Edgar Filing: LAIDLAW GLOBAL CORP

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the fiscal year ended December 31, 2001.

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

For the transition period from ___________ to ___________

Commission file number: 0-27681

LAIDLAW GLOBAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)

DELAWARE 13-4093923
(State or other jurisdiction) (Employer Identification Number)

100 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: (212) 376-8800

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

Title of each class registered: None Name of each exchange on
which registered: None

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

Common Stock, par value $0.00001
(Title of class)

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 no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of 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. [_]

State the issuer's revenues for its most recent fiscal year: $16,493,185

State the aggregate market value of the voting and non-voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days. The aggregate market value of the voting and non-voting stock
held by non-affiliates of the registrant is approximately $2,286,979 as of April
30, 2002.

State the number of shares outstanding of each of the registrant's classes of
common equity as of the latest practicable date: 28,201,465 shares of the
registrant's common stock are outstanding as of April 30, 2002, not including
3,479,937 shares issuable upon the exercise of outstanding warrants and employee
stock options.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the form 10-KSB into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424 (b) or
(c) of the Securities Act of 1933. None

Transitional Small Business Disclosure Format (check one): Yes [_] No [X]

TABLE OF CONTENTS

Page
PART I

Item 1. Description of Business......................................... 4
Item 2. Description of Property......................................... 13
Item 3. Legal Proceedings............................................... 14
Item 4. Submission of Matters to a Vote of Security Holders............. 14

PART II

Item 5. Market for Common Equity and Related Stockholder Matters........ 14
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations .......................................... 17
Item 7. Financial Statements............................................ 25
Item 8. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure........................................ 25

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons.... 25
Item 10. Executive Compensation.......................................... 29
Item 11. Security Ownership of Certain Beneficial Owners and Management.. 32
Item 12. Certain Relationships and Related Transactions.................. 34
Item 13. Exhibits and Reports on Form 8-K................................ 36

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Forward-Looking Statements

This report contains forward-looking statements. The forward-looking statements
include all statements that are not statements of historical fact. The
forward-looking statements are often identifiable by their use of words such as
"may," "expect," "believe," "anticipate," "intend," "could," "estimate," or
"continue," "plans" or the negative or other variations of those or comparable
terms. Our actual results could differ materially from the anticipated results
described in the forward-looking statements. Factors that could affect our
results include, but are not limited to, those discussed in Item 6,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and included elsewhere in this report.

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In this Annual Report, "Laidlaw," "we," "us," and "our" each refers to
Laidlaw Global Corporation and, where appropriate, to our subsidiaries.

PART I

Item 1. Description of Business.

A. General

Through our subsidiaries, we provide a broad range of investment services
and products to individuals, corporations and institutions. We are increasing
the coordination of our investment banking and syndicate and trading activities,
as well as focusing such activities on growth companies in selectively targeted
industries. Transactions between the Company and subsidiaries which were sold,
ceased effective their respective sale dates.

B. Our Subsidiaries

Laidlaw Global Securities, Inc.

Laidlaw Global Securities, formerly known as Laidlaw Equities, Inc., is a
New York based financial services corporation which was incorporated in October
23, 1986. It is a broker-dealer, which is a member firm of the National
Association of Securities Dealers, Inc. ("NASD"), Securities Industry Protection
Corporation ("SIPC") and Securities Industry Association ("SIA"). Its principal
activities are institutional and retail brokerage, trading and sales, investment
banking and research. In addition to its New York offices, Laidlaw Global
Securities presently maintains an office in Miami, Florida, where it has one
registered principal.

Westminster Securities Corporation

Westminster is a New York based comprehensive professional investment
services corporation which was incorporated in 1971. It is a member of the NYSE,
NASD and SIPC. Westminster's principal activities are investment banking,
institutional and retail brokerage, market making and asset management.
Westminster also maintains an office in Miami, Florida. This subsidiary was sold
pursuant to the Amended and Restated Stock Purchase Agreement dated June 7,
2001. The Agreement stipulated that the transactions shall be treated solely for
tax and financial reporting purposes as having an effective date of May 31,
2001. Accordingly, the information for fiscal 2001 for Westminster incorporated
in this report pertains to the five months ended May 31, 2001.

Howe & Rusling, Inc.

We owned an 81% interest in H&R Acquisition Corp., which owns a 100%
interest in Howe & Rusling, a 68 year old asset management company based in
Rochester, New York. Howe & Rusling's principal activities are professional
investment management. This subsidiary was sold on December 26, 2001 pursuant to
a Stock Purchase Agreement dated December 21, 2001. Accordingly, the information
for fiscal 2001 for H & R Acquisition Corp. pertains to the period January 1 to
December 26, 2001.

Globeshare Group, Inc. (formerly Global Electronic Exchange Inc.)

Globeshare Group, Inc. (formerly Global Electronic Exchange), a 97% owned
subsidiary of Laidlaw, is a New York based entity which was incorporated in
January 26, 1999. It was established by Laidlaw to create and develop an
internet-based international investment services business, including operations
in securities trading, investment banking, asset management and real estate. It
owns and operates Globeshare, Inc., a broker-dealer based in New York, focusing
on affording customers access to international and domestic markets through the
internet and strategic alliances. In view of the losses realized in the first
three quarters of 2001 and in fiscal year 2000, Laidlaw reviewed its marketing
strategy, the cost structure and the services and products which it has been
offering to the industry and what changes may be necessary to achieve
profitability. It was determined that, in order for Laidlaw to survive the
current difficult conditions, it was economically efficient to consolidate the
brokerage operations in one entity and to cease the operations of its
broker-dealer subsidiary Globeshare, Inc. effective October 5, 2001. An
agreement was executed between Laidlaw Global Securities, Inc. and Globeshare,
Inc. wherein Globeshare - a division of Laidlaw Global Securities assumed the
customer accounts of Globeshare, Inc. On November 20, 2001, Globeshare, Inc.
applied for a withdrawal of its broker-dealer license with the Securities and
Exchange Commission.

Laidlaw Pacific (Asia) Ltd.

Laidlaw Pacific is a Hong Kong based investment advisor, which was
incorporated in June 2, 1992. Laidlaw Pacific is a registered Dealer and
Investment Advisor with the Hong Kong Securities and Futures Commission. Its
principal activities intended to provide corporate financial advisory services.
Since this subsidiary has not generated any revenues since it was acquired in
2000, the Company decided to apply for a revocation of this entity's license in
early 2001 so as to avoid any further costs of maintaining a dormant operation.
Business activity ceased effective April 6, 2001.

Laidlaw International, S.A.

Laidlaw International, S.A. is a fully licensed broker in Paris, France
that was granted its license by Banque de France in April, 2001. The weakened
economic activity in the European equities market in 2001 prevented the
realization of the business model upon which this French entity was developed.
The September terrorist attacks in the United States further magnified economic
uncertainty and depressed all activities in the financial markets worldwide. In
light of continuing operating losses by Laidlaw International, the French
Commission Bancaire required a capital increase of 2 million Euros in February,
2002 in order for the entity to be in compliance with French Net Capital
Regulations and the Company was given a short time period to provide the
additional capital. Given the difficult market and economic conditions the U.S.
broker-dealers were also experiencing, Laidlaw decided to concentrate its
efforts in maintaining the U.S. operations and not provide the additional
capital. An Administrator was appointed by Commission Bancaire to operate
Laidlaw International and the Company abandoned its control. We understand that
effective April 11, 2002, the French Administrator committed to a process of
liquidation.

C. Recent Developments

On March 29, 2000, the Company completed an amended and restated agreement,
which had been originally entered into on May 20, 1999, with PUSA Investment
Company ("PUSA"), Laidlaw Pacific Financial Services Ltd. (a wholly-owned
subsidiary of PUSA) and that entity's wholly-owned subsidiary Laidlaw Pacific
(Asia) Ltd. ("Laidlaw Pacific"), a Hong Kong based investment advisor to acquire
Laidlaw Pacific. Laidlaw Pacific ceased business activities on April 6, 2001.

Laidlaw International S.A. was developed into a fully licensed French
broker-dealer with a license issued in April 2001 that allows it to do business
in all of the European countries. The brokerage commissions business generated
after the issuance of the license in April 2001 was in-line with the Business
Plan prepared by the team of professionals which had been mostly hired from IFF
a former subsidiary of Banque Worms then a subsidiary of the AXA group. After
September 11, 2001, the European market, which were the essential part of the
business generated by that office, deteriorated and did not recover as promptly
as the U.S. markets. As a result, the initial Business Plan provisions started
falling short of the actual numbers that showed a substantial drop in revenues.
In early February, 2002 the French Commission Bancaire required a capital
increase of 2 million Euros in order to maintain the French subsidiary in
compliance with French Net Capital Regulations. Laidlaw Global Corporation had
to make a hard decision since it could not support its European operations while
keeping adequate capital for the U.S. operations. The deadline imposed by the
French regulatory authority being very short, Laidlaw Global Corporation was
unable to access additional capital prior to the nomination of an Administrator
by the Commission Bancaire. Once the Administrator took over, Laidlaw Global
Corporation became totally cut off from the decision making process and could no
longer be involved in salvaging what initially had been a promising venture.

We understand that effective April 11, 2002, the French Administrator
committed to a process of liquidation. Accordingly, the Company recognized a
loss as of December 31, 2001 from the write off of all its remaining investment
in the French subsidiary amounting to $634,562.

As previously reported in the Current Report on Form 8-K of the Company
dated June 13, 2001, the sale of Westminster closed in escrow on June 12, 2001,
the documents and consideration were released from escrow on June 13, 2001, and
the parties agreed to treat May 31, 2001 as the effective date of the
Transaction for financial purposes.

In light of the continuing losses of Globeshare, Inc., the online
broker/dealer subsidiary, management decided to transfer the operations of
Globeshare, Inc. to Globeshare - a Division of Laidlaw Global Securities, Inc.
on October 5, 2001. Globeshare, Inc. filed for withdrawal of its registration as
a broker/dealer with the NASD on November 20, 2001.

During 2001, an asset write down in the amount of $2.35 million was
required to adjust the investment of the Globeshare Group, Inc. subsidiary in
computer hardware and customized application software to their estimated net
realizable value.

As previously reported in the Current Report on Form 8-K of the Company
dated December 4, 2001, the sale of H & R Acquisition Corp. was closed on
December 21, 2001. All transaction documents were held in escrow to December 26,
2001 when the transfer of the initial price was finalized. The parties agreed to
treat December 26, 2001 as the effective date of the transaction for financial
purposes.

As previously reported in the Current Report on Form 8-K of the Company
dated March 5, 2002, Grant Thornton ("Grant") resigned as independent accountant
for Laidlaw. On March 11, 2002, Laidlaw engaged Richard A. Eisner & Company, LLP
as its new independent accountant for fiscal year ended December 31, 2001.

The resignation came about as a result of questions with respect to the
cancellation and pricing of stock options of Laidlaw that were raised by Grant
in late 2001. For fiscal years ended December 31, 2000 and 1999, there were no
disagreements between the Company and Grant in connection with the Company's
financial reports. Further, those reports did not contain any adverse opinion
nor were they qualified as to uncertainty, audit scope or accounting principles.

On March 5, 2002, Grant notified the Laidlaw Board of Directors that
pursuant to Section 10A of the Exchange Act of 1934 (the "Grant Report"), in
Grant's belief, an illegal act or acts may have occurred at Laidlaw during 2001
with respect to the options. The Grand Report alleged in part "that neither
management nor the Board of Directors has taken sufficient steps to determine
whether an illegal act has occurred within the meaning of Section 10A of the
Exchange Act of 1934."

This report was issued despite Laidlaw having, at the request of Grant, an
independent director conduct an investigation and submit a written report on the
issue. Subsequently, Laidlaw retained independent counsel who separately
submitted his findings in a report. The reports attributed poor procedural
controls for the failure to timely apprize Grant of the corporate actions.
Nevertheless, the reports of the independent director and independent counsel
concluded that no unlawful or deceptive practices, or fraudulent conduct were
engaged in at any time by Laidlaw, its employees, officers or board members. The
reports did recommend changes in procedural controls, which have been
implemented.

The SEC is conducting an informal inquiry with respect to the Grant Report.
The Company has responded completely to the SEC's request for information.

The Company strongly rejects any implications of impropriety and fully
accepts the conclusions reached in both the report of the independent director
and independent counsel. Laidlaw has filed its response to the Grant Report with
the SEC rejecting the contentions of the Grant Report.

Notwithstanding the contention of the Company that it acted properly, the
Company decided to act conservatively in connection with the treatment of the
options and will account for the options as a variable plan from the date of the
modification to the date the options are exercised, forfeited or expire
unexercised. Accordingly in fiscal 2001, the Company recorded a charge of
$754,714 as compensation expense with a corresponding increase to additional
paid-in capital.

D. Our Strategy - Measures to Return to Profitability

While the Company will concentrate on building sales and developing its
investment banking and securities brokerage activities, overall market
conditions continue to be unfavorable and we are constantly trying to identify
ways to cut our costs as well as to find new avenues for revenue generation.

Laidlaw undertook several cost-cutting measures last year and our operating
expenses were significantly lower in December 2001 than in January of 2001.
Although our revenue base continued to erode, resulting in sizable losses for
the year, our monthly losses from operations declined consistently through the
course of the year.

The major initiatives of last year to curtail our expenses included:

o Closing down our unprofitable on-line business

o Eliminating unnecessary positions

o Changing compensation structure of some salaried employees to pure
commission

o Adjusting salaries of senior management by up to 65%

o Reducing ticket charges

o Adjusting commission rates to competitive levels

Mainly due to a shrinking revenue base, the company is still generating losses
of nearly $300,000 to $400,000 per month. The company is in the process of
implementing further cost curtailment measures to reduce these ongoing losses.
These measures will include one or more of the following strategies:

o Further reduction in headcount

o Sub leasing of space

o Further monitoring expenses such as travel and entertainment

It is clear to company management, however, that to stem the losses, the major
initiative has to be to increase our revenue base. To that end, Laidlaw is
currently pursuing several alternatives.

Identifying Merger Partners

Laidlaw is presently in early stages of negotiations with at least three
different entities in our line of business to forge strategic partnerships and
potential joint ventures or other business combinations. The intent is to bring
on board additional sales personnel with good track records, especially over the
past 24 months. Each of the entities also recognizes that they would have to
bring in additional capital into the firm as a condition to us merging. We have
entered into mutual non-disclosure and confidentiality agreements in pursuit of
such an understanding.

Targeting Additional Revenue Niches

A majority of our corporate finance revenue in the past two to three years was
generated from private placements for micro- and small-cap companies. This
segment of the market has had little activity in the recent past. Over the past
six months, our corporate finance department has targeted its efforts to
generate revenue from investment banking related work other than raising capital
for companies. To that end, more recently we have been successful in being
retained by clients for corporate advisory and merger and acquisition related
transactions. We are also focusing on middle market companies in emerging growth
countries, a segment we believe is under served by U.S. investment banks.

E. Lines of Business

Traditional Trading and Brokerage Services

Laidlaw Global Securities: Laidlaw Global Securities provides professional
brokerage services to both institutional and individual investors. Laidlaw
Global Securities is focused to meet the needs of the sophisticated investor by
offering a full range of investment strategies and services including domestic
and international equities, bonds, debt securities, mutual funds, government
securities, new public and private offerings, retirement services and life
insurance/annuity products. In addition, Laidlaw Global Securities provides
proprietary product offerings for investment clients by specializing in firm
research and client underwriting of small to mid-capitalization companies with
market capitalization under $500 million.

An experienced trading staff and syndicate department at Laidlaw Global
Securities allow Laidlaw's institutional and individual clients to participate
in new debt and equity offerings.

Laidlaw Global Securities offers its clients financial services, securities
transaction, and account maintenance capabilities available through an alliance
with Pershing, a Credit Suisse First Boston Company ("Pershing"), a leading
provider of correspondent brokerage clearing house services. Pershing offers
Laidlaw Global Securities clearing capabilities and investment services
specifically developed for the securities industry.

Investment Banking

Laidlaw Global Securities: Laidlaw Global Securities has the platform to
emerge as a global investment bank for middle-market companies. Laidlaw Global
Securities' investment banking professionals have completed numerous private
placements, public stock offerings, and secondary equity and debt offerings.
Since January of 1997, Laidlaw Global Securities has acted as either lead
underwriter or co-underwriter in several public offerings including Puro Water,
Inc., Asia Pacific Wire & Cable Company, Augment Systems, Inc., Scheid
Vineyards, Inc., JinPan International, Ltd., Newmark Homes Corp., and Sanguine
Corporation. Laidlaw Global Securities also acts as a financial advisor to a
number of middle-market companies in developing strategies for maximizing
shareholder value. Laidlaw Global Securities provides fairness opinions and
valuations, advice on recapitalization, mergers and acquisitions, advice on
selling companies, and assistance with the private placement and public
distribution of securities in the United States and abroad.

By providing experienced counsel to middle-market and growth companies,
where the market capitalizations are less than $500 million, Laidlaw Global
Securities is well-positioned in an important market niche. Laidlaw Global
Securities' investment professionals offer domestic clients an opportunity to
extend their investment offerings beyond the United States, to key international
markets, while also assisting international companies who desire access to the
United States.

Asset Management and Investment Services

Laidlaw Global Securities: Laidlaw Global Securities is also a registered
investment advisory firm, and such, provides services including performance
monitoring selection of third party investment managers, and discretionary asset
management. The investment advisory services offered by Laidlaw Global
Securities are tailored for a variety of clients, including individuals, pension
and profit-sharing plans, trusts and estates, charitable organizations,
corporations and other businesses.

