features a central data source that eliminates duplicate entry of
information and provides GlobalNet personnel with readily accessible, real-time
data to meet customer needs. Additionally, DSS tracks rapidly changing vendor
costs to determine the most cost-effective routing, and loads the new
information into the network with minimal manual intervention. The system
permits GlobalNet to make substantial routing changes in order to take advantage
of pricing changes.

GlobalNet has also deployed an advanced suite of applications to monitor faults
and availability of services throughout its VoIP network. These network
applications provide real-time, proactive monitoring of faults throughout the
GlobalNet infrastructure, allowing network engineers and operations personnel to
address potential problems before they cause disruptions in service. In
addition, the system provides GlobalNet with the capability of generating
detailed network performance analysis reports that assist in determining which
services and customers could potentially be affected by problems on the network.

Sales and Marketing

Sales Strategy. Our sales efforts target leading telecommunications carriers
globally. Our sales force is composed of experienced personnel with
well-established relationships in the telecommunications industry, based in key
markets worldwide and typically responsible for business development in a small
number of countries regionally. Our sales process often involves a test by our
potential customers of our services in which they route traffic over our network
to a particular country. Our experience to date has been that once a carrier has
begun to use our network for a single country and finds our quality to be
acceptable, the sales process for increasing the volume of traffic they send to
us and growing the number of destinations for which they use our network becomes
incrementally easier.

We also seek to establish and grow relationships with service providers that can
terminate the local leg of international calls. We believe that our ability to
deliver a high volume of minutes makes us an attractive potential partner for
local service providers.

                                       11
<PAGE>
As deregulation and competition push all local service providers to both
originate and terminate as much traffic as possible on their local networks,
GlobalNet will increasingly enjoy "reciprocal" relationships with the providers
with which we do business, further improving sales productivity.

We have offices providing sales coverage in Europe and North America.

Marketing Strategy. We seek to attract termination partners as well as customers
and consequently address our marketing efforts to both. Most retail origination
is controlled by the largest (Tier 1) retail carriers. We believe that we have
largely achieved our primary marketing objectives of awareness and acceptance
among much of this customer segment, as evidenced by our penetration of these
carriers, particularly in Mexico and Latin America. We will continue to
reinforce our brand presence with this segment in 2004 to help increase our
share of their international traffic. Also, we will concentrate on state-owned
carriers, known as PTTs, in developing economies generally whom we view as
natural customers. While we increasingly expect our customers to also be our
termination partners, local circumstances in many countries still are such that
we look to partner with ISPs, new Competitive Local Exchange Carriers (CLECs)
and specialist termination providers. Unlike marketing to the well-known Tier 1
carriers, we actively identify and attract smaller termination partners in many
countries, many of which are start-ups formed specifically to terminate
international traffic. Our marketing plan includes public relations activity,
outreach with industry analysts and the trade press, participation in industry
trade shows and conferences, targeted mailings and a comprehensive Website. We
expect our Web-based marketing efforts to continue to increase in prominence in
attracting and qualifying leads.

Our sales and marketing strategy for our retail prepaid service business is to
create relationships with established distributors in major urban markets in the
U.S. and in our targeted international countries. Although we have initially
concentrated our efforts on the U.S. market, we may introduce our retail prepaid
calling card business in international markets in the future.

Strategic Technology Relationships

Strategic technology relationships are important because they give us early
access to new technologies, a voice in vendors' development direction and
because strategic partners engage with us in support of our sales and marketing
programs.

Competition

We compete in two markets: wholesale international long distance telephone
services and retail prepaid services. As described more completely in the
section captioned "Risk Factors," the market for international long distance
voice and fax call completion services is highly competitive. In the
international long distance telephone business, we compete with other wholesale
telecommunications carriers worldwide. Many of these carriers have more
resources, longer operating histories and more established positions in the
telecommunications marketplace, and, in some cases, have begun to develop
Internet telephony capabilities. We also compete with smaller companies,
including those that may be specialists in just one or two routes. We also
compete against our customers' ability to carry traffic themselves, whereby
either retail carriers develop their own international networks or interconnect
with one another and exchange international traffic by "meeting" in a major
telecoms hub, such as London. At present, we do not compete with cable
operators, or local exchange carriers, such as the U.S. "Baby Bells." Also, at
present, we do not compete with emerging retail VoIP carriers as most have not
developed international networks. We compete principally on quality of service
and price.

In the retail prepaid services business, we compete with major
telecommunications carriers, and many smaller telecommunications providers. As
we have just recently introduced this service, many of our competitors have a
longer operating history and a more established market presence in the retail
prepaid calling card business than us. Also, many of these competitors have
greater resources than us. The U.S. market for retail prepaid calling card
services is currently estimated at over $4 billion per year.

Although the market for wholesale international traffic and retail prepaid
services is highly competitive and will almost certainly remain so, we believe
that ability to manage traffic across the (low-cost) Internet, while maintaining
required quality, represents a competitive advantage that will allow us to
continue expanding both volumes and margins.
Government Regulation.

As more fully described in the "Risk Factors" our business is subject to U.S.
and foreign laws, which may include those relating to telecommunications.

                                       12
<PAGE>
We are not licensed to offer traditional telecommunications services in any U.S.
state and we have filed a 214 tariff with the Federal Communications Commission.
Nonetheless, aspects of our operations may currently be, or become, subject to
state or federal regulations governing licensing, universal service funding,
advertising, disclosure of confidential communications or other information,
excise taxes, transactions restricted by U.S. embargo and other reporting or
compliance requirements.

While the FCC to date has maintained an informal policy that information service
providers, including Internet telephony providers, are not telecommunications
carriers for regulatory purposes, various entities have challenged this idea,
both before the FCC and at various state government agencies. As a result, the
FCC has held hearings and announced a Notice of Proposed Rulemaking. An adverse
ruling could subject us to licensing requirements and additional fees and
subsidies increasing the costs of providing our services.

Intellectual Property

We also rely on trade secrets, technical know-how and continuing innovation to
develop and maintain our competitive position. We have been granted certain
licenses for use in the ordinary course of business.

Employees

As of December 31, 2003, we employed 30 people. Our employees are not
represented by a labor union and we consider our relations with our employees to
be good.

ITEM 2. DESCRIPTION OF PROPERTY.

We maintain our administrative offices at 18851 NE 29th Avenue, Aventura,
Florida 33180. The facility is approximately 1,200 square feet. The rent is
approximately $12,000 per month. The lease is currently a month to month
arrangement. We also maintain a facility at 1919 South Highland Ave, Suite 125D,
Lombard, Illinois 60148. The office site is approximately 3,000 square feet
where the rental is approximately $3,200 per month. The lease expires in April
2005. In addition, we maintain a facility at 2204 Timberloch Place Suite 140,
The Woodlands, Texas 77380. The office site is approximately 3,000 square feet
where the rental is approximately $3,800 per month. The lease expires in April
2006. We also maintain a facility in New Dehli, India. The rent is approximately
$1,500 per month and is used as a customer service and R&D staff facility. We
believe that our space is adequate for our current needs. As we expand, we
expect that suitable additional space will be available on commercially
reasonable terms, although no assurance can be made in this regard. We also
believe our property is adequately covered by insurance.

ITEM 3. LEGAL PROCEEDINGS.

The Company is from time to time subject to litigation incidental to its
business. The Company believes that the results of the following asserted and
potential litigation and other potential legal proceedings will not have a
material adverse effect on its business, financial condition, results of
operations, or liquidity of the Company.

The XEX Consulting Company, Inc. - In November 2001, an action was filed against
GlobalNet and others by XEX Consulting Company, Inc. ("XEX"). The Complaint
alleged, among other things, that the defendants engaged in a fraudulent scheme
of manipulating the market for GlobalNet common stock and failed to disclose
certain matters. The plaintiff seeks compensatory damages in the amount of $3
million together with punitive damages. On June 25, 2003, GlobalNet and XEX
reached a settlement agreement, whereby XEX agreed to voluntarily dismiss its
complaint against GlobalNet without prejudice in exchange for no monetary
consideration.

Wholesale Telecom Corporation - In October 2001, GlobalNet filed a complaint
against Wholesale Telecom Corporation ("WTC") in the Circuit Court of the 11th
Judicial Circuit for Dade County (Florida) seeking to recover $536,579 (plus
interest since October 23, 2000) of past-due unpaid amounts for telecom services
provided by GlobalNet. In June 2002, WTC filed a counterclaim alleging
violations of the Communications Act and fraud, and seeking punitive damages in
excess of $1 million. The counterclaim alleges that GlobalNet has "knowingly
issued fraudulent invoices". On December 16, 2003 GlobalNet and WTC agreed to
dismiss all claims and counterclaims in exchange for no monetary consideration.

                                       13
<PAGE>
Manuel Dreyfus - On February 25, 2003, Manuel Dreyfus filed a complaint against
GlobalNet and its former President. The complaint seeks to recover $40,000 of
expenses that the plaintiff claims to have incurred on behalf of Global Telekom
Ventures, Inc. ("GTV"), a company owned by GlobalNet's former President, in 1998
and 1999. GlobalNet has never had an equity interest and/or a commercial
relationship with GTV. The plaintiff also alleges that he had an oral one-year
employment agreement with GlobalNet and that he was verbally granted 100,000
shares of GlobalNet's common stock. The plaintiff alleges that GlobalNet was in
breach of this oral employment agreement when he was terminated in November 2000
and that he is owed 100,000 shares of GlobalNet's common stock. GlobalNet
believes that it has good and meritorious defenses against the complaint. In May
2004, the Company agreed to a settlement in principle and believes that the
settlement will not have a material effect on it.

Interwest Transfer Co., Inc. - Interwest Transfer Co., Inc. ("Interwest") was
the transfer agent of Rich Earth, a publicly traded shell company acquired by
GlobalNet in a "reverse merger" transaction in May 2000. Interwest is currently
a defendant in the litigation between two former shareholders of Rich Earth over
the ownership of a stock certificate. The litigation was commenced on August
2000. Under the transfer agent agreement between Interwest and Rich Earth,
GlobalNet (as the successor company of Rich Earth) is indemnifying Interwest
from any potential loss (and legal expenses) that could arise from such
litigation. The Company believes that the resolution of this litigation will not
have a material adverse effect on it.

Star Telecommunications, Inc. - On May 15, 2003, an action was commenced in the
United States Bankruptcy Court for the District of Delaware against GlobalNet by
the Liquidating Trustee of the Star Creditors' Liquidating Trust (Star
Creditors' Liquidating Trust). The complaint alleges that GlobalNet received
preferential payments of $754,548 from Star Telecommunications, Inc. ("Star")
within the 90 days prior to Star's Chapter 11 bankruptcy filing on March 13,
2001 and seeks the refund of these payments. On September 9, 2003, GlobalNet
accepted a proposal from Star Creditors' Liquidating Trust to settle this matter
for $15,000 in exchange for a mutual release.

Advanced Tel, Inc. - In January 2003, Advanced Tel, Inc. filed a complaint
against GlobalNet Corporation, f/k/a iDial Networks, Inc., and its wholly owned
subsidiary IDNW, Inc. in the Superior Court of California, County of Orange. The
complaint seeks to recover $125,656 of past due unpaid telecom charges provided
to IDNW, Inc. On March 18, 2004, GlobalNet and Advanced Tel reached a settlement
agreement, whereby Advanced Tel agreed to dismiss its complaint against
GlobalNet with prejudice in exchange for a $45,000 payment by GlobalNet.

Qwest Communications Corporation, Inc. - Qwest filed a complaint against
GlobalNet Corporation f/k/a iDial Networks, Inc. in Arapahoe County District
Court, State of Colorado. The complaint seeks to recover past unpaid telecom
charges provided to Loxley Business Information Technology Co., Ltd., a Thailand
corporation and an entity unrelated to GlobalNet Corporation or any of its
subsidiaries, because of a past mutual relationship with an officer of the
Company. The Company believes that litigation is without merit and simply a case
of mistaken identity. The Company believes that the resolution of this
litigation will not have a material adverse effect on it.

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

On December 31, 2003, holders of a majority of the voting capital stock of
GlobalNet acted by written consent in lieu of a special meeting of shareholders
to adopt amendments to our articles of incorporation to increase the number of
shares of common stock which we are authorized to issue from one billion shares
to 20 billion shares.

                                       14
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND STOCKHOLDER MATTERS.

Market Information

Our common stock is currently traded on the Over-The-Counter Bulletin Board (the
"OTCBB") under the symbol "GLBT." The following table sets forth the high and
low sales prices of our common stock for the fiscal periods indicated as
reported in the over-the-counter market. The quotations shown represent
inter-dealer prices without adjustment for retail mark-ups, mark-downs or
commissions, and may not necessarily reflect actual transactions.

                                         Fiscal 2003             Fiscal 2002
                                         -----------             -----------

COMMON STOCK                           High       Low           High      Low
------------                           ----       ---           ----      ---

1st Quarter......................      .04        .01           .04       .02

2nd Quarter......................      .02        .004          .05       .01

3rd Quarter......................      .05        .0024         .05       .01

4th Quarter......................      .24        .02           .08       .02

The per share closing sales price of our common stock as reported by the OTCBB
on June 3, 2004, was $.022. As of June 4, 2004, we had approximately 8,000
beneficial shareholders and 800 shareholders of record.

Description of Our Capital Stock

Common Stock

Holders of our common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders. Holders of our common stock do not
have cumulative voting rights. Accordingly, holders of a majority of the shares
of our common stock entitled to vote in any election of directors may elect all
of the directors standing for election. Subject to preferences that may be
applicable to any shares of preferred stock outstanding at the time, holders of
our common stock are entitled to receive dividends ratably, if any, as may be
declared from time to time by our board of directors out of legally available
funds.

Upon our liquidation, dissolution or winding up, the holders of our common stock
are entitled to receive ratably, net assets available after the payment of

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.

Holders of our common stock have no preemptive, subscription, redemption or
conversion rights, and there are no redemption or sinking fund provisions
applicable to our common stock. The outstanding shares of our common stock are
duly authorized, validly issued, fully paid and nonassessable. The rights,
preferences and privileges of holders of common stock are subject to, and may be
adversely affected by, the rights of the holders of shares of any series of
preferred stock which we may designate and issue in the future.

We currently have 1 billion shares of common stock authorized. Effective April
21, 2004, our authorized common stock was increased from one billion shares to
20 billion shares.

Preferred Stock

Our board of directors is authorized, without further shareholder approval, to
designate and issue up to 30,000,000 shares of preferred stock in one or more
series. Our board may fix the rights, preferences, privileges and restrictions
of these shares, including dividend rights, conversion rights, voting rights,
terms of redemption and liquidation preferences, and to fix the number of shares
constituting any series and the designations of these series. These shares may
have rights senior to our common stock. The issuance of preferred stock may have
the effect of delaying or preventing a change in control of us. The issuance of
preferred stock could decrease the amount of earnings and assets available for
distribution to the holders of common stock or could adversely affect the rights
and powers, including voting rights, of the holders of our common stock.

                                       15
<PAGE>
In December 2003, we issued 100,000 shares of our Series A Preferred Stock to
our majority shareholder, Growth Enterprise Fund S.A. ("GEF"). Each share of
Series A Preferred Stock is entitled to a cumulative annual dividend of $7.80,
which must be paid before we can pay any dividends to our common shareholders.
While the Series A Preferred Stock is outstanding, we will pay GEF $175,000 per
month, which will pay the accrued dividend; and the excess will redeem Series A
Preferred Stock at $156 per share. In lieu of such cash payment, we can deliver
to GEF a promissory note, which would contain substantially the same provisions
as the Series A Preferred Stock. In the event of liquidation, we must redeem the
outstanding Series A Preferred Stock at $156 per share before we may pay our
common shareholders.

Each share of Series A Preferred Stock is convertible into 97,500 shares of our
common stock, subject to certain anti-dilution provisions. Each share of Series
A Preferred Stock is entitled to vote along with our common shareholders as if
the Series A Preferred Stock had been converted. This means that each share of
Series A Preferred Stock is entitled to 97,500 votes.

We have not paid any dividends on the Series A Preferred Stock since issuance.
On March 2, 2004, GEF waived in writing any and all defaults by GlobalNet and
its subsidiaries under the terms of the Preferred Stock, without penalty, and
agreed that unpaid Preferred Stock dividends accrued to such date will be added
to the face amount of the Preferred Stock. GEF subsequently agreed to convert
all unpaid Preferred Stock dividends through June 30, 2004, into 1,171,875,000
shares of the Company's common stock at the $0.0016 conversion rate specified in
the certificate of designation for the Preferred Stock filed April 30, 2004.

Existing Obligations to Issue Common Stock

We are obligated under various existing agreements to issue additional shares of
our common stock.

As of June 4, 2004, we had 6,399,928,092 shares of our common stock outstanding.
If all of our outstanding options and warrants are exercised and convertible
notes and preferred stock are converted (based on certain assumptions as
described below), we will have approximately 17.6 billion shares outstanding.

Our board will have the ability, without further shareholder approval, to issue
up to approximately 2.4 billion additional shares of common stock. Such issuance
may result in a reduction of the book value or market price of our outstanding
common stock. Issuance of additional common stock will reduce the proportionate
ownership and voting power of our then existing shareholders.

The table below summarizes our outstanding common stock, obligations to issue
common stock, warrants and convertible debt and mandatorily redeemable preferred
stock as of June 4, 2004 (in millions).
<TABLE>
<CAPTION>
                                                                                       NUMBER OF
                                                                                       SHARES
                                                                       NUMBER OF       UNDERLYING
                                                                       SHARES OF       WARRANTS AND
COMMON STOCK, WARRANTS AND                                             COMMON          CONVERTIBLE
CONVERTIBLE SECURITIES                                                 STOCK           SECURITIES       TOTAL
---------------------------------                                      ---------       ------------    -------
<S>                                                                     <C>              <C>             <C>
Shares of common stock issued
and outstanding                                                        6,400                             6,400

Additional shares to be issued
to employees, consultants, etc.                                           22                                22

Warrants issued to convertible
debenture holders                                                                            4               4

Series A Preferred Stock issued
to Growth Enterprise Fund, S.A.                                                          9,750           9,750

Convertible debt

$875,000 principal amount
convertible note issued to
The Titan Corporation (1)                                                                   40              40

$2,487,000 principal amount
convertible debentures (2)                                                               1,554           1,554


TOTAL                                                                  6,422            11,350          17,772
</TABLE>
(1) Assumes the conversion price is $0.022 per share, based on the market price
of our common stock on June 3, 2004.

                                       16
<PAGE>
(2) Assumes the conversion price is $0.0016 per share, excluding interest and
penalties, if any.

Obligation to issue common stock upon conversion of Series A Preferred Stock

We are obligated to issue to the holders of our Series A Preferred Stock,
currently Growth Enterprise Fund, S.A., 9.75 billion shares of common stock
assuming that all of the Series A Preferred Stock is converted, however on May
27, 2004 received a letter in which GEF agrees to refrain from converting any
shares of Series A Preferred Stock into common stock for so long as we are
current on dividends and mandatory redemption payments due.

As part of the acquisition of GlobalNet, Inc., we issued to GEF convertible,
mandatorily redeemable preferred stock with a liquidation value of approximately
$15.6 million. We have issued and outstanding 100,000 shares of Series A
Preferred Stock. Each share of Series A Preferred Stock is convertible into
97,500 shares of our common stock.

Obligation to issue common stock upon conversion of convertible debentures

During 2003, we issued approximately $3 million principal amount of our
convertible debentures. These debentures bear interest at 12% per year and
mature two years from the date of issuance. On March 2, 2004, N.I.R. Group, LLC,
the manager of various funds holding our convertible debentures, agreed to
reduce its interest on all the convertible debentures originally totaling
$3,000,000 from 12% to 6% and granted the Company additional time to complete an
Information Statement increasing the authorized capital of the Company and to
file and secure the effectiveness of a registration statement for the shares of
common stock to be issued upon the conversion of the debentures. The Company
completed the Information Statement in late March 2004 and the increase in the
Company's authorized common stock was effective on April 21, 2004.

The debentures are convertible into shares of our common stock at the rate of
$0.0016 per share. However, if the market price for our common stock is below
$0.0016 per share, then the debentures are convertible at the lower of:

o $0.0016 per share, and
o 40% of the average of the lowest three intra-day trading prices during the 20
trading days immediately prior to the conversion.

As of June 4, 2004, the debenture holders have converted approximately $513,000
principal amount of the debentures.

Since the number of shares into which the convertible debentures could increase
if the market price of our common stock falls below $0.0016 per share in the
future, we cannot know as of today how many shares of our common stock we will
eventually issue on conversion of the convertible debentures.

The following table sets forth the number of shares of common stock into which
the principal amount of convertible debentures outstanding as of June 4, 2004
are convertible at various prices, using the maximum price of $0.0016 per share,
and the following hypothetical prices:

o $0.0005 (40% of 75% of the $0.0016 fixed price)
o $0.0003 (40% of 50% of the $0.0016 fixed price)
o $0.0002 (40% of 25% of the $0.0016 fixed price)

The table also sets forth the percentage of our common stock represented by
these shares:
<TABLE>
<CAPTION>

Hypothetical      Approximate Outstanding Principal       Number of Shares into which        Total Number of    Percentage of
Conversion      Amount of Convertible Debentures        Convertible Debentures are          Shares into which    Outstanding
 Prices                                                   Convertible (in thousands)          Convertible       Common Stock
                                                                                              Debentures are
                                                                                              Convertible
                                                                                             (in thousands)
                          Debenture Issuance Date                      Debenture Issuance Date
             February        May        August      February     May            August
              2003          2003         2003         2003      2003            2003
<C>           <C>         <C>         <C>           <C>          <C>          <C>                <C>                 <C>
$0.0016(1)    $237,000    $500,000    $1,750,000    148,125      312,500      1,093,750          1,554,375           20%
$0.0005(2)    $237,000    $500,000    $1,750,000    474,000    1,000,000      3,500,000          4,974,000           44%
$0.0003(2)    $237,000    $500,000    $1,750,000    790,000    1,666,667      5,833,333          8,290,000           56%
$0.0002(2)    $237,000    $500,000    $1,750,000  1,185,000    2,500,000      8,750,000         12,435,000           66%
</TABLE>
(1) The maximum conversion price is $0.0016 per share.
(2) If our common stock is below $0.0016, then the conversion price is 40% of
the average of the lowest three intra-day trading price for the twenty trading
days immediately preceding the conversion date.

