Edgar Filing: GLOBAL TECHNOLOGIES LTD

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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended June 30, 2001.

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

For the Transition Period from _________ to _________.

COMMISSION FILE NO. 0-25668

GLOBAL TECHNOLOGIES, LTD.
(Name of Small Business Issuer in Its Charter)

DELAWARE 86-0970492
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)

1811 CHESTNUT STREET, SUITE 120
PHILADELPHIA, PENNSYLVANIA 19103
(Address of Principal Executive Offices)

(215) 972-8191
(Issuer's Telephone Number, Including Area Code)

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

Securities registered under Section 12(g) of the Exchange Act:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Class A Common Stock, $0.01 par value per share None

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-K 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 fiscal year ended June 30, 2001 were
$290,295.

The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the Registrant on November 15, 2001 was approximately
$1,704,000, based on the closing sale price of the Class A Common Stock on such
date on the Over-The-Counter Bulletin Board.

The number of shares outstanding of the Registrant's Class A Common Stock,
$0.01 par value, on November 15, 2001 was 14,196,682.

Transitional Small Business Disclosure Format: Yes [ ] No [X]

DOCUMENTS INCORPORATED BY REFERENCE
None.

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GLOBAL TECHNOLOGIES, LTD.

ANNUAL REPORT ON FORM 10-KSB

TABLE OF CONTENTS

Page
----

PART I.........................................................................1
ITEM 1 -- DESCRIPTION OF BUSINESS...........................................1
ITEM 2 -- DESCRIPTION OF PROPERTY...........................................9
ITEM 3 -- LEGAL PROCEEDINGS.................................................9
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............12

PART II.......................................................................12
ITEM 5 -- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........12
ITEM 6 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........13
ITEM 7 -- FINANCIAL STATEMENTS.............................................24
ITEM 8 -- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE............................24

PART III......................................................................24
ITEM 9 -- DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT..............24
ITEM 10 -- EXECUTIVE COMPENSATION...........................................26
ITEM 11 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...29
ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................30
ITEM 13 -- EXHIBITS AND REPORTS ON FORM 8-K.................................32

SIGNATURES....................................................................40

PART I

ITEM 1 -- DESCRIPTION OF BUSINESS

INTRODUCTION

SUMMARY OF OUR CURRENT OPERATIONS

In the past, Global Technologies, Ltd. was engaged in developing, managing
and commercializing emerging growth companies primarily in the technology and
telecommunications sectors. As a result of difficult market conditions and a
determination by management to refocus operations, Global is concentrating on
its investment in entertainment and information systems for the passenger rail
market. This business is carried on through Global's United Kingdom subsidiary,
TNCi UK Limited, a company incorporated under the laws of England and Wales.
Global currently owns 60% of the outstanding equity of TNCi UK.

TNCi UK has developed a broadband, interactive entertainment and
information system for the passenger rail market. The system is designed to
provide rail passengers with Internet and e-mail access, with such customizable
services as on-demand films, videos and music, video games, reservation
information, train schedules and other Internet-based content and commerce
applications. TNCi UK is currently marketing the system to major rail operators
in the United Kingdom and continental Europe.

In addition to the TNCi UK investment, Global owns lottery equipment
consisting of lottery terminals, a network operating center and radio pads that
allow the terminals to communicate with the operating center remotely. Global
consummated the sale of these assets to a third party on November 3, 2001.
Global received $1,455,000 for these assets.

Global also owns approximately 62.5% of the equity of The Network
Connection, Inc. ("TNCi") and 476,300 shares of common stock of U.S. Wireless
Corporation, both of which were formerly publicly traded, Nasdaq-listed
companies that are now in Chapter 11 proceedings.

The Company has suffered losses aggregrating $72.4 million for the two year
period ended June 30, 2001 and has a stockholders' deficiency of $15.7 million
and a working capital deficiency of $8.4 million at June 30, 2001 that raise
substantial doubt about its ability to continue as a going concern.

Since April 2001, and through the date of the sale of certain of the
Company's lottery equipment in November, 2001, as discussed in this document,
the Company's cash requirements, including the cash requirements of TNCi UK,
have been met through advances from the Company's Chief Executive Officer, Mr.
Irwin L. Gross. Through that date, Mr. Gross had advanced approximately
$850,000. The Company received approximately $1.4 million from the sale of the
lottery equipment in November 2001. The Company repaid Mr. Gross approximately
$767,000 from the lottery equipment proceeds. At November 15, 2001 the Company
has cash of approximately $400,000.

The Company believes it has sufficient cash to fund its requirements and
the cash requirements of TNCi UK through January 2002. We plan to sell a portion
of or borrow against our investment in the interactive entertainment and
information system for the passenger rail market to cover our financial
obligations and to continue to execute on our business strategy. We provide no
assurance that we will be able to sell a portion of or borrow against our assets
at planned times or for prices necessary to meet our financial obligations or to
take advantage of investment opportunities consistent with our business
strategy.

OUR HISTORY

Global Technologies, Ltd. had previously been a technology incubator
investing in, developing and managing emerging growth companies in the
networking solutions, interactive information and entertainment systems,
e-commerce, telecommunications and gaming industries.

Global is the successor by merger to Interactive Flight Technologies, Inc.
Prior to the merger, Interactive Flight was engaged in the business of
developing, assembling, installing and operating computer-based, in-flight
entertainment networks in aircraft and installed these networks on 19 Swissair
aircraft, two Debonair Airlines aircraft and three Alitalia aircraft.

On September 2, 1998, Swissair Flight 111 crashed near Halifax, Nova
Scotia. To date, the causes of the accident have not been determined. An
Interactive Flight entertainment network had been installed on the aircraft that
crashed. The crash has led to many lawsuits in which we, together with Swissair,

Boeing and DuPont, among others, have been named as defendants. In addition,
TNCi is seeking payment by Swissair of $6,773,906 for sums owed by Swissair and
SR Technics to us for equipment and warranty contracts. We have also asserted
claims for business torts arising from the unjustified deactivation of the
entertainment network systems following the crash of Swissair Flight 111 in this
action.

In September 1998, a new Board of Directors was elected to lead the
company. The new Board instated a new management team, which has pursued a
strategy of forming strategic alliances with other entities in the travel and
entertainment business to maximize the potential of the entertainment network
technology and began to evaluate other technology-related business
opportunities. Through a series of acquisitions, investments and divestitures,
the Company's new leadership reorganized the company as a technology incubator
with interests in emerging growth companies in the networking solutions,
interactive information and entertainment systems, e-commerce,
telecommunications and gaming industries.

Through its majority owned subsidiary, TNCi, the Company previously
provided broadband entertainment, information and e-commerce systems for the
"away-from-home" marketplace (e.g., hotels, cruise ships, long-haul passenger
trains and schools).

On March 24, 2001, TNCi filed for protection under Chapter 11 of the
Bankruptcy Code. TNCi opted for Chapter 11 (as opposed to liquidation under
Chapter 7) because of the potential during the reorganization process to realize
value from or increase the value of certain of TNCi's remaining assets, namely
the Swissair lawsuit and its 40% interest in TNCi UK. There is no assurance,
however, that any such value will be realized or increased, or, that if
realized, such value would be to an extent sufficient for TNCi to emerge from
Chapter 11. In addition, Swissair has recently filed for bankruptcy protection.

Also, the Company had previously owned an operating center and network of
approximately 2,000 installed remote terminals through which GTL Management
Limited, one of our wholly owned United Kingdom subsidiaries, operated lotteries
on behalf of charities in Great Britain. In October 2000, the Company began to
shut down its lottery network, and subsequently de-installed and warehoused the
terminals and system while seeking a purchaser. The Company has since sold or
otherwise disposed of most of the terminals and has recorded a loss on
disposition and writedown of equipment of approximately $7.4 million.

TNCI UK LIMITED

GENERAL

Our subsidiary, TNCi UK Limited, a company incorporated under the laws of
England and Wales, believes that it has identified an emerging opportunity in
the passenger train market. To pursue this opportunity, TNCi UK has developed an
interactive entertainment and information system for individual at-seat
installations on passenger trains. TNCi UK is currently marketing the system to
train operating companies in the United Kingdom and continental European
countries. Longer term, TNCi UK plans to market the systems in Asia and,
ultimately, in the United States, as well. We have recruited a management team
consisting of rail industry personnel with experience in business development,
finance and engineering, led by a former senior executive from the international
train manufacturer ALSTOM, to develop and deliver TNCi UK's system to the rail
market.

The system that TNCi UK has developed is a video-server-based system that
combines broadband delivery technologies and interactive content to give train
travelers access to entertainment, productivity tools and information during
their journeys. The system is digital and utilizes a touch-screen graphical user
interface, which we believe lends to ease of use. The system is designed to
provide access to content and services such as on-demand feature films, news,
business information, sports, weather, digital newspapers, interactive video
games, Internet connectivity, email, public address announcements, and train
schedules and timetables. TNCi UK has applied for a patent in the United Kingdom
relating to this system and anticipates applying for further patents and
copyrights in applicable countries. TNCi UK believes that its turnkey content
and systems package can offer train operator partners a means to satisfy
increasing passenger expectations and enhance passengers' overall train travel
experience. At the same time, TNCi UK believes that the system offers train
operators opportunities for revenue generation and operating efficiencies
through advertising, e-commerce and other value-added services.

On March 12, 2001, Global and TNCi UK announced the formation of a
strategic alliance with General Dynamics Interactive Corporation, an affiliate
of General Dynamics Corporation, a multi-billion dollar worldwide leader in
systems integration and defense products, to provide engineering and
manufacturing expertise in our pursuit of the rail market opportunity. In
accordance with this alliance, TNCi UK will provide the concept, design
specifications and marketing resources to the project, and General Dynamics will
lend its expertise in systems integration, deployment and support for mobile
communications platforms to provide the hardware and software for the core of
the system. In addition, General Dynamics is to provide service support for this
equipment to TNCi UK during the operational life of the equipment.

TNCi UK has also entered into an alliance with COM DEV Wireless UK, a
wholly owned subsidiary of COM DEV International Ltd. Under the agreement, COM
DEV is to provide its connectivity expertise to TNCi UK's passenger rail system.
COM DEV is a designer, manufacturer and distributor of wireless infrastructure.
COM DEV's M/ERGY(TM) system is designed to provide broadband radio connectivity
for automatic content update to trains in service. It is expected that the
M/ERGY system will initially allow for automatic updating at stations and
maintenance depots and eventually provide broadband high-speed connectivity on
trains while traveling.

TNCi UK is currently negotiating relationships with other content and
technology providers that it believes can add value to the system. We anticipate
that these alliances will allow TNCi UK to offer state-of-the-art technology,
tailored specifically for the emerging rail market, and allow TNCi UK to support
multiple contracts. We believe that the combination of TNCi UK's existing
technical and managerial experience, together with the support and resources of
strategic partners, will position TNCi UK to capture a share of what it believes
to be a developing market for passenger rail-based interactive entertainment and
information systems. There can be no assurance that TNCi UK will be successful
in entering into any further alliances beyond the ones with General Dynamics and
COM DEV relating to the development and maintenance of TNCi UK's systems or,
that if any additional affiliations are entered into, they would be on terms
favorable to us.

TNCi UK has developed relationships with and submitted preliminary pricing
proposals to several of the world's largest train operators in the United
Kingdom and other European countries for new and retrofit installations of TNCi
UK's passenger rail system. Advanced discussions with some of these train
operators are currently in progress. TNCi UK's proposals to potential customers
have been designed so that, if accepted, we anticipate that revenues would be
generated from equipment sales, maintenance support, and content management and
delivery, including revenue sharing arrangements with respect to e-commerce,
advertising and marketing data revenue generated by the system. While we believe
that these are attractive opportunities, there is no assurance that TNCi UK will
be successful in obtaining a contract with any of these train operators, or with
any other train operator, for the sale, installation and maintenance of TNCi
UK's systems, or, that if any contracts are obtained, they would generate
revenues or be profitable. To date, no proposals have been accepted and TNCi UK
has not generated any material revenues.

THE MARKET

While most major European rail markets have experienced only moderate
growth over the past five years, we believe that ridership and revenues in these
markets are poised to grow at an increasing rate in the coming decade.
Increasingly congested airways and roadways have led governments to investigate
ways to incentivize increased inter-city railway travel. While rail travel has
always been an important means of transportation in the United Kingdom and
Europe, government authorities, such as the United Kingdom's Strategic Railway
Authority, are working to further encourage rail travel by increasing the
availability and quality of high-speed train service. In addition to government
initiatives and railway improvements, we expect factors such as rising
automotive fuel costs and congested roads to be additional drivers of this
growth. Furthermore, we expect inter-city trains to continue to achieve higher
top speeds, allowing rail travel to better compete with airline travel in many
cases.

As a result of government efforts and the other previously mentioned market
conditions, passenger rail growth has begun to increase in our United Kingdom
and continental European target markets. According to the United Kingdom's
Strategic Railway Authority, last year the United Kingdom's railways carried
more passengers than at any time since WWII. In addition, industry experts
believe that Eurostar's operations between London and Paris through the
Eurotunnel or "Chunnel" (the tunnel train route under the English Channel) have
taken a share of market away from the airlines for passengers traveling that
route. In France, there is now only limited internal air service as TGV's (the
French high-speed, inter-city trains) have replaced them.

In response to industry perception that inter-city passenger rail markets
in both the United Kingdom and continental Europe may increase substantially
over the next decade and competitive pressures resulting from privatization,
train operating companies are striving to offer improved services in an attempt
to maintain and increase their respective market shares. It seems that these
train operating companies, perhaps learning from adjacent industries (e.g.
airlines, hotels), have begun to consider the potential for entertainment
systems to enhance the passengers' travel experiences, provide competitive
differentiation and generate new sources of revenue.

As a result of these developments, we believe that there is an incentivized
international market for providers of interactive entertainment and information
systems for the rail industry. In the United Kingdom and continental Europe,
where long-haul passenger rail travel is already highly developed, there are
currently fifteen operators of long haul passenger trains, representing over 500
million intercity passenger journeys, or more than 485,000 seats. We believe
that the Asian (consisting primarily of Japan and Hong Kong) and Australian
markets are also attractive with a total of more than 300,000 seats. Finally, we
are hopeful that the United States market, where we believe that faster trains
will be introduced and congestion on the roadways and airways will increase,
will prove to be attractive in the long-term.

EUROPE TOTAL HIGH-SPEED TRAIN SEATS*
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United Kingdom 119,536
International (Eurostar) 26,810
France 193,019
Germany 96,688
Italy 50,790
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TOTAL 486,843
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ASIA AND AUSTRALIA
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Japan 288,336
Australia 21,566
Hong Kong 7,715
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TOTAL 317,617
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* AS OF JANUARY, 2001. COMPILED FROM JANE'S ALL THE WORLD'S RAILWAYS WEB SITE
STATISTICS

TNCi UK has decided to focus initial marketing and sales efforts in the
United Kingdom and on certain select continental European operators, based on
the favorable market dynamics and TNCi UK management's experience in these rail
environments. A leader in the global railways industry, in 1993, the United
Kingdom was one of the first industrialized countries to initiate a rail
privatization program. Under the direction of the United Kingdom's Strategic
Railway Authority, significant investments have been made in improving rail
infrastructure and modernizing the trains themselves through the refurbishment
of existing vehicles and the purchase of new ones.

We believe train operating companies in the United Kingdom are further
along than those in other markets in understanding the competitive dynamics
inherent in a privatized system. The train operating companies that now run the
various train lines throughout the United Kingdom have begun to face increased
competitive pressures to enhance passenger services in order to sustain current
passenger demand, and to achieve projected passenger growth rates going forward.
In this competitive environment, the train operating companies have considered
new ways of enhancing the passenger experience and maximizing per-passenger
revenues. In evaluating various alternative revenue generation opportunities, it
is our understanding that the train operating companies have expressed
significant interest in offering on-board passenger entertainment systems. TNCi

UK is aware that a number of train operating companies are now considering
at-seat passenger systems as a means of meeting the challenges of satisfying
present passengers and enticing new ones. In addition, we understand that still
other train operating companies have committed to delivering such systems as
part of their renewed franchising agreements with the British government's
Strategic Rail Authority.

While TNCi UK has begun preliminary discussions with train operating
companies outside of the United Kingdom market, it does not anticipate entering
additional markets until it has adequately penetrated the United Kingdom market.

THE SYSTEM

TNCi UK has substantially developed an interactive entertainment and
information system exclusively for passenger trains. Certain salient points
regarding the system's technology are as follows:

* It is all digital and video-server-based;
* It combines broadband delivery technologies and interactive content;
* It utilizes a touch-screen graphical user interface, which management
believe lends to ease of use;
* It is designed to provide access to content and services such as
on-demand feature films, news, business information, sports, weather,
digital newspapers, interactive video games, Internet connectivity,
email, public address announcements, and train schedules and
timetables;
* TNCi UK has applied for a patent in the United Kingdom relating to the
system and anticipates applying for further patents and copyrights in
applicable countries; and
* It is intended to be available for both new and retrofit train
installations.

TNCi UK's goal is to provide a product that will meet the needs of
inter-city train operators who desire a total solution consisting of a bundled
package of equipment, content and services customized to meet the expectations
of both the passenger/end-users and the train operators themselves. The
following equipment and service elements are included in the turnkey offering:

* Supply of original equipment for both seat-back and table-top
mounting;
* Integration and installation into new or existing passenger vehicle
environments;
* Achievement of the necessary safety certifications;
* Provision of appropriate content and automated updating;
* Provision and management of advertising and revenues; and
* Complete life cycle maintenance support.

We believe that TNCi UK's system can meet train operators' current
expectations, and that its inherent structural flexibility should enable the
system to accommodate future demands and technology advances as they arise. In
addition, the system'S structural flexibility permits customization that
reflects the specific needs of train operators, their particular trains, and
their passengers. This customization can take the form of:

* Architectural/design differences adjusted to accommodate various train
configurations, vehicle styles, as well as functionality needs for
both new and retro-fit vehicles;
* Content selected on the basis of train operator needs and passenger
demographics which may include video, audio, e-commerce, games, news,
information and passenger services such as e-ticketing, seat
reservations, concession sales, communications and passenger surveys;
and
* At-Seat System Interface (graphical user interface)
customized/personalized to reflect the branding of the train operator
and the needs or interests of the passengers.

In designing the system, TNCi UK has recognized that the content and
services offered on the system are some of the primary drivers behind a
passenger's decision to use the system. With the goal of providing compelling,
usage-stimulating content selection, TNCi UK is seeking to develop strategic
relationships with content developers and aggregators to deliver a varied menu

of choices to passengers. Through a variety of relationships, TNCi UK hopes to
offer general, local interest and country-specific content such as destination
and region/demographic-specific videos. To date, TNCi UK has not entered into
any agreements with any content developers or aggregators. There can be no
assurance that TNCi UK will be successful in entering into any agreements with
any of these content developers and aggregators for the provision of content or
services over TNCi UK's systems, or, that if any agreements are entered into,
they would be on terms favorable to us.

In addition, we believe that TNCi UK's system has revenue generation and
operational cost savings potential that could cause prospective train operating
company customers to consider the system as a potential profit center, as
opposed to a cost center. Revenues may be generated from system advertisements,
"pay-for-use" content and e-commerce transactions, while operational cost
savings may be realized through the system's e-ticketing, seat reservation and
in-seat surveying capabilities.

TNCi UK believes that its system could provide train operating companies
with the following key points of competitive differentiation:

* "TURNKEY" SOLUTION. TNCi UK will offer train operating companies a
complete system, including equipment, content, automated loading and
ongoing maintenance, allowing the train operators to remain focused on
the operation of their core businesses.

* REVENUE GENERATING MODEL. To the best of TNCi UK's knowledge, its
system would be the first interactive at-seat entertainment and
information systems offering its broad range of content and services,
and could provide train operating companies the potential to realize
incremental revenues through advertising, e-commerce, select
pay-per-use features, and perhaps from increased passenger loads. We
believe that prospective customers could consider the system a profit
center.

* POTENTIAL COST SAVINGS. The system may provide operational cost
savings to train operators through use of the system for e-ticketing,
real time seat reservations and passenger surveys.

* ENCOURAGING PASSENGER FEEDBACK. Recent limited passenger trials
conducted on TNCi UK's fully operational system simulator located at
its headquarters in Derby, England yielded positive results. More than
90% of the passengers reported that the system would make their
journey more enjoyable.

STRATEGIC ALLIANCES

TNCi UK believes that by incorporating high-quality components into its
proprietary design, it can provide train operating companies with a truly
state-of-the-art system. To this end, TNCi UK seeks to enter into arrangements
with companies that it views as leaders in their industries. TNCi UK has entered
into a strategic alliance, embodied in a teaming agreement, with General
Dynamics Interactive Corporation and it has progressed in negotiations with
additional potential strategic partners.

In March 2001, together with TNCi UK and General Dynamics Interactive, we
announced the formation of an alliance with the goal of providing the worldwide
passenger rail market with a single source for the design, development,
integration and delivery of interactive broadband entertainment and information
systems on trains. General Dynamics Interactive Corporation is a part of General
Dynamics Communication Systems, a business unit of General Dynamics Corporation,
a multi-billion dollar worldwide leader in systems integration and defense
products.

In accordance with its alliance with General Dynamics, the parties plan to
leverage their respective core competencies to develop the market for the TNCi
UK system:

* TNCi UK will provide the concept, design specifications and marketing
resources.
* General Dynamics is to lend its expertise in systems integration,
deployment and support for mobile communications platforms to provide
the hardware and software for the core of the system.

* General Dynamics is also to provide service support for this equipment
to TNCi UK during the operational life of the equipment.

COMPETITION

We believe that there are few actual products available for train operators
to consider in terms of at-seat entertainment and information systems. In fact,
to date, we are not aware of any company that has offered a total solution
package of systems, content and services customized for the specific needs and
rigors of the train environment. In light of the absence of substantive
competition in the market, and what we perceive as an expanding interest from
the industry, we believe there is an opportunity for TNCi UK to be one of the,
if not the, first-to-market in making available to train operators a customized
at-seat multimedia information and entertainment system solution.

TNCi UK has submitted preliminary pricing and specification requirements to
several major train operators and has engaged in discussions beyond these
proposals with these operators regarding development, installation and
maintenance of TNCI UK system for them. Discussions with some of these train
operators are currently in advanced stages. There is no assurance that any of
the proposals that we have submitted to, or the discussions and negotiations
that we have had with, any train operating company will result in a contract, or
that if a contract is obtained, it would result in revenue or be profitable for
us or TNCi UK.

While TNCi UK, with the assistance of strategic partner General Dynamics,
believes that it has developed a novel product offering, it could face potential
competition from a number of companies operating in various industries. We
believe TNCi UK's main competitor is a company called Joyce Loebl. This United
Kingdom-based military/ transport electronics supply company recently absorbed
SmartWorld(TM), a United Kingdom company with experience in the in-flight
entertainment industry that had recently begun to market a limited
video-on-demand "multi-cast" system for passenger trains. While TNCi UK does not
believe that this system is functionally comparable to its system, it could be
considered a solution by train operators.

While TNCi UK believes that no other company is currently offering an
interactive entertainment system comparable to its system to the inter-city
passenger rail market, other entities with experience in the rail industry, such
as train manufacturers, or interactive entertainment system providers for the
airline industry could decide to enter the market. Train manufacturers such as
ALSTOM, Bombardier, Siemens or others could leverage their railway expertise and
resources to develop and market a competitive product. In addition, in-flight
entertainment system providers, such as Rockwell-Collins and Matsushita, could
potentially leverage their expertise in interactive systems to provide a

competitor system. Most of these companies have greater personnel, technical and
financial resources than we and TNCi UK, which could enable them to compete more
successfully in this market if they determined to enter it. If TNCi UK does
experience success in the rail market, the opportunity may become more
attractive to potential competitors who may be able to leverage significant
resources to develop a competitive product. In addition, train operating
companies could also decide to deploy less sophisticated entertainment systems
on their trains.

Despite the potential for competitors with greater personnel, technical and
financial resources to enter the market, TNCi UK believes that it has the
following advantages over competitors that may enter the market:

* EARLY MOVER ADVANTAGE. TNCi UK believes that it is one of very few
companies (and possibly the only company) currently marketing an
interactive entertainment system as comprehensive as TNCi UK's system
to the rail industry.

* PRODUCT DESIGN. Significant resources have already been committed to
developing a working prototype of TNCi UK's core interactive
entertainment system for the passenger rail environment. All aspects
of the system from the server to the seat and tabletop integration
have been customized functionally and ergonomically with the purpose
of accommodating in-train installations. The system is ready to enter
the safety certification process, one of the last steps necessary
prior to installation. The system has not yet been tested in an actual
rail environment, however, and there is no assurance that it will
respond as anticipated.

* SYSTEM SIMULATOR. In June 2000, TNCi UK launched its demonstration
showroom and full-scale system simulator in the United Kingdom. This
simulator, which we believe is the first and only one of its kind in
the world, has been instrumental in allowing train operators and
passengers to evaluate firsthand the features of TNCi UK's system in a
life-size replica of a modern passenger rail vehicle environment. The
feedback from use of the simulator has provided TNCi UK with
invaluable information about potential users' likes and dislikes.

* STRATEGIC RELATIONSHIPS. We believe that TNCi UK's strategic
relationships with General Dynamics and COM DEV provides access to a
wealth of engineering and systems integration, communications and
connectivity resources and know-how, increases the credibility of TNCi
UK's system with prospective customers, reduces up-front and on-going
capital requirements, and provides the scalability necessary to
support multiple contracts. We are pursuing relationships with
companies of a similar caliber, although no assurance is given that we
will be successful in consummating any of these additional
relationships.

* RAIL INDUSTRY EXPERTISE. TNCi UK's management has significant
experience in the railway industry, including extensive work with
leading international rail companies, such as ALSTOM and the former
British Railways. We believe that their experience with the train
operating companies will prove valuable to the design, marketing and
maintenance of the TNCi UK system.

TNCI UK MANAGEMENT

We have recruited a management team consisting of rail industry personnel
with experience in business development, finance and engineering, led by a
former senior executive from the international train manufacturer ALSTOM, to
develop and deliver TNCi UK's system to the rail market:

* STEPHEN OLLIER - MANAGING DIRECTOR
Mr. Ollier joined TNCi UK in September 1999 as its Managing Director.
Prior to joining TNCi UK, Mr. Ollier was head of ALSTOM's Railway
Maintenance Services Ltd. division, which he established in 1994.
Prior to this position, Mr. Ollier served as UK Business Development
Director of ALSTOM Transport. Prior to ALSTOM, Mr. Ollier held several
management posts within British Railways over a twenty-year period.
Mr. Ollier obtained a Degree in Mechanical Engineering from Salford
University, and is a Member of the Institution of Mechanical
Engineers.

* PHILIP CAMPBELL - COMMERCIAL DIRECTOR
Mr. Campbell joined TNCi UK in March 2000 as its Commercial Director.
Prior to joining TNCi UK, Mr. Campbell was Director of Commercial
Services at ALSTOM Train Services Ltd. During his ten years with
ALSTOM, Mr. Campbell held a series of positions with the company,
including creating the Materials Division of the ALSTOM Service
business. Prior to joining ALSTOM, Mr. Campbell held a number of
financial posts with companies based in Europe and abroad.

* JULIAN BURRELL - SALES DIRECTOR
Mr. Burrell joined TNCi UK in March 2000 as its Sales Director. Prior
to joining TNCi UK, Mr. Burrell was Director of Sales & Marketing for
SmartWorld(TM)(a.k.a. Joyce Loebl), a company seeking to develop and
provide media systems to the railway industry. Mr. Burrell was a
founding member of SmartWorld(TM), formed by former employees of
in-flight entertainment manufacturer MBM. Prior to founding
SmartWorld(TM), Mr. Burrell managed the Sales & Marketing efforts of
MBM's Aerotech Division. Prior to this, Mr. Burrell held a variety of
managerial positions with companies such as The Volex Group, Brand Rex
Cables and others. Mr. Burrell received an HND (Higher National
Diploma) in Mechanical Engineering with Sperry Vickers.

* DOMINIC NEWTON - ENGINEERING DIRECTOR
Mr. Newton TNCi UK in August 2000 as its Engineering Director. Prior
to his employment with TNCi UK, Mr. Newton was employed by Jones
Garrard, one of Europe's leading technical design consultancy
companies. Prior to Jones Garrard, Mr. Newton held a research and
development position with ALSTOM. Mr. Newton has published 12 academic
papers in international journals and received the Institution of
Mechanical Engineers Bennett-Rowling Prize for his work in artificial
intelligence techniques. Mr. Newton graduated from Hatfield
Polytechnic with a Master of Engineering Degree and is a registered
Chartered Engineer.

OWNERSHIP OF TNCI UK LIMITED

On March 9, 2001, to permit TNCi UK to fund ongoing operations and avoid
insolvency and receivership, we acquired 600 cumulative redeemable preferred
shares of TNCi UK. We paid a purchase price of $600,000 for these preferred
shares over a five-month period. Prior to this transaction, TNCi UK was a wholly
owned subsidiary of The Network Connection, Inc., of which we own approximately
62.5%. The Network Connection filed for bankruptcy under Chapter 11 of the
Bankruptcy Code on March 24, 2001. The 600 preferred shares of TNCi UK that we
acquired represent 60% of its outstanding voting equity. The Network Connection
holds the remaining 40% of the outstanding voting equity of TNCi UK through its
ownership of ordinary shares.

