GLOBAL TELEMEDIA INTERNATIONAL INC, 10KSB/A, 2000-06-30

GLOBAL TELEMEDIA INTERNATIONAL INC
10KSB/A, 2000-06-30
COMMUNICATIONS SERVICES, NEC

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

10KSB
AMENDMENT No. 1

This report includes a total of 58 pages

(Mark One)

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

For the fiscal year ended December 31, 1999
OR

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

For the transition period from to
------------ -------------------

Commission file number: 0-15818

GLOBAL TELEMEDIA INTERNATIONAL, INC.
(Name of small business issuer in its charter)

Delaware 64-0708107
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

4675 MacArthur Court, Ste. 710, Newport Beach CA. 92660
--------------------------------------------------------------------------------
Address of principal executive offices,

3490 Piedmont Road, Suite 600, Atlanta, Georgia 30305
--------------------------------------------------------------------------------
(Former address of principal executive offices)

949-253-9588
--------------------------------------------------------------------------------
(Issuer's telephone number)

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

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

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

Common stock, $0.004 par value per share
(Title of Class)

Check whether the issuer: (i) 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 (ii) has been
subject to such filing requirements for the past 90 days. Yes X No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained to the best of 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 issuers revenues for its most
recent fiscal year : $594,021

<PAGE>
The number of shares outstanding of the issuer's common stock as of April 13th
2000, was 74,939,500 shares. The aggregate market value of the common stock
(43,883,473 shares) held by non-affiliates, based on the average of the bid and
asked prices ($0.20) of the common stock as of December 31, 1999 was $8,776,695.
Documents incorporated by reference:

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

FORWARD LOOKING STATEMENTS
----------------------------

THIS ANNUAL REPORT ON FORM 10-KSB (THE "REPORT") MAY BE DEEMED TO CONTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 (THE "REFORM ACT"). FORWARD-LOOKING STATEMENTS IN
THIS REPORT OR HEREAFTER INCLUDED IN OTHER PUBLICLY AVAILABLE DOCUMENTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"), REPORTS TO THE
COMPANY'S STOCKHOLDERS AND OTHER PUBLICLY AVAILABLE STATEMENTS ISSUED OR
RELEASED BY THE COMPANY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS WHICH COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE (FINANCIAL
OR OPERATING) OR ACHIEVEMENTS TO DIFFER FROM THE FUTURE RESULTS, PERFORMANCE
(FINANCIAL OR OPERATING) OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. SUCH FUTURE RESULTS ARE BASED UPON MANAGEMENT'S
BEST ESTIMATES BASED UPON CURRENT CONDITIONS AND THE MOST RECENT RESULTS OF
OPERATIONS. THESE RISKS INCLUDE, BUT ARE NOT LIMITED TO, THE RISKS SET FORTH
HEREIN, EACH OF WHICH COULD ADVERSELY AFFECT THE COMPANY'S BUSINESS AND THE
ACCURACY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

GOVERNMENT REGULATION
----------------------

The Company originally intended to provide telecommunications services
subject to the rules and regulation of both state and federal regulatory
agencies. Interstate telecommunications services are governed by the rules and
regulations of the FCC, while intrastate telecommunications services (or
services provided within a state's geographic boundaries) are governed by the
particular state regulatory authorities having jurisdiction within that
state. During the last quarter of 1995 and the first three quarters of 1996,
the Company applied for and received authority to act as a Carrier for domestic
and international telecommunications.

SPECIFIC LICENSING REQUIREMENTS
---------------------------------

The terms and conditions of the Company's telecommunications services are
subject to government regulation. Federal laws and FCC regulations generally
apply to interstate telecommunications, while intrastate services are regulated
by the relevant state authorities. Federal Regulation. The Company was
classified by the FCC as a non-dominant carrier, and therefore is subject to
minimal federal regulation. Since executing a carrier agreement with
WorldXchange Inc. the company no longer needs to comply with regulations of any
state or regulatory body. The company is on a profit sharing arrangement only
with its carrier partner.

COMPETITION
-----------

The telecommunications industry is characterized by strong competition from
companies of all sizes and capacities for technological and marketing
innovation. As such, the Company acquired subsidiaries and made strategic
alliances with partners who have products and services in the e-commerce field,
possess innovative patents and patents pending and who have a world-wide
consumer base.

<PAGE>
The company has identified the English speaking countries in the Pacific Rim who
have a combined population of around 400 million people and are under-serviced
by the major telecommunications and e-commerce companies. These countries, are
called the BIMP-EAGA countries, consists of Brunei, Indonesia, Philippines,
Malaysia and Australia. These areas experience significantly higher calling
costs and are in the midst of a technological revolution. The Company, intends
to offer the public a unique combination of communications based services.
This strategy should allow BentleyTel.com to provide low-cost
telecommunications, e-commerce Business-to-Business, and direct consumer
products to BIMP-EAGA Pacific Rim region.

KEY PERSONNEL.
---------------

The Company is dependent upon the skills of its new management team. Every
subsidiary has an experienced team of executives with many years in their
respective industries. The key members are Presidents or Executive Vice
presidents of the various subsidiaries. As such the key members have either
formed or built-up the business or are long time senior employees with stock in
the Company and therefore should demonstrate loyalty in building up and
expanding the infrastructure and Telecom industry in their country. The Company
will buy key-man life insurance for senior management and key employees of the
Company. See "Business - the Company's Management Team" and "Management."

LIMITED MARKET FOR STOCK
---------------------------

The market price for the common stock has grown recently and may continue
to be volatile depending on a number of factors, including new business
development, industry dynamics, news announcements, significant international
revenue, commencement of housing construction and changes or improvements in the
general economy and the roll out of new E-commerce products and enhanced
services. The stock may continue to exhibit volatility and no assurance can be
given that the price per share will continue to increase.

DISCLOSURE RELATING TO LOW-PRICED STOCK
-------------------------------------------

The Company's common stock is currently listed for trading in the over-
the-counter market on the NASD Electronic Bulletin board which is generally
considered to be a less efficient market than markets such as NASDAQ, AMEX or
other national exchanges. The Company's securities are subject to the "penny
stock rules" adopted pursuant to Section 15 (g) of the Exchange Act. The penny
stock rules apply to non-NASDAQ companies whose common stock trades at less
than $5.00 per share or which have tangible net worth of less than $5,000,000
($2,000,000 if the Company has been operating for three or more years). Such
rules require, among other things, that brokers who trade "penny stock" to
persons other than "established customers" complete certain documentation,
make suitability inquiries of investors and provide investors with certain
information concerning trading in the security, including a risk disclosure
document and quote information under certain circumstances. In addition, NASDAQ
has announced its intentions to make its trading rules for "penny stocks" even
more stringent. Many brokers have decided not to trade "penny stock" because
of the requirements of the penny stock rules and, as a result, the number of
broker-dealers willing to act as market makers in such securities is limited
and may decline further due to the pending additional NASDAQ rules.

The new management's strategy is to re-list on the NASDAQ or another major
exchange. Subsequent to the close of the 1999 financial year the company began
to realize the effects of its acquisitions and due to a rise of over 2000% in
its stock, the Board of Directors decided not to reverse split its stock in
order to qualify in this area. The Company believes its future earnings and
new business opportunities have added significant shareholder value to the
stock.

<PAGE>
PART I

ITEM 1. DESCRIPTION OF BUSINESS.

HISTORY OF THE COMPANY
-------------------------

The Company was incorporated in Florida on December 31, 1984, under the
name Phoenix Hi-Tech, Inc. The Company completed an initial public offering of
its equity securities on May 23, 1986. On October 22, 1994, the Company changed
its name to Global TeleMedia International, Inc. In September 1997, the
Company's shareholders approved the reincorporating of the Company in Delaware.

In September, 1993, the Company acquired all of the equity securities of
Global Wats One, Inc. and TeleFriend, Inc. (both collectively, "Global") of
which Roderick A. McClain, the Company's Chief Executive Officer and its
Chairman of the Board of Directors and Geoffrey F. McClain, a director of the
Company, were the principal shareholders. Roderick and Geoffrey McClain are
brothers. See "Certain Relationships and Related Transactions."

In October, 1994, the Company licensed certain assets of the nutritional
division of the Company (its former business) and sold the Company's nutritional
marketing Company, Market-share International, a wholly-owned subsidiary to L&M
Group, L.C. ("L&M"), an unaffiliated third party. On January 31, 1995, the
Company entered into a sales and license agreement with L&M pursuant to which
L&M acquired the rights to the Company's nutritional product line for royalties
from sales of the nutritional products based on a percentage of gross sales. In
1998, the Company received no royalties; in 1997, the Company received a total
of approximately $35,000 in royalties, compared to a total of approximately
$115,000 in royalties, including certain guaranteed minimum amounts, received in
1996. In the first quarter of 1998, the Company entered into an agreement under
which an unaffiliated third party acquired all of the Company's interest in the
nutritional products. Since the culmination of these transactions, the Company
has devoted all of its resources to its telecommunications business.

The Company also funded seed money for UltraPulse Communications for the
development of "Broadband Spread Spectrum" wireless technology. On December 17,
1998, the principals of CyberAir Communications Inc., introduced the Company to
the principals of Bentley House Furniture Company Inc. (BHFC). BHFC entered
into a share exchange dialogue with the Company predicated on the contractual
agreement with CyberAir to act as its primary marketing arm (see 10QSB 9-30-98
and 10KSB 15/4/99) and a pending agreement to acquire UltraPulse Communications
Inc., which had developed a broadband Spread spectrum technology. The Company
had invested development capital in both CyberAir and UltraPulse to secure these
agreements.

On April 2, 1999, the GTMI, Inc. acquired Bentley House Furniture
Company,Inc. a Philippine Corporation (BHFC). The merger was accounted for as a
reverse acquisition whereby BHFC was treated as the accounting acquirer and
GTMI as the accounting acquiree. The accompanying consolidated financial
statements include the historical results of BHFC and the consolidated results
of GTMI as of the date of merger

BHFC allows the Company to have a manufacturing base, whereby furniture and
wood products can be manufactured for the housing and resort industries.
Management's plans are to reinvest any profits from this line of business into
the telecommunications arena.

THE BUSINESS PLAN
-------------------

The Company's prior Business Plan (the "Business Plan") for a nationwide
telecommunications business failed due to problems associated with its
switching platform and the lack of sufficient capital to implement the
Business Plan. The Business Plan required the Company to direct marketing and
sales efforts to its Carrier Services Businesses. Compliance with the Business
Plan required the Company to obtain significant financing, which the Company was
unable to procure on favorable terms. Due to insufficient resources and an
untenable operation plan, management has since abandoned the Business Plan.

Under New Management the Company expended considerable effort in the
investigation of new technologies that would afford the Company an advantage in
the marketplace. Management believes that these new technologies will play an
important part in achieving and retaining market share. Accordingly, management
has formulated a Business Plan (the "Plan") that incorporates both new
technology and the manufacturing base of BHFC.

In building upon BHFC's manufacturing base, the Company can profit from
existing BHFC contracts. BHFC has completed a contract to manufacture furniture
and furnishings for the Karamunsing Hotel in the resort city of KotaKinabalu,
Malaysia. In addition, BHFC is provisionally awarded a contract to build the
EcoTech Hotel in Sydney, Australia.The contract for the EchoTech Hotel project
is delayed due to current Olympic games 2000 construction, but the Company
expects to start the contract in the 3rd quarter of 2000.

The Plan also incorporates BHFC's 25-year contract to construct one million
government employee houses. A Canadian/Philippine "AAA" rated Rapid-Built
Modular housing builder will use a patented computer designed technology to
construct the houses. As part of the Plan, the Company has signed a thirty-one
million dollar contract with Integrated Philcan, Inc., a subsidiary of HRS Steel
in Canada. Integrated Philcan has opened offices in Makati, Philippines and has
confirmed that the Canadian Government through CIDA as approved $288,000 for
initial training of the assembly workers. Construction should commence in
second quarter 2000. The contract is fully guaranteed by the Philippine
National Housing Authority and calls for the Company to be the Exclusive
provider of local and long distance telephone, cable TV and Internet services to
the newly constructed one million government homes.

BHFC is located in the "Free Trade Zone" in Mindanao's largest city,
Davao, which is part of the BIMP-EAGA (AFTA, Asian Free Trade Agreement) between
Brunei, Indonesia, Malaysia, the Philippines and Australia. Similar to the
NAFTA, BIMP-EAGA is located in the Pacific Rim serves a combined population of
over 400 million mostly English speaking people.

<PAGE>
The BHFC factory is believed by management to be one of the largest and
most modern furniture factories in the Philippines. BHFC equipment includes
BACCI Italian shaping machines, high frequency microwave wood bending machines,
Italian automated heated spray booths and other specialized machinery. The
BHFC factory has a certified output capacity of 10,000 finished pieces per
month. BHFC utilizes mahogany, teak and other hardwood timber from
plantations controlled by BHFC to supply hotels and resorts under construction
with timber and interior furniture.

GTMI has entered into a contract with re-known architect Paul Thoryk under which
GTMI through its subsidiary BHFC will create an exclusive line of
furniture for hotels and exclusive residences which Thoryk is designing. Thoryk
has contracted to deliver $75 million in revenues over a 7 year period. In
exchange for the contracts, Thoryk will receive 5% of the shareholding in GTMI,
his shareholding will be earned proportionate to the contracts he delivers. BHFC
has already commenced manufacturing samples for hotels. GTMI will also bid to
supply communications and services to the same hotels that BHFC outfits.

The construction of housing and the exclusive supply of telephone, cable
and Internet services to newly constructed homes, links the core-manufacturing
platform of BHFC with the technology available from GTMI. The income
stream from these existing businesses is expected to generate profits, which
will be re-invested in the telecom arena, reducing the need for further
outside financing.

As provided by the Agreement, 100% of BHFC stock was delivered into escrow
on March 20, 1999. Shares of GTMI stock were to be exchanged for the BHFC stock
pending the occurrence of certain conditions precedent, including the filing
with the Securities and Exchange Commission of the Company's 1998 Annual Report
on Form 10-KSB and its Form 10-QSB for the quarter ended March 31, 1999. Since
then, new management has followed its debt restructuring schedule and reduced
the Company's debt by resolving a significant number of the disputes. The
Company anticipates resolution of the remaining disputes by the end of year
2000.

BUSINESS COMBINATIONS
----------------------

New management, having spent considerable funds and effort in the
investigation of new technologies, concluded that the future of the Company lies
in e-commerce web-hosted products, e-music, unified messaging and other enhanced
web-based services. Management is developing a proprietary Smart-e-Card that
will give corporate clients and consumers direct access to enhanced
technological services and provide the Company with a strategic advantage in the
marketplace.

Management believes that these new technologies will play an important
role in achieving and retaining market share. The Company's new management
has decided that it will review available wireless technologies carefully.
Prior management had invested exploratory funds in new technology concerning
wireless research. However, due to insufficient funds to continue investment in
exploratory research, current management is re-evaluating committed funds
required to become a "Carrier's Carrier." Instead, current management considers
owning software patents, proprietary SmartCard products and e-commerce products
with strategic alliances with web design and unified messaging companies would
bring the Company significant recurring revenues and global market share in the
near-term.

On April 2, 1999, the Company, via a share exchange, and pending the
occurrence of certain conditions precedent, acquired 100% of BHFC in
exchange for 29,595,139 common shares of GTMI and 4,000 shares of Series "A"
GTMI Preferred Shares (Series "A" Preferred Shares are convertible at 208,274
shares of GTMI common stock per each preferred share).

To clearly identify, create and fund the distinct revenue streams and
cultivate specialized management on the telecom side, the Company acquired the
majority interest in a Nevada corporation named BentleyTel.com, Inc.
BentleyTel.com, holds proprietary software products and enhanced services, which
will be deployed in the Pacific Rim, Europe, China, Japan and North America.

