E NET INC
SB-2/A, 1996-05-30
COMPUTER PROGRAMMING SERVICES
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<PAGE>
   
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 30, 1996.
    
 
   
                                                       REGISTRATION NO. 333-3860
    
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
   
                                AMENDMENT NO. 1
                                       TO
                                   FORM SB-2
    
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
 
                                  E-NET, INC.
   
                 (Name of Small Business Issuer in Its Charter)
    
 
<TABLE>
<S>                               <C>                           <C>
            DELAWARE                          1711                    52-1929282
(State or other jurisdiction of   (Primary standard industrial      (IRS employer
 incorporation or organization)   classification code number)   identification number)
</TABLE>
 
                             7-4 METROPOLITAN COURT
                          GAITHERSBURG, MARYLAND 20878
                                 (301) 548-8880
 
         (Address, including zip code, and telephone number, including
            area code, of Registrant's principal executive offices)
 
                             7-4 METROPOLITAN COURT
                          GAITHERSBURG, MARYLAND 20878
                                 (301) 548-8880
 
(Address of principal place of business or intended principal place of business)
 
            ROBERT A. VESCHI, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                  E-NET, INC.
                             7-4 METROPOLITAN COURT
                          GAITHERSBURG, MARYLAND 20878
                                 (301) 548-8880
 
      (Name, address, including zip code, and telephone number, including
                        area code, of agent for service)
                            ------------------------
 
                                   COPIES TO:
 
<TABLE>
<S>                                       <C>
     THOMAS T. PROUSALIS, JR., ESQ.             STEVEN F. WASSERMAN, ESQ.
     1919 Pennsylvania Avenue, N.W.             Berstein & Wasserman, LLP
               Suite 800                             950 Third Avenue
         Washington, D.C. 20006                     New York, NY 10022
             (202) 296-9400                           (212) 826-0730
           (202) 296-9403 Fax                       (212) 371-4730 Fax
</TABLE>
 
                            ------------------------
 
          APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
   AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
                            ------------------------
 
    IF  ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUING BASIS, PURSUANT TO RULE 415 UNDER THE SECURITIES ACT  OF
1933, AS AMENDED, CHECK THE FOLLOWING BOX: /X/
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                        CALCULATION OF REGISTRATION FEE
 
   
<TABLE>
<CAPTION>
                                   AMOUNT TO    PROPOSED MAXIMUM  PROPOSED MAXIMUM     AMOUNT OF
     TITLE OF EACH CLASS OF            BE        OFFERING PRICE      AGGREGATE       REGISTRATION
  SECURITIES TO BE REGISTERED      REGISTERED     PER SECURITY     OFFERING PRICE         FEE
<S>                               <C>           <C>               <C>               <C>
Units...........................   1,150,000         $ 7.00         $ 8,050,000         $ 2,776
Common Stock, $.01 Par Value....   2,300,000           --                --               --
Class A Warrants................   2,300,000           --                --               --
Common Stock, $.01 Par Value,
 Underlying Class A Warrants....   2,300,000         $ 4.00         $ 9,200,000         $ 3,172
Underwriters' Purchase Option...    100,000          $11.55         $ 1,155,000         $  398
Common Stock $.01, Par Value, in
 Underwriters' Purchase
 Option.........................    200,000            --                --               --
Class A Warrants in
 Underwriters' Purchase
 Option.........................    200,000            --                --               --
Common Stock, $.01 Par Value,
 Underlying Class A Warrants in
 Underwriters' Purchase
 Option.........................    200,000          $ 4.80          $  960,000         $  331
Common Stock, $.01 Par Value,
 Offered by Selling
 Security-holders...............   2,000,000         $ 3.50         $ 7,000,000         $ 2,414
Class A Warrants Offered by
 Selling Security-holders.......   2,000,000           --                --               --
Common Stock, $.01 Par Value,
 Underlying Class A Warrants
 Offered by Selling
 Security-holders...............   2,000,000         $ 4.00         $ 8,000,000         $ 2,759
Common Stock, $.01 Par Value,
 Underlying Class B Warrants....   2,000,000         $ 4.20         $ 8,400,000         $ 2,897
  Total Registration and Fee....                                    $42,765,000         $14,747
</TABLE>
    
 
    THE  REGISTRANT HEREBY  AMENDS THIS REGISTRATION  STATEMENT ON  SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A  FURTHER  AMENDMENT  WHICH SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT  SHALL THEREAFTER BECOME EFFECTIVE IN  ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT  OF 1933  OR UNTIL  THE REGISTRATION  STATEMENT SHALL  BECOME
EFFECTIVE  ON SUCH DATE AS THE COMMISSION,  ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
 
                                       ii
<PAGE>
                                  E-NET, INC.
                             CROSS-REFERENCE SHEET
                            PURSUANT TO ITEM 501(B)
                 SHOWING LOCATION IN PROSPECTUS OF INFORMATION
                         REQUIRED BY ITEMS OF FORM SB-2
 
<TABLE>
<CAPTION>
         REGISTRATION STATEMENT ITEM                 CAPTION IN PROSPECTUS
- ---------------------------------------------  ---------------------------------
<C>  <S>                                       <C>
 1.  Front of Registration Statement and
      Outside Front Cover of Prospectus......  Facing Page; Cross-Reference
                                               Sheet; Prospectus Cover Page
 2.  Inside Front and Outside Back Cover
      Pages of Prospectus....................  Prospectus Cover Page; Prospectus
                                               Back Cover Page
 3.  Summary Information and Risk Factors....  Prospectus Summary; The Company;
                                               Risk Factors
 4.  Use of Proceeds.........................  Use of Proceeds
 5.  Determination of Offering Price.........  Risk Factors; Underwriting
 6.  Dilution................................  Dilution and Other Comparative
                                               Data
 7.  Selling Security-holders................  Description of Securities;
                                               Selling Security-holders
 8.  Plan of Distribution....................  Prospectus Cover Page;
                                               Underwriting
 9.  Legal Proceedings.......................  Legal Proceedings
10.  Directors, Executive Officers, Promoters
      and Control Persons....................  Management; Principal
                                               Shareholders
11.  Security Ownership of Certain Beneficial
      Owners and Management..................  Principal Shareholders
12.  Description of Securities...............  Description of Securities
13.  Interest of Named Experts and Counsel...  Legal Matters; Experts
14.  Disclosure of Commission Position on
      Indemnification for Securities Act
      Liabilities............................  Certain Transactions
15.  Organization Within Five Years..........  Prospectus Summary; Business
16.  Description of Business.................  Business
17.  Management's Discussion and Analysis or
      Plan of Operation......................  Management's Discussion and
                                               Analysis or Plan of Operation
18.  Description of Property.................  Business
19.  Certain Relations and Related
      Transactions...........................  Certain Transactions
20.  Market for Common Equity and Related
      Stockholder Matters....................  Description of Securities
21.  Executive Compensation..................  Management
22.  Financial Statements....................  Financial Statements
23.  Changes in and Disagreements With
      Accountants on Accounting and Financial
      Disclosure.............................  Not applicable
</TABLE>
 
                                      iii
<PAGE>
                                EXPLANATORY NOTE
 
    This  registration statement covers the primary  offering of Units by e-NET,
Inc.  ("Company")   and  the   offering  of   securities  by   certain   selling
security-holders ("Selling Security-holders"). The Company is registering, under
the  primary  prospectus  ("Primary  Prospectus"),  1,150,000  Units,  each Unit
consisting of two shares of Common Stock  and two Class A Warrants. The  Selling
Security-holders  are  registering,  under an  alternate  prospectus ("Alternate
Prospectus"), 2,000,000 shares of Common  Stock and 2,000,000 Class A  Warrants.
The  Alternate Prospectus  pages, which  follow the  Primary Prospectus, contain
certain sections which are to be combined with all of the sections contained  in
the  Primary Prospectus, with the following exceptions: the front and back cover
pages, and the sections entitled "The Offering" and "Selling  Security-holders."
In addition, the sections entitled "Concurrent Sales" and "Plan of Distribution"
will be added to the Alternate Prospectus. Furthermore, all references contained
in  the  Alternate Prospectus  to the  "offering" shall  refer to  the Company's
offering of securities under the Primary Prospectus.
 
                                       iv
<PAGE>
INFORMATION   CONTAINED  HEREIN  IS  SUBJECT   TO  COMPLETION  OR  AMENDMENT.  A
REGISTRATION STATEMENT  RELATING TO  THESE SECURITIES  HAS BEEN  FILED WITH  THE
SECURITIES  AND EXCHANGE  COMMISSION. THESE SECURITIES  MAY NOT BE  SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR  TO THE TIME THE REGISTRATION STATEMENT  BECOMES
EFFECTIVE.  THIS  PROSPECTUS  SHALL  NOT  CONSTITUTE AN  OFFER  TO  SELL  OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE  SECURITIES
IN  ANY STATE IN WHICH SUCH OFFER,  SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
   
                   SUBJECT TO COMPLETION, DATED MAY 30, 1996.
    
PROSPECTUS
                                1,000,000 UNITS
                                  E-NET, INC.
 
    e-NET, Inc. ("Company"), a Delaware corporation, is offering 1,000,000 units
("Units") at a  price of $7.00  per Unit. Each  Unit consists of  two shares  of
common  stock  ("Common Stock"),  $.01  par value,  and  two redeemable  Class A
warrants ("Class  A  Warrants"). The  Common  Stock  and Class  A  Warrants  are
detachable  and  may  trade  separately  immediately  upon  issuance.  See "Risk
Factors" and "Description of Securities."
    The Class A Warrants shall be exercisable commencing one year after the date
of this Prospectus ("Effective Date"). Each Class A Warrant entitles the  holder
to  purchase one share of  Common Stock at $4.00 per  share during the four year
period commencing one year from the Effective Date hereof. The Class A  Warrants
are  redeemable  by  the  Company  for  $.05  per  Warrant,  at  any  time after
             , 1998, upon thirty (30) days' prior written notice, if the average
closing price or bid  price of the  Common Stock, as  reported by the  principal
exchange  on  which  the Common  Stock  is  quoted, the  Nasdaq  SmallCap Market
("Nasdaq") or the National Quotation Bureau,  Incorporated, as the case may  be,
equals  or exceeds $9.00 per share, for any twenty (20) consecutive trading days
within a period of thirty (30) days ending within ten (10) days of the notice of
redemption. Upon thirty (30)  days' prior written notice  to all holders of  the
Class  A Warrants, the Company shall have the right to reduce the exercise price
and/or extend  the  term  of  the  Class  A  Warrants  in  compliance  with  the
requirements  of  Rule  13e-4  to the  extent  applicable.  See  "Description of
Securities."
    Also, the  registration statement  of  which this  Prospectus forms  a  part
covers  the offering of 2,000,000  shares of Common Stock  and 2,000,000 Class A
Warrants owned by four  persons who are nonaffiliated  with the Underwriter  and
the Company, hereinafter collectively referred to as "Selling Security-holders."
The Class A Warrants are identical to the Class A Warrants included in the Units
being  offered by the Company.  The shares of Common  Stock and Class A Warrants
held by the Selling Security-holders may be sold commencing eighteen (18) months
from the  date  of this  Prospectus,  subject to  earlier  release at  the  sole
discretion  of  Stratton  Oakmont,  Inc.  ("Underwriter"),  and  such securities
include a  legend  with  such  restrictions. The  Underwriter  may  release  the
securities held by the Selling Security-holders at any time after all securities
subject  to the Over-allotment Option have been sold or such option has expired.
The resale of  the securities  of the  Selling Security-holders  are subject  to
Prospectus  delivery and  other requirements of  the Securities Act  of 1933, as
amended. Sales of  such securities in  the Over-allotment Option  and the  early
release  of the Selling  Security-holder shares, which  has occurred in previous
offerings underwritten by the Underwriter, or the potential of such sales at any
time may have an adverse effect on  the market prices of the securities  offered
hereby. See "Selling Security-holders" and "Underwriting."
    The Company has applied for inclusion of the Units, Common Stock and Class A
Warrants  on Nasdaq, although there can be  no assurances that an active trading
market will  develop,  even  if  the  securities  are  accepted  for  quotation.
Additionally,  if the Company's securities are accepted for quotation and active
trading develops, the Company is  required to maintain certain minimum  criteria
established  by Nasdaq, of which there can be no assurance that the Company will
be able to continue to fulfill such criteria. The Company has been advised  that
the  Company's securities  offered hereby  will be listed  on           upon the
Effective Date of this offering under  the symbols "EENTU," "EENT" and  "EENTW."
See "Risk Factors."
    Prior  to this  offering, there  has been  no public  market for  the Units,
Common Stock  and Class  A Warrants.  The price  of the  Units, as  well as  the
exercise   price  of  the  Class  A  Warrants,  was  arbitrarily  determined  by
negotiations between  the Company  and  the Underwriter,  and  do not  bear  any
relationship  to  the Company's  assets,  book value,  net  worth or  results of
operations  or  any  other  established   criteria  of  value.  For   additional
information  regarding the factors considered  in determining the initial public
offering price of the Units and the exercise price of the Class A Warrants,  see
"Risk  Factors  -- Arbitrary  Offering Price,"  "Description of  Securities" and
"Underwriting."
   
    The Underwriter from time to time  will become a market maker and  otherwise
effect  transactions in the securities of  this offering. The Underwriter, if it
participates in the market, may become  an influence and thereafter a factor  of
increasing  importance in  the market for  the securities. However,  there is no
assurance that  the  Underwriter  will  or will  continue  to  be  a  dominating
influence.  The prices and liquidity of  the Units may be significantly affected
by the degree, if any,  of the Underwriter's participation  in such market as  a
market  maker. The Underwriter may discontinue  such market making activities at
any time or from time to time.
    
   
    The Company does not presently file  reports and other information with  the
Securities  and  Exchange  Commission.  However,  following  completion  of this
offering, the Company intends  to furnish its  stockholders with annual  reports
containing  audited financial statements and such  interim reports, in each case
as it may determine to furnish or as may be required by law.
    
   
    On February  28, 1995,  the Underwriter  became subject  to a  court-imposed
permanent  injunction  to  comply  with  certain  procedures  recommended  by an
independent consultant  arising  out  of  the settlement  of  a  Securities  and
Exchange Commission ("Commission") proceeding. The failure by the Underwriter to
comply  with  the permanent  injunction may  adversely affect  the Underwriter's
activities in that the court may  issue a further order restricting the  ability
of  the Underwriter to  act as a  market maker of  the Company's securities. See
"Risk Factors."
    
 
   
AN INVESTMENT IN THE  SECURITIES OFFERED HEREBY INVOLVES  A HIGH DEGREE OF  RISK
AND  IMMEDIATE  SUBSTANTIAL DILUTION  OF THE  BOOK VALUE  OF THE  COMMON STOCK
  INCLUDED IN THE  UNITS AND SHOULD  BE CONSIDERED ONLY  BY PERSONS WHO  CAN
    AFFORD  THE LOSS OF       THEIR  ENTIRE INVESTMENT. SEE "RISK FACTORS,"
                            PAGE 6, AND "DILUTION."
    
 
THESE SECURITIES HAVE  NOT BEEN APPROVED  OR DISAPPROVED BY  THE SECURITIES  AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
   OR  ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
     OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
                                    OFFENSE.
 
<TABLE>
<CAPTION>
                                                               UNDERWRITING DISCOUNTS    PROCEEDS TO THE
                                            PRICE TO PUBLIC      AND COMMISSIONS (1)       COMPANY (2)
<S>                                        <C>                 <C>                      <C>
Per Unit.................................        $7.00                  $.70                  $6.30
Total(3).................................      $7,000,000             $700,000              $6,300,000
</TABLE>
 
                            (SEE "NOTES," NEXT PAGE)
    THE SECURITIES ARE OFFERED BY THE  UNDERWRITER ON A "FIRM COMMITMENT"  BASIS
SUBJECT  TO  PRIOR  SALE  WHEN, AS  AND  IF  DELIVERED TO  AND  ACCEPTED  BY THE
UNDERWRITER, AND SUBJECT TO THE UNDERWRITER'S RIGHT TO REJECT ORDERS IN WHOLE OR
IN PART  AND  TO CERTAIN  OTHER  CONDITIONS. IT  IS  EXPECTED THAT  DELIVERY  OF
CERTIFICATES  REPRESENTING THE  SECURITIES OF  THE OFFERING  WILL BE  MADE ON OR
ABOUT           , 1996.
                         ------------------------------
                               STRATTON OAKMONT, INC.
 
               The date of this Prospectus is            , 1996.
<PAGE>
                                     NOTES
 
   
(1) Does not include additional compensation  to be received by the  Underwriter
    in  the  form  of (i)  a  nonaccountable  expense allowance  of  $210,000 if
    1,000,000 Units are  sold (or $241,500  if the Underwriter's  Over-allotment
    Option  is fully exercised); and (ii) an option (exercisable for a period of
    four years commencing one year after the date of this Prospectus)  entitling
    the Underwriter to purchase 100,000 Units at $11.55 per Unit ("Underwriter's
    Purchase  Option"). In addition, the Company and the Underwriter have agreed
    to  indemnity   and   contribution  provisions   regarding   certain   civil
    liabilities,  including  liabilities under  the Securities  Act of  1933, as
    amended. See "Principal Stockholders" and "Underwriting."
    