EMPLOYEES

As of November 15, 2001, Global employed five people on a full-time basis,
and had an independent contractor serving as its interim chief financial
officer. Due to liquidity issues, four of Global's full-time employees have been
receiving half-salary since December 2000. These employees have agreed to defer
payment of the remainder of their salaries until such time as Global is in a
position to pay the deferred amounts. In addition, Global's consolidated
subsidiary, TNCi UK, employs four people on a full-time basis. No employee is
covered by a collective bargaining agreement. We consider our relations with our
employees to be good.

ITEM 2 -- DESCRIPTION OF PROPERTY

We lease approximately 1,500 square feet of space in Philadelphia,
Pennsylvania, which serves as our headquarters. The space is leased to Ocean
Castle Partners, LLC and, pursuant to an agreement between Ocean Castle and us,
we pay the rent and related expenses. Irwin L. Gross, Chief Executive Officer
and Chairman of the Board of Directors of Global, is a principal of Ocean
Castle. Also, through United Kingdom subsidiaries, Global leases warehouse space
in the United Kingdom in both Berkshire and Manchester. Each space is
approximately 2,000 square feet. TNCi UK Limited leases approximately 1,000
square feet of space in the United Kingdom in Derby.

We have no policy regarding investments in real estate or interests in real
estate, real estate mortgages or securities of persons primarily engaged in real
estate activities. We currently hold no such investments.

ITEM 3 -- LEGAL PROCEEDINGS

SWISSAIR/MDL-1269, IN REGARDS TO AN AIR CRASH NEAR PEGGY'S COVE, NOVA
SCOTIA. This Multi-district litigation, which is being overseen by the United
States District Court for the Eastern Division of Pennsylvania, relates to the
crash of Swissair Flight No. 111 on September 2, 1998. The aircraft involved in
the crash was a McDonnell Douglas MD-11 equipped with an in-flight interactive
entertainment system developed by the Interactive Entertainment Division that
The Network Connection acquired from us. Since then, a number of claims have
been filed by the families of the victims of the crash. We have been named as
one of the many defendants, including Swissair, Boeing, DuPont and The Network
Connection (all claims against The Network Connection have been stayed pending
resolution of bankruptcy proceedings), in this consolidated multi-district
litigation. Our aviation insurer is defending us in the action. We have $10
million in insurance coverage related to the action. With respect to additional
insurance coverage, a court has ruled that an umbrella policy for an additional
$10 million in insurance does not cover the Swissair action. Currently, we do
not plan to appeal such ruling in connection with the Swissair crash. If
liability is assessed against us, to the extent this liability exceeds the
available insurance, our business will be adversely affected. If found liable
for an amount substantially in excess of the limits of our coverage, we could
lose all of our assets. Swissair has recently filed for Bankruptcy.

FIDELITY AND GUARANTY INSURANCE COMPANY V. INTERACTIVE FLIGHT TECHNOLOGIES,
INC. This case was before the United States District Court for the District of
Minnesota, CV No. 99-410. This is a reformation action in which one of the
Company's insurers is seeking to reform an umbrella policy in the amount of $10
million to include an exclusion for completed products for policies issued for
years 1997-98 and 1998-99. Such exclusion would preclude claims made by the
estates of victims of the crash of Swissair Flight No. 111 on September 2, 1998.
The insurer recently filed a motion for summary judgment, which was heard before
the United States District Court for the District of Minnesota on September 12,
2000. On October 24, 2000, the Court ruled in favor of the insurer. We filed a
motion to alter or amend the ruling, which was denied on January 19, 2001. We
thereafter determined not to appeal this action further and entered into a
voluntary dismissal with respect to this action. The umbrella policy at issue in
this suit is in addition to the $10 million in aviation insurance coverage that
we currently have in place.

BRYAN R. CARR V. THE NETWORK CONNECTION, INC. AND GLOBAL TECHNOLOGIES, LTD.
This case was brought in the Superior Court of Georgia, Civil Action No.
99-CV-1307. Bryan R. Carr, The Network Connection former Chief Operating and
Financial Officer and a former Director, filed a claim on November 24, 1999
alleging a breach of his employment agreement with The Network Connection. Mr.
Carr claims that he is entitled to the present value of his base salary through
October 31, 2001, a share of any "bonus pool," the value of his stock options
and accrued vacation time. The Network Connection and Global filed a motion to
compel arbitration of the claims pursuant to an arbitration provision in the
employment agreement and to stay the State Court action pending the arbitration
proceeding. Our motion was granted on August 9, 2000. On November 7, 2000, Mr.
Carr filed his claim for arbitration in Georgia. The arbitration is currently in
the discovery phase, although all claims against The Network Connection have
been stayed pending resolution of bankruptcy proceedings.

Orders to the United States Court of Appeals for the Ninth Circuit. Swissair
filed a motion to dismiss the appeal for lack of jurisdiction, which was granted
on September 18, 2000. On March 28, 2001, the Supreme Court of the United States
granted our petition for writ of certiori and remanded the case to the Circuit
Court for further consideration. Both sides have filed briefs with the Ninth
Circuit Court of Appeals and we are awaiting oral argument on the issue of
whether the case is subject to arbitration abroad or can continue here in the
States. We have assigned any proceeds we may be entitled to in this action to
The Network Connection. Swissair has recently filed for bankruptcy

In September of 1999, we filed a lawsuit against Barington Capital Group,
L. P. in Maricopa County Superior Court, Arizona, seeking a declaratory judgment
that no sums were owed to Barington pursuant to a one-year Financial Advisory
Service Agreement dated October 21, 1998. In October 1999, Barington filed a
lawsuit on the same contract in the Supreme Court of the State of New York,
County of New York, Index No. 99-6041606, captioned BARINGTON CAPITAL GROUP,
L.P. V. INTERACTIVE FLIGHT TECHNOLOGIES, INC., alleging that Barington is owed
$1,750,471 in connection with services alleged to have been performed pursuant
to the Financial Advisory Service Agreement. On October 20, 2000, Barington
filed a Renewed Motion to Dismiss for Lack of Personal Jurisdiction and For
Forum Non Conveniens our Amended Complaint in the Arizona action. By Order dated
January 8, 2001, the Arizona Court dismissed our Amended Complaint, finding that
New York was a more convenient forum for the parties to litigate their dispute.
Accordingly, the parties are proceeding with the New York action and are
undertaking discovery.

A suit captioned AVNET, INC. V. THE NETWORK CONNECTION, INC., was filed May
17, 2000 in Maricopa County Superior Court, CV2000-009416. The suit related to
invoices for inventory purchased by The Network Connection in late 1998 and
early 1999. Avnet, Inc. sought payment of the invoices, interest and legal fees.
The aggregate amount of relief sought by Avnet was approximately $900,000. The
Network Connection did not pay for the inventory purchased primarily for the
following reasons: (i) the inventory purchased did not meet specifications and
thus was not accepted by its customer, and (ii) The Network Connection was
pursuing a separate warranty claim against Avnet regarding certain other
inventory purchased from Avnet. On October 11, 2000, The Network Connection won
a jury verdict of $1.8 million in the warranty suit. On December 21, 2000 as
amended by letter agreement dated December 22, 2000, The Network Connection
settled this suit for $700,000 in cash, the cancellation of approximately
$899,000 of outstanding accounts payable due to Avnet and mutual releases of all
existing claims. The Network Connection recorded a gain in other income of
$1,363,563 reflecting the settlement, net of legal fees in the year ended June
30, 2001. The Network Connection received the cash payment on January 2, 2001.

FIRST LAWRENCE CAPITAL CORP. V. GLOBAL TECHNOLOGIES, LTD. AND GLOBALTECH
HOLDINGS LIMITED, F/K/A IFT HOLDINGS LIMITED, Supreme Court of the State of New
York, County of New York, Index No.: 01/601576. First Lawrence filed a complaint
commencing this lawsuit against us and our affiliate on March 28, 2001. This
complaint alleges a breach of the settlement agreement dated August 13, 1999
between First Lawrence and us relating to an earlier lawsuit commenced by First
Lawrence against us and certain of our affiliates. The aggregate amount of
relief sought is approximately $545,000, plus related interest, costs and
expenses.

INSIGHT DIRECT USA, INC. V. GLOBAL TECHNOLOGIES, LTD., ET AL, Superior
Court of the State of Arizona, County of Maricopa, Case No. CV2000-021045. This
matter relates to a stipulated judgment against us for $36,000, initially to be
paid $6,000 per month from March through August 2001. The terms of repayment
have been extended and Global is paying $3,000 per month towards the balance.
Final payment will be made in April 2002.

AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. V. GLOBAL
TECHNOLOGIES, LTD. AND NETWORK CONNECTIONS, INC., Supreme Court of the State of
New York, County of New York, Index No.: 01/601416. American Express sought
payment of unpaid balances on credit cards issued under each of our and The
Network Connection's corporate accounts. As to us, American Express sought
approximately $34,000 and, as to The Network Connection, American Express is
seeking approximately $974,000. The latter action has been stayed pending
resolution of bankruptcy proceedings. The action with respect to Global was
satisfied as of July 2001 by payment in full.

MORRIS C. AARON V. THE NETWORK CONNECTION AND GLOBAL TECHNOLOGIES, LTD.,
Superior Court of the State of Arizona, County of Maricopa, Case No.
CV2001-003733. Morris C. Aaron, The Network Connection former Chief Financial
Officer, filed a claim on March 5, 2001 for $35,658 for wages claimed and treble
damages. The action against The Network Connection has been stayed pending
resolution of the bankruptcy proceeding, and both Global and Mr. Aaron have
filed motions for summary judgment.

FRANK E. GOMER V. THE NETWORK CONNECTION AND GLOBAL TECHNOLOGIES, LTD.,
Superior Court of the State of Arizona, County of Maricopa. Frank E. Gomer, The
Network Connection Systems Group former President and Chief Operating Officer
filed a claim on March 22, 2001 for $76,000 for wages claimed and treble
damages. The action against The Network Connection has been stayed pending
resolution of the bankruptcy proceeding, and both Global and Dr. Gomer have
filed motions for summary judgment. Global's motion for summary judgement was
granted in November 2001.

44TH STREET AND VAN BUREN LIMITED PARTNERSHIP V. THE NETWORK CONNECTION AND
GLOBAL TECHNOLOGIES, LTD., Superior Court of the State of Arizona, County of
Maricopa, Case No. CV2001-004664. The landlord for The Network Connection's
Arizona offices filed this complaint on March 20, 2001 alleging breaches of the
lease with The Network Connection and guaranteed by us for those offices and
seeking approximately $12,000 and other relief. The action against The Network
Connection has been stayed pending resolution of bankruptcy proceedings.

DONALD H. GOLDMAN V. GLOBAL TECHNOLOGIES, LTD., arbitration number 13 117
01861 1 before the American Arbitration Association in New York City. This
action was instituted in September 2001. Mr. Goldman has brought this action
seeking recovery of an alleged $17,000 in legal fees incurred by him in
connection with termination of a consulting agreement between him and one of our
subsidiaries. The matter was settled on November 13, 2001 for $13,750.

An action captioned KEATING DEVELOPMENT COMPANY V. THE NETWORK CONNECTION,
INC. AND GLOBAL TECHNOLOGIES, LTD., case number 000997 was initiated on January
8, 2001 in the Philadelphia County Court of Common Pleas. The case relates to
the The Network Connection's alleged breach of a lease for office and warehouse
space. The lease was guaranteed by Global. Keating is seeking approximately
$350,000 in damages. The action against The Network Connection has been stayed
pending resolution of bankruptcy proceedings. This action against Global was
settled in November 2001.

We may be subject to other lawsuits and claims arising in the ordinary
course of our business. In our opinion, as of June 30, 2001, the effect of such
matters will not have a material adverse effect on our results of operations or
financial condition.

ITEM 4 -- SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

There are no items or circumstances to be disclosed under this Item 4.

PART II

ITEM 5 -- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The following table sets forth the high and low last sale prices for our
Class A Common Stock for each quarter within our last two fiscal years, and for
the quarter ended September 30, 2001. Prices are as reported by the Nasdaq
National Market until August 8, 2001. Thereafter prices are as reflected on the
Over-The-Counter Bulletin Board and represent inter-dealer prices, without
mark-up, mark-down or commission, and may not represent actual transactions.

CLASS A COMMON STOCK HIGH LOW
-------------------- ------- ------
July 1, 1999 through September 30, 1999.......... $ 3.083 $2.000
October 1, 1999 through December 31, 1999........ $ 6.500 $1.583
January 1, 2000 through March 31, 2000........... $21.000 $5.500
April 1, 2000 through June 30, 2000.............. $15.000 $3.375
July 1, 2000 through September 30, 2000.......... $ 6.375 $3.125
October 1, 2000 through December 31, 2000........ $ 4.563 $0.375
January 1, 2001 through March 31, 2001........... $ 1.969 $0.281
April 1, 2001 through June 30, 2001.............. $ 0.910 $0.210
July 1, 2001 through September 30, 2001.......... $ 0.430 $0.100

The closing sales price of the Class A Common Stock on November 15, 2001 as
reflected by the Over-The-Counter Bulletin Board was $0.12 per share.

As of November 15, 2001, there were approximately 109 record holders of our
Class A Common Stock.

We have not paid any cash dividends on our Class A Common Stock during the
last two fiscal years and do not intend to do so in the foreseeable future.

UNREGISTERED ISSUANCES

There are no items or circumstances to be disclosed under this section.

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

The following discussion should be read in conjunction with, and is
qualified in its entirety by, our Consolidated Financial Statements and the
Notes thereto appearing elsewhere herein. Historical results are not necessarily
indicative of trends in operating results for any future period.

RESULTS OF OPERATIONS

Our financial statements included in this Annual Report on Form 10-KSB
contain the results of operations for our fiscal years ended June 30, 2001 and
June 30, 2000. The results of operations for the fiscal years ended June 30,
2001 and June 30, 2000 are included in the table below for comparative
purposes):

YEAR ENDED YEAR ENDED
JUNE 30, 2001 JUNE 30,2000
------------- ------------
Revenues:
Equipment sales $ 84,149 $ 6,983,787
Service income 206,146 413,209
------------ ------------
290,295 7,396,996
------------ ------------
Costs and Expenses:
Cost of equipment sales 61,753 4,867,519
Cost of service income 170,083 148,221
General and administrative expenses 19,249,060 21,166,771
Expenses associated with investments -- 1,944,743
Loss from Write off on Intangibles 5,547,560 --
Loss from impairment of long-lived assets 10,719,040 --
Special charges 725,753 2,156,205
Amortization of intangibles 1,150,395 912,553
------------ ------------
37,623,644 31,196,012
------------ ------------
Operating loss (37,333,349) (23,799,016)

Other:
Interest expense (4,278,315) (5,948,347)
Interest income 47,264 655,194
Equity in losses of affiliates -- (10,345,210)
Gain on sale of investments 4,282,844 --
Gain on legal settlement 1,336,563 --
Other expense 108,054 ( 14,339)
------------ ------------
Loss before minority interest and
extraordinary item (35,836,939) (39,451,718)

Minority interest 1,869.009 1,612,529
Extraordinary item - loss on extinguishments
of debt (698,117) --
------------ ------------
Net loss (34,666,047) (37,839,189)

Cumulative dividend on preferred stock (50,000) (187,415)
Redemption of preferred stock (173,469) 509,183
------------ ------------
Net loss attributable to common stockholders $(34,889,516) $(37,517,421)
============ ============

Revenues for the year ended June 30, 2001 were $290,295, a decrease of
$7,106,701 compared to revenues of $7,396,996 for the year ended June 30, 2000.
Revenues for the year ended June 30, 2001 consisted of equipment sales of
$84,149 and service income of $206,146. Revenues for the year ended June 30,
2000 consisted of equipment sales of $6,983,787 and service income of $413,209.
The decrease in equipment sales of $6,899,638 and service income of $207,063 is
due to the ceasing of operations by the Network Connection and its subsequent
filing for bankruptcy protection on March 24, 2001. The decrease in service
income is also the result of the cessation of operations by the Network
Connection and also the closure of the United Kingdom lottery operation in
August 2000.

Cost of equipment sales for the year ended June 30, 2001 was $61,753, a
decrease of $4,805,766, compared to cost of equipment sales of $4,867,519 for
the year ended June 30, 2000. The decrease is the result of the cessation of
domestic operations by the Network Connection ("TNCI") and subsequent bankruptcy
filing. The cost of service income also fell as a result of the cessation of
operations by TNCI and the United Kingdom Lottery operation.

General and administrative expenses for the year ended June 30, 2001 were
$19,249,060, a decrease of $1,917,711 from expenses of $21,166,771 for the year
ended June 30, 2000. Significant components of general and administrative
expenses include costs of personnel, legal and professional fees, advertising
and marketing expenses, rent and other facilities costs and depreciation
expense. General and administrative expenses for the year ended June 30, 2001
would have been considerably higher than the previous year, but the initial
cutbacks in expenditures by the Network Connection beginning in January 2001
with personnel layoffs and the complete cessation of operations by March 31,
2001 kept the total for the year from exceeding the previous period. All
expenses of the subsidiary, TNCI stopped, for purposes of the consolidated
financial statements as of the date of the bankruptcy due to the discontinuance
of consolidating the results of operations of the subsidiary at that date.
Expenditures for Global Technologies also declined in the fourth quarter, as the
administrative staff was reduced and the New York office closed. Expenditures
for TNCI-UK operations have increased due to the pursuit of major contracts with
European rail operators for the purchase of the interactive entertainment
system.

General and Administrative expenses, for the year ended June 30, 2001, also
include non-cash charges of $267,868 primarily related to the issuance of common
stock purchase warrants for financial advisory services and a $561,000 charge
for 1,700,000 shares of common stock issued to Equilink Capital Partners LLC for
financial consulting services.

Non-cash compensation expense of $1,905,419 included in general and
administrative expenses for the year ended June 30, 2000 is comprised of an
$85,000 expense for a former employee as part of a severance package, charges of
$193,318 for modifications of stock option awards for three former employees and
charges totaling $1,627,101 related to the issuance of common stock purchase
warrants and common stock for financial advisory services.

Expenses associated with investments of $1,944,743 for the fiscal year
ended June 30, 2000 represent the net loss on our sale of our equity interest in
Donativos of $335,058, the loss on the transfer of our 27.5% equity interest in
Inter Lotto of $684,685 and the write-down of $925,000 of our investment in
Shop4Cash.com, Inc.

Losses from the impairment of long-lived assets were recognized during the
year ended June 30, 2001 in the amount of $10,719,040. The Network Connection
filed for bankruptcy protection under Chapter 11 on March 24, 2001 and a loss of
$3,324,665 was recognized on the fixed assets, which had a remaining book value
at June 30, 2001 of approximately $600,000 and are being sold to provide funding
for the final liquidation of the corporation. GTL Leasing, the United Kingdom
company that owned the lottery equipment, has recognized a loss on the
impairment of fixed assets of $7,316,630 due to the abandonment of the lottery
operation and subsequent sale of the lottery equipment. Global Technologies
incurred a loss of $77,745 on the disposition of its New York office equipment.

Special charges for the year ended June 30, 2001 were $725,753, compared to
$2,156,205 for the year ended June 30, 2000. Special charges for the year ended
June 30, 2001 represent the legal settlement reached with the vendor in regards
to the return of a portion of the lottery equipment that had been purchased from
the vendor. Special charges for the year ended June 30, 2000 represent inventory
write-offs and accruals for rework costs for future redeployment of equipment
and estimated de-installation obligations associated with the termination of the
Carnival Cruise lines contract pursuant to a master settlement agreement between
us and Carnival.

Amortization of intangibles for the year ended June 30, 2001 was $1,150,395
compared to $912,553 for the year ended June 30, 2000. The increase is
attributable to the impact of the revision of the estimated useful life for
determining amortization for the nine month period up to March 31, 2001. The
Network Connection recorded a loss on the write off of intangibles of $5,547,560
in the month of March 2001, because of impairment prior to its bankruptcy filing
under Chapter 11 on March 24, 2001.

Interest expense for the year ended June 30, 2001 was $4,278,315 compared
to $5,948,347 for the year ended June 30, 2000. The decrease in interest expense
was due to the conversion of interest bearing Secured Convertible Notes to
Preferred and Common Stock issues.

Interest income for the year ended June 30, 2001 was $47,264, a decrease of
$607,930 compared to income of $655,194 for the year ended June 30, 2000. The
interest arose principally out of short-term investments. The decrease in
interest income is due to a significantly lower average cash balance during 2001
compared to 2000.

For the year ended June 30, 2001, there were no losses to record from
equity interests in affiliates, as these investments have been written off at
June 30, 2001.

For the year ended June 30, 2000, we recorded our proportionate share of
our equity interest in losses of affiliates in the amount of $10,345,210,
primarily attributable to higher losses at Inter Lotto related to the April 2000
launch of the lottery operations in the UK and higher losses at Donativos
related to the launch of the entertainment center in Monterrey, Mexico. In
addition, we determined that we retained the majority of the financial risk
related to Inter Lotto and, accordingly, recorded against our investment 100% of
the loss incurred by Inter Lotto for the year ended June 30, 2000.

Gains from the sale of investments of $4,282,844 were recognized during the
year ended June 30, 2001. These gains were from the sale of U.S. Wireless common
stock that was held as an investment by Global Technologies, Ltd. U.S. Wireless
Corp subsequently declared bankruptcy under Chapter 11, on August 29, 2001; the
stock is no longer traded and the remaining shares held by Global have been
written off at June 30, 2001, resulting in a loss of approximately $450,000.

Other income for the year ended June 30, 2001 was $108,054 compared to
other expense of $14,339 for the year ended June 30, 2000. Other income in 2001
consists of amortization of certain deferred credits for financing fees which
were written of entirely at March 31, 2001 in conjunction with the TNCi
bankruptcy.

Gains from legal settlements amounted to $1,336,563 for the year ended June
30, 2001. The gain was recognized by TNCI, as a result of the Avnet litigation
settlement agreement that was executed in December 2000.

LIQUIDITY AND CAPITAL RESOURCES

During the year ended June 30, 2001, we used $19.4 million of cash for
operating activities, as compared to $9.3 million of cash used by operating
activities for the year ended June 30, 2000. Cash utilized in operations during
the year ended June 30, 2001 resulted primarily from our net loss of $34.1
million, partially offset by $25.1 million of non-cash charges, including the
impairment of long-lived asset of $10.7 million, write down of intangibles of
$5.5 million, $2.8 million of depreciation and amortization and $3.5 million of
non-cash interest expenses, primarily related to charges for a beneficial
conversion feature of convertible notes and the estimated fair value of warrants
issued in connection with related party borrowings and collateral pledges. Cash
was also used by the reduction, approximately $4.3 million, in accounts payable
and accrued liabilities during the period.

Cash utilized in operations during the year ended June 30, 2000 resulted
primarily from our net loss of $37.8 million, predominately offset by $11.6
million of non-cash charges, including $2.1 million of depreciation and
amortization, $5.7 million of non-cash interest expenses primarily related to
charges for a beneficial conversion feature of convertible notes and the
estimated fair value of pledges, $1.9 million of compensation expenses related
to the issuances of common stock or stock purchase warrants for financial
advisory services, and $1.9 million of expenses associated with the write off or
write down of affiliate investments. Cash utilized for operating activities was
offset by an increase in accounts payable of $7.8 million during the period. In
addition, cash utilized in operating activities excludes $10.3 million of equity
in loss of affiliates related to the losses of Donativos and Inter Lotto, which
are shown as investments in non-consolidated affiliates in cash utilized from
financing activities at June 30, 2000. The cash utilized primarily relates to
our funding of 100% of the losses of Inter Lotto related to the launch of the
lottery operations in the UK.

Restricted cash at June 30, 2001 was $70,538 as compared to $766,748 at
June 30, 2000. Restricted cash decreased primarily as a result of our cessation
of consolidating TNCi, the Company's major subsidiary and to a lesser extent,
the termination of the Company's New York office lease. TNCi had restricted cash
of approximately $450,000, related to an employment contract prior to its
bankruptcy filing. The Company forfeited approximately $220,000 of its deposit
on the termination of the New York Office Lease.

Cash of approximately $9.9 million was provided by the Company's investing
activities during the year ended June 30, 2001, primarily as a result of the
Company's sales of its investment securities, U.S. Wireless Corporation,
partially offset by equipment purchases. The Company sold or used to retire
debt, approximately 2,520,000 shares of it's U. S. Wireless holdings. U.S.
Wireless filed for protection under Chapter 11 of the US Bankruptcy Code during
August 2001. TNCi purchased, for approximately $3.4 million, equipment for use
in its hotel interactive systems. The Company's basis in its remaining
approximately 480,000 shares of U.S. Wireless was determined to be worthless and
charged to expense at June 30, 2001.

Cash flows used in investing activities were $21.8 million during the year
ended June 30, 2000. Cash utilized resulted primarily from purchases of property
and equipment of $18.3 million, including $9.4 million of gaming network
equipment for the lottery operations, $2.5 million of networking equipment
installed at hotels for guest pay interactive entertainment systems and $0.4
million of equipment for a train entertainment system simulator, and our
investment in Inter Lotto of $10.0 million to fund their losses related to the
launch of the lottery. Cash utilized in investing activities also resulted from
our investment of $1.0 million in Shop4Cash.com, Inc. Cash utilized was offset
by net proceeds of $4.6 million from the sale of available-for-sale investment
securities, $1.2 million from the sale of our 24.5% equity interest in
Donativos, and $0.7 million from the sale of the gaming equipment leased to
Donativos.

Net Cash provided from financing activities during the year ended June 30,
2001, $5.9 million, primarily resulted from the issuance of convertible notes,
the sale of common and preferred stock, primarily to officers, directors and
other related parties, and advances from related parties. These financings,
totaling approximately $14.1 million were partially offset by redemptions of
convertible notes and a net reduction of borrowing under a secured credit
facility.

Cash provided from financing activities during the year ended June 30, 2000
of $20.6 million resulted primarily from the issuance of the Series C 5%
Convertible Preferred Stock for net proceeds of $9.7 million, net borrowings
under a secured credit facility with Merrill Lynch of $6.3 million, the issuance
of $4.0 million of 6% Secured Convertible Notes due December 7, 2001, issuances
of our Class A Common Stock to certain related parties totaling $2.7 million and
issuances of our Class A Common Stock totaling $2.1 million through the exercise
of Unit Purchase Options issued in connection with our Initial Public Offering
in 1995. Cash utilized was offset by the redemption of our Series A 8%
Convertible Preferred Stock for $3.6 million and payments totaling $1.4 million
we made to exercise call options to repurchase shares of our Class A Common
Stock issued to holders of TNCi notes in connection with the extinguishment of
those notes as part of our acquisition by merger of TNCi.

On October 3, 2000, the Company issued $7.0 million of secured convertible
notes (the "October Notes") to Advantage and Koch. The notes had an annual
interest rate of 8% and were convertible after 120 days into shares of the
Company's Class A Common Stock at a 20% discount to market, and after 150 days
into shares of U.S. Wireless common stock also at a 20% discount to market. The
Company was obligated to register the Class A Common Stock into which the notes
were convertible. To secure such borrowing, the Company pledged 866,538 shares
of U.S. Wireless common stock to the holders of the notes. The Company could
redeem the secured convertible notes at any time for a premium.

At the date of issuance, the conversion rate of the October Notes was lower
than the market price of the Company's common stock, and as such the notes had
an embedded beneficial conversion feature. As the notes could be converted after
120 days, the Company recorded a non-cash interest expense of $631,725 in the
the year ended June 30, 2001 related to the beneficial conversion feature.

The terms of the Stock Pledge Agreement executed and delivered in
connection with issuance of the October Notes required that the Company maintain
collateral coverage of 150%, and, in the event that such coverage fell below
150%, that it deliver additional shares of U.S. Wireless common stock so as to
bring the collateral coverage back to 200%.

The price per share of U.S. Wireless common stock fell such that the
collateral coverage under the Stock Pledge Agreement fell below the 150%
threshold, and, in response to such occurrence, Advantage and Koch requested
that the Company deposit additional shares of U.S. Wireless common stock to
remedy such deficiency.

The Company and the investors engaged in negotiations regarding the deposit
of additional shares of U.S. Wireless common stock, but such negotiations
terminated without resolution. Advantage and Koch ultimately filed a complaint
(the "Complaint") and obtained a Temporary Restraining Order ("TRO") prohibiting
the Company and its Chairman and Chief Executive Officer from selling,
conveying, pledging or otherwise transferring any shares of U.S. Wireless common
stock until resolution of the matters covered in the Complaint and dissolution
of the TRO.

Ultimately, The Company and Advantage and Koch resolved their differences
pursuant to a Settlement Agreement that provides in general for the following:

* The Company transfers ownership of an aggregate of 1,380,000 shares of
U.S. Wireless common stock to Advantage and Koch in return for the
October Notes and related Stock Pledge Agreement being deemed
satisfied in full and canceled (the "Share Transfer");

* The Series C 5% Convertible Preferred Stock (the "Preferred Stock")
held by Advantage and Koch be amended such that it may convert into no
more than 18.5% (approximately 1.99 million shares) of the Company's
Class A common stock outstanding on the date of execution of the
Settlement Agreement (the "Execution Date");

* The Company registers for resale the shares of Class A common stock
into which the Preferred Stock converts that are not already
registered for resale;

* The Company issues unsecured, non-convertible notes to Advantage (in
the principal amount of $4,800,000) and Koch (in the principal amount
of $3,200,000);

* The warrants held by Advantage (warrants to purchase 123,055 shares of
the Company) and Koch (warrants to purchase 102,870 shares of the
Company) be re-priced so that the exercise prices thereof equal 115%
of market on the day prior to the Execution Date;

* The Complaint be dismissed with prejudice and the TRO be dissolved;
and

* The Company, Advantage and Koch exchange mutual releases.