<PAGE>
During the 4th quarter of 1999, BentleyTel.com (USA) acquired three
companies: Octa4 Pty. Ltd. Located in Darwin, Australia, 3G Communications,
Inc. located in Davao, Philippines and DynaSem Communications Sdn. Bhd.
located in Kuching, Malaysia. The acquisitions have provided the Company with
income from long-distance telecommunications, e-commence business, ISP services
and technology training. In the future, it is anticipated that the acquisitions
will provide a platform for the sale of VOIP continental and international
calling cards.

BENTLEYTEL.COM, INC., GROUP OF COMPANIES-DESCRIPTION
--------------------------------------------------------

The BentleyTel.com Group of Companies (www.bentleytel.com)now includes:
-------------------

a) Octa4 Pty. Ltd. is an Australian ISP and has the only private National
Fiber Optic Ericsson Tigris ISP, VPN, VoIP capable network connecting every
state of Australia. Established in 1991, Octa4, Headed by Felino Molina, former
University Physics Lecturer, offers VPN, secure Virtual Private Networks to
businesses, and ISP to 4,000 + members as well as offering ISP, virtual ISP, VPN
(Virtual Private Networks) and e-commerce to every Australian state, the Company
in planning to enable its VoIP services in mid 2000. Octa4, developed a
Real-Time Credit card clearing platform, which is in use by the largest banks in
Australia for almost one year. Its clients account for almost 50% of
Australia's e-commerce. Octa4, located on the web at www.BentleyTel.com has
also developed the secure "Centrebet" an Internet international web hosted
betting system, which can be viewed at www.centrebet.com. In November 1999, as
a member of a consortium with COMPAQ, NEC,CABLE & WIRELESS and OPTUS,
BentleyTel.com (Octa4) was successful in winning a 5 year $110 million
Australian Government. BentleyTel.com will provide the VPN,(Virtual Private
Network)and Cable & Wireless and Optus will provide LAN/WAN systems. BentleyTel
has developed secure software to enable Government employees to access
Government files from remote locations. In June 1 2000 BentleyTel took over the
dialup and Internet hosting for the Australian Northern Territory Government.
The five year contract should bring in revenue of $100,000 per month and ramp up
significantly as government workers come on line. This contract is expected to
double the BentleyTel ISP client base.

b)3G Communications, Inc., located in Davao, Philippines. 3G has operated
since 1995 and is headed by Socrates Palabyab, who has been the key figure in
roll out programs for the major Philipine telecoms. 3G owns and operates 56
mobile satellite long distance tele-centers. When 3G was acquired it had 18
sites, now as BentleyTel.com (Phils) it has deployed 56 satellite tele-centers
and Kiosks in Mindanao. 3G-BentleyTel.com Phils is currently nine (9) months
ahead of schedule, completing 70% of the year's roll-out in the first quarter of
2000. 3G has partnerships or strategic alliances with Globe, Digital, Philcom,
Philtel and PLDT. 3G now is the dominant telecom provider to 56 towns with a
combined population of aprox.1.5 million, 3G also offers enhanced services such
as e-mail, telegram, fax and other B2B and B2C products.

c) DynaSem Communications, Inc., ("DynaSem") located in the city of
Kuching, Malaysia, and on the world-wide web at www.mdc.com.my, is a computer
sales and technology training company. Headed by Dr. Morni Kambri,
BentleyTel.com Malaysia will assist with technology transfers between the
BentleyTel.com companies and to train BentleyTel.com personnel in VOIP, ISP,
secure data transfer and e-commerce. It is anticipated that the acquisition of
DynaSem will facilitate the Company's entry into the Malaysian Multi-media Super
Corridor. (MSC). The MSC is building a 20 mile long 1 mile wide 2-10 gig per
second fiber optic technology development corridor. The chairman of the
Committee is Bill Gates and over 320 companies including Microsoft, NEC,
Netscape, Siemans, Sun MicroSystems, Oracle and many more are already
participating in the MSC. BentleyTel is committed to interacting with those
companies. BentleyTel.com Malaysia is associated with the Tun Abdul Razak
University which has 12 campuses.

The group of companies now comprising BentleyTel.com have all maintained
a 100% growth rate in recent years. It is anticipated that the transfer of
technology and networking between the companies will significantly increase the
Company's earnings over time.

On October 27, 1999, BentleyTel.com completed the share exchanges with the
above mentioned companies. Pursuant to the share exchanges, BentleyTel.com
agreed to provide capital, as required to each of the subsidiaries to support
their business development and operations.

<PAGE>
Given the expected growth and continued need for capital, BentleyTel.com
intends to conduct an initial public offering of BentleyTel.com stock by late
2000.

OPERATIONS, CONTRACTS AND PROJECTS.
-----------------------------------------------

CONSTRUCTION CONTRACTS:
-----------------------

BHFC maintains existing contracts, including joint venture contracts for
construction of Philippine government employee homes. The contracts have been
executed on behalf of the Philippine National Police, the Armed Forces of the
Philippines, the Department of Interior of the Philippines and several local
Philippine government arms. Subdivisions are presently delineated and nearly
all necessary permits needed to commence construction have been secured. BHFC
had anticipated construction to begin during the 4th quarter of 1999, but due to
insufficient funds, construction has been delayed. BHFC expects sufficient
funds in the near future to support site development in preparation for
construction pursuant to the contracts.

Construction contracts, pursuant to the development of the Philippine
employee government homes, have been executed with San Antonio Housing Systems &
Technology, Inc., Canadian Company and Integrated Philcan, Inc., a "AAA"
rated subsidiary of HRS Steel. Both companies can produce "Rapid-Built" modular
houses and maintain factories in the Philippines. The companies are fully
licensed and accredited with and by the Philippine Government. Integrated
PhilCan Inc. has opened offices in Makati, Philippines, and has advised that
the Canadian Government through CIDA has approved a $288,000 Grant for the
initial training of local assembly workers.

Pursuant to a Philippine Presidential Proclamation, BHFC was awarded the
Land Conversion Project, which granted BHFC a 50,000 acre tract of land in
the Philippines to reforest and convert the original mahogany, teak, and other
hardwood forest into palm oil and coffee commercial plantations. BHFC will
extract the original timber and replant fruit bearing trees, at a ratio of
450% positive over existing standing timber. This will result in the
recovery of a large quantity of hardwood which will be removed and processed
by BHFC over the next 8-10 years for anticipated hardwood sales and furniture
manufacturing. components. BHFC is the Managing Partner of the project
and Jonathon Bentley-Stevens is the Attorney-in-Fact for the duration of
the project. By contract, the project is expected to expand up to 500,000
acres over the next 48 years. Funds derived from the project will be utilized
to acquire and expand the Company's telecom and e-commerce divisions.

TECHNOLOGY CONTRACTS:

The Company has entered into a co-development agreement with Richardson Texas
based Data Exchange Inc. to assist in developing the Message Pilot.
DataXchange has filed for a patent on the MessagePilot TM and BentleyTel
utilized its previously developed software to accelerate the development of the
Unified Integrated Messaging System.

The company has also entered into a contract for the manufacturing of its
proprietary Smart-e-Card with Moore Business Systems one of the largest
manufacturers of credit/debit cards. Once manufacturing is in full operation
Moore has committed to a 7 day fulfillment of orders for the BentleyTel.com
Smart-e-Card. The company has paid the initial production cost of the
Smart-e-Card.

The Company has entered into a marketing agreement for the distribution and sale
of its Smart-e-Card with Big Wheel Promotions, a Dallas based marketing company
who specializes in event marketing and brand recognition. Big Wheel is an agent
for Corona Beer and Western Union as well as well known celebrities. The
company has paid the initial marketing and promotion costs for the Smart-e-Card.

The Company has entered into a telemarketing agreement with Cambridge Marketing
and has paid for the development of telemarketing scripts for sale of its
Smart-e-Card and MessagePilot to qualified B2B and B2C clients identified by
Cambridge Marketing.

CHANGES IN MANAGEMENT
-----------------------

An important element of the Company's plan to broaden its business base is
the recruitment of skilled personnel. In addition to the Company's current
executive officers and directors the Company has executed a 5 year employment
agreement with John Walsh in the position as Chief Operating Officer, John has
35 years experience in telecom, start up projects, international debit cards.
John was one of the founders of USDialtone and has held management positions
with such prestigious companies as MCI, FMC and GTE.

JONATHON BENTLEY-STEVENS effective April 2, 1999, was appointed Chairman of
the Board, Chief Executive Officer and President of the Company, the posts to
which he was appointed was as a result of the Company's acquisition of Bentley
House Furniture Company, Inc. ("BHFC") in March, 1999. Mr. Bentley-Stevens is
the current Chief Executive Officer of Bentley House Furniture Company, Inc.,
now one of the Company's subsidiaries. He is also President of Bentley House

<PAGE>
International Corporation (Seychelles) and President of BentleyTel.com Inc. Mr.
Bentley-Stevens is the author of the Bentley-Tricap Ancestral Land Development
Plan, currently in use in the Republic of the Philippines ("ROP") as a platform
for infrastructure and technological development. He is the author of the
BentleyTel.com marketing plan and the architecture of the Company's
Smart-e-Card.

REGINA S. PERALTA effective April 2, 1999, was appointed the Company's
Executive Vice President, and has also been a director of the Company since
March, 1999. Ms. Peralta's family founded Bentley House Furniture Company, Inc.
and she has served as its President for the past 18 years Ms. Peralta previously
served as a board member on the Philippine chamber of furniture industries.

DAVID TANG was appointed Chief Financial Officer of the Company on July 22,
1999. In November 1999, Mr. Tang was also appointed Chief Financial Officer for
BentleyTel.com, Inc. Mr. Tang is a Certified Public Accountant licensed in
California practicing in the fields of accounting and taxation. Prior to
starting his practice in 1990, Mr. Tang worked at Price Waterhouse and Ozur,
Andersen & Radder, Certified Public Accountants. Mr. Tang is a graduate of
McGill University in Montreal, Canada and has worked in public accounting since
1982.

RENATO DE VILLA has served as a director of the Company since June 1999.
General de Villa has served as a Four Star General Chief of Staff of the
Philippine Army from 1991 through 1997 and was Secretary of National Defense of
the ROP. He is currently a Director of the Bank of the Philippine Islands in
Manila, ROP. General de Villa's principal occupation is as Chairman and
President of Independent Insight, Inc., a risk control organization firm in the
Philippines. He is also advisor to the Chairman of Ayala Corporation, a
Philippine company with annual sales of over $1 Billion. General de Villa holds
a B.S. in Economics and a M.A. in Business Management.

JOHN WALSH on December 1, 1999, succeeded R n Fruto as Chief Operating
Officer of the Company. From 1995 to 1999 Mr. Walsh served as Vice President of
The Wickford Group which is a telecommunications consultant group specializing
in the switchless re-sale, international callback and debit card industry. From
1993 to 1995, Mr. Walsh served as the Executive Vice President and Partner of US
Dialtone which specializes in international long distance and international
debit card network permitting origination in 47 countries. From 1991 to 1993,
Mr. Walsh served as the Senior Vice President of INTEX Inc., a nationwide long
distance Company which produced $1,200,000 in monthly sales. From 1988 to 1991,
Mr. Walsh served as the Vice President and Partner of TelTec Inc., a company
offering debit cards, operator services and long distance. In addition, Mr.
Walsh has held positions ranging from sales engineer, regional
telecommunications manager and senior national account manager for GTE, FMC and
MCI. Mr. Walsh briefly held the position of Chief Executive Officer of GTMI in
1995, but conflict with previous management over Mr. Walsh's strict control
measures resulted in his dismissal. Unfair dismissal litigation was settled in
Mr. Walsh's favor in August 1999. Upon review of Mr. Walsh's file, new
management asked Mr. Walsh to rejoin the company.

RAMON A. TIROL is a licensed attorney in the Philippines, and has served as
a director of the Company since June 1999. Mr. Tirol served as a Philippine
Ambassador to Brunei from February, 1995 through June, 1998, when he retired
from official public service. Prior to his position as Ambassador, Mr. Tirol
served as a commercial Attach to Bonn, Germany from 1956 to 1961. From 1989 to
1994, Mr. Tirol served as Chief Presidential Legislative Officer to President F.
V. Ramos in the ROP.

ROBERTO S. SEBASTIAN has been a director of the Company since June 1999.
He is currently President, Chief Executive Officer and a Director of Marsman
Drysdale Agribusiness Group of Companies, a corporate agribusiness located in
the Philippines. Mr. Sebastian is also a senior executive and director of
several affiliated agribusiness companies. From 1992 to 1996, Mr. Sebastian
served as Secretary of Agriculture of the ROP. Thereafter, from 1996 to 1997
Mr. Sebastian served as Special Envoy for Agriculture of the ROP to the World
Trade Organization.

<PAGE>
JOEMARI D. GEROCHI has been a director of the Company since June 1999.
From July 1992 until May 1998, Mr. Gerochi served as Undersecretary of
Agriculture of the ROP. Mr. Gerochi has also served as a consultant to the
World Bank on Agriculture in the ROP, and as a representative of the ROP to the
GATT Conference. Mr. Gerochi is currently President of FairConsult Inc., an
environmental consulting company.

YAM PG ANAK HJ ABDUL WADOOD BOLKIAH has been a director of the Company
since June 1999. Prince Wadood Bolkiah is the eldest nephew of the Sultan of
Brunei. In Brunei, he is the Chairman of National Broadcast Media, Sebcom
Technology, and Communication Brunei, which are all well known Brunei broadcast
and communications companies. Prince Wadood Bolkiah is also the Chairman of the
Entertainment Production Group of Brunei, BSB Brunei, which is a marketing and
sales promotion company in Brunei promoting the country.

In February 2000 the Board of Directors approved the appointment of Ken Heffner
as Chief Technical Officer. Ken was with NORTEL for 16 years and retired as
Senior Vice President and General Manager, prior to which he worked for SPRIINT.
Ken is also President of Data Exchange and brings his vast knowledge of
telecommunications and Technology to the Company.

In February 2000 the Board of Directors also approved the appointment of Annette
Gieseman as Vice President of Marketing. Annette who was with NORTEL for 13
years as their Vice President of Intelligent Networks. Annette brings her
experience in generating revenue via marketing, licensing, promotions and brand
recognition to the Company.

All of the current directors were appointed to the Board of Directors by
Unanimous Written Consent of the predecessor Board of Directors as of June 30,
The predecessor directors resigned their respective positions as directors and
(where applicable) as officers of the Company as of March 31, 1999, and June 30,
1999.

EMPLOYEES
---------

As of December 31st 1999 , the Company and its subsidiaries had 314 full and
part time employees, including executive personnel and approximately 100
contractual employees.

The Company intends to hire personnel as the development of the Company's
business and additional financing for operations makes such action
appropriate. The change of former key personnel has had a positive effect
Company's business. The Company has retained qualified personnel knowledgeable
of the Company's industry to re-build the telecom business and such
personnel have agreed to become full time executive staff as soon as
revenues permit.

FORWARD LOOKING STATEMENTS.
-----------------------------

This Report may be deemed to contain forward-looking statements within the
meaning of the Reform Act. Forward-looking statements in this Report or
hereafter included in other publicly available documents filed with the
Commission, reports to the Company's stockholders and other publicly available
statements issued or released by the Company involve known and unknown risks,
uncertainties and other factors which could cause the Company's actual results,
performance (financial or operating) or achievements to differ from the future
results, performance (financial or operating) or achievements expressed or
implied by such forward-looking statements. Such future results are based upon
management's best estimates based upon current conditions and the most recent
results of operations. These risks include, but are not limited to, risks set
forth herein, each of which could adversely affect the Company's business and
the accuracy of the forward-looking statements contained herein.