F. Employees

As of April 30, 2002, we had 51 employees, of which 49 are employed
full-time and 2 are employed part-time at Laidlaw Global Securities, Inc. We
believe that one of our strengths is the quality and dedication of our employees
and the shared sense of being a part of a team. We strive to maintain a work
environment that fosters professionalism, excellence, diversity and cooperation
among our employees. Our future success will depend, in part, on our ability to
continue to attract, retain and motivate highly qualified technical and
management personnel, for whom competition is intense. Our employees are not
covered by any collective bargaining agreement, and we have never experienced a
work stoppage. We believe our relations with our employees are good.

G. Competition

The financial services industry is intensely competitive, and we expect it
to remain so. Our competitors are other brokers and dealers, online brokerage
businesses, investment banking firms, insurance companies, investment advisors,
mutual funds, hedge funds, commercial banks and merchant banks. We compete with
some of our competitors globally and with some others on a national and regional
basis. We compete on the basis of a number of factors, including transaction
execution, our products and services, innovation, reputation and price.

Competition is also intense for the attraction and retention of qualified
employees. Our ability to continue to compete effectively in our businesses will
depend upon our ability to attract new employees and retain and motivate our
existing employees.

In recent years there has been a significant consolidation and convergence
in the financial services industry. Commercial banks and other financial
institutions have established or acquired broker-dealers or have merged with
other financial institutions. These firms have the ability to offer a wide range
of products, from loans, deposit-taking and insurance to brokerage, asset
management and investment banking services which may enhance their competitive
position. They also have the ability to support investment banking and
securities products with commercial banking, insurance and other financial
services revenues in an effort to gain market share.

Many of our competitors have significantly greater financial, technical,
marketing and other resources than we do. Some of our competitors also offer a
wider range of products and services than we do and have greater name
recognition, more established reputations and more extensive client and customer
bases. These competitors may be able to respond more quickly to new or changing
opportunities, technologies and customer requirements due to superior systems
capabilities. They may also be better able to offer more attractive terms to
customers and clients and adopt more aggressive pricing and promotional policies
compared to our firm.

H. Trademarks

Since August 27, 1996 we have maintained a registered service mark "Laidlaw
& Co." We regard our intellectual property as being an important factor in the
marketing of Laidlaw. We are not aware of any facts which would negatively
impact our continuing use of our trademarks.

I. Regulation

Regulation of the Securities Industry and Broker-Dealers

The securities industry - and all of our businesses - is subject to
extensive regulation under both federal and state laws. In the United States,
the Securities and Exchange Commission ("Commission") is the federal agency
responsible for the administration of the federal securities laws. Laidlaw
Global Securities is an NASD member firm and a registered investment advisor
with the Commission. Securities firms are subject to regulation by the
Commission and by self-regulatory organizations ("SROs"), including but not
limited to the NASD, the Municipal Securities Review Board (the "MSRB") and
national securities exchanges such as the New York Stock Exchange. Securities
firms are also subject to regulation by state securities administrators in those
states in which they conduct business. Laidlaw Global Securities is a registered
broker-dealer in 50 states, the District of Columbia and the Commonwealth of
Puerto Rico. Failure to comply with the laws, rules or regulations of the
Commission, SROs and state securities commissions may result in censure, fine,
the issuance of cease-and-desist orders or the suspension or expulsion by such
entities of a broker-dealer, an investment adviser, officers, or employees. The
Commission and SROs regulate many aspects of our business including trade
practices among broker-dealers, capital structure and withdrawals, sales
methods, use and safekeeping of customers' funds and securities, the financing
of customers' purchases, broker-dealer and employee registration and the conduct
of directors, officers and employees. Additional legislation, changes in the
rules promulgated by SROs or changes in the interpretation of enforcement of
existing rules, either in the United States or elsewhere, may directly affect
the mode of operation and profitability of Laidlaw.

We do not currently maintain any offices outside the United States, but
have maintained such offices in the past and may do so in the future. We will be
subject to foreign law and the rules and regulations of foreign governmental and
regulatory authorities in virtually all countries where we might elect to
establish an office. This may include laws, rules and regulations relating to
any aspect of the securities business, including sales methods, trade practices
among broker-dealers, use and safekeeping of customers' funds and securities,
capital structure, record-keeping, the financing of customers' purchases,
broker-dealer and employee registration requirements and the conduct of
directors, officers and employees.

Effect of Net Capital Requirements

As a registered broker-dealer and member of various SROs, we are subject to
the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule
15c3-1). The Uniform Net Capital Rule specifies the minimum level of net capital
a broker-dealer must maintain and also requires that at least a minimum part of
its assets be kept in relatively liquid form. As of December 31, 2001 and 2000,
our broker-dealer subsidiary. Laidlaw Global Securities was required to maintain
minimum net capital of $106,622 and $100,000, respectively, and had total net
capital of approximately $758,722 and $1,347,938, respectively. As of December
31, 2000, our former broker-dealer subsidiary Westminster Securities was
required to maintain minimum net capital of $100,000 and had total net capital
of approximately $1,986,095. As of December 31, 2000, Globeshare, our
broker-dealer subsidiary that ceased operations in October, 2001, was required
to maintain minimum net capital of $27,019 and had total net capital of
approximately $52,220.

The Commission and various SROs impose rules that require notification when
net capital falls below certain predefined criteria, dictate the ratio of debt
to equity in the regulatory capital composition of a broker-dealer and constrain
the ability of a broker-dealer to expand its business under certain
circumstances. Additionally, the Uniform Net Capital Rule imposes certain
requirements that may have the effect of prohibiting a broker-dealer from
distributing or withdrawing capital and requiring prior notice to the Commission
for certain withdrawals of capital.

Compliance with net capital requirements could limit our broker-dealer
operation which requires the intensive use of capital, such as underwriting and
trading activities and the financing of customer account balances. Our ability
to withdraw capital from our broker-dealer operation limit our ability to repay
debt or pay dividends on our common stock.

Application of Securities Act and Exchange Act to Internet Business

The Securities Act governs the offer and sale of securities. The Exchange
Act governs, among other things, the operation of the securities markets and
broker-dealers. When enacted, the Securities Act and the Exchange Act did not
contemplate the conduct of a securities business through the Internet. Although
the Commission, in releases and no-action letters, has provided guidance on
various issues related to the offer and sale of securities and the conduct of a
securities business through the Internet, the application of the laws to the
conduct of a securities business through the Internet continue to evolve.
Uncertainty regarding these issues may adversely affect the viability and
profitability of our business.

Item 2. Description of Property.

Our principal executive offices, which are occupied by Laidlaw and Laidlaw
Global Securities, are located on the 25th, 27th, 28th and 29th floors at 100
Park Avenue, New York, New York and comprise approximately 30,467 square feet of
leased space. The lease of space located on the 25th and 27th floors expires in
2005 and the lease of space located on the 28th and 29th floors expires in 2010.

Outside New York, Laidlaw Global Securities occupies 900 square feet of
office space in Miami, Florida.

Item 3. Legal Proceedings.

Galacticomm Technologies, Inc. vs. Laidlaw Global Securities, Inc.

The Company is a defendant in a legal matter involving the underwriting and
initial public offering of Galacticomm Technologies, Inc. ("Galacticomm")
shares. The Company acted as a member of a selling group, pursuant to which the
Company agreed to purchase 200,000 shares of Galacticomm at $5.40 per share and
200,000 warrants of Galacticomm at $0.09 per warrant. Additionally, the Company
agreed to guarantee the purchase of an additional 20,000 shares and warrants if
deemed necessary. Prior to the settlement of the IPO, the Company had satisfied
all its commitments as part of its agreement with the lead underwriters. Prior
to the settlement of the IPO, the lead underwriters aborted the IPO based upon
what they, in their sole discretion, believed was a declining market in the U.S.
and abroad. Pursuant to the underwriting agreement between Galacticomm and the
lead underwriters, the lead underwriters had the right, in their sole
discretion, to abort the IPO in the event of adverse conditions. Galacticomm
commenced suit against the underwriting group in a Florida state court seeking
damages for breach of the underwriting agreement. The Company believes that the
outcome of this matter would not have a material adverse effect on the financial
position, results of operations or liquidity.

Greek Capital Commission vs. Laidlaw Global Corporation

The Greek Capital Market Commission ("CMC") has assessed fines and
penalties against the Company and Laidlaw Global Securities aggregating
1,257,168 Euros ($US 1,119,004). The CMC determined that the subsidiary failed
to file notice of its acquisition and disposition of shares in 2 Greek
companies. The fine against Laidlaw came about because we didn't deny
publications of alleged false percentages of ownership by ourselves in the Greek
companies. Laidlaw had never owned any shares in the Greek Companies. Our
counsel in Greece has advised that in their opinion, the fines imposed by the
CMC are civil fines and can only be enforced against the assets of the Company
in Greece. Further, they advise that any enforcement of the fine in the United
States would require commencing a new action in the United States. The
determinations are being appealed and we believe the findings of the CMC will be
overturned upon appeal.

Plural, Inc. vs. Laidlaw Global Corporation, et al.

In November, 2001, Plural instituted an action in the New York State
Supreme Court for services rendered pursuant to a computer consulting agreement.
Plural claims approximately $70O,OO0 is due them pursuant to the agreement. The
Company claims the services did not meet the terms of the agreement and plans to
counterclaim for monies previously paid to Plural.

We are subject to various legal proceedings. However, in management's
opinion, there are no legal proceedings pending against us or any of our
subsidiaries that would have a material adverse effect on our financial
position, results of operations or liquidity.

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

No matters were submitted to a vote of security holders during the last
three quarters of the fiscal year ended December 31, 2001. However, at a special
meeting of shareholders held February 27,2001, the shareholders elected a Board
of Directors, ratified the appointment of Grant Thornton LLP as auditors for the
Company, and gave discretionary authority to the Board of Directors to implement
a 1 for 5 reverse stock split.

Item 5. Market for Common Equity and Related Stockholder Matters.

Market Information

Laidlaw's common stock has been traded on the American Stock Exchange
("AMEX") since May 18, 2000 under the symbol GLL. Prior thereto and subsequent
to the acquisition of Laidlaw Holdings on June 8, 1999, the common stock was
traded on the OTC Bulletin Board under the symbol LAIG. Prior to the
acquisition, the common stock was traded under the symbol FTKV. The following
table sets forth the high and low closing prices per share as reported by the
AMEX during the period the shares have been traded on the AMEX and the high and
low closing prices during the period the shares were traded on the OTC Bulletin
Board. The market prices have been adjusted to give retroactive effect to a
Reverse Stock Split and a Forward Stock Split. The quotations while the shares
were traded on the OTC Bulletin Board reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions:

Common Stock
-------------------------------------------
2001 2000
-------------------------------------------
Prices Prices
--------------------------------------------------------------------------------
Period High Low High Low
--------------------------------------------------------------------------------
First Quarter...................... $ 0.75 $ 0.40 $10.56 $5.50
--------------------------------------------------------------------------------
Second Quarter..................... $ 0.44 $ 0.29 $ 7.50 $2.625
--------------------------------------------------------------------------------
Third Quarter...................... $ 0.32 $ 0.10 $ 3.00 $1.1875
--------------------------------------------------------------------------------
Fourth Quarter..................... $ 0.80 $ 0.19 $ 1.25 $0.50
--------------------------------------------------------------------------------

The closing price of the common stock on April 30, 2002 was $0.17.

Holders

On April 30, 2002 there were 146 holders of record of Laidlaw's common
stock.

Dividends

Laidlaw has never declared or paid cash dividends on its common stock.
Laidlaw currently intends to retain earnings, if any, to support its growth
strategy and does not anticipate paying cash dividends in the foreseeable
future. Payment of future dividends, if any, will be at the discretion of
Laidlaw's Board of Directors after taking into account various factors,
including Laidlaw's financial condition, operating results, current and
anticipated cash needs and plans for expansion.

Recent Sales of Unregistered Securities

On June 8, 1999, Laidlaw, formerly known as Fi-Tek V, Inc., acquired
approximately 99% of the issued and outstanding shares of common stock of
Laidlaw Holdings pursuant to a Plan and Agreement of Reorganization among
Laidlaw Holdings, Fi-Tek V, Inc., Westminster and the principal stockholders of
such companies, dated May 27, 1999. As a result of such transactions, on June 8,
1999, Laidlaw issued 13,109,137 shares of its common stock to stockholders of
Laidlaw Holdings. Also, pursuant to the Reorganization Agreement, on July 1,
1999, Laidlaw issued 4,500,000 shares of common stock for substantially all of
the issued and outstanding common stock of Westminster. See Description of
Business - Our Operating Subsidiaries and Recent Developments.

Laidlaw granted to holders of the Euro-Notes the right to exchange the
Euro-Notes and Common Stock Purchase Warrants issued with the Euro-Notes for
shares of common stock of Laidlaw at the rate of $2.05 per share for each
Euro-Note exchanged, and the right to obtain common stock of Laidlaw upon
exercise of the Common Stock Purchase Warrants issued with the Euro-Notes upon
the same terms and conditions of such warrants. To date, 15 holders of
Euro-Notes aggregating $1,876,000 in principal amount have exchanged their notes
for shares of Common Stock of Laidlaw. The balance of the Euro-Notes were paid
in full in December, 2001.

Issuance of 8% Convertible Subordinated Notes Due 2000 (the "Convertible
Notes"): From July 1998 to June 1999, Laidlaw Holdings offered, on a "best
efforts" basis, 8% Convertible Notes due 2000 in the minimum aggregate amount of
$1,000,000 and a maximum of $8,000,000. The Convertible Notes, are convertible
into common stock of Laidlaw Holdings at a price of $2.05 per share, subject to
adjustment under certain conditions. Interest on the Convertible Notes shall
accrue on a semi-annual basis until the date of the conversion. 125 Convertible
Notes aggregating $8 million in principal were sold. The Convertible Notes were
sold to (i) 19 domestic accredited investors pursuant to an exemption from
registration under Regulation D of the Securities Act; and to (ii) 50 foreign
accredited investors under Regulation S of the Securities Act.

Laidlaw assumed the obligations of Laidlaw Holdings with respect to the
conversion rights of holders of the Convertible Notes. As a result, holders of
the Convertible Notes could convert such notes into common stock of Laidlaw at
the rate of $2.05 per share, upon the same terms and conditions of conversion
privileges set forth in the Convertible Notes. The holders of the Convertible
Notes aggregating $8 million in principal amount have converted their notes into
shares of common stock of Laidlaw.

In connection with the closing down of the operations of Globeshare Group,
Inc. ("GGI"), holders of shares of GGI who were not affiliates of Laidlaw were
given the opportunity to exchange their GGI shares for shares of Laidlaw on a
one for one basis and in 2001, Holders of 1,126,759 shares accepted the offer.
Affiliates or former affiliates of Laidlaw were given an opportunity to exchange
their GGI shares for shares of Laidlaw on a less favorable basis and 9,620,004
shares were exchanged for 4,500,000 shares of Laidlaw. During the period January
1, 2002 through April 30, 2002, an additional 263,427 shares of GGI were
exchanged for a like number of shares of Laidlaw.

Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Overview

Laidlaw Global Corporation is a global financial services firm that operates in
two business segments: brokerage, which includes investment banking and sales
and trading, and asset management.

Asset management activities include raising and investing capital and providing
financial advice to companies and individuals throughout the United States and
overseas. Through this group, Laidlaw provides client advisory services.

Brokerage activities include underwriting public offerings of securities,
arranging private placements and providing client advisory services, trading,
conducting research on, originating and distributing equity and fixed income
securities on a commission basis and for their own proprietary trading accounts.

It has operated through a number of separate entities owned directly by Laidlaw
Global Corporation or through its wholly owned subsidiary, Laidlaw Holdings,
Inc. Laidlaw Global Securities, Inc. provides brokerage services and is wholly
owned by Laidlaw Holdings, Inc. Howe & Rusling, Inc. provided management
services of financial assets and was owned by H&R Acquisition Corp., 81% of
whose stock was owned by Laidlaw Holdings, Inc. Westminster Securities
Corporation, a NYSE member firm acquired by Laidlaw on July 1, 1999 also
provided general brokerage services. Another subsidiary, Globeshare Group, Inc.
(formerly Global Electronic Exchange, Inc.),was a holding company that owned
100% of Globeshare, Inc., an online broker-dealer. The last subsidiary was a
French broker/dealer called Laidlaw International, S.A., located in France,
which was granted the license to operate as a broker/dealer by Banque de France
in April 2001.

Numerous changes in the operation of the businesses of Laidlaw Global
Corporation occurred during fiscal year 2001.The interest in H&R Acquisition
Corp. was sold on December 26, 2001 pursuant to a Stock Purchase Agreement dated
December 21, 2001. Accordingly, the information for fiscal 2001 for H & R
Acquisition Corp. pertains to the period January 1 to December 26, 2001.
Westminster Securities Corporation, a NYSE member firm acquired by Laidlaw on
July 1, 1999, was sold on June 12, 2001. The sale of Westminster Securities
Corporation was completed pursuant to the Amended and Restated Stock Purchase
Agreement dated June 7, 2001. The Agreement stipulated that the transactions
shall be treated solely for tax and financial reporting purposes as having an
effective date of May 31, 2001. Accordingly, the information for fiscal 2001 for
Westminster incorporated in this report pertains to the five months ended May
31, 2001. Globeshare, Inc., filed for withdrawal of its registration as a
broker/dealer with the NASD on November 20, 2001. The operations and customer
accounts of the on-line broker were transferred to Laidlaw Global Securities on
October 5, 2001 after duly informing the customers. After September 11, 2001,
the European market, an essential part of the business generated by the French
subsidiary Laidlaw International, deteriorated and has not recovered as promptly
as the U.S. markets. In early February, 2002, the French Commission Bancaire
demanded a capital increase of 2 million Euros in order to maintain the French
subsidiary in compliance with French Net Capital Regulations. Laidlaw Global
Corporation had to make a hard decision since it could not support its European
operations while keeping adequate capital for the U.S. operations. With a very
short deadline imposed by the French regulatory authority, Laidlaw Global
Corporation determined not to provide the additional capital and this resulted
in the nomination of an Administrator for Laidlaw International by the
Commission Bancaire. Effective April 11, 2002, the French Administrator
committed to a process of liquidation. Accordingly the Company recognized a loss
as of December 31, 2001 from the write off of all its investment in the French
subsidiary amounting to $634,562.