The Settlement Agreement and ancillary documents were executed as of
January 31, 2001, however, they were held in escrow and not delivered until
their effectiveness upon consummation of the Share Transfer on February 15,
2001. As a result of the above provisions, the Company has recognized a gain on
the shares transferred to Advantage and Koch amounting to approximately $5.5
million and an extraordinary loss on extinguishment of debt of approximately
$7.6 million, or a net extraordinary loss of approximately $2.1 million.

In May and June 2000, The Gross Charitable Unit Trust and The Gross
Charitable Annuity Trust (together the "Trusts"), advanced a total of $800,000
to TNCi for working capital purposes. An additional $250,000 was advanced to
TNCi in July 2000. On September 12, 2000, the advances to TNCi were converted
into two promissory notes, each in the amount of $525,000, issued to each Trust
by TNCi. The notes matured on December 31, 2000 and bore interest at 9.0%. On
September 28, 2000 the Trusts and two trusts established for the benefit of Mr.
Gross's children advanced an additional $250,000 in total to TNCi. On January 2,
2001 the notes and the advances were converted into 260 shares of TNCi Series F
8% Convertible Preferred Stock with an aggregrate stated value of $1,300,000.
The preferred stock is convertible into 1,733,333 shares of TNCi's common stock.
Irwin L. Gross, Chairman and Chief Executive Officer of Global, was trustee of
each of these trusts until March 23, 2001.

In August and September 2000 the Trusts also advanced a total of $800,000
to Global for working capital purposes. On September 22, 2000, the advances were
converted into two promissory notes, each in the amount of $400,000, issued to
each Trust by Global. The notes matured on December 31, 2000 and had an annual
interest rate of 9.0%. On December 8, 2000 the Company pledged 200,000 shares of
common stock of U.S. Wireless to the trusts as security for the notes. On
December 31, the maturity dates of the notes were extended to June 30, 2001.

During the months of August 2000 through December 2000, The Network
Connection's Executive Vice President advanced a total of $335,046 to The
Network Connection for working capital purposes. Two of these advances totaling
$220,000 were evidenced by a note dated November 22, 2000 and allonge dated
December 5, 2000, that matured on December 31, 2000. On January 2, 2001, this
note and allonge were canceled, and the principal amount thereof and the
remainder of these advances were rolled into a promissory note in the aggregate
principal amount of $335,046 that bears interest at 9% per annum and matures six
months from the date of issuance.

On October 16, 2000, an officer of TNCi purchased 500,000 units of TNCi
consisting of 500,000 shares of TNCi common stock and warrants to purchase
166,667 shares of TNCi common stock. The purchase price was $2.00 per unit,
which was the closing market price of TNCi common stock on such date. The
warrants have an exercise price of $3.50 per share and a term of four-years.
Aggregrate consideration to TNCi was $1 million, which was paid in installments
in August and September 2000.

On November 22, 2000, $1,667,400 of Mr. Gross' collateral pledged to secure
the Secured Credit Facility with Merrill Lynch was applied to repay, in part,
the Secured Credit Facility. The Company issued two promissory notes totaling
$1,667,400 to Mr. Gross and a charitable foundation controlled by him. The new
promissory notes matured on December 31, 2000 and had an annual interest rate of
9.0%. To secure such borrowing, the Company pledged 300,000 shares of common
stock of U.S. Wireless to the holders of the notes. On December 31, 2000 the
maturity dates of the notes were extended to June 30, 2001.

Between July 2000 and April 2001, Mr. Gross, the trusts and the charitable
foundation made additional advances to the Company totaling $757,549 ($644,000
of these advances, plus accrued interest, are in the form of a Treasury Bill and
remain as collateral for the Secured Credit Facility with Merrill Lynch). On
March 30, 2001, Mr. Gross, the trusts and the charitable foundation converted
the existing $2,467,400 of notes discussed above and an additional $32,600 of
these advances into 250 shares of Global Technologies, Ltd. Series E 8%
Convertible Preferred Stock with an aggregate stated value of $2,500,000. This
preferred stock is convertible into shares of Class A common stock at a fixed
conversion price of $0.3125 per share, the closing price per share of Class A
common stock on March 30, 2001.

Between June 30, 2001 and November 5, 2001, Mr. Gross, a limited
partnership controlled by him and certain Trusts established by him advanced
$464,000 to the Company to cover the working capital requirements of the Company
and the Company's 60% owned subsidiary, TNCi UK. The company received, on
November 2, 2001, $1,455,378 from the sale of terminals formerly used in its
lottery business in Great Britain. The Company repaid Mr. Gross and the Trusts a
total $767,000 on November 9, 2001. Remaining unpaid advances, at November 12,
2001, received from Mr. Gross and the Trusts total $80,000.

On June 8, 2000, the Company issued $4.0 million of secured convertible
notes to Advantage Fund II Ltd. and Koch Investment Group, Ltd. (the "Secured
Convertible Notes"). The notes bear interest at 6% per annum and mature on
December 7, 2001. The notes are convertible into shares of the Company's Class A
Common Stock at a conversion price of $2 per share, subject to customary
adjustments. To secure such borrowing, the Company pledged 1,000,000 shares of
common stock of U.S. Wireless to the holders of the notes. An event of default
under the notes occurs if U.S. Wireless common stock trades at less than $5.00
per share at any time during each of five trading days (which need not be
consecutive) within any consecutive 30-day period and certain other conditions
are met. A default under the notes would allow the holders to accelerate
repayment of the notes. The failure to repay on an accelerated basis in a
default situation could result in the liquidation of the pledged shares of U.S.
Wireless Common Stock.

On July 7, 2000, the Company redeemed $2.0 million of the principal amount
of the Secured Convertible Notes. In connection with this redemption, the enders
released to the Company 500,000 shares of U.S. Wireless common stock previously
held as collateral. The notes require that in connection with such redemption
the Company issue warrants for 125,000 shares, in the aggregate, of its Class A
Common Stock to the holders of the notes. These warrants have a four-year term
and an exercise price of $4.00 per share. The Company recorded an extraordinary
gain on the extinguishments of debt of $977,580 related to the redemption of the
secured notes.

On October 5, 2000, the Company redeemed $1.0 million of the principal
amount of the notes for cash of $1.2 million plus the issuance of 62,500 shares
of its Class A Common Stock, as required under the notes. As a result of the
redemption, the lenders released 250,000 shares of U.S. Wireless common stock
previously held as collateral to the Company. The Company recorded an
extraordinary gain on the extinguishments of debt of $514,557 for the second
fiscal quarter ended December 31, 2000.

On February 16, 2000, Global issued 1,000 shares of Series C 5% Convertible
Preferred Stock ("Series C Stock") and callable warrants in return for net
proceeds of $9.7 million. The preferred stock has a stated value of $10,000 per
share and carries a 5% cumulative dividend payable quarterly in cash or in kind.
As of June 30, 2000, cumulative dividends total $187,415, and have been paid in
kind. The preferred stock converts into Class A Common Stock at a conversion
price of $15.21 per share, representing 120% of the average closing bid prices
thereof over the five trading days beginning March 1, 2000 (the "Fixed
Conversion Price") as adjusted for certain dilutive events. Nine months after
funding, and every three months thereafter, the conversion price resets to the
lesser of the Fixed Conversion Price or 100% of the average of the four low
trading prices over the course of the preceding 20 trading days. On April 14,
2000 the Company registered the Class A Common Stock into which the preferred
stock and warrants are convertible or exercisable, as the case may be.
Additionally, the Company may redeem the preferred stock for a premium under
certain circumstances. During March 2001 and April 2001, the holders of 200
shares of the Series C Stock converted such shares into 400,023 shares of the
Company's Class A Common Stock.

In April 2001, the holders of the remaining 800 shares of the Company's
Series C Stock Exchanged such stock for 800 shares of the Company's newly
authorized Series D Convertible Preferred Stock. This exchange was determined to
be a less costly means of permitting us to issue shares of our capital stock to
the holders of the Series C Stock having the rights and remedies contemplated by
the amendments to the Series C Stock described in the Settlement Agreement with
Advantage and Koch. All accrued and unpaid dividends on the Series C Stock were
cancelled pursuant to the Settlement Agreement. The Series D Convertible
Preferred Stock does not accrue dividends and the conversion price per share of
our Class A Common Stock is fixed at $5.0057 with adjustment of the conversion
price limited to certain capital changes and distributions. The settlement
agreement provides that we register any unregistered shares of Class A Common
Stock underlying the Series D Convertible Preferred Stock.

On April 5, 2000, the Company entered into a line of credit facility with
Merrill Lynch in which Merrill Lynch agreed to advance up to $10.0 million based
upon a percentage of the value of securities pledged as collateral to secure
amounts drawn under the line of credit (the "Secured Credit Facility").
Principal amounts borrowed under the line, together with accrued interest at an
annual rate equal to the London Inter-bank Offer Rate (LIBOR) (4.0% at June 30,
2001) plus 1.25%, are payable upon demand by Merrill Lynch. Approximately
$547,000 and $6.3 million was outstanding at June 30, 2001 and June 30, 2000,
respectively, under the Secured Credit Facility. To secure such borrowing, the
Company pledged to Merrill Lynch 1,000,000 shares of common stock of U.S.
Wireless held by the Company.

If the amount owed under the Secured Credit Facility at any time exceeds
35% of the market value of the shares of common stock of U.S. Wireless pledged
to Merrill Lynch, the Company will be subject to a maintenance call which would
require the Company to pledge additional securities which are acceptable to
Merrill Lynch as collateral or require the Company to reduce the outstanding
balance owed under the Secured Credit Facility through payment in cash. On May
2, 2000, Merrill Lynch issued a maintenance call for approximately $1.4 million
to the Company. This maintenance call was waived until May 12, 2000, when the
Company reduced the outstanding balance by $1.9 million from the proceeds of the
sale of its equity interest in Donativos and the gaming equipment leased to
Donativos. Beginning on May 24, 2000, Merrill Lynch issued a series of
maintenance calls requiring a reduction in the balance owed of approximately
$900,000. The final maintenance calls were subsequently satisfied by a pledge of
additional collateral with a market value of approximately $1.6 million, pledged
by Irwin L. Gross, the Company's Chairman and Chief Executive Officer. As of
June 30, 2000, the market value of the shares of common stock of U.S. Wireless
was sufficient to maintain the outstanding balance owed under the Secured Credit
Facility, and Mr. Gross' collateral was released.

In July and August 2000, Merrill Lynch issued a series of maintenance calls
requiring a reduction in the balance owed of approximately $1.2 million. The
maintenance calls were subsequently secured by pledges of additional collateral
with a total market value of approximately $2.7 million, pledged by Mr. Gross
for the Company's benefit.

On November 22, 2000 Merrill Lynch issued a demand for repayment of the
Secured Credit Facility based upon the deterioration in the price of U.S.
Wireless common stock. Approximately $6.8 million was outstanding at that time.
The Company agreed to apply $1,667,400 of Mr. Gross' collateral as partial
repayment of the Secured Credit Facility and to begin an orderly liquidation of
the shares of U.S. Wireless common stock to repay the balance. Through these
sales, the Company reduced the balance of the facility to approximately $840,000
at December 5, 2000. At the same date the facility was secured by a pledge of
777,500 shares of U.S. Wireless common stock and a $646,000 Treasury Bill
pledged for the benefit of the Company by Mr. Gross and two trusts and a
charitable foundation that he established. From March 27, 2001 to May 3, 2001,
the Company sold an additional 242,100 of the pledged shares of U.S. Wireless
common stock pursuant to an arrangement with Merrill Lynch whereby half of the
proceeds of such sales went to reduce the balance of the credit facility and the
remaining proceeds went to the Company. Half of the proceeds from additional
sales of 126,900 of these shares were applied to reduce the balance of the
credit facility to approximately $700,000. The Company subsequently sold
additional shares of U.S. Wireless stock and further reduced the balance to
approximately $581,000. The balance owed on the credit facility is currently
approximately $547,000. Merrill Lynch agreed to release the remaining pledged
shares of U.S. Wireless common stock once the facility was covered by 90% of the
value of the pledged Treasury Bill. The treasury bill continues to be pledged to
Merrill Lynch to secure the credit facility.

Global is concentrating on its investment in entertainment and information
systems for the passenger rail market. This business is carried on through
Global's United Kingdom majority-owned subsidiary, TNCi UK Limited, a company
incorporated under the laws of England and Wales. Global currently owns 60% of
the equity of TNCi UK.

The Company has reduced its number of employees to the minimum number
necessary to continue developing and marketing the system discussed above.
Currently, the Company has five employees in Philadelphia and four employees in
the United Kingdom.

Since April 2001, and through the date of the sale of certain of the
Company's lottery equipment in November, 2001, as discussed in this document,
the Company's cash requirements, including the cash requirements of TNCi UK,
have been met through advances from the Company's Chief Executive Officer, Mr.
Irwin L. Gross, a company controlled by him and two trusts established by him.
Through that date, Mr. Gross and these entities had advanced approximately
$850,000. The Company received approximately $1.4 million from the sale of the
lottery equipment in November 2001. The Company repaid Mr. Gross and these
entities approximately $767,000 from the lottery equipment proceeds. At November
15, 2001 the Company has cash of approximately $400,000.

The Company believes it has sufficient cash to fund its requirements and
the cash requirements of TNCi UK through January 2002. We plan to a sell portion
of or borrow against our investment in the interactive entertainment and
information system for the passenger rail market to cover our financial
obligations and to continue to execute on our business strategy. We provide no
assurance that we will be able to sell a portion of or borrow against our assets
at planned times or for prices necessary to meet our financial obligations or to
take advantage of investment opportunities consistent with our business
strategy.

INFLATION AND SEASONALITY

We do not believe we are significantly impacted by inflation or that our
operations are seasonal in nature.

NEW ACCOUNTING PRONOUNCEMENTS

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation (an interpretation of APB 25). This interpretation clarifies the
application of APB No. 25 by clarifying the definition of an employee, the
determination of non-compensatory plans and the effect of modifications to stock
options. This interpretation, effective July 1, 2000, did not have have a
material effect on Global's consolidated financial statements.

In June 2001, the Financial Accounting Standards Board finalized FASB
statement No. 141, Business Combinations (SFAS 141), and No.142, Goodwill and
Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interest method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS 142 that the company reclassify the carrying
amounts of intangible assets and goodwill based on criteria specified in SFAS
141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purpose of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life would be tested for impairment in
accordance with guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from due date of asoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

The Company's previous business combinations were accounted for using the
purchase method. As of June 30, 2001, the Company wrote off its net carrying
amount of goodwill and other intangible assets totaling $5,547,460. Amortization
expense during the year ended June 30, 2001 was $1,150,395. The Company has
determined that the adoption of Financial Accounting Standards Board "FASB"
Statements No. 141 (SFAS 141), Business Combinations and No. 142 (SFAS 142),
Goodwill and Other Intangible Assets, will not have a significant impact on its
financial position, results of operations, and cash flows in the foreseeable
future.

The FASB recently issued FASB Statement No. 143, Accounting for Retirement
Obligations, to address accounting for asset retirement obligations and
associated retirement costs of long-lived assets. It will apply to costs such as
those incurred to close a nuclear power plant, an offshore oil platform, a mine
(e.g., coal or other natural resources), or a landfill as well as similar costs
incurred in other industries. The Statement amends FASB Statement No. 19,
Financial Accounting and Reporting by Oil and Gas Producing Companies, to
indicate that a company should account for obligations for dismantlement,
restoration, and abandonment costs in accordance with Statement 143. It also
applies to rate-regulated entities that meet the criteria for application of
FASB Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Statement 143 is effective for years beginning after June 15, 2002.
Management has determined that there will be no material potential impact on
financial position, results of operations and cash flows.

The FASB recently issued FASB Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. The new guidance resolves
significant implementation issues related to FASB Statement No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of. Statement 144 is effective for fiscal years beginning after December 15,
2001. Management has not determined the potential impact on financial position,
results of operations and cash flows.

FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-KSB includes "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 we make in this
Report are forward-looking. In particular, the statements herein regarding our
future results of operations or financial position are forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential," or "continue" or the negative of
such terms or other comparable terminology.

Forward-looking statements reflect our current expectations and are
inherently uncertain. For these statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. You should understand that future events, in
addition to those discussed elsewhere in this Report, particularly under "Risk
Factors," and also in other filings made by us with the Securities and Exchange
Commission, could affect our future operations and cause our results to differ
materially from those expressed in our forward-looking statements. The
cautionary statements made in this Report should be read as being applicable to
all related forward-looking statements contained herein.

ITEM 7 -- FINANCIAL STATEMENTS

Our audited consolidated financial statements for the fiscal years ended
June 30, 2001 and 2000 are located beginning at page F-1 of this Annual Report.

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

There are no items or circumstances to be disclosed under this Item 8.

PART III

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

The following sets forth biographical information about each of our
directors and executive officers as of September 28, 2001:

NAME AGE POSITION/OFFICE
---- --- ---------------
Irwin L. Gross 58 Chief Executive Officer and Chairman of
the Board
Eric Greenberg 37 President - Gaming Operations
David N. Shevrin 39 Vice President - Business Development
S. Lance Silver 33 General Counsel
M. Moshe Porat 53 Director
Charles T. Condy 60 Director
Stephen Schachman 56 Director

Irwin L. Gross has been Chairman of Global's Board of Directors and its
Chief Executive Officer since September 1998. Mr. Gross is a founder of Rare
Medium, Inc., a publicly held company listed on the Nasdaq National Market, and
was Chairman and a Director of Rare Medium from 1984 to 1998. In addition, Mr.
Gross served as the Chief Executive Officer of Engelhard/ICC, a joint venture
between Rare Medium and Engelhard. Mr. Gross has served as a consultant to,
investor in and director of, numerous publicly held and private companies and
serves on the board of directors of several charitable organizations. Mr. Gross
has a Bachelor of Science degree in Accounting from Temple University and a
Juris Doctor degree from Villanova University.

Eric Greenberg has served as President - Gaming Operations of Global since
August 2000. Prior thereto, he served as Co-President of InteliHealth since
January 2000 and from February 1996 to January 2000 as President of
InteliHealth's Healthy Home catalogue Division, which he founded. InteliHealth
is an award-winning consumer health portal owned by Aetna U.S. Healthcare. Mr.
Greenberg co-founded The Fairfield Mint, a consumer collectibles company based
in Connecticut, in August 1995. He holds a B.A. in Economics from Western
Maryland College and an M.B.A. from Harvard Business School.

David N. Shevrin has served as Vice President - Business Development of
Global since September 15, 1998, with primary responsibility for new business
development, analysis and strategy. Prior thereto, from July 1998, Mr. Shevrin
was Vice President of Ocean Castle Investments, LLC. His responsibilities there
were also in the areas of business development and analysis. From November 1994
to July 1998, Mr. Shevrin was Assistant to the Chairman and Chief Executive
Officer of ICC Technologies. Before then, Mr. Shevrin served as a Product
Manager with Kraft General Foods. Mr. Shevrin received his M.B.A. degree from
Duke University's Fuqua School of Business and Bachelor of Arts degree in
Economics from Emory University.

S. Lance Silver has served as Vice President and General Counsel of Global
since September 7, 1999. Prior thereto, from September 1994, Mr. Silver was an
associate in the Corporate Department of Wolf, Block, Schorr and Solis-Cohen,
LLP, where his practice focused on securities law, mergers and acquisitions, and
venture financing. Mr. Silver received his Juris Doctor (MAGNA CUM LAUDE) from
Temple University School of Law and a Bachelor of Science degree in Finance from
the Pennsylvania State University. Mr. Silver is licensed to practice law in
Pennsylvania and New Jersey.

M. Moshe Porat has been a Director of Global since September 1998. Since
September 1996, Dr. Porat has served as the Dean of the School of Business and
Management at Temple University. From 1988 to 1996 he was Chairman of the Risk
Management, Insurance and Actuarial Science Department at Temple University. Dr.
Porat received his undergraduate degree in economics and statistics (with
distinction) from Tel Aviv University, his M.B.A. (MAGNA CUM LAUDE) from the
Recanati Graduate School of Management at Tel Aviv University, and completed his
doctoral work at Temple University. Dr. Porat holds the Chair of the Joseph E.
Boettner Professorship in Risk Management and Insurance and has won several
awards in the insurance field. Prior to his academic work, Dr. Porat served as
deputy general manager of a large international insurance company. He holds the
CPCU professional designation and is a member of ARIA (American Risk and
Insurance Association), IIS (International Insurance Society), RIMS (Risk and
Insurance Management Society) and Society of CPCU. Dr. Porat has authored
several monographs on captive insurance companies and their use in risk
management, has published numerous articles on captive insurance companies,
self-insurance and other financial and risk topics.

Charles T. Condy has been a Director of Global since September 1998. Mr.
Condy was a director of Rare Medium, Inc., a publicly traded company listed on
the Nasdaq National Market, from 1996 to 1999. Mr. Condy is the founder,
chairman and chief executive officer of Next Century Restaurants, Inc., a
private company that owns Aqua, and Charles of Nob Hill, both of which are in
San Francisco, and Aqua of Las Vegas. He is founder and has been Chairman and
Chief Executive Officer of Proven Alternatives, Inc., a privately held
international energy management company, since 1991. Mr. Condy was chairman and
chief executive officer of California Energy Company, Inc., a geothermal energy
company, which he founded in 1971, and which become the largest geothermal
energy company in the world. Prior to founding California Energy Company, Mr.
Condy was Executive Vice President - Western Region of John Nuveen and Company,
members of the New York Stock Exchange. In the public policy area, Mr. Condy
helped found and has served as a board member of the Business Council for a
Sustainable Energy Future and the Coalition for Energy Efficiency and Renewable
Technologies. Mr. Condy currently advises the U.S. Department of Energy, the
U.S. Agency for International Development, and the U.S. Asian Environmental
Partnership on energy efficiency technology transfer and related funding to
developing economies.

Stephen Schachman has been a Director of Global since September 1998. Since
1995, Mr. Schachman has been the owner of his own consulting firm, Public
Affairs Management. From 1992 to 1995, Mr. Schachman was an executive officer
and consultant to Penn Fuel Gas Company, a supplier of natural gas products.
Prior thereto, he was an attorney with the Philadelphia law firm Dilworth,
Paxson, Kalish & Kaufman. Mr. Schachman was also an Executive Vice President of
Bell Atlantic Mobile Systems and prior thereto, President of the Philadelphia
Gas Works, the largest municipally owned gas company in the United States. Mr.
Schachman has a Bachelor of Arts degree from the University of Pennsylvania and
Juris Doctor degree from the Georgetown University Law School.

Officers serve at the discretion of the Board of Directors, subject to
rights, if any, under contracts of employment.

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

The SEC has comprehensive rules relating to the reporting of securities
transactions by directors, officers and stockholders who beneficially own more
than 10% of Global's Class A Common Stock. These rules are complex and difficult
to interpret. Based solely on a review of Section 16 reports received by Global
from Section 16 reporting persons, Global believes that no reporting person has
failed to file a Section 16 report on a timely basis during the most recent or
any prior fiscal year, except as follows: Irwin L. Gross (one option grant in
fiscal year 2000, and acquisition of preferred stock in fiscal year 2001) and
James W. Fox (one option grant in fiscal year 1999 and two in fiscal year 2000).

ITEM 10 -- EXECUTIVE COMPENSATION

The summary compensation table below sets forth the aggregate compensation
paid or accrued by Global for the fiscal years ended June 30, 2001 and 2000, and
the Transition Period ended June 30, 1999 to (i) the Chief Executive Officer,
(ii) Global's most highly paid executive officers other than the CEO who were
serving as executive officers at the end of the last completed fiscal year and
whose total annual salary and bonus exceeded $100,000, and (iii) two individuals
who would have been included in the table but for the fact that they were not
serving as executive officers of Global at the end of the most recently
completed fiscal year (collectively, the "Named Executives").

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION SECURITIES
---------------------------------- UNDERLYING
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY($) BONUS($) OTHER($) OPTIONS (#)
--------------------------- ----------- --------- -------- -------- -----------

Irwin L. Gross, 2001 250,000(1) -- -- --
Chief Executive Officer 2000 190,846 250,000 -- 1,500,000
1999 -- -- -- --

James W. Fox, President 2001 125,000(2) -- 56,170(3) --
2000 242,046 45,000 -- 25,000
1999 104,718 -- -- 105,000

Patrick J. Fodale, 2001 150,000(4) 26,923 -- --
Chief Financial Officer 2000 104,708 -- 39,766 (5) 75,000
1999 -- -- -- --

Eric Greenberg, President - 2001 175,385(6) -- -- 100,000
Gaming Operations 2000 -- -- -- --
1999 -- -- -- --

David N. Shevrin, Vice President - 2001 132,000(7) -- -- --
Business Development 2000 115,670 22,000 -- 25,000
2001 71,924 -- -- 75,000

S. Lance Silver, 2001 118,500(8) -- -- --
General Counsel 2000 82,500 11,000 -- 75,000
1999 -- -- -- --

----------
(1) Due to liquidity issues, Mr. Gross has been receiving half-salary since
December 2000. Thus, $182,692 was actually paid and $67,308 has been
deferred indefinitely.
(2) Mr. Fox left our employ on December 31, 2000.
(3) Represents severance payments made to Mr. Fox after December 31, 2000.
(4) Due to liquidity issues, Mr. Fodale received half-salary since December
2000. He left our employ on March 31, 2001. Thus, $121,154 was actually
paid and $28,846 has been deferred indefinitely.

(5) Represents reimbursement of moving expenses incurred by Mr. Fodale in his
relocation to New York City to begin work for us in December 1999.
(6) Due to liquidity issues, Mr. Greenberg has been receiving half-salary since
December 2000. Thus, $124,231 was actually paid and $51,154 has been
deferred indefinitely.
(7) Due to liquidity issues, Mr. Shevrin has been receiving half-salary since
December 2000. Thus, $96,462 was actually paid and $35,538 has been
deferred indefinitely.
(8) Due to liquidity issues, Mr. Silver has been receiving half-salary since
December 2000. Thus, $86,596 was actually paid and $31,904 has been
deferred indefinitely.

OPTION GRANTS IN FISCAL YEAR

Mr. Eric Greenberg received, during the year ended June 30, 2001, an option
to purchase 100,000 shares of the Company's common stock. These options,
exercisable at $4 per share, vest monthly in equal monthly amounts over the
three years following the date of grant and expire on August 2, 2010.

OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES

The following table sets forth the stock options exercises made during the
fiscal year ended June 30, 2001 by the Named Executives, as well as the value of
their unexercised stock options as of the end of the Period:

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE JUNE 30, 2001 JUNE 30, 2001
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE($)(1)
---- ----------- ----------- ------------------------- -------------------------------

Irwin L. Gross -- -- 775,000/725,000 --/--
James W. Fox -- -- 93,000/0(2) --/--
Patrick J. Fodale -- -- 30,000/45,000 --/--
Eric Greenberg -- -- 27,780/72,220 --/--
David N. Shevrin -- -- 62,500/37,500 --/--
S. Lance Silver -- -- 50,000/25,000 --/--

----------
(1) None of these options had an exercise price less than the closing bid price
per share of Global's Class A Common Stock on September 28, 2001.
(2) Mr. Fox's separation letter provided that 93,000 of his options would be
deemed vested and the remainder canceled.

DIRECTOR COMPENSATION

Outside directors receive $1,000 for each meeting of the Board of
Directors, and $500 for each committee meeting, attended in person or by
telephone. In addition, all directors are reimbursed for expenses actually
incurred in connection with each meeting of the Board of Directors or any
Committee thereof attended.

Global's 1994 Stock Option Plan provides for the automatic grant of
non-qualified stock options to directors of Global who are not employees or
principal stockholders ("Eligible Directors") to purchase shares of common
stock. On the date an Eligible Director becomes a director of Global, he or she
is to be granted options to purchase 10,000 shares of Global's Class A Common
Stock (the "Initial Director Options"). On the day immediately following the
date of the annual meeting of stockholders for Global for each fiscal year, each
Eligible Director, other than directors who received Initial Director Options
since Global's prior annual meeting, is to be granted options to purchase 1,000
shares of Global's Class A Common Stock (each an "Automatic Grant"), as long as

such director is a member of the Board of Directors on such day. The exercise
price for each share subject to these options is to be equal to the fair market
value of the Class A Common Stock on the date of grant, except for directors who
receive incentive options and who own more than 10% of the voting power, in
which case the exercise price is to be not less than 110% of the fair market
value on the date of grant. These options are to be exercisable in four equal
annual installments, commencing one year from the date of grant, and are to
expire the earlier of ten years after the date of grant or 90 days after the
termination of the director's service on the Board of Directors.

None of the members of the present Board of Directors has received
Automatic Grants. They have otherwise been granted options under Global's 1994
and 1997 Stock Option Plans, each of which allows for grants to directors in
addition to or in lieu of the Initial Director Option and Automatic Grant
mechanisms.