 
(2) Before deducting expenses of this offering payable by the Company, estimated
    at $1,000,000, including the Underwriter's nonaccountable expense allowance.
    The  Company  has  agreed  to  pay  all  of  the  expenses  related  to  the
    registration  of the securities  by the Selling  Security-holders, which are
    included in the expenses of this offering. See "Underwriting."
 
   
(3) The Company has granted the Underwriter a 30-day Over-allotment Option  from
    the  date of this Prospectus to purchase up to 150,000 additional Units upon
    the  same  terms  and  conditions  as  set  forth  above,  solely  to  cover
    over-allotments,  if  any. If  such  Underwriter's Over-allotment  Option is
    exercised in full, the total Price to the Public, Underwriting Discounts and
    Proceeds to  the  Company  will  be  $8,050,000,  $805,000  and  $7,245,000,
    respectively. See "Underwriting."
    
 
(4) The  Company  will not  receive any  of the  proceeds from  the sale  of the
    securities  offered   by   the  Selling   Security-holders.   See   "Selling
    Security-holders" and "Underwriting."
 
    IN  CONNECTION WITH THIS OFFERING, THE  UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES AT A
LEVEL ABOVE  THAT  WHICH  MIGHT  OTHERWISE PREVAIL  IN  THE  OPEN  MARKET.  SUCH
TRANSACTIONS  MAY BE EFFECTED ON THE  NASDAQ SMALL-CAP MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SEE "RISK FACTORS."
 
   
    THE SECURITIES TO BE SOLD  IN THIS OFFERING MAY,  IN THE ORDINARY COURSE  OF
BUSINESS, BE SOLD ONLY TO CUSTOMERS OF THE UNDERWRITER, AND THE CONCENTRATION OF
SECURITIES  IN CUSTOMERS OF THE UNDERWRITER  MAY ADVERSELY AFFECT THE MARKET FOR
AND LIQUIDITY OF THE COMPANY'S SECURITIES SINCE THE UNDERWRITER MAY BE THE  ONLY
MARKET  MAKER. IN THE EVENT THAT ADDITIONAL  BROKER-DEALERS DO NOT MAKE A MARKET
IN THE COMPANY'S  SECURITIES AND  THE UNDERWRITER  BECOMES A  MARKET MAKER,  THE
UNDERWRITER  MAY BECOME A  DOMINATING INFLUENCE ON THE  MARKET. NO OTHER BROKER-
DEALER HAS INDICATED THAT IT WILL MAKE A MARKET IN THE COMPANY'S SECURITIES. THE
UNDERWRITER DOES NOT HAVE ANY CURRENT  PLANS OR AGREEMENTS TO OFFER AND/OR  SELL
ANY  OF THE SECURITIES TO A SPECIFIC  CUSTOMER OR CUSTOMERS. SUCH PURCHASERS, AS
CUSTOMERS OF THE UNDERWRITER,  SUBSEQUENTLY MAY ENGAGE  IN TRANSACTIONS FOR  THE
SALE OR PURCHASE OF THE SECURITIES THROUGH AND/OR WITH THE UNDERWRITER, ALTHOUGH
NO  AGREEMENTS OR UNDERSTANDINGS, WRITTEN OR  ORAL, EXIST FOR SUCH TRANSACTIONS,
AND SUCH TRANSACTIONS MAY FURTHER ENHANCE THE UNDERWRITER'S DOMINATING INFLUENCE
ON THE MARKET. SEE  "RISK FACTORS -- LITIGATION  INVOLVEMENT OF UNDERWRITER  MAY
HAVE  ADVERSE CONSEQUENCES  -- UNDERWRITER'S  INFLUENCE ON  THE MARKET  MAY HAVE
ADVERSE CONSEQUENCES."
    
 
                             AVAILABLE INFORMATION
 
    The  Company  has  filed  with   the  Securities  and  Exchange   Commission
("Commission"),  Washington, D.C. 20549, a  Registration Statement on Form SB-2,
pursuant to  the  Securities  Act of  1933,  as  amended, with  respect  to  the
securities  offered by this Prospectus. This  Prospectus does not contain all of
the information  set forth  in  said Registration  Statement, and  the  exhibits
thereto.  For further information with respect to the Company and the securities
offered hereby, reference is  made to said  Registration Statement and  exhibits
which  may be inspected  without charge at the  Commission's principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
 
    The Company  intends to  furnish its  security-holders with  annual  reports
containing  audited financial statements and the audit report of the independent
certified public accountants, and such  interim reports as it deems  appropriate
or as may be required by law. The Company's fiscal year ends March 31.
 
    The  Company will  provide without charge  to each person  who receives this
Prospectus, upon written or oral  request of such person, a  copy of any of  the
information  that is  incorporated by  reference herein  (excluding exhibits) by
contacting the Company at 7-4 Metropolitan Court, Gaithersburg, Maryland  20878,
telephone (301) 548-8880, attention: chief financial officer.
 
   
              SPECIAL STANDARDS FOR SECURITIES SOLD IN CALIFORNIA
    
 
   
    Each  California  investor,  and  each  transferee  thereof  who  also  is a
California investor, must have an annual gross income of at least $65,000 and  a
net worth, exclusive of home, furnishings and automobiles, of at least $250,000,
or  in  the  alternative,  a  net  worth  exclusive  of  home,  furnishings  and
automobiles, of at least $500,000. In addition, an investor's total purchase may
not exceed 10% of such investor's net worth.
    
 
                                       2
<PAGE>
                               PROSPECTUS SUMMARY
 
    The  following summary  is qualified  in its  entirety by  the more detailed
information  and  financial  statements,  including  notes  thereto,   appearing
elsewhere in this Prospectus.
 
THE COMPANY
 
   
    e-Net,   Inc.  develops,  markets  and  supports  open  client,  server  and
integrated applications software that enables local, national and  international
telephone  communications, information  exchange and commerce  over the Internet
and private Internet Protocol ("IP")  networks. The Company's software  products
are  designed to deliver high  levels of performance, ease  of use and security.
These software products  allow individuals and  organizations to execute  secure
voice  communications  across the  Internet, through  the use  of authentication
technology, for  local  national  and  international  telephone  communications,
information exchange and commerce. In addition, through the use of the Company's
software,  organizations  can  extend  their  internal  information  systems and
enterprise applications to geographically  dispersed facilities, remote  offices
and mobile employees.
    
 
   
    In  March 1996, the Company  acquired all rights, title  and interest in the
first U.S.  patent, U.S.  Patent No.  5,526,353,  for a  system and  method  for
communicating  high fidelity and  clear transmission of audio  or voice over the
Internet, enabling  free  worldwide  high fidelity  and  clear  transmission  of
ordinary  telephone communications over  the Internet. The  Company acquired all
rights, title and  interest in  the patent  from the  inventors, Messrs.  Arthur
Henley  and  Scott  Grau,  who  are original  stockholders  of  the  Company, in
consideration of  a  five  percent overriding  royalty  interest  against  gross
profits  involving the  use of  the patent. The  Company has  agreed to allocate
$1,000,000 of paid in  capital to develop and  exploit the market  opportunities
for the patent by December 31, 1996, or the patent will be subject to repurchase
by  the inventors  of the patent.  The Company  believes that its  patent is the
first patent awarded  of its  kind, specifically involving  the transmission  of
audio  or voice over the Internet. The Company also believes that its patent may
provide certain strategic and technological advantages in the new and burgeoning
area of audio or voice  over the Internet. The  Company can make no  assurances,
however,  as to the extent of the advantages  or protection, if any, that may be
granted to the Company as a result of its patent or as to the future success  of
the  Company  in bringing  products related  to this  technology to  market. The
Company's first product utilizing its patent is Telecom-2000-TM-, a hardware and
software suite  designed for  voice over  the Internet,  which is  in the  final
testing  stage  and  projected to  be  available to  market  by the  end  of the
Company's third quarter of fiscal 1997.
    
 
   
    Also, in March 1996, e-Net entered into an agreement with Sprint ("Sprint"),
a leading telecommunications company, under which e-Net will deliver certain  of
its  technologies, products and services known  as Sprint Internet Protocol Dial
Services support.  Sprint, to  date, has  been the  Company's largest  customer.
Under  the agreement,  e-Net will  use its  Internet technologies,  products and
services to  provide security  and field  support to  Sprint customers  who  use
Sprint  as a  means of accessing  the Internet. e-Net's  agreement provides that
e-Net will generate all of the revenues associated with the number of authorized
Sprint Internet  Protocol Dial  Service user  identity codes.  e-Net shall  also
perform  password administration, customer  service administration and emergency
help desk administration under the terms  of the agreement. The agreement has  a
duration  of  one year,  with  automatic one  year  renewals, subject  to mutual
consent, and is exclusive between e-Net and Sprint for the first 90 days.  e-Net
intends  to seek additional strategic alliances with the Regional Bell Operating
Companies (RBOC's) for the use of  its technologies, products and services.  The
Company  has  not entered  into  any negotiations  to  enter into  any strategic
alliances with the RBOC's. The  Company can make no  assurances that it will  be
able  to  enter into  any agreements  with such  concerns for  its technologies,
products and services.
    
 
   
    In addition to  the compensation to  be received by  the Underwriter in  the
form  of commissions in the  amount of $700,000 if  1,000,000 Units are sold (or
$805,000 if the  Underwriter's Over-allotment  Option is  fully exercised),  the
Underwriter  will receive (i) a nonaccountable  expense allowance of $210,000 if
1,000,000 Units are sold (or $241,500 if the Underwriter's Over-allotment Option
is fully
    
 
                                       3
<PAGE>
   
exercised); and  (ii)  an  option  (exercisable  for  a  period  of  four  years
commencing one year after the date of this Prospectus) entitling the Underwriter
to  purchase 100,000 Units at $11.55 per unit ("Underwriter's Purchase Option").
The Company has granted the Underwriter a 30-day Over-allotment Option from  the
date of this Prospectus to purchase up to 150,000 additional Units upon the same
terms  and conditions  as set forth  above, solely to  cover over-allotments, if
any. If such Over-allotment Option is exercised in full, the total Price to  the
Public,  Underwriting Discounts and Proceeds to  the Company will be $8,050,000,
$805,000 and $7,245,000, respectively. See "Underwriting."
    
 
   
    As  a  result  of  this   offering,  certain  members  of  management   will
substantially  benefit in the amount of remuneration to be paid to them from the
proceeds of this offering in fiscal 1997. See "Management -- Remuneration."
    
 
   
    In March and April  1996, the Company borrowed  $1,000,000 in a bridge  loan
from four persons who are nonaffiliated with the Underwriter and the Company, to
wit:  Edward Ratkovich ($500,000), Robert Foise ($250,000), Armstrong Industries
($200,000) and Martin Sumichrast ($50,000), at the rate of eight percent  simple
annual  interest, which is due and payable  at the closing of this offering from
the net proceeds  of this  offering. General  Ratkovich and  Mr. Sumichrist  are
officers,  directors  and  principal  stockholders  of  Nasdaq  listed companies
recently underwritten by the Underwriter. In further consideration of the bridge
loan, the Company  issued 2,000,000 shares  of Common Stock,  2,000,000 Class  A
Warrants  and 2,000,000  Class B Warrants  to the  Selling Security-holders. The
shares  of  Common   Stock  and  Class   A  Warrants  issued   to  the   Selling
Security-holders  are being  registered in this  offering. The  Class A Warrants
issued to the  Selling Security-holders are  identical to the  Class A  Warrants
included  in the Units being offered by the Company. The Class B Warrants, which
are not being registered in this offering, are identical to the Class A Warrants
included in the  Units being  offered by the  Company except  that the  exercise
price  if $4.20. The securities held by the Selling Security-holders may be sold
commencing eighteen (18)  months from the  date of this  Prospectus, subject  to
earlier  release at the sole discretion  of the Underwriter, and such securities
include a  legend  with  such  restrictions. The  Underwriter  may  release  the
securities held by the Selling Security-holders at any time after all securities
subject  to the Over-allotment Option have been sold or such option has expired.
The resale of  the securities  of the  Selling Security-holders  are subject  to
Prospectus  delivery and  other requirements of  the Securities Act  of 1933, as
amended. Sales of such securities or the potential of such sales at any time may
have an adverse effect  on the market prices  of the securities offered  hereby.
The Company will not receive any of the proceeds from the sale of the securities
being  offered  by  the  Selling  Security-holders.  The  Class  A  Warrants are
redeemable upon certain conditions. Should the  Class A Warrants offered by  the
Selling  Security-holders  be exercised,  of which  there  is no  assurance, the
Company will  receive the  proceeds therefrom  aggregating up  to an  additional
$8,000,000.  Prior  to  making  the  bridge loan  to  the  Company,  the Selling
Security-holders did not own  any other securities of  the Company. None of  the
Selling  Security-holders  of  the  Company are  otherwise  affiliated  with the
Company, at the time of making the bridge loan, at the time of this offering  or
at any other time. The Company believes that its financial transactions with the
Selling  Security-holders served a legitimate  business purpose, I.E., providing
needed working capital for the Company,  and were fair and reasonable under  the
circumstances  since  the  transactions are  highly  speculative.  The Company's
financial transactions with  the Selling  Security-holders were  managed by  the
Underwriter  and no commissions or other remuneration  were paid or will be paid
to  the  Underwriter  in  connection   with  such  transactions.  See   "Selling
Security-holders" and "Description of Securities."
    
 
   
    Also,  as a result of this  offering, after deducting underwriting discounts
of $700,000 and other expenses of the offering estimated to be $1,000,000, which
includes  the  Underwriter's  nonaccountable  expense  allowance  of   $210,000,
assuming  an offering  price of  $7.00 per  Unit, the  Company will  receive net
proceeds from the  offering of  approximately $5,300,000. The  Company will  not
receive  any of  the proceeds  from the  sale of  the securities  by the Selling
Security-holders. These proceeds, excluding the exercise of any of the Warrants,
will be  utilized  by the  Company  for approximately  12  months. See  "Use  of
Proceeds."
    
 
                                       4
<PAGE>
    The  Company was incorporated in  the State of Delaware  on January 9, 1995,
and began its operations on June 8, 1995. The principal executive offices of the
Company are located at 7-4 Metropolitan Court, Gaithersburg, Maryland 20878, and
its telephone number is (301) 548-8880. Unless the context otherwise  indicates,
the terms "Company" and "e-Net" as used in this Prospectus refer to e-Net, Inc.
 
    SEE "RISK FACTORS," "MANAGEMENT" AND "CERTAIN TRANSACTIONS" FOR A DISCUSSION
OF  CERTAIN FACTORS THAT SHOULD BE CONSIDERED  IN EVALUATING THE COMPANY AND ITS
BUSINESS.
 
                                       5
<PAGE>
                                  THE OFFERING
 
<TABLE>
<S>                                       <C>
Securities Offered by Company(1)(4).....  1,000,000 Units
Securities Offered by Selling             2,000,000 Shares
Security-holders(2).....................  2,000,000 Class A Warrants
Shares of Common Stock Outstanding Prior  8,500,000 Shares
to Offering.............................
Shares of Common Stock Outstanding After  10,500,000 Shares
Offering(3).............................
Comparative Share Ownership Upon
Completion of Offering:
  Present Stockholders (8,500,000         80.95%
   Shares)(2)(5)........................
  Public Stockholders (2,000,000          19.05%
   Shares)(2)(5)........................
Use of Net Proceeds of Sale of            Administrative expenses, operating
Securities Offered by Company...........  costs and working capital, including
                                          software support and development,
                                          capital equipment, marketing and
                                          sales, mergers and acquisitions and
                                          the repayment of debt. See "Use of
                                          Proceeds."
Nasdaq SmallCap Market Symbols..........  EENTU
                                          EENT
                                          EENTW
</TABLE>
 
- ------------------------
(1) The Company is offering 1,000,000 Units at  a price of $7.00 per Unit.  Each
    Unit  consists of  two shares  of Common  Stock and  two redeemable  Class A
    Warrants. The  Class A  Warrants shall  be exercisable  commencing one  year
    after  the date of the Prospectus. Each  Class A Warrant entitles the holder
    to purchase one share  of Common Stock  at $4.00 per  share during the  four
    year  period commencing one year from the Effective Date hereof. The Class A
    Warrants are redeemable upon certain conditions. Should the Class A Warrants
    be exercised, of which there is  no assurance, the Company will receive  the
    proceeds   therefrom  aggregating  up  to   an  additional  $8,000,000.  See
    "Description of Securities."
 