There is a limited public market for the Company's Common stock.
Persons who may own or intend to purchase shares of Common stock in any
market where the Common stock may trade should consider the risk factors
discussed herein, together with other information contained elsewhere in the
Company's reports, proxy statements and other available public information, as
filed with the Securities and Exchange Commission, prior to purchasing shares of
the Common stock:

SUPPLEMENTARY INFORMATION
--------------------------

<PAGE>

Although the Company was formed in 1984, it had many of the
characteristics of a development stage Company. Since the acquisition of Bentley
House Furniture Company, change of management, and the acquisition of
BentleyTel.com and subsequent international Company acquisitions, all of
which own their proprietary equipment, the Company has become an asset
based manufacturing, construction and Telecommunications Corporation.

Since the reverse merger the new management has reduced the Company's
liabilities by over $4 million, has infused almost $2 million for hardware,
software development and marketing and operating costs and continues to resolve
the remainder of the Company's prior litigation by cash settlement, bank
instrument or part cash and stock on conditions favorable to the Company.
The previous management failed to remit payroll withholding taxes,
which resulted in the Company's liability of more than $600,000 to the
Internal Revenue Service. New management has remitted a cash payment of
$300,000 and is engaged in 22 month workout program with the IRS regarding
the balance.

The new management will engage in the recovery of the Company's assets
and is committed to capitalizing on any previous arrangements for technology
which have not yet been utilized. The implementation of new management's
business plan and development program will result ultimately, in the attainment
of profitable operations. The Company expects to obtain adequate financing from
both infusion by directors and traditional equity and debt instruments to
fulfill its capital requirements . The Company expects to achieve a level of
international sales adequate to support the Company's international
expansion.

Management's mission is to develop and maintain a market share in an
industry characterized by explosive growth. The Company's ability to
operate as a national and international software supplier and developer is
enhanced by the recent acquisitions and strategic alliances. The Company expects
to release its e-commerce products and services by the 3rd quarter of the year
2000.

ABILITY TO MANAGE NEW BUSINESSES.
-------------------------------------

BHFC is comprised of Companies which have been in existence for 45 years,25
years and 23 years, respectively, of which the majority of personnel have
been retained. With respect to the telecommunications business, the Company
is not only a re-seller of another carrier's services but a true ISP in its own
right in Australia. Through its subsidiary, BentleyTel.com, the Company has its
own hardware already deployed in the emerging East-Asian market including
Australia and the Philippines. See "Business Combinations."

ITEM 2. DESCRIPTION OF PROPERTIES.
--------------------------------------

a) In August 1999, the Company has entered into a five-year operating
lease at 4675 MacArthur Court, Suite 420, Newport Beach, CA 92660. The
monthly rental is $3,450 and the lease is with an unaffiliated third party.
The Company has built an office/factory complex, located in the tax and
duty free zone in Davao City Philippines. The eight-acre compound contains
a three-acre facility to manufacture furniture. This secure compound totals
8 acres with 3 acres under roof. This eight million dollar two story
facility houses the Company's Pacific corporate offices and manufacturing
facility. The facility will manufacture and export high quality hotel
and resort furniture and Communications assembly and installation. The
company will commence manufacturing in 3rd quarter 2000.

<PAGE>

b) The Company has an 8.5 acre telephone pole manufacturing facility , BHFC
Creosoting Inc. purchased in 1998 and located in Butuan city, Philippines.
It features a private loading pier and ship-side facilities. This facility
was built and operational since 1976. It manufactures telephone poles
primarily for the Philippine government. The Company expects to
commence manufacturing in 3rd quarter 2000.

c) The company leases offices in Darwin Australia and has its own national
Network with a POP (point of Presence) in every capital city. BentleyTel
offers not only ISP but VPN (Virtual Private Networks) and a wide range of
enhanced B2B and B2C services. BentleyTel.com Australia is part of a
consortium with NEC, Optus, Compaq and Cable & Wireless to provide
the Australian Northern Territory Government with Internet access, VPN and
LAN/WAN over the next 5 years. BentleyTel.com also developed the
international gaming site www.centrebet.com, licensed by the Australian
Government and operated by Jupiter's casino. BentleyTel has an exclusive
service and maintenance contract for the site.

d) The company has offices in Davao City and owns and operates 44 V-Sat
and fiber network TeleCenters and 12 call Kiosks in Mindanao.

e) The Company has offices in Kuching Malaysia and offers computer sales and
IT training. BentleyTel Malaysia is affiliated with the Kuching campus of
the Tun Abdul Razak University, the University has 10 campuses and is
expected to be a source of highly skilled computer engineers and B.Sc.
graduates of computer science for the Company.

f) The Company retains an office in Atlanta Georgia where the operations
monitor the manufacturing, marketing and distribution of the Company's
Smart-e-Card.

ITEM 3. LEGAL PROCEEDINGS AS OF DECEMBER 31 1999
--------------------------------------------------------

CAM-NET Litigation. On February 20, 1997, a complaint was filed by CAM-NET
-------------------
Communications Network, Inc. ("CN") in federal court for the Northern District
of Georgia, (197-CV-0448). The complaint sought recovery on two promissory
notes in the total principal amount of $250,000, together with interest thereon
to February 17, 1997 of $21,071.70, additional interest to date of payment,
attorney's fees, costs and expenses. The company has offered a split payment
cash settlement in this matter. As at Dec 31 1999 interest accrued is
$81,764.00

RBB Bank-Khalifa Litigation. On or about July 30 1996 and August 28, 1996,
---------------------------
The Company issued the aggregate principal amount of $6,683,333 of certain 3%
Convertible Debentures, due August 15, 1998 (the "Debentures"), as follows: (i)
RBB Bank Aktiengesselschaft ("RBB Bank") ($4,000,000), (ii) Mohammed Ghaus
Khalifa ("Khalifa") ($1,333,333), and (iii) Canadian Imperial Bank of Commerce
("CIBC") ($1,350,000) (collectively, the "Debenture holders"). The Company has
finalized a negotiated settlement of these disagreements providing for payment
of $1,000,000 to Khalifa, and $3,417,667 to RBB Bank over a period of 6 months
commencing after the shareholders meeting. The settlement calls for conversions
every 45 days, at market rate in either cash, or stock at the Company's choice.
The payments will commence within 30 days of the next shareholders meeting.

<PAGE>
WorldCom/WilTel Litigation. On August 29, 1997, a complaint was filed
---------------------------
against the Company by WorldCom Network Services, Inc. d/b/a WilTel in the
State Court of Dekalb County, Georgia (Action No. 97A-36948-3) seeking recovery
of Approximately $9 million for payment of services rendered as well as fees for
Attorneys and court costs. New management has offered a cash settlement in this
matter.

K&S International Communications, Ltd Arbitration. The Company was involved
--------------------------------------------------
in an arbitration proceeding with Extelcom Corporation (a/k/a K&S International
Communications, Ltd."K&S") with respect to a former agreement under which each
party was to provide services to the other. The Company believes that
Extelcom's claims are without substantial merit but due to the nature of the
arbitration process, at the end of 1997 elected to increase its litigation
reserves by an amount in excess of $1,000,000 for the potential liability claim
by Extelcom. Based upon a technical default, an award was entered against the
Company in May 1998 for $2.5 million. The Company has negotiated a $390,000
settlement in this matter and has paid $90,000 towards this settlement.

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

There have not been any matters submitted to a vote of Security Holders.

PART II

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

As of April 12th 2000, the authorized capital stock of the Company
consisted of 75,000,000 shares of common stock, par value $0.004 per share (the
"Common stock") and 10,000,000 shares of preferred stock, par value $0.004 per
share (the "Preferred Stock"). As of December 31st 1999 there were issued and
outstanding 74,939,500 shares of common stock, options and warrants to purchase
3,704,757 shares of common stock at prices ranging from $0.41 to $2.40.

The Company's common stock has been traded in the over-the-counter
Bulletin Board ("OTCBB") market since July, 1995 and is quoted on the OTCBB or
in the "pink sheets" maintained by the National Quotation Bureau, Inc. under
the symbol "GTMI." The number of shares of common stock issued and outstanding
as of April 12, 2000, was approximately 75,000,000. The bid and asked sales
prices of the common stock, as traded in the OTCBB market, on December
31st 1999 were approximately $ 0.125 and $0.146 respectively. The quarterly
range of high and low bid prices for the past two years were as follows:

Bid Prices Asked Prices
High Low High Low

Year Ended December 31, 1997
1st Quarter 0.938 0.625 0.969 0.453
2nd Quarter 1.156 0.469 1.219 0.500
3rd Quarter 0.750 0.370 0.781 0.400
4th Quarter 0.625 0.380 0.656 0.410

Year Ended December 31, 1998
1st Quarter 0.290 0.070 0.380 0.080
2nd Quarter 0.720 0.300 0.730 0.310
3rd Quarter 0.455 0.125 0.465 0.130
4th Quarter 0.380 0.125 0.390 0.133

Year Ended December 31, 1999
1st Quarter 0.365 0.125 0.375 0.130
2nd Quarter 0.29 0.17 0.30 0.18
3rd Quarter 0.24 0.14 0.25 0.13
4th Quarter 0.23 0.11 0.25 0.13

<PAGE>
These prices are based upon quotations between dealers, without adjustments
for retail mark-ups, markdowns or commissions, and therefore may not represent
actual transactions.

The transfer agent for the Company is American Stock Transfer and Trust
Company.

Discussions of sales of unregistered stock over the last 3 years. The
Company's securities are now traded on the OTCBB, an electronic trading system
under the general oversight of National Association of Securities Dealers and
involve self-regulated markets in the company's stock, which are legally
required to be registered broker dealers. The OTCBB is a quotation service
which displays real-time quotes, last-sale prices, and volume information for
domestic and certain foreign securities. The regulations applicable to stocks
trading on the OTCBB have recently been revised to impose significant new
financial reporting requirements on such companies. Subject to a phase-in
period starting June, 1999, market makers will not be permitted to quote stock
prices on the OTCBB unless the issuer has registered with the Securities and
Exchange Commission (SEC) or other applicable agency, and submitted the required
periodic reports, including the form 10KSB, and other applicable reports to
other such agency.

Information required by item 701 of the Regulation SB are subject to
investigation by Management

NEGOTIATIONS FOR CERTAIN REGISTRATION RIGHTS. The Company has entered into
various agreements pursuant to which certain holders of the Company's
outstanding common stock would have been granted the right, under various
circumstances, to have Common stock that is currently outstanding registered for
sale in accordance with the registration requirements of the Securities Act upon
demand or "piggybacked" to a registration statement which may be filed by the
Company. Of the issued and outstanding Common stock as of Dec 31 1999, no
shares are subject of future registration statements pursuant to the terms of
such agreements. In addition, as of Dec 31 1999, there are warrants to acquire
3,479,575 shares of Common stock which may be exercised through September 30th
2001, and which carry certain piggyback registration rights.

DIVIDENDS ON COMMON STOCK.
-----------------------------

The Company has paid no dividends on its Common stock as of December 31,
1999. The Company will explore a plan to pay dividends as soon as a profit
benchmark is achieved and expansion plans permit.

Shares Eligible for Future Sale. The Company has announced that it will
not undertake a reverse split of its shares.

The Company had reserved 218 shares of series "A" preferred shares to be
issued to the principals of CyberAir Communications Inc., Chairman, Charles
Lewis and President Robert Dietrich. However upon calling on CyberAir's
commitment to provide service by December 31st 1999, CyberAir was not able to
comply, therefore the company has canceled the reserved shares and will await
further advice from the provider

MAJOR EXCHANGE LISTING
------------------------

The Company has applied for listing on the AMEX EXCHANGE. The company
expects to qualify in all respects except for its share price.
The Company has submitted its first stage application and in now completing
its second stage.

<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
---------------------------------------------------------------------------
This Report, including the disclosures below, contains certain forward-looking
statements that involve substantial risks and uncertainties. When used herein,
the terms "anticipates," "expects," "estimates," "believes" and similar
expressions, as they relate to the Company or its management, are intended to
identify such forward-looking statements. The Company's actual results,
performance or achievements may differ materially from those expressed or
implied by such forward-looking statements. Factors that could cause or
contribute to such material differences include the factors disclosed in the
"Risk Factors" section of this Report, which readers of this Report should
consider carefully.

OVERVIEW OF PRESENTATION.
---------------------------

The following discussion and analysis should be read in conjunction with
the Selected Consolidated Financial Data and the Consolidated Financial
Statements and Notes thereto included elsewhere herein.

On April 2, 1999, Global TeleMedia International, Inc. acquired Bentley House
Furniture Company ,Inc. a Philippine Corporation. (BHFC). The merger was
accounted for as a reverse acquisition whereby the BHFC was treated as the
accounting acquirer and GTMI as the accounting acquiree. The accompanying
consolidated financial statements include the historical results of BHFC and the
consolidated results of GTMI as of the date of merger. Simultaneously with the
closing of the acquisition agreement, an Escrow Agreement was created then
amended on July 1, 1999, so that 3,878 shares of the 4,000 shares originally
issued of GTMI Series A Convertible Preferred Stock and 200,000 of BHFC's common
stock would be placed in escrow for a period of one year from July 1999.

All of the Company's businesses were substantially new in 1997 and as a
result significant losses were incurred as the Company attempted to pursue a
multifaceted business plan. Due to capital constraints and other circumstances,
the Company has refocused its efforts and streamlined its operations. The
Carrier Sales Business was started in January, 1998, however these operations
were on hold, pending the Companies ability to resolve certain litigation and
enter into separate carrier service agreements.

FINANCES AND RESTRUCTURING
----------------------------

Since the share exchange with BHFC, the Company has been successful at
obtaining capital through fully paid private placements in the amount of
$485,400 for the subscription of 3,491,943 shares. The Company's President/CEO
and Vice President surrendered 7,210,666 shares and the Company received
$5,765,000 to meet the Company's financial needs.

Subsequent to the end of 1999 the company was successful in executing a $10
million equity investment agreement based on shares owned by the Major
Shareholders. The major shareholders Jonathon Bentley-Stevens and Regina S.
Peralta agreed to assist the company by offering their own shares to the equity
partner, the shareholders will receive preferred stock after the shareholders
meeting scheduled for around July 20th and have agreed to immediately retire the
newly issued shares so as not to further dilute the existing shareholders.

The Company has approved a term sheet in New York with The Malachi Group
(NASD & NYSE) for the placement of a 2 year $5 million convertible debenture at
US$10.00 per share. This debenture is redeemable by the Company at 115%. The
company is pursuing this option which is made more attractive as subsequent to
the end of the 1999 year the company's shares rose to a height of $3-$4.00

As part of the restructuring, the Company acquired a Nevada corporation called
BentleyTel.com, Inc. A BentleyTel Board Meeting was held in the first quarter
of 2000 to examine the viability of exercising its option of investing an
initial $10 million to develop the 1997 patent of Ultra Pulse. The agreement
also includes the allocation of additional shares to UCI, which will further
dilute the existing shareholders. There can be no estimate as to the eventual
amount required to develop the Ultra Pulse technology. The decision was
referred to the shareholders meeting.

The Company owns a 55% majority of the shares of BentleyTel.com, and additional
BentleyTel.com shares were allocated for 100% of the shares of Octa4 Pty. Ltd.
3G Communications Inc. and DynaSem Communications Sdn. Bhd. Octa4 is a major
ISP in Australia providing VPN (Virtual Private Networks) E-Commerce, and
e-commerce solutions, and soon VoIP voice over the Internet, DynaSem is a
Computer sales and IT training company and 3G communications owns and operates
56 satellite tele-centers offering long distance and international long distance
calling.

BentleyTel.com planned to release its national and international phone
cards in 4th quarter 1999. The company decided to delay the release of a phone
card until its development of a multi-purpose debit/ATM/Phonecard/E-commerce
card platform was finalized. In the subsequent period the Company decided to
implement international long distance 0+ calling services from its 56
tele-centers and Kiosks. The company is now finalizing agreements with data
processing companies as a final step to the launch of its international
proprietary Smart-e-Card, which should be available to the public by mid 2000.