Market fluctuations in both U.S. and overseas markets, as well as general global
economic factors have and may continue to significantly affect Laidlaw's
operations. These factors include economic and market conditions; the
availability of capital; the availability of credit; the level and volatility of
equity prices and interest rates; currency values and other market indices; and
technological changes and events. The increased use of the Internet for
securities trading and investment services are important factors that may affect
Laidlaw's operations. Inflation and the fear of inflation as well as investor
sentiment and legislative and regulatory developments will continue to affect
the business conditions in which our industry operates. Such factors may also
have an impact on Laidlaw's ability to achieve its strategic objectives on a
global basis, including growth in assets under management, global investment
banking and brokerage service activities.

Laidlaw's securities business, particularly its involvement in primary and
secondary markets in domestic

and overseas markets is subject to substantial positive and negative
fluctuations caused by a variety of factors that cannot be predicted with great
certainty. These factors include variations in the fair value of securities and
other financial products and the volatility and liquidity of global trading
markets. Fluctuations also occur due to the level of market activity, which,
among other things, affects the flow of investment dollars into bonds and
equities, and the size, number and timing of transactions or client assignments.

Laidlaw's results of operations also may be materially affected by competitive
factors. Recent and continuing global convergence and consolidation in the
financial services industry will lead to increased competition from larger
diversified financial services organizations even though Laidlaw's strategy has
been to position itself in markets where it believes it has an advantage over
its competition due to strong local connections and access to foreign brokerage
firms and investors. Laidlaw, though global in its scope, sees itself as
becoming a local player throughout the world. Revenues in any particular period
may not be representative of full-year results and may vary significantly from
year to year and from quarter to quarter. Laidlaw intends to manage its
businesses for the long term and help mitigate the potential effects of market
downturns by strengthening its competitive position in the global financial
services industry through diversification of its revenue sources and enhancement
of its global franchise. Laidlaw's overall financial results will continue to be
affected by its ability and success in maintaining high levels of profitable
business activities, emphasizing technological updates and innovation, and
carefully managing risks in all the securities markets in which it is involved.
In addition, the complementary trends in the financial services industry of
consolidation and globalization present, among other things, technological, risk
management and other infrastructure challenges that will require effective
resource allocation in order for Laidlaw to remain profitable and competitive.

Laidlaw believes that the technological advancements in the internet and the
growth of electronic commerce in recent years will continue to present both
challenges and opportunities to the Company. Laidlaw gives special importance to
innovations in this field, which have and will continue to lead to significant
changes in the financial markets and financial services industry as a whole.

Global Economic and Market Developments in Fiscal 2001

Global market and economic conditions in fiscal 2001 were significantly less
favorable compared with those experienced during the prior fiscal year. Early in
the year, activity overseas was depressed by increasing oil prices, the global
slump in the high-tech sector, and spillover from the U.S. economic slowdown.
Most global economies experienced higher levels of unemployment and lower levels
of industrial production. When compared to the prior fiscal year, overall stock
indexes in the foreign industrial countries generally declined and stock prices
in emerging market economies were generally quite weak. The September terrorist
attacks further magnified economic uncertainty. In response to the notable
weakness in economic activity, monetary authorities in the major industrial
countries eased policy throughout the year. It is currently unpredictable when
these market and economic conditions will improve.

In Europe, the level of business and consumer confidence, which remained
relatively strong during the first quarter of fiscal 2001, slowed noticeably
during the balance of the fiscal period and as compared to the more rapid rates
seen early in fiscal 2000. The levels of employment and industrial production
decreased steadily starting the second quarter of fiscal 2001. In early May, the
European Central Bank (the ECB), which had raised interest rates within the
European Union (the EU) by an aggregate of 1.75 percentage points during fiscal
2000, surprised the markets with a 25 basis points reduction of its interest
rates on concerns of increasing indications of slowing economic growth within
the EU, and the impact of the overall slowdown in global economic activity.
Since there remained much uncertainty as to the region's future growth prospects
in light of slower U. S. economic performance and a weakened global economy, the
ECB lowered the benchmark interest rate within the EU by an additional 125 basis
points during the rest of fiscal 2001.

In the U.S., the slowdown in the growth of economic activity that had become
apparent in late 2000

intensified in 2001. Although the level of consumer spending remained steady for
most of fiscal 2001, the rate of U.S. economic growth declined significantly and
turned in its weakest performance in a decade. Businesses slashed investment
spending, making markedly deep cuts in outlays for high technology equipment, in
response to weakening demand and declining profits. As sales deteriorated, the
manufacturing sector struggled with uncomfortably high levels of inventories,
and the accompanying declines in manufacturing output steepened. The reduced
economic activity, coupled with lower corporate earnings and uncertainty about
future business prospects, led to higher levels of unemployment and decreased
consumer confidence. These conditions, as well as the reduction in the level of
overall global economic activity, contributed to the declines experienced by
U.S. equity markets. The devastating events of September 11, 2001 further set
back an already fragile economy. Heightened uncertainty and badly shaken
confidence caused a widespread pullback from economic activity and from
risk-taking in financial markets. In response to these conditions, during fiscal
2001 the Federal Reserve Board (the "Fed") aggressively reduced interest rates
in order to stimulate economic activity and to avoid a recession. In 12 separate
actions, the Fed lowered both the overnight lending rate and the discount rate
by an aggregate of 4.75%. This series of interest rate cuts represents one of
the most profound monetary policy relief programs on record. On some signs that
the economy was beginning to mend, the Fed decided not to make any further rate
cutbacks during the first quarter of fiscal 2002.

These uncertain and turbulent market and economic environment adversely affected
Laidlaw's fiscal 2001 results of operations, as the net income for each of its
two business segments (brokerage and asset management) declined from the levels
in fiscal 2000. The Company's brokerage business recorded lower revenues from
its investment banking, institutional sales and trading, and individual
securities activities in fiscal 2001 as compared with fiscal 2000. The decline
in revenues in the Company's asset management business reflected a decrease in
customer assets under management and supervision .

As economic growth and profits weakened, capital spending decelerated sharply as
many companies responded by changing their focus from expansion to cost
reduction. Accordingly, revenues from mergers and acquisitions transactions fell
significantly during fiscal 2001 as compared with fiscal 2000.

The markets for the underwriting of securities also were negatively impacted by
the generally volatile market and economic conditions that existed during fiscal
2001. The considerable drop in valuations in some sectors and the elevated
volatility of equity price movements caused the pace of initial public offerings
to slow markedly over the year. The slowdown was particularly evident in the
technology sector. In total, the dollar amount of initial public offerings by
domestic non-financial companies tapered off in the fourth quarter to its lowest
level in two years. This adverse economic climate has negatively affected
Laidlaw's subsidiaries and the revenues generated from investment banking
activities.

The Board of Directors has continued its efforts to position Laidlaw in new
markets and ventures, while trying to optimize the business structure of
Laidlaw. These efforts have included the sale and closing of subsidiaries, where
it was determined that such efforts were in the best interest of the company as
a whole. Management continues to focus its activities in areas that take into
consideration the operational structure of Laidlaw and the need to allocate
resources efficiently giving priority to ventures that can reasonably be
expected to self-finance on a short term basis.

Sale of Subsidiaries

Pursuant to an Amended and Restated Stock Purchase Agreement dated June 7, 2001
(the "Transaction"), Laidlaw sold all of its common stock holdings in
Westminster Securities Corp. The consideration consisted of: Prepayment of
$600,000 in indebtedness of Westminster to the Company; payment of $100,000 in
cash at the closing of the Transaction; and payment of $300,000 plus interest at
10% per annum payable in two installments of principal of $150,000 and interest
due on April 19, 2002 and April 19, 2003; and transfer to the Company of the
4,500,000 shares of the Company's common stock valued at $1,890,000. The Company
recorded a loss of $1,611,072 pursuant to this transaction which represents a
write-down of the Company's investment in Westminster to net realizable value.

Pursuant to a Stock Purchase Agreement dated December 21, 2002, the Company sold
its common stock interest in HRAC, the parent company of Howe & Rusling, Inc., a
money management firm, to Third Security Management, Inc.("3rd Security").
Consideration consisted of $5 million in cash which was received in December,
2001 with the balance of the sale proceeds of $2,289,000, subject to certain
post-closing adjustments, was to be paid on or prior to April 1, 2002, in
accordance with a promissory note issued by 3rd Security. Although no claims
were asserted prior to December 31, 2001, 3rd Security did raise claims for
offsets as provided by the Stock Purchase Agreement, which were settled by the
Company. After credit for offsets the Company received $1,915,000 in March 2002
as the final payment of the purchase price. The Company recognized a gain on the
sale of HRAC of $4,557,606, after giving effect to the aforementioned offsets.

David Bottoms, an investment manager with whom the Company had a previous
relationship, also sold his entire interest in HRAC at the same time as the
Company. The Company was able to secure the services of Mr. Bottoms as a
consultant for 3 years at an annual fee of $100,000 to assist in the rebuilding
and restructuring of the investment management business of the Company.

In connection with the closing down the operations of GGI, holders of shares of
GGI who were not affiliates of Laidlaw were given the opportunity to exchange
their GGI shares for shares of Laidlaw on a one for one basis and holders of
1,126,759 shares accepted the offer. Affiliates or former affiliates of Laidlaw
were given an opportunity to exchange their GGI shares for shares of Laidlaw on
a less favorable basis and 9,620,004 shares were exchanged for 4,500,000 shares
of Laidlaw. During the period January 1, 2002 through April 30, 2002, an
additional 263,477 shares of GGI were exchanged for a like number of shares of
Laidlaw. In 2001, the Company recognized a charge to operations of $1,271,420
representing the fair value of the Company's common stock issued in the
exchange. Also during 2001, an asset write-down in the amount $2,353,127 was
recorded to adjust Globeshare's investment in computer hardware and customized
application software to their estimated net realizable value.

Results of Operations for the Years Ended December 31, 2001 and 2000

Laidlaw posted a loss of $11.2 million in fiscal 2001, compared to the net loss
of $5.7 million in fiscal 2000. This increase in net loss is due to the adverse
economic conditions experienced both domestically and internationally. Globally,
the foreign markets overall experienced a decline during the second half of
2000, which continued to deteriorate during fiscal 2001. Generally weak stock
prices in emerging markets, coupled with low trading volume, adversely affected
Laidlaw.

Domestically, the steep decline of NASDAQ had a great impact on Laidlaw, as its
institutional clients focused their investments in the technology sector. The
combination of sharp reduction in commission revenues from overseas markets, the
drop in volume received from institutional investors, the write down of the
value of the assets of Globeshare Group, Inc., Westminster Securities, Inc., and
Laidlaw International, S.A. have resulted in a charge aggregating approximately
$4.6 million in 2001. The net loss as reported is net of the gain from the sale
of the H & R Acquisition Corp. amounting to approximately $4.6 million.

Basic and diluted loss per common share was $.43 in 2001 compared to a basic and
diluted loss per share of $.21 in 2000.

Operations of three subsidiaries, Laidlaw Global Securities, Inc. Globeshare
Group, Inc., and Laidlaw International, S.A., significantly contributed to the
loss incurred during fiscal 2001. Laidlaw Global Securities, Inc. saw a sharp
decrease in its commissions volume strictly related to the market performance of
the emerging global markets and the NASDAQ market in the U.S. Globeshare Group,
Inc. presented a particularly difficult problem for the group due to the high
cost of technological development still required at a time of sharp reduction of
the commissions volume generated in light of the reduction in commissions
resulting from financials markets that have consistently moved down since March
2000. The operations of Globeshare in fiscal 2001 resulted in a net loss to the
Company of approximately $6.9 million. The market for electronic brokerage
services over the Internet is rapidly evolving and intensely competitive. In
view of the losses realized in the first three quarters of 2001 and in fiscal
year 2000, management at Globeshare Group, Inc. decided to cease the operations
of its broker-dealer subsidiary Globeshare, Inc. effective October 5, 2001. An
agreement was executed between Laidlaw Global Securities, Inc. and Globeshare,
Inc. wherein Globeshare - division of Laidlaw Global Securities assumed the
customer accounts of Globeshare, Inc. On November 20, 2001, Globeshare, Inc.
applied for a withdrawal of its broker-dealer license with the Securities and
Exchange Commission. The French subsidiary Laidlaw International incurred a net
loss of $1,776,805, primarily due to the sharp decline in the European equities
market and the initial costs of launching its operations and has been abandoned.

Laidlaw's income is derived form its operation in two principal segments of the
financial services industry, namely asset management and brokerage activities.
Income from those activities is summarized as follows.

Brokerage commission revenues which represent 43% and 47% of total revenues for
the fiscal years 2001 and 2000, respectively, are geographically categorized as
follows:

For the year ended December 31, 2001, revenues of $280,071 were generated from
the activities of Laidlaw Global Securities on behalf of foreign and U.S.
institutional customers in foreign markets and revenues of $4,886,641 were
generated from the activities of Laidlaw Global Securities and Westminster in
the U.S. markets. Globeshare generated revenues of $898,995 from online trading
with U.S. and overseas customers. Laidlaw International generated revenues of
$1,065,254 from the transactions in the French market and other European Union
countries, in particular, the German market.

Asset Management fees from Howe & Rusling and partly from Laidlaw Global
Securities amount to $4,922,170 and $5,517,140 for the years ended December 31,
2001 and December 31, 2000, respectively, which represent 30% and 23% the
Company's revenue for the respective periods. Corporate finance fees of Laidlaw
Global Securities amount to $208,436 and $1,845,693 for the years ended December
31, 2001 and December 31, 2000, respectively, which represent 1% and 8% of the
Company's revenue for the respective periods. Trading profit of Laidlaw Global
Securities, Laidlaw International, S.A. and Westminster amount to $3,652,317 for
the year ended December 31, 2001, which represents 22% of the Company's revenue.
Trading profit of Laidlaw Global Securities and Westminster amount to $4,060,809
for the year ended December 31, 2000, which represents 17% of the Company's
revenue. Other revenue, which consists principally of interest income and
rebates on securities trades, amount to $579,301 and $1,228,143 for the years
ended December 31, 2001 and December 31, 2000, respectively, which represent 3%
and 5% of the Company's revenue for the respective periods.

Income from sale of subsidiary amounting to $4,557,606 represents the gain from
the sale of the H & R Acquisition Corp. subsidiary in December, 2001.

In the future Laidlaw will aim at diversifying its commission revenues by
generating a large portion of its revenues from an expanded retail customer
business in Laidlaw Global Securities.

Salaries and other employee costs for the year ended December 31, 2001 increased
to $8.9 million from $8.8 million for the year ended December 31, 2000. The
increase in this expense for the year primarily relates to the compensation
recognized pertinent to stock options and the salaries incurred by the Laidlaw
International subsidiary starting April, 2001. The increase was offset
substantially by the reduction of personnel in the Laidlaw Global Securities and
Globeshare subsidiaries, the retirement of a key officer in Howe and Rusling,
Inc., and reduction in this expense effective June, 2001 resulting from the sale
of Westminster.

As more fully described under the heading Recent Developments, the Company
recorded a charge of $754,714 in connection with its stock option plan, as
compensation expense for repriced options with a

corresponding increase to additional paid-in capital.

Commissions expense for the year ended December 31, 2001 decreased to $4.6
million from $6.7 million for the year ended December 31, 2000. The decrease is
attributable to the decrease in commission revenue.

Clearing expenses for the year ended December 31, 2001 increased to $1.8 million
from $1.7 million for the year ended December 31, 2000. Clearing expenses, which
primarily consist of amounts paid to the broker-dealers' clearing agent for
processing and clearing customers' trades, reflect the increase due to the
transactions of the Laidlaw International subsidiary starting April, 2001. The
increase was, however, offset to some extent by the reduction in such expenses
related to the decline in commission revenue.

Rent and utility expenses for the year ended December 31, 2001 increased to $1.6
million from $1.5 million for the year ended December 31, 2000. Rent and utility
expenses include cost of leasing office space and space with our Internet
service provider. The increase is primarily attributable to the fact that the
Globeshare subsidiary had incurred these expenses starting only in May, 2000 and
to the expense incurred by the newly established Laidlaw International S.A.
subsidiary. The increase was reduced partially by the rental income received
from Westminster Securities Corp. starting June, 2001.

Depreciation and amortization expenses for the year ended December 31, 2001
increased to $2.2 million from $1.7 for the year ended December 31, 2000.
Depreciation and amortization expenses, which include depreciation of equipment
and amortization of software development costs, increased primarily due to the
increment in such expenses related to the technology infrastructure developed
for Globeshare Inc.

Client-related marketing expenses for the year ended December 31, 2001 decreased
to $0.4 million from $1.2 million for the year ended December 31, 2000. The
decrease in client-related marketing expenses resulted from the efforts of
management in reducing costs in developing strategic alliances in promoting
brand name recognition for Laidlaw and Globeshare.

Travel and entertainment expenses for the year ended December 31, 2001 decreased
to $0.4 million from $0.8 million for the year ended December 31, 2000. The
decrease in travel and entertainment expenses are also attributed to the efforts
of management to minimize costs in light of the difficult market conditions that
continually persist in 2001.

Professional fees for the year ended December 31, 2001 increased minimally to
$2.12 million from $2.10 million for the year ended December 31, 2000. The
increase in accounting fees and legal fees pertinent to the efforts of
management in negotiating funding for the firm and to the sale of assets and
subsidiaries was offset by the reduction of the fees paid to public relations
firms, and fees paid to outside technical consultants and an executive
recruitment firm. Fewer additional SEC filings were made other than the regular
quarterly and annual audited reports.