(2) This offering also includes 2,000,000  shares of Common Stock and  2,000,000
    Class A Warrants owned by the Selling Security-holders. The Class A Warrants
    are identical to the Class A Warrants included in the Units being offered by
    the  Company. The shares  of Common Stock  and Class A  Warrants held by the
    Selling Security-holders may  be sold commencing  eighteen (18) months  from
    the  date  of  this  Prospectus,  subject to  earlier  release  at  the sole
    discretion of the  Underwriter, and  such securities include  a legend  with
    such  restrictions. The Underwriter  may release the  securities held by the
    Selling Security-holders at  any time  after all securities  subject to  the
    Over-allotment  Option have been sold or such option has expired. The resale
    of the securities of the Selling Security-holders are subject to  Prospectus
    delivery  and other requirements of the  Securities Act of 1933, as amended.
    Sales of such securities or the potential of such sales at any time may have
    an adverse effect  on the market  prices of the  securities offered  hereby.
    Should  the Class A Warrants  be exercised, of which  there is no assurance,
    the Company  will  receive  the  proceeds therefrom  aggregating  up  to  an
    additional   $8,000,000.   See  "Certain   Transactions,"   "Description  of
    Securities," "Selling Security-holders" and "Underwriting."
 
(3) Assumes no exercise  of (i) the  Class A Warrants  offered hereby; (ii)  the
    Underwriter's  Over-allotment Option  to purchase  up to  150,000 Units; and
    (iii) the Underwriter's Purchase Option to purchase up to 100,000 Units. See
    "Description of Securities" and "Underwriting."
 
(4) The public offering  price of  the Units and  the exercise  price and  other
    terms  of the Class  A Warrants were  arbitrarily determined by negotiations
    between the Company and the Underwriter  and does not necessarily relate  to
    the  assets, book value or results of operations of the Company or any other
    established criteria of value. See "Underwriting."
 
(5) See "Dilution."
 
                                       6
<PAGE>
                            SELECTED FINANCIAL DATA
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATE)
 
   
<TABLE>
<CAPTION>
                                                                    FOR THE PERIOD
                                                              JUNE 8, 1995 (BEGINNING OF
                                                                     OPERATIONS)
                                                                  TO MARCH 31, 1996
                                                         ------------------------------------
<S>                                                      <C>
Statement of Operations Data:
  Revenue..............................................                  $     294
  Income from operations...............................                         90
  Loss before income taxes.............................                       (537)
  Net loss.............................................                       (537)
  Pro forma net loss...................................                       (775)
  Pro forma loss per share.............................                       (.09)
  Average number of common shares outstanding..........                  8,500,000
</TABLE>
    
 
<TABLE>
<CAPTION>
                                                                MARCH 31, 1996
                                                         ----------------------------
                                                         HISTORICAL   AS ADJUSTED (1)
                                                         -----------  ---------------
<S>                                                      <C>          <C>
Balance Sheet Data:
  Working capital......................................   $     519      $   5,319
  Total assets.........................................         746          5,546
  Long-term debt.......................................         500         --
  Stockholders' equity.................................         153          5,453
</TABLE>
 
- ------------------------
(1) Adjusted to reflect the sale of the Units offered hereby, less  underwriting
    discounts  and  the payment  by  the Company  of  expenses of  this offering
    estimated at $1,000,000. See "Use of Proceeds."
 
                                       7
<PAGE>
                                  RISK FACTORS
 
    THE  SECURITIES OFFERED HEREBY ARE SPECULATIVE  AND INVOLVE A HIGH DEGREE OF
RISK. ONLY THOSE PERSONS  ABLE TO LOSE THEIR  ENTIRE INVESTMENT SHOULD  PURCHASE
THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION,
SHOULD  CAREFULLY READ  THIS PROSPECTUS AND  CONSIDER, ALONG  WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS:
 
    DEVELOPMENT STAGE COMPANY
 
    The Company was incorporated  in Delaware on January  9, 1995 and, as  such,
faces the risks and problems associated with businesses in their early stages of
development and has a limited operating history upon which to base an evaluation
of  its prospects. Such  prospects should be  considered in light  of the risks,
expenses and difficulties frequently encountered in the expansion of a  business
in  an industry  characterized by  a substantial  number of  market entrants and
intense competition. See "Business."
 
    BRIDGE FINANCING COSTS WILL NEGATIVELY IMPACT EARNINGS
 
    The Company did  not report  earnings for the  year ending  March 31,  1996,
principally  as a result  of the costs  attributed to the  issuance of 2,000,000
shares of  Common  Stock, 2,000,000  Class  A  Warrants and  2,000,000  Class  B
Warrants,  as additional consideration for a  bridge loan of $1,000,000 provided
by the Selling Security-holders,  the proceeds of which  were received in  March
and  April 1996. Interest expense  of $7,000,000 related to  the issuance of the
securities will be  accrued during the  period from March  19, 1996 through  the
date  of the  offering and a  corresponding credit  will be credited  to paid in
capital. Consequently,  earnings  will  be negatively  impacted  by  this  cost;
however,  net stockholders'  equity will  not be  impacted by  the corresponding
increase in  paid  in  capital.  In  addition, there  will  be  no  cash  outlay
associated  with the  issuance of  such securities.  See "Certain Transactions,"
"Selling Security-holders" and "Financial Statements."
 
   
    In March and April  1996, the Company borrowed  $1,000,000 in a bridge  loan
from four persons who are nonaffiliated with the Underwriter and the Company, to
wit:  Edward Ratkovich ($500,000), Robert Foise ($250,000), Armstrong Industries
($200,000) and Martin Sumichrast ($50,000), at the rate of eight percent  simple
annual  interest, which is due and payable  at the closing of this offering from
the net proceeds  of this  offering. General  Ratkovich and  Mr. Sumichrist  are
officers,  directors  and  principal  stockholders  of  Nasdaq  listed companies
recently underwritten by the Underwriter. In further consideration of the bridge
loan, the Company  issued 2,000,000 shares  of Common Stock,  2,000,000 Class  A
Warrants  and 2,000,000  Class B Warrants  to the  Selling Security-holders. The
shares  of  Common   Stock  and  Class   A  Warrants  issued   to  the   Selling
Security-holders  are being  registered in this  offering. The  Class A Warrants
issued to the  Selling Security-holders are  identical to the  Class A  Warrants
included  in the Units being offered by the Company. The Class B Warrants, which
are not being registered in this offering, are identical to the Class A Warrants
included in the  Units being  offered by the  Company except  that the  exercise
price  if $4.20. The securities held by the Selling Security-holders may be sold
commencing eighteen (18)  months from the  date of this  Prospectus, subject  to
earlier  release at the sole discretion  of the Underwriter, and such securities
include a  legend  with  such  restrictions. The  Underwriter  may  release  the
securities held by the Selling Security-holders at any time after all securities
subject  to the Over-allotment Option have been sold or such option has expired.
Should  the   Underwriter   release  the   securities   held  by   the   Selling
Security-holders  for resale,  it is  uncertain whether  the securities  will be
offered for sale. The resale of  the securities of the Selling  Security-holders
are  subject to Prospectus delivery and other requirements of the Securities Act
of 1933, as amended. Sales of such securities or the potential of such sales  at
any  time may  have an  adverse effect  on the  market prices  of the securities
offered hereby. The Company will not receive  any of the proceeds from the  sale
of  the securities  being offered by  the Selling Security-holders.  The Class A
Warrants are redeemable  upon certain  conditions. Should the  Class A  Warrants
offered  by  the Selling  Security-holders be  exercised, of  which there  is no
assurance, the Company will receive the
    
 
                                       8
<PAGE>
   
proceeds therefrom aggregating up to  an additional $8,000,000. Prior to  making
the  bridge loan to  the Company, the  Selling Security-holders did  not own any
other securities of  the Company. None  of the Selling  Security-holders of  the
Company  are otherwise affiliated  with the Company,  at the time  of making the
bridge loan, at  the time of  this offering or  at any other  time. The  Company
believes  that  its  financial transactions  with  the  Selling Security-holders
served a legitimate business purpose, I.E., providing needed working capital for
the Company,  and  were  fair  and  reasonable  under  the  circumstances  since
transactions  are highly speculative. The  Company's financial transactions with
the Selling Security-holders were managed by the Underwriter and no  commissions
or other remuneration were paid or will be paid to the Underwriter in connection
with  such  transactions.  See "Selling  Security-holders"  and  "Description of
Securities."
    
 
    NO ASSURANCE OF FUTURE PROFITABILITY OR PAYMENT OF DIVIDENDS
 
    The Company can make no assurances that the future operations of the Company
will result in additional revenues or will be profitable. Should the  operations
of the Company be profitable, it is likely that the Company would retain much or
all  of its earnings in order to finance future growth and expansion. Therefore,
the Company does not  presently intend to  pay dividends, and  it is not  likely
that  any  dividends  will be  paid  in  the foreseeable  future.  See "Dividend
Policy."
 
    IMMEDIATE AND SUBSTANTIAL DILUTION
 
    An investor  in  this offering  will  experience immediate  and  substantial
dilution.  As of March  31, 1996, the Company  had a net  tangible book value of
$152,809 or $.02 per share derived from the Company's balance sheet as of  March
31,  1996  and the  total common  stock outstanding  at March  31, 1996  and the
issuance in April 1996 related to  the bridge financing. After giving effect  to
the  sale of the Units offered hereby at  an assumed offering price of $7.00 per
Unit, after deducting  underwriting discounts and  estimated offering  expenses,
pro forma net tangible book value would have been $5,452,809, or $.52 per share.
The result will be an immediate increase in net tangible book value per share of
$.50  (2,789%)  to  existing  shareholders  and  an  immediate  dilution  to new
investors of $2.98 (85%) per share. As a result, public investors will bear most
of the  risk  of  loss  since  their  shares  are  being  purchased  at  a  cost
substantially  above the price that existing shareholders acquired their shares.
See "Dilution."
 
    POSSIBLE NEED FOR ADDITIONAL FINANCING
 
    The Company intends to fund its  operations and other capital needs for  the
next  12 months substantially from the proceeds  of this offering, but there can
be no  assurance that  such funds  will be  sufficient for  these purposes.  The
Company may require substantial amounts of the proceeds of this offering for its
future  expansion, operating costs and working  capital. The Company has made no
arrangements to obtain future additional  financing, if required, and there  can
be  no  assurance that  such financing  will be  available, or  that it  will be
available on acceptable terms. See "Use of Proceeds."
 
    DEPENDENCE ON MAJOR CUSTOMERS
 
   
    For the period ending March 31, 1996, the Company derived 32% (Sprint),  29%
(Comsat),  16% (First Data Resources) and 13% (Documenta) of its sales from four
customers, respectively. The dependence on major customers subjects the  Company
to  significant financial risks in the operation  of its business should a major
customer terminate, for any reason, its business relationship with the  Company.
In  such event, the financial condition of the Company may be adversely affected
and the Company may be required  to obtain additional financing, of which  there
is  no assurance.  The Company  is not  aware of  any adverse  developments with
respect  to  its   major  customers.   Also,  dependence   on  major   customers
significantly  increases the  Company's costs,  E.G., travel,  communication and
delivery of  products  and  services,  which  are  reflected  in  the  Company's
financial performance. See "Business" and "Financial Statements."
    
 
    DEPENDENCE ON MANAGEMENT
 
    The  Company's success  is principally  dependent on  its current management
personnel for the operation  of its business. In  particular, Robert A.  Veschi,
the Company's president and chief executive
 
                                       9
<PAGE>
officer,  has played a substantial role in the development and management of the
Company, although there  is no assurance  that additional managerial  assistance
will  not  be  required. The  analysis  of  new business  opportunities  will be
undertaken by or  under the supervision  of the management  of the Company.  The
Company  has  recently entered  into an  employment  agreement with  Mr. Veschi.
However, if the employment  by the Company  of Mr. Veschi  terminates, or he  is
unable  to perform  his duties, the  Company may be  substantially affected. The
agreement also contains non-compete provisions  but are limited in  geographical
scope,  I.E., the Washington, D.C. metropolitan  area. The Company has agreed to
purchase key-man life insurance on Mr. Veschi in the amount of $1 million  prior
to  the closing of this offering. The  Company will be the owner and beneficiary
of  the  term  insurance   policy.  See  "Use   of  Proceeds,"  "Business"   and
"Management."
 
    DEPENDENCE ON HIGHLY QUALIFIED TECHNICAL PERSONNEL
 
    The  Company believes that its future success will depend in large part upon
its  continued  ability  to  recruit  and  retain  highly  qualified   technical
personnel.  Competition for highly qualified technical personnel is significant,
particularly in  the  geographic area  in  which the  Company's  operations  are
located.  No assurances  can be  made that  the Company's  relationship with its
employees will remain good. See "Management."
 
   
    PRODUCT SECURITY RISKS
    
 
   
    The Company has included in certain  of its products an implementation of  a
security  protocol which operates in  conjunction with authentication technology
that it has developed. Despite the  existence of this technology, the  Company's
products  may be vulnerable to break-ins  and similar disruptive problems caused
by certain Internet users. Such  computer break-ins and other disruptions  would
jeopardize  the security  of information stored  in and  transmitted through the
computer systems of  end users of  the Company's products,  which may result  in
significant  liability to  the Company and  may also  deter potential customers.
Persistent  security  problems  continue  to  plague  public  and  private  data
networks.   Recent  break-ins  at  major   government  institutions,  banks  and
corporations have  involved hackers  bypassing firewalls  and  missappropriating
confidential  information.  Alleviating  problems caused  by  third  parties may
require significant expenditures of capital and resources by the Company and may
cause interruptions, delays or cessation of service to the Company's  customers;
such  expenditures or  interruptions may have  a material adverse  effect on the
Company's business,  operating results  and financial  condition. Moreover,  the
security  and privacy concerns  of existing and potential  customers, as well as
concerns related to  computer viruses, may  inhibit the growth  of the  Internet
marketplace,   generally,  and   the  Company's  customer   base  and  revenues,
specifically. The Company intends to limit its liability to customers, including
liability arising  from a  failure of  the security  features contained  in  the
Company's  products, through  provisions in  its future  contracts. However, the
Company can  make  no  assurances  that such  contractual  limitations  will  be
enforceable.  The Company currently does not have liability insurance to protect
against these risks and there  can be no assurance  that such insurance will  be
available  to the Company on commercially  reasonable terms, or available on any
terms.
    
 
    UNCERTAINTY OF PROPOSED MERGERS AND ACQUISITIONS CAMPAIGN
 
    Following the closing of this offering,  the Company intends to engage in  a
mergers  and acquisitions campaign  in order to merge  with or acquire companies
engaged in a similar business. The Company has not entered into any negotiations
to merge  with  or  acquire any  such  target  companies, but  the  Company  has
identified  several  such companies  engaged  in a  complementary  business. The
Company can make no assurances that it will be able to merge with or acquire any
companies. Although the Company intends to utilize approximately $500,000 of the
net proceeds of this offering in its mergers and acquisitions activities  during
the  12 months following the date of  this Prospectus, no assurances can be made
that such funds will enable the Company to expand its base or realize profitable
consolidated operations. In  addition, the Company's  stockholders may not  have
the  opportunity to review the financial statements of any of the companies that
may be acquired  or have the  opportunity to vote  on any proposed  acquisitions
since Delaware law does not require such review and
 
                                       10
<PAGE>
approval.  Should such  funds not  be utilized  in its  mergers and acquisitions
activities, the Company intends to utilize the funds in equal amounts in working
capital, capital equipment and marketing and sales. See "Use of Proceeds."
 
    LITIGATION INVOLVEMENT OF UNDERWRITER MAY HAVE ADVERSE CONSEQUENCES.
 
   
    RECENT NASD ACTION INVOLVING UNDERWRITER
    
   
    The Company has been advised by the Underwriter that the NASD (District  10)
filed  a complaint (No. C10950081) on  October 5, 1995 ("Complaint") against the
Underwriter, Steven  Sanders, the  head  trader of  the Underwriter,  Danial  M.
Porush,  the  president of  the  Underwriter, and  Paul  F. Byrne,  formerly the
Underwriter's director of compliance (collectively, the "Respondents"), alleging
various violations of the NASD Rules  of Fair Practice. The complaint  consisted
of  three  causes. The  first  cause alleged  that  the Underwriter  and Sanders
effected principal retail sales of  securities at prices that were  fraudulently
excessive.  The second  cause alleged that  the Underwriter  and Sanders charged
excessive markups.  The third  cause alleged  that the  Underwriter, Porush  and
Byrne   failed  to  establish,  maintain   and  enforce  reasonable  supervisory
procedures designed to assure compliance with the NASD's rules and policies.
    
 
   
    On April 15,  1996 the NASD  in its  decision found all  of the  Respondents
except  Paul Byrne in  violation of all  three causes and  imposed the following
sanctions:
    
 
   
    -Sanders was censured, fined $25,000 and was suspended from association with
     any member of the NASD in any capacity for a period of one year.
    
 
   
    -Underwriter was censured, fined $500,000  and was required to disgorge  its
     excess  profits  to its  customers,  totaling $1,876,205,  plus prejudgment
     interest. In addition, the  Underwriter was suspended for  a period of  one
     year from effecting any principal retail transactions.
    
 
   
    -Porush  was censured, fined  $250,000 and barred  from association with any
     member of the NASD in any capacity.
    
 
   
    The Underwriter,  Porush  and  Sanders have  appealed  the  NASD's  decision
thereby staying imposition of the sanctions.
    