The Company has resolved a significant amount of its litigation and hopes
to able to resolve the remaining disputes within 180 days. The Company did
generate revenue in the fourth quarter of 1999 and had a significant increase in
revenue in the first quarter 2000 as compared to the same quarter last year.
The Company intends to continue to build its revenue streams in future years.
The strategy of the Company was to develop a strategic alliance with various
technology companies through strategic alliances, mergers or acquisitions.
Acquisitions were made of companies possessing substantial market share in their
industries and technological advantages.

YEAR 2000 COMPLIANCE.
-----------------------
The Company's administrative operations have been reviewed for Year 2000
Compliance. All divisions of the Company are Year 2000 compliant. Some
remaining operations, such as non-essential personal computers and non-financial
software products, have been upgraded at nominal cost.

RESULTS OF OPERATIONS FOR PERIOD ENDED DECEMBER 31 1999 AND 1998.

On April 2, 1999, Global Telemedia International, Inc. acquired Bentley House
Furniture Company ,Inc. a Philippine Corporation. (BHFC). The merger was
accounted for as a reverse acquisition whereby the BHFC was treated as the
accounting acquirer and GTMI as the accounting acquiree. The accompanying
consolidated financial statements include the historical results of BHFC and the
consolidated results of GTMI as of the date of merger.

The following discussion reflects the financial condition and results of
operations of the Company for the years ended December 31, 1999 and 1998.
Because of material changes to the Company and new management these past results
are not indicative of future performance.

The Company's revenues increase from $104,700 in 1998 to approximately
$594,021. This increase in revenues was primarily derived from
telecommunication and internet related operation in Australia and the Pacific
Rim.

During 1999, as compared with 1998, the cost of services sold increased
from approximately $31,000 to $91,000, and the Company's gross profit increased
from $479,290 to approximately $3,688,000. The increase in gross profit was due
primarily as result of the reverse acquisition, acquisition of telecommunication
subsidiaries that make up BTC and as a result of the Company's emphasis in
developing business opportunities in e-commerce, web-hosted products, unified
messaging and other enhanced web based services.

General and administrative expenses increased to $4,191,283 in 1999 as
compared to $552,803 in 1998. The increase during 1999 was primarily the result
of the reverse merger, the amortization of acquired goodwill, the suspension of
operations of the Company's Vision 21, Inc., as well as the suspension of the
initial phase of the Company's 1998 enhanced services platform, and as a result
of the Company's emphasis in developing business opportunities in e-commerce,
web-hosted products, unified messaging and other enhanced web based services

The Company incurred additional legal and professional fees of approximately
$815,000 during 1999. These were mostly due to resolutions of previous
managements debts and legal cost associated with mergers and acquisitions.

Interest expense for 1999 was approximately $133,000 as compared to $0 for
1998. This increase relates directly to interest paid on debt financing and
write-offs of prepaid debt financing costs obtained during 1999 and 1998. As a
result of the Company's cumulative operating losses, the Company has not paid
income tax since inception. In addition, the Company is approximately five
quarters behind on federal and state payroll taxes, however, $300,000 has been
paid towards unpaid withholding taxes. The Company has negotiated with IRS for
a 22 months progressive payment of the balance of approximately $300,000. As of
December 31, 1999, the Company had net operating loss carry forward totaling
approximately $42 million.

Utilization of the Company's net operating loss may be subject to limitation
under certain circumstances and accordingly the Company has elected to fully
reserve against these deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES.
-----------------------------------

BHFC maintains contracts, including joint venture contracts for the construction
of Philippine government employees' homes. The contracts have been executed on
behalf of the Philippine National Police, the Armed Forces of the Philippines,
the Department of Interior of the Philippines and several local Philippine
government arms. Subdivisions are presently delineated and nearly all necessary
permits needed to commence construction are secured. BHFC had anticipated
construction to begin during the 4th quarter of 1999, but due to insufficient
funds, construction has been delayed. BHFC expects sufficient funds in the near
future to support site development in preparation for construction pursuant to
the contracts.

The Company has historically financed its operations principally through
the sale of equity and debt securities and through funds provided by operating
activities.

As of December 31, 1999, the Company had total liabilities including
accrued interest, notes payable, current accounts payable and accrued but unpaid
expense approximating $31.6 million the substantial increase was due to
acquisitions it telecom subsidiaries and as a result of the reverse merger.

The Company's total assets have been increased to approximately $46.7
million as at 12/31/1999 as compared to $6.7 million last year. The increase in
total assets is a result of the business combinations completed in 1999, which
includes the BHFC-GTMI reverse acquisition and the BTC acquisition. The
business combinations increased the Company's tangible assets by about $800,000
and goodwill by $38.7 million. Company policy dictates that it receives a
letter of credit from all contracts undertaken by the construction divisions.

ITEM 7. FINANCIAL STATEMENTS.
--------------------------------

The financial statements required by this Item 7 are being submitted with
this filing together with submission of Management's discussion and analysis or
plan of operation

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

Current reports on Form 8-K
Dated as of May 25, 2000

PART III

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

The directors of the Company currently have terms which will end at the
conclusion of the next Meeting of the stockholders of the Company and until
their successors are elected and qualify, subject to their prior death,
resignation or removal. Officers serve at the discretion of the Board of
Directors.

The following table sets forth certain information concerning the persons
who have been nominated by the Board of Directors to be directors of the Company
in connection with PROPOSAL ONE of this Proxy Statement and the current
executive officers of the Company:

<TABLE>
<CAPTION>
NAME POSITION AGE
------------------------ ----------------------------- ---
<S> <C> <C>
Jonathon Bentley-Stevens Chairman of the Board of 45
Directors and Chief Executive
Officer

Regina S. Peralta Executive Vice President and 39
Director

David Tang Chief Financial Officer 40

Renato de Villa Director 64

John Walsh Director 56

Ramon A. Tirol Director 75

<PAGE>
Roberto S. Sebastian Director 56

Joemari D. Gerochi Director 54

Yam Pg Anak HJ Abdul Director 30
Wadood Bolkiah
</TABLE>

JONATHON BENTLEY-STEVENS effective April 2, 1999, was appointed Chairman
of the Board, Chief Executive Officer and President of the Company, posts to
which he was appointed as a result of the Company's acquisition of Bentley House
Furniture Company, Inc. ("BHFC") in March, 1999. Mr. Bentley-Stevens is the
current Chief Executive Officer of Bentley House Furniture Company, Inc., which
is one of the Company's chief operating subsidiaries. He is also President of
Bentley House International Corporation (Seychelles) and President of
BentleyTel.com Inc. Mr. Bentley-Stevens is the author of the Bentley-Tricap
Ancestral Land Development Plan, currently in use in the Republic of the
Philippines ("ROP") as a platform for infrastructure and technological
development.

REGINA S. PERALTA effective April 2, 1999, was appointed the Company's
Executive Vice President, and has also been a director of the Company since
March, 1999. Ms. Peralta's family founded Bentley House Furniture Company, Inc.
and she has served as its President for the past 18 years. Ms. Peralta is also
the Vice President of BHTC Sdn. BHD., a BHFC subsidiary. Ms. Peralta previously
served as a board member on the Philippine chamber of furniture industries.

RENATO DE VILLA has served as a director of the Company since June 1999.
General de Villa has served as a Four Star General Chief of Staff of the
Philippine Army from 1991 through 1997 and was Secretary of National Defense of
the ROP. He is currently a Director of the Bank of the Philippine Islands in
Manilla, ROP. General de Villa's principal occupation is as Chairman and
President of Independent Insight, Inc., a risk control organization firm in the
Philippines. He is also advisor to the Chairman of Ayala Corporation, a
Philippine company with annual sales of over $1 Billion. General de Villa holds
a B.S. in Economics and a M.A. in Business Management.

JOHN WALSH on December 1, 1999, succeeded Rene Fruto as Chief Operating
Officer of the Company. From 1995 to 1999 Mr. Walsh served as Vice President of
The Wickford Group which is a telecommunications consultant group specializing
in the switchless re-sale, international callback and debit card industry. From
1993 to 1995, Mr. Walsh served as the Executive Vice President and Partner of US
Dialtone which specializes in international long distance and international
debit card network permitting origination in 47 countries. From 1991 to 1993,
Mr. Walsh served as the Senior Vice President of INTEX Inc., a nationwide long
distance company which produced $1,200,000 in monthly sales. From 1988 to 1991,
Mr. Walsh served as the Vice President and Partner of TelTec Inc., a company
offering debit cards, operator services and long distance. In addition, Mr.
Walsh has held positions ranging from sales engineer, regional
telecommunications manager and senior national account manager for GTE, FMC and
MCI. Mr. Walsh briefly held the position of Chief Executive Officer of GTMI in
1995, but conflict with previous management over Mr. Walsh's strict control
measures resulted in his dismissal. Unfair dismissal litigation was settled in
Mr. Walsh's favor in August 1999. Upon review of Mr. Walsh's file, new
management asked Mr. Walsh to rejoin the company.

<PAGE>
RAMON A. TIROL is a licensed attorney in the Philippines, and has served as
a director of the Company since June 1999. Mr. Tirol served as a Philippine
Ambassador to Brunei from February, 1995 through June, 1998, when he retired
from official public service. Prior to his position as Ambassador, Mr. Tirol
served as a commercial Attach to Bonn, Germany from 1956 to 1961. From 1989 to
1994, Mr. Tirol served as Chief Presidential Legislative Officer to President F.
V. Ramos in the ROP.

JOEMARI D. GEROCHI has been a director of the Company since June 1999.
From July 1992 until May 1998, Mr. Gerochi served as Undersecretary of
Agriculture of the ROP. Mr. Gerochi has also served as a consultant to the
World Bank on Agriculture in the ROP, and as a representative of the ROP to the
GATT Conference. Mr. Gerochi is currently President of FairConsult Inc., an
environmental consulting company.

YAM PG ANAK HJ ABDUL WADOOD BOLKIAH has been a director of the Company
since June 1999. Prince Wadood Bolkiah is the eldest nephew of the Sultan of
Brunei. In Brunei, he is the Chairman of National Broadcast Media, Sebcom
Technology, and Communication Brunei, which are all well-known Brunei broadcast
and communications companies. Prince Wadood Bolkiah is also the Chairman of the
Entertainment Production Group of Brunei, BSB Brunei, which is a marketing and
sales promotion company in Brunei promoting the country.

(1) The SEC initiated a civil action against Mr. Bentley-Stevens for an
alleged 1996 violations of 10(b) of the Securities Exchange Act of 1934 ("the
Act"). Mr. Bentley-Stevens had been a 1% shareholder and outside director of a
Nevada corporation, Global Timber Corporation ("Global Timber"). In December,
1995, January, 1996 and November, 1996, Global Timber filed disclosure documents
with the SEC pursuant to Rule 15c2-11 of the SEC and also filed a Form 10
Registration Statement in March 1996. In each of these documents, Global Timber
announced the acquisition of certain timber rights in the Philippines. The SEC
claims that these statements were false and/or misleading since as of the date
of the disclosure documents Global Timber had not obtained approval from the
Philippine government to actually harvest the timber. Mr. Bentley-Stevens is
vigorously opposing the SEC's claims on the grounds that nothing in the
disclosure documents claims that Global Timber had a right to harvest timber
and he was not in the USA and played no role in the drafting of the documents
nor did he review them before they were filed. Global Timber is in no way
affiliated with GTMI or any of its subsidiaries. No findings, orders, decrees
or judgments have been made in this matter, although the SEC has indicated that
it might examine GTMI's public statements.

ITEM 10. EXECUTIVE COMPENSATION
------------------------------

SUMMARY COMPENSATION TABLE

The following table sets forth certain information concerning compensation
of certain of the Company's current and former executive officers, including the
Company's Chief Executive Officer and all executive officers whose total annual
salary and bonus exceeded $100,000, for the years ended December 31, 1999, 1998
and 1997:

<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Annual Compensation Long Term
------------------- ---------
Compensation
------------
Awards Payouts
-------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
------------------------------------------------------------------------------------
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Jonathon 1999* 170,000 0 0 0 0 0 0
Bentley-Stevens,
CEO

Regina S. 1999* 165,000 0 0 0 0 0 0
Peralta,
Exec. Vice
President

Roderick A. McClain, 1999* 170,000 0 0 0 0 0 0
Former CEO

1998 151,250 0 0 0 0 0 0

1997 137,000 0 0 0 0 0 0

Geoffrey F. McClain, 1999* 100,000 0 0 0 0 0 0
Former
Senior
Vice
President

1998 100,000 0 0 0 0 0 0

1997 98,000 0 0 0 0 0 0

Herbert S. 1999* 115,000 0 0 0 0 0 0
Perman,
Former
CFO

1998 105,000 0 0 0 0 0 0

1997 98,000 0 0 0 0 0 0
<FN>
* Mr. Bentley-Stevens and Ms. Regina S. Peralta have agreed to forego all 1999 compensation from the Company.
Messrs. McClain, Perman and McClain were not compensated in 1999 prior to the Bentley House Furniture Company
due to the change in control and their employment relationships were canceled on August 12, 1999.
</TABLE>

OPTIONS GRANTS IN LAST FISCAL YEAR

There were no grants of stock options during the 1999 calendar year.

<PAGE>
AGGREGATED OPTION EXCERCISES IN LAST CALENDAR YEAR AND FY-END OPTION VALUES

The following table sets forth, for the 1999 calendar year, each exercise
of stock options by each of the Named Executive Officers and the calendar
year-end value of unexercised options on an aggregate basis.

<TABLE>
<CAPTION>
Value Number of Value of Unexercised
Shares Realized Unexercised In-the-Money Options
Acquired on ($) Options at FY-End at FY-End
Exercise (#) Exercisable/Unexercisable ($) Exercisable/Unexercisable
(#) (1)
Name
<S> <C> <C> <C> <C>
Geoffrey F. McClain 0 0 / 0 / 0
Roderick A. McClain 0 0 / 0 / 0
Herbert S. Perman 0 0 / 0 / 0
<FN>

(1) Options are "in-the-money" if the fair market value of the common stock underlying the options
exceeds the exercise price of the option. The bid and asked sale prices quoted by the OTCB Market on
December 31, 1999 was approximately $0.15.
</TABLE>

EMPLOYMENT AGREEMENTS

In 1997, the Company entered into a revised and restated employment
agreement with Roderick A. McClain, then Chief Executive Officer of the Company,
which provided for (a) a term of the employment of ten years from the effective
date, which term is automatically extended by one month at the end of each
month; (b) a base salary of $125,000 annually, increased by ten percent each
year; (c) a performance bonus equal to 7.5% of the net income before taxes of
the Company for any year, (d) a revenue bonus equal to 10,000 shares of the
Company's Common Stock for each increment of $250,000 by which the Company's
gross monthly revenues exceed those of the prior month, starting from a base of
$450,000; (e) 1,000 shares of a class of convertible preferred stock to be
authorized by the Company, subject to terms of such class of preferred stock as
are agreed to by the parties hereto; (f) any other bonus, supplemental or
incentive compensation as may be approved by the Board of Directors; (g)
nonqualified options to acquire up to 1,600,000 shares of the Company's Common
Stock at an exercise price of $0.41 per share which were repriced on March 3,
1998 at $0.10 per share; and (h) a trigger to receive all unpaid compensation,
whether or not earned, upon the occurrence of a change in control of the
Company. For purposes of the employment agreement, a change in control equals;
(i) a change in twenty-five (25%) percent of either the outstanding shares of
Common Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally, or (ii) the approval by the
stockholders of the Company of a reorganization, merger or consolidation, in
which persons who were stockholders of the Company immediately prior to such
reorganization, merger or consolidation did not, immediately thereafter, own or
control more than fifty percent (50%) of the combined voting power entitled to
vote generally in the election of directors of the surviving corporation of such
reorganization merger or consolidation; or (iii) a liquidation or dissolution of
the Company or of the sale of all or substantially all of the Company's assets.