Dues and assessments for the year ended December 31, 2001 decreased to $0.5
million from $0.8 million for the year ended December 31, 2000. The decrease in
dues and assessments resulted from reduction of the registration fees paid to
the NASD and the various states by Laidlaw Global Securities with the
resignation of certain personnel and from the diminished state corporate income
taxes. The sale of the Westminster subsidiary also contributed to the reduction
of dues effective the month of June, 2001. The decrease, however, was partially
offset by the increase in dues and assessments paid by Laidlaw International.

Communications and information systems expenses for the year ended December 31,
2001 decreased to $1.8 million from $2.4 million for the year ended December 31,
2000. Communications and information systems expenses, which include telephone,
quotes and other information costs, decreased due to the reduction of services
with the cessation of operations of Globeshare, Inc. in October, 2001 and the
sale of Westminster Securities effected in June, 2001. The decrease was
partially offset by the increment in such expenses related to the operations
Laidlaw International.

Interest expense for the year ended December 31, 2001 increased to $0.7 million
from $0.4 million for the year

ended December 31, 2000. The increase in interest expense resulted from lease
contracts entered into with computer hardware and Internet infrastructure
providers for Globeshare Inc. and from the financing obtained in fiscal 2001 for
the operational funds of the Company. The increase in interest expense was
partially offset, however, by the decrease which resulted from the reduction in
the inventory positions of the Westminster subsidiary in 2001, thereby lowering
the carrying cost charged by its clearing broker.

A provision for doubtful accounts of $0.6 million was recorded for the year
ended December 31, 2001 to provide for certain receivables from customers which
have become doubtful of collection and to write off receivables that are deemed
uncollectible.

As previously reported in the Current Report on Form 8-K of the Company dated
June 13, 2001, the sale of Westminster closed in escrow on June 12, 2001, the
documents and consideration were released from escrow on June 13, 2001, and the
parties agreed to treat May 31, 2001 as the effective date of the transaction
for financial purposes. The Company recognized a loss of $1.6 million
representing a write-down of the Company's investment in Westminster to net
realizable value.

Pertinent to the abandonment of the operations of Laidlaw International, S.A. in
2002 (see Recent Developments), the Company recognized a loss of $0.7 million
for fiscal 2001 to write off the value of the investment in the subsidiary.

As previously reported in the Current Report on Form 8-K of the Company dated
December 4, 2001, the sale of H & R Acquisition Corp. was closed on December 21,
2001. All transaction documents were held in escrow to December 26, 2001 when
the transfer of the initial price was finalized. The parties agreed to treat
December 26, 2001 as the effective date of the transaction for financial
purposes. The Company recognized a gain of $4.6 million as a result of the sale
and after deducting offsets from the final payment received in March, 2002.

During 2001, an asset write down in the amount of $2.35 million was required to
adjust the investment of the Globeshare Group, Inc. subsidiary in computer
hardware and customized application software to their estimated net realizable
value.

A charge of $1.3 million was recognized in fiscal 2001 pertinent to the exchange
of the shares Globeshare Group, Inc. for shares of Laidlaw.

All other expenses for the year ended December 31, 2001 decreased to $1.8
million from $2.2 million for the year ended December 31, 2000. These expenses
consist, among other things, of office supplies, amortization of goodwill,
insurance, and other miscellaneous expenses. The decrease in these expenses, net
of the increase in these expenses related to the Laidlaw International
subsidiary operations, resulted from the reduced cost of operations stemming
from the contraction in the volume of operations, the cessation of operations of
Globeshare, Inc. and the sale of Westminster effected on May 31, 2001.

Liquidity and Capital Resources

The Company has incurred an increase in net loss for the year ended December 31,
2001. As a result, the Company has continued to experience cash flow problems.
Although the Company believes that it will have the resources to maintain its
operations through cost control measures which have been instituted, cash flow
from continuing growth of operations, and financial support from existing
shareholders which has been promised orally, the Company may need to seek
additional infusions of capital. Management is in discussion with prospective
investors to furnish such capital, but no definitive purchase agreements have
been executed and there is no assurance that we will be able to finalize such an
agreement.

In addition to the funding through private financing, the Company's strategic
plan to achieve profitability and liquidity focuses on the following:

o Cost Containment: We will seek to continually minimize operating costs and
convert fixed costs to variable costs, where appropriate. Recently, decisions
were made to enhance the profitability of Laidlaw by reviewing and reorganizing
its operating infrastructure, which will result in significant expense
reduction. With the integration of the operations of Globeshare into Laidlaw
Global Securities, Laidlaw expects to achieve savings in employment costs and
other operational expenditures.

o Brokerage: A focal point of our strategic incentive is to restructure and
build our brokerage base. Laidlaw will focus on the addition of new brokers in
Laidlaw Global Securities and increase the potential of attracting high net
worth retail and institutional sales producers.

If the cash flow problems continue and we are unable to obtain financing from
the sale of our equity and/or debt securities, the ability of the Company to
implement its strategic plan and continue the current levels of its operations
will be impaired.

The Balance Sheet

The following table sets forth our total assets, adjusted assets, leverage
ratios and book value per share. The purpose of illustrating these ratios is to
indicate the liquidity and financial position of Laidlaw for the year ended
December 31, 2001 despite the net loss incurred on a year to date basis. The
decrease in total assets as of December 31, 2001 compared to those as of
December 31, 2000 attributed mainly to the loss sustained for the year, the
write off of the fixed assets of the Globeshare Group, Inc subsidiary and the
disposition of Westminster Securities and H & R Acquisition Corp. subsidiaries.

As of As of
December 2001 December 2000
(in $ except for ratios)

Adjusted Assets (1) 6,646,118 22,770,577
Leverage Ratio (2) 3.76 2.31
Adjusted Leverage Ratio (3) 3.76 2.31
Book value per share (4) .06 0.36

(1) Adjusted assets represent total assets.

(2) Leverage ratio equals total assets divided by equity capital.

(3) Adjusted leverage ratio equals adjusted assets divided by equity capital.

(4) Book value per share was based on common shares outstanding at December 31,
2001 and 2000.

Item 7. Financial Statements.

In response to this Item, financial information contained on pages 39 to 68
of this Annual Report for the year ended December 31, 2001 is incorporated
herein by reference.

Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.

Our former independent accountant Grant Thornton ("Grant") resigned on
March 5, 2002. On March 11, 2002, we engaged Richard A. Eisner & Company, LLP
("Eisner") as our new independent accountants for fiscal year ended December 31,
2001. The resignation came about as a result of questions with respect to the
cancellation and pricing of options of Laidlaw that were raised by Grant in late
2001. For fiscal years ended December 31, 2000 and 1999, there were no
disagreements between us and Grant in connection with our financial reports.
Further, the reports did not contain any adverse opinion nor were they qualified
as to uncertainty, audit scope or accounting principles.

In connection with the cancellation and repricing of stock options of
Laidlaw, Grant determined that they could no longer rely on the representations
of management and were unwilling to be associated with the financial statements
prepared by management. In addition, they believed that our internal controls
were materially deficient with respect to reporting corporate actions
accurately. An independent director and special counsel discussed the matter
with Grant and submitted reports concluding that no unlawful or deceptive
practice, or fraudulent conduct was engaged in any time by our Company, its
officers or board members. The reports did recommend changes in procedural
controls which have been implemented. We authorized Grant to fully respond to
inquiries of Eisner regarding the cancellation and pricing of the stock options
at issue.

PART II

Item 9. Directors, Executive Officers, Promoters and Control Persons.

Directors and Executive Officers

Name Age Position
---- --- --------
Larry D. Horner** 67 Chairman of the Board and Director

Roger Bendelac 45 Chairman, Chief Executive Officer,
Secretary and Director

Jean-Marc Beaujolin 57 Director

Philip Connor III*** 40 Director

Carlos C. Campbell 64 Director

Harit Jolly 41 President, Chief Operating Officer,
and Director

Jack Tacaks 55 Director

Michael McCraw 50 Director

John P. O'Shea* 45 Director

Marc Riez**** 38 Director

Arthur James Niebauer* 43 Director

* Resigned effective April 11, 2001.
** Resigned effective December, 2001.
*** Resigned effective January, 2002.
**** Resigned effective February, 2002.

ROGER BENDELAC has been Chairman since April 2001. He has also been
the Chief Executive Officer since October 2000. He has served as Secretary and
Director of the Company since June 1999. He served as the Chief Financial
Officer from June 1999 to September 2000. From July 1998 to November 1999, Mr.
Bendelac served as Chief Financial Officer, Secretary and as a Member of the
Board of Laidlaw Holdings. He has also served as an executive officer and a
director of Laidlaw Global Securities since March 1999 and as President and
Chief Financial Officer of Globeshare Group, Inc. from its inception in February
of 1999 to June 2001.

From 1989 to 1997, Mr. Bendelac served as an investment executive
with Westminster Securities Corporation. Simultaneously from 1988 to 1991, Mr.
Bendelac served as the Co- Chairman and Chief Executive officer of REB Futures,
Inc., a then CFTC -NFA registered Commodity Pool Operator and Commodity Trading
Advisor.

Prior to that Mr. Bendelac was a Senior Vice President in the
International Department of Shearson Lehman Hutton, Inc. and a Senior Vice
President for Sales at Oppenheimer & Co., Inc. Mr. Bendelac is a Graduate of the
Institut d'Etudes Politiques of the Univerisity of Paris, France and of the
Columbia Graduate School of Business in New York where he obtained an M.B.A.
with a major in Finance and International Business in May 1980.

Jean-Marc Beaujolin has served as a director of Laidlaw since June 1999 and
as a director of Laidlaw Holdings since October of 1994. Since 1974, Mr.
Beaujolin has served as the Chairman of the Board of Europ Continents Holding, a
holding company quoted on the Luxembourg stock exchange and principally engaged
in distribution, real estate and financial services in South East Asia. Europ
Continents Holding deals specifically in industrial goods and equipment such as
medical supplies and automotive parts.

Carlos C. Campbell currently operates a consulting business in Reston,
Virginia and serves on the Board of Directors for Resource America, Inc. and
Pico Holdings, Inc., both NASDAQ companies. He also serves on the Board of
Directors for the Board of Advisors for Passport Health, Inc. He has previously
served on the Board of Directors for Dominion Bank, Graphic Scanning, Inc., both
NYSE companies, Cataract, Inc., Computer Dynamics, Inc., SENSYS, Inc. and
numerous other corporations. In 1981, Mr. Campbell was appointed by President
Ronald Reagan as the Assistant Secretary of Commerce for Economic Development
with the U.S. Department of Commerce. He represented President Reagan as his
Envoy to the State Funeral of King Sobhuza II of Swaziland. He served as the
White House Urban Policy Task Force and the President's Counsel on Integrity and
Efficiency, and as a Member of the U.S. Department of the Treasury Task Force on
Debt Management. He led numerous Trade Delegations and participated in forums in
Europe, Africa, the Caribbean and South America. He also held positions as the
alternate U.S. Executive Director, Inter-American Development Bank, Special
Assistant, U.S. Department of Housing and Urban Development, and Deputy
Assistant Administrator for Resources Development, American Bicentennial
Administration. He has visited over thirty-six nations. During the nine years of
active service as a Naval Aviator and Intelligence Officer, he achieved the rank
of Lieutenant Commander and acquired over 1,000 flight hours in Pacific area
Patrol Squadrons. He also served with the Defense Intelligence Agency
Headquarters in Washington, D.C. Mr. Campbell has a Master of City and Regional
Planning from Catholic University, a diploma in Engineering Science from the
U.S. Naval Post Graduate School and B.S. from Michigan State University. He also
completed a seminar in Professional Public Management conducted by the Harvard
Graduate School of Business and the Kennedy School of Government. He is the
author of New Towns, Another Way to Live, a 1976 Book-of-the-Month Club
selection, and over 100 articles published in newspapers and magazines. Mr.
Campbell is a licensed pilot and sailor.

Jack Takacs joined Pacific USA in June, 2001 as its Chief Executive
Officer. He directs all U.S. operations and coordinates the activities of
Pacific USA with each operating subsidiary. Mr. Takacs was a Partner and
Managing Director of Stone Pine Companies, a principal investor, private equity
money manager and fund administrator. Mr. Takacs directed the activities of
Stone Finance in structured finance and consumer receivables securitizations.
Mr. Takacs was also Director of Corporate Finance for Cornerstone Partners, a
subsidiary of GKM, a New York Stock Exchange member firm. Over his career with
various entities, Mr. Takacs has placed in excess of $8 billion debt and equity
securities in a variety of real estate, corporate finance and consumer finance
transactions.

Michael McCraw is currently President of Pacific USA. He was appointed
Chief Operating Officer in 2001 and has been the Chief Operating Officer since
1989. Additionally, from 1995 to 2000, he served as President and Chief
Operating Officer of Pacific Realty Group ("PRG") and Chairman of Newmark Homes
Corp., a PRG subsidiary. Mr. McCraw was employed with KPMG Peat Marwich, LLP
from 1974 to 1989.

Harit Jolly joined the Company in August, 1998 and has served as its
President and Chief Operating Officer since April, 2001. From 1992 to 1996, he
held various positions at H.J. Meyers & Co. and was their Director of Research
when he left the firm. Prior to joining H.J. Meyers, he served in various
capacities with the Value Line Group and was a Senior Equities Analyst when he
left the firm in 1992. Mr. Jolly is also the founder of and Director of Funds
99, LLC, the General Partner of an investment partnership investing in the
capital markets of India. Mr. Jolly is a graduate of the Indian Institute of
Technology, Kharagpur, India. He earned a graduate degree in Management from the
Georgia Institute of Technology.

Committees on the Board

The Board of Directors has established a Stock Option Committee, composed
of David Cohen, an independent party, and Jean-Marc Beaujolin, an indedpendent
director of Laidlaw, who are responsible for administering the Laidlaw 1999
Omnibus Plan. The members of the Stock Option Committee are no longer eligible
to participate in the Omnibus Plan and qualify as disinterested persons for
purposes of Rule 16b-3(c)(2)(i) of the Exchange Act.

The Board of Directors has established a Compensation Committee, composed
of Messrs. Roger Bendelac, Jean-Marc Beaujolin and Carlos Campbell. The
Compensation Committee is responsible for determining the compensation to the
Company's Officers and Directors.

The Board of Directors has also established an Audit Committee, composed of
Messrs. Carlos Campbell, a director of the Company, and David Cohen, of counsel
to the law firm of Herzfeld & Rubin, P.C. The Audit Committee is responsible for
reviewing the results and scope of the audit and other services provided by the
Company's independent auditors as well as review accounting and control
procedures and policies. The Audit Committee held its first meeting on March 7,
2000 to adopt its written charter, a copy of which is annexed hereto. The Audit
Committee also discussed with the independent auditors the matters required to
be discussed by SAS 61, as may be modified or supplemented, received written
disclosures and letters from the independent auditors required by Independence
Standards Board Standard No. 1 (Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees), as may be modified or
supplemented, and discussed the independent auditor's independence. At the
meeting, the members of the Audit Committee and the independent auditors
determined that the members of the Audit Committee are independent as such term
is defined under Section 121(A) of The American Stock Exchange listing
standards.

Section 16(a) Beneficial Ownership Reporting Compliance

The following persons and entities have previously filed a Form 3 with the
Commission. However, each such person and entity did not file such form on a
timely basis as required by section 16(a) of the Exchange Act during the most
recent fiscal year:

Harit Jolly - Director

While Pacific USA Holdings Corp. has filed an appropriate Form 3 with the
Commission, Messrs. Takacs and McCraw, officers of Pacific USA have not filed
Form 3s in their capacities as directors of the Company.

Item 10. Executive Compensation.

Summary Compensation

The following table sets forth the cash compensation paid by the company to
executive officers who received compensation in excess of $100,000 during fiscal
years 2001, 2000, and 1999.

SUMMARY COMPENSATION TABLE

Long-Term Compensation
Annual Compensation Awards Payouts
Securities LTIP All Other
Name and Principal Salary Bonus Underlying Payouts Compensation
Position Year ($) ($) Options (#) ($) ($)
-------- ---- --- --- ----------- --- ---

Roger Bendelac, Chairman, Chief
Executive Officer, and Secretary 2001 130,000 -- 50,000 -- 7,577
2000 165,000 30,000 150,000 -- 52,907
1999 101,250 98,000 62,700 -- 177,067

Harit Jolly, President and Chief
Operating Officer 2001 112,708 -- 50,000 -- --
2000 100,333 30,000 100,000 -- --
1999 82,062 32,500 -- -- --

Anastasio Carayannis * 2000 138,750 -- -- 170,157
1999 175,000 302,000 62,700 -- 629,469

Daniel Bendelac ** 2000 165,000 19,526 100,000 -- --
1999 150,000 134,103 62,700 -- --

Bonuses awarded in 1999 were accrued in December 1999 and paid in January
2000. All other compensation was earned from commissions generated by the
Laidlaw Global Securities business.

* Resigned as Chairman of the Board and Chief Executive Officer on September
15, 2000.
** Deceased December, 2000.

Options Granted

The following table sets forth information with respect to stock options
granted between May 15, 1997 and April 30, 2002 to executive officers of Laidlaw
and its subsidiaries.