 
   
    If  the sanctions imposed on the Underwriter are not reversed on appeal, the
Underwriter's ability to act as a market maker of the Company's securities  will
be  restricted. The Company cannot ensure that  other broker dealers will make a
market in the Company's securities. In the event that other broker dealers  fail
to  make a market in  the Company's securities, the  possibility exists that the
market for  and the  liquidity  of the  Company's  securities may  be  adversely
affected  to such an extent that public  security holders may not have anyone to
purchase their securities when offered for sale at any price. In such event, the
market for and liquidity of the Company's securities may not exist. It should be
noted that although  the Underwriter may  not be  the sole market  maker in  the
Company's  securities,  it  may  likely  be the  dominant  market  maker  in the
Company's securities. See "Underwriting."
    
 
   
    In addition,  in April  1996 the  NASD settled  an action  whereby it  fined
Stratton  Oakmont $325,000  for fraud and  other violations  (which were neither
admitted or denied)  in connection with  its underwriting of  an initial  public
offering.  Steven Sanders was fined $50,000 and was suspended for a period of 45
days from  associating with  an NASD  member and  agreed not  to engage  in  any
trading-related  activities for  any NASD  member for a  period of  50 days. The
settlement also  requires that  Stratton Oakmont  file certain  new  supervisory
procedures with the NASD. See "Underwriting."
    
 
   PERMANENT  INJUNCTION  GRANTED --  STRATTON OAKMONT  ENJOINED TO  COMPLY WITH
   RECOMMENDATIONS OF  AN  INDEPENDENT  CONSULTANT AND  AN  INDEPENDENT  AUDITOR
   APPOINTED PURSUANT TO AN ADMINISTRATION ORDER
 
    The  Company  has  been  advised by  Stratton  Oakmont  that  the Commission
instituted an action on  December 14, 1994 in  the United States District  Court
for the District of Columbia against
 
                                       11
<PAGE>
   
Stratton  Oakmont. The complaint alleged that Stratton Oakmont was not complying
with the  Administrative Order  entered  by the  Commission  on March  17,  1994
("Administrative   Order")  by  failing  to  adopt  the  recommendations  of  an
independent consultant. The Administrative Order was previously consented to  by
Stratton  Oakmont, without admitting or  denying the findings contained therein,
as settlement of an action commenced against Stratton Oakmont by the  Commission
in  March 1992, which  found willful violations of  the anti-fraud provisions of
the securities laws such that Stratton Oakmont:
    
 
    -engaged in fraudulent sales practices;
 
    -engaged in and/or permitted unauthorized trading in customer accounts;
 
   
    -knowingly and  recklessly  manipulated  the market  price  of  a  company's
     securities by dominating and controlling the market for those securities;
    
 
    -made  improper and unsupported price predictions with regard to recommended
     over-the-counter securities; and
 
    -made material misrepresentations and omissions regarding certain securities
     and its experience in the securities industry.
 
    Pursuant to the Administrative Order,  Stratton Oakmont was censured and  an
independent  consultant ("Stratton Consultant") was  chosen by the Commission to
advise and  consult  with Stratton  Oakmont  and  to review  and  recommend  new
supervisory and compliance procedures. The complaint sought:
 
    -to enjoin Stratton Oakmont from violating the Administrative Order;
 
    -an  order  commanding Stratton  Oakmont to  comply with  the Administrative
     Order; and
 
    -to have a Special  Compliance Monitor appointed  to ensure compliance  with
     the  Administrative  Order.  Stratton  Oakmont  claimed  that  the Stratton
     Consultant exceeded his  authority under the  Administrative Order and  had
     violated the terms of the Administrative Order.
 
   
    On  February  28, 1995,  the  court granted  the  Commission's motion  for a
permanent injunction ("Permanent  Injunction") and ordered  Stratton Oakmont  to
comply  with  the Administrative  Order, which  required  the appointment  of an
independent consultant and a separate independent auditor and required that  all
recommendations  be  complied  with,  including  the  taping  of  all  telephone
conversations  between  Stratton  Oakmont's  brokers  and  their  customers.  In
granting   the  Commission's  motion  for  a  Permanent  Injunction,  the  court
determined that Stratton Oakmont's conduct unequivocally demonstrated that there
is a substantial likelihood that it will continue to evade its  responsibilities
under  the Administrative  Order. On April  20, 1995, Stratton  Oakmont filed an
appeal to the United States Court of  Appeals for the District of Columbia,  and
on  April 24, 1995 filed  a motion to stay  the Permanent Injunction pending the
outcome of the  appeal. The motion  to stay was  denied. Subsequently,  Stratton
Oakmont  voluntarily dismissed  its appeal. The  failure by  Stratton Oakmont to
comply with  the  Administrative Order  or  Permanent Injunction  may  adversely
effect Stratton Oakmont's activities in that the court may enter a further order
restricting  the ability  of Stratton Oakmont  to act  as a market  maker of the
Company's securities. The effect of such  action may prevent the holders of  the
Company's  securities from selling such securities since Stratton Oakmont may be
restricted from acting  as a market  maker of the  Company's securities and,  in
such  event, will  not be able  to execute a  sale of such  securities. Also, if
other broker dealers  fail to  make a market  in the  Company's securities,  the
public  security holders may  not have anyone to  purchase their securities when
offered for sale at any  price and the security holders  may suffer the loss  of
their entire investment.
    
 
    RECENT STATE ACTIONS INVOLVING STRATTON OAKMONT -- POSSIBLE LOSS OF
LIQUIDITY
 
   
    As  a result  of the  Permanent Injunction,  the states  of Pennsylvania and
Indiana have commenced administrative  proceedings seeking, among other  things,
to  revoke Stratton Oakmont's license to do business in such states. In Indiana,
the Commissioner suspended Stratton Oakmont's license for a
    
 
                                       12
<PAGE>
   
three year period. Stratton Oakmont has appealed the decision and has  requested
a  stay pending appeal. The requested stay would maintain the status quo pending
appeal. The states of Alabama, North Carolina, South Carolina and Arkansas  also
have   suspended  Stratton  Oakmont's  license   pending  a  resolution  of  the
proceedings in those states. The states  of Minnesota, Vermont, and Nevada  have
served  upon Stratton  Oakmont notices  of intent  to revoke  Stratton Oakmont's
license in such states. The state of Rhode Island has served on Stratton Oakmont
a Notice  of Intent  to suspend  its  license in  that state.  In the  state  of
Mississippi,  Stratton Oakmont has agreed to a suspension of its license pending
resolution of certain claims and review  of its procedures and practices by  the
state  authorities. In addition,  Stratton Oakmont withdrew  its registration in
the state of New Hampshire (with the right of reapplication) and in the state of
Maryland. There  may  be  further  administrative action  against  the  firm  in
Maryland.  The firm withdrew  its registration in Massachusetts  with a right to
reapply for registration after two years, withdrew its registration in  Delaware
with  a right to reapply  in three years and agreed  to a temporary cessation of
business in  Utah  pending  an on-site  inspection  and  further  administrative
proceedings.  Stratton Oakmont's license in the  state of New Jersey was revoked
by an administrative judge pursuant to  an administrative hearing and an  appeal
has been filed (and such decision is not final). The state of Georgia has lifted
its  suspension and  has granted  Stratton Oakmont  a conditional  license. Such
conditional license was granted pursuant to an order, which Stratton Oakmont has
proposed to various states, which provides provisions for: (i) the suspension of
revocation, (ii) compliance  with recommendations  of the  Consultant, (iii)  an
expedited  claims  mediation  arbitration  process,  (iv)  resolution  of claims
seeking compensatory damages, (v) restrictions on use of operating revenue, (vi)
the limitation on selling  group members in  offerings underwritten by  Stratton
Oakmont  and  the prohibition  of  participating as  a  selling group  member in
offerings underwritten by certain  other NASD member  firms, (vii) the  periodic
review of Stratton Oakmont's agents, (viii) the retention of an accounting firm,
and  (ix)  supervision  and  training,  restrictions  on  trading, discretionary
accounts and other matters. The  state of Oregon, as  a result of the  Permanent
Injunction,  has filed a  notice of intent to  revoke Stratton Oakmont's license
subject to the holding of a hearing to determine definitively Stratton Oakmont's
license status,  and Stratton  Oakmont,  in this  proceeding  as well  as  other
proceedings,  expects to be able to demonstrate that the Permanent Injunction is
not of a nature  as to be  a lawful basis to  revoke Stratton Oakmont's  license
permanently. Finally, Stratton Oakmont has received an order limiting license in
the state of Nebraska. Such proceedings, if ultimately successful, may adversely
affect  the market for  and liquidity of the  Company's securities if additional
broker-dealers do  not make  a  market in  the Company's  securities.  Moreover,
should  investors purchase any of the  securities in this offering from Stratton
Oakmont prior to a revocation of Stratton Oakmont's license in their state, such
investors will  not be  able to  resell such  securities in  such state  through
Stratton  Oakmont but will  be required to  retain a new  broker-dealer firm for
such purpose. The Company  cannot ensure that other  broker-dealers will make  a
market  in the Company's securities. In the event that other broker-dealers fail
to make a market  in the Company's securities,  the possibility exists that  the
market  for  and the  liquidity  of the  Company's  securities may  be adversely
affected to such an extent that public  security holders may not have anyone  to
purchase their securities when offered for sale at any price. In such event, the
market  for, and liquidity and prices of the Company's securities may not exist.
It should be noted  that although Stratton  Oakmont may not  be the sole  market
maker  in the Company's securities,  it will most likely  be the dominant market
maker  in  the  Company's  securities.  In  addition,  in  the  event  that  the
Underwriter's  license to do business is revoked  in the states set forth above,
the Underwriter has  advised the  Company that it  believes the  members of  the
selling  syndicate  in  this offering  will  be able  to  make a  market  in the
Company's securities in  such states  and that  such an  event will  not have  a
materially  adverse effect on this offering, although no assurance can be given.
See "Underwriting."
    
 
    FOR ADDITIONAL INFORMATION  REGARDING STRATTON OAKMONT,  INVESTORS MAY  CALL
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AT 1-800-289-9999.
 
                                       13
<PAGE>
    PAUL CARMICHAEL V. STRATTON OAKMONT.
 
   
    The  Company has  been advised  by Stratton  Oakmont that  Honorable John E.
Sprizzo, United States Judge for  the Southern District of  New York, on May  6,
1994  denied  the  class certification  motion  in PAUL  CARMICHAEL  V. STRATTON
OAKMONT, INC., ET AL.,  Civ. 0720 (JES), of  the plaintiff Paul Carmichael.  The
class  action complaint alleges  manipulation and fraudulent  sales practices in
connection with  a  number of  securities.  The allegations  were  substantially
similar  and involve  much of  the same  time period  as the  Commission's civil
complaint (discussed above). The Company has further been informed that  counsel
for  the  class  action  plaintiff  sought  to  re-argue  the  motion  for class
certification, which motion for re-argument was denied.
    
 
    BROAD DISCRETION IN APPLICATION OF PROCEEDS
 
    The management of the Company has broad discretion to adjust the application
and allocation of the  net proceeds of this  offering, including funds  received
upon  exercise of the Class A Warrants, of which there is no assurance, in order
to  address  changed  circumstances  and  opportunities.  As  a  result  of  the
foregoing,  the success of the Company  will be substantially dependent upon the
discretion and judgment  of the management  of the Company  with respect to  the
application  and  allocation of  the net  proceeds hereof.  Pending use  of such
proceeds, the net proceeds of this offering  will be invested by the Company  in
temporary, short-term interest-bearing obligations. See "Use of Proceeds."
 
   UNCERTAIN PROTECTION OF PATENT, TRADEMARK, COPYRIGHT AND PROPRIETARY RIGHTS
 
   
    In  March 1996, the Company  acquired all rights, title  and interest in the
first U.S.  patent, U.S.  Patent No.  5,526,353,  for a  system and  method  for
communicating  high fidelity and  clear transmission of audio  or voice over the
Internet,  enabling   free   worldwide  transmission   of   ordinary   telephone
communications  over the  Internet. The Company  acquired all  rights, title and
interest in the patent from the inventors, Messrs. Arthur Henley and Scott Grau,
who are original stockholders of the Company, in consideration of a five percent
overriding royalty  interest against  gross  profits involving  the use  of  the
patent.  The Company  has agreed  to allocate $1,000,000  of paid  in capital to
develop and exploit the market opportunities of the patent by December 31, 1996,
or the patent will be subject to repurchase by the inventors of the patent.  The
Company  believes  that its  patent is  the  first patent  awarded of  its kind,
specifically involving the transmission of audio or voice over the Internet. The
Company also  believes  that  its  patent  may  provide  certain  strategic  and
technological  advantages in the new and burgeoning  area of audio or voice over
the Internet. The Company can make no  assurances, however, as to the extent  of
the  advantages or protection, if  any, that may be granted  to the Company as a
result of its patent.
    
 
    The Company currently does not have any other patent, trademark or copyright
applications pending.  However,  the  Company may  file  patent,  trademark  and
copyright  applications relating to certain  of the Company's software products.
If patents,  trademarks  or  copyrights were  to  be  issued, there  can  be  no
assurance as to the extent of the protection that will be granted to the Company
as a result of having such patents, trademarks or copyrights or that the Company
will  be able  to afford  the expenses  of any  complex litigation  which may be
necessary to enforce its proprietary  rights. Failure of the Company's  patents,
trademark  and copyright applications may have  a material adverse impact on the
Company's business. Except as may be required by the filing of patent, trademark
and  copyright  applications,  the  Company  will  attempt  to  keep  all  other
proprietary  information secret and to take such  actions as may be necessary to
insure the  results of  its development  activities are  not disclosed  and  are
protected under the common law concerning trade secrets. Such steps will include
the  execution of nondisclosure agreements by key Company personnel and may also
include the imposition of restrictive agreements on purchasers of the  Company's
products  and  services.  There  is  no assurance  that  the  execution  of such
agreements will be effective  to protect the Company,  that the Company will  be
able  to  enforce  the  provisions  of  such  nondisclosure  agreements  or that
technology and  other  information  acquired  by the  Company  pursuant  to  its
development  activities will be deemed to  constitute trade secrets by any court
of competent jurisdiction.
 
                                       14
<PAGE>
    SUBSTANTIAL COMPETITION
 
    Businesses in the  United States  and abroad  that are  engaged in  Internet
technologies,  products  and  services  are  substantial  in  number  and highly
competitive. Many of the companies with which the Company intends to compete are
substantially larger and have substantially greater resources than the  Company.
It  is also likely that other competitors will emerge in the future. The Company
will compete  with  companies  that have  greater  market  recognition,  greater
resources  and broader capabilities than the Company. As a consequence, there is
no assurance  that the  Company will  be  able to  successfully compete  in  the
marketplace. See "Business."
 
    LIMITATION ON DIRECTOR LIABILITY
 
    As  permitted  by  the  Delaware  General  Corporation  Law,  the  Company's
Certificate of Incorporation limits the liability of directors to the Company or
its stockholders for monetary damages for breach of a director's fiduciary  duty
except for liability in four specific instances. These are for (i) any breach of
the  director's duty of loyalty to the Company or its stockholders, (ii) acts or
omissions not in good faith or  which involve intentional misconduct or  knowing
violation  of  law,  (iii)  unlawful payments  of  dividends  or  unlawful stock
purchases or redemptions  as provided  in Section  174 of  the Delaware  General
Corporation  Law, or  (iv) any  transaction from  which the  director derived an
improper personal benefit. As  a result of the  Company's charter provision  and
Delaware  law,  stockholders may  have more  limited  rights to  recover against
directors for  breach  of  fiduciary  duty. See  "Management  --  Limitation  on
Liability of Directors."
 
    ARBITRARY OFFERING PRICE
 
   
    There  has been  no prior  public market  for the  Company's securities. The
price to the public of the Units offered hereby has been arbitrarily  determined
by   negotiations  between  the  Company  and   the  Underwriter  and  bears  no
relationship to  the Company's  earnings,  book value  or any  other  recognized
criteria  of value. The  offering price of  $7.00 per Unit  ($3.50 per share) is
substantially in  excess of  the net  tangible  book value  of $.02  per  share,
derived  from the Company's balance sheet as of March 31, 1996, and in excess of
the price received  by the Company  for shares sold  in prior transactions.  See
"Prospectus  Summary -- Selected Financial  Data," "Underwriting," "Dilution and
Other Comparative Data" and "Certain Transactions."
    