                                       17
<PAGE>
Warrants issued to convertible debenture holders

In conjunction with the issuance of the secured convertible debentures in 2003,
we issued warrants to acquire an additional 3,725,000 shares of our common stock
at an exercise price of $.0016 per share. 2,250,000 warrants terminate in
February 2008 and 1,500,000 warrants terminate in May 2008.

In conjunction with the issuance of the secured convertible debentures in 2001,
we issued warrants to acquire 166,666 shares of our common stock at an exercise
price of $.06 per share. These warrants terminate in July 2006.

Obligation to issue shares of common stock to The Titan Corporation

On December 29, 2003, we settled with The Titan Corporation an outstanding
promissory note owing by us to Titan in the original amount of $1,500,000. The
balance of the note, in the amount of $1,000,000, was due December 17, 2003. On
December 29, 2003, the parties entered into a Settlement Agreement and Release
of Claims replacing the original note with the Amended and Restated Convertible
Note in the principal amount of $1,250,000. The amended note is without
interest.

Under the terms of the amended note, we committed to pay Titan $25,000 per week
in reduction of principal, with the balance due in a balloon payment on March
31, 2004. Titan may convert any portion or the entire outstanding principal
balance of the amended note into shares of our common stock commencing after a
registration statement registering the resale of the common stock issuable upon
conversion of the amended note is declared effective by the SEC. The note is
convertible at the then-current market value of our common stock. The proceeds
from the sale of the shares will reduce the amount of the amended note dollar
for dollar. Since the number of shares into which the Titan amended note will be
converted depends on the market price of our common stock at various dates in
the future, we cannot know as of today how many shares of our common stock we
will eventually issue on conversion of the amended note.

Because of the time it took to complete the Company's Information Statement
related to the increase of the number of the Company's authorized common stock,
the Company was unable to register the appropriate shares in the timeframe
originally contemplated. Neither did we pay Titan the balance due -
approximately $875,000 - under the amended note on March 31, 2004 as required by
the terms of the amended note. Therefore, the Company is currently in default
under the amended note. The increase in our authorized common stock was
effective on April 21, 2004. We are negotiating with Titan to cure the default
and to extend the maturity date of the amended note but there are no assurances
that this will be accomplished and we may incur late fees and/or additional
extension fees in the process.

The following table sets forth the number of shares of common stock into which
the Titan amended note is convertible at various closing prices, using the
closing price of our common stock on June 3, 2004 ($0.022 per share) and prices
that are less by 25%, 50% and 75%. The table also sets forth the percentage of
our common stock represented by these shares (after giving effect to the
issuance of approximately 4.6 billion shares to GEF and assuming that we do not
issue any other shares in any other transaction):
<TABLE>
<CAPTION>
Hypothetical      Outstanding Principal Amount of      Number of Shares into which    Percentage of
 Conversion        Convertible Debentures as of             the Titan Note is          Outstanding
  Prices                 June 3, 2004                          Convertible             Common Stock
<C>                       <C>                                   <C>                         <C>
$0.022                    $875,000                              39,772,727                  0.62%
$0.0165                   $875,000                              53,030,303                  0.82%
$0.011                    $875,000                              79,545,455                  1.23%
$0.0055                   $875,000                             159,090,909                  2.43%
</TABLE>
Dividends and Dividend Policy

We have never declared or paid any cash dividends on our common stock. We
anticipate that any earnings will be retained for development and expansion of
our business and we do not anticipate paying any cash dividends in the
foreseeable future. Our board of directors has sole discretion to pay cash
dividends based on our financial condition, results of operations, capital
requirements, contractual obligations and other relevant factors.

We may not pay or set aside cash for dividends to our common stockholders unless
holders of our Series A Preferred Stock have been paid all accrued dividends.

Recent Sales of Unregistered Securities

During the 4th quarter of 2003, we issued 100,000,000 shares of common stock to
GEF towards the consideration as part of the iDial Networks/GlobalNet merger.
The issuance was exempt from registration under section 4(2) of the Securities
Act and Rule 506 thereunder as a sale not involving a public offering.

                                       18
<PAGE>
Repurchase of Securities

We did not repurchase any of our common stock during the fourth quarter of 2003.

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

Forward-Looking Statements

This annual report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. This Act provides a "safe
harbor" for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify these
statements as forward looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact made
in this annual report are forward looking. In particular, the statements herein
regarding industry prospects and future results of operations or financial
position are forward-looking statements. Forward-looking statements reflect
management's current expectations and are inherently uncertain. GlobalNet's
actual results may differ significantly from management's expectations. We
disclaim any duty to update any forward-looking statements, all of which should
be read in conjunction with the "Risk Factors" section of this annual report.

Overview

GlobalNet is one of the top 10 U.S. service providers of outbound traffic to
Latin America and counts among its customers more than 30 Tier 1 and Tier 2
carriers as well as a host of other well known global service providers and
major international telecommunications providers organizations including AT&T,
MCI/WorldCom, Qwest, Global Crossing, IDT, Tricom, Telecom New Zealand,
Broadwing and ITXC. Management has been successful in establishing and
maintaining relationships with these customers as a result of its ability to
provide consistent, cost effective and high quality service in the capacity
constrained telecommunications corridors linking Latin America and the United
States. This has been accomplished through the development of partnerships with
several Mexican telecommunications companies, including Protel, Marcatel, Bestel
and Alestra.

The GlobalNet network is a combination of (i) IP-based VPNs with service level
agreements to assure the highest levels of performance, (ii) the public Internet
that expands geographic coverage beyond the reach of private networks and (iii)
fixed cost point-to-point fiber optic facilities for domestic and international
private line transport. GlobalNet is expanding its international connection
points with the establishment of additional contracts with international
carriers. GlobalNet has also internally developed a VoIP interoperabitity
gateway that enables communications between VoIP networks without causing
deterioration in call quality. The deployment of these IP gateway devices are
facilitating quicker customer connections on a global basis.

GlobalNet currently manages its own telecommunications network and utilizes the
transmission capacity of several carriers. GlobalNet is increasing the
percentage of traffic it carries on its network or "on-net", enabling it to
increase margins and profitability while ensuring quality. In addition,
GlobalNet's use of multiple carriers increases cost efficiencies by establishing
additional routing capability and enables GlobalNet to obtain sufficient
capacity to support rapid growth. GlobalNet's IP network currently serves more
than 19 countries with over 250 points of presence.

GlobalNet's present network uses the Internet, fixed cost point-to-point fiber
optic facilities and other international private line capacity for physical
transport. GlobalNet is expanding its network by installing additional IP
transmission and switching equipment in its targeted U.S. and Latin American
markets to provide more cost efficiencies and savings by routing an increasing
portion of traffic "on-net."

GlobalNet owns and operates two Lucent Excel Exchange Plus IP gateway switches
with a total capability of 28,800 Dynamic Server Object (DSO) ports. The New
York switch serves as a gateway for refile and carrier exchange traffic and the
San Antonio switch serves as the gateway to Central and South America and can
provide prepaid calling card services. Lucent's MaxTNT and Cisco 5350 VoIP
gateways are also used between the GlobalNet switches and international
destinations in the network, providing GlobalNet with a scaleable solution that
allows the transport of voice, data and Internet traffic as well as QoS
assurances. The GlobalNet network also includes backbone connections and routing
and gateway equipment in Miami, FL, McAllen, TX, and Reynosa, Monterey and
Mexico City, Mexico.

                                       19
<PAGE>
During 2003, the Company largest challenge has been its continued losses,
maintaining a margin that supports current business operations and diversifying
revenue amongst customers. With the majority of the revenue coming from
wholesale traffic to Mexico, decreasing margins to that market have a negative
effect on the business. During 2003, the Company has had to continue borrow
money from either its former parent or from its cash flows. The Company
continues to diversify its business by increasing revenues to other wholesale
market and retain services, both with higher margins. The Company also continues
to diversify it amongst customers by increasing sales to lesser billing
customers. The Company has had a history of providing a majority of revenues to
a few larger customers, however during 2003 managed to reduce its dependence

                          Critical Accounting Policies

Revenue Recognition

For our wholesale business, our revenue transactions are derived from the resale
of international minutes of calling time. We recognize revenue in the period the
service is provided, net of revenue reserves for potential billing disputes.
Such disputes can result from disagreements with customers regarding the
duration, destination or rates charged for each call. In order to mitigate risk
of loss, several customers prepay for their services, in which case revenue is
deferred and is recognized as minutes are utilized.

Increased competition from other providers of telephony services and greater
expansion into new markets, such as prepaid calling services could materially
adversely affect revenue in future periods. The loss of a major customer could
have a material adverse affect on our business, financial condition, operating
results, cash flows and future prospects.

We have identified the policies below as critical to our business operations and
the understanding of our results of operations.

Valuation of Goodwill

In accordance with SFAS No. 142 we no longer amortize goodwill, but rather
perform an annual assessment as to whether any impairment has occurred. We also
assess the impairment of goodwill whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Factors we consider
important that could trigger an impairment review include the following:

o significant under-performance relative to expected historical or projected
future operating results;
o significant changes in the manner of our use of the acquired assets or the
strategy for our overall business;
o significant negative industry or economic trends;
o significant decline in our stock price for a sustained period; and
o our market capitalization relative to net book value.

We determine whether the carrying value of goodwill may not be recoverable
annually and more frequently based upon events and circumstances including the
existence of one or more of the above indicators of impairment. We determine
whether impairment has occurred by first, comparing the fair value of our only
reporting unit to the carrying value of the reporting unit. If the fair value of
the reporting unit is less than the carrying value of the net assets, then the
second step is to initially determine the fair value of the net assets in the
reporting unit exclusive of goodwill, and record any necessary impairment of
assets other than goodwill in accordance with SFAS No. 144 or other applicable
standards. The difference in the fair value of the individual net assets
exclusive of goodwill and the reporting unit results in the implied value of
goodwill. The implied value of goodwill is compared to its carrying value and
the difference is recorded as an impairment charge, if necessary.

Accounting for the Impairment of Long-lived Assets

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and supersedes
SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, and the accounting and reporting provisions
of Accounting Principles Board (APB) Opinion No. 30, Reporting the Results of
Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for
the disposal of a segment of a business (as previously defined in that Opinion).
The provisions of SFAS No. 144 are effective for financial statements issued for
fiscal years beginning after December 15, 2001. The Company adopted SFAS No. 144
on January 1, 2002.

                                       20
<PAGE>
In July 2002, it became uncertain whether we would be able to recover the
carrying value of its property and equipment as a result of our former parent
company's decision to exit the telecommunications business and the current
depressed market values for telecommunications assets. As a result, we
determined that its property and equipment were impaired and recorded a
$4,146,000 write-off, which represented 50% of the net book value of those
assets as of June 29, 2002.

Valuation of Equity Instruments Issued in Connection with Convertible Debt
Securities and Embedded Conversions Features

We record as a component of non-cash financing cost in our statement of
operations amortization of in-the-money conversion features on convertible debt
accounted for in accordance with EITF 98-5 and 00-27, amortization of discounts
from warrants issued with debt securities in accordance with APB No. 14 based on
their relative fair values, and any value associated with inducements to convert
debt in accordance with Statement of Financial Accounting Standards No. 84 (SFAS
No 84).

Assigning fair value to warrants issued in connection with our convertible debt
securities involves a number of variables, some of which are subject to certain
judgments that impact the valuation. We use the Black-Scholes option-pricing
model to estimate fair value of those warrants issued in connection with our
convertible debt. The assumptions for annual volatility and estimated life of
the warrants are subject to judgments that impact the valuation of the warrants.
We estimate our expected future volatility by reviewing the previous historical
volatility of our stock immediately preceding the issuance of the warrants. We
also estimate the expected future life of warrants issued as the contractual
term of the instrument. We believe that these are the best estimates of each
variable based on our past history and current circumstances.

                         Liquidity and Capital Resources

Our liquidity and capital needs are primarily related to the development and
implementation of our network infrastructure, our marketing efforts and our
general and administrative functions. As of December 31, 2003, we had $405,000
cash on hand and $2,778,000 of accounts receivable net of a reserve for
uncollectible accounts of $1,251,000. As of that date, the Company has
significant contractual commitments. The following table sets forth a summary of
our contractual obligations:
<TABLE>
<CAPTION>

Year Ending      Capital  Operating      MCI           MCI          Preferred   Shareholder                Convertible
December 31      Leases    Leases    Note Payable   Rev Commit        Stock     Note Payable  Titan Note   Debtenture       Total
------------ ----------- ---------- ------------- ------------- --------------- -----------  ------------ ------------- ------------
<C>            <C>          <C>         <C>          <C>             <C>           <C>          <C>            <C>       <C>
2004           2,830,390    375,796     3,681,939    30,000,000      2,100,000     1,440,005    1,200,000      851,915   42,480,045
2005-2006          6,378    228,022             -    20,000,000      4,200,000             -            -            -   24,434,400
2007-2008              -    192,600             -             -      4,200,000             -            -            -    4,392,600
>2009                  -          -             -             -      5,360,000             -            -            -    5,360,000
------------ ----------  ---------- ------------- --------------- ------------- -----------  ------------   ----------- ------------
Total          2,836,768    796,418     3,681,939    50,000,000     15,860,000     1,440,005    1,200,000      851,915   76,667,045
============ ==========  ========== ============= =============== ============= ===========  ============   =========== ============
</TABLE>
We do not have existing capital resources or credit lines available that are
sufficient to fund our operations and contractual obligations as presently
planned over the next twelve months. We are actively pursuing additional funds
through the issuance of debt and/or equity instruments of which there is no
guarantee that we will be able to obtain such additional funds. As such, the
Company has maintained a position to work with its creditors to restructure
certain portions of its debts as set forth below:

o On December 29, 2003, we settled with The Titan Corporation an outstanding
promissory note owing by us to Titan in the original amount of $1,500,000. The
balance of the note, in the amount of $1,000,000, was due December 17, 2003. On
December 29, 2003, the parties entered into a Settlement Agreement and Release
of Claims replacing the original note with the Amended and Restated Convertible
Note in the principal amount of $1,250,000. The amended note is without
interest. A payment of $50,000 was made prior to the end of the year leaving an
outstanding balance as of December 31, 2003 of $1,200,000.

                                       21
<PAGE>
Under the terms of the amended note, we committed to pay Titan $25,000 per week
in reduction of principal, with the balance due in a balloon payment on March
31, 2004. Titan may convert any portion or the entire outstanding principal
balance of the amended note into shares of our common stock commencing after a
registration statement registering the resale of the common stock issuable upon
conversion of the amended note is declared effective by the SEC. The note is
convertible at the then-current market value of our common stock. The proceeds
from the sale of the shares will reduce the amount of the amended note dollar
for dollar. Since the number of shares into which the Titan amended note will be
converted depends on the market price of our common stock at various dates in
the future, we cannot know as of today how many shares of our common stock we
will eventually issue on conversion of the amended note.

Because of the time it took to secure SEC clearance of the Company's Information
Statement related to the increase of the number of the Company's authorized
common stock, the Company was unable to register the appropriate shares in the
timeframe originally contemplated. Neither did we pay Titan the balance due -
approximately $875,000 - under the amended note on March 31, 2004 as required by
the terms of the amended note. Therefore, the Company is currently in default
under the amended note. The Company received clearance from the SEC for the
distribution of the Information Statement on or about March 24, 2004 and the
increase in the Company's authorized common stock was effective on April 21,
2004. The Company is negotiating with Titan to cure the default and to extend
the maturity date of the amended note but there are no assurances that this will
be accomplished.

o In February 2004, the Company entered negotiations with MCI, the Company's
largest vendor, to settle past due balances due them. On March 11, the Company
entered into a temporary agreement that required a $1,000,000 minimum payment
per week through March 26, 2004 for current traffic and required the Company to
provide MCI with a new payment proposal by March 29, 2004 to settle the past due
balances due MCI. The Company provided MCI with a new payment proposal by such
date, but MCI did not accepted it . While the Company is preparing a new
proposal, the Company and MCI have extended through July 9, 2004, the temporary
arrangement that requires a $1,000,000 minimum payment per week for current
traffic. There are no assurances that an agreement can be reached with MCI and
any service disruption or termination could cause serious harm to the Company,
its revenues and ability to continue operations. However, because of the
uncertainty with MCI, the Company is simultaneously working to add redundant
capacities to terminate service to in the case of a disruption or termination.

o We have not paid any dividends on the Series A Preferred Stock since issuing
it in December 2003 to Growth Enterprise Fund, S.A. On March 2, 2004, GEF waived
any and all defaults by GlobalNet and its subsidiaries under the terms of the
Preferred Stock, without penalty, and agreed that unpaid Preferred Stock
dividends accrued to such date will be added to the face amount of the Preferred
Stock. On March 2, 2004, GEF waived any and all defaults by GlobalNet and its
subsidiaries under the terms of the Preferred Stock, without penalty, and agreed
that unpaid Preferred Stock dividends accrued to such date will be added to the
face amount of the Preferred Stock. GEF subsequently agreed to convert all
unpaid Preferred Stock dividends through June 30, 2004, into 1,171,875,000
shares of the Company's common stock at the modified conversion rate of $0.0016
contemplated in the amendment to the certificate of designation for the
Preferred Stock that was filed on April 30, 2004.

o On March 2, 2004, N.I.R. Group, LLC, the manager of various funds holding
convertible debentures issued by us, agreed to reduce its interest on all the
convertible debentures originally totaling $3,000,000 from 12% to 6% and granted
us additional time to secure approval of the SEC for an Information Statement
increasing our authorized capital of the Company and to file and secure the
effectiveness of a registration statement for the shares of common stock to be
issued upon the conversion of the debentures. Currently we are not in
compliance, but are actively working to cure the default. The increase in our
authorized common stock was effective on April 21, 2004.

o On May 11, 2004, Cisco sent out a written notice of default. At that time we
had an outstanding balance of $1,850,000 due to Cisco Corporation. Cisco is
secured with assets under a lease agreement of the subsidiary GlobalNet, Inc. If
we fail to pay our liabilities due to Cisco, Cisco may enforce all available
remedies and seize assets to satisfy any amounts owed. We are currently working
with Cisco to cure all defaults, however there are no assurances that a
settlement can be reached.

Due to consistent cash delinquencies, we previously entered into convertible
debt that had beneficial conversion features. During 2004 the following notes
were converted into common stock:

o In February, 2004,under the modified conversion terms, we issued an aggregate
of 8,951,592 shares of common stock to AJW Offshore, Ltd., AJW Partners, LLC,
and AJW Qualified Partners, LLC upon conversion of a portion of the February
2003 convertible debentures.

                                       22
<PAGE>
o In April 2004, we issued 658,736,250 shares of common stock to Mark T Wood,
our chairman of the board, president and chief executive officer upon conversion
of the convertible note issued to Mr. Wood in August 2003. In August 2003, we
issued to Mr. Wood, as consideration for loans made to our company, a
convertible demand note in the amount of $1,053,978. This note was convertible
at the rate of $0.0016 into 658,736,250 shares of common stock. Mr. Wood
converted the note and waived any interest that accrued on the note.

o In April 2004, we issued 73,750,000 shares of common stock to Daniyel Erdberg
upon conversion of the convertible note issued to Mr. Erdberg in August 2003. In
August 2003, we issued to Mr. Erdberg, as remaining consideration due from the
Asset Purchase Agreement with GBLK Communications, a convertible note in the
amount of $118,000. This note was convertible at the rate of $0.0016 into
73,750,000 shares of common stock. Mr. Erdberg converted the note and waived any
interest that accrued on the note.

o In April 2004, we issued 167,516,360 shares of common stock to Callflow
Limited as satisfaction of a settlement agreement for past due services provided
by Callflow of $268,023.

o In April 2004, we issued 4,595,814,835 shares of common stock to Growth
Enterprise Fund, S.A. as required under the Securities Purchase Agreement dated
August 21, 2003. Pursuant to the Securities Purchase Agreement, we acquired from
Growth Enterprise Fund's wholly-owned subsidiary all of its rights to acquire
GlobalNet, Inc. from The Titan Corporation. In connection with the transaction,
we issued to GEF a $500,000 principal amount promissory note and $15.6 million
of Series A Preferred Stock. In addition, we were obligated to issue GEF
4,695,814,835 common shares, of which 100 million shares had previously been
issued in November 2003.

o On May 21, 2004, we entered into a Securities Purchase Agreement with our
existing convertible debenture holders for the sale of $3,800,000 principal
amount callable secured convertible notes and warrants to buy 11,400,000 shares
of our common stock. The transactions will occur in three tranches:

     o    $1,300,000 investment for $1,300,000 principal amount notes and
          3,900,000 warrants, which closed on May 21, 2004,

     o    $1,300,000 investment for $1,300,000 principal amount notes and
          3,900,000 warrants, which we anticipate will close on or before June
          21, 2004, and

     o    $1,200,000 investment for $1,200,000 principal amount notes and
          3,600,000 warrants, which we anticipate will close on or before July
          20, 2004.