OPTIONS GRANTED

Percentage of
Total Options Potential Realizable
Granted to Value at Assumed
Number of Employees in the Annual Rates of Stock
Securities period beginning Exercise Price Appreciation for
Underlying May 15, 1997 and Price Per Option Terms(3),(4)
Options ended April 30, Share(4) Expiration
Name Granted(1) 2002(2) ($) Date 5%($) 10%($)
---- ---------- ------- --- ---- ----- ------

Roger Bendelac 225,000 3.00% .25 1/15/03 -- --

62,700 .83% .25 5/28/04 -- --

150,000 2.00% .25 8/22/05 -- 2,950

50,000 .67% .25 1/02/06 -- 1,400

Harit Jolly 9,000 .12% .25 7/15/03 -- --

100,000 1.33% .25 8/22/05 -- 1,967

50,000 .67% .25 01/02/06 -- 1,400

----------
(1) Such options are incentive options granted pursuant to and in accordance
with the Company's Stock Option Plan.

(2) Based on an aggregate of 7,500,250 options granted to employees during the
period beginning May 15, 1997 and ending April 30, 2002.

(3) In accordance with the rules of the Commission, shown are the hypothetical
gains or "option spreads" that would exist for the respective options.
These gains are based on assumed rates of annual compounded stock price
appreciation of 5% and 10% from the date the option was granted over the
full option term, assuming a fair market value equal to the exercise price
per share on the date of grant. The 5% and 10% assumed rates of
appreciation are mandated by the Commission and do not represent our
estimate projection of future increases in the price of our common stock.

(4) On October 1, 2001, all outstanding options were repriced to $.25 and the
fair market value of the common stock on that date was $.19.

Aggregate Option Exercises and Option Values

The following table sets forth information as of April 30, 2002 with
respect to exercisable and unexercisable stock options held by the executive
officers of Laidlaw and its subsidiaries.

AGGREGATE OPTION EXERCISES AS OF APRIL 30, 2002

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at April 30, April 30, 2002
Acquired on Value Realized 2002 Exercisable / Exercisable /
Name Exercise (#) ($) Unexercisable Unexercisable
----- ------------ ------ ------------- -------------

Roger Bendelac -- -- 487,700 / 0 --

Harit Jolly -- -- 159,000 / 0 --

Executive Officer Employment Agreements

In July of 2001, we entered into a 3 year employment agreement with Mr.
Bendelac. The agreement provided for an annual base salary of $165,000
(increasing to $200,000 if the we successfully complete a debt or equity funding
of a least $3,000,000). In addition to the base salary, Mr. Bendelac shall
receive a minimum annual performance bonus of the greater of $25,000 or 3% of
the our net income. Mr. Bendelac shall also receive a 40% payout on all
commissions generated from his customer accounts. Mr. Bendelac is eligible to
participate in all our employee benefit plans. During the term of the employment
agreement Mr. Bendelac shall be reimbursed for his reasonable business expenses.
Mr. Bendelac has agreed not to compete with us during the term of employment.
The agreement includes customary provisions entitling us to terminate the
executive's employment for cause or upon incapacitation or extended disability
of the executive. The employment agreement also includes customary provisions to
protect our confidential information and ensure that we will own, among other
things, customer lists, products and pricing and financing techniques.

In July of 2001, we entered into a 3 year employment agreement with Mr. Jolly.
The agreement provided for an annual base salary of $125,000 (increasing to
$150,000 if the we successfully complete a debt or equity funding of a least
$3,000,000). In addition to the base salary, Mr. Jolly shall receive a minimum
annual performance bonus of the greater of $25,000 or 10% of the our net income.
Mr. Jolly is eligible to participate in all our employee benefit plans. During
the term of the employment agreement Mr. Jolly shall be reimbursed for his
reasonable business expenses. Mr. Jolly has agreed not to compete with us during
the term of employment. The agreement includes customary provisions entitling us
to terminate the executive's employment for cause or upon incapacitation or
extended disability of the executive. The employment agreement also includes
customary provisions to protect our confidential information and ensure that we
will own, among other things, customer lists, products and pricing and financing
techniques.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information regarding beneficial
ownership of Laidlaw's common stock as of April 30, 2002 by (i) each person
known by Laidlaw to be the beneficial owner of more than 5% of the outstanding
Common Stock; (ii) each director of Laidlaw; (iii) each executive officer of
Laidlaw; and (iv) all executive officers and directors of Laidlaw as a group.

Number of Shares Percentage of Common Equity
Name of Beneficial Owner Beneficially Owned(1) Beneficially Owned(2)
------------------------ --------------------- ---------------------

PUSA Investment Company(3) 8,341,983 29.58%

Pacific USA Holdings Corp.(3) 9,791,983 33.25%

Europ Continents Holding(4) 976,516 3.46%

Roger Bendelac(5) 487,700 1.70%

Roger Bendelac Family L.P.(5) 1,743,150 6.18%

Jean-Marc Beaujolin(6)(4) 0 --

Harit Jolly(8) 1,186,000 4.18%

Grand Agency International(4) 1,100,000 3.91%

Philip Connor III(9) 2,072,000 7.19%

Carlos Campbell 0 0%

Jack Takacs(7) 0 0%

Michael McCraw(7) 0 0%

All Directors and Executive
Officers as a Group 1,941,700 6.69%

----------
(1) Beneficial ownership is determined in accordance with the rules of the
Commission. In general, a person who has voting power and/or investment
power with respect to securities is treated as a beneficial owner of those
securities. For purposes of this table, shares subject to the Common Stock
Purchase Warrants and options exercisable within 60 days of March 31, 2002
are considered as beneficially owned by the person holding such securities.
To our knowledge, except as set forth in the footnotes to this table, we
believe that the persons named in this table have sole voting and
investment power with respect to the shares shown. Except as otherwise
indicated, the address of each of the directors and executive officers and
5% stockholders in this table is as follows: Laidlaw Global Corporation,
100 Park Avenue, New York, New York 10017.

(2) Percentage beneficially owned is based upon 28,201,465 shares of common
stock issued and outstanding as of April 30, 2002 including 3,308,856
shares of common stock issuable upon exercise of outstanding warrants and
employee stock options including: (a) 1,544,454 Common Stock Purchase
Warrants; and (d) 1,764,402 employee stock options exercisable within 60
days of April 30, 2002.

(3) The address for PUSA Investment Company is 2740 North Dallas Parkway,
Suite 200, Plano, Texas 75093. PUSA Investment Company is a subsidiary of
Pacific USA Holdings Corp. Pacific USA Holdings Corp. beneficial ownership
includes the 8,341,983 common shares held by PUSA Investment Company.

(4) The address for Europ Continents Holding is 5 rue C.M. Spoo L-2546
Luxembourg. Jean-Marc Beaujolin, a director of Laidlaw, is also the
Chairman of the Board of Directors of Europ Continents Holding and is
affiliated with Grand Agency International.

(5) Includes 487,700 shares of common stock issuable upon the exercise of
options exercisable within 60 days of March 31, 2002. Roger Bendelac
disclaims a beneficial interest in the shares owned by Roger Bendelac
Family L.P.

(6) The address for Jean-Marc Beaujolin is 5 rue C.M. Spoo L-2546 Luxembourg.

(7) Officer of Pacific USA Holdings Corp., which is the parent company of PUSA
Investment Company, the 29.58% owner of our common stock.

(8) Includes 159,000 shares of common stock issuable upon the exercise of
options exercisable within 60 days of April 30, 2002.

(9) Includes 612,700 shares of common stock issuable upon the exercise of
options exercisable within 60 days of April 30, 2002.

Item 12. Certain Relationships and Related Transactions.

Since April 7, 1998, we have not been a party to any transaction or series
of similar transactions in which the amount involved exceeds $60,000 and in
which any director, executive officer, or holder of more than 5% its common
stock had or will have a direct or indirect material interest other than:

o normal compensation arrangements which are described under Item 10
above; and

o the transactions described below.

All future transactions, including loans, if any, between Laidlaw and its
officers, directors and principal shareholders and their affiliates and any
transactions between Laidlaw and any entity with which its officers, directors
or principal shareholders are affiliated will be subject to the approval of a
majority of Laidlaw's board of directors, including the majority of the
independent and disinterested outside directors of the board of directors and
must be on terms no less favorable to Laidlaw than could be obtained from
unaffiliated third parties.

Shares Exchanged for Laidlaw Holdings, Inc. 12% Senior Secured Euro-Notes

Subsequent to the Reorganization, Laidlaw granted to holders of the Laidlaw
Holdings 12% Senior Secured Euro-Notes the right to exchange the Euro-Notes and
Common Stock Purchase Warrants issued with the Euro-Notes for shares of common
stock of Laidlaw at the rate of $2.05 per share for each Euro-Note exchanged,
and the right to obtain common stock of Laidlaw upon exercise of the Common
Stock Purchase Warrants issued with the Euro-Notes upon the same terms and
conditions of such warrants. The holders of Euro-Notes aggregating $1,876,000 in
principal amount have exchanged their notes for shares of common stock of
Laidlaw.

Shares Exchanged for Laidlaw Holdings, Inc. 8% Convertible Subordinated Notes

Subsequent to the Reorganization, Laidlaw assumed the obligations of
Laidlaw Holdings with respect to the conversion rights of holders of the Laidlaw
Holdings 8% Convertible Notes. As a result, holders of the Convertible Notes
could convert such notes into common stock of Laidlaw at the rate of $2.05 per
share, upon the same terms and conditions of conversion privileges set forth in
the Convertible Notes. The holders of Convertible Notes aggregating $8 million
in principal amount have converted their notes into shares of common stock of
Laidlaw.

Loan from PUSA Investment Company

In August, 2001, Laidlaw obtained a loan of $1,450,000 from Pacific USA
Holdings, Corp., of which Laidlaw received $1,000,000 and the balance of
$450,000 was used to pay off outstanding 12% Senior Secured Euro Notes in
December, 2001. This loan and the corresponding interest of $44,418 was fully
paid in December, 2001. In connection with this loan, 1,450,000 warrants were
issued to Pacific USA Holdings Corp.

In September, 2001, Laidlaw obtained a short term 7% loan of $400,000 from
Pacific USA Holdings, Corp. This loan was paid in full in October, 2001.

Finder's Fee to John O'Shea

Pursuant to a Letter of Intent dated April 30, 1999 between Laidlaw
Holdings and Westminster to enter into the Reorganization, Laidlaw Holdings paid
a finder's fee of $50,000 to John O'Shea, one of our former directors.

Formation of Globeshare Group, Inc. (formerly Global Electronic Exchange) and
Globeshare

In January 1999, Laidlaw, in a joint venture with several individuals
associated with Laidlaw, formed Globeshare Group, Inc. and its broker-dealer
subsidiary, Globeshare, Inc. Laidlaw received 8,190,000 shares of Global
Electronic Exchange common stock in exchange for expenses paid and services
rendered by Laidlaw on its behalf in the amount of $558,770. This resulted in a
59% ownership in Globeshare Group, Inc. by Laidlaw as of December 31, 2000 and
1999. In association with the private placement of Globeshare Group, Inc. common
stock under Regulation D of the Securities Act, Laidlaw Global Securities
received $440,190 for services rendered as placement agent.

Acquisition of Laidlaw Pacific from PUSA Investment Company

On March 29, 2000, Laidlaw completed an amended and restated agreement with
Pacific USA Holdings Corp. ("Pacific"), Pacific's wholly owned subsidiaries PUSA
Investment Company, the 26.75% shareholder of the Company ("PUSA"), and Laidlaw
Pacific Financial Services Ltd. to acquire Laidlaw Pacific. The amount paid was
200,000 shares of common stock of Laidlaw and $HK 4 million. Laidlaw Pacific
agreed to pay a dividend to Laidlaw Pacific Financial Services Ltd. equal to $HK
3 million. Further it consented to grant an option to Laidlaw to receive a
dividend equal to $HK 4 million, should it elect to withdraw such funds from
Laidlaw Pacific. PUSA Investment Company represented to Laidlaw that, at the
time of closing, Laidlaw Pacific would have cash in the amount of $HK 11
million, all licenses to engage in the investment banking business in Hong Kong,
and no liabilities. Laidlaw Pacific is a registered Dealer and Investment
advisor with the Hong Kong Securities and Futures Commission. Its principal
activities are corporate financial advisory services.

Exchange of Shares of Globeshare Group, Inc. for Shares of Laidlaw Global Corp.

In connection with closing down of the operations of GGI, holders of shares
of GGI who were not affiliates of Laidlaw were given the opportunity to exchange
their GGI shares for shares of Laidlaw on a one for one basis and in 2001,
Holders of 1,126,759 shares accepted the offer. Affiliates or former affiliates
of Laidlaw were given an opportunity to exchange their GGI shares for shares of
Laidlaw on a less favorable basis and 9,620,004 shares were exchanged for
4,500,000 shares of Laidlaw. During the period January 1, 2002, through April
30, 2002, an additional 263,427 shares of GGI were exchanged for a like number
of shares of Laidlaw.

Item 13. Exhibits and Reports on Form 8-K.

(a) Exhibits

EXHIBIT NO. DESCRIPTION

2.1 Amended and Restated Plan and Agreement of Reorganization by
and among Laidlaw Holdings, Inc., Fi-Tek V, Inc.,
Westminster Securities Corporation and shareholders of the
companies, dated May 27, 1999(1)

3.1 Certificate of Incorporation of Laidlaw and amendments
thereto(2)

3.2 By-Laws of Laidlaw(2)

4.1 Specimen Laidlaw Common Stock Certificate(2)

4.2 Specimen Fi-Tek V, Inc. Class A Warrant(2)

4.3 Specimen Fi-Tek V, Inc. Class B Warrant(2)

10.1 Employment Agreement between Registrant and Anastasio
Carayannis, dated as of January 1, 2000(3)

10.2 Employment Agreement between Registrant and Roger Bendelac,
dated as of January 1, 2000(3)

10.3 Employment Agreement between Registrant and Daniel Bendelac,
dated as of January 1, 2000(3)

10.4 Exchange Agreement to acquire Laidlaw Pacific, dated May 20,
1999(4)

10.5 Amendment to Exchange Agreement to acquire Laidlaw Pacific,
dated March 29, 2000(4)

21.1 List of Subsidiaries of Laidlaw Global Corporation

23.1 Consent of Independent Auditor.

23.2 Consent of Independent Auditor.

----------
(1) Such document if hereby incorporated herein by reference to Laidlaw's
Current Report on Form 8-K dated June 8, 1999.

(2) Such document if hereby incorporated herein by reference to Laidlaw's
Registration Statement on Form 8-A filed October 15, 1999.

(3) Such document if hereby incorporated herein by reference to Laidlaw's
Registration Statement on Form SB-2 filed February 14, 2000.

(4) Such document is hereby incorporated herein by reference to Laidlaw's
Current Report on Form 8-K filed April 12, 2000.

(b) Reports on Form 8-K

On November 7, 2001, Laidlaw filed a Current Report on Form 8-K
announcing the transfer of the brokerage operations of Globeshare, Inc. to
Laidlaw Global Securities, Inc. The Report also stated that shareholders of
Globeshare Group, Inc. would have the opportunity to exchange their shares
for shares of Laidlaw Global Corporation common stock. The Report also
announced that Pacific USA Holdings Corp. had made a $1,450,000 secured
loan to Laidlaw Global Corporation.

SIGNATURES

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

LAIDLAW GLOBAL CORPORATION

By: /s/ Roger Bendelac
----------------------------------
Roger Bendelac,
Chairman, Chief Executive Officer,
Secretary and Director

/s/ Milmarina M. Camacho
---------------------------------
Chief Financial Officer

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

Signature Title Date
--------- ----- ----

/s/ Roger Bendelac
------------------------ Chairman, Chief Executive Officer, May 16, 2002
Roger Bendelac Secretary and Director

/s/ Harit Jolly
------------------------ President, Chief Operating Officer, May 16, 2002
Harit Jolly Director

/s/ Carlos C. Campbell
------------------------ Director May 16, 2002
Carlos C. Campbell

/s/ Jean-Marc Beaujolin
------------------------ Director May 16, 2002
Jean-Marc Beaujolin

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Laidlaw Global Corporation and Subsidiaries

We have audited the accompanying consolidated balance sheet of Laidlaw Global
Corporation and Subsidiaries (the "Company") as of December 31, 2001, and the
related consolidated statements of operations, changes in stockholders' equity
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 financial statements based on our audit. We did not
audit the financial statements of Laidlaw International SA, a 99.8 percent
owned subsidiary, which statements reflect total revenue and net losses
of 18 percent and 16 percent, respectively, of the related consolidated totals.
Those statements were audited by other auditors whose report has been furnished
to us and included explanatory language regarding the liquidation of Laidlaw
International SA. Our opinion, insofar as it relates to the amounts included for
Laidlaw International SA, is based solely on the report of the other auditors.

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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company at
December 31, 2001, and the consolidated results of their operations and their
consolidated cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note A to the
consolidated financial statements, the Company has suffered recurring losses
from operations, has net cash outflows from operating activities, is
anticipating continuing losses and believes it will require additional sources
of funding during 2002 to maintain its operations and provide sufficient
regulatory net capital for its broker-dealer operations. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note A. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Eisner LLP
------------------------------------
New York, New York
April 26, 2002

With respect to the accounts of Laidlaw International S.A.
May 15, 2002

INDEPENDENT AUDITOR'S REPORT
ON
LAIDLAW INTERNATIONAL SA

Year end accounts 31 December 2001

We have audited the financial statements of LAIDLAW INTERNATIONAL SA. These
financial statements are the responsibility of the Company's management. We were
not provided with, and have not audited, financial statements for previous year.
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, which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

LAIDLAW INTERNATIONAL SA has been liquidated by decision of the Commercial Court
of Paris, France, dated 11 April 2002. The Company had previously significantly
reduced its activities since the end of 2001, and totally discontinued them on
22 March 2002.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of changes in stockholders'
equity present fairly, in all material respects, the financial position of
LAIDLAW INTERNATIONAL SA at December 31, 2001, and the results of its operations
and cash flows for the years ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America.