 
   REQUIREMENTS OF CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION IN
   CONNECTION WITH THE EXERCISE OF THE WARRANTS
 
   
    The Company will be able to  issue the securities offered hereby, shares  of
its  Common Stock upon the  exercise of the Warrants  and the Underwriters' Unit
Purchase Option  only if  (i) there  is  a current  prospectus relating  to  the
securities  offered hereby under an  effective registration statement filed with
the Securities  and Exchange  Commission, and  (ii) such  Common Stock  is  then
qualified for sale or exempt therefrom under applicable state securities laws of
the  jurisdictions in which the various holders of Warrants reside. Although the
Company intends to maintain  a current registration statement,  there can be  no
assurance, however, that the Company will be successful in maintaining a current
registration statement. After a registration statement becomes effective, it may
require  updating by the filing of  a post-effective amendment. A post-effective
amendment is required (i) anytime after nine months subsequent to the  Effective
Date  when any  information contained in  the prospectus is  over sixteen months
old; (ii)  when facts  or events  have occurred  which represent  a  fundamental
change in the information contained in the registration statement; or (iii) when
any  material  change  occurs  in  the  information  relating  to  the  plan  or
distribution of the  securities registered by  such registration statement.  The
Company  anticipates that this Registration  Statement will remain effective for
not more  than  nine months  following  the date  of  this Prospectus  or  until
            ,  1997, assuming  a post-effective  amendment is  not filed  by the
Company, which may be required. The Company  intends to qualify the sale of  the
Class  A Warrants  in a  limited number  of states,  although certain exemptions
under certain state securities ("Blue Sky")  laws may permit the Warrants to  be
transferred  to purchasers in states other than those in which the Warrants were
initially qualified.  Qualification for  the exercise  or sale  of the  Class  A
Warrants in the states is
    
 
                                       15
<PAGE>
   
essential  for  the establishment  of a  trading market  in the  securities. The
Company can make no assurances that it will be able to qualify its securities in
any state. The  Company will be  prevented, however, from  issuing Common  Stock
upon  exercise of the Warrants in  those states where exemptions are unavailable
and the Company has failed to qualify the Common Stock issuable upon exercise of
the Warrants. The Company may decide not to  seek, or may not be able to  obtain
qualification of the issuance of such Common Stock in all of the states in which
the  ultimate purchasers of the Warrants reside. In such a case, the Warrants of
those purchasers  will expire  and have  no  value if  such Warrants  cannot  be
exercised  or  sold. Accordingly,  the market  for the  Warrants may  be limited
because  of  the  Company's  obligation   to  fulfill  both  of  the   foregoing
requirements. See "Description of Securities," and "Underwriting."
    
 
   ADDITIONAL AUTHORIZED SHARES AVAILABLE FOR ISSUANCE MAY ADVERSELY AFFECT THE
   MARKET
 
   
    The  Company is authorized  to issue 50,000,000 shares  of its Common Stock,
$.01 par value. If  all of the  1,000,000 Units offered  hereby are sold,  there
will  be a total  of 10,500,000 shares  of Common Stock  issued and outstanding.
However, the total number of shares of Common Stock issued and outstanding  does
not include the exercise of up to 4,000,000 Class A Warrants and 2,000,000 Class
B  Warrants to purchase  up to 6,000,000  shares of the  Company's Common Stock.
Moreover, the Underwriters have been granted an option to purchase 100,000 Units
in connection with this offering, which  has been authorized by the Company  for
issuance.  Also,  this  does  not  include  the  exercise  of  the Underwriters'
Over-allotment Option to purchase  up to 150,000 Units  in connection with  this
offering, which has been authorized by the Company for issuance. After reserving
a  total of 6,500,000 shares  of Common Stock for  issuance upon the exercise of
all the Warrants, if all of the Warrants are exercised, the Company will have at
least 33,000,000 shares of authorized  but unissued capital stock available  for
issuance  without further  shareholder approval.  As a  result, any  issuance of
additional shares of Common Stock may cause current shareholders of the  Company
to  suffer significant dilution which may  adversely affect the market. Pursuant
to  the  terms   of  the  Underwriting   Agreement,  the  Company's   restricted
stockholders  and the Company  have agreed not  to sell any  of their restricted
shares of Common  Stock for a  period of 24  months following the  date of  this
Prospectus  without the consent of the Underwriter. Also, the Company has agreed
not to issue any additional securities for  a period of 24 months following  the
date  of this Prospectus without  the consent of the  Underwriter. The sale of a
significant number of  these shares in  the public market  may adversely  affect
prevailing  market prices of  the Company's securities  following this offering.
See "Dilution," "Principal  Stockholders," "Certain Transactions,"  "Description
of Securities" and "Underwriting."
    
 
    LACK OF PRIOR MARKET FOR SECURITIES OF THE COMPANY
 
    No  prior  market existed  for the  securities being  offered hereby  and no
assurance can be given that a  market will develop subsequent to this  offering.
The  Underwriter may  make a market  in the  securities of the  Company upon the
closing of this offering, but there is  no assurance that it will be  successful
in its efforts. See "Description of Securities" and "Underwriting."
 
    WARRANTS SUBJECT TO REDEMPTION
 
    The Class A Warrants shall be exercisable commencing one year after the date
of  this Prospectus ("Effective Date"). Each Class A Warrant entitles the holder
to purchase one share of  Common Stock at $4.00 per  share during the four  year
period  commencing one year from the Effective Date hereof. The Class A Warrants
are redeemable  by  the  Company  for  $.05  per  Warrant,  at  any  time  after
            ,  1998, upon thirty (30) days' prior written notice, if the average
closing price or bid  price of the  Common Stock, as  reported by the  principal
exchange  on which the Common Stock is quoted, the Nasdaq SmallCap Market or the
National Quotation Bureau, Incorporated, as the  case may be, equals or  exceeds
$9.00 per share, for any twenty (20) consecutive trading days within a period of
thirty  (30) days ending within ten (10)  days of the notice of redemption. Upon
thirty (30) days' prior written notice to  all holders of the Class A  Warrants,
the  Company shall have the right to reduce the exercise price and/or extend the
term of the  Class A  Warrants. Redemption of  the Warrants  will force  holders
thereof  to either (i)  exercise such Warrants  and pay the  exercise price at a
time when it may be less than advantageous economically to do so, or (ii) accept
the redemption price, which may be
 
                                       16
<PAGE>
substantially less than the market value thereof at the time of redemption. This
offering also includes 2,000,000  shares of Common Stock  and 2,000,000 Class  A
Warrants  owned  by  the  Selling Security-holders.  The  Class  A  Warrants are
identical to the Class  A Warrants included  in the Units  being offered by  the
Company.  The  securities  held  by the  Selling  Security-holders  may  be sold
commencing eighteen (18)  months from the  date of this  Prospectus, subject  to
earlier  release at the sole discretion  of the Underwriter, and such securities
include a  legend  with  such  restrictions. The  Underwriter  may  release  the
securities held by the Selling Security-holders at any time after all securities
subject  to the Over-allotment Option have been sold or such option has expired.
The resale of  the securities  of the  Selling Security-holders  are subject  to
Prospectus  delivery and  other requirements of  the Securities Act  of 1933, as
amended. Sales of such securities or the potential of such sales at any time may
have an adverse effect  on the market prices  of the securities offered  hereby.
See    "Certain   Transactions,"    "Description   of    Securities,"   "Selling
Security-holders" and "Underwriting."
 
    The Company  intends to  qualify the  sale of  the securities  in a  limited
number  of states,  although certain  exemptions under  certain state securities
("Blue Sky") laws  may permit the  Warrants to be  transferred to purchasers  in
states  other than  those in  which the  Warrants were  initially qualified. The
Company will be prevented, however, from  issuing Common Stock upon exercise  of
the  Warrants in those  states where exemptions are  unavailable and the Company
has failed to qualify the Common  Stock issuable upon exercise of the  Warrants.
The  Company may decide not to seek, or  may not be able to obtain qualification
of the issuance of such Common Stock in all of the states in which the  ultimate
purchasers  of  the  Warrants  reside.  In  such  case,  the  Warrants  of those
purchasers will expire and have no value if such Warrants cannot be exercised or
sold. Accordingly, the  market for the  Warrants may be  limited because of  the
Company's obligation to fulfill the foregoing requirements.
 
   UNDERWRITER'S INFLUENCE ON THE MARKET MAY HAVE ADVERSE CONSEQUENCES
 
    A  significant  number  of  securities  may  be  sold  to  customers  of the
Underwriter. Such customers of the Underwriter of this offering subsequently may
engage in transactions for  the sale or purchase  of such securities through  or
with  the Underwriter.  Although they  have no  legal obligation  to do  so, the
Underwriter from time to time in the future will make a market in and  otherwise
effect  transactions in the Company's securities.  To the extent the Underwriter
acts as marketmaker in the securities, it may be a dominating influence in  that
market.  The  price and  liquidity of  such  securities may  be affected  by the
degree, if any, of the Underwriter's participation in the market, inasmuch as  a
significant  amount  of  such  securities  may  be  sold  to  customers  of  the
Underwriter. Such customers, as customers  of the Underwriter of this  offering,
subsequently  may  engage  in transactions  for  the  sale or  purchase  of such
securities  through  or  with  the   Underwriter,  although  no  agreements   or
understandings,   written  or  oral,  exist  for  such  transactions,  and  such
transactions may further enhance the  Underwriter's dominating influence on  the
market.  Such market making activities, if commenced, may be discontinued at any
time or from time to time by the Underwriter without obligation or prior notice.
If a dominating  influence at  such time, the  Underwriter's discontinuance  may
adversely affect the price and liquidity of the securities.
 
    Further,  unless  granted  an  exemption  by  the  Securities  and  Exchange
Commission to its Rule 10b-6, the Underwriter may be prohibited from engaging in
any market making  activities with regard  to the Company's  securities for  the
period  from two or nine business days prior to any solicitation of the exercise
of Warrants until the later of the termination of such solicitation activity  or
the  termination, by waiver or otherwise, of  any right that the Underwriter may
have to receive a fee for  the exercise of Warrants following the  solicitation.
As  a result, the Underwriter may be unable  to continue to provide a market for
the  Company's  securities  during  certain  periods  while  the  Warrants   are
exercisable,  which  may  adversely  affect  the  price  and  liquidity  of  the
securities.
 
   CONTRACTUAL OBLIGATIONS TO UNDERWRITER MAY REDUCE PROCEEDS AVAILABLE TO THE
   COMPANY
 
    The Company has also agreed to  pay fees to the Underwriter, aggregating  up
to  five  percent  of the  consideration  involved  in the  transaction,  if the
Underwriter arranges  equity  financing,  debt  financing  and  assistance  with
mergers  and acquisitions,  for the  Company other  than this  offering during a
 
                                       17
<PAGE>
period of five years after  the date of this  Prospectus, or if the  Underwriter
obtains  or are influential  in increasing any  lines of credit  the Company may
have, provided such financing or increase is accepted by the Company. Such  fees
will  reduce the amount of proceeds available to the Company from such financing
or line of credit. Further, in addition to an ten percent underwriting discount,
the Company has  also agreed  to pay  the Underwriter  a nonaccountable  expense
allowance  of three percent of the gross proceeds of this offering, as well as a
fee of four percent of  the exercise price of  the Warrants (which includes  all
Class A Warrants and Class B Warrants owned by the Selling Security-holders), if
certain  conditions are  met. To the  extent the foregoing  compensation is paid
from the proceeds of this offering,  the amounts available to the Company,  will
be  reduced. On the closing date, the Company will sell to the Underwriter for a
purchase price of  $100, an  option to  purchase 100,000  Units at  120% of  the
initial offering price of $7.00 per Unit, or $8.40 per Unit, on the date of this
Prospectus. See "Underwriting."
 
   EXERCISE OF CLASS A WARRANTS MAY HAVE DILUTIVE EFFECT ON MARKET
 
    The Class A Warrants will provide, during their term, an opportunity for the
holder  to  profit  from a  rise  in the  market  price,  of which  there  is no
assurance, with resulting dilution in the ownership interest in the Company held
by the then  present stockholders.  Holders of  the Warrants  most likely  would
exercise  the Warrants and purchase  the underlying Common Stock  at a time when
the Company may be  able to obtain  capital by a new  offering of securities  on
terms  more favorable than those  provided by such Warrants,  in which event the
terms on which the  Company may be  able to obtain  additional capital would  be
affected adversely. See "Description of Securities" and "Underwriting."
 
   "PENNY STOCK" REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF
   SECURITIES
 
    The   Securities   and  Exchange   Commission  ("Commission")   has  adopted
regulations which generally define "penny stock" to be any equity security  that
has  a market price (as defined) less than  $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Upon  authorization
of  the securities offered hereby for  quotation on Nasdaq, such securities will
initially be exempt  from the  definition of  "penny stock."  If the  securities
offered  hereby are  removed from  listing by Nasdaq  at any  time following the
Effective Date, the Company's securities may become subject to rules that impose
additional  sales  practice  requirements   on  broker-dealers  who  sell   such
securities  to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual income  exceeding
$200,000,  or $300,000 together with their  spouse). For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase  of  such securities  and  have received  the  purchaser's  written
consent  to  the  transaction  prior  to  the  purchase.  Additionally,  for any
transaction involving  a  penny stock,  unless  exempt, the  rules  require  the
delivery,  prior to the  transaction, of a risk  disclosure document mandated by
the Commission relating to the penny  stock market. The broker-dealer also  must
disclose  the commissions payable  to both the  broker-dealer and the registered
representative, current quotations for the securities and, if the  broker-dealer
is  the sole  market-maker, the  broker-dealer must  disclose this  fact and the
broker-dealer's presumed control  over the market.  Finally, monthly  statements
must be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks. Consequently, the
"penny  stock"  rules may  restrict the  ability of  broker-dealers to  sell the
Company's securities and may affect the  ability of purchasers in this  Offering
to sell the Company's securities in the secondary market.
 
    The Company has applied for inclusion of the Units, Common Stock and Class A
Warrants  on the Nasdaq National Market System ("Nasdaq"), although there can be
no assurances that an active trading market will develop, even if the securities
are accepted  for  quotation.  Additionally, if  the  Company's  securities  are
accepted  for quotation and active trading  develops, the Company is required to
maintain certain minimum criteria established by  Nasdaq, of which there can  be
no assurance that the Company will be able to continue to fulfill such criteria.
The  Company has been advised that  the Company's securities offered hereby will
be listed on  Nasdaq upon  the Effective Date  of this  offering. Generally,  to
qualify  for a Nasdaq listing, the Company must have $4 million in total assets,
$2 million in total stockholders' equity and 300 or more shareholders of record.
The Company believes that it will
 
                                       18
<PAGE>
meet these minimum criteria upon the closing of this offering, but no assurances
can be made that the  Company will be able to  satisfy the criteria to  maintain
its  listing. Should  the Company  fail to  maintain its  listing, the Company's
securities will  be traded  in  the over-the-counter  market on  the  Electronic
Bulletin  Board as  maintained by  the National  Quotation Bureau, Incorporated,
which may pose  for the  investor potentially greater  difficulty in  purchasing
and/or selling the Company's securities.
 
    SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET
 
    All  of  the  Company's currently  outstanding  shares of  Common  Stock are
"restricted securities" and,  in the future,  may be sold  upon compliance  with
Rule  144,  adopted under  the  Securities Act  of  1933, as  amended.  Rule 144
provides, in essence, that a person holding "restricted securities" for a period
of two years may sell only an amount every three months equal to the greater  of
(a)  one percent  of the  Company's issued  and outstanding  shares, or  (b) the
average weekly volume  of sales  during the  four calendar  weeks preceding  the
sale.  The  amount of  "restricted  securities" which  a  person who  is  not an
affiliate of the  Company may sell  is not so  limited, since nonaffiliates  may
sell  without volume limitation  their shares held  for three years  if there is
adequate current public information available  concerning the Company. Upon  the
sale of the securities, and assuming that there is no exercise of any issued and
outstanding  Warrants, the  Company will  have 10,500,000  shares of  its common
stock issued  and outstanding,  of which  6,500,000 shares  will be  "restricted
securities."  Therefore, during  each three  month period,  beginning January 9,
1997, a holder of restricted securities who  has held them for at least the  two
year  period may sell  under Rule 144 a  number of shares  up to 105,000 shares.
Non-affiliated persons who hold  for the three-year  period described above  may
sell unlimited shares once their holding period is met. Pursuant to the terms of
the  Underwriting Agreement, the officers,  directors and principal stockholders
of the Company  and the Company  have agreed  not to sell,  transfer, assign  or
issue any securities of the Company for a period of 24 months following the date
of  this  Prospectus without  the  consent of  the  Underwriter. The  sale  of a
significant number of  these shares in  the public market  may adversely  affect
prevailing  market prices of  the Company's securities  following this offering.
See "Dilution," "Principal  Stockholders," "Certain Transactions,"  "Description
of Securities" and "Underwriting."
 
    This  offering also includes 2,000,000 shares  of Common Stock and 2,000,000
Class A Warrants owned by the Selling Security-holders. The Class A Warrants are
identical to the Class  A Warrants included  in the Units  being offered by  the
Company.  The shares of  Common Stock and  Class A Warrants  held by the Selling
Security-holders may be sold  commencing eighteen (18) months  from the date  of
this  Prospectus,  subject to  earlier  release at  the  sole discretion  of the
Underwriter, and such securities  include a legend  with such restrictions.  The
Underwriter  may release the securities held  by the Selling Security-holders at
any time after  all securities subject  to the Over-allotment  Option have  been
sold  or such option  has expired. The  resale of the  securities of the Selling
Security-holders are subject  to Prospectus delivery  and other requirements  of
the  Securities  Act  of 1933,  as  amended.  Sales of  such  securities  in the
Over-allotment Option  and  the early  release  of the  Selling  Security-holder
shares,   which  has  occurred   in  previous  offerings   underwritten  by  the
Underwriter, or the  potential of such  sales at  any time may  have an  adverse
effect  on  the market  prices of  the securities  offered hereby.  See "Certain
Transactions," "Selling Security-holders" and "Underwriting."
 