          The two additional investments are subject to certain conditions,
          including:

     o    our representations and warranties in the Securities Purchase
          Agreement are correct in all material respects as of such closings,
     o    we shall have complied with all covenants with which we are obligated
          under the Securities Purchase Agreement at the time of such closing,
     o    no judicial or governmental action prohibits such additional closings,
     o    no event shall have occurred at the time of such additional closings
          which could reasonably be expected to have an effect on our business,
          operations, assets, financial condition or prospects or on the
          transactions contemplated by the Securities Purchase Agreement, and o
          the continued listing of our common stock on the Over-the-Counter
          Bulletin Board

The notes bear interest at 6%, mature four years from the date of issuance, and
are convertible into our common stock, at each investors' option, at the lower
of $0.06 per share or 70% of the average of the three lowest trading prices for
our common stock for the 20 trading days before but not including the conversion
date.

We may call all the notes generally at any time that our common stock is trading
below $0.06 per share, calculated as follows:

     o    120% of the principal and accrued but unpaid interest within the first
          60 days of the issue date of the notes

     o    130% of the principal and accrued but unpaid interest after the first
          60 days but within the first 120 days of the issue date of the notes,
          and

     o    140% of the principal and accrued but unpaid interest after the first
          120 days of the issue date of the notes.

The investors may convert their notes within 10 trading days after we give
notice of our election to call the notes.

                                       23
<PAGE>
The warrants are exercisable until five years from the date of issuance at a
purchase price of $0.02 per share. We also granted the investors a security
interest in substantially all of our assets and intellectual property and
registration rights with respect to registering the resale of the common stock
underlying the notes and warrants. The investors also agreed to extend the
maturity date of the existing convertible debentures until May 21, 2008.

We will incur significant charges for the debt discount on the $1,300,000
convertible note, warrants and debt issuance costs of approximately $850,000
that will be amortized over the contractual life of the debt of 48
months. We will also incur additional charges for other debt discounts as the
other traunches are closed and funded.

We intend to use the net proceeds from the sale of the notes and warrants,
which, net of debt issuance costs, is approximately $3.5 million, for repayment
of approximately $2.4 million of debt and other working capital.

We also entered into an agreement with our majority stockholder, Growth
Enterprise Fund, S.A., whereby Growth will make available to us up to 2.5
billion shares of our common stock equal to the number of shares that the
investors acquire upon conversion of the notes and exercise of the warrants. As
a result of this agreement, the conversion of the notes and debentures or
exercise of the warrants, up to 2.5 billion shares, will not cause any dilution
to our common stockholders. Growth currently owns approximately 4.425 billion
shares of our common stock and mandatorily redeemable preferred stock
convertible into 9.75 billion shares of common stock.

Net cash provided by (used in) operating activities was $2,741,000 and
($6,165,000) for the year ended December 31, 2003 and 2002, respectively. This
increase in funds from operations was partially due to the decrease in the net
loss adjusted for non-cash items(as defined below) from $3,375,000 for the year
ended December 31, 2002 to $3,302,000 for the year ended December 31, 2003 as a
result of a 3.3% increase in revenues and a reduction in operating expenses. The
Company generated cash in the amount of $6,043,000 as a result of positive
working capital fluctuations during the year ended December 31, 2003. In
contrast, the Company used cash in the amount of $2,790,000 as a result of
unfavorable working capital fluctuations for the year ended December 31, 2002.
<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                          -------------------------------------------
                                                                 2003                       2002
                                                          ----------------           ----------------
<S>                                                           <C>                       <C>
Net Loss                                                      ($7,462,000)              ($69,389,000)

         Depreciation and amortization                          1,922,000                  3,127,000
         Fixed asset write-off                                          -                  4,145,000
         Goodwill write-off                                             -                 50,300,000
         Provision for doubtful accounts                                -                    726,000
         Noncash stock compensation                                     -                  5,318,000
         Noncash financing costs                                2,238,000                  1,285,000
         Restructure charges                                            -                  1,113,000
                                                               ----------               ------------

                  Total non-cash items                          4,160,000                 66,014,000
                                                               ----------                -----------

Net Loss Adjusted for Non-Cash Items                          ($3,302,000)               ($3,375,000)
</TABLE>
Net cash used in investing activities was $2,332,000 and $76,000 for the year
ended December 31, 2003 and 2002, respectively. These amounts correspond to
capital expenditures incurred in connection with the purchase of
telecommunications equipment which amounted to $396,000 and $76,000 for the
years ended December 31, 2003 and 2002, respectively. Additionally, the
Company's cash disbursements in connection with the business combination
amounted to $1,835,115 for the year ended December 31, 2003.

Net cash provided by (used in) financing activities was ($985,000) and
$5,581,000 for the year ended December 31, 2003 and 2002, respectively. The net
cash used in financing activities for the year ended December 31, 2003 consisted
primarily of payments on notes payable and capital lease of $6,094,000 and
proceeds from former parent loans and stockholder notes of $5,250,000. The net
cash provided by financing activities for the year ended December 31, 2002
consisted primarily of proceeds from former parent loan of $10,300,000, net of
capital lease payments of $4,719,000.

                                       24
<PAGE>
RESULTS OF OPERATIONS - TWELVE MONTHS ENDED DECEMBER 31, 2003 AND 2002

REVENUE. Net revenue increased by 3.3%, from $98,977,054 for the year ended
December 31, 2002 to $102,214,126 for year ended December 31, 2003. The increase
in revenue was due to the 21 % increase in minutes of usage in GlobalNet's
network from 1,174 million minutes for the year ended December 31, 2002 to 1,421
million minutes for the year ended December 31, 2003. The increase in traffic
resulted from the addition of new customers to the GlobalNet's network as well
as to the increase of the traffic from existing customers. This change in
minutes was partially offset by an overall decrease in GlobalNet's weighted
average sell rate from $0.0843 per minute for the year ended December 31, 2002
to $0.0715 per minute for the year ended December 31, 2003. This decrease in the
average sell rate was primarily due to competitive pricing pressure from certain
carriers in the industry.

DATA COMMUNICATIONS AND TELECOMMUNICATIONS. Data communications and
telecommunications cost increased by 6.0% from $90,797,555 for the year ended
December 31, 2002 to $96,275,470 for the year ended December 31, 2003. This
increase resulted primarily from an increase in traffic and decrease in selling
margins, which in turn increased the termination costs and purchased minutes. As
a percentage of net revenue, data communications and telecommunications costs
increased by 2.5%, from 91.7% for the year ended December 31, 2002 to 94.2% for
the year ended December 31, 2003 as a result of the pricing pressure in the
Company's routes.

NETWORK OPERATIONS. Network operation expenses decreased by approximately 19.9%,
from $5,003,058 for the year ended December 31, 2002 to $4,009,099 for the year
ended December 31, 2003. As a percentage of revenues, network operation expenses
decreased from 5.1% for the year ended December 31, 2002 to 3.9% for the year
ended December 31, 2003.

The decrease in network operation expenses was primarily due to the decrease in
leased line costs as a result of a better utilization of the Company's network
capacity and the renegotiation of certain contracts. Additionally, in July 2002,
the Company recorded a restructuring charge of $681,000 in connection with the
discontinuance of certain circuits that were not being utilized. This charge
represented the future payments for the remaining term of the lease of those
circuits.

SELLING AND MARKETING. Selling and marketing expenses increased by 20.7%, from
$675,499 for the year ended December 31, 2002 to $815,265 for the year ended
December 31, 2003. As a percentage of revenues, selling and marketing expenses
increased slightly from 0.68% for the year ended December 31, 2002 to 0.80% for
the year ended December 31, 2003.

The increase in selling and marketing expenses was primarily due to a one time
charge of $150,000 for restructuring of previously accrued commission payable.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
decreased by 34.9%, from $4,352,077 for the year ended December 31, 2002 to
$2,833,135 for the year ended December 31, 2003. The decrease in general and
administrative expenses was primarily due to Company's efforts to cut
non-revenue generating expenses and a significant decrease in professional fees.

Professional fees decreased significantly for the year ended December 31, 2002
compared to the year ended December 31, 2003. The majority of the professional
fees for the year ended December 31, 2002 are related to investment banking
fees, finder's fees, legal fees and accounting expenses incurred in connection
with the acquisition of GlobalNet by Titan on March 21, 2002. Management
believes that future professional fees will be significantly higher than the
2003 total due to costs of maintaining the proper reporting of a public company.

In July 2002, GlobalNet terminated 6 employees, reducing its workforce by 21% to
22 employees. In connection with the workforce reduction, GlobalNet recorded a
restructuring charge of approximately $279,000, which represents the severance
paid to the employees who were terminated. GlobalNet recorded an additional
restructuring charge of approximately $163,000 in connection with the closing of
its office in Marietta (Georgia) and the underutilization of its corporate
offices in Lombard (Illinois).

RESTRUCTURING CHARGES. Restructuring charges amounted to $987 for the year ended
December 31, 2003 and $1,113,112 for the year ended December 31, 2002. In July
2002, GlobalNet recorded the restructuring charge in connection with the
termination of certain employees, the discontinuance of certain circuits and the
closing of its office in Marietta (Georgia) as part of a restructuring plan to
reduce operating expenses.

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<PAGE>
FIXED ASSET WRITE-OFF. Fixed asset write-offs amounted to $0 for the year ended
December 31, 2003 and $4,145,564 for the year ended December 31, 2002. In July
2002, it became uncertain whether GlobalNet would be able to recover the
carrying value of its property and equipment as a result of its former parent
company's decision to exit the telecommunications business and the current
depressed market values for telecommunications assets. As a result, GlobalNet
determined that its property and equipment were impaired and recorded a
$4,145,564 write-off, which represented 50% of the net book value of those
assets as of June 29, 2002.

GOODWILL WRITE-OFF. Good will write-off amounted to $0 for the year ended
December 31, 2003 and $50,300,000 for the year ended December 31, 2002.

On March 21, 2002, GlobalNet merged with a subsidiary of Titan. In the merger, a
wholly owned subsidiary of Titan merged into GlobalNet and all of GlobalNet's
outstanding common shares and certain outstanding stock options and warrants
were converted into Titan common shares, options and warrants, plus cash in lieu
of fractional shares. The merger had an aggregate equity transaction value of
approximately $31.0 million. The transaction was accounted for as a purchase.
The excess of the purchase price of $31.0 million over the estimated fair market
value of the net liabilities acquired of approximately $19.3 million was
approximately $50.3 million, which was allocated to goodwill.

On July 11, 2002, Titan made the decision to exit its telecommunications
business and to sell GlobalNet. Titan determined that there had been an
impairment of the carrying value of GlobalNet's goodwill of approximately $50.3
million in accordance SFAS No. 142. The measurement of this impairment was
evident based upon estimates of fair value, as determined by recent offers
received by Titan from potential buyers, compared to the carrying value of the
asset. In accordance with Staff Accounting Bulletins No. 54 and No. 73, the
Company has "pushed down" to its stand-alone consolidated statements the
purchase accounting adjustments and the subsequent write-off of goodwill
recorded by GlobalNet. As a result, the consolidated financial information for
the period after merger is presented on a different cost basis than that for the
periods before the merger and, therefore, is not comparable.

BAD DEBT EXPENSE. Bad debt expense amounted to $71,161 for the year ended

December 31, 2003 and $726,057 for the year ended December 31, 2002. The
majority of this bad debt expense was recorded in connection with Global
Crossing's Chapter 11 bankruptcy filing in January 2002.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses decreased
by 38.5%, from $3,126,571 for the year ended December 31, 2002 to $1,921,547 for
the year ended December 31, 2003. The decrease in depreciation expenses was
primarily due to the write-off of 50% of the net book value of GlobalNet's fixed
assets in July 2002. Management believes that the depreciation and amortization
expense will increase in 2004 due to the addition of iDial's assets.

NON-CASH STOCK COMPENSATION. Non-cash stock compensation amounted to
approximately $0 and $5,318,000 for the year ended December 31, 2003 and
December 31, 2002, respectively.

The non-cash stock compensation expense resulted primarily from the issuance of
restricted stock to certain GlobalNet employees and directors in May and
December 2000. The stock was issued to motivate and retain key employees and had
a vesting period of three years. On March 21, 2002, all the shares of restricted
stock issued to employees and directors vested as a result of the change of
control that resulted from the acquisition of GlobalNet by Titan. As a result of
the vesting of the restricted common stock, GlobalNet expensed the remaining
unamortized deferred stock compensation balance of $4,707,000.

INTEREST EXPENSE AND NON-CASH FINANCING COSTS, NET. Interest expense and
non-cash financing costs increased by 38.9% from $2,253,549 for the year ended
December 31, 2002 to $3,131,124 for the year ended December 31, 2003. The
increase in interest expense was primarily due to the increase iDial's
convertible debentures resulting in non-cash charges of $634,760 and accrued
preferred stock dividend payments to Growth Enterprise Fund, S.A. of $260,000
and modification of conversion rates on shareholder notes payable resulting in
$1,440,000 of charges.

Non-cash financing cost for the year ended December 31, 2002 includes the
amortization of debt discount related to a convertible note issued to Crescent
International. GlobalNet had been amortizing this debt discount over the
three-year term of the convertible note since April 10, 2001. In January and
February 2002, Crescent International converted the note into common stock in a
series of partial conversions. As a result of the full conversion of the note,
GlobalNet expensed the remaining unamortized balance of $1,263,818 related to
the debt discount.

                                       26
<PAGE>
INCOME TAXES. Due to the uncertainty of the realization of the deferred tax
assets, the Company established a 100% valuation allowance on the net deferred
tax assets. Accordingly, there is no income tax benefit reflected in the
Company's financial statements as of December 31, 2003 and for the year then
ended.

NET LOSS. The net loss for the year ended December 31, 2003 totaled $7,461,612,
representing a 89.7% decrease over a net loss of $69,388,713 for the year ended
December 31, 2002. The decrease in net loss was primarily due to the goodwill
write-off of $50,300,000, the restructuring charge of $1,131,000 and the fixed
asset write-off of $4,146,000 recorded in July 2002. Additionally, GlobalNet
recorded non-cash stock compensation of $5,318,000 in March 2002 in connection
with the vesting of the stock grants to employees as a result of the change of
control that resulted from the acquisition of GlobalNet by Titan.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future material effect on us.

OUTLOOK

Factors That May Affect Future Results and Financial Condition

Any investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below, which we believe are all the
material risks to our business, together with the information contained
elsewhere in this report, before you make a decision to invest in our company.

Risks Related to Our Company

A failure to restructure our existing debt or obtain necessary additional
capital in the future could jeopardize our operations.

We will need additional capital in the future to fund our operations, finance
investments in equipment and corporate infrastructure, expand our network,
increase the range of services we offer and respond to competitive pressures and
perceived opportunities. We have had a history of negative cash flows from
operations. We have $41.4 million in liabilities, of which $15.9 million is in
mandatorily redeemable preferred stock. Without achieving positive cash flow and
restructuring our liabilities, cash flow from operations and cash on hand will
not be sufficient to cover our operating expenses, working capital, interest on
and repayment of our debt and capital investment needs. We may not be able to
restructure our debt or obtain additional financing to repay this debt that is
available on terms acceptable to us, if at all. If we raise additional funds by
selling equity securities, the relative equity ownership of our existing
investors could be diluted or the new investors could obtain terms more
favorable than previous investors. A failure to restructure our debt, or obtain
additional funding to repay this debt and support our working capital and
capital investment requirements, could cause us to be in default of our existing
debt and prevent us from making expenditures that are needed to allow us to grow
or maintain our operations.

We may not be able to pay our debt and other obligations and our assets may be
seized as a result. We may also incur significant financing charges under terms
we may have to offer to refinance our debts.

As of December 31, 2003, we had an outstanding balance of $13.5 million due to
MCI. MCI is secured with, among other things, all assets of the operating
subsidiary GlobalNet International LLC. If we fail to pay our liabilities due to
MCI, MCI may enforce all available remedies and seize our assets or receivables,
to satisfy any amounts owed.

As of December 31, 2003, we had an outstanding balance of $2.5 million due to
N.I.R. Group LLC. NIR is secured with all assets of the Company including any
assets of the operating subsidiary GlobalNet International LLC. If we fail to
pay our liabilities due to NIR, NIR may enforce all available remedies and seize
our assets or receivables, to satisfy any amounts owed.

As of December 31, 2003, we had an outstanding balance of $1.2 million due to
The Titan Corporation. Titan is secured with, among other things, all assets of
the operating subsidiary GlobalNet International LLC. If we fail to pay our
liabilities due to Titan, Titan may enforce all available remedies and seize our
assets or receivables, to satisfy any amounts owed.

Investor interest in our common stock may be negatively affected by our trading
on the Over-the-Counter Bulletin Board.

The OTC Bulletin Board market is generally considered to be less efficient and
not as liquid as NASDAQ's National Market. Trading in this market may decrease
the market value and liquidity of our stock, which could materially and
adversely affect our ability to attract additional investment to finance our
operations.

                                       27
<PAGE>
International governmental regulation and legal uncertainties and other laws
could limit our ability to provide our services, make them more expensive, or
subject us to legal or criminal liability.

A number of countries currently prohibit or limit competition in the provision
of traditional voice telephony services. In some of those countries, licensed
telephony carriers as well as government regulators have questioned our legal
authority and/or the legal authority of our service partners or affiliated
entities and employees to offer our services. We may face similar questions in
additional countries. Our failure to qualify as a properly licensed service
provider, or to comply with other foreign laws and regulations, could materially
adversely affect our business, financial condition and results of operations,
including subjecting us or our employees to taxes and criminal or other
penalties and/or by precluding us from, or limiting us in, enforcing contracts
in such jurisdictions.

The telecommunications industry is subject to domestic governmental regulation
and legal uncertainties and other laws that could materially increase our costs
and prevent us from executing our business plan.

We are not licensed to offer traditional telecommunications services in any U.S.
state and we have a filed 214 tariff at the Federal Communications Commission.
Nonetheless, aspects of our operations may currently be, or become, subject to
state or federal regulations governing licensing, universal service funding,
advertising, disclosure of confidential communications or other information,
excise taxes, transactions restricted by U.S. embargo and other reporting or
compliance requirements.

While the FCC to date has maintained an informal policy that information service
providers, including Internet telephony providers, are not telecommunications
carriers for regulatory purposes, various entities have challenged this idea,
both before the FCC and at various state government agencies. As a result, the
FCC has held hearings and announced a Notice of Proposed Rulemaking. An adverse
ruling could subject us to licensing requirements and additional fees and
subsidies.

We have offered our prepaid international calling card services on a wholesale
basis to international carrier customers, and others, some of which provide
these services to end-user customers, enabling them to call internationally over
The GlobalNet Network from the U.S. We have also made arrangements to
participate in the selling and marketing of such cards on a retail basis.
Although the calling cards are not primarily marketed for domestic interstate or
intrastate use, we have not blocked the ability to place such calls or required
our wholesale customers or distributors to show evidence of their compliance
with U.S. and state regulations. As a result, there may be incidental domestic
use of the cards. Domestic calling may employ transport and switching that is
not connected to the Internet and, therefore, may not enjoy the lighter
regulation to which our Internet-based services are subject. Because we provide
services that are primarily wholesale and/or international, we do not believe
that we are subject to federal or state telecommunications regulation for the
possible uses of these services described here and, accordingly, we have not
obtained state licenses, filed state or federal tariffs, posted bonds, or
undertaken other possible compliance steps. Under current standards or as-yet
undetermined rules, the FCC and state regulatory authorities may not agree with
our position. If they do not, we could become subject to regulation at the
federal and state level for these services, and could become subject to
licensing and bonding requirements, and federal and state fees and taxes,
including universal service contributions and other subsidies, and other laws,
all of which could materially affect our business.

We are also subject to federal and state laws and regulations regarding consumer
protection and disclosure regulations. These rules could substantially increase
the cost of doing business domestically and in any particular state. Law
enforcement authorities may utilize their powers under consumer protection laws
against us in the event we do not meet legal requirements in that jurisdiction.

The FCC also requires all calling card service providers that enable users to
place toll-free calls from payphones in the United States to compensate the
payphone operator for each call placed from a payphone. Future changes in FCC
payphone compensation rules and/or the failure of a company that provides
toll-free numbers to us to compensate payphone companies could affect our
revenues.

Risks Related to Our Operations

We may never achieve sustained profitability and the market price of our common
stock may fall.

Our revenue and results of operations have fluctuated and will continue to
fluctuate significantly from quarter to quarter in the future due to a number of
factors, some of which are not in our control, including, among others:

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<PAGE>
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 our
network 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.

Because of these factors, you should not rely on quarter-to-quarter comparisons
of our results of operations as an indication of our future performance. It is
possible that, in future periods, our results of operations will be
significantly lower than the estimates of public market analysts, investors or
our own estimates. Such a discrepancy could cause the price of our common stock
to decline significantly and prevent us from achieving profitability.

We may never generate sufficient revenue to attain profitability if
telecommunications carriers and other communications service providers or others
are reluctant to use our services or do not use our services, including any new
services, in sufficient volume.

If the market for International telephony and new services does not develop as
we expect, or develops more slowly than expected, our business, financial
condition and results of operations will be materially and adversely affected.

Our customers may be reluctant to use our Internet telephony services for a
number of reasons, including:

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.

The growth of our core business depends on carriers and other communications
service providers generating an increased volume of international voice and fax
traffic and selecting our network to carry at least some of this traffic.
Similarly, the growth of any retail services we offer depends on these factors
as well as acceptance in the market of the brands that we service, including
their respective rates, terms and conditions. If the volume of international
voice and fax traffic and associated or other retail services fail to increase,
or decrease, and these parties or other customers do not employ our network or
otherwise use our services, our ability to become profitable will be materially
and adversely affected.

We may not be able to collect amounts due to us from our customers.

Some of our customers have closed their businesses or filed for bankruptcy owing
us hundreds of thousands of dollars for services we have provided to them in the
past. Despite our efforts to collect these overdue funds, we may never be paid.
The bankruptcy court may require us to continue to provide services to these
companies during their reorganizations. Other customers may discontinue their
use of our services at any time and without notice, or delay payments that are
owed to us. Additionally, we may have difficulty in collecting amounts from
them. Although we have internal credit risk policies to identify companies with
poor credit histories, we may not effectively manage these policies and provided
services to companies that refuse to pay. Our cash reserves will be reduced and
our results of operations will be materially adversely affected if we are unable
to collect amounts from our customers.