EMPLOYMENT AND SEVERANCE AGREEMENTS

Irwin L. Gross serves as Global's Chief Executive Officer pursuant to the
terms of an employment agreement that terminates on September 30, 2002. Mr.
Gross receives a minimum annual base salary of $250,000 and, subject to the
achievement of assigned goals, bonuses of not less than 20% of his annual
salary. Mr. Gross also received 1,500,000 ten-year options, 25% of which vested
immediately, 25% of which vest, subject to certain conditions, in three annual
increments beginning on October 8, 2000, and the balance of which vest on the
sixth anniversary of the date of grant, subject to accelerated vesting pursuant
to a three-year vesting schedule in the event of the achievement of certain
performance milestones and other conditions. The employment agreement provides
for a severance payment in the event that Global terminates Mr. Gross other than
for "cause" as defined in the employment agreement. The severance payment would
be equal to two times the remaining balance of his base salary for the remainder
of the then current term. The employment agreement also provides a payment in
the event Global terminates Mr. Gross due to a termination of its business as
defined in the employment agreement. In the event of the termination of Global's
business, Mr. Gross would receive an amount equal to two times his remaining
base salary for the then current term, but not less than his annual base salary
for one year. The employment agreement also provides that Global may pay other
incentive compensation as may be set by the Board of Directors from time to
time, and for such other fringe benefits as are paid to other executive
officers. Such fringe benefits take the form of medical and dental coverage and
an automobile allowance of $1,000 per month.

James W. Fox served as Global's President and Chief Operating Officer
pursuant to the terms of an employment agreement that terminated on December 31,
2000. Mr. Fox's employment with Global was not renewed. Under the agreement, Mr.
Fox was to receive a minimum annual base salary of $225,000 and, subject to the
achievement of assigned goals, bonuses of not less than 20% of his annual
salary. Mr. Fox also received 105,000 10-year options under Global's 1997 Stock
Option Plan, which vest in increments of 21,000 options per year pursuant to the
terms of the employment agreement. The employment agreement provided for a
severance payment in the event that Global terminated Mr. Fox other than for
"cause" as defined in the employment agreement. The severance payment would be
equal to two times the remaining balance of his base salary for the remainder of
the then current term. The employment agreement also provided a payment in the
event Global terminated Mr. Fox due to a termination of its business as defined
in the employment agreement. In the event of the termination of Global's
business, Mr. Fox would receive an amount equal to two times his remaining base
salary for the then current term, but not less than his annual base salary for
one year. The employment agreement also provides that Global may pay other
incentive compensation as may be set by the Board of Directors from time to
time, and for such other fringe benefits as are paid to other executive
officers. Such fringe benefits took the form of medical and dental coverage and
an automobile allowance of $450 per month. Mr. Fox's separation letter provided
that 93,000 of his options would be deemed vested and the remainder canceled,
and that he would receive severance payments.

Patrick J. Fodale received a letter regarding his employment from Global on
December 3, 1999. Mr. Fodale resigned his position with Global on March 30,
2001. The letter provided for a start date of December 15, 1999 and salary of
$200,000 per year. The terms of the letter included a performance-based bonus,
with a target of 25% of salary, and a grant of options to purchase 75,000 shares
of Global Class A Common Stock, vesting in five equal annual increments

beginning with the date of grant. Mr. Fodale also received a $400 per month car
allowance and medical and dental coverage. In the event of a termination without
"cause" or termination of Global's business, Mr. Fodale would have been entitled
to six months base salary. Mr. Fodale was also reimbursed for moving expenses of
$39,766.

Eric Greenberg serves as Global's President - Gaming Operations pursuant to
the terms of an employment agreement that terminates on August 1, 2003. Under
the agreement, Mr. Greenberg is to receive a minimum annual base salary of
$190,000 and, subject to the achievement of assigned goals, bonuses of up to 50%
of his annual salary. Mr. Greenberg also received 100,000 options under Global's
1994 Stock Option Plan, which vest in increments of 2,778 per month, with a last
increment of 2,770. The employment agreement provides for a severance payment in
the event that Global terminates Mr. Greenberg other than for "cause," in
connection with termination of its business, or, if after a "change of control"
Mr. Greenberg leaves for "good reason." The severance payment would be equal to
one-half of his base salary and acceleration of vesting of a portion of his
options. The employment agreement also provides that Global may pay other
incentive compensation as may be set by the Board of Directors from time to
time, and for such other fringe benefits as are paid to other executive
officers. Such fringe benefits take the form of medical and dental coverage and
an automobile allowance of $500 per month.

ITEM 11 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of November 15, 2001
regarding the ownership of Global's Class A Common Stock and Series E 8%
Convertible Preferred Stock by (i) each person known by Global to own
beneficially more than five percent of any class of Global's voting securities,
(ii) each director of Global, (iii) the Named Executives and (iv) all executive
officers and directors of Global as a group.

CLASS A SERIES E 8% CONVERTIBLE
COMMON STOCK PREFERRED STOCK(3)
------------ -------------------------------------
NAME AND ADDRESS OF NUMBER OF PERCENT OF NUMBER OF PERCENT OF
BENEFICIAL OWNER (1) SHARES CLASS(2) SHARES CLASS
-------------------- ------ -------- ------ -----

Irwin L. Gross 3,465,151(4) 22.0% 250(5) 100%
Charles T. Condy 137,025(6) * -- --
Stephen Schachman 131,400(7) * -- --
M. Moshe Porat 506,400(8) 3.5% -- --
David N. Shevrin 65,583(9) * -- --
James W. Fox 99,600(10) * -- --
Patrick J. Fodale 45,000(11) * -- --
Eric Greenberg 41,920(12) * -- --
S. Lance Silver 57,167(13) * -- --
All executive officers and
directors as a group 4,549,246(4)(6)(7)
(9 persons) (8)(9)(10)(11)(12)(13) 27.7% 250 100%

----------
* Less than 1%.

(1) Unless otherwise noted, all persons named in the table have sole voting and
investment power with respect to all shares beneficially owned by them.
Except as otherwise indicated below, the address of each beneficial owner
is c/o Global Technologies, Ltd., The Belgravia, 1811 Chestnut Street,
Suite 120, Philadelphia, Pennsylvania 19103.
(2) For Global, these percentages are based on 14,196,682 shares of Global's
Class A Common Stock outstanding as of November 15, 2001, except that
shares underlying options and warrants to purchase Class A Common Stock
exercisable within 60 days are deemed to be outstanding for purposes of
calculating the percentage owned by the holder(s) of such options and
warrants.

(3) $2,500,000 in advances to us were converted into these 250 shares of
preferred stock on March 30, 2001. Each share has a stated value of $10,000
and is convertible into shares of Class A common stock pursuant to the
following formula: stated value/0.3125 ($0.3125 was the closing price per
share of Class A common stock on March 30, 2001 as reported by the Nasdaq
National Market).

(4) Includes 50,948 shares owned by trusts for the benefit of Mr. Gross'
children of which Mr. Gross is not a trustee, and 9,000 shares held in
custodial accounts for the benefit of Mr. Gross' children of which Mr.
Gross' wife serves as custodian. Also includes 149,309 shares owned by
Ocean Castle Partners, LLC, and 39,750 shares and warrants currently
exercisable for 198,318 shares held by charitable trusts established by Mr.
Gross and of which he was trustee until March 23, 2001. Mr. Gross disclaims
beneficial ownership of all of these shares.

Includes 4,498 shares and warrants currently exercisable for 361,596 shares
owned jointly by Mr. Gross and his wife. Also includes 775,000 shares
issuable to Mr. Gross upon exercise of currently exercisable options. Also
includes warrants exercisable for 192,382 shares held by a charitable
foundation established by Mr. Gross.

(5) Includes 128 shares held by charitable trusts established by Mr. Gross and
of which he was trustee until March 23, 2001. Mr. Gross disclaims
beneficial ownership of all of these shares.

Includes 24 shares owned jointly by Mr. Gross and his wife. Also includes
98 shares held by a charitable foundation established by Mr. Gross.

(6) Includes 90,000 shares issuable to Mr. Condy upon exercise of currently
exercisable options, and 30,000 shares issuable to Mr. Condy upon exercise
of options exercisable within 60 days.

(7) Includes 90,000 shares issuable to Mr. Schachman upon exercise of currently
exercisable options, and 30,000 shares issuable to Mr. Schachman upon
exercise of options exercisable within 60 days.

(8) Includes 375,000 shares owned by First Lawrence Capital Corp. over which
Dr. Porat retains voting power pursuant to a proxy agreement until January
1, 2002. Also includes 90,000 shares issuable to Dr. Porat upon exercise of
currently exercisable options, and 30,000 shares issuable to Dr. Porat upon
exercise of options exercisable within 60 days.

(9) Includes 62,500 shares issuable to Mr. Shevrin upon exercise of currently
exercisable options, and 833 shares issuable to Mr. Shevrin upon exercise
of options exercisable within 60 days.

(10) Includes 93,000 shares issuable to Mr. Fox upon exercise of currently
exercisable options.

(11) Includes 30,000 shares issuable to Mr. Fodale upon the exercise of
currently exercisable options, and 15,000 shares issuable to Mr. Fodale
upon exercise of options exercisable within 60 days.

(12) Includes 36,114 shares issuable to Mr. Greenberg upon exercise of currently
exercisable options, and 5,556 shares issuable to Mr. Greenberg upon
exercise of options exercisable within 60 days.

(13) Includes 50,000 shares issuable to Mr. Silver upon exercise of currently
exercisable options, and 4,167 shares issuable to Mr. Silver upon exercise
of options exercisable within 60 days.

ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

BHG FLIGHTS, L.L.C.

We reimburse BHG Flights, L.L.C. for costs and expenses associated with our
use for corporate purposes of an airplane owned by BHG. Irwin L. Gross, our
Chairman and Chief Executive Officer, owns 50% of the interests in BHG. To date,
we have reimbursed BHG approximately $107,585.

PLEDGE OF COLLATERAL FOR MERRILL LYNCH CREDIT FACILITY

In response to a demand by Merrill Lynch that additional collateral be
deposited with Merrill Lynch in connection with our margin loan from Merrill
Lynch against 1,000,000 shares of U.S. Wireless Corporation common stock, Mr.
Gross, for the benefit of Global, deposited certain collateral with Merrill
Lynch on two separate dates - May 31 ($653,671 of collateral) and June 6, 2000
($956,238 of collateral) - all of which collateral was subsequently released to
Mr. Gross on June 27, 2000. Merrill Lynch demanded that additional collateral be
deposited in connection with the margin loan again, and, on July 24, 2000, Mr.
Gross redeposited the collateral released to him on June 27, 2000. Merrill
Lynch, on a third occasion, demanded that additional collateral be deposited in
connection with the margin loan, and, on July 27, 2000, Mr. Gross and a
charitable foundation that he established deposited an additional $1,129,002 of
collateral with Merrill Lynch.

In connection with Mr. Gross and the foundation's pledge of these amounts
of collateral on our behalf, they have been issued warrants to purchase that
number of shares of our Class A Common Stock equal to the fair market value of
the aggregate amount of collateral deposited as described above with Merrill
Lynch (accounting for the amount of collateral released on June 27, 2000 and
redeposited on July 24, 2000 only once) divided by the last sale price of a
share of our Class A Common Stock on the day on which the deposit was made
(using, for purposes of the redeposited collateral, the last sale prices per
share for the days on which the deposits were first made). Mr. Gross was
therefore issued three tranches of five-year warrants - one to purchase 174,312
shares (exercise price of $3.75 per share, the last sale price per share on May
31, 2000), the second to purchase 159,373 shares (exercise price of $6.00 per
share, the last sale price per share on June 6, 2000), and the third to purchase
27,911 shares (exercise price of $5.125 per share, the last sale price per share
on July 27, 2000). The foundation was issued one tranche of five-year warrants
to purchase 192,382 shares (exercise price of $5.125 per share, the last sale
price per share on July 27, 2000).

SERIES E 8% CONVERTIBLE PREFERRED STOCK

In August and September 2000 two charitable trusts established by Irwin L.
Gross, our Chairman and Chief Executive Officer, advanced a total of $800,000 to
us for working capital purposes. On September 22, 2000, the advances were
converted into promissory notes, each in the amount of $400,000. The notes
matured on December 31, 2000 and had an annual interest rate of 9.0%. On
December 31, the maturity dates of the notes were extended to June 30, 2001.

On November 22, 2000, $1,667,400 of collateral pledged to Merrill Lynch in
connection with our $10.0 million credit facility for our benefit by Mr. Gross
and a charitable foundation established by Mr. Gross was applied to pay down the
balance of the credit facility. We issued two promissory notes totaling
$1,667,400 to Mr. Gross and the charitable foundation. The new promissory notes
matured on December 31, 2000 and had an annual interest rate of 9.0%. On
December 31, the maturity dates of the notes were extended to June 30, 2001.

Between July 2000 and April 2001, Mr. Gross, the trusts and the charitable
foundation made additional advances to us totaling $757,548.58 ($644,000 of
these advances plus $2,000 in accrued interest are in the form of a Treasury
Bill and remain as collateral for the credit facility with Merrill Lynch). On
March 30, 2001, Mr. Gross, the Trusts and the charitable foundation converted
the existing $2,467,400 of notes discussed above and an additional $32,600 of
these advances into 250 shares of Global Technologies, Ltd. Series E 8%
Convertible Preferred Stock with an aggregate stated value of $2,500,000. This
preferred stock is convertible into shares of Class A common stock at a fixed
conversion price of $0.3125 per share, the closing price per share of Class A
common stock on March 30, 2001. The Certificate of Designation creating this
series of preferred stock includes certain other terms and conditions customary
for this type of investment. In accordance with NASDAQ rules, Class A common
stock representing no more than 19.99% of the outstanding Class A common stock
on March 30, 2001 may be issued on conversion of the preferred stock without
prior stockholder approval.

WARRANTS

As described above, in August and September 2000, each of two charitable
trusts established by Mr. Gross advanced $100,000 and $300,000 to us,
respectively. These advances were aggregated into notes, dated September 22,
2000, for each of the trusts. Each note is in the principal amount of $400,000,
matures on December 31, 2000 and bears interest at 9% per annum. In connection
with the advances, each trust was issued five-year warrants to purchase that
number of shares of our Class A common stock equal to the amount of each advance
made divided by the last sale price per share on the day of each such advance.
Each trust was therefore issued two tranches of warrants - one for 28,571
(exercise price of $3.50) shares and the other for 70,588 shares (exercise price
of $4.25). Irwin L. Gross, Chairman and Chief Executive Officer of Global, was
trustee of each of these trusts until March 23, 2001.

LOANS TO GLOBAL

Since March 30, 2001, when the conversion of advances to the Series E
Preferred Stock discussed above occurred, Mr. Gross, two charitable trusts
established by him and a limited partnership controlled by him have funded an
additional $847,000 to Global. These advances are currently evidenced by notes
that provide for interest at a rate of prime plus 2% per annum, $767,000 of
which have been repaid. The remaining debt is secured by a security interest in
the equity of TNCi UK owned by Global.

LEASE OF OFFICE SPACE

Mr. Gross was a principal of Ocean Castle Partners, LLC until April 2000.
Ocean Castle leases the approximately 1,500 square feet of office space in which
our principal executive offices are located. Pursuant to an agreement between
Ocean Castle and us, we pay the landlord for the amount of rent attributable to
this space. To date, we have paid a total of $74,136 pursuant to this agreement.

EMPLOYMENT MATTERS

We have employment agreements with certain of our executive officers and
have granted such officers options to purchase shares of Class A Common Stock.

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

The following Index to Exhibits lists the Exhibits filed as part of this
Annual Report on Form 10-KSB. Where so indicated, Exhibits which were previously
filed are incorporated by reference. Documents filed herewith are denoted with
an asterisk (*).

Exhibit
Number Description
------ -----------
2.01 - Asset Purchase and Sale Agreement dated as of April 29, 1999
between the Registrant and TNCi. (8)

2.02 - First Amendment to Asset Purchase and Sale Agreement dated as of
May 14, 1999 between the Registrant and TNCi. (8)

2.03 - Agreement and Plan of Merger by and between Interactive Flight
Technologies, Inc. and Global Technologies, Ltd., dated as of
August 16, 1999. (12)

2.04 - Deed, dated August 18, 2000, relating to the transfer of stock in
Inter Lotto (UK) Limited and the termination of the Operating
Agreements, by and among Inter Lotto (UK) Limited, GTL Management
Limited, Global Technologies, Ltd., GlobalTech Holdings Limited,
The Right Honourable The Lord Mancroft, Roy Fisher, and Douglas
Smith. (20)

2.05 - Articles of Association of TNCi UK Limited. (23)

2.06 - Application for Shares. (23)

3.01 - Certificate of Ownership and Merger. (1)

3.02 - Amended and Restated Certificate of Incorporation of the
Registrant. (1)

3.03 - By-laws of the Registrant. (1)

3.04 - Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant dated November 2, 1998. (9)

3.05 - Certificate of Designations, Preferences, and Rights of Series A
Convertible Preferred Stock of the Registrant. (9)

3.06 - Certificate of Designations, Preferences, and Rights of Series B
Convertible Preferred Stock of the Registrant. (9)

3.07 - Amended and Restated Certificate of Incorporation of Global
Technologies, Ltd., filed with the Secretary of State of the State
of Delaware on August 13, 1999. (12)

3.08 - Amended and Restated By-Laws of Global Technologies, Ltd. (12)

4.01 - Warrant Agreement, dated as of March 7, 1995 among the Registrant,
D. H. Blair Investment Banking Corp. and American Stock Transfer &
Trust Company. (1)

4.02 - Form of Underwriter's Unit Purchase Option. (1)

4.03 - Amendment to March 7, 1995 Warrant Agreement, among the Registrant,
D. H. Blair Investment Banking Corp. and American Stock Transfer &
Trust Company. (4)

4.04 - Warrant Agreement dated as of October 24, 1996 among the
Registrant, D. H. Blair Investment Banking Corp. and American Stock
Transfer & Trust Company. (4)

4.05 - Amendment to October 24, 1996 Warrant Agreement, among the
Registrant, D. H. Blair Investment Banking Corp., and American
Stock Transfer & Trust Company. (4)

4.06 - Stock Purchase Warrant dated as of November 7, 1996 issued to
FortuNet, Inc. (4)

4.07 - Stock Purchase Warrant dated as of November 12, 1996 issued to
Houlihan Lokey Howard & Zukin. (4)

4.08 - Form of Warrant issued to The Shaar Fund Ltd. dated May 10, 1999.
(11)

4.09 - Registration Rights Agreement dated May 6, 1999 between the
Registrant and The Shaar Fund Ltd. (11)

4.10 - Certificate of Designations, Rights, Preferences and Limitations of
Series A 8% Convertible Preferred Stock of Global Technologies,
Ltd. (12)

4.11 - Certificate of Designations, Rights, Preferences and Limitations of
Series B 8% Convertible Preferred Stock of Global Technologies,
Ltd. (12)

4.12 - Certificate of Designations, Rights, Preferences and Limitations of
Series C Convertible Preferred Stock of Global Technologies, Ltd.
(14)

4.13 - Form of Callable Warrant issued to holders of Series C Convertible
Preferred Stock of Global Technologies, Ltd. (14)

4.14 - Registration Rights Agreement dated February 16, 2000 between the
Registrant and the investors signatory thereto. (15)

4.15 - Private Placement Purchase Agreement among Registrant and the
Investors signatory thereto, dated as of June 8, 2000. (18)

4.16 - Form of Secured Convertible Note issued to Investors. (18)

4.17 - Form of Warrant to be issued to holders of Secured Convertible
Notes in the event of certain redemptions. (18)

4.18 - Convertible Secured Note Purchase Agreement among Registrant and
the Investors signatory thereto, dated as of October 3, 2000. (21)

4.19 - Form of 8% Convertible Secured Note issued to Investors. (21)

4.20 - Stock Pledge Agreement, dated as of October 3, 2000. (21)

4.21 - Certificate of Designations, Rights, Preferences and Limitations of
Series D Convertible Preferred Stock of Global Technologies, Ltd.
(24)

4.22 - Financial Consulting Agreement dated as of March 22, 2001 between
Equilink Capital Partners, LLC and the Registrant. (25)

4.23 - Letter Amendment dated as of April 6, 2001 to the Financial
Consulting Agreement among the Registrant, Equilink Capital
Partners, LLC and certain affiliates of Equilink Capital Partners,
LLC. (25)

4.24 - Financial Advisory and Consulting Agreement dated April 12, 2001
among the Registrant, Equilink Capital Partners, LLC and National
Securities Corporation. (25)

4.25 - Warrant dated April 12, 2001 issued to National Securities
Corporation. (25)

4.26 - Certificate of Designations, Rights, Preferences and Limitations of
Series E Convertible Preferred Stock of Global Technologies, Ltd.
(*)

10.01 - Amended and Restated 1994 Stock Option Plan. (3)

10.02 - Amended and Restated Shareholders' Agreement dated October 6, 1994
by Yuri Itkis, Michail Itkis, Boris Itkis, Steven M. Fieldman,
Donald H. Goldman, Lance Fieldman and Registrant. (l)

10.03 - Amended and Restated Escrow Agreement between the Registrant,
American Stock Transfer & Trust Company, Yuri Itkis, Michail Itkis,
Boris Itkis, Steven M. Fieldman, Donald H. Goldman and Lance
Fieldman. (1)

10.04 - Employment Agreement between the Registrant and Michail Itkis dated
as of October 31, 1994. (l)

10.05 - Form of Indemnification Agreement. (1)

10.06 - Employment Agreement between the Registrant and John Alderfer dated
as of October 2, 1996. (4)

10.07 - Severance Agreement between the Registrant and Lance Fieldman dated
as of November 4, 1996. (4)

10.08 - Amended and Restated Intellectual Property License and Support
Services Agreement dated as of November 7, 1996 between FortuNet,
Inc. and Registrant. (4)

10.09 - Sublease and Consent dated July 16, 1996 between the Registrant and
AGF 4041 Limited Partnership. (4)

10.10 - Office Lease dated July 15, 1996 between the Registrant and AGF
4041 Limited Partnership. (4)

10.11 - Standard Industrial/Commercial Single-Tenant Lease-Net, dated as of
June 27, 1996, between the Registrant and 44th Street and Van Buren
Limited Partnership. (4)

10.12 - Strategic Alliance Agreement dated as of November 12, 1996 between
the Registrant and Hyatt Ventures, Inc. (4)

10.13 - Registration Rights Agreement dated as of November 12, 1996 between
the Registrant and Hyatt Ventures, Inc. (4)

10.14 - Amendment No. 2 to Amended and Restated Shareholders' Agreement
dated as of November 12, 1996. (4)

10.15 - Employment Agreement between the Registrant and Thomas Metzler
dated as of November 18, 1996. (5)

10.16 - Lease Surrender Agreement dated as of May 12, 1998. (6)

10.17 - Amendment to Severance Compensation Agreement dated as of August
28, 1998 between the Registrant and Michail Itkis. (7)

10.18 - Second Amendment to Employment Agreement dated as of August 28,
1998 between the Registrant and John Alderfer. (7)

10.19 - Second Amendment to Employment Agreement dated as of August 28,
1998 between the Registrant and Thomas Metzler. (7)

10.20 - Securities Purchase Agreement dated as of May 10, 1999 between the
Registrant and The Shaar Fund, Ltd. (9)

10.21 - Termination Agreement dated November 10, 1997 between the
Registrant and Hyatt Ventures, Inc. (10)

10.22 - Office Lease dated as of September 10, 1999 between the Registrant
and 135 East 57th Street LLC. (11)

10.23 - Assignment dated May 10, 1999 of rights under the Securities
Purchase Agreement and the Registration Rights Agreement, both
dated October 23, 1998 between TNCi and the Shaar Fund Ltd. to the
Registrant. (11)

10.24 - Amendment dated May 10, 1999 to Registration Rights Agreement dated
October 23, 1998 between Registrant and TNCi. (11)

10.25 - Securities Purchase Agreement dated as of May 10, 1999 between TNCi
and the Registrant for TNCi Series C Convertible Preferred Stock.
(11)

10.26 - Form of Securities Purchase Agreement dated as of June 25, 1999.
(11)

10.27 - Registration Rights Agreement dated July 1999 respecting shares
issued pursuant to the Securities Purchase Agreement dated as of
June 25, 1999, for the purchase of TNCi Series A and Series E
Notes. (11)

10.28 - Form of Put/Call Agreement dated July 1999. (11)

10.29 - Securities Purchase Agreement dated August 9, 1999 for the purchase
of TNCi Series D Notes. (11)

10.30 - Form of Warrant Purchase Agreement dated August 9, 1999 between
Registrant and certain TNCi Warrant holders. (11)

10.31 - Registration Rights Agreement dated August 12, 1999 among the
Registrant, XCEL Capital, LLC and Elaine Martin. (11)

10.32 - Registration Rights Agreement dated August 12, 1999 among the
Registrant, Robert E. Benninger, Jr., Sara Anne Benninger, Will
Brantley and Elaine Martin. (11)

10.33 - Form of Put/Call Agreement dated August 12, 1999 respecting shares
issued pursuant to the Warrant Purchase Agreement between the
Registrant and certain TNCi Warrant holders. (11)

10.34 - Employment Agreement between the Registrant and James W. Fox. (11)

10.35 - Employment Agreement between Global Technologies, Ltd. and Irwin L.
Gross, dated October 1, 1999. (12)

10.36 - Purchase Agreement between IFT Leasing Limited and International
Lottery and Totalizator Systems, Inc. regarding purchase of ILTS
Datatrak On-Line Turnkey Lottery System, dated September 8, 1999.
(12)

10.37 - Facilities Management Agreement between IFT Management Limited and
International Lottery and Totalizator Systems, Inc. regarding
operational and technical support management of ILTS Datatrak
On-Line Turnkey Lottery System, dated September 8, 1999. (12)

10.38 - Guarantee by Global Technologies, Ltd. of the obligations of IFT
Leasing Limited and IFT Management Limited under the Purchase
Agreement and Facilities Management Agreement, respectively. (12)

10.39 - Option Agreement between Global Technologies, Ltd. and Irwin L.
Gross, dated October 8, 1999. (13)

10.40 - Convertible Preferred Stock Purchase Agreement among Global
Technologies, Ltd. and the Investors Signatory thereto, dated as of
February 16, 2000. (14)

10.41 - Employment Agreement between Robert Pringle and The Network
Connection, Inc., dated March 6, 2000. (17)

10.42 - Option Agreement between Robert Pringle and The Network Connection,
Inc., dated March 6, 2000. (17)

10.43 - Registration Rights Agreement between The Network Connection, Inc.
and Robert Pringle, Jay Rosan, and Richard Genzer, dated March 6,
2000. (17)

10.44 - Settlement Agreement by and among Registrant, Advantage Fund II
Ltd. and Koch Investment Group Ltd. (22)

10.45 - Note Issued by Registrant to Advantage Fund II Ltd. in Principal
Amount of $4,800,000. (22)

10.46 - Note Issued by Registrant to Koch Investment Group Ltd. in
Principal Amount of $3,200,000. (22)

10.47 - Release Among Registrant, Advantage Fund II Ltd. and Koch
Investment Group Ltd. (22)

10.48 - Amendment dated as of April 26, 2001 to the Settlement Agreement
dated as of January 31, 2001 by and among Registrant, Advantage
Fund II Ltd. And Koch Investment Group, Ltd. (24)

10.49 - Securities Exchange Agreement dated as of April 26, 2001 among
Registrant, Advantage Fund II, Ltd and Koch Investment Group, Ltd.
(24)

23.00 - Consent of BDO Seidman, LLP (*)

23.01 - Consent of KPMG LLP (*)

99.01 - Certificate of Designations of Series B Convertible Preferred Stock
of TNCi dated October 23, 1998. (8)

99.02 - Amendment dated as of April 29, 1999 to Certificate of Designations
of Series B Convertible Preferred Stock of TNCi. (8)

99.03 - Certificate of Designations of Series C Convertible Preferred Stock
of TNCi dated as of April 30, 1999. (8)

99.04 - Certificate of Designations of Series D Convertible Preferred Stock
of TNCi dated as of May 5, 1999. (8)

99.05 - Agreement for the Sale and Purchase of Shares in Inter Lotto (UK)
Limited dated April 29, 1999 between Crown Leisure Sales Limited
and IFT Holdings Limited. (11)

99.06 - Shareholders Agreement dated April 29, 1999 by and between Norman
Feinstein & Others and IFT Holdings Limited and Inter Lotto (UK)
Limited. (11)

99.07 - Operating Agreement dated April 29, 1999 between Inter Lotto (UK)
Limited and IFT Management Limited. (11)

99.08 - Secured Promissory Note dated January 29, 1999 made by TNCi and
payable to the order of the Company. (8)

99.09 - Allonge to Secured Promissory Note dated January 29, 1999. (8)

99.10 - Second Allonge to Secured Promissory Note dated March 19, 1999. (8)

99.11 - Third Allonge to Secured Promissory Note dated March 24, 1999. (8)

99.12 - Fourth Allonge to Secured Promissory Note dated May 10, 1999. (8)

99.13 - Opinion of ValueMetrics, Inc. addressed to TNCi dated May 14, 1999.
(8)

99.14 - Fifth Allonge to Secured Promissory Note dated July 16, 1999. (11)

99.15 - Sixth Allonge to Secured Promissory Note dated August 9, 1999. (11)

99.16 - Seventh Allonge to Secured Promissory Note dated August 24, 1999.
(11)

99.17 - Form of Termination and Settlement Agreement with Yuri Itkis. (19)

99.18 - Form of Termination and Settlement Agreement with Donald Goldman.
(19)

----------
* Filed Herewith.

(1) Incorporated by reference from the Registrant's Registration Statement on
Form SB-2, Registration No. 33-86928.

(2) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal period ended July 31, 1996, filed with the Securities
and Exchange Commission on September 16, 1996, File No. 0-25668.

(3) Incorporated by reference from the Registrant's Registration Statement on
Form SB-2, Registration No. 333-02044.