    Prospective investors should be aware that the possibility of sales may,  in
the  future, have a depressive effect on the price of the Company's Common Stock
in any market which may develop and,  therefore, the ability of any investor  to
market  his shares may be dependent directly  upon the number of shares that are
offered and  sold. Affiliates  of the  Company may  sell their  shares during  a
favorable  movement in the market price of  the Company's Common Stock which may
have  a  depressive  effect  on  its  price  per  share.  See  "Description   of
Securities."
 
                                       19
<PAGE>
                                USE OF PROCEEDS
 
    After deducting underwriting discounts of $700,000 and other expenses of the
offering   estimated  to   be  $1,000,000,  which   includes  the  Underwriter's
nonaccountable expense  allowance of  $210,000, assuming  an offering  price  of
$7.00  per Unit,  the Company  will receive  net proceeds  from the  offering of
approximately $5,300,000. The Company will not receive any of the proceeds  from
the  sale of  the securities  by the  Selling Security-holders.  These proceeds,
excluding the exercise  of any of  the Warrants,  will be utilized  in order  of
priority   by  the  Company   as  listed  below   for  approximately  12  months
substantially as follows:
 
<TABLE>
<CAPTION>
                                                           APPROXIMATE
                                                          AMOUNT OF NET
ADMINISTRATIVE EXPENSES                                     PROCEEDS          %
                                                         ---------------  ---------
<S>                                                      <C>              <C>
Management Compensation(1).............................    $   750,000        14.15
Employee Salaries and Overhead(2)......................        750,000        14.15
 
OPERATING COSTS AND WORKING CAPITAL
Software Support and Development(3)....................        750,000        14.15
Capital Equipment(4)...................................        500,000         9.43
Marketing and Sales(5).................................        500,000         9.43
Mergers and Acquisitions(6)............................        500,000         9.43
Working Capital(7).....................................        550,000         9.63
Debt Retirement(8).....................................      1,000,000        18.87
                                                         ---------------  ---------
    TOTAL..............................................    $ 5,300,000       100.00
                                                         ---------------  ---------
                                                         ---------------  ---------
</TABLE>
 
- ------------------------
(1) The  officers  and  employees  of   the  Company  also  intend  to   receive
    remuneration  as part of  an overall group  insurance plan providing health,
    life and disability  insurance benefits  for employees of  the Company.  The
    amount   allocable  to  each  individual  officer  and  employee  cannot  be
    specifically or precisely ascertained,  but, in any  event, will not  exceed
    $25,000 per annum as to each individual. "See Management -- Remuneration."
 
(2) Includes  annual general and administrative  employee salaries, exclusive of
    management  salaries,   associated  benefits,   related  office   rent   and
    miscellaneous office expenses.
 
(3) Includes annual salaries for software and engineering support personnel.
 
(4) The  Company  intends to  purchase and/or  lease certain  additional capital
    equipment including,  but  not  limited to,  engineering  and  manufacturing
    equipment,  computer hardware/software and  systems, telephone and facsimile
    systems, security systems and office equipment and furniture.
 
(5) The amount  allocated  by  the  Company for  marketing  and  sales  includes
    marketing   materials,  advertising,  business   travel  and  a  significant
    expansion of its marketing and sales staff.
 
   
(6) Following the closing of this offering,  the Company intends to engage in  a
    mergers  and  acquisitions  campaign  in  order  to  merge  with  or acquire
    complementary companies in the $10 million to $25 million revenue range. The
    Company has not entered into  any negotiations, agreements, arrangements  or
    understandings  with respect to  the merger with or  acquisition of any such
    target companies,  or has  any  such agreement  or understandings  with  any
    brokers  or finders regarding same. The  Company can make no assurances that
    it will be able to merge with or acquire any companies. Although the Company
    intends to utilize  approximately $500,000 in  its mergers and  acquisitions
    activities  during the 12  months following the date  of this Prospectus, no
    assurances can be made that such funds, or additional funds, will enable the
    Company to expand  its base or  realize profitable consolidated  operations.
    Whenever  possible, the Company intends to  issue its securities rather than
    use cash funds  to consummate a  merger or acquisition.  The ability of  the
    Company  to engage  in a  mergers and acquisitions  campaign in  view of the
    Company's resources is uncertain. Should such  funds not be utilized in  its
    mergers  and  acquisitions activities,  the Company  intends to  utilize the
    funds in equal amounts in capital equipment and marketing and sales.
    
 
                                       20
<PAGE>
(7) Working capital will be utilized by  the Company to enhance and,  otherwise,
    stabilize cash flow during the initial 12 months of operations following the
    closing of this offering, such that any shortfalls between cash generated by
    operating  revenues and costs  will be covered  by working capital. Although
    the Company prefers to  retain its working capital  in reserve, the  Company
    may be required to expend part or all of these proceeds as financial demands
    dictate.
 
(8) In  March and April 1996,  the Company borrowed $1,000,000  in a bridge loan
    from the Selling Security-holders at the rate of eight percent simple annual
    interest, which is due and payable at the closing of this offering from  the
    net  proceeds of this  offering. The bridge  loan has been  used for working
    capital, the  repayment of  debt and  to  pay for  certain expenses  of  the
    offering,  including legal fees and accounting fees. The 2,000,000 shares of
    Common Stock, 2,000,000 Class A Warrants and 2,000,000 Class B Warrants were
    issued to  the  Selling Security-holders  in  further consideration  of  the
    bridge loan. The Class A Warrants issued to the Selling Security-holders are
    identical to the Class A Warrants included in the Units being offered by the
    Company.  The  Class B  Warrants,  which are  not  being registered  in this
    offering, are identical to the Class A Warrants included in the Units  being
    offered  by  the  Company  except  that the  exercise  price  is  $4.20. The
    2,000,000 shares of Common  Stock and 2,000,000 Class  A Warrants are  being
    registered  as part  of this  offering. The  securities held  by the Selling
    Security-holders may be sold commencing  eighteen (18) months from the  date
    of  this Prospectus, subject to earlier release by the Underwriter, and such
    securities include  a legend  with such  restrictions. The  Underwriter  may
    release  the securities  held by  the Selling  Security-holders at  any time
    after all securities subject to the Over-allotment Option have been sold  or
    such  30-day option  has expired.  The Company will  not receive  any of the
    proceeds from  the sale  of  the securities  being  offered by  the  Selling
    Security-holders.   The  Class  A  Warrants   are  redeemable  upon  certain
    conditions. See  "Certain  Transactions," "Description  of  Securities"  and
    "Selling Security-holders."
 
    Although it is uncertain that the Company's shares of Common Stock will rise
to a level at which the Warrants would be exercised, in the event subscribers in
this  offering elect to exercise  all of the Warrants  herein (not including the
Underwriter's Over-allotment Option or  the Underwriter's Purchase Option),  the
Company  will  realize gross  proceeds  of approximately  $8,000,000. Management
anticipates that  the  proceeds from  the  exercise  of the  Warrants  would  be
contributed  to working capital of the  Company. Nonetheless, the Company may at
the time of exercise allocate a portion  of the proceeds to any other  corporate
purposes.  Accordingly, investors who exercise their Warrants will entrust their
funds to management, whose specific intentions  regarding the use of such  funds
are not presently and specifically known.
 
    The  Company is unable to predict the precise period for which this offering
will provide financing,  although management  believes that  the Company  should
have  sufficient working capital to meet its cash requirements for the 12 months
period following the date of this offering. Accordingly, the Company may need to
seek additional funds through loans or other financing arrangements during  this
period  of time.  No such arrangements  exist or are  currently contemplated and
there can be no  assurance that they  may be obtained in  the future should  the
need arise.
 
    Pending  utilization, management intends to make temporary investment of the
proceeds in  bank certificates  of deposit,  interest-bearing savings  accounts,
prime commercial paper or federal government securities.
 
                                       21
<PAGE>
                                    DILUTION
 
    As  of March 31, 1996, the Company had a net tangible book value of $152,809
or $.02 per share, derived from the Company's balance sheet as of March 31, 1996
and the total common stock  outstanding at March 31,  1996 and the issuances  in
April  1996 related to the  bridge financing. Net tangible  book value per share
means the tangible assets of the  Company, less all liabilities, divided by  the
number of shares of Common Stock outstanding. After giving effect to the sale of
the  Units offered hereby  at an assumed price  of $7.00 per  Unit, or $3.50 per
share of  Common  Stock after  deducting  underwriting discounts  and  estimated
offering  expenses, pro forma net tangible book value would have been $5,452,809
or $.52 per share. The result will be an immediate increase in net tangible book
value per  share of  $.50 (2,789%)  to existing  shareholders and  an  immediate
dilution  to  new  investors of  $2.98  (85%)  per share.  As  a  result, public
investors will  bear most  of the  risk of  loss since  their shares  are  being
purchased  at a  cost substantially above  the price  that existing shareholders
acquired their shares. "Dilution" is determined by subtracting net tangible book
value per share  after the offering  from the offering  price to investors.  The
following   table  illustrates  this  dilution   assuming  no  exercise  of  the
over-allotment option:
 
<TABLE>
<S>                                                                     <C>        <C>
Public offering price of the Common Stock offered hereby..............             $    3.50
  Pro forma net tangible book value per share, before the offering....  $     .02
  Increase per share attributable to the sale by the Company of the
   Units offered hereby...............................................  $     .50
                                                                            ---
Pro forma net tangible book value per share, after the offering.......             $     .52
                                                                                   ---------
Dilution per share to new investors...................................             $    2.98
                                                                                   ---------
                                                                                   ---------
</TABLE>
 
    The  above  table  assumes  no  exercise  of  the  Class  A  Warrants,   the
Over-allotment  Option or the Underwriter's Purchase Option. See "Description of
Securities."
 
    The following table summarizes the investments of all existing  stockholders
and  new investors after giving  effect to the sale  of the Units offered hereby
assuming no exercise of the Over-allotment Option:
 
<TABLE>
<CAPTION>
                                                                 PERCENTAGE                  PERCENT OF     AVERAGE
                                                     SHARES       OF TOTAL      AGGREGATE       TOTAL      PRICE PER
                                                    PURCHASED      SHARES     CONSIDERATION   INVESTED       SHARE
                                                  -------------  -----------  -------------  -----------  -----------
<S>                                               <C>            <C>          <C>            <C>          <C>
Present Stockholders(1).........................      8,500,000      80.95%   $     310,000       4.24%    $     .04
                                                                                                               -----
                                                                                                               -----
Public Stockholders.............................      2,000,000      19.05%   $   7,000,000      95.76%    $    3.50
                                                  -------------  -----------  -------------  -----------       -----
                                                                                                               -----
    Total.......................................     10,500,000     100.00%   $   7,310,000     100.00%    $     .69
                                                  -------------  -----------  -------------  -----------       -----
                                                  -------------  -----------  -------------  -----------       -----
</TABLE>
 
    If the Over-allotment Option is  exercised in full, the public  stockholders
will  have  paid $8,050,000  and  will hold  2,300,000  shares of  Common Stock,
representing 96.99 percent of the total  consideration and 21.30 percent of  the
total  number  of  outstanding  shares  of  Common  Stock.  See  "Description of
Securities" and "Underwriting."
- ------------------------
(1) This offering also includes 2,000,000  shares of Common Stock and  2,000,000
    Class A Warrants owned by the Selling Security-holders. The Class A Warrants
    are identical to the Class A Warrants included in the Units being offered by
    the  Company. The shares  of Common Stock  and Class A  Warrants held by the
    Selling Security-holders may  be sold commencing  eighteen (18) months  from
    the  date  of  this  Prospectus,  subject to  earlier  release  at  the sole
    discretion of the Representative, and such securities include a legend  with
    such  restrictions. The Underwriter  may release the  securities held by the
    Selling Security-holders at  any time  after all securities  subject to  the
    Over-allotment  Option have been sold or such option has expired. The resale
    of the securities of the Selling Security-holders are subject to  Prospectus
    delivery  and other requirements of the  Securities Act of 1933, as amended.
    Sales of such securities in the Over-allotment Option and the early  release
    of  the  Selling  Security-holder  shares, which  has  occurred  in previous
    offerings underwritten by the Underwriter, or the potential of such sales at
    any time may have an adverse effect  on the market prices of the  securities
    offered  hereby. Should the Class A Warrants be exercised, of which there is
    no assurance, the Company will receive the proceeds therefrom aggregating up
    to an  additional $8,000,000.  See "Certain  Transactions," "Description  of
    Securities" and "Selling Security-holders."
 
                                       22
<PAGE>
                                 CAPITALIZATION
                             (DOLLARS IN THOUSANDS)
 
    The following table sets forth the capitalization of the Company as of March
31,  1996, and as adjusted to reflect the  sale of the Units offered hereby. The
table should be read in conjunction with the Financial Statements, and the notes
thereto.
 
<TABLE>
<CAPTION>
                                                          MARCH 31,
                                                            1996       PRO FORMA   AS ADJUSTED (1)
                                                         -----------  -----------  ---------------
<S>                                                      <C>          <C>          <C>
Long-term debt.........................................   $     500    $   1,000      $  --
                                                         -----------  -----------
Stockholders' equity
  Common Stock, $.01 par value, 50,000,000 shares
   authorized, 7,500,000 shares outstanding; pro forma
   8,500,000 shares outstanding reflecting the issuance
   of units in connection with the April 1996 bridge
   loan; 10,500,000 shares outstanding, as adjusted....   $      75    $      85      $     105
Stock subscriptions and notes receivable...............        (310)        (310)          (310)
Additional paid-in capital.............................         925          915          6,195
Retained deficit.......................................        (537)        (537)          (537)
                                                         -----------  -----------       -------
    Total stockholders' equity.........................   $     153    $     153      $   5,453
                                                         -----------  -----------       -------
    Total capitalization...............................   $     553    $   1,153      $   5,453
                                                         -----------  -----------       -------
                                                         -----------  -----------       -------
</TABLE>
 
- ------------------------
(1) As adjusted to reflect this offering. Assumes no exercise of (i) the Class A
    Warrants; (ii) the  Underwriter's Over-allotment  Option to  purchase up  to
    150,000  Units; or (iii) the Underwriter's Purchase Option to purchase up to
    100,000 Units. See "Description of Securities" and "Underwriting."
 
(2) The pro  forma capitalization  illustrates  the effect  of the  bridge  loan
    received in April 1996.
 
                                DIVIDEND POLICY
 
    Holders of the Company's Common Stock are entitled to dividends when, as and
if  declared by the Board of Directors  out of funds legally available therefor.
The Company does not anticipate the  declaration or payment of any dividends  in
the  foreseeable  future. The  Company intends  to retain  earnings, if  any, to
finance the development and  expansion of its  business. Future dividend  policy
will  be  subject  to the  discretion  of the  Board  of Directors  and  will be
contingent upon  future earnings,  if any,  the Company's  financial  condition,
capital  requirements, general business conditions and other factors. Therefore,
there can be no assurance  that any dividends of any  kind will ever be paid  by
the Company.
 
                                       23
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
PLAN OF OPERATION
 
   
    e-NET,  Inc. ("Company"), develops, markets and supports open client, server
and  integrated  applications   software  that  enables   local,  national   and
international  telephone communications, information  exchange and commerce over
the Internet  and  private  Internet Protocol  ("IP")  networks.  The  Company's
software  products allow individuals  and organizations to  execute secure voice
communications  across  the   Internet,  through  the   use  of   authentication
technology,  for  local,  national and  international  telephone communications,
information exchange and commerce. In addition, through the use of the Company's
software, organizations  can  extend  their  internal  information  systems  and
enterprise  applications to geographically  dispersed facilities, remote offices
and mobile employees. A  number of companies, some  with greater resources  than
the  Company, manufacture  similar system  products which  may compete  with the
Company's products. See "Risk Factors" and "Business -- Competition."
    
 
   
    In March 1996,  the Company acquired  all rights title  and interest in  the
first  U.S.  patent, U.S.  Patent No.  5,526,353,  for a  system and  method for
communicating high fidelity and  clear transmission of audio  or voice over  the
Internet,  enabling  free  worldwide  high fidelity  and  clear  transmission of
ordinary telephone communications  over the Internet.  The Company acquired  all
rights,  title and  interest in  the patent  from the  inventors, Messrs. Arthur
Henley and  Scott  Grau,  who  are original  stockholders  of  the  Company,  in
consideration of a five percent overriding royalty interest against gross profit
involving  the use of the patent. The  Company has agreed to allocate $1,000,000
of paid in capital to develop and exploit the market opportunities of the patent
by December  31, 1996,  or  the patent  will be  subject  to repurchase  by  the
inventors  of the  patent. The  Company believes  that its  patent is  the first
patent awarded of its kind, specifically involving the transmission of audio  or
voice  over the Internet. The Company also  believes that its patent may provide
certain strategic and technological advantages in the new and burgeoning area of
audio or voice over the Internet.  The Company can make no assurances,  however,
as to the extent of the advantages or protection, if any, that may be granted to
the  Company  as  a  result  of its  patent.  See  "Business,"  "Management" and
"Financial Statements."
    