Paris, France on the 15th of May, 2002

COFISYS

Jean Michel MATT

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders of
Laidlaw Global Corporation and Subsidiaries

We have audited the accompanying consolidated statements of operations, changes
in stockholders' equity (deficit) and cash flows of Laidlaw Global Corporation
and Subsidiaries (the "Company") for the year ended December 31, 2000. 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 consolidated
statement of operations, changes in stockholders' equity (deficit) and cash
flows are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statements of
operations, changes in stockholders' equity (deficit) and cash flows. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the
results of operations. We believe that our audit of the consolidated statements
of operations, changes in stockholders' equity (deficit) and cash flows provides
a reasonable basis for our opinion.

In our opinion, the consolidated statements of operations, changes in
stockholders' equity (deficit) and cash flows referred to above present fairly,
in all material respects, the results of operations of Laidlaw Global
Corporation and Subsidiaries for the year ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States of America.

/S/ GRANT THORNTON LLP

New York, New York
April 18, 2001

Laidlaw Global Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEET

December 31, 2001

ASSETS

Cash and cash equivalents $ 2,220,119
Receivable from clearing broker 248,600
Securities owned, at market value 314,764
Equipment and leasehold improvements -- net 679,708
Notes receivable 2,215,000
Deposits 379,485
Prepaid and other 588,442
------------

$ 6,646,118
============

LIABILITIES AND STOCKHOLDERS' EQUITY

Notes payable $ 732,058
Accounts payable and accrued expenses 2,825,152
Commissions and compensation payable 243,656
Securities sold but not yet purchased, at market value 930
Capitalized lease obligations 421,701
Deferred revenue 99,722
Deferred rent 527,756
Other payable 30,000
------------
4,880,975
------------
Commitments and contingencies
Stockholders' equity
Common stock, voting, $.00001 par value; 50,000,000
shares authorized; 33,211,439 shares issued
and 27,578,939 shares outstanding 332
Additional paid-in capital 40,131,868
Accumulated deficit (35,952,003)
Treasury stock, at cost (5,632,500 shares) (2,415,054)
------------
1,765,143
------------

$ 6,646,118
============

The accompanying notes are an integral part of these consolidated financial
statements.

Laidlaw Global Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended December 31,

2001 2000
------------ ------------

Revenues
Commissions $ 7,130,961 $ 11,415,405
Trading gains, net 3,652,317 4,060,809
Investment banking fees 203 90,697
Corporate finance fees 208,436 1,845,693
Asset management fees 4,922,170 5,517,140
Interest 295,152 805,601
Other 283,946 331,845
------------ ------------
16,493,185 24,067,190
------------ ------------
Expenses
Commissions 4,551,964 6,749,087
Salary and benefits 8,864,280 8,821,335
Professional fees 2,124,000 2,100,034
Communications and information systems 1,826,279 2,448,442
Clearing fees 1,818,430 1,689,955
Rent and utilities 1,615,611 1,479,025
Client-related marketing 402,049 1,205,994
Depreciation and amortization 2,205,086 1 680,666
Amortization of goodwill 328,862 475,138
Interest 753,240 355,817
Office 736,010 958,121
Dues and assessments 510,487 821,669
Travel and entertainment 422,695 791,482
Loss from asset write offs 4,603,410 --
Provision for doubtful account 629,993 --
Charge in connection with share exchange 1,271,420 --
Other 697,932 723,127
------------ ------------
33,361,748 30,299,892
------------ ------------
Loss before other income (16,868,563) (6,232,702)
Income from sale of subsidiary 4,557,606 --
------------ ------------
Loss before minority interest (12,310,957) (6,232,702)
------------ ------------
Minority interest 1,120,757 1,465,122
------------ ------------
Loss before tax (11,190,200) (4,767,580)
Income taxes -- (944,976)
------------ ------------
Net loss $(11,190,200) $ (5,712 556)
============ ============

Basic and diluted net loss per share ($ 0.43) ($ 0.21)
============ ============

Basic and diluted weighted average number of
shares outstanding 26,305,829 26,966,363
============ ============

The accompanying notes are an integral part of these consolidated financial
statements.

Laidlaw Global Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY

Years ended December 31, 2001 and 2000

Additional
Shares Common paid-in Accumulated Treasury
issued stock capital deficit Stock
---------- ------ ------------ ------------- -----------

Balance at January 1, 2000
as previously reported 26,617,929 $266 $ 33,747,210 $ (19,049,247) --
Prior period adjustment 2,960,609
---------- ---- ------------ ------------- -----------
Balance at January 1, 2000
as restated (Note Q) 26,617,929 266 36,707,819 (19,049,247) --
Issuance of common stock for the
acquisition of Laidlaw Pacific (Asia) 200,000 2 556,398
Issuance of common stock upon
exercise of stock options 144,000 2 119,999
Issuance of common stock pursuant
to consulting services
agreement 500,000 5 468,745
Purchase of treasury stock (257,713)
Net loss (5,712,556)
---------- ---- ------------ ------------- -----------

Balance at December 31, 2000 27,461,929 275 37,852,961 (24,761,803) (257,713)
---------- ---- ------------ ------------- -----------

Purchase of treasury stock (267,341)
Purchase of treasury stock
pursuant to sale of Westminster
Securities Corporation (1,890,000)
Issuance of shares pursuant to the
exchange of Globeshare Group Inc. stock
for Laidlaw Global Corporation stock on
a one for one basis 4,500,000 45 899,955
Issuance of warrants in connection with
loan agreement 222,143
Issuance of shares pursuant to the exchange
of Globeshare Group Inc. stock for Laidlaw
Global Corporation stock on a one for one
basis by private placement shareholders 1,126,760 11 371,409
Issuance of common stock upon exercise of
stock options 122,750 1 30,686
Charge attributable to repricing of options
granted to employees 754,714
Net loss (11,190,200)

---------- ---- ------------ ------------- -----------
Balance at December 31,2001 33,211,439 $332 $ 40,131,868 $ (35,952,003) $(2,415,054)
========== ==== ============ ============= ===========

Total
------------

Balance at January 1, 2000,
as previously reported $ 14,698,229
Prior period adjustment 2,960,609
------------
Balance at January 1, 2000
as restated (Note Q) 17,658,838
Issuance of common stock for the
Acquisition of Laidlaw Pacific (Asia) 556,400
Issuance of common stock upon
Exercise of stock options 120,001
Issuance of common stock pursuant
To consulting services
Agreement 468,750
Purchase of treasury stock (257,713)
Net loss (5,712,556)
------------

Balance at December 31, 2000 12,833,720
------------

Purchase of treasury stock (267,341)
Repurchase of shares into treasury (1,890,000)
pursuant to sale of Westminster
Securities Corporation
Issuance of shares pursuant to the exchange of
Globeshare Group Inc. stock for Laidlaw Global
Corporation stock on a one to one-basis 900,000
Contribution to capital pursuant to issuance of warrants
to PUSA in connection with loan agreement 222,143
Issuance of shares pursuant to the exchange
of Globeshare Group Inc. stock for Laidlaw
Global Corporation stock on a one to one
basis by private placement shareholders 371,420
Issuance of common stock upon exercise of
Stock options 30,687
Charge attributable to repricing of options
granted to employees 754,714
Net loss (11,190,200)
------------

Balance at December 31, 2001 $ 1,765,143
============

The accompanying notes are an integral part of these consolidated financial
statements.

Laidlaw Global Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31,

2001 2000
------------ -----------

Cash flows from operating activities
Net income (loss) $(11,190,200) $(5,712,556)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities
Depreciation and amortization 2,533,948 2,155,804
Deferred income taxes -- 800,000
Minority interest in net loss (1,120,757) (1,465,123)
Income on sale of H&R (4,557,606) --
Loss on asset write offs 4,239,199 --
Provision for doubtful account 582,348 --
Fair value of warrants issued in connection with debt 222,143 --
Compensation expense recognized on repricing of options 754,714 --
Charge in connection with share exchange 1,271,420 --
(Increase) decrease in operating assets
Receivable from clearing broker 1,258,884 866,900
Securities owned, at market value (28,990) 393,576
Investment banking fees receivable -- 67,193
Deposits 184,487 141,395
Prepaid and other assets 742,251 (875,274)
Increase (decrease) in operating liabilities
Accounts payable and accrued expenses (357,663) 70,600
Commissions and compensation payable 391,672 (1,132,654)
Securities sold but not yet purchased at market value 72,371 (177,142)
Deferred revenue 68,651 (15,525)
Other liabilities (29,720) (17,447)
------------ -----------

Net cash (used in) provided by operating activities (4,962,848) (4,900,253)
------------ -----------

Cash flows from investing activities
Purchase of equipment and leasehold improvements (382,534) (3,397,594)
Proceeds from sale of Westminster Securities Corp 700,000 --
Proceeds from sale of Howe & Rustling, Inc. 5,000,000 --
------------ -----------

Net cash used in investing activities 5,317,466 (3,397,594)
------------ -----------

Laidlaw Global Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Year ended December 31,

2001 2000
----------- ------------

Cash flows from financing activities
Repayment of notes payable $(3,129,000) $ (500,000)
Payments for leased equipment (400,177) (321,559)
Proceeds from issuance of Note Payable 3,732,058 --
Payments for treasury stock (267,341) (257,713)
Proceeds from issuance of common stock 30,687 1,145,151
----------- ------------
Net cash provided by financing activities (33,773) 65,879
----------- ------------

Net (decrease) increase in cash and cash equivalents 320,845 (8,231,968)

Cash and cash equivalents, beginning of year 1,899,274 10,131,242
----------- ------------

Cash and cash equivalents, end of year $ 2,220,119 $ 1,899,274
=========== ============

Supplemental disclosures of cash flow information:
Cash paid during the year for
Interest $ 623,240 $ 319,817

Supplemental schedule of noncash investing and financing activities

During the years ended December 31, 2001 and 2000 the following transactions
occurred:
Equipment acquired under capital leases 43,147 336,630
Issuance of common stock upon purchase of Laidlaw Pacific (Asia") Ltd -- 348,313
Issuance of common stock pursuant to consulting agreement -- 468 745
Notes received on sale of subsidiaries 2,215,000 --
Securities borrowed and repaid during the year 2,176,937 --

Laidlaw Global Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Year ended December 31,

2001 2000
---------- ---------

The Company acquired substantially all of the common stock of various entities
for common stock of the Company. The net assets purchased consisted of the
following:

Receivable from Laidlaw Pacific Financial Services ("Holdings") Ltd. $ -- $ 326,444

Other assets -- 21,869

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

Net assets purchased -- 348,313

Less Common stock issued -- (556,389)
---------- ---------

Net cash received from acquisitions $ -- $(208,076)
========== =========

The accompanying notes are an integral part of these consolidated financial
statements.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2001 and 2000

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Organization and Basis of Presentation

Laidlaw Global Corporation (the Company) is a holding company whose wholly-
or majority-owned operating subsidiaries include Laidlaw Holdings, Inc.
(Laidlaw Holdings) Laidlaw Global Securities, Inc. (Laidlaw Global
Securities), Westminster Securities Corporation, (Westminster), which the
Company sold in June, 2001, H&R Acquisition Corporation (HRAC), an
81%-owned subsidiary which maintains a 100% interest in Howe & Rusling,
Inc., (H&R) which the Company sold in December, 2001, Globeshare Group,
Inc., (GGI), formerly Global Electronic Exchange, Inc. a 97%-owned
internet-based investment services company established on June 14, 1999
which maintains a 100% interest in Globeshare, Inc. (Globeshare), an
internet-based broker-dealer, whose operations were integrated with Laidlaw
Global Securities in October, 2001, Laidlaw Pacific (Asia) Ltd. (LPA), a
registered broker-dealer and Investment Advisor with the Hong Kong
Securities and Futures Commission, which ceased operations in 2001, and
Laidlaw International, S.A., (LI) a 99.8% owned broker-dealer based in
France, which ceased operations in April, 2002. The business activities
include securities brokerage, investment banking, asset management and
investment advisory services to individual investors, corporations, pension
plans and institutions worldwide.

On April 6, 2001, LPA ceased business activity to avoid incurring any
further costs of maintaining a dormant operation. Its license was revoked
in May, 2001.

On June 12, 2001, the Company sold its common stock interest in Westminster
pursuant to an Amended and Restated Stock Purchase Agreement dated June 7,
2001. The parties to the transaction agreed to treat May 31, 2001 as the
effective date of the transaction for financial statement purposes.
Accordingly, results of operations of Westminster for fiscal 2001
incorporated in the consolidated financial statements pertain to the period
through May 31, 2001.

Due to the continuing losses incurred by the Globeshare operations, the
Company deemed it best for economic reasons to integrate the operations of
the on-line broker as a division of Laidlaw Global Securities. The
combination of the operations, which would eliminate the redundancy of
services and reduce operating costs, was made effective on October 5, 2001.

On December 26, 2001, the Company sold its interest in HRAC pursuant to a
Stock Purchase Agreement dated December 21, 2001. Accordingly, all assets,
liabilities, equity and results of operations of H & R for fiscal 2001
incorporated in the consolidated financial statements pertain to the period
through December 26, 2001.

The accompanying consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The Company
has suffered recurring losses and has a significant accumulated deficit as
of December 31, 2001. In addition, the Company continues to incur
substantial losses. Accordingly, the Company anticipates that it will
require additional sources of funding during 2002 to maintain its
operations and to provide sufficient regulatory net capital for its
broker-dealer operations. The Company is dependent on outside sources of
financing and is presently pursuing several alternatives, although no
additional financing is imminent. These conditions raise substantial doubt
about the ability of the Company to continue as a going concern. The
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

2. Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned and majority-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in
consolidation.

3. Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions in determining the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reported period. Actual results could differ from these estimates.

4. Cash and Cash Equivalents

Cash and cash equivalents include cash in bank accounts and deposits
in money market accounts with maturities of three months or less when
purchased.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE A (continued)

5. Securities Transactions

Customers' securities transactions are recorded on a settlement-date
basis with related commission income and expenses recorded on a
trade-date basis. Proprietary securities transactions are recorded on
a trade-date basis. Profit and loss arising from all securities
transactions entered into for the account and risk of the Company are
recorded on a trade-date basis.

Securities are valued at market value, and securities not readily
marketable are valued at fair value as determined by management. The
resulting difference between cost and market (or fair value) is
included in trading gains, net.

6. Securities Sold, But Not Yet Purchased

Securities sold, but not yet purchased, consist of trading securities
at market values. The difference between the proceeds received from
securities sold short and the current market value is included in
trading gains, net.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE A (continued)

7. Commissions

Commissions and related clearing expenses are recorded on a trade-date
basis as securities transactions occur.

8. Equipment and Leasehold Improvements

Equipment, which includes computer equipment and software, and
leasehold improvements, are stated at cost, less accumulated
depreciation and amortization. Depreciation and amortization on
equipment and capital leases are recognized on a straight-line basis
over the estimated useful lives of the assets ranging from three to
seven years. Leasehold improvements are amortized on a straight-line
basis over the lesser of their estimated useful lives or the terms of
the related leases.

Equipment and leasehold improvements held and used by the Company are
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of assets may not be recoverable.

9. Goodwill

Goodwill, which represents the excess of purchase price over fair
value of net assets acquired, is amortized on a straight-line basis
over a period of fifteen to thirty years, the expected periods to be
benefited. The Company assesses the recoverability of these intangible
assets by determining whether the amortization of the goodwill balance
over its remaining life can be recovered through undiscounted future
operating cash flows of the acquired operation. The amount of goodwill
impairment, if any, is measured based on projected discounted future
operating cash flows expected to be realized from the intangible asset
to its recorded value. The assessment of the recoverability of
goodwill will be impacted if estimated future operating cash flows are
not achieved.

10. Deferred Rent Liability

The Company's lease for office space provides for no rental payments
during the first fourteen months of the lease and scheduled lease
payments that increase during the term of the lease. The Company has
recorded a deferred lease liability to recognize rental expense on a
straight-line basis over the life of the lease.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE A (continued)

11. Investment Banking Fees

Investment banking fees include gains, losses and fees, net of
syndicate expenses, arising from securities offerings in which the
Company acts as an underwriter or agent. These fees are recorded on
the offering date, sales concessions on the settlement date and
underwriting fees at the time the underwriting is completed and the
income is reasonably determinable.

12. Corporate Finance Fees

Corporate finance fees are received from providing advisory and due
diligence services for proposed financings that do not result in
either the offering of private or public financing. Fees are
recognized when the services are performed.

13. Asset Management Fees

The Company computes asset management fees and the related commission
payout on a quarterly basis and amortizes them for financial statement
purposes on a monthly basis.

14. Income Taxes

The Company files a consolidated Federal income tax return and a
combined return for state and city purposes with its domestic
subsidiaries. The consolidated or combined taxes payable are generally
allocated between the Company and its subsidiaries based on their
respective contributions to consolidated or combined taxable income.

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. 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.

15. Fair Value of Financial Instruments

The fair value of cash and cash equivalents, securities, notes and
other receivables and payables approximate their respective book
values.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE B - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July, 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141, Business Combinations (SFAS
No. 141) and Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets (SFAS No. 142). The new standards require that all
business combinations initiated after June 30, 2001 be accounted for under
the purchase method. In addition, all intangible assets acquired that are
obtained through contractual or legal right, or are capable of being separately
sold, transferred, licensed, rented or exchanged shall be recognized as an asset
apart from goodwill. Goodwill and intangibles with indefinite lives will no
longer be subject to amortization, but will be subject to at least an annual
assessment for impairment by applying a fair value based test. The Company does
not expect there to be a material impact from the adoption of SFAS NO. 142.

In August 2001, the FASB issued statement of Financial Accounting Standard No.
144 Accounting for the Impairment or Disposal of Long Lived Assets. This
statement is effective for fiscal years beginning after December 15, 2001. This
supercedes Statement of Financial Accounting Standards No. 121 "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of", while retaining many of the requirements of such statement. The Company is
currently evaluating the impact of the statement.