The change in control provisions of Mr. McClain's employment agreement were
triggered by the acquisition of Bentley House Furniture Company, Inc. by the
Company, which resulted in greater than 40% of the Company's common shares being
issued to Jonathan Bentley-Stevens and Regina S. Peralta (the "Principal
Shareholders"). Additionally, 4,000 Series A Convertible Preferred Shares were
issued to the Principal Shareholders to compensate them for the assumption of
the Company's debt. Additionally, 4,000 Series A Convertible Preferred Shares

<PAGE>
were issued to the Principal Shareholders to compensate them for the assumption
of the Company's debt. On June 15, 1999, Mr. McClain waived the change of
control provision in Section 4 of his employment contract.

The Company entered into an employment agreement with Herbert S. Perman,
dated October 1, 1995, and amended February 1, 1996. Pursuant to the employment
agreement, which had a term of three years, Mr. Perman was employed as the
Company's Chief Financial Officer and was compensated with an annual salary of
$85,000 and a one-time grant of 150,000 shares of the Company's Common Stock.
In addition, Mr. Perman shared in the Company's Executive Stock Bonus Plan,
which provided for the issuance of shares of Common Stock upon an increase of
gross monthly revenues over a base of $450,000. As of July 12, 1999, Mr.
Perman's employment with the Company was terminated pursuant to the acquisition
of Bentley House Furniture Company, and the Company considers it has no further
obligation to Mr. Perman.

The Company entered into an employment agreement with Geoffrey F. McClain,
dated May 25, 1995, amended February 1, 1996, and amended February 1, 1997.
Pursuant to the employment agreement, which had a term of three years, Mr.
McClain was employed as the Company's Senior Vice President and was compensated
with an annual salary, as of February 1, 1997, of $98,000. In addition, Mr.
McClain shared in the Company's Executive Stock Bonus Plan, which provided for
the issuance of shares of Common Stock upon an increase of gross monthly
revenues over a base of $450,000. As of July 12, 1999, Mr. McClain's employment
with the Company was terminated pursuant to the acquisition of Bentley House
Furniture Company, and the Company believes it has no further obligation to Mr.
McClain.

<PAGE>
The Company entered into an employment agreement with Jonathon
Bentley-Stevens on April 2, 1999 for a ten year term. Pursuant to the
employment agreement, Mr. Bentley-Stevens is employed as the Company's President
and Chief Executive Officer. Mr. Bentley-Stevens' annual salary is $170,000.

The Company entered into an employment agreement with Regina S. Peralta on
April 2, 1999. Pursuant to the employment agreement, which has a term of ten
years, Ms. Peralta is employed as the Company's Executive Vice President. Ms.
Peralta's annual salary is $165,000.

The Company entered into an employment agreement with David Tang on July
22, 1999. Pursuant to the employment agreement, which has a term of five years,
Mr. Tang is employed as the Company's Chief Financial Officer. Mr. Tang's
annual salary is $150,000 and he received a one-time grant of 100,000 shares of
the Company's Common Stock.

The Company entered into an employment agreement with John Walsh on
December 31, 1999. Pursuant to the employment agreement, which has a term of
three years, Mr. Walsh is employed as the Company's Chief Operating Officer.
Mr. Walsh's annual salary is $160,000 and he received a one-time grant of
100,000 shares of the Company's Common Stock.

TERMINATION OF CERTAIN EMPLOYMENT AND STOCK OPTION RIGHTS

On June 15, 1999, the Company agreed to modify the existing employment
agreements of Roderick A. McClain, Herbert S. Perman, Geoffrey F. McClain, and
Paul C. Graham. The employment agreements were modified as follows.

Roderick A. McClain waived the "Change in Control" provision in Section 4
of his employment agreement with respect to transactions contemplated by the
March 18, 1999 Stock Purchase Agreement between the Company and Bentley House
Furniture Company, Inc. In addition, Mr. McClain's annual base compensation
increased to $170,000, subject to a 10% annual increase in accordance with
Section 4.1(1) of the employment agreement. Mr. McClain waived the bonus
compensation provisions of Section 4.2(2) and 4.3 of his employment agreement,
and further waived a club membership allowance set forth in Section 4.1(6)(b) of
his employment agreement.

Herbert S. Perman agreed to waive the bonus compensation provisions of
Section 2.4 of his employment agreement. In addition, the Company and Mr.
Perman agreed that the choice of law and forum provisions of Section 6.6 of his
employment agreement would be changed from Atlanta, Georgia to Los Angeles,
California.

Geoffrey F. McClain agreed to waive the bonus compensation provisions of
Section 2.4 of his employment agreement, but retained the commission
compensation provisions of Section 2.1 of the same agreement. In addition, the
Company and Mr. McClain agreed that the choice of law and forum provisions of
Section 7.6 of his employment agreement would be changed from Atlanta, Georgia
to Los Angeles, California.

Paul C. Graham and the Company changed the choice of law and forum
provisions of Section 7.6 of Mr. Graham's employment agreement from Atlanta,
Georgia to Los Angeles, California.

On August 12, 1999, following the June 15, 1999 modifications, the Company
terminated the employment of Roderick A. McClain, Herbert S. Perman, and
Geoffrey F. McClain. Pursuant to the 1996 Company Stock Option Plan (the
"Plan"), unexercised stock options provided for in the employment agreements at
issue were canceled.

In some instances, the circumstances governing the right to exercise stock
options specified in the employment agreements conflict with the circumstances
under which such options may be exercised in connection with the Plan. Given
the conflict, the Company relied upon the Plan to justify cancellation of
certain purported stock option rights. In the event of certain terminations,
the Plan permits a party to exercise stock option rights within thirty (30) days
after the date of termination. The Company terminated the parties' employment
rights and benefits on August 12, 1999. The right to exercise stock options
pursuant to the employment agreements and the Plan expired on September 12,
1999. No party exercised stock options within the specified period.

<PAGE>
On March 3, 1998, the Company granted to each of Roderick A. McClain,
Herbert S. Perman, and Geoffrey F. McClain options to purchase up to 350,000
shares of Common Stock, at an exercise price of $0.10 per share, in
consideration of bona fide services rendered. Such services were not in
connection with the offer or sale of securities in a capital-raising transaction
or services otherwise excluded from being the subject of a Registration
Statement on Form S-8 under the Securities Act of 1933, as amended. The option
contracts expressly provided an expiration date of December 31, 1999, and
prevented either party from canceling the option rights, even if the Company
terminated the employee party for cause.

By December 31, 1999, the options granted to each of Roderick A. McClain,
Herbert S. Perman and Geoffrey F. McClain expired.

OPTIONS/SAR GRANTS TABLE DURING LAST FISCAL YEAR

COMPENSATION OF DIRECTORS

The Company issued options to purchase up to 25,000 shares of Common Stock to
each of Don L. Thone and Ron Berkowitz, who were outside and non-employee
directors during 1998. Otherwise, the Company has not and does not currently
compensate directors for services rendered in their capacity as directors. The
Company does not compensate any employee-directors in their capacities as
directors of the Company. See SECURITY OWNERSHIP OF CETAIN BENEFICIAL OWNERS
AND MANAGEMENT

INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Company's Certificate of Incorporation and bylaws designate the
relative duties and responsibilities of the Company's officers, establish
procedures for actions by directors and stockholders and other items. The
Company's Certificate of Incorporation and bylaws also contain extensive
indemnification provisions, which will permit the Company to indemnify its
officers and directors to the maximum extent provided by Delaware law.

TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS

Except as set forth in employment agreements of certain employees of the
Company and its subsidiaries, the Company has no compensatory plans or
arrangements which relate to the resignation, retirement or any other
termination of an executive officer or key employee with the Company or a change
in control of the Company or a change in such executive officer's or key
employee's responsibilities following a change in control.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

In accordance with SEC and NASD rules the Company plans to form an audit
committee following its shareholders meeting.

COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors, executive officers, and beneficial holders of
more than 10% of the Company's Common Stock to file with the Commission initial
reports of ownership, current reports of changes in ownership and annual reports
of changes in ownership of such equity securities of the Company. Based solely

<PAGE>
upon a review of such forms, or on written representations from certain
reporting persons that no other reports were required for such persons, except
for those reports discussed in the next paragraph, the Company believes that all
reports required pursuant to Section 16(a) with respect to its executive
officers, directors and 10% beneficial stockholders for the year ended December
31, 1999 were timely filed.

Jonathan Bentley-Stevens failed to file a Form 3, Form 4 or Form 5 in a
timely manner for the 17,757,083 shares of Common Stock and 2,400 shares of
Series A Preferred Stock acquired on April 2, 1999 through the acquisition of
Bentley House Furniture Company, Inc. Mr. Bentley-Stevens reported such
information on Form 5 on March 17, 2000.

Regina Peralta failed to file a Form 3, Form 4 or Form 5 in a timely manner
for the 11,838,056 shares of Common Stock and 1,600 shares of Series A Preferred
Stock acquired on April 2, 1999 through the acquisition of Bentley House
Furniture Company, Inc. Ms. Peralta reported such information on Form 5 on
March 17, 2000.

David Tang failed to file a Form 3, Form 4 or Form 5 in a timely manner for
shares of Common Stock received pursuant to his employment agreement with the
Company. Mr. Tang reported such information on Form 5 on March 17, 2000.

John Walsh failed to file a Form 3, Form 4 or Form 5 in a timely manner for
shares of Common Stock received pursuant to his employment agreement with the
Company. Mr. Walsh reported such information on Form 5 on February 8, 2000.

ITEM 11. SECURITY OWNERSHIP OF CETAIN BENEFICIAL OWNERS AND MANAGEMENT
-------------------------------------------------------------------------------

The following table reflects for the year ended December 31, 1999, the
beneficial Common Stock ownership of: (a) each director of the Company, (b) each
executive officer named in the Summary Compensation Table in this Proxy
Statement for the fiscal year ended December 31, 1999, (c) each person known by
the Company to be a beneficial holder of five percent (5%) or more of its Common
Stock, and (d) all executive officers and directors of the Company as a group:

<TABLE>
<CAPTION>
Name and Address No. of
of Beneficial Owners(1) Shares Percent#
------------------------------ ---------- --------
<S> <C> <C>
Jonathon A. Bentley-Stevens(2) 17,757,083 23.7
Regina S. Peralta(3) 11,838,056 15.8
Roderick A. McClain(4) 0 0
Geoffrey F. McClain(5) 1,000 0.1
Herbert S. Perman(6) 150,000 0.1
David Tang 100,000 0.1
John Walsh 350,000 0.5
All Executive Officers and 31,316,527 40.2
Directors as a Group
</TABLE>

On March 18, 1999, following several months of discussions and mutual due
diligence on the financial and legal aspects of the transaction, the Company
entered into an "Agreement to Purchase Stock" (the "Agreement") with Bentley
House Furniture Corporation, Inc., a Philippine corporation ("BHFC"), and the
shareholders of BHFC. The Agreement provided for the Company to acquire 100% of
the issued and outstanding shares of capital stock of BHFC (the "Exchanged BHFC
Stock") in exchange for Common Stock and Series A Preferred Stock of the Company
(collectively, the "Exchanged GTMI Stock") which represented a 90% ownership

<PAGE>
interest in the Company. The Agreement included various financial and legal
representations, covenants and obligations of the parties typical in similar
agreements, including provisions to protect the parties' respective interests.
Pursuant to the Agreement, 100% of BHFC's capital stock was to be exchanged by
BHFC shareholders for (i) 29,595,139 shares of GTMI Common Stock and (ii) 4,000
shares of GTMI series A Preferred Stock. Each share of Series A Preferred Stock
is convertible into 208,274 GTMI Common Stock shares for a total of 833,096,000
GTMI Common Stock shares, or 90% of GTMI Common Stock shares on a fully diluted
basis.

# Pursuant to the rules of the Commission, shares of Common Stock which an
individual or group has a right to acquire within 60 days pursuant to the
exercise of options or warrants are deemed to be outstanding for the purpose of
computing the percentage ownership of such individual or group, but are not
deemed to be outstanding for the purpose of computing the percentage ownership
of any other person shown in the table.

(1) The address for each of these persons is the Company's principal executive
office, located at 4675 MacArthur Court, Suite 420, Newport Beach, California
92660.

(2) In addition to the shares held directly by him, respectively, Jonathon
Bentley-Stevens holds 2,288 shares of Series A Preferred Stock which
are convertible into 208,274 shares of Common Stock for each share of Preferred.

(3) Regina S. Peralta holds 1,590 shares of Series A Preferred Stock.

(4) Roderick A. McClain was the registered owner of options to acquire up to
1,600,000 shares of Common Stock pursuant his employment agreement with the
Company which was canceled on August 12, 1999.

(5) Geoffrey F. McClain was the registered owner of options to acquire 280,820
shares of Common Stock pursuant to his employment agreement with the Company
which was cancelled on August 12, 1999.

(6) Herbert S. Perman was the registered owner of options to acquire 150,000
shares of Common Stock pursuant to his employment agreement with the Company
which was cancelled on August 12, 1999.

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

BentleyTel.com ("BentleyTel"), a subsidiary of GTMI, was incorporated in
Nevada on September 30, 1999. It was organized by Jonathan Bentley-Stevens and
Regina Peralta for the purpose of centralizing all of the Company's
telecommunications, electronics and internet activities in the United States and
other jurisdictions. The Board of Directors consists of Mr. Bentley-Stevens,
Ms. Peralta, Mr. David Tang, Felino Molina , Socrates Palabyab, Dr. Morni
Kambri and Terry Lillis. Mr. Bentley-Stevens is the Chief Executive Officer,
Ms. Peralta is the Executive Vice President and Mr. Tang is the Chief Financial
Officer and John Walsh is the Chief Operating Officer.

On October 11, 1999, as provided by the Agreement, 97 shares of series "A"
preferred shares was delivered into escrow on 11/10/99. The 97 shares of
Convertible Series "A" preferred shares were surrendered to the Company by
Jonathon Bentley-Stevens so that the acquisition of BentleyTel would not further
dilute GTMI shareholders. The Company then issued 97 shares of GTMI Series "A"
preferred shares which were to be exchanged for 20, 202, 578 common shares of
Bentleytel.com stock pending the occurrence of certain conditions precedent,
including the resolution

<PAGE>
of the major debts of GTMI consistent with the original GTMI/BHFC share exchange
and escrow agreement. In connection with the share exchange, Mr. Bentley-Stevens
and Ms. Peralta received no consideration or compensation of any kind. The
transaction has been approved by the Boards of Directors of the Company and the
Board of Directors of BentleyTel.

On December 31, 1997, open account advances made by the Company to Roderick
McClain totaled $226,386 Effective December 31, 1997, Roderick A. McClain
executed a demand promissory note, bearing interest at eight percent per annum
for such amount. During 1998, the Company accrued interest increasing the
amount to $244,497. As of December 31, 1999 the entire amount was reserved.

The Company believes that the above-described transactions are as fair to
the Company as could have been made with unaffiliated parties. The Company
requires that transactions between the Company and its officers, directors,
employees or stockholders or persons or entities affiliated with officers,
directors, employees or stockholders be on terms no less favorable to the
Company than it could reasonably obtain in arms-length transactions with
independent third parties. Such transactions were approved by a majority of the
disinterested directors of the Company.

PART IV

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

A. Financial Statements

The financial statements required by this Item 13 are not being submitted
with this filing. When the financial statements are prepared and filed, the
Company will include submission of Management's discussion and analysis or plan
of operation.