 
   
    The Company's operations to date have concentrated on continuing development
of its  technologies,  products and  services,  establishing acceptance  of  its
software  products in the telecommunications industry, providing services to its
existing customer base,  and securing financing  necessary to fund  development,
operations, and expansion of its business. The Company's products include:
    
 
    TELECOM-2000-TM-
 
   
    e-NET's  Telecom-2000  product is  based  on the  patent  rights acquisition
described  above  and  consists   of  voice/data  integration  protocol,   voice
packetization  software,  prototype interfaces  to Ethernet  telephony hardware,
address resolution and call handling software, and interfaces to the traditional
telephone network.  The  Telecom-2000  is  designed  to  allow  individuals  and
organizations  to execute secure voice  communications across the Internet, such
as local,  national  and  international telephone  communications.  Due  to  the
economical   and  highly   scalable  architecture  that   e-NET  has  developed,
Telecom-2000 can be utilized for integrated data and telephony communications in
very small offices, enterprise networks, national reseller networks and for  the
consumer.  The product is in  the final test stages  of its initial development,
and the Company believes the product will be ready for release by the end of the
Company's third quarter of fiscal  1997. Depending on the precise  configuration
and  volume,  the  Company intends  to  offer  the Telecom-2000  at  a  price of
approximately $750 per unit,  which includes a one  year warranty and  technical
service, training and support.
    
 
    INTELLICD-TM-
 
   
    The  IntelliCD product was  developed by e-NET  to meet a  strategic need of
Sprint. Sprint's  larger customers  have  reported a  critical need  to  receive
monthly  billing  information (call  detail  reports) in  an  easily accessible,
computer acceptable input format,  which would allow  direct access, search  and
retrieval  to meet  a wide variety  of requirements. The  CD-ROM medium provides
rapid access to data,
    
 
                                       24
<PAGE>
   
uses  ubiquitous  PC  equipment  for   access,  and  requires  minimal   storage
requirements.  The  e-NET approach  includes the  design  and development  of an
ergonomic, SQL-based search  and retrieval  software engine  that permits  users
with  little knowledge of data  processing to easily define  and generate a wide
variety of  searches  and  reports.  Since e-NET's  software  design  is  highly
generalized,  the  IntelliCD  process  is  readily  adapted  to  any requirement
involving repeated use  of large  volume, non-volatile data  sets. Depending  on
precise configuration and volume, the Company offers the IntelliCD at a price of
approximately  $300 per unit,  which includes a one  year warranty and technical
service, training and support. At March  31, 1996, the Company realized  $74,500
in  sales of the IntelliCD product, representing approximately 25 percent of its
total sales.
    
 
    E-NET NMS-TM-
 
   
    The e-Net Network Management  System ("e-Net NMS")  is a proprietary  expert
systems-based,  user  friendly,  object-oriented network  and  system management
product that is offered  by the Company. Through  the introduction of  automated
problem,  configuration,  accounting, performance  and security  management, the
Company's e-Net NMS product provides  corporate and government enterprises  with
flexibility  for the management of global telephone and data networks, including
networks connected by the Internet. The e-Net NMS product also provides  network
traffic  optimization  and  re-routing,  real-time  configuration  and  database
management, generation of all needed  reports, and system failure detection  and
prediction.  Depending on precise  configuration and volume,  the Company offers
the e-Net  NMS product  at a  price  of approximately  $60,000 per  unit,  which
includes  a one  year warranty and  technical service, training  and support. At
March 31, 1996, the Company realized $43,000 in sales of the e-Net NMS  product,
representing approximately 15 percent of its total sales.
    
 
    DEBITBILL-TM-
 
   
    The  telephone debit card business has experienced strong growth in response
to customer acceptance and  increasing demand. e-Net's  experience with its  own
proprietary debit billing card product, called DebitBill-TM-, has indicated that
there may be significant market demand for this technology, although the Company
can  make no assurances of the extent of  any demand. The Company intends to use
its current  market position  to sell  its debit  card product  to the  Internet
service  delivery  market.  DebitBill-TM-  interfaces  with  standard  telephone
switches and related accounting management software to identify the customer and
to record and manage amounts owed.  The Company believes that DebitBill-TM-  may
be a significant product in its suite of products because of the ease-of-use and
cash  flow  implications of  this  technology. e-Net  has  specifically designed
DebitBill-TM- for the  Internet and  private IP networks.  Depending on  precise
configuration  and volume, the Company has recently begun to offer the DebitBill
product at a price of approximately $60,000 per unit, which includes a one  year
warranty  and technical  service, training and  support. At March  31, 1996, the
Company has not realized any sales of this product.
    
 
   
    SERVICES
    
 
   
    In addition to the products listed above, e-NET provides technology services
to its customers in a number of  other areas. The Company has made a  commitment
to  provide timely, high quality technical support  to meet the diverse needs of
its customers  and  partners and  to  facilitate the  adoption  and use  of  its
technologies,  products  and  services. These  services  include  e-NET Helpdesk
support, consulting on software programming  and network management systems  and
training.  At March 31, 1996, the Company  realized $176,376 in sales related to
its technology support  services, representing approximately  60 percent of  its
total sales.
    
 
    The  Company's  plans  for the  next  fiscal year  center  around continuing
efforts  to  complete  the  first  phase  development  and  test  marketing   of
Telecom-2000. Management believes that the market for such a product is only now
being  defined and customers are  waiting for a product  which can deliver voice
quality equivalent to existing telephony at a reduced cost. While no  assurances
can  be  made  of  Telecom-2000's success,  management  believes  this product's
potential in the marketplace  may be significant. To  date, no installations  of
Telecom-2000  have been sold.  As a result, the  Company's operating results may
fluctuate significantly based upon future sales.
 
                                       25
<PAGE>
    The Company  also intends  to continue  internal development  of  additional
versions  of  Telecom-2000,  as  well as,  other  software  products. Management
believes that, as  the market  matures, different market  segments will  require
slightly  modified versions of  its Telecom-2000. Management  also believes that
additional software product requirements will  be recognized while working  with
its  customers and  installing its existing  products or  providing its existing
expert services. Management also intends to engage in a mergers and acquisitions
campaign in order to merge with or acquire complementary companies in the $10 to
$25 million revenue range.
 
   
    The Company's objective is to market and distribute its products  worldwide,
in   part  by   disseminating  its   products  through   multiple  national  and
international distribution channels.  However, there can  be no assurances  that
the  Company will be able  to meet this objective.  The Company has designed its
distribution strategy  to address  the particular  requirements of  its  diverse
institutional and individual target customers. The Company's direct distribution
efforts  will consist of a direct sales force and telesales as well as marketing
directly VIA the  e-Net home page  on the Internet.  The Company's products  are
currently  distributed indirectly  through OEMs,  systems integrators,  VARs and
software retailers.
    
 
   
    As described  in Note  B to  the Financial  Statements, the  Company  issued
1,000,000  bridge units, comprising 2,000,000  shares of Common Stock, 2,000,000
Class A Warrants, and 2,000,000 Class B Warrants as additional consideration for
a bridge loan of $1,000,000,  the proceeds of which  were received in March  and
April 1996. In addition to the payment of interest of 8% per annum on the bridge
loan, interest expense of $7,000,000 related to the issuance of the bridge units
will  be  accrued during  the  period from  the date  of  each loan  through the
effective date of this offering and  a corresponding credit will be credited  to
paid in capital; of this amount $614,865 has been accrued as of March 31, 1996.
    
 
   
    In  addition,  operating  results for  the  year  ended March  31,  1997 and
thereafter, will  be  negatively  impacted  by  the  expenditure  of  funds  for
continuing development of the Company's technologies, products and services.
    
 
RESULTS OF OPERATIONS
 
    PERIOD FROM BEGINNING OF OPERATIONS (JUNE 8, 1995) TO MARCH 31, 1996
 
   
    The Company reported sales for the period of $293,876. For the period ending
March  31, 1996, the Company derived 32% (Sprint), 29% (Comsat), 16% (First Data
Resources) and 13% (Documenta) of  its sales from four customers,  respectively.
The  sales is attributable to  its three main business  areas: sales of software
products, integration and support of software products, integration and  support
of  enterprise computer networks. The cost of product sales and service consists
of salaries and wages,  support costs and other  expenses. The gross margin  for
its products and services was approximately 70% of sales.
    
 
    The  Company  reported  selling,  general  and  administrative  expenses  of
$115,171 which consisted of  salaries of officer  and employees, support  costs,
legal  fees,  the cost  of  product development  charged  to expense  during the
period, and other administrative expenses.
 
    Interest and financing charges were $621,749 including an interest charge of
$614,865  associated  with   the  issuance   of  bridge   units  as   additional
consideration  for a $500,000 bridge loan originating  in March 1996, as well as
interest on loans from the president of the Company.
 
INCOME TAXES
 
    As a result of operating losses  generated during the period from  beginning
of  operations (June 8, 1995) to March 31, 1996, the Company has no income taxes
due. Currently, the Company  maintains a tax year  ending on December 31,  while
its  fiscal year ends on March 31. The  Company is also able to file its returns
using the cash basis method of accounting.
 
                                       26
<PAGE>
CAPITAL RESOURCES, LIQUIDITY AND BACKLOG
 
   
    The Company has a cash balance available to fund operations as of March  31,
1996, since $500,000 of the $1,000,000 in bridge loans had already been received
at  that time. The Company believes that  these funds are sufficient to continue
operations until  the closing  of this  offering.  The Company  is also  in  the
process  of establishing a  credit facility to  provide additional financing for
equipment purchases and for service and support contract operations funding. The
Underwriter is playing no  role in the Company's  efforts to establish a  credit
facility.  No assurance can be  given as the ultimate  success of the Company in
establishing such a facility.
    
 
   
    The Company received $500,000 in March 1996 and $500,000 in April 1996 under
bridge loan transactions wherein the  Company issued 1,000,000 units (each  unit
consisting  of two shares of Common Stock, two  Class A Warrants and two Class B
Warrants) as additional financing costs  in consideration for making the  loans.
These  loans  become due  at  the earlier  of  the completion  of  the Company's
proposed initial public offering  or June 1,  1997. See "Certain  Transactions,"
"Description of Securities" and "Selling Security-holders."
    
 
   
    In  addition to the  loan proceeds received  in March and  April 1996, it is
anticipated that the  Company will  raise approximately  $5,160,000 through  its
proposed initial public offering of securities. These funds are intended to fund
continuing  operations,  including  its administrative  expenses  and management
compensation, as well as retire the bridge loan debt. The Company believes  that
the  proceeds from the bridge loans and this offering will be sufficient to meet
its cash  flow needs  for the  12-month  period following  the closing  of  this
offering.
    
 
   
    The  Company  leases  approximately  1,500  square  feet  for  its principal
executive offices  located at  7-4  Metropolitan Court,  Gaithersburg,  Maryland
20878.  The  Company  intends to  expand  its  facilities to  3,000  square feet
following the closing of this offering. Base rental for the current premises  is
approximately  $1,900 per month.  The lease requires the  Company to pay certain
property taxes and  certain operating  expenses. The Company  believes that  its
current and anticipated facilities are suitable and adequate for its operations.
    
 
IMPACT OF INFLATION
 
   
    The  Company  does not  believe that  inflation has  had a  material adverse
effect on sales or  income since its inception.  Increases in supplies or  other
operating  costs  may adversely  affect the  Company's operations;  however, the
Company believes  it  may increase  prices  of its  technologies,  products  and
services to offset increases in costs of goods sold or other operating costs.
    
 
TECHNOLOGY CHANGES
 
    Based  on  its limited  experience to  date, the  Company believes  that its
future operating  results may  be subject  to quarterly  variations based  on  a
variety of factors, including technology changes and advances, especially in the
Internet.  Such effects may  not be apparent in  the Company's operating results
during a period of expansion. However,  the Company can make no assurances  that
its business can be significantly expanded under any circumstances.
 
                                       27
<PAGE>
                                    BUSINESS
 
OVERVIEW
 
   
    e-Net,   Inc.  develops,  markets  and  supports  open  client,  server  and
integrated applications software that enables local, national and  international
telephone  communications, information  exchange and commerce  over the Internet
and private Internet Protocol ("IP")  networks. The Company's software  products
are  designed to deliver high  levels of performance, ease  of use and security.
These software products  allow individuals and  organizations to execute  secure
voice  communications  across the  Internet, through  the use  of authentication
technology, for  local,  national and  international  telephone  communications,
information exchange and commerce. In addition, through the use of the Company's
software,  organizations  can  extend  their  internal  information  systems and
enterprise applications to geographically  dispersed facilities, remote  offices
and mobile employees.
    
 
   
    In  March 1996, the Company  acquired all rights, title  and interest in the
first U.S.  patent,  U.S. Patent  No.  5,526,353 for  a  system and  method  for
communicating  high fidelity and  clear transmission of audio  or voice over the
Internet, enabling  free  worldwide  high fidelity  and  clear  transmission  of
ordinary  telephone communications over  the Internet. The  Company acquired all
rights, title and  interest in  the patent  from the  inventors, Messrs.  Arthur
Henley  and  Scott  Grau,  who  are original  stockholders  of  the  Company, in
consideration of  a  five  percent overriding  royalty  interest  against  gross
profits  involving the  use of  the patent. The  Company has  agreed to allocate
$1,000,000 of paid in  capital to develop and  exploit the market  opportunities
for the patent by December 31, 1996, or the patent will be subject to repurchase
by  the inventors  of the patent.  The Company  believes that its  patent is the
first patent awarded  of its  kind, specifically involving  the transmission  of
audio  or voice over the Internet. The Company also believes that its patent may
provide certain strategic and technological advantages in the new and burgeoning
area of audio or voice  over the Internet. The  Company can make no  assurances,
however,  as to the extent of the advantages  or protection, if any, that may be
granted to the Company as  a result of its  patent. The Company's first  product
utilizing its patent is Telecom-2000-TM-, a hardware and software suite designed
for  voice over the Internet, which is  in the final testing stage and projected
to be available to market  by the end of the  Company's third quarter of  fiscal
1997.
    
 
   
    Also, in March 1996, e-Net entered into an agreement with Sprint ("Sprint"),
a  leading telecommunications company, under which e-Net will deliver certain of
its technologies, products and services  known as Sprint Internet Protocol  Dial
Services  support. Sprint,  to date,  has been  the Company's  largest customer.
Under the  agreement, e-Net  will use  its Internet  technologies, products  and
services  to  provide security  and field  support to  Sprint customers  who use
Sprint as a  means of accessing  the Internet. e-Net's  agreement provides  that
e-Net will generate all of the revenues associated with the number of authorized
Sprint  Internet Protocol  Dial Service  user identity  codes. e-Net  shall also
perform password administration, customer  service administration and  emergency
help  desk administration under the terms of  the agreement. The agreement has a
duration of  one year,  with  automatic one  year  renewals, subject  to  mutual
consent,  and is exclusive between e-Net and Sprint for the first 90 days. e-Net
intends to seek additional strategic alliances with the Regional Bell  Operating
Companies  (RBOC's) for the use of  its technologies, products and services. The
Company has  not entered  into  any negotiations  to  enter into  any  strategic
alliances  with the RBOC's. The  Company can make no  assurances that it will be
able to  enter into  any agreements  with such  concerns for  its  technologies,
products and services.
    
 
INDUSTRY BACKGROUND
 
    INTERNET
 
    The  Internet is a global web of  computer networks. Developed over 25 years
ago, this "network of networks" allows any computer attached to the Internet  to
talk  to any other  using the Internet Protocol.  The Internet has traditionally
been subsidized by  the U.S.  federal government.  As the  number of  commercial
entities  that rely on the Internet for business communications and commerce has
increased, the  level of  federal subsidies  has significantly  diminished,  and
funding for the Internet
 
                                       28
<PAGE>
infrastructure  and  backbone operations  has shifted  primarily to  the private
sector.  Further,  the   Internet  has  historically   been  used  by   academic
institutions,  defense contractors and government  agencies primarily for remote
access to host computers and for sending and receiving e-mail.
 
    Further,  individuals  are  connecting  directly  to  the  Internet  through
Internet  access services  such as  those provided  by MCI,  NETCOM, Performance
Systems International,  Inc. ("PSI"),  and UUNET  Technologies, Inc.  ("UUNET").
These  services are growing as easy-to-use  software packages make accessing the
Internet as easy as  getting onto the popular  online services. To compete  with
these  direct  Internet  access providers,  consumer  online  services including
America Online,  Inc.  ("AOL"),  CompuServe, Inc.  ("CompuServe"),  and  Prodigy
Services  Co.  ("Prodigy"), have  also introduced  Internet access  gateways for
their existing subscribers. With these gateways, the online services effectively
become large Internet "on-ramps," bringing large numbers of subscribers onto the
Internet.
 