NOTE C - ACQUISITION AND SALE OF BUSINESSES

On March 29, 2000, the Company acquired Laidlaw Pacific ("Asia") Ltd. (LPA), an
investment advisory company incorporated under the laws of Hong Kong. The amount
paid was 200,000 shares of common stock of the Company and HK$4M. The purchase
price was allocated to the net assets acquired based on their estimated fair
values. On March 31, 2000, LPA's assets were approximately HK$6,874,000
(US$882,844), which included cash received of US$534,531. The purchase price
approximated the fair value of net assets; therefore, no goodwill was recorded.
On April 6, 2001, LPA ceased business activity.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE C (continued)

Pursuant to an Amended and Restated Stock Purchase Agreement dated June 7, 2001,
Laidlaw sold all of its common stock holdings in Westminster. The consideration
consisted of: Prepayment of $600,000 in indebtedness of Westminster to the
Company; payment of $100,000 in cash at the closing of the Transaction; and
payment of $300,000 plus interest at 10% per annum payable in two installments
of principal of $150,000 and interest due on April 19, 2002 and April 19, 2003;
and transfer to the Company by the buyers of 4,500,000 shares of the
Company's common stock, valued at $1,890,000. The Company recorded a loss of
$1,611,072 pursuant to this transaction, which represents a write-down of the
Company's investment in Westminster to net realizable value. The Company
received the first installment of principal and interest in April 2002.

Pursuant to a Stock Purchase Agreement dated December 21, 2002, the Company sold
its common stock interest in HRAC, the parent company of Howe & Rusling, Inc., a
money management firm, to Third Security Management, Inc. ("3rd Security").
Consideration consisted of $5 million which was received in December, 2001 with
the balance of the sale proceeds of $2,289,000, subject to certain post-closing
adjustments, was to be paid on or prior to April 1, 2002, in accordance with a
promissory note issued by 3rd Security. Although no claims were asserted prior
to December 31, 2001, 3rd Security did raise claims for offsets as provided by
the Stock Purchase Agreement, which were settled by the Company. After credit
for offsets the Company received only $1,915,000 in March 2002 as the final
payment of the purchase price. The Company recognized a gain on the sale of HRAC
of $4,557,606 after giving effect to the aforementioned offsets.

David Bottoms, an investment manager with whom the Company had a previous
relationship, also sold his entire interest in HRAC at the same time as the
Company. The Company was able to secure the services of Mr. Bottoms as a
consultant for 3 years at annual fee of $100,000 to assist in the rebuilding and
restructuring of the investment management business of the Company.

In connection with the closing down of the operations of GGI, holders of shares
of GGI who were not affiliates of Laidlaw were given the opportunity to exchange
their GGI shares for shares of Laidlaw on a one for one basis and holders of
1,126,759 shares accepted the offer. Affiliates or former affiliates of Laidlaw
were given an opportunity to exchange their GGI shares for shares of Laidlaw on
a less favorable basis and 9,620,004 shares were exchanged for 4,500,000 shares
of Laidlaw. Subsequent to December 31, 2001, additional 263,427 shares of GGI
were exchanged for a like number of shares of Laidlaw. In 2001, the Company
recognized a charge to operations of $1,271,420 representing the fair value of
the Company's common stock issued in the exchange. Also during 2001, an asset
write-down in the amount $2,353,127 was recorded to adjust Globeshare's
investment in computer hardware and customized application software to their
estimated net realized value.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE D - EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements consist of:

December 31,
2001
------------

Furniture and office equipment $ 264,389
Computer equipment and software 1,447,388
Leasehold improvements 231,333
-----------

1,943,110
Accumulated depreciation and amortization (1,263,402)
-----------

Equipment and leasehold improvements, net $ 679,708
===========

Depreciation and amortization expense for 2001 and 2000
amounted to $2,205,086 and $1,680,666, respectively.

NOTE E - NOTES PAYABLE

Notes payable at December 31, 2001 consist of the following:

December 31,
2001
------------
Note Payable, 8% due July 2002 482,058
Convertible Subordinated Note, 10% due August 2002 250,000
------------

$ 732,058
============

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE E (continued)

Issuance of 12% Senior Secured Euro-Notes Due 2002 (the "Euro-Notes"): From
April 1997 to May 1997, Laidlaw Holdings offered, on a "best efforts" basis
a minimum of 50 Units and a maximum of 80 Units, each Unit consisting of 5
year 12% Senior Secured Notes in the principal amount of $100,000 and a 5
year warrant to purchase 6,881 shares of non-voting common stock of Laidlaw
Holdings, at an exercise price of $4.36 per share (the "Common Stock
Purchase Warrants"). Euro-Notes in the aggregate principal amount of
$2,305,000 were sold. Laidlaw granted to holders of the Euro-Notes the
right to exchange the Euro-Notes and Common Stock Purchase Warrants issued
with the Euro-Notes for shares of common stock of Laidlaw at the rate of
$2.05 per share for each Euro-Note exchanged, and the right to obtain
common stock of Laidlaw upon exercise of the Common Stock Purchase Warrants
issued with the Euro-Notes upon the same terms and conditions of such
warrants. Fifteen holders of Euro-Notes aggregating $1,876,000 in principal
amount have exchanged their notes for shares of Common Stock of Laidlaw.
The Euro-Notes were collateralized by the outstanding shares of the
Company's subsidiary, HRAC, which owns 100% of the outstanding common stock
of Howe & Rusling, with 20% subject to Howe & Rusling, Inc. employee
options. These notes in the amount of $429,000 were paid in December, 2001.

On January 30, 2001, the Company obtained a loan of $400,000 through the
issuance of a 12% subordinated note. This loan was paid in December, 2001.

In February, 2001, GGI obtained a 90-day, 12% loan of $100,000. The loan
was paid in full in June, 2001.

On March 14, 2001, LI obtained a loan of $446,350 through the issuance of
an 8% note in which the principal and interest are due in one year. This
loan was assumed by the Company in December 2001 in the amount of $482,058
which included interest of $35,708 to original maturity date. If the
Company defaults as defined in the agreement, then the noteholder may, in
lieu of payment of the Principal Amount, convert the note into common stock
of the Company at the conversion price of $0.30 per Common Share. In March
and April of 2002, the terms were renegotiated wherein 50,000 of the note
was converted into 333,329 shares of the Company's stock with the balance
of the principal and interest payable in varying installments with the
final payment due in July 2002. No additional interest is charged on the
note from March 14, 2002 until July 2002.

On April 5, 2001, GGI obtained a loan of $250,000 through the issuance of a
10% convertible subordinated note in which the interest is due on a
semi-annual basis and the principal on April 5, 2002. Under the terms of
the note, the noteholder may convert into GGI stock at the greater of $.65
per share or a 40% discount from the initial public offering price per
share or into Company common shares at a price of $.55 per share. In March
and April 2002 the terms were renegotiated wherein $50,000 of the note was
converted into 166,670 shares of the Company's common stock and the balance
is repayable in varying installment payments through August, 2002. No
additional interest is charged on the note from April 5, 2002 until August
2002.

On June 29, 2001, the Company obtained a 30-day 10% loan of $150,000. On
October 3, 2001, the Company paid $75,000 and the loan was extended to and
repaid in December 2001.

In July, 2001, the Company obtained a 4-day, 10% loan of $200,000. The loan
was paid in full in August 2001.

On August 31, 2001, the Company obtained a bridge loan in the amount of
$1,450,000 from Pacific USA Holdings Corp. (Lender), which is the parent
company of Laidlaw's largest stockholder, PUSA Investment Company, through
the issuance of a 12% secured promissory note. Repayment of the note is
secured by a pledge of Laidlaw's interest in the outstanding stock of HRAC.
In connection with the loan, Laidlaw issued the Lender a 2 year warrant to
acquire 1,450,000 shares of its common stock at an exercise price of $0.11
per share, which the Company valued at $222,143. The value of the warrants
was charged to interest expense and a corresponding increase to additional
paid-in capital. In addition, the Lender received a one year option
expiring August 31, 2002 to acquire the Company on the same price per share
terms as any transaction approved by the Board of Directors. The $1,450,000
loan was paid in December, 2001 from the proceeds of the sale of HRAC.

On September 27, 2001, the Company obtained a short term 7% loan of
$400,000 from Lender which was paid in full in October, 2001.

In October, 2001, the Company borrowed securities worth $2,176,937 from
non-related parties. The securities were returned in December 2001. In
connection with these borrowings, the Company paid a commitment fee of
$20,000 and interest at the rate of 8% for the period the securities were
borrowed.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE F - RELATED PARTY TRANSACTIONS

The Company received two loans aggregating $1,850,000 in 2001 from Pacific
USA Holdings Corp. In 2001 the loans were fully paid. Interest on loans
amounted to $44,418 for the year ended December 31, 2001.

In January 1999, the Company, in a joint venture with several individuals
associated with the Company, formed Global Electronic Exchange, Inc.
("GEE") and its broker-dealer subsidiary, Globeshare. GEE is an
internet-based international investment services company, including
operations in securities trading, investment banking, asset management and
real estate. The Company received 8,190,000 shares of GEE common stock in
exchange for expenses paid and services rendered by the Company on its
behalf in the amount of $558,770. This resulted in a 59% ownership in GEE
by the Company. On October 31, 2000, GEE changed it corporate name to GGI.

In connection with closing down of the operations of GGI, holders of shares
of GGI who were not affiliates of Laidlaw were given the opportunity to
exchange their GGI shares for shares of Laidlaw on a one for one basis and
in 2001, holders of 1,126,759 shares accepted the offer. Affiliates or
former affiliates of Laidlaw were given an opportunity to exchange their
GGI shares for shares of Laidlaw on a less favorable basis and 9,620,004
shares were exchanged for 4,500,000 shares of Laidlaw. This exchange
resulted in an ownership increase to 96.07% in GGI by the Company as of
December 31, 2001 and resulted in a charge to operations of $1,271,420.

NOTE G - NET CAPITAL REQUIREMENTS

The Company's broker-dealer subsidiaries are subject to the Securities and
Exchange Commission's Uniform Net Capital Rule (SEC Rule 15c3-1), which
requires the maintenance of minimum net capital and requires that the ratio
of aggregate indebtedness to net capital, both as defined, shall not exceed
15 to 1 for Laidlaw Global Securities. At December 31, 2001 Laidlaw Global
Securities was required to maintain minimum net capital of $106,622 and had
total net capital of $758,722 which was $652,100 in excess of its minimum
requirement.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE H - STOCKHOLDERS' EQUITY

On March 29, 2000, the Company issued 200,000 shares of common stock in
connection with the acquisition of Laidlaw Pacific (Asia) Ltd. The common
stock was valued at $556,400.

Additionally, the Company issued 500,000 shares of its common stock
pursuant to a consulting agreement dated October 30, 2000 for consulting
services relating to potential technology alliances, networking and
software services for GGI and Globeshare for $468,750.

On August 22, 2000, the Board of Directors of the Company decided to allow
the Company to purchase from time to time for the next 12 months up to
500,000 shares of its common stock in the open market as part of a treasury
stock corporate buy-back program. During 2000, the Company repurchased
352,600 shares of its common stock for $257,713.

On September 4, 2001 and December 19, 2001, the Board of Directors of the
Company decided to allow the Company to purchase from time to time for the
next 12 months up to 500,000 and 400,000 shares, respectively, of its
common stock in the open market as part of the treasury stock corporate buy
back program. During 2001, the Company repurchased 779,900 shares of its
common stock for $267,341.

In connection with the sale of Westminster in June, 2001, the Company
purchased into treasury 4,500,000 Laidlaw shares owned by the principals of
Westminster and valued the purchase at $1,890,000.

In connection with the $1,450,000 loan obtained by the Company from Pacific
USA Holdings Corp. on August 31, 2001, the Company issued the Lender a
2-year warrant to acquire 1,450,000 shares of its common stock at an
exercise price of $.11 per share. The Company computed the fair value of
the warrant at $222,143. The value of the warrant was charged to interest
expense with a corresponding increase to additional paid-in capital.

In connection with the closing down of the operations of GGI, holders of
shares of GGI who were not affiliates with Laidlaw were given the
opportunity to exchange their GGI shares for shares of Laidlaw on a one for
one basis. In 2001, holders of 1,126,759 shares accepted the offer. The
exchange resulted in an increase to common stock and additional paid-in
capital of $371,420. Affiliates or former affiliates of Laidlaw were give
the opportunity to exchange their GGI shares for shares of Laidlaw on a
less favorable basis and 9,620,004 shares were exchanges for 4,500,000
shares of Laidlaw. The exchange resulted in an increase to common stock and
additional paid-in capital of $900,000.

In 2001 the Company charged $754,714 to operations in connection with its
stock option plan as compensation expense for repriced options with a
corresponding increase to additional paid-in capital.

NOTE I - CONCENTRATIONS OF CREDIT RISK

The Company's subsidiaries are engaged in various trading and brokerage
activities in which counterparties primarily include broker-dealers, banks,
and other financial institutions. In the event counterparties do not
fulfill their obligations, the Company may be exposed to risk. The risk of
default depends on the creditworthiness of the counterparty or issuer of
the instrument. It is the Company's policy to review, as necessary, the
credit standing of each counterparty.

NOTE J - COMMITMENTS AND CONTINGENCIES

1. Lease Commitments

a. The Company leases office space under noncancelable leases
generally varying from four to nine years, with certain renewal
options.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE J (continued)

At December 31, 2001, the Company's future aggregate minimum
annual rental payments based upon the original term (including
escalation clauses), under all noncancelable leases which have an
initial or remaining term of one year or more, were as follows:

Year ending December 31,

2002 $ 1,053,848
2003 1,053,848
2004 1,082,936
2005 890,524
Thereafter 3,010,608
-----------

7,091,764
Sublease payments (752,498)
-----------

Net lease commitments $ 6,339,266
===========

Rent expense was $1,272,964 and $1,108,089 net of sublease income
of $209,907 and $170,328 for the years ended December 31, 2001
and 2000, respectively.

b. The Company leases computers under long-term leases and has the
option to purchase the computers for a nominal amount at the
termination of the lease.

Future minimum payments for capitalized leases were as follows at
December 31, 2001:

Fiscal year ending December 31,
2002 $383,995
2003 76,186
--------
Total minimum payments 460,181
Less amount representing interest (38,480)
--------
Present value of net minimum
lease payments $421,701
========

Substantially, all of the equipment related to the capitalized
leases were written off in 2001.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE J (continued)

2. Litigation

Galacticomm Technologies, Inc. vs. Laidlaw Global Securities, Inc.

The Company is a defendant in a legal matter involving the underwriting and
initial public offering of Galacticomm Technologies, Inc. ("Galacticomm")
shares. The Company acted as a member of a selling group, pursuant to which
the Company agreed to purchase 200,000 shares of Galacticomm at $5.40 per
share and 200,000 warrants of Galacticomm at $0.09 per warrant.
Additionally, the Company agreed to guarantee the purchase of an additional
20,000 shares and warrants if deemed necessary. Prior to the settlement of
the IPO, the Company had satisfied all its commitments as part of its
agreement with the lead underwriters. Prior to the settlement of the IPO,
the lead underwriters aborted the IPO based upon what they, in their sole
discretion, believed was a declining market in the U.S. and abroad.
Pursuant to the underwriting agreement between Galacticomm and the lead
underwriters, the lead underwriters had the right, in their sole
discretion, to abort the IPO in the event of adverse conditions.
Galacticomm commenced suit against the underwriting group in a Florida
state court seeking damages for breach of the underwriting agreement. The
Company believes that the outcome of this matter would not have a material
effect on the financial position, results of operations or liquidity.

Greek Capital Market Commission vs. Laidlaw Global Corporation, Inc.

The Company has been named, as well as the its subsidiary Laidlaw Global
Securities, in an administrative proceeding involving the Greek Capital
Market Commission ("CMC"). In early 2000, representatives of the Company
were introduced to a representative of Elektra S.A. ("Elektra"), an entity
whose securities are publicly traded in Greece, in order to discuss a
business strategy by which the Company would assist in the sale of a
significant amount of Elektra's shares by certain of its stockholders.
Following meetings with such persons, Elektra announced in the spring of
2000 that its principal shareholders would sell up to 3,000,000 shares of
its stock. On March 28, 2000, Elektra sold two million shares of its stock
to institutional investors through a Greek brokerage firm, Contalexis
Financial Services.

On February 28, 2001, the CMC, an administrative body which reviews
securities issues in Greece, found that Laidlaw Global Securities violated
certain notification requirements to the CMC and Elektra. According to the
CMC's findings, the Company (i) failed to notify the CMC and Elektra of the
March 28, 2000 acquisition of Elektra shares and (ii) failed to notify the
Athens Stock Exchange of the Company's assignment of voting rights and
participation of share capital in Elektra. The Company believes that, since
neither it nor any subsidiary, including the Company, ever owned shares of
Elektra, and for the other reasons set forth below, both of these findings
are without merit and factually inaccurate and will be overturned on
appeal.

Additionally, the CMC found that a representative of the Company falsely
stated to the public that the Company was interested in holding Elektra
shares two days prior to selling such shares. Since the Company never held
shares of Elektra, management believes that such statements were misquoted
by the Greek press. The subsidiary Laidlaw Global Securities and the
Company have been assessed fines and penalties aggregating 1,257,168 Euros
(US$1,119,004).