(4) Incorporated by reference from the Registrant's Registration Statement on
Form S-3, Registration No. 333-14013.

(5) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal quarter ended January 31, 1997, filed with the
Securities and Exchange Commission on March 17, 1997, File No. 0-25668.

(6) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal quarter ended April 30, 1998, filed with the
Securities and Exchange Commission on June 5, 1998, File No. 0-25668.

(7) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal quarter ended July 31, 1998, filed with the
Securities and Exchange Commission on September 15, 1998, File No. 0-25668.

(8) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated May 17, 1999, filed with the Securities and Exchange Commission on
June 1, 1999, File No. 0-25668.

(9) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal quarter ended April 30, 1999, filed with the
Securities and Exchange Commission on June 14, 1999, File No. 0-25668.

(10) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 31, 1998, filed with the Securities and
Exchange Commission on January 20, 1999, File No. 0-25668.

(11) Incorporated by reference from the Registrant's Annual Report on Form
10-KSB for the transition period ended June 30, 1999 filed with the
Securities and Exchange Commission on October 28, 1999, File No. 0-25668.

(12) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal quarter ended September 30, 1999, filed with the
Securities and Exchange Commission on November 15, 1999, File No. 0-25668.

(13) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal quarter ended December 31, 1999, filed with the
Securities and Exchange Commission on February 14, 2000, File No. 0-25668.

(14) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated February 16, 2000, filed with the Securities and Exchange Commission
on February 28, 2000, File No. 0-25668.

(15) Incorporated by reference from the Registrant's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on March 17,
2000, File No. 333-32772.

(16) Incorporated by reference from the Registrant's Registration Statement on
Form S-3/A filed with the Securities and Exchange Commission on April 14,
2000, File No. 333-32772.

(17) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the fiscal quarter ended March 31, 2000, filed with the
Securities and Exchange Commission on May 13, 2000, File No. 0-25668.

(18) Incorporated by reference from the Registrant's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on July 10,
2000, File No. 333-41096.

(19) Incorporated by reference from the Registrant's Registration Statement on
Form S-3/A filed with the Securities and Exchange Commission on August 15,
2000, File No. 333-41096.

(20) Incorporated by reference from the Registrant's Current Report on Form 8-K
for the period ended August 18, 2000, filed with the Securities and
Exchange Commission on September 5, 2000, File No. 0-25668.

(21) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated October 3, 2000, filed with the Securities and Exchange Commission on
October 20, 2000, File No. 0-25668.

(22) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated February 15, 2001, filed with the Securities and Exchange Commission
on February 20, 2001, File No. 0-25668.

(23) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated March 5, 2001, filed with the Securities and Exchange Commission on
March 20, 2001, File No. 0-25668.

(24) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated April 26, 2001, filed with the Securities and Exchange Commission on
May 2, 2001, File No. 0-25668.

(25) Incorporated by reference from the Registrant's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on May 8, 2001,
File No. 333-60424.

REPORTS ON FORM 8-K

We filed the following Current Reports on Form 8-K during the relevant
reporting period:

* April 5, 2001 explaining that on March 24, 2001, The Network
Connection, Inc., an approximately 70% subsidiary at the time, filed a
voluntary petition for relief under Chapter 11 of Title 11 of the
United States Code with the United States Bankruptcy Court for the
Eastern District of Pennsylvania, in Philadelphia.
* May 2, 2001 describing the exchange of all shares of our outstanding
Series C Preferred Stock for shares of our Series D Preferred Stock.
* June 4, 2001 explaining that we issued a press release regarding our
receipt of a Nasdaq Staff Determination on May 23, 2001 indicating
that our securities were subject to delisting and that we had
requested a hearing before a Nasdaq Listing Qualifications Panel to
review the Staff Determination.
* June 13, 2001 explaining that trading in shares of U.S. Wireless
Corporation, sales of which had been a primary source of liquidity,
had been halted by Nasdaq.

We filed the following Current Reports on Form 8-K after the relevant
reporting period:

* August 8, 2001 explaining that a Nasdaq Listing Qualifications Panel
had determined to delist our securities from The Nasdaq Stock Market
effective with the open of business on August 8, 2001.

SIGNATURES

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

GLOBAL TECHNOLOGIES, LTD.

Dated: December 13, 2001 By: /s/ Irwin L. Gross
------------------------------------
Irwin L. Gross
CHIEF EXECUTIVE OFFICER

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

SIGNATURE TITLE DATE
--------- ----- ----

/s/ IRWIN L. GROSS Chief Executive Officer December 13, 2001
-------------------------- and Director
Irwin L. Gross

/s/ STANLEY O. JESTER Interim Chief Financial Officer December 13, 2001
-------------------------- (Principal Financial Officer)
Stanley O. Jester

/s/ CHARLES T. CONDY Director December 13, 2001
--------------------------
Charles T. Condy

/s/ STEPHEN SCHACHMAN Director December 13, 2001
--------------------------
Stephen Schachman

/s/ M. MOSHE PORAT Director December 13, 2001
--------------------------
M. Moshe Porat

GLOBAL TECHNOLOGIES, LTD.
AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
----

Report of Independent Certified Public Accountants................... F-2

Independent Auditors' Report......................................... F-3

Consolidated Balance Sheets as of June 30, 2001 and 2000............. F-4

Consolidated Statements of Operations for the Years Ended
June 30, 2001, and June 30, 2000.................................... F-5

Consolidated Statements of Stockholders' Equity (Deficiency) and
Comprehensive Income (Loss) for the Years Ended June 30, 2001 and
2000............................................................... F-6 & F-7
Consolidated Statements of Cash Flows for the Years Ended
June 30, 2001 and June 30, 2000.. .................................. F-8

Notes to Consolidated Financial Statements...........................F-9 to F-44

F-1

Report of Independent Certified Public Accountants

To the Stockholders and Board of Directors
Global Technologies, Ltd.
Philadelphia, Pennsylvania

We have audited the accompanying consolidated balance sheet of Global
Technologies, Ltd and subsidiaries as of June 30, 2001 and the related
consolidated statements of operations, stockholders' equity (deficiency) and
comprehensive income (loss), and cash flows for the year 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 audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Global
Technologies, Ltd. and subsidiaries as of June 30, 2001, and the results of
their operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses aggregating $72.4 million
for the two year period ended June 30, 2001 and has a stockholders' deficiency
of $15.7 million and a working capital deficiency of $8.4 million at June 30,
2001 that raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to this matter are also described in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.

The Company is also a defendant in several legal proceedings, as described more
fully in Note 16 to the consolidated financial statements, the outcome of which
are not presently determinable.

As discussed in Note 2 to the financial statements, the Company's majority -
owned subsidiary, The Network Connection, Inc., filed for protection under
Chapter XI of the Bankruptcy Code. The net liabilities of the subsidiary of $5.9
million at June 30, 2001 have been classified as a deferred credit on the
consolidated balance sheet. The disposition of the deferred credit is contingent
upon the bankruptcy court's ultimate resolution of the matter.

BDO Seidman, LLP

Philadelphia, Pennsylvania

November 15, 2001

F-2

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Global Technologies, Ltd. and subsidiaries:

We have audited the accompanying consolidated balance sheet of Global
Technologies, Ltd. and subsidiaries as of June 30, 2000 and the related
consolidated statements of operations, stockholders' equity and comprehensive
income and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material respects, the financial position of Global Technologies,
Ltd. and subsidiaries as of June 30, 2000 and the results of their
operations and their cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.

/s/ KPMG LLP

Phoenix, Arizona
September 27, 2000,
except for Note 10(c) paragraph 1,
which is as of October 4, 2000

F-3

GLOBAL TECHNOLOGIES, LTD.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

June 30, June 30,
2001 2000
------------- -------------

ASSETS
Current Assets:
Cash and cash equivalents $ 45,650 $ 3,761,301
Restricted cash 70,538 766,748
Investment securities -- 64,125,000
Accounts receivable -- 55,951
Prepaid expenses 115,333 846,957
Assets held for sale 1,700,000 --
Deferred tax asset -- 24,439,131
Other current assets 48,144 2,204,803
------------- -------------

Total current assets 1,979,665 96,199,891

Investments -- 75,000
Note receivable from related party -- 117,612
Property and equipment, net 556,009 17,222,957
Intangibles, net -- 6,697,955
Other assets 83,678 1,412,516
------------- -------------

Total assets $ 2,619,352 $ 121,725,931
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
Accounts payable $ 1,809,255 $ 9,956,182
Accrued liabilities 1,466,819 3,516,012
Deferred credit 5,929,024 --
Accrued product warranties -- 141,796
Notes payable 747,560 6,314,129
Notes payable to related parties 401,000 800,000
------------- -------------

Total current liabilities 10,353,658 20,728,119
Notes payable 8,000,000 4,000,000
Accrued litigation settlement -- 875,000
------------- -------------

Total liabilities 18,353,658 25,603,119
------------- -------------

Minority interest -- --

Stockholder's equity (deficiency):
Series C 5% convertible preferred stock, 1,000 shares
designated, zero shares and 1,000 shares issued and
outstanding respectively -- 10
Series D 5% convertible preferred stock, 1,000 shares
designated, 150 and zero shares issued and outstanding
Respectively 2 --
Series E 8% convertible preferred stock, 250 shares
Designated, 250 shares issued and outstanding 3 --
Class A common stock, one vote per share, par value $.01
Share, 40,000,000 shares authorized; 14,196,682 and
10,395,015 issued and outstanding, respectively 141,967 103,952
Additional paid-in capital 142,846,151 135,358,848
Accumulated other comprehensive income (loss) (558,626) 84,157,758
Accumulated deficit (158,163,803) (123,497,756)
------------- -------------

Total stockholders' equity (deficiency) (15,734,306) 96,122,812
------------- -------------

Total liabilities and stockholders' equity (deficiency) $ 2,619,352 $ 121,725,931
============= =============

See accompanying notes to consolidated financial statements.

F-4

GLOBAL TECHNOLOGIES, LTD.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED JUNE 30
-------------------------------
2001 2000
------------ ------------

Revenues:
Equipment sales $ 84,149 $ 6,983,787
Service income 206,146 413,209
------------ ------------
290,295 7,396,996
------------ ------------
Costs and expenses:
Cost of equipment sales 61,753 4,867,519
Cost of service income 170,083 148,221
General and administrative expenses 19,249,060 21,166,771
Expenses associated with investments -- 1,944,743
Loss on write off of intangibles 5,547,560 --
Loss from impairment of long-lived assets 10,719,040 --
Special charges 725,753 2,156,205
Amortization of intangibles 1,150,395 912,553
------------ ------------
37,623,644 31,196,012
------------ ------------

Operating loss (37,333,349) (23,799,016)
Other:
Interest expense (4,278,315) (5,948,347)
Interest income 47,264 655,194
Equity in loss of nonconsolidated affiliates -- (10,345,210)
Gain on sale of investments 4,282,844 --
Gain on legal settlement 1,336,563 --
Other income (expense) 108,054 (14,339)
------------ ------------
Loss before minority interest and
extraordinary item (35,836,939) (39,451,718)
Minority interest 1,869,009 1,612,529
------------ ------------

Loss before extraordinary item (33,967,930) (37,839,189)

Extraordinary loss on extinguishment of debt (698,117) --
------------ ------------

Net Loss (34,666,047) (37,839,189)

Cumulative dividend on preferred stock (50,000) (187,415)

Redemption of preferred stock (173,469) 509,183
------------ ------------

Net loss attributable to common shareholders $(34,889,516) $(37,517,421)
============ ============
Loss per common share: basic and diluted
Loss per common share before extraordinary item $ (2.96) $ (3.81)
Extraordinary loss on extinguishments of debt $ (.06) --
------------ ------------

Loss per common share $ (3.02) $ (3.81)
============ ============

Weighted average common shares outstanding: basic and diluted 11,541,469 9,842,392
============ ============

See accompanying notes to consolidated financial statements.

F-5

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
AND COMPREHENSIVE INCOME (LOSS)

CLASS A CLASS B SERIES A SERIES C, D, & E
COMMON STOCK COMMON STOCK PREFERRED STOCK PREFERRED STOCK
------------------- -------------- --------------- --------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------ ------ ------ ------ ------

Balance as of June 30, 1999 8,151,965 $ 81,521 -- $ -- 3,000 $ 30 -- $ --
Exercise of stock options 132,306 1,323 -- -- -- -- -- --
Issuance of stock for purchase of Series Notes 581,415 5,814 -- -- -- -- -- --
Issuance of stock to officers and directors 1,544,250 15,443 -- -- -- -- -- --
Issuance of warrants and stock to third parties
for services and in connection with financing 22,500 225 -- -- -- -- -- --
Treasury stock purchases -- -- -- -- -- -- -- --
Issuance of Series C preferred stock -- -- -- -- -- -- 1,000 10
Redemption of Series A preferred stock -- -- -- -- (3,000) (30) -- --
Conversion of Note Payable to TNCi common stock -- -- -- -- -- -- -- --
Unit purchase options 168,897 1,689 -- -- -- -- -- --
TNCi purchase of outstanding warrants -- -- -- -- -- -- -- --
Advance under equity purchase agreement -- -- -- -- -- -- -- --
Net issuance of TNCi commitment shares associated
with equity purchase agreement -- -- -- -- -- -- -- --
Beneficial conversion on convertible notes -- -- -- -- -- -- -- --
Compensation expense related to stock option
modifications -- -- -- -- -- -- -- --
Issuance of warrants to related party -- -- -- -- -- -- -- --
Fractional shares paid for stock dividend (38) -- -- -- -- -- -- --
Retirement of treasury stock (582,530) (5,825) -- -- -- -- -- --
Issuance of stock in legal settlements 376,250 3,762 -- -- -- -- -- --
Equity attributable to minority interest -- -- -- -- -- -- -- --
Comprehensive income(loss):
Gain/Loss on foreign currency translation -- -- -- -- -- -- -- --
Net unrealized gain on investments -- -- -- -- -- -- -- --
Unrealized tax benefit of NOL carryforward -- -- -- -- -- -- -- --
Net Loss -- -- -- -- -- -- -- --
----------- --------- ----- ----- ------- --- ------- ----

Balance as of June 30, 2000 10,395,015 103,952 -- -- -- -- 1000 10
Issuance of warrants to related party -- -- -- -- -- -- -- --
Issuance of common stock in legal settlements 305,045 3,050 -- -- -- -- -- --
Conversion of Note Payable to common stock 562,500 5,625 -- -- -- -- -- --
Issuance of common stock related to -- -- -- -- -- -- -- --
Consulting Agreement with Equilink 1,700,000 17,000 -- -- -- -- -- --
Beneficial conversion on secured notes -- -- -- -- -- -- -- --
Redemption of secured convertible notes -- -- -- -- -- -- -- --
Conversion of Series C & D Preferred stock to
common stock 1,234,122 12,340 -- -- -- -- (850) (8)
Conversion of related party debt to Preferred stock -- -- -- -- -- -- 250 3
Incremental increase in capital of TNCi
Comprehensive income (loss):
Gain/loss on foreign currency translation -- -- -- -- -- -- -- --
Net unrealized gain on investments -- -- -- -- -- -- -- --
Unrealized tax benefit of NOL carryforward -- -- -- -- -- -- -- --
Net Loss -- -- -- -- -- -- -- --
----------- --------- ----- ----- ------- --- ------- ----

Balance as of June 30, 2001 14,196,682 $ 141,967 -- -- -- -- 400 $ 5
=========== ========= ===== ===== ======= === ======= ====

See accompanying notes to consolidated financial statements.

F-6

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
AND COMPREHENSIVE INCOME (LOSS)
(Continued)

ACCUMULATED
ADDITIONAL OTHER
PAID-IN COMPREHENSIVE ACCUMULATED
CAPITAL INCOME (LOSS) DEFICIT
------------- ------------ -------------

Balance as of June 30, 1999 $ 113,435,479 $ (10,107) $ (85,658,567)
Exercise of stock options 563,386 -- --
Issuance of stock for purchase of Series Notes 1,647,812 -- --
Issuance of stock to officers and directors 2,669,495 -- --
Issuance of warrants and stock to third parties
for services and in connection with financing 1,949,223 -- --
Treasury stock purchases -- -- --
Issuance of Series C preferred stock 9,847,405 -- --
Redemption of Series A preferred stock (3,570,787) -- --
Conversion of Note Payable to TNCi common stock 399,800 -- --
Unit purchase options 2,109,430 -- --
TNCi purchase of outstanding warrants (296,036) -- --
Advance under equity purchase agreement 447,544 -- --
Net issuance of TNCi commitment shares associated
With equity purchase agreement 606,133 -- --
Beneficial conversion on convertible notes 4,000,000 -- --
Compensation expense related to stock option
Modifications 278,318 -- --
Issuance of warrants to related party 2,324,195 -- --
Fractional shares paid for stock dividend (519) -- --
Retirement of treasury stock (1,583,125) -- --
Issuance of stock in legal settlements 972,409 -- --
Equity attributable to minority interest (441,314) -- --
Comprehensive income(loss):
Loss on foreign currency translation -- (1,369,104) --
Net unrealized gain on investments -- 61,097,838 --
Unrealized tax benefit of NOL carryforward -- 24,439,131 --

Net Loss -- -- (37,839,189)
------------- ------------ -------------

Balance as of June 30, 2000 135,358,848 84,157,758 (123,497,756)

Issuance of warrants to related party 1,070,527 -- --
Issuance of common stock in legal settlements 1,106,691 -- --
Conversion of Note Payable to common stock 1,212,933 -- --
Issuance of common stock related to
Consulting Agreement with Equilink 561,000 -- --
Beneficial conversion expense on secured notes 842,300 -- --
Redemption of secured convertible notes (2,909,704) -- --
Conversion of Series C & D preferred stock to
common stock -- -- --
Conversion of related party debt to preferred stock 2,499,997 -- --
Incremental increase in capital of TNCi 3,103,559 3,103,559
Comprehensive income (loss):
Gain on foreign currency translation -- 820,585 --
Net unrealized gain on investments -- (61,097,838) --
Unrealized tax benefit of NOL carryforward -- (24,439,131) --

Net Loss -- -- (34,666,047)
------------- ------------ -------------

Balance as of June 30, 2001 $ 142,846,151 $ (558,626) $(158,163,803)
============= ============ =============

TOTAL
STOCKHOLDERS' COMPREHENSIVE
TREASURY EQUITY INCOME
STOCK (DEFICIENCY) (LOSS)
----------- ------------ -------------
Balance as of June 30, 1999 $ (193,990) $ 27,654,366
Exercise of stock options -- 564,709
Issuance of stock for purchase of Series Notes -- 1,653,626
Issuance of stock to officers and directors -- 2,684,938
Issuance of warrants and stock to third parties
for services and in connection with financing -- 1,949,448
Treasury stock purchases (1,394,960) (1,394,960)
Issuance of Series C preferred stock -- 9,847,415
Redemption of Series A preferred stock -- (3,570,817)
Conversion of Note Payable to TNCi common stock -- 399,800
Unit purchase options -- 2,111,119
TNCi purchase of outstanding warrants -- (296,036)
Advance under equity purchase agreement -- 447,544
Net issuance of TNCi commitment shares associated
With equity purchase agreement -- 606,133
Beneficial conversion on convertible notes -- 4,000,000
Compensation expense related to stock option
Modifications -- 278,318
Issuance of warrants to related party -- 2,324,195
Fractional shares paid for stock dividend -- (519)
Retirement of treasury stock 1,588,950
Issuance of stock in legal settlements -- 976,171
Equity attributable to minority interest -- (441,314)
Comprehensive income(loss):
Loss on foreign currency translation -- (1,369,104) $ (1,369,104)
Net unrealized gain on investments -- 61,097,838 61,097,838
Unrealized tax benefit of NOL carryforward -- 24,439,131 24,439,131

Net Loss -- (37,839,189) (37,839,189)
----------- ------------ -------------

Balance as of June 30, 2000 -- 96,122,812 $ 46,328,676
=============
Issuance of warrants to related party -- 1,070,527
Issuance of common stock in legal settlements -- 1,109,741
Conversion of Note Payable to common stock -- 1,218,558
Issuance of common stock related to
Consulting Agreement with Equilink -- 578,000
Beneficial conversion expense on secured notes -- 842,300
Redemption of secured convertible notes -- (2,909,704)
Conversion of Series C & D preferred stock to
common stock -- 12,332
Conversion of related party debt to preferred stock -- 2,500,000
Incremental increase in capital of TNCi
Comprehensive income (loss):
Gain on foreign currency translation -- 820,585 $ 820,585
Net unrealized gain on investments -- (61,097,838) (61,097,838)
Unrealized tax benefit of NOL carryforward -- (24,439,131) (24,439,131)

Net Loss -- (34,666,047) (34,666,047)
----------- ------------ -------------

Balance as of June 30, 2001 -- $(15,734,306) $(119,382,431)
=========== ============ =============

See accompanying notes to consolidated financial statements.

F-7

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED JUNE 30
-----------------------------
2001 2000
------------ ------------

Cash flows from operating activities:
Net loss $(34,666,047) $(37,839,189)
Adjustments to reconcile net loss to net cash
Used in operating activities:
Depreciation and amortization 2,798,432 2,080,472
Gain on sale of investments (4,282,844) --
Gain on legal settlement (1,336,563) --
Equity in loss of nonconsolidated affiliate -- 10,345,210
Non-cash expenses associated with investments 174,990 1,944,743
Loss applicable to minority interest (1,869,009) (1,612,529)
Special charges 725,753 2,156,205
Loss from impairment of long-lived assets 10,719,040 --
Loss on sale of assets held for sale -- 37,893
Loss on sale of furniture -- 44,300
Non-cash financial advisory expenses 561,000 --
Non-cash compensation expense 267,868 1,905,419
Non-cash interest expense 3,497,937 --
Non-cash expenses -- 5,729,936
Loss from write down of intangibles assets 5,547,560 --
Extraordinary loss on extinguishments of debt 698,117 --
Loss on write off of note receivable 117,612 --
Changes in assets and liabilities, net of acquisition:
(Increase) decrease in accounts receivable (12,268) 72,538
(Increase) in inventories -- (957,625)
(Increase) decrease in prepaid expenses and other current assets 2,815,016 (1,907,400)
Increase (decrease) in accounts payable (3,481,975) 7,763,641
Increase (decrease) in accrued liabilities (852,021) 531,826
Increase in deferred revenue -- 374,234
Increase in accrued product warranties -- 141,796
Decrease in accrued litigation settlement (875,000) (125,000)
------------ ------------
Net cash used in operating activities (19,452,402) (9,313,530)
------------ ------------
Cash flows from investing activities:
Maturities of investment securities -- 1,450,079
Purchases of investment securities -- (1,839,643)
Sales of investment securities 12,779,913 4,994,422
Investments in affiliates (99,990) (10,988,268)
Payments received on related party note receivable -- 42,381
Purchases of property and equipment (3,450,507) (18,254,276)
Proceeds from sale of equipment -- 799,638
Proceeds from sale of Donativos -- 1,216,155
Proceeds from sale of assets held for sale -- 762,107
Decrease in restricted cash 696,210 645,988
Payments to purchase Series A, D and E notes -- (610,000)
------------ ------------
Net cash provided by (used in) investing activities 9,925,626 (21,781,417)
------------ ------------
Cash flows from financing activities:
Issuance of secured convertible notes 7,000,000 --
Issuance of Series E Preferred Stock of Subsidiary 908,749 --
Issuance of Unsecured Convertible Notes 200,000 --
Issuance of Series C Preferred Stock -- 9,660,000
Redemption of Series A Preferred Stock -- (3,570,817)
Net convertible debt borrowings -- 3,985,000
Exercise of unit purchase options -- 2,111,119
Purchase of treasury stock -- (1,394,960)
Redemption of Secured Convertible Notes (3,405,000) --
Payments on notes payable (4,542) (790,092)
Net (repayments) borrowings under Secured Credit Facility (5,761,825) 6,327,730
Issuance of stock to directors and officers 1,000,000 2,684,938
Issuance of common stock of subsidiary 1,794,076
Advances under equity purchase agreement -- 500,000
Re-purchase of outstanding warrants -- (296,040)
Advances from related parties 4,176,046 800,000
Proceeds from issuance of common stock 17,000 --
Employee stock option purchases -- 564,710
------------ ------------
Net cash provided by financing activities 5,924,504 20,581,588
------------ ------------

Effect of exchange rate on cash and cash equivalents (113,379) (1,246,614)
------------ ------------

Net decrease in cash and cash equivalents (3,715,651) (11,759,974)
Cash and cash equivalents at beginning of period 3,761,301 15,521,275
------------ ------------

Cash and Cash equivalents at end of period $ 45,650 $ 3,761,301
============ ============

See accompanying notes to consolidated financial statements.

F-8

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

(a) DESCRIPTION OF BUSINESS

Global Technologies, Ltd., and subsidiaries ("Global or the "Company"), in
the past, was engaged in developing, managing and commercializing emerging
growth companies, primarily in the technology and telecommunications sectors. As
a result of difficult market conditions and a determination by management to
re-focus operations, Global is now concentrating its efforts on entertainment
and information systems for the passenger rail market through its United Kingdom
majority-owned subsidiary, TNCi UK Limited ("TNCi UK"), a company incorporated
under the laws of England and Wales. Global currently owns 60% of TNCi UK.

On March 24, 2001, the Network Connection, Inc. ("TNCi"), a Global
majority-owned subsidiary, filed a voluntary petition for relief under Chapter
11 of the U.S. Bankruptcy Code. TNCi designed, manufactured, and installed
information and entertainment systems. TNCi was acquired by the Company during
May 1999. TNCi owns the 40% balance of TNCi UK.

Since April 2001, and through the date of the sale of certain of the
Company's lottery equipment in November, 2001, the Company's cash requirements,
including the cash requirements of TNCi UK, have been met through advances from
the Company's Chief Executive Officer, Mr. Irwin L. Gross. Through that date,
Mr. Gross had advanced approximately $850,000. The Company received
approximately $1.4 million from the sale of the lottery equipment in November
2001. The Company repaid Mr. Gross approximately $767,000 from the lottery
equipment proceeds. At November 15, 2001 the Company has cash of approximately
$400,000.

(b) PRINCIPLES OF CONSOLIDATION

Global Technologies, Ltd. and its wholly-owned subsidiaries: GTL Subco,
Inc., GTL Lottoco, Inc., GTL Investments, GlobalTech Holdings Limited, GTL
Management Limited ("GTL Management"), GTL Leasing Limited ("GTL Leasing"),
Lottery Sales Company Limited, Interactive Flight Technologies (Gibraltar)
Limited, GlobalTec Networks, LLC and MTJ Corp., and its majority owned
subsidiaries, TNCi and TNCi UK Limited, are referred to herein as "Global" or
the "Company".

As a result of TNCi's bankruptcy filing Global does not have a controlling
financial interest after that date, as defined in accordance with Statement of
Financial Accounting Standards No. 94 "Consolidation of All Majority-Owned
Subsidiaries". Consequently, pending resolution of the bankruptcy filing, the
net liabilities of TNCi, as of March 31, 2001 have been classified as a Deferred
Credit in the consolidated balance sheet. Results of TNCi's operations for the
period from March 24, 2001 through March 31, 2001 are not significant and have
not been eliminated from operations. Operations of TNCi have not been
consolidated subsequent to March 31, 2001.

F-9

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

subsidiary, TNCi UK. TNCi UK's directors had informed TNCi on March 2, 2001 that
it was on the verge of insolvency and subject to imminent voluntary dissolution
under English law. Global, in order to provide TNCi UK with funds for ongoing
operations and to avoid insolvency, committed to pay $600,000 for 600 shares of
TNCi UK 9% cumulative, convertible preferred stock. $446,980 of this amount had
been funded through June 30, 2001 and the balance is represented by a note
payable to TNCi UK. The preferred shares are convertible into ordinary shares
and vote as if they are ordinary shares. As a result of this transaction, Global
acquired a 60% interest in TNCi UK and TNCi maintains the remaining 40%.

The equity method of accounting was used for the Company's 50% or less
owned affiliates over which the Company has the ability to exercise significant
influence. The amount by which the Company's carrying value exceeds its share of
the underlying net assets of equity affiliates ("Equity Goodwill") was amortized
over five years on a straight-line basis which adjust the Company's share of the
affiliates earnings or losses.

The equity method of accounting requires that when it is determined that
only one party in an investment has any tangible assets at risk, 100% of the
equity loss should be recorded by that party without regard to the percent
ownership in the investment. The Company determined during the quarter ended
December 31,1999 that it retained the majority of the financial risk related to
Inter Lotto (UK) Limited ("Inter Lotto") and, accordingly, recorded against its
investment, 100% of the loss incurred by Inter Lotto for the fiscal year ended
June 30, 2000.

All other investments for which the Company does not have the ability to
exercise significant influence are accounted for under the cost method of
accounting.

The Company continually evaluates investments for indications of impairment
based on the market value of each investment relative to cost, financial
condition, near-term prospects of the investment, and other relative factors. If
impairment is determined the carrying value is adjusted to fair value.

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

(d) CASH EQUIVALENTS

The Company considers all highly liquid investments with original
maturities at the date of purchase of three months or less to be cash
equivalents.