We are susceptible to increased costs and increased risks in our business due to
our reliance on third parties.

                                       29
<PAGE>
Vendors. We rely upon third-party vendors to provide us with the equipment,
software, circuits, and other facilities that we use to provide our services.
For example, we purchase substantially all of our Internet telephony equipment
from Cisco Systems. We may be forced to try to renegotiate terms with vendors
for products or services that have become obsolete. Some vendors may be
unwilling to renegotiate such contracts, which could affect our ability to
continue to provide services and consequently render us unable to generate
sufficient revenues to become profitable.

Parties that Maintain Phone and Data Lines and Other Telecommunications
Services. Our business model depends on the availability of the Internet and
traditional telephone networks to transmit voice and fax calls. Third parties
maintain and own these networks, other components that comprise the Internet,
and business relationships that allow telephone calls to be terminated over the
public switched telephone network. Some of these third parties are telephone
companies. They may increase their charges for using these lines at any time and
thereby decrease our profitability. They may also fail to maintain their lines
properly, fail to maintain the ability to terminate calls, or otherwise disrupt
our ability to provide service to our customers. Any such failure that leads to
a material disruption of our ability to complete calls or provide other services
could discourage our customers from using our network, which could have the
effect of delaying or preventing our ability to become profitable.

Local Communications Service Providers. We maintain relationships with local
communications service providers in many countries, some of whom own the
equipment that translates calls from traditional voice networks to the Internet,
and vice versa. We rely upon these third parties both to provide lines over
which we complete calls and to increase their capacity when necessary as the
volume of our traffic increases. There is a risk that these third parties may be
slow, or fail, to provide lines, which would affect our ability to complete
calls to those destinations. We may not be able to continue our relationships
with these local service providers on acceptable terms, if at all. Because we
rely upon entering into relationships with local service providers to expand
into additional countries, we may not be able to increase the number of
countries to which we provide service. Finally, any technical difficulties that
these providers suffer, or difficulties in their relationships with companies
that manage the public switched telephone network, could affect our ability to
transmit calls to the countries that those providers help serve.

Strategic Relationships. We depend in part on our strategic relationships to
expand our distribution channels and develop and market our services. In
general, if we lose these key strategic relationships, or if we fail to maintain
or develop new relationships in the future, our ability to expand the scope and
capacity of our network and services provided, and to maintain state-of-the-art
technology, would be materially adversely affected.

Distributors of prepaid calling cards to retail outlets. We make arrangements
with distributors to market and sell prepaid calling cards to retail outlets. In
some cases, we rely on these distributors to print cards, prepare marketing
material, activate accounts, track usage and other data, and remit payments
collected from retailers. There is a risk that distributors will not properly
perform these responsibilities, comply with legal requirements, or pay us monies
when due. We may not have adequate contractual or credit protections against
these risks. There is also a risk that we will be ineffective in our efforts to
implement new systems, customer care and disclosure policies, and certain
technical and business processes. The result of any attendant difficulties may
have a material impact on our business.

We may not be able to succeed in the intensely competitive market for our
various services.

We compete in our wholesale business principally on quality of service and
price. In recent years, prices for long distance telephone services have been
declining as a result of deregulation and increased competition. We face
competition from major telecommunications carriers, such as AT&T, British
Telecom, Deutsche Telekom, MCI WorldCom and Qwest Communications, as well as new
emerging carriers. We also compete with Internet protocol and other Internet
telephony service providers who route traffic to destinations worldwide. Also,
Internet telephony service providers that presently focus on retail customers
may in the future enter the wholesale market and compete with us. If we cannot
offer competitive prices and quality of service our business could be materially
adversely affected.

We may not be able to succeed in the intensely competitive market for prepaid
calling services.

The market for prepaid calling services is extremely competitive. Hundreds of
providers offer calling card products and services. We have just recently begun


                                       30
<PAGE>
offering prepaid calling card services and have little prior experience in this
business and no established distribution channel for these services. If we do
not successfully establish a distribution channel and enter geographic markets
in which our rates, fees, surcharges, country services, and our other products
and service characteristics, can successfully compete, our business could be
materially adversely affected.

We are subject to downward pricing pressures and a continuing need to
renegotiate overseas rates, which could delay or prevent our profitability.

As a result of numerous factors, including increased competition and global
deregulation of telecommunications services, prices for international long
distance calls have been decreasing. This downward trend of prices to end-users
has caused us to lower the prices we charge communications service providers and
calling card distributors for call completion on our network. If this downward
pricing pressure continues, we may not be able to offer Internet telephony
services at costs lower than, or competitive with, the traditional voice network
services with which we compete. Moreover, in order for us to lower our prices,
we have to renegotiate rates with our overseas local service providers who
complete calls for us. We may not be able to renegotiate these terms favorably
enough, or fast enough, to allow us to continue to offer services in a
particular country on a cost-effective basis. The continued downward pressure on
prices and our failure to renegotiate favorable terms in a particular country
could have a material adverse effect on our ability to operate our network and
Internet telephony business profitably.

If we are not able to keep up with rapid technological change in a
cost-effective way, the relative quality of our services could suffer.

The technology upon which our services depends is changing rapidly. Significant
technological changes could render the hardware and software which we use
obsolete, and competitors may begin to offer new services that we are unable to
offer. If we are unable to respond successfully to these developments or do not
respond in a cost-effective way, we may not be able to offer competitive
services.

We may not be able to expand and upgrade our network adequately and
cost-effectively to accommodate any future growth.

Our business requires that we handle a large number of international calls
simultaneously. As we expand our operations, we expect to handle significantly
more calls. If we do not expand and upgrade our hardware and software quickly
enough, we will not have sufficient capacity to handle the increased traffic and
growth in our operating performance would suffer as a result. Even with such
expansion, we may be unable to manage new deployments or utilize them in a
cost-effective manner. In addition to lost growth opportunities, any such
failure could adversely affect customer confidence in The Globalnet Network and
could result in us losing business outright.

We depend on our current personnel and may have difficulty attracting and
retaining the skilled employees we need to execute our business plan.

We will need to retain skilled personnel to execute our plans. Our future
success will also depend on our ability to attract, retain and motivate highly
skilled employees, particularly engineering and technical personnel. Past
workforce reductions have resulted in reallocations of employee duties that
could result in employee and contractor uncertainty and dissatisfaction.
Reductions in our workforce or restrictions on salary increases or payment of
bonuses may make it difficult to motivate and retain employees and contractors,
which could affect our ability to deliver our services in a timely fashion and
otherwise negatively affect our business.

We believe that we do not infringe upon the proprietary rights of any third
party.

It is possible, however, that such a claim might be asserted successfully
against us in the future. Our ability to provide our services depends on our
freedom to operate. That is, we must ensure that we do not infringe upon the
proprietary rights of others or have licensed all such rights. A party making an
infringement claim could secure a substantial monetary award or obtain
injunctive relief that could effectively block our ability to provide services
in the United States or abroad.

We rely on a variety of technologies, primarily software, which is licensed from
third parties.

Continued use of this technology by us requires that we purchase new or
additional licenses from third parties. We may not be able to obtain those
third-party licenses needed for our business or the third party technology
licenses that we do have may not continue to be available to us on commercially
reasonable terms or at all. The loss or inability to maintain or obtain upgrades
to any of these technology licenses could result in delays or breakdowns in our
ability to continue developing and providing our services or to enhance and
upgrade our services.

                                       31
<PAGE>
We may undertake strategic acquisitions or dispositions that could damage our
ability to attain or maintain profitability.

We may acquire additional businesses and technologies that complement or augment
our existing businesses, services and technologies. We may need to raise
additional funds through public or private debt or equity financing to acquire
any businesses, which may result in dilution for stockholders and the incurrence
of indebtedness. We may not be able to operate acquired businesses profitably or
otherwise implement our growth strategy successfully.

We may need to sell existing assets or businesses in the future to generate cash
or focus our efforts in making our core business, Internet telephony,
profitable. As with many companies in the telecommunications sector that
experienced rapid growth in recent years, we may need to reach profitability in
one market before entering another. In the future, we may need to sell assets to
cut costs or generate liquidity.

Risks Related to the Internet and Internet Telephony Industry

If the Internet does not continue to grow as a medium for voice and fax
communications, our business will suffer.

Historically, the sound quality of calls placed over the Internet was poor. As
the Internet telephony industry has grown, sound quality has improved, but the
technology may require further refinement. Additionally, as a result of the
Internet's capacity constraints, callers could experience delays, errors in
transmissions or other interruptions in service. Transmitting telephone calls
over the Internet, and other uses of the Internet, must also be accepted by
customers as an alternative to traditional services. Because the Internet
telephony market is evolving, predicting the size of these markets and their
growth rate is difficult. If our market fails to continue to develop, then we
will be unable to grow our customer base and our results of operations will be
materially adversely affected.

If the Internet infrastructure is not adequately maintained, we may be unable to
maintain the quality of our services and provide them in a timely and consistent
manner.

Our future success will depend upon the maintenance of the Internet
infrastructure, including a reliable network backbone with the necessary speed,
data capacity and security for providing reliability and timely Internet access
and services. To the extent that the Internet continues to experience increased
numbers of users, frequency of use or bandwidth requirements, the Internet may
become congested and be unable to support the demands placed on it and its
performance or reliability may decline thereby impairing our ability to complete
calls and provide other services using the Internet at consistently high
quality. The Internet has experienced a variety of outages and other delays as a
result of failures of portions of its infrastructure or otherwise. Future
outages or delays could adversely affect our ability to complete calls and
provide other services. Moreover, critical issues concerning the commercial use
of the Internet, including security, cost, ease of use and access, intellectual
property ownership and other legal liability issues, remain unresolved and could
materially and adversely affect both the growth of Internet usage generally and
our business in particular. Finally, important opportunities to increase traffic
on The iBasis Network will not be realized if the underlying infrastructure of
the Internet does not continue to be expanded to more locations worldwide.

Our ability to provide our services using the Internet may be adversely affected
by computer vandalism.

If the overall performance of the Internet is seriously downgraded by website
attacks or other acts of computer vandalism or virus infection, our ability to
deliver our communication services over the Internet could be adversely
impacted, which could cause us to have to increase the amount of traffic we have
to carry over alternative networks, including the more costly public-switched
telephone network. In addition, traditional business interruption insurance may
not cover losses we could incur because of any such disruption of the Internet.
While some insurers are beginning to offer products purporting to cover these
losses, we do not have any of this insurance at this time.

Risks Related to Investing in Our Company

Growth Enterprise Fund, S.A. will control more than half of our outstanding
stock and will be able to exercise significant control.

Growth Enterprise Fund, S.A. beneficially owns approximately 60% of our common
stock and will, after including the voting rights under the Series A Preferred
Stock, have the right to vote approximately 94% of the total outstanding capital
stock of our company. Accordingly, GEF will have the power to control the
election of all of our directors and the approval of actions for which the
approval of our shareholders is required.

                                       32
<PAGE>
The rights of our common shareholders are subject to the rights and preferences
of our outstanding Series A Preferred Stock.

We currently have issued and outstanding 100,000 shares of the Series A
Preferred Stock, all of which is owned by Growth Enterprise Fund, S.A. The
Series A Preferred Stock is convertible, at GEF's option, into 9,750,000,000
shares of common stock. Unless and until converted, the Series A Preferred Stock
shall carry certain rights and preferences relative to our common stock to which
our common shareholders shall be subject. Such rights and preferences include:

o Liquidation Priority. In the event of liquidation of our company, after all
debts are paid, GEF will be entitled to receive $15.6 million for the Series A
Preferred Stock before our common shareholders receive anything.
o Dividend Priority. The Series A Preferred Stock is entitled to 5% annual
cumulative dividends, which is currently $780,000 per year. These cumulative
dividends must be paid before we may pay dividends to our common shareholders.

Since we were unable to satisfy the Titan note, which was due by March 31, 2004,
Titan could foreclose on its security interest in our Globalnet, Inc.
Subsidiary.

Our interest in GlobalNet, Inc. is pledged to secure the Titan note. If we fail
to pay the Titan note, or if Titan does not convert any or all of the amount of
the note into shares of common stock, by March 31, 2004, Titan could foreclose
on our GlobalNet Inc. subsidiary. Since substantially all of our assets, revenue
and cash flow are generated through our GlobalNet, Inc. subsidiary, if Titan
does foreclose, we would likely no longer be in business and you would likely
lose your investment.

As of June 4, 2004 the Company has been unable to commence a registration
statement for Titan and is currently in default on the note. The Company is
currently in negotiations to extend the maturity date with Titan.

We cannot determine the number of shares of our common stock that we must issue
upon conversion of the Titan note.

The number of shares of our common stock into which the Titan note is
convertible depends on the market price of our common stock at the time of
conversion at various dates in the future. As such, we cannot know as of today
how many shares of our common stock we will eventually issue on conversion of
the Titan note, and there is no upward limit on this number.

The maximum conversion price of our convertible debentures, which is $0.0016, is
substantially below our current market price.

The maximum conversion price of our convertible debentures is $0.0016, which is
substantially below our current market price. Even if the market price for our
common stock increases, we will be obligated, upon conversion of the convertible
debentures by the holders, to issue approximately 1.554 billion shares.

If the market price for our common stock dramatically drops below $0.0016, the
conversion price feature of our convertible debentures could require us to issue
substantially more shares, which will cause an even greater dilution to our
existing stockholders.

The conversion price of our convertible debentures is $0.0016. In the event,
however, that the market price of our common stock is below $0.0016, then the
convertible debentures are convertible into common stock at 40% of the market
price. Therefore, in the event that the market price is below $0.0016, our
obligation to issue shares upon conversion of the convertible debentures is
essentially limitless.

The adjustable conversion price feature of our convertible debentures may
encourage investors to make short sales in our common stock, which could have a
depressive effect on the price of our common stock.

In the event that the market price of our common stock is below $0.0016, the
convertible debentures are convertible into shares of our common stock at 40% of
the trading price of the common stock prior to the conversion. The significant
downward pressure on the price of the common stock as the convertible debenture
holders convert and sell material amounts of common stock could encourage short
sales by investors. This could place further downward pressure on the price of
the common stock. The convertible debenture holders could sell common stock into
the market in anticipation of covering the short sale by converting their
securities, which could cause the further downward pressure on the stock price.
In addition, not only the sale of shares issued upon conversion of debentures,
but also the mere perception that these sales could occur, may adversely affect
the market price of the common stock.

                                       33
<PAGE>
If we are required for any reason to repay our outstanding convertible
debentures, we would be required to deplete our working capital, if available,
or raise additional funds. Our failure to repay the convertible debentures, if
required, could result in legal action against us, which could require the sale
of substantial assets.

We currently have outstanding approximately $2,487,000 principal amount of
convertible debentures. The convertible debentures are due and payable, with 12%
interest, two-years from the date of issuance, unless sooner converted into
shares of our common stock.

In addition, any event of default under the convertible debentures could require
the early repayment of the convertible debentures, including a default interest
rate of 15% on the outstanding principal balance of the debentures if the
default is not cured with the specified grace period. Events of default include:

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.

We anticipate that the full amount of the convertible debentures, together with
accrued interest, will be converted into shares of our common stock, in
accordance with the terms of the convertible debentures. If we are required to
repay the convertible debentures, we would be required to use our limited
working capital and raise additional funds. If we were unable to repay the
debentures when required, the debenture holders could commence legal action
against us and foreclose on all of our assets to recover the amounts due. Any
such action would require us to curtail or cease operations.

ITEM 7. FINANCIAL STATEMENTS.

The response to this item is set forth at the end of this report.

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

On March 15, 2002, the Company dismissed its former independent auditor, Kenneth
Lieberman CPA, PA ("Lieberman"), based on that such action was in the best
interests of the Company. Effective as of that date, the Company engaged
Ehrhardt Keefe Steiner & Hottman PC ("EKS&H") as its new independent auditor.
The decision to change accountants was approved by the board of directors of the
Company.

For the years ended December 31, 2000 and 2001 and up until the date of
dismissal, the Company and Lieberman had no disagreements on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreement, if not resolved to the satisfaction of
Lieberman, would have caused it to make reference to the subject matter of the
disagreement in connection with any report or opinion it might have issued.

Lieberman's opinion in its report on the Company's financial statements for the
year ended December 31, 2000 expressed substantial doubt with respect to the
Company's ability to continue as a going concern. Lieberman's report on the
Company's financial statements for the year ended December 31, 2000 did not
contain any other adverse opinion, disclaimer of opinion, or modification or
qualification of opinion. Lieberman did not issue a report on the financial
statements for the year ended December 31, 2001.

ITEM 8A. CONTROLS AND PROCEDURES.

As of the end of each of the period covered by this report and the period
covered by our Form 10-QSB for the quarter ended March 31, 2004, our Company
conducted an evaluation, under the supervision and with the participation of our
Chief Executive Officer and Chief Financial Officer, of our disclosure controls
and procedures (as defined in Rule 13a-15(e) and of the Exchange Act). Based
upon this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that immediately following the merger of GlobalNet, Inc. and iDial
Networks, Inc. in the 4th fiscal quarter of 2003, there were material weaknesses
in the Company's disclosure controls and procedures. The Company's Chief
Executive Officer and Chief Financial Officer are evaluating these deficiencies
and expect to take necessary corrective actions in the future to eliminate these
weaknesses.

There was no change in our internal controls, which are included within
disclosure controls and procedures, during our most recently completed fiscal
year and subsequently fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal controls.

                                       34
<PAGE>
                                    PART III

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

Our executive officers, directors and key employees and their ages and positions
with us as of June 3, 2004, are as follows:


Name                               Age      Position
----                               ---      --------

Mark T. Wood                        44      Chairman of the Board, Chief
                                            Executive Officer, President

Thomas G. Seifert                   32      Chief Financial Officer and
                                            Secretary

David Halpern                       64      Director

Oscar de la Guardia                 45      Director

The following is a brief description of each officer and director listed above:

MARK T. WOOD, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER. Prior to
GlobalNet, Mr. Wood held several executive positions at international
telecommunications companies, which included Vice President and General Manager
of Loxcomm America, Inc., Chief Operating Officer of WorldQuest Networks
(NASDAQ:WQNI), and Vice President of International Sales at Intellical, Inc.
(AMEX:ICL).

THOMAS G. SEIFERT, CHIEF FINANCIAL OFFICER. Mr. Seifert is a graduate of
Colorado State University and graduated with a Bachelor of Science in Finance
with a minor in Accounting. Mr. Seifert has worked as the controller for
Integrated Telephony Products, Inc., as well as controller for Mountain
Vacations, Inc. and assisted with the sale of each company to a publicly trading
company. He was also a co-founder of 2Sendit.com, Inc.

DAVID HALPERN, DIRECTOR. Mr. Halpern is the sole outside director of GlobalNet.
Mr. Halpern brings years of Telecom experience, specifically on the finance
side. He was born in New York, educated at the Peddie School, University of
Pennsylvania, Ben-Gurion University of the Negev, Diaspora Yeshiva, Jerusalem.
Mr. Halpern has acted and currently acts as a director for numerous companies
including, Moishe Mana Groups, New York and Curacao, director, Next
Communication, Inc., Miami, CFO and director, Dorchester Technologies, Ltd.,
director, Rentar Environmenmtal solutions, Palm Beach, FL, director.

OSCAR DE LA GUARDIA, DIRECTOR Mr. de la Guardia is an experienced corporate
executive and business attorney. Mr. de la Guardia was a Business Development
Executive for an intellectual property division of PricewaterhouseCoopers in
Latin America and the Caribbean. Mr. de la Guardia was a founder and CEO of
IdentiData, Inc., a start-up company formed to provide electronic identity
services in Latin America, from 2000 until its sale to PwC in 2002. Prior to
that, he served as Executive Vice President of Advanced Multimedia Group, Inc.
(AMG), a Miami-based Internet investment fund and business accelerator, where he
was responsible for executing all business development efforts undertaken by the
company. Before joining AMG in early 2000, he was Senior Vice President of
American Disease Management, Inc., a disease management company headquartered in
the Washington, D.C. area and its predecessor companies from 1997 to 2000. Mr.
de la Guardia is a 1983 graduate of the University of Miami School of Law, where
he served as Executive Editor of the Law Review. He practiced law with Greenberg
Traurig, P.A., until 1988, thereafter founding his own corporate law firm with
three partners.

Audit Committee

The entire board of directors of the GlobalNet is acting as the Company's audit
committee. GlobalNet has determined that David Halpern is an audit committee
financial expert.

Section 16(a) Beneficial Ownership Reporting Compliance

                                       35
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities to file with
the SEC initial reports of ownership and reports of change in ownership of
common stock and other equity securities of the Company. Officers, directors and
greater than ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. To our knowledge,
the following persons have failed to file, on a timely basis, the identified
reports required by Section 16(a) of the Exchange Act during the most recent
fiscal year:
<TABLE>
<CAPTION>
                                                                    Transactions not     Known failures to
Name and Relationship                    Number of late reports     timely reported    file a required form
---------------------                    -----------------------    ---------------         ---------------
<S>                                                  <C>                   <C>                   <C>
Mark T. Wood, Chairman of the Board
and Chief Executive Officer                          2                     4                     0
Thomas G. Seifert, Chief Financial
Officer and Secretary                                2                     3                     0
David Halpern, Director                              1                     0                     1
Oscar de la Guardia, Director                        1                     0                     0
Growth Enterprise Fund, S.A., 10%
shareholder                                          1                     1                     0

</TABLE>
Code of Ethics

The Company has adopted its Code of Ethics and Business Conduct for Officers,
Directors and Employees that applies to all of the officers, directors and
employees of the Company. The Company's Code of Ethics is filed as Exhibit 99.3
to the Company's Form 10-KSB for the fiscal year ended December 31, 2002.