These fines were levied after reviewing response letters filed by the
Company's Greek counsel. Greek counsel to the Company will be filing
Remedy Petitions before the CMC against the decisions assessing the fines,
which is a form of an administrative proceeding. In the event the Remedy
Petitions are rejected by the CMC, the Parent will file Writs of Annulment
before the Conseil d'Etat, which is the Greek Court having jurisdiction
over such matters. Since neither the Company, nor any of its subsidiaries,
has (i) ever owned shares of Elektra, (ii) ever acted as a principal or
agent for the purchase or sale of shares of Elektra, (iii) acted as a
broker-dealer of securities of Elektra, or (iv) ever stated, publicly or
otherwise, that it, or any of its subsidiaries, did hold, or intended to
hold or own, shares of Elektra, it believes that the findings of the CMC
will be overturned on appeal. The Company's counsel in Greece has advised
that in their opinion, the fines imposed by the CMC are civil fines and
can only be enforced against the assets of the Company in Greece. Further,
they advise that any enforcement of fine in the United States would
require commencing a new action in the United States.

Plural, Inc. vs. Laidlaw Global Corporation, et. al.

In November, 2001, Plural instituted action in the New York State Supreme
Court for services rendered pursuant to a computer consulting agreement.
Plural claims approximately $700,000 is due them pursuant to the agreement.
The Company claims the services did not meet the terms of the agreement and
plan to counterclaim for monies previously paid to Plural.

The Company is subject to various other legal actions and claims arising
out of the conduct of its business. Management of the Company, after
consultation with outside legal counsel, believes that the resolution of
these proceedings will not result in any material adverse effects on the
Company's financial position. In the opinion of management of the Company,
amounts accrued in connection with these matters are adequate.

3. Employment Agreements

The Company maintains agreements with key employees who also act as Chief
Executive Officer and Chief Operating Officer(the "Executives"), subject to
the following terms and conditions:

In July of 2001, the Company entered into a 3 year employment agreement
with the Chief Executive Officer (CEO). The agreement provided for an
annual base salary of $165,000 (increasing to $200,000 if the Company
successfully complete a debt or equity funding of a least $3,000,000). In
addition to the base salary, the CEO shall receive a minimum annual
performance bonus of the greater of $25,000 or 3% the Company's net income.
The CEO shall also receive a 40% payout on all commissions generated from
his customer accounts. The CEO is eligible to participate in all of the
Company's employee benefit plans. During the term of the employment
agreement the CEO shall be reimbursed for his reasonable business expenses.
The CEO has agreed not to compete with the Company during the term of
employment. The agreement includes customary provisions entitling the
Company to terminate the executive's employment for cause or upon
incapacitation or extended disability of the executive. The employment
agreement also includes customary provisions to protect the Company's
confidential information and protect the Company's ownership of among,
other things, customer lists, products and pricing and financing
techniques.

In July of 2001, the Company entered into a 3 year employment agreement
with the Chief Operating Officer (COO). The agreement provided for an
annual base salary of $125,000 (increasing to $150,000 if the Company
successfully completes a debt or equity funding of a least $3,000,000). In
addition to the base salary, the COO shall receive a minimum annual
performance bonus of the greater of $25,000 or 10% of the Company's net
income. The COO is eligible to participate in all of the Company's employee
benefit plans. During the term of the employment agreement the COO shall be
reimbursed for his reasonable business expenses. The COO has agreed not to
compete with the Company during the term of employment. The agreement
includes customary provisions entitling the Company to terminate the
executive's employment for cause or upon incapacitation or extended
disability of the executive. The employment agreement also includes
customary provisions to protect the Company's confidential information and,
among other things, customer lists, products and pricing and financing
techniques.

In addition to the above employment contracts, the Company maintains
standard employment agreements with 2 other officers.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE K - TRANSACTIONS WITH CLEARING BROKER AND CUSTOMERS

Laidlaw Global Securities, Inc. ("LGS") conducts business with two separate
clearing brokers, one of which executes and settles all non-U.S. equity
trades for the LGS, on a fully disclosed basis, on behalf of its customers
and for its own proprietary accounts pursuant to a clearance agreement.
LGS earns commissions as an introducing broker for the transactions of its
customers.

In the normal course of business, LGS customer activities involve the
execution of various customer securities transactions. These activities may
expose LGS to off-balance-sheet risk in the event the customer or other
broker is unable to fulfill its contracted obligations and LGS has to
purchase or sell the financial instrument underlying the contract at a
loss.

LGS customer securities activities are transacted on either a cash or
margin basis. In margin transactions, the clearing brokers extend credit to
LGS customers, subject to various regulatory margin requirements,
collateralized by cash and securities in the customers' accounts. However,
LGS is required to contact the customer and to either obtain additional
collateral or to sell the customer's position if such collateral is not
forthcoming. LGS is responsible for any losses on such margin loans, and
has agreed to indemnify its clearing brokers for losses that the clearing
brokers may sustain from the customer accounts introduced by LGS.

LGS seeks to control the risks associated with these activities by
reviewing the credit standing of each customer and counterparty with which
it does business. Further, working with the clearing broker, it requires
customers to maintain collateral in compliance with various regulatory and
internal guidelines. Required margin levels are monitored daily pursuant to
such guidelines. Customers are requested deposit additional collateral or
reduce security positions when necessary. LGS exposure to these risks
becomes magnified in volatile markets.

In addition, LGS has sold securities that it does not currently own and
will therefore be obligated to purchase such securities at a future date.
LGS has recorded these obligations in the financial statements at the
December 31, 2001 market values of the related securities, and will incur a
loss if the market values of the securities increase subsequent to December
31, 2001.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE L - INCOME TAXES

As of December 31, 2001, the Company has net operating loss carryforwards
for Federal income tax purposes available to offset future taxable income.
Pursuant to Section 382 of the Internal Revenue Code utilization of these
carryforwards may become limited if certain ownership changes occur. The
net operating loss carryforward losses are scheduled to expire as follows:

Year ending December 31,
2014 through 2022 $18,149,000
==========

The Company is not certain that it will realize the benefit of the net
operating loss carryforwards and has recorded a valuation allowance for the
full amount of the deferred tax asset. The Company continually reviews the
adequacy of the valuation allowance and recognizes those benefits only as
the Company's assessment indicates that it is more likely than not that
future tax benefits will be realized.

The components of the net deferred tax asset as of December 31, 2001
consist of the following:

December 31,
------------
2001
----------
Federal, net operating loss $5,082,000
State and local, net operating loss 3,321,000
----------

8,403,000
Valuation allowance 8,403,000
----------

Recorded net tax asset $ --
==========

The valuation allowance increased by $4,077,000 for the year ended December 31,
2001.

The difference between the statutory federal income benefit rate on the
Company's loss before income tax benefit for the years ended December 31, 2001
and 2000 are summarized as follows:

2001 2000
---- ----
Statutory federal income tax rate (34%) (34%)
State and local income tax rate,
net of federal benefit (12%) (12%)
Non-deductible expenses 2% 4%
Change in valuation allowance 44% 42%
---- ----
-- --
==== ====

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE M - TAX DEFERRED SAVINGS PLAN

The Company maintains a defined contribution 401(k) plan which covers
substantially all employees who are employed by the Company and its
affiliates who have attained the age of 21. The Company has appointed
individual trustees under the Plan and the assets are held with an outside
agent. Additionally, the employer reserves the right to terminate the Plan,
in whole or in part, at any time.

The Plan allows each participant to contribute up to 15% of the
participant's annual compensation to the Plan. Employee contributions are
vested immediately. The Company, at the discretion of management, can elect
to match up to 50% of each participant's salary deferrals to the extent
such participant's contribution does not exceed 6% of compensation. Vesting
in the Company match occurs ratably over a period of five-years. During
2001 and 2000, the Company contributed approximately $96,624 and $81,823,
respectively, to the Plan.

NOTE N - INDUSTRY SEGMENTS

In 2001 and prior years, the Company operated in two principal segments of
the financial services industry: Asset Management and Broker-Dealer
activities. Corporate services consist of general and administrative
services that are provided to the segments from a centralized location and
are included in corporate and other.

Asset Management and Investment: activities include raising and investing
capital and providing financial advice to companies and individuals
throughout the United States and abroad. Through this group the company
provides client advisory services and pursues direct investment in a
variety of areas.

Broker-Dealer: Activities include underwriting public offerings of
securities, arranging private placements and providing client advisory
services, trading, and brokerage services including conducting research on,
originating and distributing both foreign and domestic equity and fixed
income securities on a commission basis to both institutional and
individual investors throughout the United States and abroad and for their
own proprietary trading accounts.

Laidlaw Global Securities, the Company's majority owned subsidiary, is
substantially engaged in traditional trading, brokerage and investment
banking services.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE N (continued)

Foreign Operations and Major Customers: The Company had no significant
assets or revenues (either external or intercompany) from operations in
foreign countries for each of the two years in the period ended December
31, 2001 and 2000 other than commission and Investment Banking revenues
from the activities of Laidlaw Global Securities on behalf of foreign and
U.S. customers in foreign markets, amounting to $4,167 and $2,290,834
respectively, which approximates .02% and 10% of external revenue,
respectively. Additionally, the Company had no significant individual
customers (domestic or foreign) as of December 31, 2001, or for each of the
two years in the period ended December 31, 2001.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE N (continued)

The following table sets forth the net revenues of these industry segments
of the Company's business.

Year ended December 31,
--------------------------
2001 2000
----------- -----------

Revenue from external customers
Asset management $ 3,997,273 $ 4,462,988
Broker-dealer 11,694,941 18,498,549
Corporate and other 800,971 1,105,652
----------- -----------

Total external revenue $16,493,185 $24,067,189
=========== ===========

Inter-segment revenue
Broker-dealer $ 197,781 $ 200,000
---------- ----------

Total inter-segment revenue $ 197,781 $ 200,000
=========== ===========

Interest revenue
Asset management $ 30,686 $ --
Broker-dealer 201,490 660,634
Corporate and other 62,976 144,967
----------- -----------

Total interest revenue $ 295,152 $ 805,601
=========== ===========

Interest expense
Asset management $ -- $ 15,357
Broker-dealer 220,491 141,196
Corporate and other 532,749 199,264
----------- -----------

Total interest expense $ 753,240 $ 355,817
=========== ===========

Depreciation and amortization expense
Asset management $ 58,997 $ 45,320
Broker-dealer 105,153 82,656
Corporate and other 2,040,936 1,552,690
----------- -----------

Total depreciation and amortization expense $ 2,205,086 $ 1,680,666
=========== ===========

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE N (continued)

Year ended December 31,
------------------------------
2001 2000
------------ ------------

Income Tax Expense (benefit)
Asset management $ -- $ 418,905
Broker-dealer -- 800,000
Corporate and other -- (273,929)
------------ ------------

Total income tax expense $ -- $ 944,976
============ ============

Net Loss
Asset management $ 303,733 $ 468,213
Broker-dealer (6,639,678) (1,459,744)
Corporate and other (4,854,255) (4,721,025)
------------ ------------

Total net loss $(11,190,200) $ (5,712,556)
============ ============

Total Assets
Asset management $ -- $ 3,533,562
Broker-dealer 3,079,411 9,895,950
Corporate and other 3,566,707 9,341,065
----------- -----------

Total assets $ 6,646,118 $ 22,770,577
============ ============

Addition to Long-Lived Assets
Asset management $ -- $ 127,991
Broker-dealer 49,861 73,133
Corporate and other 21,573 3,598,867
------------ ------------

Total addition to long-lived assets $ 71,434 $ 3,799,991
============ ============

NOTE O - STOCK OPTIONS

During 1999, the Company established a stock option plan incorporated all
outstanding options previously granted under the prior Laidlaw Holdings
stock option plans. The plan allows the Company to grant options to
employees of the Company, its subsidiaries and affiliates, for up to
4,350,000 shares of common stock at December 31, 2001. Options currently
outstanding are exercisable either immediately or up to five years from the
grant date and expire five years after the grant date.

In October 2001, the Company reduced the exercise price on options to
purchase 2,657,238 common shares from prices ranging from $0.75 to $8.00
per share to $0.25 per share. In accordance with APB 25, these are now
accounted for as variable options and the Company recorded a charge of
$754,714 in December 2001 representing the intrinsic value of the options
at December 31, 2001.

The Company applies APB 25 in accounting for stock options and,
accordingly, recognizes compensation expense for the difference between the
fair value of the underlying common stock and the exercise price of the
option at the date of grant. The effect of applying Statement of Financial
Accounting Standards No. 123 (SFAS No. 123) on pro forma net loss is not
necessarily representative of the effects on reported net income or loss
for future years due to, among other things, (i) the vesting period of the
stock options and (ii) the fair value of additional stock options in future
years. Had compensation cost for the Company's stock option plans been
determined based upon the fair value of the options at the grant date of
awards under the plans consistent with the methodology prescribed under
SFAS No. 123, the Company's net loss for each of the years ended December
31, 2001 and 2000 would have been approximately $11,972,000 or $0.46 per
share and $6,814,445 or $0.25 per share, respectively. The weighted average
fair value of the options granted are estimated at $0.35 and $1.46 per
share respectively, for the years ended December 31, 2001 and 2000 on the
date of grant using the Black-Scholes option-pricing model with the
following weighted average assumptions; dividend yield 0%, volatility of
135% and 98%, risk-free interest rate of 4.77% for 2001 and 6.30% for 2000,
and expected life of three years.

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE O (continued)

A summary of the option activity for years ended December 31, 2001 and 2000
is as follows:

Year ended December 31,
------------------------------------------------
2001 2000
----------------------- -----------------------
Weighted- Weighted-
average average
exercise exercise
Shares price Shares price
------ ---------- --------- ---------

Balance, beginning of year 4,066,663 $1.46 3,027,913 $1.44

Granted(1) 4,027,238 0.28 1,515,000 1.30

Exercised (122,750) 0.25 (144,000) 0.83

Forfeited (1,679,380) 1.46 (332,250) 0.98

Cancelled(1) (2,657,238) 1.27 -- --

Balance, end of year 3,634,533 0.25 4,066,663 1.46

(1) Includes options to purchase 2,657,238 common shares where the exercise
price was reduced to $0.25.

The status of outstanding stock options is summarized as of December 31,
2001 as follows:

Weighted-
average
remaining
Options contractual Options
Exercise price outstanding life (years) exercisable
-------------- ----------- -------------- ------------

$ .25 3,634,533 3.21 3,270,325

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE P - EARNINGS PER COMMON SHARE

Earnings per common share are computed in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings Per Share." Basic
earnings per share excludes the dilutive effects of options and convertible
securities and is calculated by dividing income available to common
shareholders by the weighted-average number of common shares outstanding
for the period. Diluted earnings per share reflect all potentially dilutive
securities, as well as the related effect on net income. Set forth below is
the reconciliation of net income (loss) applicable to common shares and
weighted-average common and common equivalent shares of the basic and
diluted earnings per common share computations:

Year ended December 31,
--------------------------------
2001 2000
------------ ------------

Numerator
Net (loss) applicable to common shares
for basic and diluted earnings per share $(11,190,200) $ (5,712,556)
============ ============

Denominator
Weighted-average common shares for basic
and diluted earnings per share 26,305,829 26,966,363
============ ============
Basic and diluted
earnings per common share $ (.43) $ (0.21)
============ ============

Laidlaw Global Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2001 and 2000

NOTE P (continued)

Because the Company reported a net loss during the years ended 2001 and
2000, the calculation of diluted earnings per share does not include
convertible securities, options and warrants, as they are antidilutive and
would result in a reduction of the net loss per share. If the Company had
reported net income, there would have been additional shares as of December
31,2001 and 2000 included in the calculation of diluted earnings per share.

NOTE Q - PRIOR PERIOD ADJUSTMENT

In January 1999, the Company, in a joint venture with several individuals
associated with the Company, formed Globeshare Group, Inc. (formerly Globe
Electronic Exchange, Inc.) ("GGI") and its broker-dealer subsidiary,
Globeshare. The Company received 16,380,000 shares of GGI common stock in
exchange for expenses paid and services rendered by the Company on its
behalf in the amount of $558,770, representing 59% of GGI's outstanding
common stock. Other investors received 11,416,700 shares of GGI's common
stock in exchange for $5,848,000. As the offering price per share to other
investors exceeded the Company's carrying value per share, the Company
should have increased its carrying value in GGI by approximately
$2,960,000, with a corresponding increase in additional paid-in capital.
Additional paid-in capital has been adjusted as of January 1, 2000 to
reflect such increase. There is no effect on the Company's reported net
income (loss) and net income (loss) per share in 1999 or 2000, as a result
of this restatement.

NOTE R - SUBSEQUENT EVENT

Laidlaw International S.A. was developed into a fully licensed French
broker-dealer with a license issued in April, 2001 that allows it to do
business in all of the European countries. However, after the September 11,
2001 events, the European market, deteriorated. In February, 2002, the
French Commission Bancaire required a capital increase of 2 million Euros
in order to maintain LI in compliance with French Net Capital Regulations.
The deadline imposed by the French regulatory authority being very short,
Laidlaw Global Corporation was unable to access additional capital prior to
the nomination of an Administrator by the Commission Bancaire.

Effective April 11, 2002, the French Administrator committed to a process
of liquidation. Accordingly, the Company recognized a loss as of December
31, 2001 from the write-off of all its investment in the French subsidiary
amounting to $634,562. Additional liability resulting from this
liquidation, if any, cannot presently be determined.

Laidlaw intends to maintain its European business directly from its U.S.
operations and focus almost exclusively on Foreign investors in US
securities and investments rather than the heavy infrastructure required to
execute European related business.

On March 5, 2002, Grant Thornton LLP ("Grant") notified the Laidlaw Board
of Directors that pursuant to Section 10A of the Exchange Act of 1934 (the
"Grant Report"), in their belief, an illegal act or acts may have occurred
at Laidlaw during 2001 with respect to the repricing of stock options.
Grant alleged in part that neither management nor the Board of Directors
had taken sufficient steps to determine whether an illegal act had occurred
within the meaning of Section 10A of the Exchange Act of 1934 and,
accordingly, Grant notified the Securities and Exchange Commission (SEC).
The Company has been notified that the SEC has commenced an informal
investigation into this matter.