(e) INVESTMENT SECURITIES

Investment securities at June 30, 2000 consisted of corporate equity
securities issued by U.S. Wireless Corporation and Shop4cash. U.S. Wireless
Corporation filed, on August 29, 2001, for protection under Chapter 11 of the
Bankruptcy Code. The Company's remaining basis of approximately $482,000 in its
U.S. Wireless Corporation securities was charged to loss on investment
securities during the year ended June 30, 2001. In accordance with Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", the equity and debt securities are
classified at June 30, 2000 as available-for-sale and carried at fair value,
based on quoted market prices. The net unrealized gains or losses on these
investments were reported in stockholders' equity. The specific identification
method is used to compute the realized gains and losses on the investment
securities.

F-10

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(f) INTANGIBLES

Intangibles consisted of goodwill and trademarks and represented the excess
of the purchase price over the fair value of the net assets acquired. On March
7, 2001, TNCi announced that it had re-evaluated certain aspects of its business
and would focus its efforts on the Company's operations in the United Kingdom
and discontinue and suspend its domestic operations. In connection with this
discontinuance and suspension of domestic operations, TNCi determined it
necessary to write off all of the intangible assets on its balance sheet, which
consisted of goodwill and certain intellectual property. As a result, TNCi
determined that the remaining unamortized intangibles were worthless and a loss
on write off of intangibles in the amount of $5,547,560 was recorded.

Prior to the write off, goodwill had been amortized over five years using
the straight-line method. Effective May 1, 2000, the Company revised its
estimate of the remaining useful life of its goodwill from ten years to five
years as a result of economic events which occurred during the period. Goodwill
amortization expense was $1,150,395 and $896,287 in the year ended June 30, 2001
and June 30, 2000, respectively. Had the Company assumed a five-year life for
goodwill amortization at the beginning of the year, additional expense of
approximately $593,000 (unaudited) would have been recorded for the year-ended
June 30, 2000.

Trademarks are stated at fair market value at the date of acquisition and
were amortized over ten years using the straight-line method.

The company continually evaluates whether events and circumstances have
occurred that indicate the remaining estimated useful lives of intangibles may
warrant revision or that the remaining balances may not be recoverable. When
factors indicate that assets should be evaluated for possible impairment, the
Company uses an estimate of the undiscounted net cash flows over the remaining
life of assets in measuring whether an asset is recoverable. In cases where
undiscounted expected future cash flows are less than the carrying value, an
impairment loss is recognized to reduce the carrying value of the intangible to
its estimated fair value. There were no remaining intangible assets at June 30,
2001.

(g) PROPERTY AND EQUIPMENT

Property and equipment are stated at the lower of cost or net realizable
value. Depreciation and amortization expense is calculated using the
straight-line method over the estimated useful lives of the assets ranging from
three to seven years. Leasehold improvements are amortized using the
straight-line method over the shorter of the underlying lease term or asset
life. Property and equipment at June 30, 2001 is primarily equipment and
information systems used in the information and entertainment systems business
carried on through TNCi UK.

In October 2000, the Company began to shut down its lottery network,
consisting of a central computer system and terminals connected to the central
system via wireless technology. The Company, through its wholly owned United
Kingdom subisidaries, had previously operated lotteries on behalf of charities
in Great Britain. The Company de-installed and warehoused the terminals and
system while seeking a purchaser. The Company has sold or otherwise disposed of
most of the terminals and has recorded a loss on disposition and writedown of
equipment of approximately $7.4 million.

On March 7, 2001, TNCi, a majority owned subsidiary of the Company,
announced that it had re-evaluated certain aspects of its business and would
focus it's efforts on the Company's operations in the United Kingdom and
discontinue its domestic operations. TNCi wrote down the value of equipment and
systems, primarily installed interactive entertainent systems, by approximately
$3.3 million.

Guest pay interactive systems at June 30, 2000 consisted of equipment and
related costs of installation. Construction in progress at June 30, 2000
consisted of purchased and manufactured parts of partially installed guest pay
interactive systems.

F-11

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(h) REVENUE RECOGNITION

The Company's revenue derived from sales and installation of equipment was
recognized upon installation and acceptance by the customer. Fees derived from
servicing installed systems are recognized when earned, according to the terms
of the service contract. Revenue pursuant to contracts that provide for revenue
sharing with customers and/or others was recognized in the period the services
are purchased by the systems' end users (i.e., a hotel guest). Revenue earned
pursuant to extended warranty agreements was recognized ratably over the
warranty period. The Company is currently negotiating to install its systems in
passenger trains in Europe and currently has no other revenue streams.

(i) IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates the potential impairment of long-lived assets in
accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." In cases where undiscounted
expected future cash flows are less than the carrying value, an impairment loss
is recognized to reduce the carrying value of the asset to its estimated fair
value.

(j) INCOME TAXES

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases 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. 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.

(k) NET LOSS PER SHARE

Basic net loss per share is computed by dividing loss attributable to
common stockholders, by the weighted average number of common shares outstanding
for all periods presented. All stock options and warrants outstanding have been
excluded from the weighted average number of common shares outstanding because
their inclusion would have been anti-dilutive. There were options and warrants
outstanding, at June 30, 2001, to purchase 3,904,971 shares of the Company's
class A common stock.

In November 1999, the Company redeemed the Series A Stock valued at
$4,080,000 for cash of $3,520,000, plus payment of $50,817 for legal fees
related to the transaction. The resulting $509,183 discount represents the
excess carrying value amount of the preferred stock over the fair value of
consideration transferred to the holders of the preferred stock, and is added
back to net loss at June 30, 2000 to arrive at net loss available to common
shareholders for determining basic net loss per share for the year ended June
30, 2000. In August 2000, TNCi issued 100 shares of Series E convertible
preferred stock that included an embedded beneficial conversion feature. The net
loss attributable to common stockholders was increased by $173,469, the
estimated value of the beneficial conversion feature.

(l) STOCK-BASED COMPENSATION

In accordance with the provisions of Accounting Principals Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), the Company
measures stock-based compensation expense as the excess of the market price at
the grant date over the amount the employee must pay for the stock. The
Company's policy is to generally grant stock options at fair market value at the
date of grant; accordingly, no compensation expense is recognized. SFAS No. 123
"Accounting for Stock Based Compensation" established accounting and disclosure
requirements using fair value based methods of accounting for stock based
employee compensation plans. As permitted, the Company has elected to adopt the
pro forma disclosure provisions only of SFAS No. 123.

F-12

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(m) RECENT ACCOUNTING PRONOUNCEMENTS

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation (an interpretation of APB 25). This interpretation clarifies the
application of APB No. 25 by clarifying the definition of an employee, the
determination of non-compensatory plans and the effect of modifications to stock
options. This interpretation was effective July 1, 2000 and did not have a
material effect on Global's consolidated financial statements.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purpose of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life would be tested for impairment in
accordance with guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from due date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

The Company's previous business combinations were accounted for using the
purchase method. As of June 30, 2001, the Company wrote off its net carrying
amount of goodwill and other intangible assets totaling $5,547,460. Amortization
expense during the year ended June 30, 2001 was $1,150,395. The Company has
determined that the adoption of SFAS 141 and SFAS 142 will not have a
significant impact on its financial position, results of operations, and cash
flows in the foreseeable future.

F-13

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(n) FOREIGN CURRENCY TRANSLATION

The financial statements of the Company's United Kingdom ("UK")
subsidiaries are translated into U.S. dollars in accordance with SFAS No. 52,
"Foreign Currency Translation". Assets and liabilities of the subsidiaries are
translated into U.S. dollars at current or historical exchange rates. Income and
expense items are translated at the average exchange rate for the year. The
resulting translation adjustments are recorded directly as a separate component
of stockholders' equity. All transaction gains or losses are recorded in the
consolidated statement of operations. The Company recognized foreign currency
transaction losses of $139,297 and $246,938 for the years ended June 30, 2001
and 2000 respectively in general and administrative expenses.

(o) CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of cash, investment
securities and accounts receivable. The Company's investment securities consist
primarily of approximately 476,000 and 3,000,000 shares of U.S. Wireless
Corporation Common Stock at June 30, 2001 and June 30, 2000, respectively. U.S.
Wireless Corporation filed, on August 29, 2001, for protection under Chapter 11
of the Bankruptcy Code. The Company's remaining basis of approximately $482,000
was charged to loss on investment securities at June 30, 2001.

Concentrations of credit risk with respect to accounts receivable result
from the Company's current exposure to a limited customer base.

(p) COMPREHENSIVE INCOME (LOSS)

The Company reports comprehensive income and its components in its full set
of financial statements in accordance with SFAS No. 130, "Reporting
Comprehensive Income." Comprehensive income consists of net income, unrealized
gains on investment securities, and foreign currency translations, and is
presented in the Consolidated Statement of Stockholders' Equity and
Comprehensive Income; it does not affect the Company's financial position or
results of operations.

(2) IMPACT OF TNCi's BANKRUPTCY ON GLOBAL TECHNOLOGIES AND GLOBAL TECHNOLOGIES
ACQUISITION OF TNCi UK

The Company acquired an approximate 79% interest, on an if-converted common
stock basis, in TNCi through a series of transactions during May 1999. The
Company has consolidated the results of operations of TNCi from the date of
acquisition through the date of TNCi's bankruptcy filing.

On March 24, 2001, TNCi filed for protection under Chapter 11 of the
Bankruptcy Code. TNCi opted for Chapter 11 (as opposed to liquidation under
Chapter 7) because of the potential during the reorganization process to realize
value from or increase the value of certain of TNCi's remaining assets, namely
the Swissair lawsuit (See Note 16) and its 40% interest in TNCi UK. There is no
assurance, however, that any such value will be realized or increased, or, that
if realized, such value would be to an extent sufficient for TNCi to emerge from
Chapter 11. In addition, Swissair has recently filed for bankruptcy protection.
After filing its petition for relief under Chapter 11, TNCi filed a Form 15 with
the SEC and terminated its registration under Section 12(g) of the Securities
Act of 1933.

Pending resolution of the bankruptcy filing, the net liabilities totaling
$5,929,024 of TNCi as of March 31, 2001 have been classified as a Deferred
Credit in the Company's consolidated balance sheet as at June 30, 2001, which is
the result of netting $1.2 million of TNCi assets and $7.1 million of TNCi
liabilities. The Deferred Credit, or a portion thereof, could represent a
recovery by Global upon the resolution of the bankruptcy.

F-14

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 7, 2001, TNCi announced that it was suspending its hotel
operations and discontinuing its other domestic operations in order to focus on
long-haul train operations to be provided through its then wholly owned
subsidiary, TNCi UK. TNCi UK's directors had informed TNCi on March 2, 2001 that
it was on the verge of insolvency and subject to imminent voluntary dissolution
under English law. Global, in order to provide TNCi UK with funds for ongoing
operations and to avoid insolvency, committed to pay $600,000 for 600 shares of
TNCi UK 9% cumulative, convertible preferred stock. $446,980 of this amount had
been funded through June 30, 2001 and the balance is represented by a note
payable to TNCi UK. The preferred shares are convertible into ordinary shares
and vote as if they are ordinary shares. As a result of this transaction, Global
acquired a 60% interest in TNCi UK and TNCi maintains the remaining 40% of TNCi
UK's outstanding equity

(3) INVESTMENT SECURITIES

Market value reflects the price of publicly traded securities at the close
of business at the respective dates. Unrealized gain reflects the excess of
market value over carrying value of publicly traded securities classified as
available for sale.

The following summarizes our investments in marketable securities at June
30, 2001 and June 30, 2000:

GROSS GROSS
UNREALIZED UNREALIZED
AMORTIZED HOLDING HOLDING FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- -----------

JUNE 30, 2001 Available-for-sale:
Corporate equity Securities $ 0 $ 0 $ 0 $ 0

JUNE 30, 2000 Available-for-sale:
Corporate equity Securities $ 3,037,269 $61,087,731 $ 0 $64,125,000

Corporate equity securities consist of 476,300 and 3,000,000 shares of U.S.
Wireless Corporation ("U.S. Wireless") Common Stock as of June 30, 2001 and June
30, 2000, respectively. U.S. Wireless Corporation filed, on August 29, 2001, for
protection under Chapter 11 of the Bankruptcy Code. The Company's remaining
basis of approximately $482,000 in its U.S. Wireless Corporation securities was
charged to loss on investment securities during the year ended June 30, 2001.

The Company's non-current investments at June 30, 2000 consisted of its
$75,000 investment in Shop4cash.com which was written off in 2001.

(a) U.S. WIRELESS CORPORATION

In March 1999, the Company invested $3 million in U.S. Wireless in exchange
for 30,000 shares of Series B Preferred Stock. In March and April 2000, the
Company converted its Series B Preferred Stock of U.S. Wireless Corporation into
3,000,000 shares of U.S. Wireless Common Stock. The common stock had not been
registered under the Securities Act of 1934 and any sales by the Company were
subject to the limitations of Rule 144.

After the expiration of the one-year holding period, the Company began
selling its shares of U.S. Wireless Common Stock under Rule 144. As the Company
intended to sell all or a portion of these shares, the Company changed its
method of accounting for this investment from the cost method to classifying the
investment as available-for-sale carried at fair market value as of March 31,
2000. Unrealized gains on this investment were reflected as a separate component
of stockholders' equity. At June 30, 2000 the market price of U.S. Wireless
Common Stock was $21.375 per share, resulting in a total fair market value of
$64,125,000.

F-15

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(b) INTER LOTTO (UK) LIMITED

The Company, through certain wholly owned United Kingdom subsidiaries,
previously operated lotteries on behalf of charities in Great Britain in
conjunction with Inter Lotto (UK) Limited (which maintained the license to
operate lotteries).

In May 1999, the Company completed the acquisition of a 27.5% equity
interest in Inter Lotto through its wholly-owned subsidiary, GlobalTech Holdings
Limited, a UK company ("GlobalTech Holdings"). The Company accounted for this
investment under the equity method.

Inter Lotto has a license granted by the Gaming Board for Great Britain to
operate daily lotteries on behalf of charities throughout the UK. Through an
Operating Agreement between Inter Lotto and GTL Management Limited, a UK company
and wholly-owned subsidiary of GlobalTech Holdings ("GTL Management"), GTL
Management managed the operations of the lotteries and Inter Lotto retained
responsibility for regulatory issues, charity recruiting and certain other
functions as required under the gaming laws. GTL Management developed and
installed a network of gaming terminals and a central operating center to
operate the lotteries and markets and operated the lottery, including selecting
the game and managing the network. In exchange, GTL Management retained a
portion of the revenues generated from lottery ticket sales.

In December 1999, the Company determined that it retained the majority of
the financial risk related to Inter Lotto and, accordingly, recorded against its
investment, 100% of the loss incurred by Inter Lotto for the fiscal year ended
June 30, 2000.

On August 18, 2000 the Company transferred its equity interest in Inter
Lotto back to existing shareholders of Inter Lotto in exchange for a nominal
amount, the termination of the existing Operating Agreement with GTL Management,
the continued use of the Inter Lotto lottery license through December 31, 2000
and the repayment of certain Value Added Tax rebates owed to GTL Management. The
Company wrote off its investment as of June 30, 2000 in Inter Lotto of $684,685,
consisting of working capital advances, notes receivable and capitalized
acquisition costs.

The Company recorded its proportionate share of losses of Inter Lotto and
Equity Goodwill amortization of $10,204,125 for the year ended June 30, 2000,
which was recorded as equity in loss of non-consolidated affiliates in the
consolidated statements of operations.

Donativos S.A. de C.V. ("Donativos") is a Mexican corporation formed for
the purpose of operating a gaming and entertainment center in Monterrey, Nuevo
Leon, Mexico.

In May 1999, the Company, through its wholly-owned subsidiary, Interactive
Flight Technologies (Gibraltar) Limited, a Gibraltar company ("IFT Gibraltar"),
loaned $1,632,000 to Donativos in exchange for a 24.5% interest in the venture.
The Company accounted for this investment under the equity method. In addition
to IFT Gibralter, other partners in the venture included Regal Gaming and
Entertainment, Inc. a Minnesota corporation, which also had a 24.5% interest,
and a Mexican national, who had a 51% interest. The IFT Gibraltar loan had an
annual interest rate equal to the Prime Rate plus three percent (3%) and a
maturity date of April 30, 2001. The Company had also provided a letter of
credit in the amount of $913,445 to secure repayment of the purchase price of
certain gaming equipment acquired by IFT Gibraltar and leased to Donativos. In
addition to its 24.5% equity interest in Donativos, in consideration for making
the loan and providing the letter of credit, the Company was to receive 25% of
all of the profits generated by Donativos.

F-16

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the quarter ended December 31, 1999, the Company determined that the
value of its investment in Donativos had been permanently impaired. Donativos
was not generating sufficient profits to meet its obligations to the Company
under the loan and equipment financing agreements and, therefore, its ability to
continue as a "going concern" was in doubt. At that time the equity investment
was written off and a reserve for the full amount of the loans and subsequent
advances to Donativos was recorded, resulting in a charge to income of $1.5
million. On April 14, 2000, the Company entered into an agreement pursuant to
which on May 10, 2000 the Company received $2.0 million from Donativos in return
for cancellation of the debt owed by Donativos to IFT Gibraltar and the transfer
of the equity that Global and Regal Gaming held in Donativos to the majority
shareholder of Donativos. The transaction also involved an exchange of general
releases and transfer of title to the equipment in the gaming center in
Monterrey, Mexico from IFT Gibraltar to Donativos. The Company reversed $1.2
million of the prior loan reserve. In addition, in February 2000, the Company
paid the gaming equipment purchase obligation in full and cancelled the letter
of credit.

During the year ended June 30, 2000 the Company recorded its proportionate
share of losses of Donativos and Equity Goodwill amortization of $141,085 which
have been recorded as equity in loss of non-consolidated affiliates in the
consolidated statements of operations.

(d) SHOP4CASH.COM, INC.

On November 23, 1999 the Company acquired 500,000 shares, or approximately
4% of Shop4Cash.com, Inc. ("Shop4Cash") at a price of $2.00 per share. Shop4Cash
is a privately held, cash incentive based, Internet shopping portal. Global has
registration rights in connection with these shares. The investment was recorded
at cost.

In July 2000, Shop4Cash decided to implement certain changes to its
existing business model in order to create additional value for its merchant
base. In September 2000, Shop4Cash signed a letter of intent for the purpose of
merging with an on-line credit card services provider. This anticipated merger
would create an e-commerce platform servicing both consumers and the Shop4Cash
merchant base. The post-merger entity would offer merchants on-line credit card
processing and transaction services in addition to the existing services of the
Shop4Cash website.

Concurrently with the proposed merger, Shop4Cash was seeking additional
financing for working capital purposes of $300,000 from a group of its
stockholders, which includes the Company. It planned to raise these additional
funds through the sale of common stock and accepted subscription agreements for
the full $300,000. The Company determined it necessary to write-down its
investment in Shop4Cash by $925,000 as of June 30, 2000, (which does not include
the shares to be purchased in the recent financing round) to $75,000 to reflect
a permanent impairment of its previous investment.

On October 11, 2000, the Company purchased an additional 999,900 shares of
common stock of Shop4Cash.com, Inc. ("Shop4Cash") for $99,990, resulting in a
total investment of approximately 14% of the outstanding common stock of
Shop4Cash. Shop4Cash continued to require capital to finance its business model.
As of March 15, 2001, Shop4Cash has been unable to obtain additional financing
to continue its operations. As a result, the Company wrote off its total
remaining investment of $174,990.

F-17

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) RESTRICTED CASH

At June 30, 2001 and 2000, the Company held restricted cash of $70,538 and
$766,748, respectively. The June 30, 2001 balance was the amount of lease
collateral which was released, during July 2001, by the landlord of the
Company's New York office, upon the cancellation of the lease. The Company
forfeited approximately $220,000 upon that cancellation. The Company held
$475,915 as of June 30, 2000 in a trust fund for payments, which might have been
required under severance agreements with one former executive of the Company. At
June 30, 2000, restricted cash also included $290,833 held in a certificate of
deposit with a commercial bank as collateral for a letter of credit issued to
secure the lease for the Company's offices in New York.

(5) ASSETS HELD FOR SALE

Assets held for sale at June 30, 2001 of $1,700,000 is the estimated net
sales value of the remaining approximate 2,300 terminals and central computer
system owned by certain of the Company's wholly owned United Kingdom
subsidiaries. The Company sold, during October 2001, the 2,300 terminals for
$1,455,000. The Company has not yet found a purchaser for the central computer
system.

The Company, through certain of its wholly owned United Kingdom
subsidiaries, previously owned a lottery network and operated lotteries on
behalf of charities in Great Britain in conjunction with Inter Lotto (UK)
Limited (which maintains the license to operate lotteries). The network was
comprised of approximately 3,675 terminals and a central computer system. In
December 2000, the Company returned 1,333 terminals in a settlement with
International Lottery & Totalizator Systems, Inc. ("ILTS") in lieu of payment of
approximately $2.8 million of outstanding accounts payable due ILTS for both the
original purchase and facilities management services. The remaining terminals
were sold as discussed above.

(6) IMPAIRMENT OF LONG-LIVED ASSETS

The Company continually evaluates the potential impairment of long-lived
assets, including intangible assets, primarily goodwill, in accordance with SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of." In cases where undiscounted expected future cash
flows are less than the carrying value, an impairment loss will be recognized to
reduce the carrying value of the asset to its estimated fair value.

On March 7, 2001, TNCi announced that it had re-evaluated certain aspects
of its business and would focus it's efforts on the Company's operations in the
United Kingdom and discontinue and suspend its domestic operations. In
connection with this discontinuance and suspension of domestic operations, TNCi
determined it necessary to write off all of the intangible assets on its balance
sheet, which consisted of goodwill and certain intellectual property. The amount
written off was approximately $5.5 million. In addition, based on the impairment
of certain fixed assets of TNCi consisting primarily of installed interactive
entertainment systems at hotel properties, resulting from the determination to
suspend hotel operations, TNCi has written down the value of these assets as
reflected on its balance sheet by approximately $3.3 million in the quarter
ended March 31, 2001.

On March 22, 2001, TNCi returned new equipment costing approximately $1.5
million to a vendor to reduce an outstanding accounts payable balance. In return
the company received a credit for $1.1 million with the difference of $.4
million representing a 25% restocking charge from the vendor. This difference
was recorded to operating expenses.

F-18

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company owned a lottery network, consisting of a central computer
system and 2,244 terminals that connect to the central system via wireless
technology. The Company, through certain of its wholly owned United Kingdom
subsidiaries, previously operated lotteries on behalf of charities in Great
Britain in conjunction with Inter Lotto (UK) Limited (which maintains the
license to operate lotteries), using this system. On August 18, 2000, the
Company transferred its equity interest in Inter Lotto back to the existing
shareholders of Inter Lotto and terminated the operating agreement with Inter
Lotto. While the Company was entitled to use the Inter Lotto lottery license
through December 31, 2000, it ceased operating lotteries on behalf of Inter
Lotto in October 2000, and began to shut down the network of lottery terminals
to reduce costs. At that time, the network consisted of the central system and
approximately 3,675 gaming terminals, of which approximately 3,000 were
installed at third-party retailer locations with the wireless connection
technology. The Company de-installed and warehoused all the terminals and
central system. The base cost of the network was approximately $12.3 million. In
December 2000, the Company returned 1,333 terminals in a settlement with
International Lottery & Totalizator Systems, Inc. ("ILTS") in lieu of payment of
approximately $2.8 million of outstanding accounts payable due ILTS for both the
original purchase and facilities management services.

Based upon the value realized from the settlement with ILTS and the
prospects for alternative uses of the network, the Company recorded an
impairment loss of approximately $3.4 million in the second quarter ended
December 31, 2000. After a further review, the Company determined that an
additional impairment loss of approximately $1.4 million was necessary in the
third quarter ended March 31, 2001 to adjust the carrying value of the equipment
to the then estimated net realizable value of approximately $4.3 million. The
company reached a sales agreement on October 12, 2001 with ILTS for the purchase
of the remaining 2,287 terminals for $1,455,378. Final payment was received on
November 2, 2001 and the equipment was released to the purchaser. As a result,
the Company recorded, as of June 30, 2001, an additional impairment loss of
approximately $2.6 million.

The Company also plans to sell the remaining central computer system, which
value is estimated at approximately $250,000. The lottery equipment is recorded
on the Balance Sheet at June 30,2001 as assets held for sale.

F-19

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) Property and Equipment

Property and equipment consist of the following:

JUNE 30,
--------------------------------
2001 2000
------------ ------------
Leasehold improvements $ 24,044 $ 831,388
Purchased software 12,550 188,476
Furniture 28,333 414,890
Equipment 892,222 15,090,614
Guest Pay Interactive Systems:
Installed -- 467,885
Construction in progress:
System components -- 967,215
Work in progress -- 1,009,907
------------ ------------
957,149 18,970,375
Less accumulated depreciation
and amortization (401,140) (1,747,418)
------------ ------------
$ 556,009 $ 17,222,957
============ ============

(8) INTANGIBLES

Intangibles consist of the following:

JUNE 30,
--------------------------------
2001 2000
------------ ------------
Goodwill $ -- $ 7,605,876
Trademarks -- 79,613
----------- -----------
-- 7,685,489
Less accumulated amortization -- (987,534)
----------- -----------
$ -- $ 6,697,955
=========== ===========

The Goodwill and trademarks were recorded on the books of TNCi which, on
March 24, 2001, filed for Bankruptcy protection under Chapter 11. Prior to this
filing the Goodwill and Trademarks were reevaluated and determined to be
worthless and written off in the quarter ended March 31, 2001.

(9) ACCRUED LIABILITIES

Accrued liabilities consist of the following:

JUNE 30,
------------------------------
2001 2000
---------- ----------
Due to related parties $ 95,963 $1,419,716
Other accrued expenses 1,370,856 2,096,296
---------- ----------
$1,466,819 $3,516,012
========== ==========

F-20

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(10) NOTES PAYABLE

Notes payable consists of the following:

JUNE 30,
---------------------------
2001 2000
---------- -----------

Secured Credit Facility due on demand, interest
at LIBOR plus 1.25% $ 547,560 $ 6,309,385
Secured Convertible Notes due December 7, 2001, interest
at 6%, convertible into common stock of the Company -- 4,000,000
Unsecured and Non-Convertible Notes due February 2003,
interest at 8% 8,000,000
Secured Non-Convertible Note due February 2002,
interest at Prime plus 4% 200,000
Notes payable due in varying installments through 2000,
interest ranging from 6.9% to 11% collateralized by vehicles -- 4,744
---------- -----------
Total 8,747,560 10,314,129
Less current portion 747,560 6,314,129
---------- -----------
$8,000,000 $ 4,000,000
========== ===========

Aggregate maturities of notes payable as of June 30, 2001 are as follows:

2002 $ 747,560
2003 8,000,000
-----------
$ 8,747,560
===========

(a) SECURED CREDIT FACILITY

On April 5, 2000, the Company entered into a line of credit facility with
Merrill Lynch in which Merrill Lynch agreed to advance up to $10.0 million based
upon a percentage of the value of securities pledged as collateral to secure
amounts drawn under the line of credit (the "Secured Credit Facility").
Principal amounts borrowed under the line, together with accrued interest at an
annual rate equal to the London Inter-bank Offer Rate (LIBOR) (3.875% at June
30, 2001) plus 1.25%, are payable upon demand by Merrill Lynch. To secure such
borrowing, the Company pledged to Merrill Lynch 1,000,000 shares of common stock
of U.S. Wireless held by the Company.

F-21

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On November 22, 2000 Merrill Lynch issued a demand for repayment of the
Secured Credit Facility based upon the deterioration in the price of U.S.
Wireless common stock. Approximatley $6.8 million was outstanding at that time.
The Company agreed to apply $1,667,400 of Mr. Gross' collateral as partial
repayment of the Secured Credit Facility and to begin an orderly liquidation of
the shares of U.S. Wireless common stock to repay the balance. Through these
sales, the Company reduced the balance of the facility to approximately $840,000
at December 5, 2000. At the same date the facility was secured by a pledge of
777,500 shares of U.S. Wireless common stock and a $646,000 Treasury Bill
pledged for the benefit of the Company by Mr. Gross and two trusts and a
charitable foundation that he established. From March 27, 2001 to May 3, 2001,
the Company sold an additional 242,100 of the pledged shares of U.S. Wireless
common stock pursuant to an arrangement with Merrill Lynch whereby half of the
proceeds of such sales went to reduce the balance of the credit facility and the
remaining proceeds went to the Company. Half of the proceeds from additional
sales of 126,900 of these shares were applied to reduce the balance of the
credit facility to approximately $700,000. The Company subsequently sold
additional shares of U.S. Wireless stock and further reduced the balance to
approximately $581,000. The balance owed on the credit facility is currently
approximately $547,000. Merrill Lynch agreed to release the remaining pledged
shares of U.S. Wireless common stock once the facility was covered by 90% of the
value of the pledged Treasury Bill. The treasury bill continues to be pledged to
Merrill Lynch to secure the credit facility.

In connection with the pledges of his collateral to meet the maintenance
calls, Mr. Gross was granted warrants to purchase 553,978 shares of the
Company's Class A Common Stock based upon the amount of collateral pledged and
the closing market price of the stock on the date of each pledge. The Company
recorded non-cash interest expense of $1,070,527 and $1,526,527 for the years
ended June 30, 2001 and June 30, 2000, respectively, related to the estimated
fair value of the warrants granted for the collateral pledged.