ITEM 10. EXECUTIVE COMPENSATION.

The following table summarizes all compensation paid by us with respect to the
fiscal year ended December 31, 2003 to our Chief Executive Officer, and all
other executive officers whose total cash compensation exceeded $100,000 in the
fiscal year ended December 31, 2003.


<TABLE>
<CAPTION>
                                               SUMMARY COMPENSATION TABLE
                              Annual Compensation                       Long-Term Compensation
                              -------------------                       ----------------------
                                                     Other       Restricted    Securities
                                                     Annual      Stock         Underlying                  All Other
Name and Principal              Salary     Bonus     Compens     Award(s)      Options/        LTIP Pay    Compensation
Position                Year     ($)        ($)      -ation        ($)         SAR's (#)       -outs ($)      ($)
--------------------    ----    ------     -----     -------    ------------   ----------      --------    ------------
<S>                     <C>    <C>         <C>       <C>         <C>           <C>            <C>          <C>
Mark T. Wood, Chief     2003   133,278     ---       ---        28,073,000 sh  ---             ---         ---
Executive Officer       2002    96,000     ---       ---        13,984,500 sh  ---             ---         ---
                        2001    44,000     ---       ---         2,500,000 sh  ---             ---         ---

David F. Levy,          2003       ---     ---       ---        ---            ---             ---         ---
President(1)

David Halpern,          2003       ---     ---       ---        ---            ---             ---         ---
Director (2)

Thomas G. Seifert,      2003   119,231     ---       ---        14,401,000 sh  ---             ---         ---
Chief Financial         2002    96,000     ---       ---        13,984,500 sh  ---             ---         ---
Officer (3)             2001    72,000     ---       ---         1,750,000 sh  ---             ---         ---

Oscar de la Guardia,    2003       ---     ---       ---        ---            ---             ---         200,000

</TABLE>
(1) Mr. Levy resigned from the Company effective May 3, 2004.

(2) As a member of the Board of Directors, David Halpern's annual compensation
is $20,000 effective January 2004.

(3) Mr. Seifert's employment is guaranteed under an employment contract that
expires January 31, 2006. See attached exhibit for more details.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

                                       36
<PAGE>
Securities Authorized for Issuance Under Equity Compensation Plans

The following table shows information with respect to each equity compensation
plan under which the Company's Common Stock is authorized for issuance as the
fiscal year ended December 31, 2003.
<TABLE>
<CAPTION>
                          EQUITY COMPENSATION PLAN INFORMATION
                                                                     NUMBER OF
                                                                     SECURITIES
                                                                     REMAINING
                          NUMBER OF                             AVAILABLE FOR FUTURE
                       SECURITIES TO BE                            ISSUANCE UNDER
                         ISSUED UPON        WEIGHTED-AVERAGE           EQUITY
                         EXERCISE OF       EXERCISE PRICE OF        COMPENSATION
                         OUTSTANDING          OUTSTANDING         PLANS (EXCLUDING
                      OPTIONS, WARRANTS    OPTIONS, WARRANTS    SECURITIES REFLECTED
                          AND RIGHTS           AND RIGHTS          IN COLUMN (a))
  PLAN CATEGORY              (a)                  (b)                   (c)
====================================================================================
<S>                           <C>                  <C>                   <C>
Equity
compensation plans
approved by
security holders             -0-                  -0-                   -0-
====================================================================================
Equity
compensation plans
not approved by
security holders             -0-                  -0-                   -0-
====================================================================================
TOTAL                        -0-                  -0-                   -0-
====================================================================================
</TABLE>
Security Ownership of Certain Beneficial Owners

                                       37
<PAGE>
The following table sets forth information regarding the beneficial ownership of
our common stock as of June 3, 2004. The information in this table provides the
ownership information for:

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.

Beneficial ownership has been determined in accordance with the rules and
regulations of the SEC and includes voting or investment power with respect to
the shares. Unless otherwise indicated, the persons named in the table below
have sole voting and investment power with respect to the number of shares
indicated as beneficially owned by them.



NAME AND ADDRESS OF                       NUMBER OF SHARES        PERCENTAGE
BENEFICIAL OWNER                          BENEFICIALLY OWNED      OUTSTANDING
--------------------------------          ------------------      -----------
Growth Enterprise Fund, S.A. (1)
    Sea Orchard
    Elms Avenue - Poole
    Dorsett BH14 8EE
    United Kingdom                            14,445,814,835              89%

Mark T. Wood
   Chairman and CEO
   2204 Timberloch Place, Suite 140
   The Woodlands, Texas 77380                    742,982,000              12%

Thomas G. Seifert
   Chief Financial Officer and Secretary
   10940 S Parker Road, Suite 451
   Parker, Colorado 80134                        101,598,704               2%

David Halpern
   Director
   18851 NE 29th Avenue, 7th Floor
   Aventura, FL 33180                                      0               0%

Oscar de la Guardia
   Director
   18851 NE 29th Avenue, 7th Floor
   Aventura, FL 33180                                      0               0%

                                       38
<PAGE>
All Executive Officers and Directors as
   a Group (4 persons)                           844,580,704              13%


(1) Includes 4,695,814,835 shares of common stock currently outstanding and
9,750,000,000 shares issuable upon conversion of 100,000 shares of Series A
Preferred Stock.

The following table sets forth information regarding the beneficial ownership of
our common stock as of June 3, 2004, before giving effect to any future
issuances or potential issuances of our common stock upon:

o issuance of any additional shares to Growth Enterprise Fund, S.A.;
o exercise of any options or warrants; or
o conversion of any convertible mandatorily redeemable preferred stock or notes.



NAME AND ADDRESS OF                       NUMBER OF SHARES        PERCENTAGE
BENEFICIAL OWNER                          BENEFICIALLY OWNED      OUTSTANDING
----------------------------              ------------------      -----------
Growth Enterprise Fund, S.A.
    Sea Orchard
    Elms Avenue - Poole
    Dorsett BH14 8EE
    United Kingdom                             4,695,814,835              73%

Mark T. Wood
   Chairman and CEO
   2204 Timberloch Place, Suite 140
   The Woodlands, Texas 77380                    742,982,000              12%


Thomas G. Seifert
   Chief Financial Officer and Secretary
   10940 S Parker Road, Suite 451
   Parker, Colorado 80134                        101,598,704               2%

David Halpern
      Director
   18851 NE 29th Avenue, 7th Floor
   Aventura, FL 33180                                      0               0%

Oscar de la Guardia
   Director
   18851 NE 29th Avenue, 7th Floor
   Aventura, FL 33180                                      0               0%


All Executive Officers and Directors as
   a Group (4 persons)                           844,580,704              13%

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

As part of the acquisition dated August 21, 2003, iDial issued a note to Growth
Enterprise Fund, S.A. for $500,000. This note was repaid during 4th Quarter
2003.

On February 2, 2004, the Company hired Deborah Halpren, who is the wife of David
Halpren, as an administrative assistant.

On February 9, 2004, David Halpern received $3,334 as compensation for his
service as a member of the Company's board of directors for January and February
2004.

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

(a) Index to Exhibits:

Exhibit No.        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)

                                       39
<PAGE>
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)

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)

                                       40
<PAGE>
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)

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)

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)

                                       41
<PAGE>
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)

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)

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)

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

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

                                       42
<PAGE>
16.2               Letter from Lieberman, dated March 29, 2002. (6)

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

21.1               List of Subsidiaries.

31.1               Certification by Mark T. Wood, Chief Executive Officer,
                   pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2               Certification by Thomas G. Seifert, Chief Financial Officer,
                   pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1               Certification by Mark T. Wood, Chief Executive Officer,
                   pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2               Certification by Thomas G. Seifert, Chief Financial Officer,
                   pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


(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.


(b) Reports on Form 8-K:

On November 4, 2003, the Company filed a current report on Form 8-K/A amending
disclosure of the acquisition of GlobalNet, Inc. and the appointment of a new
director and officer. The Company filed the following financial statements with
the Form 8-K/A: (1) audited financial statements of GlobalNet, Inc. for the
years ended December 31, 2002 and December 31, 2001; (2) unaudited financial
statements of GlobalNet, Inc. for the six-month period ended June 30, 2003; (3)
unaudited pro forma combined balance sheet for the Company as of June 30, 2003;
(4) unaudited pro forma combined statement of operations of the Company for the
six months ended June 30, 2003; and (5) unaudited pro forma combined statement
of operations of the Company for the year ended December 31, 2002.

On December 29, 2003, the Company filed a current report on Form 8-K disclosing
(1) the merger of GlobalNet, Inc. into iDial Networks, Inc., and (2) a change of
the Company's name from iDial Networks, Inc. to GlobalNet Corporation.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
<TABLE>
<CAPTION>

      1            2            3            4            5           6            7            8
----------------------------------------------------------------------------------------------------------
<S>               <C>         <C>          <C>           <C>           <C>       <C>            <C>
Fiscal Year                Audit-Related Percentage    Tax Fees    Percentage   All Other    Percentage
Ending        Audit Fees   Fees          of              (3)       of Tax       Fees         of All
                  (1)       (2)          Audit-Related             Services                  Other
                                         Services                  that were                 Services
                                         that were                 approved by               that were
                                         approved by               the audit                 approved by
                                         the audit                 committee                 the audit
                                         committee                   (4)                     committee
                                           (4)                                                  (4)
----------------------------------------------------------------------------------------------------------
Year Ended
December 31,
2003            125,446       24,313        100%       16,520        100%         -0-          N/A

----------------------------------------------------------------------------------------------------------
</TABLE>

Audit-related fees were incurred in connection with registration statement
filings, Form 8-K filings and information statement filings

                                       43
<PAGE>
                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

               GLOBALNET CORPORATION (f/k/a iDial Networks, Inc.)





             By: /s/ Mark T. Wood
                 -----------------------------
                 Mark T. Wood, Chairman of the Board and Chief Executive Officer



Dated: June 8, 2004

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




                 /s/ Mark T. Wood
                 -----------------------------
                 Mark T. Wood, Chairman of the Board and Chief Executive Officer

                 /s/ Thomas G. Seifert
                 -----------------------------
                 Thomas G. Seifert, Chief Financial Officer and Secretary

                 /s/ David Halpern
                 -----------------------------
                 David Halpern, Director

                 /s/ Oscar de la Guardia
                 -----------------------------
                 Oscar de la Guardia, Director




Dated: June 8, 2004


                                       44
<PAGE>
                     GlobalNet Corporation and Subsidiaries

                        Consolidated Financial Statements

                           December 31, 2003 and 2002

                                TABLE OF CONTENTS



                                                                            Page

Independent Auditors' Report                                                 F-2


Consolidated Financial Statements:


         Consolidated Balance Sheet                                          F-3
         Consolidated Statements of Operations and Comprehensive Loss        F-4
         Consolidated Statements of Stockholders' Equity (Deficit)           F-5
         Consolidated Statements of Cash Flows                               F-7
         Notes to Consolidated Financial Statements                          F-9



<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of GlobalNet Corporation

We have audited the accompanying consolidated balance sheets of GlobalNet
Corporation and subsidiaries (the Company) as of December 31, 2003 and 2002, and
the related consolidated statements of operations, stockholders' equity
(deficit), and cash flows for each of the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of GlobalNet
Corporation and Subsidiaries as of December 31, 2003 and 2002, and the results
of their operations and their cash flows for each of the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 16 to
the financial statements, the Company has negative working capital at December
31, 2003 and has experienced negative cash flows and net losses from operations
and is in default on several notes payable. These conditions raise substantial
doubt about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note16. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

As described in Note 1 the Company adopted FAS 150 in 2003.





/s/Ehrhardt Keefe Steiner & Hottman PC
   Ehrhardt Keefe Steiner & Hottman PC




May 15, 2004
Denver, Colorado

                                       F-2
<PAGE>
                     GlobalNet Corporation and Subsidiaries

                          Consolidated Balance Sheets
                                    <TABLE>
<CAPTION>

                           Assets                                December 31,    December 31,
                                                                     2003            2002
                                                                --------------  -------------
<S>                                                             <C>                  <C>
Current assets:
    Cash                                                        $     405,373        981,296
    Accounts receivable, net of allowance for doubtful
      accounts of $1,250,803 and $2,318,159 respectively            2,778,798      4,551,574
    Prepaid expenses and other current assets                         236,307        376,415
    Carrier deposits                                                  432,266        578,072
                                                                --------------  -------------
             Total current assets                                   3,852,745      6,487,357

Property and equipment, net                                         2,628,947      3,317,141
Intangible assets, net                                              3,940,676           --
Goodwill                                                           38,280,042           --
Other assets                                                          372,171           --
                                                                --------------  -------------
           Total assets                                         $  49,074,580      9,804,498
                                                                ==============  =============
    Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
    Accounts payable                                            $   3,975,323      4,513,930
    Due to MCI                                                      9,850,435      5,973,383
    Accrued expenses                                                1,394,746        868,694
    Due to related parties                                            159,745           --
    Payable to Former Parent, net of receivable                         --         1,761,991
    Restructuring reserve                                             137,668        526,822
    Deferred revenue                                                   37,854        103,595
    Current portion of notes payable                                   27,179           --
    Current portion of capital lease obligations                    2,749,146      5,321,454
    Payment Agreement with MCI                                          --         3,883,414
    Note payable to MCI                                             3,681,939           --
    Note payable                                                    1,200,000           --
    Note payable to Former Parent                                       --        10,854,601
    Notes payable - Stockholders                                    1,440,005           --
    Notes payable -  net of discount of $1,649,788                    851,915           --
    Current portion of 5% mandatorily redeemable
      preferred stock (11,795 shares of Series
      A, accrued preferred dividend of $260,000, and
      liquidation preference of $1,713,000)                         2,100,000           --
                                                                --------------  -------------
           Total current liabilities                               27,605,955     33,807,884

Capital lease obligations, net of current portion                       6,236      2,277,372
 5% mandatorily redeemable preferred stock (88,205 shares of
 of Series A and liquidation preference of $14,147,000)            13,760,000           --
                                                                --------------  -------------
           Total liabilities                                       41,372,191     36,085,256
                                                                --------------  -------------

Commitments and contingencies                                           --              --
                                                                --------------  -------------

Stockholders' equity (deficit):
    Common stock, $.005 par value, 1,000,000,000 shares
      authorized and 595,159,276 shares outstanding
     (December 31, 2003) and $0 par value,
      25,000 shares authorized and 1,000 shares
      outstanding (December 31, 2002)                               2,975,797            --
    Common stock to be issued in connection with business
      acquisition with $0.005 par value                            23,761,830            --
    Additional paid-in-capital                                     45,708,416     31,001,282
    Accumulated deficit                                           (64,743,654)   (57,282,040)
                                                                --------------  -------------
           Total stockholders' equity (deficit)                     7,702,389    (26,280,758)
                                                                --------------  -------------
           Total liabilities and stockholders' equity (deficit)    49,074,580      9,804,498
                                                                ==============  =============
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       F-3
<PAGE>
                     GlobalNet Corporation and Subsidiaries

                      Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                                                                                 Years Ended

                                                                                        December 31,        December 31,
                                                                                            2003               2002
                                                                                    -------------------- ------------------
<S>                                                                               <C>                           <C>
Revenue                                                                           $         102,214,126         98,977,054

Operating expenses:
    Data communications and telecommunications                                               96,275,470         90,797,555

    Network operations (exclusive of $643,929 for the year ended December 31,
      2002 reported below as non-cash stock compensation)                                     4,009,099          5,003,058

    Selling and marketing                                                                       815,265            675,499

    General and administrative (exclusive of $4,674,195 for the year ended
       December 31, 2002 reported below as non-cash stock compensation)                       2,833,135          4,352,077

    Restructuring charges                                                                           987          1,113,112
    Fixed Asset write-off                                                                             -          4,145,564
    Goodwill write-off                                                                                -         50,300,000
    Bad debt expense                                                                             71,161            726,057
    Depreciation and amortization                                                             1,921,547          3,126,571
    Non-cash stock compensation                                                                       -          5,318,124
                                                                                    -------------------- ------------------

            Total operating expenses                                                        105,926,664        165,557,617
                                                                                    -------------------- ------------------

            Operating loss                                                                   (3,712,538)       (66,580,563)

    Interest on note to payable to former Parent                                               (617,950)          (554,601)
    Interest expense, net and non-cash financing costs                                       (3,131,124)        (2,253,549)

            Net loss                                                                         (7,461,612)       (69,388,713)
                                                                                    ==================== ==================

    Basic and diluted weighted average common shares outstanding                            204,418,740          7,643,437
            Basic and diluted loss per share                                      $               (0.04)             (9.08)
                                                                                    ==================== ==================

</TABLE>
          See accompanying notes to consolidated financial statements.

                                       F-4
<PAGE>
                     GlobalNet Corporation and Subsidiaries

                     Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                      For the Year Ended December 31,

                                                            2003        2002
                                                                     (Restated)
                                                        ------------ ------------
<S>                                                      <C>         <C>
Cash flows from operating activities:
   Net loss                                              (7,461,612) (69,388,713)
   Adjustments to reconcile net loss to net
     cash provided by (used in)
     operating activities:
       Depreciation and amortization                      1,921,547    3,126,571
       Fixed asset write-off                                      -    4,145,564
       Goodwill write-off                                         -   50,300,000
       Provision for doubtful accounts                            -      726,057
       Noncash stock compensation                                 -    5,318,124
       Noncash financing costs                            2,237,841    1,284,651
       Restructuring charges                                      -    1,113,112
       Changes in assets and liabilities:
         Accounts receivable                              1,930,599   (2,015,693)
         Interest on Former Parent loan                     617,950      554,601
         Prepaid expenses and other current
          assets                                            140,108     (285,886)
         Carrier deposits                                   198,580      (97,439)
         Accounts payable                                (1,646,783)  (5,148,956)
         Due to MCI                                       3,877,052    2,774,315
         Restructuring reserve                             (389,154)    (586,290)
         Payable to Former Parent, net of
          receivable                                      1,520,663    1,761,991
         Deferred revenue                                  (179,529)      75,408
         Accrued expenses                                   (26,088)     177,707
                                                        ------------ ------------
           Net cash provided by (used in)
            operating activities                          2,741,174   (6,164,876)
                                                        ------------ ------------
Cash flows from investing activities -
   Payments to Titan and other business
    acquisition                                          (1,835,115)           -
   Cash overdraft acquired in connection
    with business acquisition                              (100,976)           -
   Purchase of property and equipment                      (396,087)     (75,833)
                                                        ------------ ------------
       Net cash used in investing activities             (2,332,178)     (75,833)
                                                        ------------ ------------
Cash flows from financing activities:
   Proceeds from former parent loans                      3,500,000   10,300,000
   Proceeds from Note - stockholders                      1,750,000            -
   Loan acquisition fees and costs                         (140,000)           -
   Repayments on notes payable                           (1,050,000)           -
   Net repayments on MCI notes payable                     (201,474)           -
   Principal payments on capital lease
    obligations                                          (4,843,444)  (4,719,273)
                                                        ------------ ------------
      Net cash (used in) provided by
       financing activities                                (984,918)   5,580,727
                                                        ------------ ------------
      Net increase (decrease) in cash                      (575,921)    (659,982)

Cash at beginning of period                                 981,296    1,641,278
                                                        ------------ ------------
Cash at end of period                                       405,375      981,296
                                                        ============ ============

Supplemental disclosure cash flow information:
   Cash paid for interest                                   512,395      969,065

Supplemental disclosure of noncash financing
 and investing activity:

   Conversion of convertible note into equity                     -    2,201,386

   Conversion of former parent accrued
    interest due into debt                                3,122,909            -

   Note payable extension fee added to
    note payable                                            250,000            -

                                      F-5
<PAGE>
                     GlobalNet Corporation and Subsidiaries

                     Consolidated Statements of Cash Flows (continued)



   Issuance of mandatorily redeemable
    preferred stock in connection with
    business acquisition                                 15,600,000            -

   Issuance of note payable to Growth in
    connection with business acquisition                    500,000            -

   Issuance of note payable to Titan in
    connection business acquisition                       1,500,000            -

   Value of equity instruments to be issued
    in business acquisition                              39,819,263            -

   Net assets acquired in connection with
    business acquisition(including cash
    acquisition costs of $1,936,091)                     59,355,353            -

   Common stock issued for legal settlement                       -      227,500

   Equipment purchased under capital lease                        -    1,087,322

Pushdown accounting adjustments in connection with
   the Titan merger:

   Goodwill recorded in Merger                                    -   50,300,000

   Reclassification of intangible assets to goodwill              -   (1,222,044)

   Write down of property and equipment to fair value             -     (501,233)

   Net adjustment to stockholders' equity (deficit)               -   48,576,723

</TABLE>
          See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>

                     GLOBALNET CORPORATION AND SUBSIDIARIES

                    Consolidated Statements of Stockholders'
                 Deficit Years ended December 31, 2003 and 2002
<TABLE>
<CAPTION>
                                                        GlobalNet Corporation
                        ---------------------------------------------------------------------------------
                                                                                 Additional
                              Common Stock                             Acq        paid-in    Accumulated    Deferred       Total
                          Shares         Amount        Acq Shares    Sh Amount    capital      deficit     compensation   deficit
                        -------------  ------------- -------------- ------------ ----------- ------------  ------------ ------------
<S>                          <C>           <C>            <C>             <C>         <C>           <C>         <C>         <C>
Balance at December
 31, 2001                 32,379,374         32,379         --            --      25,477,950  (33,407,982)  (5,318,124) (13,215,777)

Conversion of
 convertible note          4,888,263          4,889         --            --       2,196,497       --            --       2,201,386

Issuance of shares
 for legal settlement        350,000            350         --            --         227,150       --            --         227,500

Amortization of deferred
 compensation                   --             --           --            --           --          --        5,318,124    5,318,124

Cancellation of shares
 Outstanding             (37,616,637)       (37,618)        --            --          37,618       --            --           --

Net effect of purchase
 accounting adjustments         --             --           --            --       3,062,067   45,514,655        --      48,576,722

Net loss for period             --             --           --            --           --     (69,388,713)       --     (69,388,713)
                         -------------  ------------- -------------- ------------ ----------- ------------ ------------ ------------
Balance at December 31,
 2002                          1,000    $      --           --       $    --      31,001,282  (57,282,040)       --     (26,280,758)
                         -------------  ------------- -------------- ------------ ----------- ------------ ------------ ------------
Net effect of purchase
 accounting adjustments  495,158,276      2,475,797   4,852,366,000   24,261,830  14,707,134       --            --      41,444,761

Issuance of shares for
 business acquisition    100,000,000        500,000    (100,000,000)    (500,000)      --          --                          --

Net loss for period             --             --           --            --           --      (7,461,612)       --      (7,461,612)
                         -------------  ------------- -------------- ------------ ----------- ------------ ------------ ------------
Balance at December 31,
 2003                    595,159,276    $ 2,975,797   4,752,366,000  $23,761,830  45,708,416  (64,743,652)       --       7,702,391
                         =============  ============= ============== ============ =========== ============ ============ ============
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       F-7
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(1) Organization and Description of Business

GlobalNet, Inc. (GlobalNet or the Company) provides global telecommunications,
including high quality voice, fax, and other value-added applications on a
wholesale basis over a managed Internet Protocol network to international
carriers and other communication service providers in the United States and
internationally.