B. Reports on Form 8-K

None

C. Other Exhibits
None

27 Financial Data Schedule.
None

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
----------------------------------------------------

The Company is currently subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington
D.C. 20549; at its New York Regional Office, Room 1400, 7 World Trade Center,
New York, New York, 10048; and at its Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2411, and copies of such materials
can be obtained from the Public Reference Section at prescribed rates. The
Company intends to furnish its stockholders with annual reports containing
audited financial statements and such other periodic reports as the Company may
determine to be appropriate or as may be required by law.

Certain documents listed above as exhibits to this Report on Form 10-KSB
are incorporated by reference from other documents previously filed by the
Company with the Commission as follows:

<PAGE>
Previous Filing Exhibit Number
Incorporated by Reference in Form 10-KSB

1. Quarterly Reports on Form 10-QSB 10.2
for the quarters ended March 31, 1999
June 30, 1999, and September 30, 1999

2. Current Reports on Form 8-K 10.3
dated as of February 19, 1998

3. 10KSB/A NOV 19TH 1999 Amended Annual Report

4. Current reports on Form 8-K
Dated as of May 25, 2000

<PAGE>
CONSENT OF KPMG, Laya Mananghaya & Co.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the incorporation by reference and use in the Form 10 KSB/A-1,
under the Securities Exchange Act of 1934 of our report on the financial
statements of Bentley House Furniture Company for the year ended December 31,
1998.

KPMG, Laya Mananghaya & Co.
Makati City 1227
Metro Manila, Philippines

Dated: June 26, 2000

<PAGE>
CONSENT OF Mendoza Berger & Company, LLP
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the incorporation by reference and use in the Form 10 KSB/A-1,
under the Securities Exchange Act of 1934 of our report on the consolidated
financial statements of Global TeleMedia International, Inc. for the year ended
December 31, 1999.

Mendoza Berger & Company, LLP
Laguna Hills, California

Dated: June 28, 2000

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

GLOBAL TELEMEDIA
INTERNATIONAL, INC.

Dated: June 29,2000 By: /s/ Jonathon Bentley-Stevens
-----------------------------
Jonathon Bentley-Stevens
President/Chief Executive Officer
Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated below.

GLOBAL TELEMEDIA
INTERNATIONAL, INC.

Dated: June 29, 2000 By: /s/ Jonathon Bentley-Stevens
-----------------------------
Jonathon Bentley-Stevens
President/Chief Executive Officer
Director

Dated: June 29, 2000 By: /s/ David Tang
---------------------
David Tang
Chief Financial Officer

<PAGE>

<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Table of Contents F-1

Independent Auditors' Report F-2

Consolidated Balance Sheets F-3

Consolidated Statements of Operations and Comprehensive Income F-5

Consolidated Statements of Stockholders' Equity F-6

Consolidated Statements of Cash Flows F-7

Notes to Consolidated Financial Statements F-9

</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Global Telemedia International, Inc.
Newport Beach, California

We have audited the accompanying consolidated balance sheet of Global Telemedia
International, Inc. (a Delaware Corporation) and subsidiaries as of December 31,
1999 and the related consolidated statements of operations and comprehensive
income (loss), 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
consolidated financial statements based on our audit. The financial statements
of Global Telemedia International, Inc. as of December 31, 1998 were audited by
other auditors whose report dated September 13, 1999 expressed an unqualified
opinion.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Global Telemedia
International, Inc. and subsidiaries as of December 31, 1999 and the results of
their operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

Mendoza Berger & Company, LLP

Laguna Hills, California
June 26, 2000

F-2
<PAGE>
<TABLE>
<CAPTION>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998

ASSETS

1999 1998
----------- ----------
Current Assets:
<S> <C> <C>
Cash $ 214,105 $ 181
Accounts and other receivables, net
of allowance for doubtful accounts of
$9,175,212 at December 31, 1999 123,559 -
Other current assets 428,146 465,492
----------- ----------

Total current assets 765,810 465,673

Property and equipment, net of accumulated
depreciation of $1,153,835 and $524,170 at December 31,
1999 and 1998, respectively (Note 4) 6,787,031 6,275,897

Goodwill, net of accumulated amortization
of $1,260,509 and38,761,800
$0 at December 31, 1999 and 1998, respectively
(Notes 1 and 3) 38,761,800 -

Other assets 398,010 -
----------- ----------

Total assets $46,712,651 $6,741,570
=========== ==========

The accompany notes are an integral part of these consolidated financial statements
</TABLE>

F-3
<PAGE>
<TABLE>
<CAPTION>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998

LIABILITIES AND STOCKHOLDERS' EQUITY

1999 1998
------------ ------------
Current liabilities:
<S> <C> <C>
Accounts payable and accrued expenses $ 7,457,853 $ 2,480,934
Accrued legal judgments and contingencies (Note 12) 14,477,067 -
Notes payable - current portion (Notes 5 and 12) 9,502,974 2,616,975
Capital lease obligations - current portion (Note 6) 74,185 -
------------ ------------

Total current liabilities 31,512,079 5,097,909
------------ ------------

Notes payable, net of current portion (Notes 5 and 12) - 88,116 -
Capital lease obligations, net of current portion (Note 6) 60,495 -
Minority interest (Note 2) 5,640,085 -

Commitments and contingencies (Notes 5, 11, and 12 ) - -

Stockholders' equity (Notes 7, 8, and 9):
Preferred stock, authorized 9,991,000 shares - -
Series A Convertible Preferred Stock, $.004 par value, authorized
5,000 shares, 4,000 and 0 shares issued at December 31,
1999 and 1998, respectively 16 -
Series B Convertible Preferred Stock, $0.004 par value,
authorized 4,000 shares, 0 shares issued and outstanding at
December 31, 1999 and 1998, respectively - -
Series B Convertible Preferred Stock subscribed 485,400 -
Common Stock, $0.004 par value and $4.19 par value,
authorized 75,000,000 and 200,000 shares, 74,939,500
and 200,000 shares issued and outstanding at
December 31, 1999 and 1998, respectively 299,758 52,347
Common stock subscribed 42,500 7,580,352
Common stock held in treasury, at cost (87,600) -
Additional paid-in capital 18,942,589 -
Accumulated other comprehensive income (1,870,137) (1,846,577)
Accumulated deficit (8,400,650) (4,142,461)
------------ ------------

Total Stockholders' equity 9,411,876 1,643,661
------------ ------------

Total liabilities and stockholders' equity $46,712,651 $ 6,741,570
============ ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

F-4
<PAGE>
<TABLE>
<CAPTION>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

1999 1998
------------ ----------
<S> <C> <C>

Net sales $ 594,021 $ 104,700
Cost of goods sold 91,063 31,187
------------ ----------

Gross profit 502,958 73,513
------------ ----------
Operating expenses:
General and administrative 4,191,283 552,803
------------ ----------
Operating Loss (3,688,325) (479,290)
------------ ----------

Other income (expense)
Interest expense (133, 157) -
Other expenses (800, 098) (484,701)
Other income 359,124 -
Minority Interest in subsidiary's net income 4,267 -
------------ ----------

Loss before income taxes (4,258,189) (963,991)
------------ ----------

Provision for income taxes (Note 10) - -
------------ ----------
Net loss (4,258,189) (963,991)
------------ ----------

Other comprehensive income, net of tax: (Note 2)
Foreign currency translation adjustments (23,560) 15,522
------------ ----------

Comprehensive loss $(4,281,749) $(948,469)
============ ==========

Weighted average number of shares
outstanding 69,693,560 200,000
------------ ----------

Loss per common share (basic) $ (.06) $ (4.82)
============ ==========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

F-5
<PAGE>
<TABLE>
<CAPTION>

GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

PREFERRED STOCK COMMON STOCK
---------------------------------- ----------------------------------
SERIES B
SERIES A CONVERTIBLE COMMON ADDITIONAL
CONVERTIBLE PAR STOCK PAR STOCK TREASURY PAID IN
STOCK VALUE SUBSCRIBED SHARES VALUE SUBSCRIBED STOCK CAPITAL
------------ ------ ------------ ---------- -------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Balance, December 31, 1997 - $ - $ - 200,000 $ 52,347 $ 7,580,352 $ - $ -
Foreign currency translation
adjustment, net of tax - - - - - - - -
Net loss - - - - - - - -
------------ ------ ------------ ---------- -------- ------------ ---------- -----------
Balance, December 31, 1998 - - - 200,000 52,347 7,580,352 - -

Shares issued for stock
(Note 3) 4,000 16 - 29,595,139 118,381 - - 6,238,840
Shares surrendered (Note 3) (97) - - - - - - -
Shares issued for stock
(Note 3) 97 - - - - - 3,030,386
Adjusting entries to reflect
reverse acquisition
(Note 1) - - - 45,144,361 129,030 (7,580,352) - 9,673,363
Treasury acquired in
exchange for amount
receivable (Note 7) - - - - - - (87,600) -
Cash received for
subscriptions - - 485,400 - - 42,500 - -
Foreign currency translation
adjustment, net of tax - - - - - - - -
Net loss - - - - - - - -
------------ ------ ------------ ---------- -------- ------------ ---------- -----------
Balance December 31, 1999 4,000 $ 16 $ 485,400 74,939,500 $299,758 $ 42,500 $ (87,600) $18,942,589
============ ====== =========== ========== ========= ============ ========== ===========

ACCUMULATED
OTHER TOTAL
COMPREHENSIVE ACCUMULATED STOCKHOLDERS'
INCOME DEFICIT EQUITY
--------------- ------------- -------------
<S> <C> <C>

Balance, December 31, 1997 $ (1,862,099) $ (3,178,470) $ 2,592,130
Foreign currency translation
adjustment, net of tax 15,522 - 15,522
Net loss - (963,991) (963,991)
--------------- ------------- -------------
Balance, December 31, 1998 (1,846,577) (4,142,461) 1,643,661

Shares issued for stock
(Note 3) - - 6,357,237
Shares surrendered (Note 3) - - -
Shares issued for stock
(Note 3) - - 3,030,386
Adjusting entries to reflect
reverse acquisition
(Note 1) - - 2,222,041
Treasury acquired in
exchange for amount
receivable (Note 7) - - (87,600)
Cash received for
subscriptions - - 527,900
Foreign currency translation
adjustment, net of tax (23,560) - (23,560)
Net loss - (4,258,189) (4,258,189)
--------------- ------------- -------------
Balance December 31, 1999 $ (1,870,137) $ (8,400,650) $ 9,411,876
=============== ============= =============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

F-6
<PAGE>
<TABLE>
<CAPTION>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

1999 1998
------------ ----------
<S> <C> <C>
Cash flows from operating activities
Net loss $(4,258,189) $(963,991)
------------ ----------
Adjustments:
Depreciation and amortization 1,618,844 140,318
Foreign currency translation adjustment (23,560) 15,522
Changes in current assets and liabilities:
Accounts and other receivables (203,580) -
Other assets 117,367 -
Accounts payable and accrued expense 2,394,142 609,765
------------ ----------

Total Adjustments 3,903,213 765,605
------------ ----------
Net cash used by operating activities (354,976) (198,386)
------------ ----------

Cash flows from investing activities
Acquisition of property and equipment - (657,228)
------------ ----------

Net cash used by investing activities - (657,228)
------------ ----------

Cash flows from financing activities
Proceeds from notes payable 41,000 970,797
Proceeds from Preferred Series B subscribed 485,400 -
Proceeds from common stock subscribed 42,500 -
Decrease in advances to shareholders - (297,382)
------------ ----------
Net cash provided by financing activities 568,900 673,415
------------ ----------

Net increase (decrease) in cash 213,924 (182,199)

Cash, beginning of year 181 182,380
------------ ----------

Cash, end of year $ 214,105 181
============ ==========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

F-7
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
------------ ----------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid for interest $ 133,157 $ -
============ ==========

SUPPLEMENTAL DISCLOSURE OF NONCASH OPERATING, INVESTING, AND
FINANCING ACTIVITIES
Issuance of stock for assets acquired $ 31,919,572 $ -

Stock issued to acquire a subsidiary $ 8,666,667 $ -

Stock issued for other assets $ 8,000 $ -

Redemption of treasury stock $ 87,600 $ -

Additional redemption fees on property $ 1,250,000 $ -

The accompanying notes are an integral part of these consolidated financial statements
</TABLE>

F-8
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

1. NATURE OF BUSINESS AND ORGANIZATION
---------------------------------------

Global Telemedia International, Inc. (The Company) (GTMI) was incorporated in
Delaware in November 8, 1996 and has been engaged in the marketing of long
distance telephone and related services to individuals, businesses and other
customers throughout the United States.

On April 2, 1999, the GTMI, Inc. acquired Bentley House Furniture Company, Inc.
a Philippine Corporation (BHFC). The merger was accounted for as a reverse
acquisition whereby BHFC was treated as the accounting acquirer and GTMI as the
accounting acquiree. The accompanying consolidated financial statements include
the historical results of BHFC and the consolidated results of GTMI as of the
date of merger (Note 3).

BHFC allows the Company to have a manufacturing base, whereby furniture and wood
products can be manufactured for the housing and resort industries. Management's
plans are to reinvest any profits from this line of business into the
telecommunications arena.

In October 1999, GTMI acquired 55.1% of BentleyTel.com, Inc. (BTC), a Nevada
Corporation. Through this acquisition, the Company now has operations in the
United States, the Philippines, Australia, and Malaysia through BTC's wholly
owned subsidiaries (Note 3).

The operations of BTC include internet services, e-commerce, telecommunications,
and computer sales and training. The Company, through BTC is currently
developing and co-developing certain telecommunication and e-commerce products
which the Company expects to bring to the market as soon as possible.

Through these acquisitions, the Company's business focus is to raise additional
capital to develop business opportunities in telecommunications, agriculture,
mining, timber import and export, and furniture manufacturing in the United
States, Asia and Australia.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------

PRINCIPLES OF CONSOLIDATION
-----------------------------

The consolidated financial statements include the accounts of the Company and
its majority owned subsidiaries that are located in the United States,
Australia, the Philippines and Malaysia. Significant intercompany accounts and
transactions have been eliminated in the consolidation. Minority interest
represents the minority shareholders' proportionate share of their equity or
income (loss) of the Company's majority-owned subsidiary, BentleyTel.com, Inc.

F-9
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
----------------------------------------------

PROPERTY AND EQUIPMENT
------------------------

Property and equipment are recorded at cost, and depreciated using the
straight-line method over the estimated useful life of the assets, which is 5
years. Maintenance and minor replacements are charged to expense as incurred.
Gains and losses on disposal of assets are included in the results of
operations.

GOODWILL
--------

Goodwill represents the excess of the purchase price over the estimated fair
values of tangible and intangible assets acquired from the reverse acquisition
of the BHFC and the acquisition of its foreign operating subsidiaries through
the Company's 55% holding in BentleyTel.com, Inc. Goodwill is amortized on a
straight-line basis over 20 years. The carrying amount of goodwill is
periodically reviewed using estimated undiscounted net cash flows of the
business acquired over the remaining amortization period. Management believes
that there has been no impairment of the goodwill recorded in the Company's
consolidated financial statements as of December 31, 1999. Total amortization
expense for the year ended December 31,1999 was $1,260,509.

REVENUE RECOGNITION
--------------------

Revenue from the sale of goods is recognized upon the delivery of goods to
customers.

Revenue from the rendering of service is recognized upon the delivery of the
services to the customers.

Revenue from the provision of internet services over a specific period of time
is recognized on an actual usage basis in the period during which the services
are utilized by the customer.

STOCK-BASED COMPENSATION
-------------------------

The Company follows Statement of Financial Accounting Standard (SFAS) No. 123
"Accounting for Stock-Based Compensation." Under SFAS 123, the Company
recognizes compensation for services rendered by employees and consultants using
a fair value methodology.