(b) 6% SECURED CONVERTIBLE NOTES

On June 8, 2000, the Company issued $4.0 million of secured convertible
notes to Advantage Fund II Ltd. and Koch Investment Group, Ltd. (the "Secured
Convertible Notes"). The notes bore interest at 6% per annum and mature on
December 7, 2001. The notes are convertible into shares of the Company's Class A
Common Stock at a conversion price of $2 per share, subject to customary
adjustments. To secure such borrowing, the Company pledged 1,000,000 shares of
common stock of U.S. Wireless to the holders of the notes. An event of default
under the notes occurs if U.S. Wireless common stock trades at less than $5.00
per share at any time during each of five trading days (which need not be
consecutive) within any consecutive 30-day period and certain other conditions
are met. A default under the notes would allow the holders to accelerate
repayment of the notes. The failure to repay on an accelerated basis in a
default situation could result in the liquidation of the pledged shares of U.S.
Wireless Common Stock.

At the date of issuance, the conversion rate of the Secured Convertible
Notes was lower than the market price of the Company's stock at issuance, and as
such the notes have an embedded beneficial conversion feature. The Secured
Convertible Notes can be converted at any time prior to redemption. Therefore,
the Company recorded interest expense of $4.0 million related to the beneficial
conversion feature.

On July 7, 2000, the Company redeemed $2.0 million of the principal amount
of the Secured Convertible Notes. In connection with this redemption, the
lenders released to the Company 500,000 shares of U.S. Wireless common stock
previously held as collateral. The notes require that in connection with such
redemption the Company issue warrants for 125,000 shares, in the aggregate, of
its Class A Common Stock to the holders of the notes. These warrants have a

F-22

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

four-year term and an exercise price of $4.00 per share. The Company recorded an
extraordinary gain on the extinguishments of debt of $977,580 related to the
redemption of the secured notes.

On October 25, 2000, the remaining $1.0 million of principal amount of the
notes was converted into 500,000 shares of the Company's Class A Common Stock.
As a result of the conversion the lenders released the final 250,000 shares of
U.S. Wireless common stock previously held as collateral.

At the date of issuance, the conversion rate of the October Notes was lower
than the market price of the Company's common stock, and as such the notes had
an embedded beneficial conversion feature. As the notes could be converted after
120 days, the Company recorded a non-cash interest expense of $842,300 in the
year ended June 30, 2001 related to the beneficial conversion feature.

Ultimately, The Company and Advantage and Koch resolved their differences
pursuant to a Settlement Agreement that provides in general for the following:

F-23

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

* The Company registers for resale the shares of Class A common stock
into which the Preferred Stock converts that are not already
registered for resale;

* The Company issues unsecured, non-convertible notes to Advantage (in
the principal amount of $4,800,000) and Koch (in the principal amount
of $3,200,000);

* The Complaint be dismissed with prejudice and the TRO be dissolved;
and

* The Company, Advantage and Koch exchange mutual releases.

The Settlement Agreement and ancillary documents were executed as of
January 31, 2001, however, they were held in escrow and not delivered until
their effectiveness upon consummation of the Share Transfer on February 15,
2001. As a result of the above provisions, the Company has recognized an
extraordinary gain on the shares transferred to Advantage and Koch amounting to
approximately $5.5 million and an extraordinary loss on extinguishment of debt
of approximately $7.6 million, a net extraordinary loss of approximately $2.1
million.

(11) NOTES PAYABLE TO RELATED PARTY

In May and June 2000, The Gross Charitable Unit Trust and The Gross
Charitable Annuity Trust (together the "Trusts"), advanced a total of $800,000
to TNCi for working capital purposes. An additional $250,000 was advanced to
TNCi in July 2000. On September 12, 2000, the advances to TNCi were converted
into two promissory notes, each in the amount of $525,000, issued to each Trust
by TNCi. The notes mature on December 31, 2000 and bear interest at 9.0%. On
September 28, 2000 the Trusts and two trusts established for the benefit of Mr.
Gross's children advanced an additional $250,000 in total to TNCi. On January 2,
2001 the notes and the advances were converted into 260 shares of TNCi Series F
8% Convertible Preferred Stock with an aggregrate stated value of $1,300,000.
The preferred stock is convertible into 1,733,333 shares of TNCi's common stock.
Irwin L. Gross, Chairman and Chief Executive Officer of Global, was trustee of
each of these trusts until March 23, 2001.

On November 22, 2000, $1,667,400 of Mr. Gross' collateral was applied to
repay the Secured Credit Facility with Merrill Lynch. The Company issued two
promissory notes totaling $1,667,400 to Mr. Gross and a charitable foundation
controlled by him. The new promissory notes matured on December 31, 2000 and had
an annual interest rate of 9.0%. To secure such borrowing, the Company pledged
300,000 shares of common stock of U.S. Wireless to the holders of the notes. On
December 31, the maturity dates of the notes were extended to June 30, 2001.

Between July 2000 and April 2001, Mr. Gross, the trusts and the charitable
foundation made additional advances to the Company totaling $757,000 ($644,000
of these advances, plus accrued interest, are in the form of a Treasury Bill and
remain as collateral for the Secured Credit Facility with Merrill Lynch). On
March 30, 2001, Mr. Gross, the trusts and the charitable foundation converted
the existing $2,467,400 of notes discussed above and an additional $32,600 of
these advances into 250 shares of Global Technologies, Ltd. Series E 8%
Convertible Preferred Stock with an aggregate stated value of $2,500,000. This

F-24

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

preferred stock is convertible into shares of Class A common stock at a fixed
conversion price of $0.3125 per share, the closing price per share of Class A
common stock on March 30, 2001. In accordance with NASDAQ rules, Class A common
stock representing no more than 19.99% of the outstanding Class A common stock
on June 30, 2001 may be issued on conversion of the preferred stock without
prior stockholder approval.

In connection with the execution of the promissory notes, each Trust was
granted warrants to purchase 99,159 shares of the Company's Class A Common Stock
and 155,780 shares of TNCi Common Stock based upon the amount advanced and the
closing market price of each stock on the date of each advance. The Company
recorded deferred financing cost of $797,668, of which $660,925 and $136,743 was
amortized into interest expense for the years ended June 30, 2001 and June 30,
2000, respectively.

Between April 2001 and November 5, 2001, Mr. Gross, a limited partnership
controlled by him and certain Trusts established by him advanced $464,000 to the
Company to cover the working capital requirements of the Company and the
Company's 60% owned subsidiary, TNCi UK. The company received, on November 2,
2001, $1,455,378 from the sale of terminals formerly used in its lottery
business in Great Britain. The Company repaid Mr. Gross and these entities a
total of $767,000 on November 9, 2001. Remaining unpaid advances, at November
12, 2001, received from Mr. Gross and the Trusts total $80,000. These advances
are secured by a security interest in the equity of TNCi UK owned by Global.

During the months of August 2000 through December 2000, TNCi's Executive
Vice President advanced a total of $335,046 to TNCi for working capital
purposes. Two of these advances totaling $220,000 were evidenced by a note dated
November 22, 2000 and allonge dated December 5, 2000, that matured on December
31, 2000. On January 2, 2001, this note and allonge were canceled, and the
principal amount thereof and the remainder of these advances were rolled into a
promissory note in the aggregate principal amount of $335, 046 that bears
interest a t 9% per annum and matures six months from the date of issuance.

(12) STOCK OPTION PLANS

In October 1994, the Company adopted a Stock Option Plan (the 1994 Plan),
which provides for the issuance of both incentive and nonqualified stock options
to acquire up to 300,000 shares of the Company's Class A Common Stock. In
November 1996, the Company amended and restated the 1994 Plan to increase the
maximum shares that may be issued and sold under the plan to 1,200,000. The
Company has granted options to purchase stock to various parties. All options
were issued at a price equal to or greater than the market price of the
Company's common stock at the date immediately prior to the grant and have a
term of ten years. Options generally become exercisable after one to four years
at the discretion of the Board of Directors. During fiscal 2000, the Board of
Directors resumed authorizing stock option grants from the 1994 Plan, and
530,000 stock options with up to a four-year vesting period were granted at
exercise prices ranging from $1.833 to $16.375. Options to purchase 100,000
shares of Class A Common Stock were granted during the year ended June 30, 2001.
As of June 30, 2001, stock options to acquire 945,750 shares of common stock
under the 1994 Plan remained available for grant.

In June 1997, the Company established the 1997 Stock Option Plan (the 1997
Plan). Options exercisable for a total of 750,000 shares of the Company's Class
A common stock are issuable under the 1997 Plan. The 1997 Plan is administered
by the Board of Directors of the Company (or a committee of the Board), which
determines the terms of options granted under the 1997 Plan, including the
exercise price and the number of shares subject to the option. The 1997 Plan

F-25

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

provides the Board of Directors with the discretion to determine when options
granted thereunder shall become exercisable. No stock options were granted under
the 1997 Plan during fiscal years 2001 or 2000. As of June 30, 2001,stock
options to acquire 315,600 shares of common stock under the 1997 Plan remained
available for grant.

In September 1999, the Company reduced the exercise price per share of
45,000 stock options granted to a former director of the Company under the 1994
Plan to $3.00 per share and extended the exercise period to the expiration date
of the stock options pursuant to the settlement of a technology licensing
agreement with Fortunet, Inc. (See Note 16)

On October 8, 1999, the Compensation Committee of the Board of Directors of
the Company recommended, and the Board approved, an option grant to purchase up
to 1,500,000 shares of Global's Class A Common Stock to Mr. Irwin L. Gross,
Chairman and Chief Executive Officer of the Company. One quarter of these
options vested immediately and one quarter vest over each of the next three
years. The remaining half vest on the sixth anniversary of the date of grant,
subject to acceleration to a three-year schedule in the event of the achievement
of certain performance goals. The exercise price of the options is equal to the
closing market price of the Company's Common Stock on the day prior to grant.
The options expire in October 2009.

In accordance with the provisions of APB 25, the Company measures
stock-based compensation expense as the excess of the market price at the grant
date over the amount the employee must pay for the stock. The Company's policy
is to generally grant stock options at fair market value at the date of grant,
so no compensation expense is recognized. As permitted, the Company has elected
to adopt the disclosure provisions only of SFAS No. 123.

Had compensation cost for the Company's stock-based compensation plans been
determined consistent with SFAS No. 123, the Company's net loss and net loss per
share for the year ended June 30, 2000 would have been increased to the pro
forma amounts indicated below:

YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
2001 2000
------------ -----------
Net loss:
As reported $(34,889,516) $(37,517,421)
============ ============

Pro forma (unaudited) $(36,685,302) $(39,977,402)
============ ============
Basic and diluted net loss per share:
As reported $ (3.02) $ (3.81)
============ ============
Pro forma (unaudited) $ (3.18) $ (4.06)
============ ============

Pro forma net losses at June 30, 2001 and 2000 reflect only options granted
during the fiscal years ended 2001, 2000, the Transition Period ended 1999, and
in fiscal years ended 1998, 1997, and 1996. Therefore, the full impact of
calculating compensation cost for stock options under SFAS No. 123 is not
reflected in the pro forma net loss amounts presented above because compensation
cost is reflected over the options' vesting period and compensation cost for
options granted prior to November 1995 are not considered under SFAS No. 123.

F-26

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For purposes of the SFAS No. 123 pro forma net loss and net loss per share
calculations, the fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model. Weighted-average assumptions
used for grants in the years ended June 30, 2001 and 2000 were a dividend yield
of 0%, expected volatility of approximately 170%, a risk free interest rate of
approximately 6% and expected lives of 5 years.

Activity related to the stock option plans is summarized below:

YEAR ENDED YEAR ENDED
JUNE 30, 2001 JUNE 30, 2000
--------------------- --------------------
Weighted Weighted
Number Average Number Average
Of Exercise Of Exercise
Shares Price Shares Price
--------- ------ --------- ------
Balance at beginning of year 2,801,460 $ 3.45 1,123,719 $ 8.49
Granted 100,000 4.00 2,075,000 2.26
Exercised -0- (132,306) 2.49
Cancelled/Forfeited (950,960) 5.14 (264,953) 14.28
--------- ---------
Balance at the end of year 1,950,500 2.65 2,801,460 3.45
========= =========
Exercisable at the end of year 725,250 2.62 788,725 6.60
========= =========

Exercise prices of options outstanding at June 30, 2001 range from $1.13 to
$4.00. Exercise prices of options exercisable also range from $1.13 to
$4.00.

At the discretion of the Board of Directors, the Company may allow
optionees to elect to receive shares equal to the market value of the option, in
lieu of delivery of the exercise price in cash. The market value of the shares
issued is charged to compensation expense. There were no cashless exercises of
options during the years ended June 30, 2001 and 2000 or during any prior
period.

(13) BENEFIT PLAN

The Company has adopted a defined contribution benefit plan (the "Plan")
that complies with section 401(k) of the Internal Revenue Code and provides for
discretionary Company contributions. Employees who complete three months of
service are eligible to participate in the Plan. The Company did not make any
contributions to the Plan for the year ended June 30, 2001, nor the year ended
June 30, 2000.

(14) STOCKHOLDERS' EQUITY

The Company's capital stock consists of Class A and Class B common stock.
Holders of Class A common stock have one vote per share and holders of Class B
common stock have six votes per share. Shares of Class B Common Stock are
automatically convertible into an equivalent number of shares of Class A Common
Stock upon the sale or transfer of such shares to a non-holder of Class B Common
Stock. There are no Class B common shares outstanding.

(a) COMMON STOCK

Between September 2000 and June 2001, the holders of 200 shares of the
Company's Series C 5% Convertible Preferred Stock and the holders of 650 shares
of the Company's Series D Convertible Preferred Stock converted such stock into
1,234,122 shares of the Company's Class A Common Stock. There are, at June 30,

F-27

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2001, 150 shares of the Company's Series D Convertible Preferred Stock
outstanding. There are no Series C 5% Convertible Preferred Stock outstanding at
June 30, 2001 since the holders of all of the remaining Series C Convertible
Preferred Stock exchanged such stock for a like number of shares of the
Company's Series D Convertible Preferred Stock.

On March 22, 2001, the Company engaged Equilink Capital Partners , LLC to
provide financial consulting services to us for a period of two years following
that date. The financial consulting agreement provided that , in addition to the
financial consulting services to be performed by Equilink, Equilink and certain
of its affiliates shall purchase, in the aggregrate, 1,700,000 shares of Class A
Common Stock for an aggregrate purchase price of $17,000. These shares were
issued as follows: 500,000 shares of Class A Common Stock to each of Robert
DePalo, Old Oak Fund Inc. and Harbor Fund Inc., 150,000 shares to Empire
Ventures, LLC and 50,000 shares to Equilink. These shares were issued on April
16, 2001 in a transaction exempt from the registration provisions of the
Securities Act of 1933 pursuant to Section 4(2) thereof. Due to market
conditions and the deterioration in the Company's businesses and financial
condition, the Company has not requested and Equilink has not performed any
services under the agreement. Therefore, the difference, $561,000, between the
market price at the date of issuance of the Company's Common Stock and the
purchase price was charged to expense at June 30, 2001.

On March 28, 2001 we also executed a private equity line of credit
agreement with Equilink Capital Partners, LLC. The private equity line of credit
agreement gives us certain rights in the two year investment period following
the effective date of a registration statement covering the shares issuable in
connection with the private equity line of credit and related warrants in
certain circumstances and on certain conditions to exercise a put right to
require Equilink to purchase shares of our Class A Common Stock and gives
Equilink the option, in the event we exercise our put right and under certain
conditions, to exercise a call right to require us to sell them additional
shares. The purchase price with respect to these shares is calculated with
respect to a discount to the then current market price. The investment period
terminates on the earlier of the date (i) 5,000,000 shares of our Class A Common
Stock are issued pursuant to our put rights under the private equity line of
credit agreement, subject to the 19.9% limitation discussed below, (ii) the
aggregate purchase price paid by Equilink to purchase shares pursuant to the
private equity line of credit agreement equals $25 million or (iii) the two year
investment period ends.

In connection with the above agreements, we issued warrants to Equilink
Capital Partners LLS and its affiliates to purchase 400,000 shares of Class A
Common Stock. These warrants are exercisable over the next five years at a price
of $1.00 per share, which price may be adjusted from time to time under certain
antidilution provisions. We may not make any issuances of our Class A Common
Stock in connection with the private equity line of credit agreement and related
warrants if that issuance would result in the issuance of a number of shares in
excess of 19.9% of the number of shares of Class A Common Stock issued and
outstanding on the effective date of the private equity line of credit agreement
unless we obtain prior stockholder approval in accordance with NASDAQ rules.

We also entered into a financial advisory and consulting agreement as of
April 12, 2001 with Equilink and National Securities Corporation wherein
Equilink engages National as its advisor to aid Equilink in providing us with
consulting services under the financial consulting agreement with Equilink. The
term of the financial advisory and consulting agreement is until April 12, 2002.
In consideration for its services, we issued a warrant to National exercisable
for five years for 100,000 shares of class A Common Stock for an exercise price
of $1.00 per share. These securities were issued in a transaction exempt from
the registration provisions of the Securities Act of 1933 pursuant to Section 4
(2) thereof.

We did not record a charge to expense for the warrants issued to Equilink
Capital Partners LLS and National Securities Corporation since the exercise
price of the warrants was significantly greater than the closing price of less
than $.40 per share of the Company's Common Stock on the dates of issue and the
resulting values were immaterial.

F-28

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In October 2000, the holders of $1.0 million of the principal amount of 6%
secured convertible notes converted such notes into 500,000 shares of the
Company's Class A Common Stock. Also in October, 2000, the Company redeemed $1.0
million of the principal amount of 6% secured convertible notes for $1.2 million
cash plus the issuance of 62,500 shares of the Company's Class A Common Stock.

In February 2000, the Company repurchased 464,630 shares of its Class A
Common Stock issued to former noteholders of TNCI's Series Notes for $1,394,960.
The shares of the common stock were issued in connection with the purchase of
the Series Notes. Pursuant to the purchase agreement, the Company exercised a
call option for the shares of common stock at prices averaging $3.00 per share.
The repurchased shares were retired from treasury stock.

In November 1999, the Company issued 1,544,250 shares of its Class A Common
Stock at $1.74 per share for total proceeds of approximately $2,685,000 in a
private placement transaction with several employees, officers and directors of
the Company. The price per share was based upon the closing market price of the
Company's Common Stock on the date the Board of Directors approved the sale. The
shares of common stock have not been registered under the Securities Act of 1933
and no registration rights were granted.

On October 30, 1998, the Board of Directors authorized a stock repurchase
program whereby the Company may repurchase up to 1,000,000 shares of its Class A
Common Stock on the open market. As of June 30, 1999, the Company had
repurchased 117,900 shares at prices ranging from $0.99 to $1.96 per share for a
total cost of $193,990. On March 16, 2000, the Company retired all 117,900 of
these shares from Treasury Stock.

(b) PREFERRED STOCK

On May 10, 1999, the Company issued 3,000 shares of Series A Stock; stated
value $1,000 per share and liquidation value of 120% of stated value. The holder
of Series A Stock is entitled to receive, when, as and if declared by the Board
of Directors, an annual cumulative dividend of $80 per share payable quarterly
in cash or common stock. At the option of the Holder, beginning 180 days after
the issue date, each share of Series A Stock is convertible into common stock at
a price equal to $2.00 per share. The Company may redeem the Series A Stock at
prices ranging from 105% to 120% of stated value, plus accrued and unpaid
dividends beginning from 180 days and ending 360 days from the issue date. On
November 16, 1999, the Company redeemed the Series A Stock for approximately
$3.57 million, consisting of its stated value of $3 million, plus accrued and
unpaid dividends of approximately $120,000 and a redemption premium of
approximately $450,000.

Series B 8% Convertible Preferred Stock ("Series B Stock"); stated value
$1,000 per share is entitled to one vote for each share of common stock into
which it may convert. The Series B Stock is entitled to the same dividends as
the Series A Stock. Each share of Series B Stock is generally convertible into
Common Stock at an amount equal to the lower of; i) 82% of the Market Price, as
defined in the Certificate of Designation; ii) $3.00 per common share, or; iii)
118% of the closing bid price on NASDAQ as defined. There are no shares of
Series B Stock issued or outstanding.

F-29

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additionally, the Company may redeem the preferred stock for a premium
under certain circumstances. During March 2001 and April 2001, the holders of
200 shares of the Series C Stock converted such shares into 400,023 shares of
the Company's Class A Common Stock.

On March 30, 2001, Mr. Gross, certain trusts related to Mr. Gross and a
charitable foundation related to Mr. Gross, converted $2,467,400 of notes and an
additional $32,600 of advances into 250 shares of Global Technologies, Ltd.
Series E 8% Convertible Preferred Stock with an aggregate stated value of
$2,500,000. This preferred stock is convertible into shares of Class A common
stock at a fixed conversion price of $0.3125 per share, the closing price per
share of Class A common stock on March 30, 2001. In accordance with NASDAQ
rules, Class A common stock representing no more than 19.99% of the outstanding
Class A common stock on June 30, 2001 may be issued on conversion of the
preferred stock without prior stockholder approval.

In connection with the Company's March 6, 1995 public offering, the Company
issued 140,000 Unit Purchase Options to designees of D. H. Blair Investment
Banking Corporation for their role as underwriters of the offering. Each Unit
Purchase Option was exercisable into one share of Class A Common Stock, One
Class A Warrant and One Class B Warrant at an exercise price of $12.00 per
share. Each Class A Warrant was exercisable into one share of Class A Common
Stock and one additional Class B Warrant at an exercise price of $13.71 per
share (as adjusted for certain dilutive events). Each Class B Warrant was
exercisable into one share of Class A Common Stock at an exercise price of
$19.10 per share (as adjusted for certain dilutive events). At the option of the
holders of the Unit Purchase Options, the holder could elect to receive shares
equal to the market value of the option in lieu of delivery of the exercise
price in cash ("cashless exercise"). The options and underlying warrants were
set to expire March 6, 2000.

Prior to March 6, 2000 all Unit Purchase Options were exercised. As a
result of certain holders electing cashless exercise, 104,458 shares of Class A
Common Stock, 104,458 Class A Warrants and 104,458 Class B Warrants were issued
upon the exercise of the Unit Purchase Options. An additional 64,439 shares of
Class A Common Stock and 64,439 Class B Warrants were issued as a result of the
exercise of Class A Warrants. No Class B Warrants were exercised. All remaining
warrants have expired. The Company received proceeds of $2,111,119.

(d) WARRANTS

The following table summarizes warrant activity for the years ended June
30, 2001 and June 30, 2000:

F-30

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CLASS A CLASS B CLASS C CLASS D CLASS E
----------- ---------- ---------- -------- -----------

Outstanding as of June 30, 1999 206,250 -- 82,500 82,500 100,000
Issued in connection with Series C Stock 150,925 -- -- -- --
Issued in connection with Secured
Convertible Notes 20,000
Issued in connection with consulting services 75,000 -- -- -- --
Issued in connection with Unit Purchase Options 104,458 168,897 -- -- --
Exercised during the year (64,439)
Expired during the year (40,019) (168,897) (82,500) (82,500) --
----------- ---------- ---------- -------- -----------
Outstanding as of June 30, 2000 452,175 -- -- -- 100,000
Issued in connection with financial
Advisory services 500,000
Issued in connection with redemption of
Notes payable 125,000
Issued in connection with collateral pledge
On credit facility 553,978
Issued in connection with cash advances 198,318
Other issues 125,000
----------- ---------- ---------- -------- -----------
Outstanding as of June 30, 2001 1,954,471 100,000
=========== ========== ========== ======== ===========

Exercise price $1.00-16.00 $ -- $ -- $ -- $3.00-16.00
=========== ========== ========== ======== ===========

Warrants entitle the holder to one share of Class A common stock. All
outstanding warrants are exercisable as of June 30, 2001.

We issued warrants, on March 28, 2001, to Equilink Capital Partners LLS and
its affiliates to purchase 400,000 shares of Class A Common Stock in connection
with the private equity line of credit discussed above. These warrants are
exercisable over the next five years at a price of $1.00 per share, which price
may be adjusted from time to time under certain antidilution provisions.

In consideration for financial consulting services as discussed above, we
also issued, on April 12, 2001, a warrant to National Securities Corporation,
exercisable for five years, for 100,000 shares of class A Common Stock for an
exercise price of $1.00 per share.

We did not record a charge to expense for the warrants issued to Equilink
Capital Partners LLS and National Securities Corporation since the exercise
price of the warrants were significantly greater than the closing price of less
than $.40 per share of the Company's Common Stock on the dates of issue and the
resulting values were immaterial.

On September 12, 2000, in connection with the execution of certain
promissory notes discussed above, the trusts were granted warrants to purchase
198,318 shares of the Company's Class A common stock based upon the amount
advanced and the closing market price of such stock on the date of each advance.
The warrants have five year terms. 57,142 of the warrants have an exercise price
of $3.50 and the remaining 141,176 warrants have an exercise price of $4.25.

In connection with the pledges of his collateral to meet maintenance calls
on the Secured Credit Facility, Mr. Gross was granted warrants to purchase
553,978 shares of the Company's Class A common stock based upon the amount of
collateral pledged and the closing market price of the stock on the date of each
pledge. The warrants have exercise prices equal to the closing price of our
Class A common stock on the date of the relevant pledge and a term of five years
from such date. Three tranches of warrants were issued: one to purchase 174,312

F-31

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

shares at an exercise price of $3.75 per share, the second to purchase 159,373
shares at $6.00 per share and the third to purchase 220,293 shares at $5.125 per
share. The Company recorded non-cash interest expense of $1,070,527 and
$1,526,527 for the years ended June 30, 2001 and June 30, 2000, respectively,
related to the estimated fair value of the warrants granted for the collateral
pledged.

On July 7, 2000, the Company redeemed $2.0 million of the principal amount
of Secured Convertible Notes. In connection with this redemption, the Company
issued warrants for 125,000 shares, in the aggregate, of its Class A Common
Stock to the holders of the notes. These warrants have a four-year term and an
exercise price of $4.00 per share. In accordance with the Settlement Agreement
with Advantage and Koch discussed above, the exercise price of these warrants
was re-priced to 115% of the closing price, $1.25, of the Company's Common Stock
on the day before the execution date, January 31, 2001, of the Settlement
Agreement.

In connection with the June 7, 2000 issuance of the Secured Convertible
Notes noted above, designees of Reedland Capital Partners, a division of
Financial West Group, received warrants to purchase an aggregate of 20,000
shares of the Company's Class A Common Stock at $5.8125 per share for Reedland
Capital Partners' role as sales agent. The warrants expire in June 2004. The
Company recorded deferred financing costs of $146,702, of which $138,550 and
$8,150 was amortized into interest expense for the years ended June 30, 2001 and
June 30, 2000, respectively.

In March 2000, the Company issued 104,458 Class A and 168,897 Class B
warrants in connection with the exercise of certain Unit Purchase Options
discussed above. Of these, 64,439 Class A warrants were exercised. All of the
unexercised warrants expired March 6, 2000.

In connection with the February 16, 2000 Series C Preferred Stock issuance
noted above, the Company issued warrants to purchase 100,925 shares of Global's
Class A Common Stock to the holders of the preferred stock. These warrants are
exercisable at a price of $15.21 per share (as adjusted for certain dilutive
events) and expire in February 2005. In accordance with the Settlement Agreement
with Advantage and Koch discussed above, the exercise price of these warrants
was re-priced to 115% of the closing price, $1.25, of the Company's Common Stock
on the day before the execution date, January 31, 2001, of the Settlement
Agreement.

In connection with the February 16, 2000 Series C Preferred Stock issuance
noted above, designees of Reedland Capital Partners, a division of Financial
West Group, received warrants to purchase an aggregate of 50,000 shares of the
Company's Class A Common Stock at $17.835 per share for Reedland Capital
Partners' role as sales agent. The exercise period of the warrants expires in
February 2005.

In December 1999, the Company retained the services of two financial
relations firms. In connection with the consulting services to be provided, the
Company issued stock purchase warrants to purchase 37,500 shares of the
Company's Class A common stock at $5.25 per share to each firm. The warrants
vested immediately and have an exercise period that expires in December 2004.
The Company recorded $356,082 as compensation expense for the year ended June
30, 2000.

In May 1999, the Company issued stock purchase warrants to purchase 131,250
shares of Class A common stock at $2.00 per share to the Shaar Fund, Ltd. In
connection with the issuance of its Series A Preferred. The exercise period of
the warrants expires in May 2004.

F-32

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In April 1999, the Company retained the services of a financial relations
firm. In connection with the consulting services to be provided, the Company
issued stock purchase warrants to purchase 75,000 shares of the Company's Class
A common stock at $1.92 per share. The exercise period of the warrants expires
in April 2002, and the warrants vest ratably over a 24-month period from the
date of issuance. The Company recorded $359,362 as compensation expense for the
year ended June 30, 2000.

In November 1996, the Company issued Class E Stock Purchase Warrants to
purchase 25,000 shares of Class A common stock at $21.50 per share in connection
with the amendment and restatement of a License Agreement with FortuNet. In
January 1997, the Company lowered the exercise price of the stock purchase
warrants to $16.00 per share, such price being the trading price of the Class A
Common Stock at the close of the previous business day. In September 1999, the
Company lowered the exercise price on the stock purchase warrants to $3.00 per
share, such price representing a premium to the then trading price of the Class
A Common Stock which was $2.46. The Company also extended the expiration date
from November 2001 to September 2002.

(e) PROCEEDS FROM EXERCISE OF COMMON STOCK OPTIONS

During the year ended June 30, 2000, current and former employees and
directors exercised common stock options for the purchase of 132,306 resulting
in proceeds of $564,710. No options were exercised during the year ended June
30, 2001.

(f) TNCi FINANCING

TNCi COMMON STOCK

During the period from July 1, 2000 up until prior to March 24, 2001, when
TNCi entered into protection under Chapter 11 of the Bankruptcy Code, it has
issued approximately 1,474,000 shares of its common stock to third party
investors for net proceeds of approximately $1,794,000.