GlobalNet was formed on May 30, 2000, when GlobalNet International, Inc. (GII)
merged with a subsidiary of Rich Earth, Inc. (Rich Earth) pursuant to an
agreement (the Merger Agreement) whereby 20,000,000 shares of Rich Earth common
stock were exchanged for 100% of the common stock of GII in a transaction
accounted for as a reverse acquisition (Merger) of Rich Earth by GII using the
purchase method of accounting. Prior to raising approximately $2.5 million to
fund an acquisition by GII in a contemplated transaction as described herein,
Rich Earth was a nonoperating public shell corporation with nominal assets. GII
management controlled the combined company after the transaction. After the
closing of the merger, Rich Earth changed its name to GlobalNet, Inc.

On March 21, 2002, GlobalNet, Inc. merged with a subsidiary of The Titan
Corporation ("Titan"). In the merger, a wholly owned subsidiary of Titan merged
into GlobalNet and all of GlobalNet's outstanding common shares and certain
outstanding stock options and warrants were converted into Titan common shares,
options and warrants, plus cash in lieu of fractional shares. The merger had an
aggregate equity transaction value of approximately $31.0 million. The
transaction was accounted for as a purchase. The excess of the purchase price of
$31.0 million over the estimated fair market value of the net liabilities
acquired of approximately $19.3 million was approximately $50.3 million, which
was allocated to goodwill. After the merger, Titan reduced the number of shares
of common stock outstanding in GlobalNet from 37,617,637 shares to 1,000 shares
and converted GII into a single member Delaware limited liability company,
GlobalNet International, L.L.C., in which GlobalNet is the sole member. In
accordance with Staff Accounting Bulletin No. 54 and No. 73, the Company has
"pushed down" to its stand-alone consolidated financial statements the purchase
accounting adjustments and the subsequent write-off of goodwill recorded by
Titan. As a result, the consolidated financial information for the period after
the merger is presented on a different cost basis than that for the periods
before the merger and, therefore, is not necessarily comparable. The operations
and management of the Company have essentially remained in place and unchanged
after the merger with Titan and thus reflect continuity of the operations of the
Company. As a result, the accompanying consolidated financial statements do not
separately present the results of operations for the period immediately
preceding the merger separately from the period subsequent to the merger with
Titan. The Company has determined the change in cost basis as a result of the
merger and the resulting impact on the operating results of the Company was not
material and the presentation of the entire annual period is more meaningful and
useful for comparative purposes.

On July 11, 2002, Titan made the decision to exit its telecommunications
business and to sell GlobalNet. At that time, Titan determined that there had
been an impairment of the carrying value of GlobalNet's goodwill of
approximately $50.3 million in accordance with SFAS No. 142. The measurement of
this impairment was evident based upon estimates of fair value, as determined by
recent offers received by Titan from potential buyers, compared to the carrying
value of the asset.

On May 20, 2003, Growth Enterprise Fund, S.A. ("GEF") entered into a Stock
Purchase Agreement with Titan to acquire 100% of the common stock of GlobalNet.
Subsequently, on August 21, 2003, iDial entered into an Assignment and
Assumption Agreement with GEF and Titan, whereby GEF transferred to iDial all
its rights and obligations under the Stock Purchase Agreement in exchange for
60% of iDial's outstanding common stock (after taking into consideration the
potential dilution from certain convertible debentures), 100,000 shares of
Series A Preferred Stock. Refer to Note (4) for further information.

The acquisition of GlobalNet by iDial has been reflected under the purchase
method of accounting in accordance with SFAS No. 141, with GlobalNet identified
as the accounting acquiror. The shareholder of GlobalNet prior to the
acquisition, will beneficially own 60% of the voting interest in iDial after the
transaction and, as a result of the change in control of iDial, the transaction
has been accounted for as a reverse acquisition of iDial by GlobalNet.

Since the acquisition, the Company has combined network operations in an effort
to reduce unnecessary expenditures. The Company will continue to provide a
retail presence, however some non-producing retail products and services may not
be transitioned.

The Company is subject to risks and uncertainties common to growing
telecommunications-based companies, including rapid technological changes, low
costs to customers of switching from carrier to carrier, failed alliances, and
pricing pressures in the international long distance market.


                                       F-8
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


(2) Summary of Significant Accounting Policies

                           Principles of Consolidation

The consolidated financial statements for all periods presented include the
accounts of GlobalNet Corporation and its wholly owned subsidiaries, GlobalNet
International, Inc. and others included in Exhibit 21.1. All intercompany
accounts and balances have been eliminated in consolidation.

The accompanying audited consolidated financial statements reflect the
acquisition of GlobalNet by iDial on August 25, 2003, which was treated as a
reverse acquisition with GlobalNet identified as the accounting acquiror as
discussed in Note (4). Accordingly, all previous periods presented reflect the
audited financial statements of GlobalNet and, therefore, such financial
statements differ from the financial statements reported in iDial's previous
filings.

                                Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenue and expenses
during the reporting period. Actual results may differ from those estimates.

                       Fair Value of Financial Instruments

Financial instruments consist principally of accounts receivable, carrier
deposits, accrued expenses, accounts payable, notes payable, and capital leases.
The estimated fair values of these instruments approximates their carrying
values.

                                    Goodwill

Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other
Intangible Assets", which establishes financial accounting and reporting for
acquired goodwill and other intangible assets and supersedes APB Opinion No. 17,
"Intangible Assets". Under SFAS No. 142, goodwill and indefinite-lived
intangible assets are no longer amortized but are reviewed at least annually for
impairment. Separable intangible assets that have finite useful lives will
continue to be amortized over their useful lives. SFAS No. 142 requires that
goodwill be tested for impairment at the reporting unit level at adoption and at
least annually thereafter, utilizing a two step methodology. The initial step
requires the Company to assess whether indications of impairment exist. If
indications of impairment are determined to exist, the second step of measuring
impairment is performed, wherein the fair value of the relevant reporting unit
is compared to the carrying value, including goodwill, of such unit. If the fair
value exceeds the carrying value, no impairment loss is recognized. However, if
the carrying value of the reporting unit exceeds its fair value, the goodwill of
the reporting unit is impaired.

                         Impairment of Long-lived Assets

The Company evaluates its long-lived assets for impairment, in accordance with
the provisions established under Statement of SFAS no.144, "Accounting for the
Impairment or Disposal of Long Lived-Assets", when events or changes in
circumstances indicate that the related carrying amount may not be recoverable.
An impairment is considered to exist if the total estimated future cash flows on
an undiscounted basis is less that the carrying amount of the related assets. An
impairment is measured and recorded based on the discounted estimated future
cash flows. Changes in significant assumptions underlying future cash flow
estimates or fair values of assets may have a material effect on the Company's
financial position and results of operations.

                                       F-9
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                               Revenue Recognition

The Company's revenue consists of the sale of wholesale carrier voice and fax,
via an international network. Revenue is recognized as services are rendered. In
order to mitigate risk of loss, several customers prepay for their services, in
which case revenue is deferred and is recognized as minutes are utilized.

                                 Finance Charges

The Company records as financing costs in its statement of operations
amortization of in-the-money conversion features on convertible debt accounted
for in accordance with EITF 98-5 and 00-27, amortization of discounts from
warrants issued with debt securities in accordance with APB No. 14 and
amortization of discounts resulting from other securities issued in connection
with debt based on their relative fair values, and any value associated with
inducements to convert debt in accordance with Statement of Financial Accounting
Standards No. 84 (SFAS No 84). The Company records these financing costs as a
component of interest expense in the consolidated statement of operations.

                        Research and Development Expenses

The Company charges research and development expenses incurred in the
development, expansion, operation, and support of the Company's global Internet
Protocol network to network research and development as incurred.

                            Stock-based Compensation

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation-Transition and Disclosure." This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation" to provide alternative methods of
transition for an entity that voluntarily changes to the fair value method of
accounting for stock-based compensation. In addition, SFAS 148 amends the
disclosure provision of SFAS 123 to require more prominent disclosure about the
effects of an entity's accounting policy decisions with respect to the
stock-based employee compensation on reported results of operations. The Company
has adopted the disclosure-only provisions on the Statement of Financial
Accounting Standards No.123, "Accounting for Stock-Based Compensation."
Accordingly, no compensation cost has been recognized for stock options issued
to employees, officers and directors under the stock option plan. Had
compensation cost for the Company's options issued to employees, officers and
directors been determined based on the fair value at the grant date for awards
consistent with the provisions of SFAS No. 123, as amended by SFAS No. 124, the
Company's net loss and basic loss per common share would have been changed to
the pro forma amounts indicated below:

<TABLE>
<CAPTION>

                                                                            YEAR ENDED DECEMBER 31,
                                                                            -----------------------
                                                                              2003           2002
                                                                            -------        -------
Pro forma net loss:
<S>                                                                     <C>             <C>
    Net loss for the year, as reported .......................          $ (7,461,612)   $(69,388,713)
    Deduct: stock-based compensation determined under APB 25..                     -       5,318,124
    Add: stock-based compensation determined under SFAS 123...                     -      (5,426,918)
                                                                        -------------   -------------

    Pro forma net loss .......................................          $ (7,461,612)   $(69,497,507)
                                                                        -------------   -------------

Net loss per share - basic and diluted:
    As reported ..............................................          $      (0.04)   $      (9.08)
    Pro forma ................................................          $      (0.04)   $      (9.09)

</TABLE>

                                       F-10
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

The fair value of each warrant grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used:
<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                                           -----------------------
                                                             2003           2002
                                                           -------        -------
<S>                                                           <C>            <C>
Approximate risk free rate                                    4.5%           3.8%
Average expected life                                     4.3 Years      5 to 9.6 Years
Dividend Yield                                                 -%              -%
Volatility                                                    100%            72%

Estimated fair value of total options granted              $ 83,080      $ 108,231
</TABLE>

                               Net Loss Per Share

The Company applies the provision of Statement of Financial Accounting Standard
No. 128, "Earnings Per Share"(FAS 128). All dilutive potential common shares
have an antidilutive effect on diluted per share amounts and therefore have been
excluded in determining net loss per share. The Company's basic and diluted loss
per share are equivalent and accordingly only basic loss per share has been
presented.

The following table reflects the effects of dilutive securities as of December
31, 2003, including the effects of subsequent revisions to conversion rates on
convertible securities.

Dilutive effects of warrants                                          3,891,666
Dilutive effects of convertible preferred shares                  9,912,500,000
Dilutive effects of convertible debtentures                       2,477,000,000
                                                              ------------------
Total Potential future dilutive securities                       12,393,391,666

                                   Derivatives

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, (SFAS 133) which
was later amended by Statement No. 137, Accounting for Derivative Instruments
and Hedging Activities - Deferral of the effective date of FASB Statement No.
133 and by Statement No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an Amendment of FASB Statement No. 133
(collectively, the Standard). The Standard requires companies to record
derivative instruments on the balance sheet as assets or liabilities measured at
fair value. The accounting treatment of gains and losses resulting from changes
in the value of derivatives depends on the use of the derivatives and whether
they qualify for hedge accounting. The Standard was required to be adopted for
financial statements issued for the fiscal year ending December 31, 2003. As the
Company does not currently engage in derivatives or hedging transactions, there
was no impact to the Company's results of operations, financial position, or
cash flows upon the adoption of SFAS 133.

                                  Income Taxes

Prior to the March 21, 2002, the Company operated in the form of a limited
liability company and accordingly, the Company's income tax liabilities were the
responsibility of its members.

Subsequent to March 21, 2002, the Company accounts for income taxes in
accordance with the provisions of Statement of Financial Accounting Standards
No. 109 (Statement 109), Accounting for Income Taxes. Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to the difference
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under Statement
109, the effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.

                                      F-11

<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                              Comprehensive Income

Comprehensive income is defined as the change in equity during a period from
transactions and other events from non-owner sources. Comprehensive income is
the total of net income or loss and other comprehensive income or loss. The
effect of foreign currency exchange rates currently is the Company's only item
which constitutes comprehensive income or loss.

                            Cash and Cash Equivalents

The company considers all highly liquid instruments purchased with an original
maturity of three months or less to be cash equivalents. The Company continually
monitors its position with, and credit quality of, the financial institutions it
invests with. As of the balance sheet date, the Company had no cash equivalents.

                      Recently Adopted Accounting Standards

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for how a company classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify certain financial instruments as a liability
(or as an asset in some circumstances). Accordingly, all mandatory redeemable
preferred stock has been presented as a liability in the accompanying balance
sheet at December 31, 2003. All required dividend payments have also been
included in the statement of operations as interest and financing costs.

                          Concentration of Credit Risk

The Company is subject to concentrations of credit risk, which consist
principally of trade accounts receivable and cash and cash equivalents.

The Company maintains its cash balances at various financial institutions. The
Company performs periodic evaluations of the relative credit standing of these
institutions.

The majority of the Company's non-carrier customers prepay for their services.
The Company establishes an allowance for doubtful accounts based upon factors
surrounding the credit risk of customers, historical trends and other
information.

                             Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the depreciable assets,
which range from three to five years. Leasehold improvements are amortized based
on the straight-line method over the shorter of the term of the lease, or the
estimated useful life of the improvements.

                                Reclassifications

Certain reclassifications have been made to the 2002 financial statements to
conform to the 2003 presentation.

The Company has also reclassified certain amounts in its 2002 Statement of Cash
Flows previously reported, for noncash investing and financing activities
pertaining to assets acquired under capital leases.

(3) Push Down Accounting in Connection with Titan Merger

On March 21, 2002, GlobalNet merged with a subsidiary of Titan. In the merger, a
wholly owned subsidiary of Titan merged into GlobalNet and all of GlobalNet's
outstanding common shares and certain outstanding stock options and warrants
were converted into Titan common shares, options and warrants, plus cash in lieu
of fractional shares. The merger had an aggregate equity transaction value of
approximately $31.0 million. The transaction was accounted for as a purchase.
The excess of the purchase price of $31.0 million over the estimated fair market
value of the net liabilities acquired of approximately $19.3 million was
approximately $50.3 million, which was allocated to goodwill.

In April 2002, the former Parent obtained an independent valuation completed by
independent valuation specialists Bearing Point (formerly KPMG Consulting, Inc.)
to assist in its purchase price allocation of the GlobalNet acquisition. The
$50.3 million allocated

                                      F-12
<PAGE>

                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

to goodwill includes $1,222,024 of net intangibles prior to the merger that has
been reclassified.

On July 11, 2002, Titan made the decision to exit its telecommunications
business and to sell GlobalNet. Titan determined that there had been an
impairment of the carrying value of GlobalNet's goodwill of approximately $50.3
million in accordance SFAS No. 142. The measurement of this impairment was
evident based upon estimates of fair value, as determined by recent offers
received by Titan from potential buyers, compared to the carrying value of the
asset. In accordance with Staff Accounting Bulletins No. 54 and No. 73, the
Company has "pushed down" to its stand-alone consolidated statements the
purchase accounting adjustments and the subsequent write-off of goodwill
recorded by GlobalNet.

(4) Business Acquisition

On May 20, 2003, GEF entered into a Stock Purchase Agreement with Titan to
acquire 100% of the common stock of GlobalNet in exchange for the assumption of
certain liabilities of Titan (the "assumed liabilities"), and certain cash
payment totaling approximately $1,500,000.

Subsequently, on August 22, 2003, iDial entered into an Assignment and
Assumption Agreement with GEF and Titan (the "Assignment"), whereby GEF
transferred to iDial all its rights and obligations under the Stock Purchase
Agreement, including the right to receive all of the issued and outstanding
common stock of GlobalNet. On August 21, 2003, amendments were made to the Stock
Purchase Agreement to reflect certain payments made by GlobalNet after the date
of the Stock Purchase Agreement. In connection with the Stock Purchase Agreement
and the Assignment, promissory notes and accrued interest payable in the
aggregate amount of approximately $15.6 million payable by GlobalNet to Titan
were assigned to iDial (the "GlobalNet Notes"). As consideration for the
Acquisition, iDial and GEF engaged in the following transactions with Titan:

o iDial issued a $1,500,000 principal amount promissory note to Titan (the
"Titan Note"), of which $550,000 was repaid on during 2003;

o iDial paid $1,500,000 to Titan; and

o GEF paid $500,000 to Titan, which was repaid during 4th Quarter 2003.

In connection with the Assignment, on August 22, 2003, iDial entered into a
Purchase Agreement with GEF whereby iDial issued to GEF a $500,000 principal
amount promissory note, 100,000 shares of the iDial's Series A Preferred Stock
and 60% of the Company's outstanding common stock after taking into
consideration the potential dilution from certain convertible debentures. In
connection with the transaction, iDial pledged 100% of the stock of GlobalNet
and the GlobalNet Notes to Titan as collateral to secure payment of the assumed
liabilities and the Titan Note.

The shares of Series A Preferred Stock carry limited voting rights, have a
stated value of $156 per share and pay cumulative dividends at the rate of $7.80
per share per annum (5% of the stated value). Commencing on December 31, 2003,
the Company is required to redeem $175,000 of the Series A Preferred Stock on
the first business day of each month, which such payment shall be for accrued
but unpaid dividends, and to the extent of any excess over such accrued but
unpaid dividends, redemption of shares of Series A Preferred Stock. At the
option of the holder, the Company must redeem additional shares of the Series A
Preferred Stock from the Company's Free Cash Balance, as defined in the Series A
Preferred Stock Certificate of Designation. In addition, if the Company fails to
make dividend payments on the Series A Preferred Stock, the Series A Preferred
Stock is convertible into the Company's common stock at the option of the
holder.

In order to fund the costs of the transaction, on August 22, 2003, iDial entered
into a Securities Purchase Agreement with unrelated investors, in which the
investors provided funding in the amount of $1,750,000. In exchange for such
investment, the investors received convertible debentures. The debentures issued
pursuant to the August 2003 Securities Purchase Agreement bear interest at 12%
per year, mature two years from the date of issuance, and are convertible into
iDial's common stock, at a rate of $.0016 per share; however, if at any time the
market price of iDial's common stock is below $.0016, then the conversion price
will be equal to the lesser of (i) $.0016, or (ii) the average of the lowest 3
intra-day trading prices during the 20 trading days immediately prior to the
conversion date discounted by 60%.


                                      F-13
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

The acquisition of GlobalNet by iDial has been reflected under the purchase
method of accounting in accordance with SFAS No. 141, with GlobalNet identified
as the accounting acquiror. The shareholder of GlobalNet prior to the
acquisition, will beneficially own 60% of the voting interest in iDial after the
transaction and as a result of the change in control of iDial, the transaction
has been accounted for as a reverse acquisition of iDial by GlobalNet.

The purchase price consideration was determined as follows:


Value of shares to be issued                      $ 39,819,263
New note payable to Titan                            1,500,000
Note payable to GEF                                    500,000
Assumed current liabilities                          1,774,103
Assumed long-term debt                                 216,755
Transaction expenses                                 1,835,115
Mandatorily Redeemable Preferred Stock              15,600,000
                                            -------------------
                                                  $ 61,245,236
                                            -------------------

The Company obtained an independent valuation for purposes of determining the
fair value and related purchase price allocation of the acquisition. According
to this independent valuation, the enterprise value of iDial was $39.8 million
based on the value of the shares (fully diluted) retained by the shareholders of
iDial after the transaction. Those shares were valued using the average stock
price of iDial during the five days before and the five days after August 27,
2003, the date on which the transaction was publicly announced. As part of the
purchase price, we have also included all the assumed liabilities.

The allocation of the purchase price was as follows:


Current assets                                       $ 109,621
Note receivable from GlobalNet                      15,595,460
Receivable from GlobalNet                            2,500,000
Property and equipment, net                            549,113
Identified intangible assets                         4,211,000
Goodwill                                            38,280,042
                                            -------------------
                                                  $ 61,245,236
                                            -------------------

As a result of this independent valuation, the Company identified approximately
$4.2 million of intangible assets of which approximately $3.3 million was
allocated to customer list with an estimated life of 5 years and $0.9 million
was allocated to acquired technology with an estimated useful life of 6 years.
The Company allocated to goodwill the difference between the purchase price of
$61.2 million and the fair market value of iDial's assets of $0.7 million, the
Note receivable from GlobalNet of $15.6 million, the receivable from GlobalNet
of $2.5 million and the identified intangible assets of $4.2 million.

Under the purchase method of accounting, tangible and identifiable intangible
assets acquired and liabilities assumed are recorded at their estimated fair
market values.