F-10
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
----------------------------------------------

USE OF ESTIMATES
------------------

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amount of revenue and expenses during the
reporting period. The Company reviews all significant estimates effecting the
financial statements on a recurring basis and records the effect of any
necessary adjustments prior to their issuance. Actual results could differ from
those estimates.

NET LOSS PER SHARE
---------------------

Net loss per share is based on the weighted average number of common shares
outstanding during each period. Dilutive potential common shares include stock
options, warrants, and convertible debentures. For 1999 and 1998, these shares
were not considered in the calculation of net loss per share as they were
anti-dilutive.

FOREIGN CURRENCY TRANSLATION
------------------------------

The Company has determined that the local currency of its international
subsidiaries is the functional currency. In accordance with Statement of
Financial Accounting Standard No. 52, "Foreign Currency Translation," the assets
and liabilities denominated in foreign currency are translated into U.S. dollars
at the current rate of exchange existing at period-end and revenues and expenses
are translated at average monthly exchange rates. The cumulative effect
resulting from such translation is included in accumulated other comprehensive
income in the consolidated financial statements. At December 31. 1999 and 1998
a foreign currency translation losses and gains of ($23,560) and $15,522,
respectively were recorded.

SEGMENT INFORMATION
--------------------

Effective January 1, 1999, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 131 "Disclosures About Segments of a Business Enterprise
and Related Information." SFAS No. 131, which supercedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise," and establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports. SFAS No. 131 also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The adoption of SFAS No. 131 did not affect the results of operations or
financial position of the Company, but did affect the disclosures of the segment
information. See Note 14 for the Company's disclosures related to SFAS No. 131.

F-11
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
----------------------------------------------

FINANCIAL INSTRUMENTS
----------------------

The carrying amounts for the Company's cash and other current assets, accounts
payable, accrued expenses, notes payable, and other liabilities approximate fair
value.

INCOME TAXES
-------------

The Company uses the liability method of accounting for income taxes specified
by SFAS No. 109, "Accounting for Income Taxes", whereby deferred tax liabilities
and assets are determined based on the difference between financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. Deferred tax assets
are recognized and measured based on the likelihood of realization of the
related tax benefit in the future.

ECONOMIC ENVIRONMENT IN THE ASIA PACIFIC REGION
-----------------------------------------------------

The economic developments in the Asia Pacific Region continue to affect the
Philippines and Malaysia and have led to fluctuating foreign exchange rates and
tight financial credit. Although the foreign exchange rates and the interest
are now leaning towards lower levels, the Company will continue to be affected
in the foreseeable future by economic events in the Asia Pacific Region. The
financial statements do not include any adjustments that might result from these
uncertainties. Related effects will be reported in the financial statements as
they become known and estimable.

RECLASSIFICATIONS
-----------------

Certain reclassifications have been made to the 1998 financial statements to
conform with the 1999 presentation.

3. BUSINESS COMBINATIONS
----------------------

ACQUISITION OF BENTLEY HOUSE FURNITURE COMPANY, INC.
----------------------------------------------------------

Pursuant to the Agreement for the Purchase of Stock dated March 18, 1999,
(Acquisition Agreement) , GTMI acquired 100% of the outstanding shares of common
stock of BHFC, as of April 2, 1999. The Company issued 29,595,139 shares of its
common stock and 4,000 shares of its Series A Convertible Preferred Stock in
exchange for all the issued and outstanding shares of BHFC common stock, which
totaled 200,0000 shares.

Simultaneously with the closing of the acquisition agreement, an Escrow
Agreement was created then amended on July 1,1999, so that 3,878 shares of the
4,000 shares originally issued of GTMI

F-12
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

3. BUSINESS COMBINATIONS(Continued)
----------------------

ACQUISITION OF BENTLEY HOUSE FURNITURE COMPANY, INC. (Continued)
----------------------------------------------------------

Series A Convertible Preferred Stock and the 200,000 shares of BHFC's common
stock would be placed in escrow for the period of one year from July 1999. The
29,595,139 shares of GTMI common stock were issued to the shareholders of BHFC.
As a condition for the release of the shares of common stock of GTMI, they
agreed to waive all and any salary or compensation for the period of one year
and to arrange funding for all of the restructuring costs and legal fees for
the same period.

The escrow agreement provides that if during the escrow period, GTMI files
chapter 11 or Chapter 7 or for other creditor protection, the 3,878 shares of
Series A Convertible Preferred shares of GTMI held in escrow will be immediately
retired, 200,000 shares of BHFC's common stock, held in escrow, will be
immediately returned and the shareholders of BHFC will retain the 29,595,139
shares of common stock issued to them and no further claims will be levied
against them. The escrow agreement allows the new shareholders of GTMI to vote
and to receive any dividends paid on the stock held in escrow.

The acquisition was accounted for as a reverse acquisition under the purchase
method of accounting, whereby BHFC was treated as the accounting acquirer and
GTMI as the accounting acquiree. As such, the assets and liabilities of GTMI
will be revalued at their fair market value as of the date of the acquisition.
Any excess purchase price over the fair market value of the net tangible and
intangible assets of GTMI at the acquisition date will be amortized over a
period of 20 years. The Company recorded a total of $31,801,176 in goodwill
related to this transaction and $1,192,000 in amortization expense for the year
ended December 31, 1999.

The historical financial statements prior to April 2, 1999, will be those of
BHFC but the name of the corporation going forward will be Global Telemedia
International, Inc.

ACQUISITION OF BENTLEYTEL.COM, INC.
--------------------------------------

On October 12, 1999, the Company completed an agreement to purchase
BentleyTel.com, Inc., and its subsidiaries (BTC), a Nevada corporation.
Pursuant to the agreement, the Company issued 97 shares of its Series A
Convertible Preferred Stock in exchange for 20,202,578 shares of BTC, which is
approximately 55.1%, of its issued and outstanding common stock. BTC's wholly
owned subsidiaries comprise of operating companies in Australia, the
Philippines, and Malaysia. In order to complete the purchase, the President/CEO
surrendered 97 shares, which he personally owned, of the Company's Series A
Convertible Preferred Stock

An Escrow Agreement was also executed simultaneously with the closing of the
Share Exchange agreement. Under the Escrow Agreement, the Company delivered to
the escrow holder the 97 shares of Series A Convertible Preferred Stock and the
20,202,578 shares of BentleyTel.com Inc.

F-13
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

3. BUSINESS COMBINATIONS (Continued)
----------------------

ACQUISITION OF BENTLEYTEL.COM, INC. (Continued)
--------------------------------------

common stock to be held in escrow for a period of one year. The escrow
provides that if during the escrow period GTMI files chapter 11 or 7 or for
other creditor protection the escrow holder shall without further instruction
deliver the exchanged BentleyTel.com, Inc. stock to BentleyTel.com, Inc. and the
exchanged GTMI stock to GTMI. The escrow agreement allows the new shareholders
of BTC to vote and to receive any dividends paid on the stock held in escrow.

The Company accounted for the acquisition under the purchase method of
accounting. The Company recorded a total of $8,221,133 in goodwill which is
being amortized over 20 years. The Company recorded $68,509 in amortization
expense for the year ended December 31, 1999

The shareholders of the 3,878 shares of GTMI Series A Convertible Preferred
Stock have signed a lock-up agreement that would progressively release the
Series A Convertible Preferred Stock over a period of five years based on
growth and other factors as may be determined by the Company.

UNAUDITED PRO FORMA INFORMATION FOR THE YEAR ENDED DECEMBER 31:
------------------------------------------------------------------------

The unaudited pro forma financial information presented for the year ended
December 31, 1999, has been prepared to illustrate the estimated effect of the
reverse acquisition and the BTC acquisition. The pro forma financial
information does not reflect any anticipated cost savings or synergies that are
anticipated to result from the acquisitions, and there can be no assurance that
any such cost savings or synergies will occur. The pro forma information
presents the effect of the acquisitions as if they had occurred on January 1,
1999. The pro forma financial statements do not purport to be indicative of the
results of operations or financial position of the Company that would have
actually been obtained had such acquisitions been completed as of the assumed
date and for the period presented, or which may be obtained in the future. The
pro forma adjustments are described in the accompanying notes and are based upon
the available information and certain assumptions that the Company believes are
reasonable. The pro forma financial information should be read in conjunction
with the separate historical consolidated financial statements of GTMI and the
notes thereto.

F-14
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

3. BUSINESS COMBINATIONS (Continued)
----------------------

UNAUDITED PRO FORMA INFORMATION FOR THE YEAR ENDED DECEMBER 31: (Continued)
---------------------------------------------------------------

Proforma information giving effect to the acquisitions as if the acquisitions
took place January 1, 1999, is as follows:

1999
------------
Revenue $ 1,080,312
============

Net loss $(5,633,333)
============

Basic and diluted loss per share $ (.08)
============

The pro forma financial information presented above shows the Company's
operating results for the year ended December 31, 1999 and the additional
goodwill amortization expenses in the amount of $740,547 that would have been
recorded if the acquisition had occurred on January 1, 1999. In addition, the
weighted average common shares outstanding reflect the effect of the assumption
that 29,595,139 shares had been issued on January 1, 1999.

4. PROPERTY AND EQUIPMENT
------------------------

Property and equipment consists of the following at December 31:

<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Land and improvements $ 5,303,169 $5,125,777
Machinery and equipment 1,602,287 934,537
Transportation equipment 357,982 357,982
Office equipment, furniture & fixtures 292,303 285,816
Leasehold improvements 171,533 95,955
Property held under capital leases 213,592 -
------------ -----------
7,940,866 6,800,067
Less: accumulated depreciation (1,153,835) (524,170)
------------ -----------
$ 6,787,031 $6,275,897
============ ===========
</TABLE>

Depreciation expense for the years ended December 31, 1999 and 1998 is
$358,335 and $140,318, respectively.

F-15
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

5. NOTES PAYABLE
--------------

Notes payable consisted of the following at December 31, 1999 and 1998:

1999 1998
------------ ----------
<S> <C> <C>
Various 0% to 10.45% notes payable to related parities $ 305,211 $ -
3% convertible debenture due on demand,
in default (Note 5a) 4,416,000 -
Note payable to bank with interest at the prevailing
market rate, subject to monthly repricing,
secured by the real estate mortgage of the Company's
land and other properties in the Philippines (Note 5b) 3,785,570 2,616,975
20% note payable, convertible into shares of the
company common stock, secured by a security
interest in prepaid expense and guaranteed by the
company's former President/CEO 172,500 -
Various 8% to 18% unsecured notes payable,
due on demand and in default 8% 903,309 -
unsecured note payable, due January 15, 2000 8,500 -
------------ ----------
9,591,090 2,616,975
Less: current maturities (9,502,974) -
------------ ----------
$ 88,116 $2,616,975
============ ==========
</TABLE>

The following are maturities of notes payable:

Year Ended December 31,
--------------------------
2000 $ 9,502,974
2001 $ 88,116

F-16
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

5. NOTES PAYABLE (Continued)
--------------

CONVERSION OF DEBENTURE
-------------------------

a) In July 1999, the Company and the debt holders entered into a settlement
agreement by which the Company will convert the remaining balance of the
convertible debt into freely trading shares of the Company's common stock
pursuant to the original conversion terms as set forth in the convertible
debenture agreements, which is at the lesser of $4.00 per share or the average
closing bid price of the Company's common stock for the 5 trading days
immediately preceding the date of conversion. This conversion will be done
gradually with a maximum conversion of $1,000,000 of debentures every forty-five
days, beginning within one week of authorization by the Company's stockholders
to issue these additional shares to satisfy this obligation. As part of this
agreement, the Company will issue 500,000 shares of its common stock to the
debenture holders in satisfaction of outstanding damage claims. These shares
are to be issued in two installments of 250,000 shares at the beginning and end
of the debenture conversions. The Company will have the right to redeem
outstanding debentures for cash at face value in whole or in part.

As part of the agreement, in the event that the Company does not promptly take
all necessary steps to obtain the approval for the authorization and issuance of
the shares, a judgment will be issued against the Company in favor of the debt
holders in the total amount of $7,896,166. As of December 31, 1999, no
debentures have been converted into common stock, since as of the date of the
report, no additional shares have been authorized.

b) One June 21, 2000, a bank in the Philippines has agreed to release
certain property in the Philippines from foreclosure for a redemption amount of
$3,785,570. The redemption amount is broken down as follows:

Original amount of loan at December 31, 1999 $ 2,535,570
Additional expenses and loan extension fee 1,250,000
------------

$ 3,785,570
============

Subsequent to year end, the Company has made payments totaling $2,970,863
towards this debt. The difference of $814,707 will be paid in six monthly
installments. The Company has indicated that they will accept these terms in
order to redeem the foreclosed property.

F-17
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

6. CAPTIAL LEASES
---------------

The Company leases various equipment under agreements classified as capital
leases and expiring in 2002. Assets and liabilities under capital leases are
recorded at the lower of the present value of the minimum lease payments or the
fair value of the asset. The assets are depreciated over the lower of the
related lease terms or their estimated productive lives. Accumulated
depreciation of the equipment under these capital leases is included in the
depreciation expense in 1999.

The future minimum lease payments due under the capital leases at December 31
are:

<TABLE>
<CAPTION>
1999 1998
--------- -----
<S> <C> <C>
Future minimum lease payments $150,488 $ -
Less: amount representing interest (15,808) -
--------- -----
Present value of net minimum lease payment 134,680 -
Less: current portion (74,185) -
--------- -----

$ 60,495 $ -
========= =====
</TABLE>

Minimum future lease payments under capital leases as of December 31, for each
of the next five years are:

Year ended
December 31,
------------

2000 $74,185
2001 55,126
2002 5,369
--------
134,680
========

7. EQUITY TRANSACTIONS
--------------------

SERIES A CONVERTIBLE PREFERRED STOCK
----------------------------------------

The Series A Convertible Preferred Stock is a voting stock with par value of
$0.004 per share, convertible into 208,274 shares of common stock at the option
of the holder. The Series A Convertible Preferred Stock bear no dividends, and
the holders shall be entitled to liquidation preferences on the same
proportionate basis as the holders of the common stock.

F-18
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

7. EQUITY TRANSACTIONS (Continued)
--------------------

SERIES A CONVERTIBLE PREFERRED STOCK (Continued)
--------------------------------------

In February, 2000, the Company changed the amount of shares which the Series A
Convertible Preferred Stock may be converted from 208,274 to 200,000 shares of
common stock. All previously issued Series A Convertible preferred shares will
still convert at the previously stated amount except for the holders of 3,903
Series A Convertible Preferred Stock which will be converted at the new
conversion rate.

SERIES B CONVERTIBLE PREFERRED STOCK
----------------------------------------

The Series B Convertible Preferred Stock is non-voting stock with par value of
$0.004 per share and is convertible into 2,500 shares of common stock at the
option of the holder. The Series B Convertible Preferred Stock bear no
dividends and the holders shall be entitled to liquidation preferences on the
same proportionate basis as the holders of the common stock.

TREASURY STOCK
---------------

In October 1999, the Company recorded 950,000 shares of common stock as treasury
stock, valued at the debt forgiven of $87,600 (Note 12).

SERIES B CONVERTIBLE PREFERRED STOCK SUBSCRIBED
----------------------------------------------------

The Company has received $485,400 for the subscription of 3,491,943 shares of
common stock. Until the Company has authorized additional shares of common
stock, shares will be issued under the Shares Surrender Agreement signed by the
President/CEO and Executive Vice President (Note 8).

COMMON STOCK SUBSCRIBED
-------------------------

The Company has received $42,500 as deposits to extend certain stock options to
June 30, 2000. The deposits will be applied against the total exercise price of
the options.