CONVERSION OF SERIES D PREFERRED STOCK

On August 2, 2000, upon receipt of notice of conversion from Global, TNCi
issued 5,000,000 shares of its common stock to Global upon conversion of 826,447
shares of the Company's Series D Preferred Stock held by Global.

ISSUANCE OF SERIES E CONVERTIBLE PREFERRED STOCK

In August 2000, TNCi designated 500 shares of Series E 6% Convertible
Preferred Stock ("Series E Stock"); stated value $10,000 per share and
liquidation value $10,000 per share plus accrued and unpaid dividends. On August
3, 2000, TNCi issued 100 shares of such stock to third party investors for net
proceeds of approximately $909,000. At the option of the Holder, beginning 180
days after the date of issue, each share of Series E Stock is convertible into
common stock at the lesser of $4.00 per share or 80% of the Average Market Price
for common stock for the five consecutive trading days immediately preceding
such date, as defined. TNCI may redeem the Series E Stock at prices ranging from
110% to 120% of stated value, plus accrued dividends during the first 180 days
from date of issue. The redemption premium increases at a rate of 3% per month
to a maximum of 140% of stated value.

INVESTMENT BY OFFICER

On August 3, 2000, TNCi's Executive Vice President purchased 500,000 units,
consisting of 500,000 shares of TNCi's common stock and warrants exercisable for
166,667 shares of TNCi's common stock. The warrants have an exercise price of
$3.50 per share and a term of four years. The purchase price for these units was
$2.00 per unit resulting in aggregate consideration of $1.0 million, which was
paid to TNCi in installments in August and September 2000. The market price per
share of TNCi common stock on October 16, 2000 was $2.00 per share.

ISSUANCE OF SERIES F PREFERRED STOCK

On January 2, 2001, notes totaling $1,050,000 and additional advances
totaling $250,000 made by two trusts controlled by Irwin L. Gross and two trusts
established for the benefit of Mr. Gross's children were converted in 260 shares
of Series F 8% Convertible Preferred Stock with an aggregate stated value of
$1,300,000. The preferred stock is convertible into 1,733,333 shares of TNCi
common stock at a fixed conversion price of $.75 per common share.

F-33

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MINORITY INTEREST

These transactions, net of new common equity valued at approximately
$1,050,000, issued to Global in compensation for Global's satisfaction of TNCi
liabilities to third parties, reduced Global's investment in TNCI to
approximately 70% on an if-converted basis. Approximately 30% of the new equity,
or $1,869,000, representing the minority interest was credited to loss before
minority interest and extraordinary item on the consolidated statement of
operations for the year ended June 30, 2001.

Approximately 70% of the additional new cash equity investment in the
subsidiary, which accrues to Global, was credited to consolidated additional
paid-in capital on the consolidated balance sheet at June 30, 2001.

(15) INCOME TAXES

Income tax benefit differed from the amounts computed by applying the U.S.
Federal corporate income tax rate of 34% to net loss as a result of the
following:

2001 2000
------------ ------------
Computed expected tax benefit $(11,595,716) $(12,865,324)
Change in federal valuation Allowance (11,595,716) (13,007,270)
Non-deductible payments -- 1,433,463
------------ ------------
$ -0- $(24,439,131)
============ ============

Total income taxes for the year ending June 30, 2000 were as follows:

Total
------------
To loss from continuing operations --
To stockholders' equity $(24,439,131)
------------
$(24,439,131)
============

The net deferred tax asset at June 30, 2000 was associated exclusively with
the unrealized gain on the U.S. Wireless stock. Since such U.S. Wireless stock
has been disposed or written off, there are no deferred tax benefits at June 30,
2001

F-34

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effects of temporary differences that give rise to significant
portions of the net deferred tax asset at June 30, 2000 are presented below:

2000
------------
Deferred tax assets:
Net operating loss carryforward $ 39,581,215
Property and equipment 939,514
Deferred start-up costs 170,784
Issuance of stock options and warrants 1,157,963
Allowance for bad debts 4,135,431
Provision for inventory valuation 3,336,316
Accrued liabilities 1,141,754
Other 512,334
------------
50,975,311
Less:
Valuation allowance (26,536,180)
------------
$ 24,439,131
============

Management has determined that a calculation of temporary differences and a
gross deferred tax asset is not meaningful at June 30,2001.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management has provided a
valuation allowance for 100% of the deferred tax assets at June 30, 2001,
substantially comprised of that amount attributable to net operating loss
carryforwards, as the likelihood of realization can not be determined. In March
2000, Management determined that the realization of a portion of the deferred
tax asset was likely as of June 30, 2000 given the realizable gains on its
investments in U.S. Wireless and TNCi.

As of June 30, 2001, the Company has a net operating loss (NOL)
carryforward for federal income tax purposes of approximately $138,000,000,
which begins to expire in 2009, and a research and experimentation tax credit of
approximately $247,000. The Company likely underwent a change in ownership in
accordance with Internal Revenue Code Section 382, the effect of which has not
yet been determined by the Company. This change would affect the timing of the
utilization of the NOL, as well as the amount of the NOL, which may ultimately
be utilized, though it is not expected to materially affect the amount of the
NOL carryforward.

(16) RELATED PARTY TRANSACTIONS

Prior to Global's acquisition of TNCi, TNCi entered into a Secured
Promissory Note with Global in the principal amount of $750,000, bearing
interest at a rate of 9.5% per annum, and a related security agreement granting
Global a security interest in its assets. The Secured Promissory Note was
convertible into shares of TNCi's Series C 8% Preferred Stock at the discretion
of Global.

In July and August 1999, Global purchased all of the Series A and E notes
and the Series D notes issued by TNCi (collectively, the "Series Notes"),
respectively from the holders of such notes. Concurrent with such purchases,
TNCi executed allonges to the Secured Promissory Note, which cancelled the
Series Notes and rolled the principal balance, plus accrued interest, penalties
and redemption premiums of the Series Notes into the principal balance of the
Secured Promissory Note.

F-35

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In August 1999, TNCi executed another allonge to the Secured Promissory
Note which rolled approximately $1.2 million of prior intercompany advances from
Global into the Secured Promissory Note and granted Global the ability to
convert the Secured Promissory Note directly into shares of TNCi's Common Stock
as an administrative convenience.

On August 24, 1999, the Board of Directors of Global approved the
conversion of the Secured Promissory Note into approximately 4.8 million shares
of TNCi's Common Stock. Such conversion was contingent upon receiving
shareholder approval to increase the authorized share capital of TNCi. This
increase in authorized share capital was approved on September 17, 1999, and the
shares were subsequently issued in December 1999 based as on the August 24, 1999
conversion date.

On August 24, 1999, the Company's Board of Directors approved a $5,000,000
revolving credit facility by and between TNCi and Global (the "Facility"). The
Facility provides that TNCi may borrow up to $5,000,000 for working capital and
general corporate purposes at the Prime Rate of interest plus 3%. The Facility
matures in September 2001. TNCi paid an origination fee of $50,000 to Global and
an unused line fee of 0.5% per annum. The Facility is convertible into shares of
TNCi's Common Stock at a price of $1.50 per share as defined in the Facility
agreement.

During the year ended June 30, 2000, TNCi borrowed $4,200,000 under the
Facility. On June 29, 2000 the Company exercised its right to convert $1,850,000
of the Facility into 1,233,333 shares of TNCi Common Stock. The balance owed on
the Facility was $3,775,000 and $2,350,000 at June 30, 2001 and June 30, 2000,
respectively. Global has filed a claim in the TNCi bankruptcy case.

The Facility and any other intercompany balances are eliminated in
consolidation at June 30, 2000.

The Company's Chief Executive Officer is a principal of Ocean Castle
Investments, LLC ("Ocean Castle") which maintains administrative offices for the
Company's Chief Executive Officer, and certain other employees of the Company
for which the Company pays rent and other administrative expenses pursuant to an
agreement. During the year ended October 31, 1998, Ocean Castle executed
consulting agreements with two principal stockholders of the Company. The rights
and obligations of Ocean Castle under the agreements were assumed by TNCi in
connection with the Transaction. The consulting agreements require payments
aggregating $1,000,000 to each of the consultants through December 2003 in
exchange for advisory services. Each of the consultants also received stock
options to purchase 50,000 shares of Class A Common Stock of the Company at an
exercise price of $3.00. As of June 30, 1999, TNCi determined that the
consulting agreements had no future value due to TNCi's shift away from
in-flight entertainment into alternative markets such as leisure cruise and
passenger rail transport. Only limited services were provided in 1999 and no
future services will be utilized. As of June 30, 2000, the outstanding balance
was approximately $1.3 million. In August 2000, Global, on behalf of TNCi,
settled the outstanding obligation with the principal stockholders of Global for
a total of 279,028 shares of Class A Common Stock. TNCi issued 411,146 shares of
its common stock as reimbursement to Global for such settlement.

In April 2000, the Directors of the Company were authorized options to
purchase equities in GTL Management totaling 10% of the fair market value of GTL
Management based upon the fair market value at the date of grant. The options
were not issued and, subsequent to the granting of such options management
decided to exit the business and determined that such options were worthless.

F-36

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On August 2, 2000 the Board of Directors of the Company approved the
conversion of 826,447 shares of Series D Preferred Stock of TNCi owned by the
Company into 5,000,000 shares of common stock of TNCi based upon an adjusted
conversion rate of 6.05 common shares per preferred share.

In May and June 2000, The Gross Charitable Unit Trust and The Gross
Charitable Annuity Trust (together the "Trusts"), advanced a total of $800,000
to TNCi for working capital purposes. An additional $250,000 was advanced to
TNCi in July 2000. On September 12, 2000, the advances to TNCi were converted
into two promissory notes, each in the amount of $525,000, issued to each Trust
by TNCi. The notes mature on December 31, 2000 and bear interest at 9.0%. On
September 28, 2000 the Trusts and two trusts established for the benefit of Mr.
Gross's children advanced an additional $250,000 in total to TNCi. On January 2,
2001 the notes and the advances were converted into 260 shares of TNCi Series F
8% Convertible Preferred Stock with an aggregrate stated value of $1,300,000.
The preferred stock is convertible into 1,733,333 shares of TNCi's common stock.
Irwin L. Gross, Chairman and Chief Executive Officer of Global, was trustee of
each of these trusts until March 23, 2001.

On September 28 and 29, 2000, a group of European investors invested an
aggregate of $474,046 in The Network Connection in return for 280,071 shares of
its common stock. The shares were issued at an average price of $1.69.

On January 26 and 31, 2001, a group of European investors invested an
aggregate of $389,675 in equity units, each of which consisted of two shares of
The Network Connection's common stock and a three-year warrant to purchase a
share of its common stock. The Network Connection issued a total of 272,631
shares of its common stock pursuant to this offering, and issued warrants to
purchase an aggregate of 136,315 shares of its common stock at an exercise price
of $2.50 per share. The shares were issued at an average price of $1.43.

F-37

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

months from the date of issuance. This note was issued in a transaction exempt
from the registration provisions of the Securities Act of 1933 pursuant to
Section 4(2) thereof.

On November 22, 2000, $1,667,400 of Mr. Gross' collateral pledged to secure
the Secured Credit Facility with Merrill Lynch was applied to repay, in part,
the Secured Credit Facility. The Company issued two promissory notes totaling
$1,667,400 to Mr. Gross and a charitable foundation controlled by him. The new
promissory notes matured on December 31, 2000 and had an annual interest rate of
9.0%. To secure such borrowing, the Company pledged 300,000 shares of common
stock of U.S. Wireless to the holders of the notes. On December 31, the maturity
dates of the notes were extended to June 30, 2001.

Between July 2000 and April 2001, Mr. Gross, the trusts and the charitable
foundation made additional advances to the Company totaling $757,548.58
($644,000 of these advances, plus accrued interest, are in the form of a
Treasury Bill and remain as collateral for the Secured Credit Facility with
Merrill Lynch). On March 30, 2001, Mr. Gross, the trusts and the charitable
foundation converted the existing $2,467,400 of notes discussed above and an
additional $32,600 of these advances into 250 shares of Global Technologies,
Ltd. Series E 8% Convertible Preferred Stock with an aggregate stated value of
$2,500,000. This preferred stock is convertible into shares of Class A common
stock at a fixed conversion price of $0.3125 per share, the closing price per
share of Class A common stock on March 30, 2001. Remaining advances made by Mr.
Gross, the trusts and the charitable foundation are secured by a security
interest in the lottery equipment formerly used by the Company in its lottery
business in Great Britain.

Between June 30, 2001 and November 5, 2001, Mr. Gross, a limited
partnership controlled by him and certain Trusts establisheded by him advanced
$464,000 to the Company to cover the working capital requirements of the Company
and the Company's 60% owned subsidiary, TNCi UK. These advances are secured by a
security interest in the lottery equipment formerly used by the Company in its
lottery business in Great Britain. The company received, on November 2, 2001,
$1,455,378 from the sale of terminals formerly used in its lottery business in
Great Britain. The Company repaid Mr. Gross and these entities a total of
$767,000 on November 9, 2001. Remaining unpaid advances, at November 12, 2001,
received from Mr. Gross and the Trusts total $80,000. These advances are secured
by a security interest in the equity of TNCi UK owned by Global.

The Company has agreed to reimburse BHG Flights, L.L.C. ("BHG") for costs
and expenses associated with the use for corporate purposes of an airplane owned
by BHG. Irwin L. Gross, Chairman of the Board and Chief Executive Officer, owns
a 50% interest in BHG. Through September 2000, the Company had incurred
approximately $106,085 for such costs and expenses. The Company reimbursed BHG
approximately $1,500 for costs and expenses between September 2000 and November
2001.

In August 1999, the Company executed a separation and release agreement
with a shareholder and former officer of TNCi, pursuant to which the Company
paid approximately $85,000 in the form of unregistered shares of the Company's
Common Stock.

In June 1999, the TNCi loaned to a vice president of TNCi $75,000 for the
purpose of assisting in a corporate relocation to the Company's headquarters in
Phoenix, Arizona. TNCi also added other outstanding advances totaling $42,000 to
the principal amount of the note. Such loan was secured by assets of the
employee. The note had a maturity date if August 2009 and bore an interest rate
of approximately 5%. The employee left the Company in January 2001 and the note
was charged to expense during the third quarter.

The Company had an Intellectual Property License and Support Services
Agreement (the "License Agreement") for certain technology with FortuNet, Inc.
("FortuNet"). FortuNet is owned by a principal stockholder and former director
of the Company. The License Agreement provides for an annual license fee of
$100,000 commencing in October 1994 and continuing through November 2002. In
September 1999, TNCi agreed to a termination of this agreement and paid Fortunet
$100,000 plus legal fees. In addition, Global agreed to reprice and extend the

F-38

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

exercise period of certain warrants and options held by FortuNet and its
principal shareholder, a former director of the Company. During the year ended
June 30, 2000, actual costs associated with this settlement were approximately
$157,000.

During the year ended October 31, 1998, the Company extended by one year a
consulting agreement with a former officer of the Company pursuant to which the
Company will paid $55,000 for services received during the period November 1999
through October 2000. TNCi assumed the liability for the consulting agreement in
the amount of $55,000 in connection with the transaction wherein Global acquired
its interest in TNCi. As of June 30, 2001, no amounts were owed in connection
with this consulting agreement.

In October 1998, the Company entered into a consulting agreement with First
Lawrence Capital Corp. (First Lawrence) to perform various financial advisory
services related to ongoing business development and management. The former
managing director of First Lawrence is also a director of the Company. The
Company retained, on a full time basis as President and Chief Operating Officer,
the services of the former managing director of First Lawrence effective
December 12, 1998. Accordingly, the Company entered into an employment contract
with such individual. During the year ended June 30, 2000, the Company paid
$43,064 for office expenses and rent of First Lawrence under the terms of the
agreement. The agreement with First Lawrence Capital Corp. to provide office
space for the Chief Operating officer of the Company was terminated in March
2000.

(17) COMMITMENTS AND CONTINGENCIES

(a) LITIGATION

F-39

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On May 6, 1999, a complaint captioned INTERACTIVE FLIGHT TECHNOLOGIES, INC.
V. SWISSAIR TRANSPORT COMPANY, LTD., et al., No. Civ. 99-0936PHXSMM, was filed
in the United States District Court for the District of Arizona. In this suit,
we are seeking payment by Swissair of $6,773,906 for sums owed by Swissair and
SR Technics to us for equipment and warranty contracts. We have also asserted
claims for business torts arising from the unjustified deactivation of the
entertainment network systems following the crash of Swissair Flight 111 in this
action. Swissair filed motions to dismiss the action alleging that the claims
asserted in our complaint are subject to resolution by arbitration. The motions
to dismiss were granted on March 31, 2000. We requested the District Court to
reconsider its ruling on the motions and such request was denied by the District
Court on May 25, 2000. We appealed both the March 31 and May 25 District Court
Orders to the United States Court of Appeals for the Ninth Circuit. Swissair
filed a motion to dismiss the appeal for lack of jurisdiction, which was granted
on September 18, 2000. On March 28, 2001, the Supreme Court of the United States
granted our petition for writ of certiori and remanded the case to the Circuit
Court for further consideration. Both sides have filed briefs with the Ninth
Circuit Court of Appeals and we are awaiting oral argument on the issue of
whether the case is subject to arbitration abroad or can continue here in the
States. We have assigned any proceeds we may be entitled to in this action to
The Network Connection. Swissair recently filed for bankruptcy.

F-40

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

existing claims. The Network Connection recorded a gain in other income of
$1,336,563 reflecting the settlement, net of legal fees. The Network Connection
received the cash payment on January 2, 2001.

An action captioned KEATING DEVELOPMENT COMPANY V. THE NETWORK CONNECTION,
INC. AND GLOBAL TECHNOLOGIES, LTD., case number 000997 was initiated on January
8, 2001 in the Philadelphia County Court of Common Pleas. The case relates to
the The Network Connection's alleged breach of a lease for office and warehouse
space. The lease was guaranteed by Global. Keating is seeking approximately
$350,000 in damages. Global has agreed to pay Keating $15,000 and, upon such
payment, will be dismissed from the action. The action against The Network
Connection has been stayed pending resolution of bankruptcy proceedings.

The Company is subject to other lawsuits and claims arising in the ordinary
course of its business. In the Company's opinion, as of June 30, 2001, the
effect of such matters will not have a material adverse effect on the Company's
results of operations and financial position.

(b) LEASE OBLIGATIONS

The Company leases office space and furniture under operating leases that
expire at various dates through January 2005. The future minimum lease
commitments under these leases are as follows:

YEAR ENDING OPERATING
JUNE 30, LEASES
-------- ------
2002 $ 91,238
2003 86,256
2004 81,745
2005 46,507
---------
$ 305,746
=========

Rental expense under operating leases totaled $808,721, and $616,081 for
the year ended June 30, 2001, and the year ended June 30, 2000, respectively.

In September 1999, GTL Leasing Limited entered into an agreement with
International Lottery & Totalizator Systems, Inc., a California corporation
("ILTS"), to purchase an on-line lottery system for the operation of the Inter
Lotto lotteries. The base value of the lottery system being purchased from ILTS
was $12.3 million, of which approximately $2.9 million was yet to be paid as of
June 30, 2000. In addition, in September 1999, GTL Management entered into an

F-41

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

eight-year facilities management agreement with ILTS to provide operational and
technology support for the system. Under this agreement, GTL Management was
required, beginning April 1, 2000, to make weekly payments of $72,000, plus
additional amounts based on the number of installed terminals and sales volumes,
upon the commencement of ticket sales through the system. Global guaranteed the
obligations of GTL Leasing Limited and GTL Management Limited under these
agreements. In December 2000, the Company returned 1,333 terminals in a
settlement with ILTS in lieu of payment of outstanding accounts payable due ILTS
for both the original purchase and facilities management services.

(d) CARNIVAL AGREEMENT

In September 1998, TNCi entered into a Turnkey Agreement (the "Carnival
Agreement") with Carnival Corporation ("Carnival") for the purchase,
installation and maintenance of its advanced cabin entertainment and management
system for the cruise industry ("CruiseView(TM)") on a minimum of one Carnival
Cruise Lines ship. During the four-year period commencing on the date of the
Carnival Agreement, Carnival had the right to designate an unspecified number of
additional ships for the installation of CruiseView(TM). The cost per cabin for
CruiseView(TM) purchase and installation on each ship was provided for in the
Carnival Agreement. In December 1998, Carnival ordered the installation of
CruiseView(TM) on one Carnival Cruise Lines "Fantasy" class ship, which has been
in operational use since August 1999. In August 1999, Carnival ordered the
installation of CruiseView(TM) on one Carnival Cruise Lines "Destiny" class ship
which was operational use from October 1999 through March 2000. Under the terms
of the agreement, TNCi was to receive payment for 50% of the sales price of the
system in installments through commencement of operation of the system. Recovery
of the remaining sales price of the system was to be achieved through the
receipt of TNCi's 50 % share of net profits, as defined in the Carnival
Agreement, generated by the system over future periods.

The terms of the Carnival Agreement provided that Carnival may return the
CruiseView(TM) system within the acceptance period, as defined in the Carnival
Agreement, or for breach of warranty. The acceptance period for the Fantasy and
Destiny class ships were twelve months and three months, respectively, from
completion of installation and testing, which occurred in February 1999 and
October 1999, respectively. The initial warranty period for these systems was
three years. As of March 31, 2000, the Company had recorded deferred revenue of
approximately $2.1 million related to the two Carnival ships.

Since the installation of the CruiseView(TM) system on two Carnival cruise
ships, and beginning in the quarter ended March 31, 2000, TNCi had experienced
costs in excess of those recoverable under the Carnival Agreement. Given these
costs, and ongoing technical issues, TNCi notified Carnival of its desire to
renegotiate the Carnival Agreement. During these discussions, Carnival notified
TNCi in a letter dated April 24, 2000 that it sought to terminate the Carnival
Agreement and sought to assert certain remedies thereunder. On September 25,
2000, TNCi entered into a Master Settlement Agreement and Mutual Release with
Carnival (the "Settlement Agreement"). The Settlement Agreement specifies that
TNCI and Carnival agree: (i) to terminate the Carnival Agreement; (ii) to
negotiate in good faith to enter into a New Agreement; (iii) that TNCi will
issue to Carnival a one-year convertible note payable in the principal amount of
$550,000; (iv) to mutually release each party from any prior claims; and (v)
that Carnival shall purchase from TNCi all networking equipment aboard the two
ships and TNCi shall retain ownership of all other equipment.

Based on the above, the Company recorded, in the year ended June 30, 2000,
revenue of $1.4 million for the value of networking equipment purchased by
Carnival, and cost of revenue in an equal amount by applying the cost recovery
method of accounting. The Company also recorded a special charge reflecting the
write-off of: (i) all remaining inventory associated with Carnival (including
the reversal of warranty reserve) as substantial uncertainty exists regarding
its realizability (approximately $2.1 million); (ii) all costs associated with
the deinstallation and removal of equipment from the two ships (approximately
$85,000) and (iii) all costs associated with the refurbishment of certain
equipment such that the equipment may be re-deployed to other customers
($157,000). Special charges were offset by the reversal of deferred revenue of
$190,000, which TNCi was not required to return to Carnival for warranty
accruals for which TNCi has no continuing obligation. Certain in-cabin equipment
removed from Carnival which may be re-deployed to other customers was
reclassified into Construction-In-Progress at June 30, 2000 (approximately
$681,000).

F-42

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the Settlement Agreement, TNCi and Carnival continued
discussions with respect to a New Agreement which would cover the installation
of TNCi's latest CruiseView(TM) technology on the "Fantasy" class ship discussed
above, and contractual terms more favorable to TNCi than the Carnival Agreement,
including a longer-term and multiple ship arrangement. However, TNCi and
Carnival were unable to reach a mutually satisfactory resolution of the Carnival
Agreement and discussions were discontinued. TNCi filed for bankruptcy
protection on March 24, 2001.

(18) FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107 "Disclosure about Fair
Value of Financial Instruments" requires that the Company disclose estimated
fair values for its financial instruments. The following summary presents a
description of the methodologies and assumptions used to determine such amounts.

Fair value estimates are made at a specific point in time and are based on
relevant market information and information about the financial instrument; they
are subjective in nature and involve uncertainties, matters of judgment and,
therefore, cannot be determined with precision. These estimates do not reflect
any premium or discount that could result from offering for sale, at one time,
the Company's entire holdings of a particular instrument. Changes in assumptions
could significantly affect these estimates.

Since the fair value is estimated as of June 30, 2001, the amounts that
will actually be realized or paid at settlement or maturity of the instruments
could be significantly different.

The carrying amount of cash, cash equivalents and restricted cash
approximates fair value because their maturity is generally less than three
months. The carrying amount of accounts receivable, accounts payable and accrued
liabilities approximate fair value as they are expected to be collected or paid
within ninety days of year-end. The fair value of notes receivable and notes
payable approximate the terms in the marketplace at which they could be
replaced. Therefore, the fair value approximates the carrying value of these
financial instruments.

(19) SUPPLEMENTAL FINANCIAL INFORMATION

Supplemental disclosure of cash flow information is as follows:

YEAR ENDED YEAR ENDED
JUNE 30, 2001 JUNE 30, 2000
------------- -------------

Cash paid for interest $ 307,611 $ 75,126
Non-cash investing and financing activities:
Modifications to stock option awards $ 278,318
Issuance of warrants to related party for collateral pledges $ 2,324,195
Issuance of warrants to related parties $ 1,070,527
Issuance of warrants for services and in connection with
financing $ 1,949,448
Issuance of stock for financial consulting services $ 578,000 $ --
Issuance of stock for legal settlements $ 1,106,691 $ 976,171

Conversion of note payable to TNCi common stock $ 400,000
Conversion notes payable to common stock $ 1,218,588

Conversion of related party debt to Preferred Stock $ 2,500,000
Beneficial conversion on secured convertible debt $ 842,300 $ 4,000,000
Stock issued in connection with purchase of Series Notes $ 1,647,812
Net issuance of commitment shares associated with equity
purchase agreement $ 553,677
Conversion of Series C and D preferred stock to common stock $ 12,332

F-43

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(20) OPERATING SEGMENT

In 1998, the Company adopted SFAS 131, which requires the reporting of
operating segments using the "management approach" versus the "industry
approach" previously required. The Company's reportable segments consist of
TNCi, including TNCi UK, and general corporate operations. On March 24, 2001,
Global's majority-owned subsidiary, TNCi, filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code. Pending resolution of the
bankruptcy filing, the net liabilities of TNCi, as of March 31, 2001 have been
classified as a Deferred Credit in the consolidated balance sheet. Operations of
TNCi have not been consolidated subsequent to March 31, 2001. In a transaction
described above, Global, in order to provide TNCi UK with funds for ongoing
operations and to avoid insolvency, committed to pay $600,000 for a 60% interest
in TNCi UK. The Company's direct investment in TNCi UK continues the segment for
the Company's financial reporting purposes.

In the past, TNCi designed, manufactured, installed and maintained
advanced, high-end, high-performance computer servers and interactive,
broad-band information and entertainment systems for both the domestic and
foreign markets, including the passenger rail market in the United Kingdom,
carried on through TNCi UK. General corporate operations consist of developing
and operating affiliate companies, most of which are engaged in
telecommunications, e-commerce, networking solutions and gaming.

Sales of entertainment networks by the Company are typically made to a
relatively few number of customers. This concentration of business among a few
customers exposes the Company to significant risk. One customer accounted for
60% and 72% of the Company's sales during the years ended June 30, 2001 and June
30, 2000, respectively.

F-44

GLOBAL TECHNOLOGIES, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following summarizes information related to the Company's segments. All
significant intersegment activity has been eliminated. Assets are the owned or
allocated assets used by each operating segment.

YEAR ENDED YEAR ENDED
JUNE 30, 2001 JUNE 30, 2000
------------- -------------
Revenue
TNCi $ 150,417 $ 7,091,660
Other 139,878 305,336
------------ ------------
290,295 7,396,996
Gross profit (loss)(a)
TNCi (43,592) 2,162,163
Other 102,051 219,093
----------- ------------
58,459 2,381,256
Operating (loss)
TNCi (20,471,110) (11,739,631)
Other (16,862,239) (12,059,385)
----------- ------------
(37,333,349) (23,799,016)
General corporate operations
Gain on sale of investments 4,282,844 --
Gain on legal settlement 1,336,563
Equity in loss of non-consolidated
affiliate -- (10,345,210)
Net interest (4,231,051) (5,293,153)
Loss on extinguishment of debt (698,117)
Other income (expenses) 108,054 (14,339)
Minority interest 1,869,009 1,612,529
------------- -------------
2,667,302 (14,040,173)
------------- -------------
Net loss $ (34,666,047) $ (37,839,189)
============= =============
Total assets
United Kingdom Operations 831,942 13,468,699
General corporate 1,787,410 108,257,232
------------ ------------

Total Assets $ 2,619,352 $ 121,725,931
============ =============

----------
(a) Gross profit (loss) is the difference between Revenue and Cost of Revenue
in the consolidated statement of operations.

Long-lived assets at June 30, 2001 primarily represent assets used by TNCi
UK of $439,000 in its Great Britain railway information and entertainment
business. As of June 30, 2000, the Company had significant long-lived assets in
both North America and Europe (UK). Long-lived assets located in North America
included net property plant and equipment and intangibles totaling $10,272,236.
Long-lived assets located in Europe included net property plant and equipment of
$13,648,676.

F-45