The following unaudited pro forma condensed consolidated financial information
gives effect to the acquisition of GlobalNet, Inc. (GlobalNet) by iDial
Networks, Inc. (iDial) with GlobalNet identified as the accounting acquiror
under the purchase method of accounting in accordance with SFAS No. 141. These
pro forma condensed consolidated statements are presented for illustrative
purposes only. They were prepared by combining GlobalNet's statement of
operations for the year with the statement of operations of iDial as if the
acquisition had occurred on January 1, 2002. These unaudited pro forma condensed
consolidated financial statements do not give effect to any restructuring costs
or to any potential cost savings or other operating efficiencies that could
result from the merger. The pro forma adjustments are based upon available
information and assumptions that we believe are reasonable. The pro forma
condensed consolidated financial statements do not purport to represent what the
consolidated results of operations or financial position of GlobalNet would
actually have been if the acquisition of GlobalNet by iDial had in fact occurred
on the dates that we refer to below, nor do they purport to project the results
of operations or financial position of GlobalNet for any future period or as of
any date, respectively.

                                      F-14
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements



                                                   For the Periods Ended
                                                December 31,      December 31,
                                                    2003               2002

Revenue                                        $ 106,392,970     $ 110,552,330
Loss from Continuing Operations                   (5,399,005)      (73,633,213)
Net Loss                                          (9,966,940)      (74,808,654)
Loss Per Share                                          (.02)             (.02)

              Unaudited Pro Forma Combined Statements of Operations

(5) Notes Payable

Convertible Notes Payable
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------- ----------------------------
                                                                                        December 31,
-------------------------------------------------------------------------------- -------------- -------------
                                                                                     2003           2002
-------------------------------------------------------------------------------- -------------- -------------
<S>                                                                             <C>                <C>
$1,750,000 Convertible notes payable related to acquisition. Note is
convertible into approximately 1,093,750,000 shares of Company's common stock
at $.0016 per share.  If the Company's common stock price is below $.0016 then
the conversion price will be adjusted to the lesser of $.0016 or the average
of the lowest three intraday trading prices during the 20 days immediately
prior to the conversion date discounted by 60%.  Interest at 12% due August
21, 2005. Subsequent to year end interest rate reduced to 6%.  Note contains a
beneficial conversion feature which result in a charge to the statement of
operations in 2003 of $315,000.  Note is recorded net of unamortized discount
of $1,435,000 collateralized by all assets of the company.  Converted shares
have registration rights. The note is currently in default, thus balance of
the note has been recorded as a current liability.                              $  315,000            -
-------------------------------------------------------------------------------- -------------- -------------
$750,000 Convertible notes payable issued February 2003 assumed in acquisition
by accounting acquiror. Convertible into approximately 157,500,000 shares of the
company's common stock at $.0016 per share. If the Company's common stock price
is below $.0016 then the conversion price will be adjusted to the lesser of
$.0016 or the average of the lowest three intraday trading prices during the 20
days immediately prior to the conversion date discounted by 60%. Interest at 12%
due February 2004 subsequent to year end interest reduced to 6% and due date
extended to August 2005. The note contains a beneficial conversion feature which
resulted in a charge to the statement of operations in 2003 of $136,096.
$498,297 was converted to common stock in 2003. Note recorded net of unamortized
discount of $4,624 collateralized by all assets of the company. 2,250,000
warrants issued in conjunction with the note at a price of $.0016 per share. The
warrants expire February 2008 and were assumed in the acquisition with iDial.
Converted shares have registration rights. The note is currently in default,
thus balance of the note has been recorded as a current liability.                  247,079            -
-------------------------------------------------------------------------------- -------------- -------------
$500,000 Convertible notes payable issued May 2003 assumed in acquisition by
accounting acquiror. Convertible into approximately 312,500,000 shares of the
company's common stock at $.0016 per share. If the Company's common stock price
is below $.0016 then the conversion price will be adjusted to the lesser of
$.0016 or the average of the lowest three intraday trading prices during the 20
days immediately prior to the conversion date discounted by 60%. Interest at 12%
due May 2004 subsequent to year end interest reduced to 6% and due date extended
to August 2005. The note contains a beneficial conversion feature which resulted
in a charge to the statement of operations in 2003 of $169,973. Note recorded
net of unamortized discount of $210,165 collateralized by all assets of the
company. Converted shares have registration rights. 1,500,000 warrants issued in
conjunction with the note at interest price of $.0016. The warrants expire May
2008 and were assumed in the acquisition with iDial. Converted shares have
registration rights. The note is currently in default, thus balance of the note
has been recorded as a current liability.                                          289,835             -
-------------------------------------------------------------------------------- -------------- -------------
                                                Total Convertible Notes Payable $  851,914             -
-------------------------------------------------------------------------------- -------------- -------------
</TABLE>
                                      F-15
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>
Convertible Stockholder Notes Payable

-------------------------------------------------------------------------------- ----------------------------
                                                                                        December 31,
-------------------------------------------------------------------------------- ----------------------------
                                                                                     2003           2002
-------------------------------------------------------------------------------- -------------- -------------
<S>                                                                             <C>                <C>
Convertible notes payable to an officer of thee Company (CEO).  Non-Interest
bearing. Convertible into approximately 659,000,000 shares of common stock at
$.0016 per share due on demand.  Assumed in acquisition of iDial.  At the date
of acquisition the note was modified which resulted in a beneficial conversion
feature immediately amortized as a charge to the statement of operations in
2003 of $1,053,978. On April 30, 2004, this note was converted into 658,736,250
shares of common stock.                                                          $ 1,053,978             -
-------------------------------------------------------------------------------- -------------- -------------
Convertible notes payable to a shareholder related to acquired technology.
Non-Interest bearing. Convertible into approximately 74,000,000 shares of common
stock at $.0016 per share due February 2005. Assumed in acquisition of iDial. At
the date of acquisition the note was modified which resulted in a beneficial
conversion feature immediately amortized as a charge to the statement of
operations in 2003 of $118,000. On April 30, 2004, this note was converted into
73,750,000 shares of common stock.                                                   118,000             -
-------------------------------------------------------------------------------- -------------- -------------
Convertible notes payable to a third party vendor. Non-Interest bearing.
Convertible into approximately 168,000,000 shares of common stock at $.0016 per
share due on demand. Assumed in acquisition of iDial. At the date of acquisition
the note was modified which resulted in a beneficial conversion feature
immediately amortized as a charge to the statement of operations in
2003 of $268,027. On April 30, 2004, this note was converted into 167,516,250
shares of common stock.                                                              268,027             -
-------------------------------------------------------------------------------- -------------- -------------
                                    Total Convertible Shareholder Notes Payable  $ 1,440,005             -
-------------------------------------------------------------------------------- -------------- -------------

Notes Payable

-------------------------------------------------------------------------------- ----------------------------
                                                                                        December 31,
-------------------------------------------------------------------------------- ----------------------------
                                                                                     2003           2002
-------------------------------------------------------------------------------- -------------- -------------
Note payable to MCI.  Interest at 6%. Monthly payments of $220,000. Final
payment of $114,906 due June 2005. Collateralized by all assets of the
Company. The note is currently in default and provides for a default rate of
interest of 18%.                                                                $ 3,681,939              -
-------------------------------------------------------------------------------- -------------- -------------
Acquisition note payable to a third party. Non-Interest bearing. Principal
payments of $25,000 per week. Note is convertible after registration statement
is effective. Conversion price is at the then current market price of the
Company's common stock. Collateralized by all assets of the Company. The note
was originally due on December 31, 2003. The Company failed to make the required
payment of $1,000,000 on December 31, 2003. Subsequently the Company entered
into an agreement to extend the note on December 29, 2003. The Company paid
$250,000 as an extension fee to the holder as consideration for granting the
extension to March 31, 2004. The note was subsequently defaulted on. The company
is in good faith negotiations to reach a mutually acceptable resolution.
                                                                                  1,200,000              -
-------------------------------------------------------------------------------- -------------- -------------
</TABLE>
                                      F-16
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
Mandatory Redeemable Preferred Stock

-------------------------------------------------------------------------------- ----------------------------
                                                                                        December 31,
-------------------------------------------------------------------------------- ----------------------------
                                                                                     2003           2002
-------------------------------------------------------------------------------- -------------- -------------
<S>                                                                             <C>                <C>
100,000 shares ($156 per share ) Preferred Stock issued in conjunction with
acquisition of iDial to Growth Enterprise Fund.  Liquidation preference of
$15,860,000 at December 31, 2003.  Payments of $87,500 on the 10th and 20th
day each month plus interest at 5% (including $260,000 of accrued interest at
December 31, 2003). Convertible into 2,143,000 shares of common stock at
$.0074 per share.  The preferred holder has 60% equivalent voting rights of
the common shares until the required acquisition shares are issued. The
conversion rate of the preferred stock was modified to $.0016 on March 2, 2004
which increased the number of common shares issuable upon conversion to
9,912,500,000.  On April 6, 2004 the holder agreed to convert current and
future principle and interest through June 2004 into 1,171,875,000 shares of
common stock as long as subsequent debt service and interest payments continue
to be made timely.  In connection with our accounting policy, the Company
recorded a discount of $15,990,000, which is equal to the principle plus
interest. This discount will create a significant expense to the Company's
statement of operations, which will be amortized over the period of
scheduled redemptions which extends through December 2010.                      $15,860,000              -

                                                          Less Current Portion    2,100,000              -
                                                                                  ---------

                                                                                 13,760,000              -
-------------------------------------------------------------------------------- -------------- -------------
</TABLE>
The following table provides a summary of notes payable and debt obligations
broken out annually:

Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
Year Ending          MCI         Shareholder                Convertible      Preferred
December 31       Note Payable  Notes Payable  Titan Note   Debtentures        Stock          Total
---------------  -------------- ------------- ------------- -------------  ---------------  -------------
<C>                 <C>           <C>           <C>             <C>           <C>             <C>
2004                3,681,939     1,440,005     1,200,000       851,915       2,100,000       9,273,859
2005                        -             -             -             -       2,100,000       3,295,209
2006                        -             -             -             -       2,100,000       2,100,000
2007                        -             -             -             -       2,100,000       2,100,000
2008                        -             -             -             -       2,100,000       2,100,000
>2009                       -             -             -             -       5,360,000       4,925,000
                 -------------- ------------- ------------- -------------  --------------- ---------------
Total               3,681,939     1,440,005     1,200,000       851,915      15,860,000      23,033,859
                 ============== ============= ============= =============  =============== ===============
</TABLE>
(6) Restructuring Charges

GlobalNet recorded a restructuring charge of $1,113,112 for the year ended
December 31, 2002, which was increased by $987 for the twelve months ended
December 31, 2003. Approximately $279,000 of the restructuring charge is related
to the severance payment for certain employees terminated in July 2002 as part
of a restructuring plan to reduce headcount and operating expenses.

Approximately $673,000 of the restructuring charge is related to lease
agreements for circuits that GlobalNet discontinued in July 2002 as a result of
GlobalNet's strategy to consolidate traffic in certain facilities in order to
realize synergies and reduce operating costs. The charge represents the future
payments for the remaining terms of those lease agreements.

                                      F-17
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

Approximately $61,000 of the restructuring charge corresponds to the cost of
closing GlobalNet's office in Marietta, Georgia. The charge includes the future
lease payments for the remaining term of the lease agreement and the moving
expenses.

The remaining $101,000 of the restructuring charge is related to GlobalNet's
headquarters in Lombard, Illinois. GlobalNet recorded a charge of 50% of the
lease cost of its offices in Lombard for the remaining term of the lease
agreement as a result of the current underutilization of the office space.

The table below shows the expenses applied against the restructuring reserve for
the twelve months ended December 31, 2003:
<TABLE>
<CAPTION>
                                                                                             Balance
                                                    Balance of                                 of
                                                   Restructuring          Expenses        Restructuring
                                                      Reserve             applied            Reserve
                                                    December 31,          against           December 31,
                                                       2002               reserve              2003
                                                  -------------------  -----------------  -----------------
<S>                                                         <C>               <C>                 <C>
Unused circuit leases                                       441,933           (314,385)           127,548
Closing costs of Marietta office                             13,554            (13,554)                 -
Underutilization cost of Lombard office                      71,335            (61,215)            10,120
                                                  -------------------  -----------------  -----------------
                                                          $ 526,822         $ (389,154)         $ 137,668
                                                  ===================  =================  =================
</TABLE>
The components of the restructuring charge and the expenses applied against the
reserve for the period from March 22, 2002 through December 31, 2002 were as
follows:

Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>

                                                           Charges               Costs                Ending
                                                          recorded              applied               balance
                                                         at March 22,           against             December 31,
                                                            2002                reserve                 2002
                                                      -------------------   -------------------   -------------------
<S>                                                   <C>                           <C>                   <C>
Severance payments                                    $       278,609               278,609                    --
Unused circuit leases                                         681,311               239,378               441,933
Closing costs of Marietta office                               52,000                38,446                13,554
Under utilization cost of Lombard office                      101,192                29,857                71,335
                                                      -------------------   -------------------   -------------------
                                                      $     1,113,112               586,290               526,822
                                                      ===================   ===================   ===================
</TABLE>
(7) Income Taxes

As a result of the change from an LLC to a C-corporation, the Company recorded
an initial net deferred income tax asset of $5,825,052 to reflect the
establishment of deferred tax assets and liabilities. However, due to the lack
of certainty of recovery, a full valuation allowance was recorded against the
initial and subsequent net deferred income taxes.

The Company has Federal net operating loss carryforwards approximating
$20,055,000, for the year ended December 31, 2003. Such losses are available to
offset future taxable income and expire from 2020 to 2023. In addition, changes
in the Company's ownership

                                      F-18
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

are deemed to have occurred, there is an annual limitation on the amount of
carryforwards which could be utilized. At this time, management has concluded
that it is not likely the Company will realize the benefits of these deductible
differences as there can be no assurance that the Company will generate the
necessary taxable income in any future periods.

The tax effects of temporary difference that give rise to significant portions
of deferred tax assets and liabilities at December 31, 2003 are as follows:

<TABLE>
<CAPTION>

                                                                         December 31,          December 31,
                                                                           2003                   2002
                                                                      ---------------      --------------
<S>                                                                   <C>                     <C>
Net operating loss carryforward ......................                $   20,055,000          13,603,440
Depreciation and amortization ........................                      (501,000)          1,496,623
Merger Costs..........................................                           -             1,475,630
Other adjustments  ...................................                           -             1,390,922
                                                                      ---------------      --------------
Net deferred tax asset ...............................                    19,554,000          17,966,617
Valuation allowance ..................................                   (19,554,000)        (17,966,617)
                                                                      ---------------      --------------
                                                                      $          -                   -
                                                                      ===============      ==============
</TABLE>
(8) Property and Equipment

Property and equipment consists of the following:
<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                            -----------------------------------------
                                                                                     2003                 2002
                                                                            -------------------   -------------------
<S>                                                                         <C>                            <C>
Leasehold improvements                                                      $        40,362                40,362
Network equipment under capital leases                                            7,889,964             7,567,767
Furniture and equipment                                                           2,729,381               817,468
                                                                            -------------------   -------------------
                                                                                 10,659,707             8,425,597
Less accumulated depreciation and amortization                                    8,030,760             5,108,456
                                                                            -------------------   -------------------
                 Property and equipment, net                                $     2,628,947             3,317,141
                                                                            ===================   ===================

</TABLE>
Property and equipment are stated at cost. Equipment held under capital leases
is stated at the lower of fair value of the asset or the net present value of
the minimum lease payments at the inception of the lease. Depreciation expense
is calculated using the straight-line method over the estimated useful lives of
the assets which range from three to five years.

In July 2002, it became uncertain whether the Company would be able to recover
the carrying value of its property and equipment as a result of our former
Parent's decision to exit the telecommunications business on July 11, 2002 and
the current depressed market values for telecommunications assets. As a result,
the Company determined that its property and equipment were impaired and
recorded a $4,145,564 write-off, which represented 50% of the net book value of
those assets as of June 29, 2002. Depreciation for the years ended December 31,
2003, and 2002 was $1,921,547, and $3,126,571, respectively. Accumulated
depreciation of assets recorded under capital leases was $5,951,348 and
$4,654,638 at December 31, 2003 and 2002, respectively.

(9) Intangible Assets

In connection with the acquisition in August 2003, the Company identified
approximately $4.2 million of intangible assets and approximately $38.3 million
of goodwill, based on the results of an independent valuation. The $4.2 million
of intangible assets

                                      F-19
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

consists of $3.3 million attributed to customer list with an estimated life of 5
years and $0.9 million was attributed to acquired technology with an estimated
useful life of 6 years. The Company recorded $218,267 of accumulated
depreciation for the customer list of 2003 and $52,056 of accumulated
depreciation for the acquired technology of 2003

The amortization schedule is as follows:

Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
                                    Amortization Expense for the Year Ended December 31,

                           2002         2003      2004      2005      2006      2007      2008
                      |----Actual----||---------------------    Future    --------------------|

<S>                        <C>             <C>      <C>        <C>     <C>        <C>      <C>
Other Assets               44,624            -         -         -         -         -         -

Customer Lists                  -      218,267   654,800   654,800   654,800   654,800   654,800

Acquired Technology             -       52,056   156,167   156,167   156,167   156,167   156,167
                           ------       ------   -------   -------   -------   -------   -------

                           44,624      270,323   810,967   810,967   810,967   810,967   810,967
</TABLE>
(10) MCI Payment Agreement

On August 27, 2003, GlobalNet made a $60 million revenue commitment to MCI for a
period of two years commencing September 1, 2003 (the "Revenue Commitment"). The
Revenue Commitment contains a price protection mechanism that allows GlobalNet
to terminate the Revenue Commitment by paying off the outstanding balance of the
notes payable, $3,681,939 as of December 31, 2003, in the event that MCI's sell
rates to GlobalNet become less competitive than the sell rates available from
other telecom providers.

Total Minimum payments due under MCI Revenue Commitment

2004                                                        $  30,000,000
2005                                                           20,000,000
                                                         -------------------
                                                            $  50,000,000
                                                         ===================
--------------------------------------------------------------------------------

In the event that the Company receives more competitive rates as a whole of at
least 2% of the prior months invoiced total for services provided, MCI has the
right to match those terms. If MCI elects not to match the terms, the Company
may terminate the agreement. The Company may be required to pay a termination
fee in the event its cumulative prior traffic is less than $2,500,000 times the
number of cumulative full and partial months. To date the Company has no usage
deficiency under the agreement.

Subsequent to the end of the year, the Company entered negotiations with MCI to
settle past due balances due them that are recorded as accounts payable. On
March 11, the Company entered into a temporary agreement that requires a
$1,000,000 minimum payment per week through March 26, 2004 for current traffic
and required the Company to provide MCI with a new payment proposal by March 29,
2004 to settle the past due balances due MCI. The Company's first proposal was
not accepted. While the Company is preparing a new proposal, the Company and MCI
have extended through July 9, 2004, the temporary arrangement that requires a
$1,000,000 minimum payment per week for current traffic. There are no assurances
that an agreement can be reached with MCI and any service disruption or
termination could cause serious harm to the Company, its revenues and ability to
continue operations. However, because of the uncertainty with MCI, the Company
is simultaneously working to add redundant capacities to terminate service to in
the case of a disruption or termination.

During 2002, the Company entered into a payment arrangement with MCI for payment
of its past due balance of $6,083,414. The payment arrangement called for
monthly payments of $250,000 with a balloon payment of $3,633,414 due on March
31, 2003. There was no interest charged or collateral secured. The Company made
payments totaling $2,200,000 during 2002 and paid the balance of $3,883,414
during 2003. F-19

                                      F-20
<PAGE>

                     GLOBALNET CORPORATION AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

(11) Leases and Commitments

The Company leases various office facilities and equipment under operating
leases with remaining terms of up to 5 years. Rent expense under operating
leases was $327,663 and $400,365 and for the years ended December 31, 2003, and
2002, respectively.

The Company has outstanding balances of the refinanced leases amounting to
$2,730,000. After the refinancing, the interest cost on the leases decreased to
11.8% from 22.0%, and the term was extended to 36 months from the 18 months
remaining under the original lease. The Company paid a $100,000 refinancing fee
in connection with the refinancing of these leases, which was expensed as
interest during the year ended December 31, 2001. At December 31, 2003, the
outstanding balance for this lease was $730,096.

In April 2001, the Company entered into an agreement with Cisco Systems Capital
Corporation (Cisco Capital) to finance the purchase of Cisco equipment through
36-month capital leases with interest rates ranging from 4.5% to 5.2% and
secured by all equipment related to the lease. The lease agreement contains
certain covenants. At December 31, 2003, the Company utilized $4,514,158 under
this credit facility, and the Company recorded a lease obligation of $1,862,062.
At December 31, 2003, the Company does not have any additional availability
under this credit facility.

In April 2000, the Company entered into a $10,000,000 credit facility to be used
for capital lease obligations with General Electric Capital Corporation (GE
Capital). The Company entered into 36-month leases with interest rates of 13.2%
and secured by all equipment related to the lease. At December 31, 2003, the
outstanding balance under this credit facility was $129,525.

The Company also maintains various leases with an aggregate outstanding balance
as of December 31, 2003 of $27,462. These leases have monthly payments varying
from $531 to $1,209 and have interest rates ranging from 9.3% to 18.5%.

Future minimum lease payments under capital leases and non-cancelable operating
lease at December 31, 2003 are as follows:
<TABLE>
<CAPTION>
                                                              Operating              Capital
                                                        -------------------   -------------------
<C>                                                     <C>                         <C>
2004                                                    $       375,796             2,830,390
2005                                                            131,722                 6,378
2006                                                             96,300                    --
2007                                                             96,300                    --
2008 and thereafter                                              96,300                    --
                                                        -------------------   -------------------
          Total future minimum lease payments           $       796,418             2,836,768
                                                        ===================

Less amount representing interest (rates ranging
     from 4.5% to 16.9%)                                                               81,386
                                                                              -------------------
          Net present value of minimum lease payments                               2,755,382
Less current portion                                                                2,749,146
                                                                               -------------------
          Long-term portion, net of current portion                            $        6,236
                                                                               ===================
</TABLE>
(12) Related Parties

As part of the acquisition dated August 21, 2003, iDial issued a note to Growth
Enterprise Fund for $500,000. This note was repaid during 4th Quarter 2003.