8. SHARE SURRENDER AGREEMENT
---------------------------

During 1999, the Company entered into a Share Surrender Agreement with its
current President/CEO and Executive Vice President whereby both individuals
agreed to surrender their personal shares GTMI's common stock to meet the
Company financing needs. Pursuant to the Share Surrender Agreement, the Company
agrees to replace the shares surrendered within a 12 month period with Series B
Convertible Preferred Stock, equivalent to the common stock surrendered. The
Company's President/CEO and Vice President surrendered 7,210,666 shares
subsequent to year end, to meet approximately $5,765,000 of the Company's
financial needs.

F-19
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

8. SHARE SURRENDER AGREEMENT (Continued)
---------------------------

In November 1999, the Company's President/CEO entered into an agreement with a
stockholder, whereby he surrendered 1,090,566 shares of common stock of the
Company in order to generate $116,900 of cash. The President/CEO will surrender
the equivalent amount of common stock of the Company in replacement of the
shares surrendered by the stockholder within 12 months under the Share Surrender
Agreement.

9. STOCK OPTIONS AND WARRANTS
-----------------------------

At December 31, 1999 and 1998, the Company had stock options and warrants
granted to employees and non-employees for compensation. Stock options and
warrants vest immediately and expire from one to nine years from the grant date.
A summary of the Company's stock option and warrant activity for the years ended
December 31, 1999 and 1998 is:

<TABLE>
<CAPTION>
1999
-----------------------------
Weighted
Average
Outstanding Exercise Price
------------ ---------------
<S> <C> <C>
Balance, beginning of year 7,025,767 $ 0.34
Granted 190,000 0.10
Exercised - -
Canceled/expired (3,636,192) 0.31
------------ ---------------
Balance, end of year 3,579,575 0.35
============ ===============
Weighted average fair value of options/warrants
granted during the year $ -
===============
</TABLE>

F-20
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

9. STOCK OPTIONS AND WARRANTS (Continued)
-----------------------------

<TABLE>
<CAPTION>
1998
-----------------------------
Weighted
Average
Outstanding Exercise Price
------------ ---------------
<S> <C> <C>

Balance, beginning of year 4,137,500 $ 1.33
Granted 12,978,289 0.17
Exercised (9,260,734) 0.15
Canceled/expired (829,288) 3.56
------------ ---------------
Balance, end of year 7,025,767 0.34
============ ===============

Weighted average fair value of options/warrants
granted during the year $ -
===============
</TABLE>

The Company measures compensation cost using the fair value-based
accounting method prescribed in SFAS No. 123. The Company estimates the fair
value of each option/warrant at the grant date using the Black-Scholes option
pricing model with the following weighted average assumptions used for grants in
1999 and 1998, respectively: no dividend yield for each year; expected
volatility of 20% and 33%; expected option/warrant life of 3 years for 1999 and
2 years for 1998; and risk free interest rates of 5.75% and 4.72%.

<TABLE>
<CAPTION>
Weighted
Options and Average
Exercise Price Range Warrants Average Life Exercise Price
---------------------- ----------- ------------ ---------------

1999 Outstanding and Exercisable
---------------------------------
<S> <C> <C> <C>
0.20 - $1.00 3,579,575 2.9 $ 0.35

1998 Outstanding and Exercisable
---------------------------------
0.10 - $2.50 7,025,767 3.10 $ 0.34
</TABLE>

OPTION TO SELL COMMON STOCK
-------------------------------

On March 9, 1999, the Company entered into an agreement whereby it has the right
to sell or "put" up to $10,000,000 of its rule 144 restricted common stock to a
private investor in $2,000,000 increments. The sale price shall be 90% of the
highest closing bid price of its common stock on the five days following the put
date. The "puts" are subject to certain market and timing conditions including
that the common stock shall be trading on the NASD OTC BB or any other major
exchange. The Company is not obligated to sell its shares. This agreement
expires one year after the agreement date.

F-21
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

10. INCOME TAXES
-------------

Deferred income taxes and the related valuation allowances result from the
potential tax benefits of tax carryforwards. The Company has recorded a
valuation allowance to reflect the uncertainty of the ultimate utilization of
the deferred tax assets as follows:

<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Deferred tax assets $ 16,289,000 $ 16,289,000
Less: valuation allowance (16,289,000) (16,289,000)
------------- -------------
Net deferred tax assets $ - $ -
============= =============
</TABLE>

The following is a reconciliation of applicable U.S. federal income tax rates
(credits) to the effective tax rates included in the consolidated statements of
operations:

<TABLE>
<CAPTION>
1999 1998
======= =======
<S> <C> <C>
U.S federal income tax rate (34.0)% (34.0)%
State income tax rate (05.8) (03.6)
Tax loss carryforwards 39.8 37.6
------- -------
0.0% 0.0%
======= =======
</TABLE>

At December 31, 1999, the Company had available unrecognized net operating loss
carryforwards for income tax reporting purposes of $42,220,000, which will
expire in various periods through 2019. In addition, the Company has $1,244,327
of capital loss carryforwards, which expire in 2000 and can be used to offset
capital gains, if any. Because of the reverse acquisition, the utilization of
the net operating loss carryover per Internal Revenue Code Section 382, will be
limited to the value of GTMI prior to the reverse acquisition multiplied by the
IRS long-term tax-exempt rate of 4.78% in 1999.

SFAS No. 109 requires a valuation allowance to be recorded when it is more than
likely than not that some or all of the deferred tax assets will not be
realized. At December 31, 1999 and 1998, valuations for 100% of the net deferred
tax assets were recorded due to uncertainties as to the amount of taxable
income that will be generated in future years. No income tax benefit has been
recorded for all periods presented because of the valuation allowance.

Due to "change in ownership" provisions in the Internal Revenue Code Section
382, the availability of the Company's net operating loss carryforwards may be
subject to an annual limitation against taxable income in future periods, which
could substantially limit the eventual utilization of these net carryforwards.

F-22
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

11. COMMITMENTS
-----------

OPERATING LEASE
----------------

The company leases its premises under a five-year operating lease, which
expires May 20, 2005.
The future minimum lease payments under the operating lease at December 31, 1999
are as follows:

Year Ended December 31
--------------------------
2000 $ 72,456
2001 93,294
2002 96,798
2003 100,302
2004 103,806
Thereafter 43,800

Rental expense for the years ended December 31, 1999 and 1998 was $26,225 and
$0, respectively.

EMPLOYMENT AGREEMENTS
----------------------

The Company has employment agreements with certain officers, which expire at
various times through 2005. During 1999, previous management resigned their
positions with the Company, effectively terminating their employment agreements.

ULTRAPULSE COMMUNICATIONS, INC. LETTER OF INTENT
-----------------------------------------------------

In May 1998, the Company entered into a letter of intent with UltraPulse
Communications, Inc. (UCI) to acquire 51% of its outstanding common stock. As
part of the agreement, the Company will have a five-year option to acquire the
additional 49% of UCI's outstanding common stock. UCI is a privately held
company that holds the exclusive licensing rights for the development,
production and marketing of its wireless telecommunications technology. In
addition, if the option were exercised, the Company would have to provide
financing to UCI in the amount of $10,000,000 on a deposit and a
performance-based schedule to be determined following the evaluation of the
functioning technology. The agreement is subject to due diligence by both
parties and shareholders consent prior to the execution of any final agreement.

MARKETING AND SALES CONTRACT
-------------------------------

In October, 1999, the Company entered into an agreement with an individual
consultant to provide services related to the design of furniture and fixtures
related to homes, resorts, and custom designed buildings and to grant the
Company and exclusive license to manufacture and sell the products through
October, 2006. In exchange for these services, the Company has agreed to pay as
compensation up to 50,000,000 shares of common stock earned through a formula
over

F-23
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

11. COMMITMENTS (Continued)
-----------

MARKETING AND SALES CONTRACT (Continued)
-------------------------------

the term of the agreement based on an overall cumulative sales goal of
$75,000,000. Additionally, the consultant will be paid additional fees for other
services. Any shares earned will be paid through the share surrender agreement
(Note 8) with the remaining shares not being issued until a Board of Directors'
meeting is held to authorize additional common stock. No amounts were paid under
this contract during 1999.

12. CONTINGENCIES
-------------

LITIGATION
----------

The Company is involved in various lawsuits, claims and proceedings which have
arisen in disputes with vendors for non payment of services received. Amounts
claimed due under the lawsuits, including accrued interest, are included in
accounts payable and accrued expenses, accrued legal judgments and contingencies
and notes payable at December 31, 1999 and 1998. The most significant
litigation is described below.

In August 29, 1997, a complaint was filed against the Company by a vendor
seeking recovery of approximately $6 million for payment of services rendered as
well as fees for attorneys and court costs. The suit was amended to reflect an
amount of $9 million plus interest. While no assurances can be given, the
Company intends to vigorously defend this action. At December 31, 1999 the
Company had accrued a total of $11,098,910 related to this matter. The Company
is optimistic that some kind of out of court settlement can be achieved.

In May 1998, an award was entered against the company for $2.5 million with
respect to a former agreement for services to be provided by each entity. On
April 1, 1999, the Company entered into a settlement agreement for $325,000.
Although the Company was successful in reaching a compromise settlement, its
inability to make payment of the settlement resulted in the reinstatement of
$2.5 million The Company has accrued a total of $2,698,157 relating to this
matter as of December 31, 1999. The Company is optimistic that some kind of out
of court settlement can be achieved.

In February 1997, a note payable holder filed a complaint against the Company
seeking recovery on two promissory notes totaling $250,000 in principal,
together with interest, attorney fees, costs and expenses. Although the Company
was successful in reaching a compromise settlement of this action, its inability
to make payment of the settlement resulted in a summary judgment against the
Company for $250,000. As of December 31, 1999, the Company has recorded
$250,000 in notes payable. The Company is optimistic that some kind of out of
court settlement can be achieved.

F-24
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

12. CONTINGENCIES(Continued)
-------------

LITIGATION (Continued)
----------

A complaint was filed against the Company to collect on a promissory note in
total principal amount of $250,000, together with interest and attorney fees.
In May 20, 2000 a default judgment was entered against the Company in the amount
of $262,309, $47,808 in interest and $46,517 in attorney fees. At December 31,
1999 the Company has recorded a 12% note payable of $262,309, $47,808 in accrued
interest, and $47,808 accrued legal fees relating to this matter.

Pursuant to a Nonqualified Stock Option Agreement dated May 28, 1998, an option
holder exercised its rights to purchase 282,075 shares of unrestricted common
stock at $.46 per share. The Company has not issued the stock, giving rise to
the claims for the beach of contract and conversion. The option holder has
stated that they will hold the Company responsible for the damages caused by the
failure to issue the shares, resulting in estimated damages of approximately
$700,000 plus punitive damages. No amounts have been recorded by management
related to this matter, since no claims have been asserted.

The Company entered into a settlement agreement with the former President of the
Company. Under the terms of the settlement agreement, the Company will pay John
Walsh $205,000 and 850,000 shares of the Company's common stock. Additionally,
upon the execution of the agreement, the Company's current President/CEO was to
have remitted his personal shares to the Company transfer agent for cancellation
and the re-issuance of the shares to the former employee. No shares have been
issued under the share surrender agreement (Note 8). The Company has accrued
$330,000 as of December 31, 1999 related to this matter.

The Company entered into a settlement agreement with a major customer for
services rendered but not paid. In the lawsuit, the Company also requested the
return of 2,168,767 shares of its common stock that were issued to this
customer. In accordance with the terms of the settlement agreement, the
customer was to pay $200,000 for the shares of common stock. The customer paid
$112,400 for 1,218,767 shares of common stock and returned 950,000 shares of the
Company's common stock instead of paying the remaining $87,600. In exchange for
such payment, the Company agreed to release any restrictions on the shares and
reissue replacement certificates as needed for the 1,218,767 shares of the
Company's common stock. The Company recorded the returned 950,000 shares of the
Company's common stock as treasury stock.

13. RELATED PARTY TRANSACTIONS
----------------------------

BENTLEYTEL.COM, INC., ACQUISITION
-----------------------------------

The President and Executive Vice President of the Company own approximately 36%
of the outstanding common stock of a subsidiary, BentleyTel.com, Inc.

F-25
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

13. RELATED PARTY TRANSACTIONS (Continued)
----------------------------

STOCK OPTION AGREEMENT - RELATED PARTY
-------------------------------------------

During 1998, the GTMI granted options to two officers/directors of the Company
to purchase 1,100,000 shares of the Company's common stock at a price of $.10
per share. These options expired January 2000 and were not exercised.

14. SEGMENT INFORMATION
--------------------

The Company, through its chief operating decision maker, evaluates and measures
its business performance on the bases of each segment's industrial
concentration. The Company operates two business segments: Telecommunications
and Furniture and Timber Production. The Company designs and produces
telecommunications software and equipment in its Telecommunications segment. The
Company also manufactures furniture and harvests timber in its Furniture and
Timber Production segment.

Company segment sales consist totally of sales to external customers. The
operating profit (loss) used by the Company to evaluate performance consists of
its industry segment gross profit measure.

(Left intentionally blank)

F-26
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

14. SEGMENT INFORMATION (Continued)
--------------------

<TABLE>
<CAPTION>
Segment information for
the years ended
December 31, is: 1999
---------------------------------------

FURNITURE AND
TIMBER
TELECOMMUNICATIONS PRODUCTION TOTAL
------------ ----------- ------------
<S> <C> <C> <C>

Sales $ 465,075 $ 128,946 $ 594,021
Gross profit (loss) 446,623 56,335 502,958
Interest expense 133,157 - 133,157
Depreciation and
amortization 1,277,512 341,332 1,642,329
Net loss (3,355,642) (902,547) (4,258,189)

At December 31:
Assets $40,265,409 $6,447,242 $46,712,651

1998
---------------------------------------

FURNITURE AND
TIMBER
TELECOMMUNICATIONS PRODUCTION TOTAL
---------------------------------------
Sales $ - $ 104,700 $ 104,700
Gross profit (loss) - 73,513 73,513
Interest expense - - -
Depreciation and
amortization - 140,318 140,318
Net loss - (963,991) (963,991)

At December 31:
Assets $ - $6,741,570 $ 6,741,570
</TABLE>

The company produced all of its sales and revenues outside of the United States
for both of the years ended December 31, 1999 and 1998. The sales to foreign
locations are as follows:

<TABLE>
<CAPTION>
REGION 1999 1998
---------------- -------- --------
<S> <C> <C>

US/North America $ - $ -
Asia/Australia 594,021 104,700
-------- --------
$594,021 $104,700
======== ========
</TABLE>

F-27
<PAGE>
GLOBAL TELEMEDIA INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

14. SEGMENT INFORMATION (Continued)
--------------------

The Company had major portions of its long-lived assets located both in the
United States and other foreign locations. These assets include all property,
plant, and equipment. Long-lived assets by foreign location at December 31, 1999
and 1998, are as follows:

<TABLE>
<CAPTION>
REGION 1999 1998
---------------- ---------- ----------
<S> <C> <C>
US/North America $ 16,494 $ -
Asia/Australia 6,770,537 6,275,897
---------------- ---------- ----------
$6,787,031 $6,275,897
========== ==========
</TABLE>

15. SUBSEQUENT EVENT

The Company has entered into discussions to acquire a software developer, owner
of a patented unified messaging system. The letter of understanding dated April
2000, states that the Company will acquire 100% of the software developer in
exchange for Series A Convertible Preferred Stock, which will be provided by the
surrender of additional shares by the Company's major shareholders, plus cash.

The Company's President/CEO has committed to funding development costs up to
$600,000 for the software developer.

In connection with this agreement, the Company, through its subsidiary
BentleyTel.com, Inc. has entered into a software co-development agreement in
January 2000 and a joint marketing agreement in February 2000, for a term of two
years. These agreements grant certain marketing rights to its products outlined
in the agreements.

Additionally, the President of the software developer has joined the Company as
Chief Technical Officer to supervise the ongoing software development agreement.

F-28
<PAGE>