On January 5, 2004, the Company secured a contract with Global Telesat Corp., a
wholly owned subsidiary of Growth Enterprise Fund, for worldwide termination of
voice and data mobile satellite telecommunications traffic originating in Iraq.
In conjunction with securing this contract, the Company issued 300,000,000
shares of common stock to consultants valued at $17,700,000. (See note 18)

On February, 2, 2004, the Company hired the wife of a director as an
administrative assistant.

On February 9, 2004, a director received $3,334 as compensation for his service
as a member of the Company's board of directors for January and February 2004.
As a member of the Board of Directors, the annual compensation is $20,000.

                                      F-21
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(13) Stockholders' Equity and Convertible Note

                               Equity Transactions
2002

Conversion of the Note

As of January and February 2002, a note holder delivered three conversion
notices for the conversion of a $2,000,000 Note into 4,888,263 shares of Company
common stock at an average conversion price of $0.41 per share. The conversion
notices were accepted by the Company in accordance with the terms of the
convertible note and the corresponding shares of the Company common stock were
delivered to the note holder.

As a result of the full conversion of the Note into Company common stock, the
Company expensed the remaining unamortized balance of $1,263,818 related to debt
discount related to the Note's beneficial conversion feature, the debt discount
related to the incentive warrants issued, the debt discount related to investor
fees, and the debt issuance costs.

2003

iDial Acquisition

On May 20, 2003, GEF entered into a Stock Purchase Agreement with Titan to
acquire 100% of the common stock of GlobalNet. Subsequently, on August 21, 2003,
iDial entered into an Assignment and Assumption Agreement with GEF and Titan,
whereby GEF transferred to iDial all its rights and obligations under the Stock
Purchase Agreement in exchange for 60% of iDial's outstanding common stock
(after taking into consideration the potential dilution from certain convertible
debentures), 100,000 shares of Series A Preferred Stock. Refer to Note (4) for
further information.

The acquisition of GlobalNet by iDial has been reflected under the purchase
method of accounting in accordance with SFAS No. 141, with GlobalNet identified
as the accounting acquiror. The shareholder of GlobalNet prior to the
acquisition, will beneficially own 60% of the voting interest in iDial after the
transaction and, as a result of the change in control of iDial, the transaction
has been accounted for as a reverse acquisition of iDial by GlobalNet.

2004

On December 31, 2003, a majority of the Company's stockholders voted by written
consent in lieu of a special meeting of stockholders to amend the Company's
Certificate of Incorporation, as amended, to increase the number of authorized
shares of common stock of the Company from 1,000,000,000 shares to
20,000,000,000. The Company filed the amendment to the Certificate of
Incorporation which became effective April 21, 2004.

                            Stock-based Compensation

GlobalNet Inc. Restricted Common Stock

Prior to 2002, the Company had unamortized stock compensation of $4,707,012 for
the issuance of restricted common stock.

GlobalNet recorded $5,310,627 of stock-based compensation for the year ended
December 31, 2002 related to issuances of restricted common stock. At December
31, 2002, there were no restricted common shares outstanding.

iDial Networks Restricted Common Stock

In conjunction with the reverse acquisition, the Company issued 100,000,000
shares of restricted common stock as a partial payment to Growth Enterprise
Fund. Subsequent to year end, the Company issued 4,595,814,835 shares of
restricted common stock as a final payment to Growth Enterprise Fund. F-21

                                      F-22
<PAGE>

                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

Subsequent to year end, the Company issued 8,951,581 shares of restricted common
stock as a payment toward the convertible debenture.

Subsequent to year end, the Company issued 900,002,500 shares of restricted
common stock for the convertible debentures.

Warrants

On July 6, 2001, in conjunction with the issuance convertible notes payable,
executed on that date, the Company issued warrants for the purchase of the
Company's common stock. Warrants issued vest on the date of execution of the
agreement. A total of 166,666 shares of common stock are authorized for issuance
with an exercise price of $.06 per share and matures in July 2006. The fair
value of the warrants was estimated to be approximately $12,000 on the date of
grant utilizing the Black-Scholes model with the following assumptions: expected
life of 5 years, 374.77% volatility, risk-free rate of 5.5% and a 0.00% dividend
yield.

In February and May 2003, in conjunction with the issuance of the secured
convertible debentures, the Company issued warrants to acquire an additional
3,750,000 shares of our common stock at an exercise price of $.0016 per share.
2,250,000 warrants terminate in February 2008 and 1,500,000 warrants terminate
in May 2008. The fair values of the warrants were estimated to be approximately
$29,186 and $11,472 on the dates of grant utilizing the Black-Scholes model with
the following assumptions: expected life of 5 years, 223.61% volatility,
risk-free rate of 4.5% and a 0.00% dividend yield.

The following table presents the activity for warrants outstanding:

                                                Weighted             Weighted
                                                Average              Average
                                                Number of            Exercise
                                                Warrants              Price
                                             ---------------       -------------

Outstanding - December 31, 2001                  1,784,764           $   0.9600
      Issued                                             -                    -
      Converted into former Parent options      (1,784,764)              0.9600
      Forfeited/canceled                                 -                    -
      Exercised                                          -                    -
                                             ---------------       -------------

Outstanding - December 31, 2002                          -                    -
      Inherited as part of recapitalization      3,916,666               0.0041
      Forfeited/canceled                                 -                    -
      Exercised                                          -                    -
                                             ---------------       -------------
 Outstanding - December 31, 2003                 3,916,666           $   0.0041
                                             ===============       =============

All of the outstanding warrants are exercisable and have a weighted average
remaining contractual life of 4.14 years.

Stock Options

The following table presents the activity for options outstanding:

                                                Weighted             Weighted
                                                Average              Average
                                                Number of            Exercise
                                                Options              Price
                                             ---------------       -------------

Outstanding - December 31, 2001                  1,856,000           $   8.2200
      Issued                                             -                    -
      Converted into former Parent options        (261,000)               .6700
      Forfeited/canceled                         1,595,000               9.4600
      Exercised                                          -                    -
                                             ---------------       -------------
Outstanding - December 31, 2002                          -                    -
                                             ===============       =============

There was no option activity during 2003 and there were no options outstanding
as of December 31, 2003.

                                      F-23
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

Registration Rights

As stated in the notes payable section above, all of our convertible debentures
and one note payable have registration rights. Under the terms of the
registration rights, the Company may be considered in default on such debts if a
registration is not effective by a certain date and may incur penalties or
increases in interest rates as a result.

Specifically, the Company has an outstanding note payable that required an
effective registration on March 31, 2004. The Company was unable to meet the
registration by March 31, 2004 and working on an extension of time with the
debtor to cure the default. Under the default, the debtor could choose to
exercise the legal rights.

The Company also has outstanding convertible debentures that require an
effective registration statement by May 1, 2004. The Company was unable to meet
that deadline of May 1, 2004 and anticipate that the convertible debentures will
go into default. In the event of default, the debentures become due and payable
at the option of the Debtor.

(14) Credit and Business Concentrations

SFAS No. 105, Disclosure of Information about Financial Instruments with
Off-Balance Sheet Risk, requires disclosure of any significant off-balance sheet
and credit risk concentrations. The Company has no significant off-balance-sheet
concentrations such as foreign exchange contracts, option contracts or other
foreign hedging arrangements. The Company maintains the majority of its cash in
one financial institution.

A significant portion of the Company's revenue is concentrated among a few large
customers. The largest customer represented 47.5% and 61.9% of total revenue for
the twelve months ended December 31, 2003 and December 31, 2002, respectively.
The next three largest customers represented 32.6% and 19.2% of total revenue
for the twelve months ended December 31, 2003 and December 31, 2002,
respectively. Accounts receivable from the largest three customers at December
31, 2003 were approximately $2,117,591, net of a reserve for uncollectible
accounts of approximately $705,000.

GlobalNet's primary customer, Global Crossing Ltd. ("Global Crossing"), filed
for protection under Chapter 11 of the United States Bankruptcy Code in January
2002. As of the date of petition, Global Crossing maintained an outstanding
balance due to the Company of $705,000, which has been included in the allowance
for doubtful accounts at December 31, 2003. Subsequent to the bankruptcy filing,
Global Crossing has resumed business with GlobalNet on substantially similar
terms and for similar volumes as prior to the filing.

The Company currently uses one primary wholesale carrier voice and fax
telecommunication services provider. Amounts due to this supplier were
$13,532,374 at December 31, 2003 and the Company's receivable from the supplier
amounted to $26,024. Approximately 60% of the Company's revenues derive from
services provided by this supplier. If the Company does not reach an agreement
with them to pay the outstanding balance, they may terminate their business
relationship with the Company. While the Company is currently searching for an
alternative wholesale carrier voice and fax telecommunication services provider,
any unfavorable change in this primary supplier's payment terms or loss in
primary supplier could have a material adverse effect on the Company's business
and liquidity.

(15) Litigation

The Company is from time to time subject to litigation incidental to its
business. The Company believes that the results of the following asserted and
potential litigation and other potential legal proceedings will not have a
material adverse effect on its business, financial condition, results of
operations, or liquidity of the Company.

The XEX Consulting Company, Inc. - In November 2001, an action was filed against
GlobalNet and others by XEX Consulting Company, Inc. ("XEX"). The Complaint
alleged, among other things, that the defendants engaged in a fraudulent scheme
of manipulating the market for GlobalNet common stock and failed to disclose
certain matters. The plaintiff seeks compensatory damages in the amount of $3
million together with punitive damages. On June 25, 2003, GlobalNet and XEX
reached a settlement agreement, whereby XEX agreed to voluntarily dismiss its
complaint against GlobalNet without prejudice in exchange for no monetary
consideration.

                                      F-24
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

Wholesale Telecom Corporation - In October 2001, GlobalNet filed a complaint
against Wholesale Telecom Corporation ("WTC") in the Circuit Court of the 11th
Judicial Circuit for Dade County (Florida) seeking to recover $536,579 (plus
interest since October 23, 2000) of past-due unpaid amounts for telecom services
provided by GlobalNet. In June 2002, WTC filed a counterclaim alleging
violations of the Communications Act and fraud, and seeking punitive damages in
excess of $1 million. The counterclaim alleges that GlobalNet has "knowingly
issued fraudulent invoices". On December 16, 2003 GlobalNet and WTC agreed to
dismiss all claims and counterclaims in exchange for no monetary consideration.

Manuel Dreyfus - On February 25, 2003, Manuel Dreyfus filed a complaint against
GlobalNet and its former President. The complaint seeks to recover $40,000 of
expenses that the plaintiff claims to have incurred on behalf of Global Telekom
Ventures, Inc. ("GTV"), a company owned by GlobalNet's former President, in 1998
and 1999. GlobalNet has never had an equity interest and/or a commercial
relationship with GTV. The plaintiff also alleges that he had an oral one-year
employment agreement with GlobalNet and that he was verbally granted 100,000
shares of GlobalNet's common stock. The plaintiff alleges that GlobalNet was in
breach of this oral employment agreement when he was terminated in November 2000
and that he is owed 100,000 shares of GlobalNet's common stock. In May 2004, the
Company agreed to a settlement in principle and believes that the settlement
will not have a material effect on it.

Interwest Transfer Co., Inc. - Interwest Transfer Co., Inc. ("Interwest") was
the transfer agent of Rich Earth, a publicly traded shell company acquired by
GlobalNet in a "reverse merger" transaction in May 2000. Interwest is currently
a defendant in the litigation between two former shareholders of Rich Earth over
the ownership of a stock certificate. The litigation was commenced on August
2000. Under the transfer agent agreement between Interwest and Rich Earth,
GlobalNet (as the successor company of Rich Earth) is indemnifying Interwest
from any potential loss (and legal expenses) that could arise from such
litigation. The Company believes that the resolution of this litigation will not
have a material adverse effect on it.

Star Telecommunications, Inc. - On May 15, 2003, an action was commenced in the
United States Bankruptcy Court for the District of Delaware against GlobalNet by
the Liquidating Trustee of the Star Creditors' Liquidating Trust (Star
Creditors' Liquidating Trust). The complaint alleges that GlobalNet received
preferential payments of $754,548 from Star Telecommunications, Inc. ("Star")
within the 90 days prior to Star's Chapter 11 bankruptcy filing on March 13,
2001 and seeks the refund of these payments. On September 9, 2003, GlobalNet
accepted a proposal from Star Creditors' Liquidating Trust to settle this matter
for $15,000 in exchange for a mutual release.

Advanced Tel, Inc. - In January 2003, Advanced Tel, Inc. filed a complaint
against GlobalNet Corporation, f/k/a iDial Networks, Inc., and its wholly owned
subsidiary IDNW, Inc. in the Superior Court of California, County of Orange. The
complaint seeks to recover $125,656 of past due unpaid telecom charges provided
to IDNW, Inc. On March 18, 2004, GlobalNet and Advanced Tel reached a settlement
agreement, whereby Advanced Tel agreed to dismiss its complaint against
GlobalNet with prejudice in exchange for a $45,000 payment by GlobalNet.

Qwest Communications Corporation, Inc. - Qwest filed a complaint against
GlobalNet Corporation f/k/a iDial Networks, Inc. in Arapahoe County District
Court, State of Colorado. The complaint seeks to recover past unpaid telecom
charges provided to Loxley Business Information Technology Co., Ltd., a Thailand
corporation and an entity unrelated to GlobalNet Corporation or any of its
subsidiaries, because of a past mutual relationship with an officer of the
Company. The Company believes that litigation is without merit and simply a case
of mistaken identity. The Company believes that the resolution of this
litigation will not have a material adverse effect on it.

(16) Management's Plans and Intentions for Continuing Operations

The Company has negative working capital at December 31, 2003 and has
experienced negative operating cash flows as well as continuing net losses for
the twelve months ended December 31, 2003 and December 31, 2002. Additionally,
the Company has experienced significant operating losses since its inception.

The Company is also in default on several notes payable. Management is currently
renegotiating or in the process of curing these defaults.

                                      F-25
<PAGE>
                     GLOBALNET CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

Management's focus has been on reducing operating expenses and increasing
revenues from existing customers in order to enhance the internal generation of
cash flows. Management is also exploring different alternatives to address its
short-term and long-term financing needs, including raising equity and debt
financings. There can be no assurances, however, that the Company will be
successful in implementing any of these alternatives.

Management continues to believe that the Company is well suited to take
advantage of the current market opportunities. The Company will continue to
aggressively pursue business in higher-margin geographic regions and monitor
costs.

(17) Geographic and Business Segment Information

The Company has adopted SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information, which establishes standards for reporting
information regarding operating segments in annual financial statements and
requires select information for those segments to be presented in interim
financial reports issued to stockholders. SFAS No. 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in deciding how to
allocate resources and assess performance. The Company's chief decision-maker,
as defined under SFAS No. 131 is the Chief Executive Officer. To date, the
Company has viewed its operations and manages its business as one operating
segment - telecommunication services.

Data relating to the Company's operations by geographic area is set forth below:
<TABLE>
<CAPTION>
                                     United States           Mexico             Other               Total
                                   -----------------   -----------------  -----------------   -----------------
<S>                                    <C>                   <C>                <C>            <C>
Twelve Months Ended Dec. 31, 2003
     Revenues                          $         --          71,474,205         30,739,921     $   102,214,126
Twelve Months Ended Dec. 31, 2002
     Revenues                          $         --          81,666,258         17,310,796     $    98,977,054
At December 31, 2003
     Identifiable assets               $  2,628,947                  --                 --     $     2,628,947
At December 31, 2002
     Identifiable assets               $  3,317,141                  --                 --     $     3,317,141
</TABLE>
The Company's revenues are primarily generated by providing telecommunication
services to Mexico and other Latin America countries on behalf of the Company's
customers. However, all of the tangible assets of the Company are located in the
United States.

(18) Subsequent Events

On January 2, 2004, the Company issued 300,000,000 shares of common stock,
valued at $.059 per share based on the share price at the date of the board
approved the contracts, or $17,700,000, to consultants to help secure certain
mobile satellite contracts. This charge will be expensed during the first
quarter of 2004. Subsequently, the Company announced three initial projects with
Iraq, Libya and Cuba. Both Libya and Cuba are still being evaluated by the DoD
(Department of Defense) and will begin when approval from the DoD is received by
the Company. The Iraqi project is already underway with initial distribution of
Satellite Phones and SIMSs (Subscriber Identity Modules) cards being sent out
within days of this report. The announcement of the successful testing and
launch of the Iraqi project stated that the "Pre-Paid Mobile Satellite System
serves Turkey, and areas to the south and east, including the eastern
Mediterranean, Egypt, Lebanon and Iraq. This project will serve as a template to
carry all the voice traffic from the countries currently in negotiations or
awaiting approval from either the DoD or State Department."

On February 22, 2004, Growth Enterprise Fund, S.A. ("GEF") notified the Company
that GEF was exercising its right to rescind the transactions contemplated by
the Securities Purchase Agreement dated August 22, 2003 entered into among the
Company, GEF, and GlobalNet Systems, Inc. (referred to in Note (4) above). In
consideration of GEF's agreement to hold in abeyance the exercise of its
rescission right, the Company extended the time for GEF to exercise such
rescission right to February 27, 2004. On February 27, 2004, the time for GEF to
exercise its rescission right lapsed without GEF effectively exercising such
right.

                                      F-26
<PAGE>
                      GLOBALNET CORPORATION AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

On March 2, 2004, Growth Enterprise Fund, S.A. ("GEF") notified the Company that
GEF waives any and all defaults by GlobalNet and its subsidiaries under the
terms of the Mandatorily Redeemable Preferred Stock and agrees that unpaid
Preferred Stock dividends accrued to date will be added to the face amount of
the Preferred Stock. As consideration for the waiver, the conversion price was
reduced from $.0074 to $.0016. This reduction for the in the money feature will
create a significant expense, equal to a minimum of $15,860,000, to the
Company's first quarter statement of operations.

On March 2, 2004, N.I.R. Group, LLC (NIR) agreed to reduce its interest on all
the convertible debentures originally totaling $3,000,000 from 12% to 6% as well
as grant GlobalNet additional time to secure approval of the SEC for the pending
Information Statement increasing the authorized capital and to file and secure
the effectiveness of a registration statement for the N.I.R. investments. With
the convertible debenture in default, NIR agreed to waive any penalties
associated with the default. The additional time granted for securing the
effectiveness of a registration statement expired on May 1, 2004. The Company
was unable to meet that deadline and the N.I.R. investments are in default
again. In the event of default, the debt becomes immediately due at the option
of the NIR and thus is shown as a current liability.

The Company is currently in negotiation with Titan Corporation to resolve a
default on the balloon payment that was due on March 31, 2004. Under the terms
of the agreement with Titan, Titan has the right to exercise a guarantee,
whereby the Parent pledged a security interest in the wholly owned subsidiary of
GlobalNet International LLC.

The Company is currently in negotiations with MCI WorldCom Network Services,
Inc. ("MCI") to resolve funding alternatives for the Company's outstanding
balance due to MCI. At December 31, 2003, the Company had an outstanding balance
due and owing to MCI of $13,532,374. MCI is the Company's primary wholesale
carrier voice and fax telecommunication services provider. Approximately 60% of
the Company's revenues derive from services provided by MCI. If the Company does
not reach an agreement with MCI to pay the outstanding balance, MCI may
terminate its business relationship with the Company. While the Company is
currently searching for an alternative wholesale carrier voice and fax
telecommunication services provider, any unfavorable change in MCI's payment
terms or a change in primary supplier could have a material adverse effect on
the Company's business and liquidity.

On April 21, 2004, our board of directors appointed Oscar de la Guardia as our
Executive Vice President and General Counsel. Mr. de la Guardia was also
appointed as a member of our board of directors to serve along with Mr. Wood and
David Halpern.

On April 30, 2004, the Company issued 4,595,814,835 shares of restricted common
stock as completion of payment of the iDial Networks, Inc. and GlobalNet Inc.
merger in August 2003. These shares were issued to Growth Enterprise Fund as
consideration for its 60% ownership pursuant to the merger. Mr. Mark Wood
received 658,736,250 as conversion of a note payable of $1,053,978. Mr. Wood is
an Officer and Director of the Company. Callflow Limited and Daniyel Erdberg
received 167,516,250 and 73,750,000 shares of restricted common stock
respectively for conversion of notes payable of $268,026 and $118,000. Each of
the conversions was set at $.0016 per share.

In May 2004, Qwest asserted a claim and filed a complaint against GlobalNet
Corporation f/k/a iDial Networks, Inc. in Arapahoe County District Court, State
of Colorado. The complaint seeks to recover past unpaid telecom charges provided
to Loxley Business Information Technology Co., Ltd., a Thailand corporation and
an entity unrelated to GlobalNet Corporation or any of its subsidiaries, because
of a past mutual relationship with an officer of the Company. The Company
believes that litigation is without merit and simply a case of mistaken
identity. The Company believes that the resolution of this litigation will not
have a material adverse effect on it.

On May 11, 2004, the Company had an outstanding balance of $1,850,000 due to
Cisco Corporation. Cisco is secured with assets under a lease agreement of the
subsidiary GlobalNet, Inc. If the Company fails to pay our liabilities due to
Cisco, Cisco may enforce all available remedies and seize assets to satisfy any
amounts owed, which could have an effect on operations. The Company has already
identified alternatives to this equipment to minimize this effect. The Company
is currently working with Cisco to cure all defaults, however there are no
assurances that a settlement can be reached.

                                      F-27