    WORLD WIDE WEB
 
    Much of the recent growth in Internet use by businesses and individuals  has
been  driven by the emergence of a  network of servers and information available
on the  Internet  called  the World  Wide  Web  ("Web"). The  Web,  based  on  a
client/server   model  and  a  set  of  standards  for  information  access  and
navigation, can be accessed  using software that  allows non-technical users  to
exploit  the  capabilities  of the  Internet.  The  Web enables  users  to find,
retrieve and link information on the Internet in a consistent way that makes the
underlying complexities  transparent  to  the  user.  Electronic  documents  are
published  on Web servers in  a common format described  by the Hypertext Markup
Language ("HTML"). Web client software  can retrieve these documents across  the
Internet  by making requests using a standard protocol called Hypertext Transfer
Protocol ("HTTP"). The  first Web client  (or "browser") with  a graphical  user
interface  to utilize these  protocols was NCSA Mosaic,  first released in April
1993 by the National Center for Supercomputing Applications at the University of
Illinois ("NCSA").
 
    The proliferation of Web clients has created significant demand for software
to enable Internet servers and private servers on corporate networks to function
as Web servers. These servers are used by organizations to offer their  products
and  services on the Internet and to publish confidential company information to
employees inside the enterprise. Web usage  is expected to be further fueled  by
advances  in  Web  client,  server and  application  software,  in  concert with
technological  developments   that  drive   cost  reductions   and   performance
enhancements.
 
    INTERNET COMMERCE
 
    The  Internet  provides  organizations  and individuals  with  new  means to
conduct business. Commercial uses  of the Internet include  business-to-business
and   business-to-consumer   transactions,   product   marketing,   advertising,
entertainment, electronic publishing, electronic services and customer  support.
The  Internet offers a new  and powerful medium for  traditional retail and mail
order businesses  to target  and  manage a  wider  customer base  more  rapidly,
economically  and productively. The Company believes  that only a small fraction
of this retail business is currently conducted electronically. Another important
application for Internet  commerce is electronic  publishing through  advertiser
supported   and  fee-based  Internet   services.  Electronic  publishing  offers
substantial savings as  compared to publishing  on paper or  computer discs.  In
addition,  Web software permits the publishing of audio files and video clips as
well as text and graphical data.
 
    In addition to retailers and publishers, other new businesses are  appearing
on  the  Web as  it provides  access to  a  growing base  of home,  business and
education customers. Business information providers such as Dow Jones & Company,
Inc., Individual, Inc. and Reuters  Ltd. have started customizing news  services
on  the  Web.  Financial  service  institutions  are  providing  online  banking
information,  stock  information  and  trading  services.  Examples  of  popular
consumer    information   services    recently   introduced    include   ESPNet,
Knight-Ridder's  Mercury  Center  and  Sportsline  U.S.A.  Companies  from  many
industries  are  publishing product  and  company information  to  their channel
partners and  customers,  providing  customer  support  via  the  Web,  allowing
customers  to immediately buy products  online, and collecting customer feedback
and demographic information interactively.
 
                                       29
<PAGE>
    APPLICATIONS
 
   
    As an increasing number  of organizations provide  their employees with  Web
access  from their desktops, an opportunity is emerging for internal information
systems and enterprise applications hosted on internal Web servers. The Internet
enables  organizations  to  extend   their  internal  information  systems   and
enterprise  applications to geographically dispersed facilities, remote offices,
and mobile employees using Web client and server software.
    
 
   
    e-Net develops,  markets and  supports open  client, server  and  integrated
applications  software that enables local,  national and international telephone
communications, information exchange and commerce over the Internet and  private
IP networks. The Company's software products are designed to deliver high levels
of  performance,  ease  of  use  and  security.  These  software  products allow
individuals and organizations  to execute secure  voice transactions across  the
Internet,  through the use of authentication technology, for local, national and
international telephone communications, information  and commerce. In  addition,
through  the  use  of the  Company's  software, organizations  can  extend their
internal information  systems  and  enterprise  applications  to  geographically
dispersed facilities, remote offices and mobile employees.
    
 
   
    The  Company  believes that  one of  its key  competitive advantages  is its
technical  experience  and  expertise.  The  Company's  core  development  group
includes  individuals  who  have  developed  and  implemented telecommunications
network management software and other Internet and network related products  and
services  as they have emerged as  a recognized application continuously for the
last 12 years.
    
 
PRODUCTS
 
    The  Company   provides   a   comprehensive   line   of   telecommunications
science-based  products for business and consumers  for use in the transmission,
management and billing of  network telephone and  computer usage, including  the
Internet.  These products enable  the improved usage,  recording, monitoring and
accounting of  network operations.  The following  material sets  forth  certain
information with respect to the Company's line of products:
 
    TELECOM-2000-TM-
 
   
    The  Company's  most sophisticated  technology  is a  software  and hardware
product suite known as Telecom-2000. Telecom-2000 on the Internet, as well as on
private wide area networks, is designed to deliver basic telephone service, in a
technically different and  improved way in  terms of voice  quality compared  to
product  offerings  in  the market  today.  The  Company's product  is  based on
Ethernet switching  and Virtual  LAN technology  completed with  low cost  voice
packetization  technology. The proliferation of  affordable ATM adapters, switch
nodes and Wide Area Network ATM services by the Local Exchange Carriers  (LEC's)
and  Interexchange Carriers (IXC's) has provided a significant cost incentive to
utilize ATM for voice transport on the Internet and other wide area networks.
    
 
   
    Telecom-2000 consists of voice/data integration and authentication protocol,
voice  packetization  software,  prototype  interfaces  to  Ethernet   telephony
hardware,  address resolution and call handling  software, and interfaces to the
traditional telephone  network.  Due  to the  economical  and  highly  scaleable
architecture  developed  by  the  Company,  Telecom-2000  can  be  utilized  for
integrated data and telephony communications  in very small offices,  enterprise
networks,  national  reseller  networks  and for  the  individual  consumer. The
technological basis for the  Telecom-2000 is the  Company's patent, U.S.  Patent
No.  5,526,353, which  provides for a  system and method  for communicating high
fidelity and clear transmission  of audio or voice  over the Internet,  enabling
free  worldwide  high  fidelity  and clear  transmission  of  ordinary telephone
communications over the Internet. The Company is not aware of any other  Company
that  possesses the  technological ability  for communicating  high fidelity and
clear transmissions of audio or voice over the Internet. Although the Company is
aware of other  companies providing a  suite of hardware  and software  products
that  enable audio or voice over the Internet, the quality of the audio or voice
is regarded  by the  Company as  poor  to fair  in comparison  to its  suite  of
hardware  and  software  (Telecom-2000)  that  provides  for  communicating high
fidelity and clear transmission  of audio or voice  over the Internet.  However,
the Company is well
    
 
                                       30
<PAGE>
   
aware  that  this  technology  is rapidly  advancing  and  although  the Company
believes that  its  patent  may  provide  certain  strategic  and  technological
advantages  in the new and burgeoning area  of audio or voice over the Internet,
the Company  can make  no  assurances as  to the  extent  of the  advantages  or
protection,  if any,  that may  be granted  to the  Company as  a result  of its
patented  technology.  See  "Business   --  Patent,  Trademark,  Copyright   and
Proprietary Rights."
    
 
   
    Telecom-2000  elements include  an integrated  Ethernet adapter  and desktop
telephone, a PC  ISA plug  in card  to provide  desktop telephone  access via  a
standard  Ethernet interface, a  PC ISA plug-in card  to terminate four standard
telephone lines or a PC ISA plug-in card to provide four telephone station lines
for desktops not equipped with a PC or LAN connection.
    
 
   
    The use of  Microsoft's TAPI  assures maximum flexibility  in providing  the
latest CTI features both in hardware and software. The provision of the hardware
assures a unique product with traditional telephone system reliability. The TAPI
compliance assures use of Telecom-2000 for unique applications, as well as third
party  software  for specialty  requirements and  ease  of value  added reseller
software products to quickly open up new markets. All of the hardware,  software
and  protocols  being  developed  and utilized  comply  with  both international
telephony and ATM standards.  This flexibility allows e-Net  to compete in  both
hardware  and  software  markets.  Depending on  the  precise  configuration and
volume, the Company offers the Telecom-2000 at a price of approximately $750 per
unit, which includes  a one year  warranty and technical  service, training  and
support.
    
 
   
    INTELLICD-TM-
    
 
   
    e-Net  has recently developed  IntelliCD, a product to  provide the market a
simpler and less expensive network  usage and billing capability. IntelliCD  has
been designed to utilize state-of-the-art imaging technology. e-Net has designed
and developed a standards compliant, general purpose search and retrieval engine
which  can  be used  unaltered in  a wide  variety of  user applications  in any
industry. This product  is distributed by  e-Net clients under  their own  trade
names.  One of  e-Net's clients, Sprint,  uses IntelliCD to  provide its clients
with database access to their monthly Call Detail Record (CDR) data. Based  upon
the  strong  market position  of  Sprint, and  that  e-Net is  not contractually
prohibited from selling this product to the other long distance carriers or  the
regional  telephone operating companies,  the Company believes  that this unique
product may have wide  utilization in the  telecommunications industry, but  the
Company  can  make  no  assurances  of  its  utilization.  Depending  on precise
configuration and  volume,  the Company  offers  the  IntelliCD as  a  price  of
approximately  $300 per unit,  which includes a one  year warranty and technical
service, training and support. At March  31, 1996, the Company realized  $74,500
in  sales of the IntelliCD product, representing approximately 25 percent of its
total sales.
    
 
    E-NET NMS-TM-
 
   
    The e-Net Network Management  System ("e-Net NMS")  is a proprietary  expert
systems-based,  user  friendly,  object-oriented network  and  system management
product that is offered  by the Company. Through  the introduction of  automated
problem,  configuration,  accounting, performance  and security  management, the
Company's e-Net NMS product provides  corporate and government enterprises  with
flexibility  for the management of global telephone and data networks, including
networks connected by the Internet. The e-Net NMS product also provides  network
traffic  optimization  and  re-routing,  real-time  configuration  and  database
management, generation of all needed  reports, and system failure detection  and
prediction.  Depending on precise  configuration and volume,  the Company offers
the e-Net  NMS product  at a  price  of approximately  $60,000 per  unit,  which
includes  a one-year  warranty and technical  service, training  and support. At
March 31, 1996, the Company realized $43,000 in sales of the e-Net NMS  product,
representing approximately 15 percent of its total sales.
    
 
   
    DEBITBILL-TM-
    
 
   
    The  telephone debit card business has experienced strong growth in response
to customer acceptance and  increasing demand. e-Net's  experience with its  own
proprietary  debit billing  card product,  called DebitBill,  has indicated that
there may be significant market demand for this technology, although the Company
can make no  assurances of  the extent  of any  demand. The  Company intends  to
    
 
                                       31
<PAGE>
   
use  its current market position to sell  its debit card product to the Internet
service delivery market. DebitBill  interfaces with standard telephone  switches
and  related  accounting management  software to  identify  the customer  and to
record and manage  amounts owed. The  Company believes that  DebitBill may be  a
significant product in its suite of products because of the ease-of-use and cash
flow  implications of this technology. e-Net has specifically designed DebitBill
for the Internet and private IP networks. Depending on precise configuration and
volume, the Company has recently begun to offer the DebitBill product at a price
of approximately  $60,000 per  unit,  which includes  a  one year  warranty  and
technical  service, training and support. At March 31, 1996, the Company has not
realized any sales of this product.
    
 
SERVICES
 
   
    The Company has made a commitment to provide timely, high quality  technical
support  to  meet  the  diverse  needs of  its  customers  and  partners  and to
facilitate the  adoption and  use of  its products,  systems and  services.  The
Company offers the following technical services:
    
 
    E-NET  HELPDESK  SUPPORT.   The  Company  offers an  annual  support program
intended for organizations who need to internally support large-scale deployment
of e-Net's products and  for authorized VARs  and systems integrators  providing
direct  support  to their  customers.  This program  offers  a full  spectrum of
support, including access to technical experts, support and training  materials,
support tools, call histories, maintenance releases and software updates.
 
    E-NET  CONSULTATION SUPPORT.   For  individuals and  for small  groups using
e-Net's products,  the  Company offers  support  through a  toll-free  telephone
number  on a  time and  materials payment  basis. This  service provides on-line
technical support  and  bug  fixes  or  software  releases  as  required.  e-Net
consultation  support is particularly economical for self-supporting departments
that consolidate  questions  through  a  department  system  administrator.  The
Company  also offers  consulting services  for particularly  complex application
design, integration  and  installation.  Consulting  services  are  provided  at
negotiated  rates, and typically include on-site support during the installation
process by Company engineers.
 
    TRAINING
 
    e-Net offers hands-on training  courses and materials  to resellers and  end
users  covering  installation  configuration and  troubleshooting.  In addition,
courses and materials  cover user  support, data loading  and content  creation,
user interface design, template scripting and integration with the data base.
 
   
    At  March 31, 1996,  the Company realized  $176,376 in sales  related to its
technology support services, representing approximately 60 percent of its  total
sales.
    
 
MARKETING AND DISTRIBUTION
 
    The  Company's  target markets  are  the Internet  commerce, enterprise-wide
private IP wide  area networks,  enterprise local area  networks, individual  PC
users and the individual telephone consumer.
 
    INTERNET COMMERCE MARKET.  The Company believes that many major corporations
may  begin to  communicate data  and manage  information on  the Internet  or on
private IP wide  area networks.  Corporations likely  to use  such products  and
services  include telecommunications  companies, information  service providers,
mail  order  and  traditional  retailers,  publishers,  and  financial   service
providers.  Any or all of these corporations  may wish to utilize the advantages
of telephone usage on the Internet or their private IP networks.
 
    ENTERPRISE MARKET.  Medium  and large-sized enterprises, particularly  those
with  geographically disbursed employee bases,  are expected to increasingly use
the Internet  in conjunction  with private  IP networks  to facilitate  internal
communications.  Many Fortune  500 companies already  maintain extensive private
communication networks, which can  be enhanced and extended  through use of  the
Internet.
 
                                       32
<PAGE>
    INDIVIDUAL PC BUSINESS AND HOME USERS.  While the number of business desktop
computer  users  accessing  the  Internet  is  increasing  rapidly,  the Company
believes that only a small fraction of business computer uses currently use  the
Internet.  The corporate employer, even for  small proprietorships will give due
consideration to the cost and other advantages of the Company's products. Demand
can be measured by the growth in usage of Prodigy, CompuServe and America Online
("AOL"), as  well as  home shopping  services,  such as  QVC and  Home  Shopping
Network,  which suggests that the home market for commercial applications on the
Internet will be substantial. The accessibility and ease of use of the Company's
systems and products are designed to address the demands of this marketplace.
 
    The market for the Company's software  and services has only recently  begun
to  develop, is rapidly evolving and is characterized by an increasing number of
market entrants  who have  introduced  or developed  products and  services  for
communication  and commerce  over the  Internet and  private IP  networks. As is
typical in the case of  a new and rapidly  evolving industry, demand and  market
acceptance  for recently introduced products and  services are subject to a high
level of  uncertainty.  The industry  is  young  and has  few  proven  products.
Moreover,  critical  issues  concerning  the  commercial  use  of  the  Internet
(including security, reliability, cost  ease of use and  access, and quality  of
service)  remain unresolved and may impact the growth of Internet use. While the
Company believes that  its software  products offer  significant advantages  for
commerce  and communication over the Internet and private IP networks, there can
be no assurance that Internet commerce and communication will become widespread,
or that the Company's systems and  products for commerce and communication  over
the Internet and private IP networks will become adopted for these purposes.
 
    MARKETING
 
    The  Company uses direct marketing of its products and services, and intends
to use  a  variety of  other  marketing programs  to  stimulate demand  for  its
products  and  services.  These  programs  are  focused  on  the  target markets
mentioned above and are designed to  leverage the Internet itself as a  powerful
marketing  vehicle.  In addition,  the Company  intends to  develop co-marketing
programs with  strategic  corporate  partners  designed  to  take  advantage  of
complementary   marketing  capabilities.  The  key  elements  of  the  Company's
marketing strategy include:
 
        MARKETING ON THE INTERNET.   e-Net will be  accessible with its own  Web
site.  This  Web site  will  provide directories  to  a variety  of  product and
technical support information. The Company will make its products available  for
evaluation and purchase through Web site.
 
        TARGET  MARKETING.  The  Company will focus  direct marketing efforts on
enterprise network  users, companies  now  publishing on  the Web  and  decision
makers   using  the  Internet  for  internal   use  in  medium  and  large-sized
enterprises, and  vertically  targeted  small  offers.  Outbound  telemarketing,
direct  response advertising and seminar programs.  The goal of these efforts is
to identify potential buyers of the Company's products, create awareness of  the
Company's product offerings and generate leads for follow-on sales.
 
        MARKETING  TO PC USERS.   Client products will be  marketed widely to PC
users in both  the business and  home PC market  segments. Distribution  through
national  resellers,  reseller agreements  with  Internet access  providers, and
bundling arrangements with PC  hardware and software OEMs  will be used to  make
Company's  products rapidly available to a  large number of potential customers.
In order to stimulate demand for its products, the Company will advertise in  PC
industry publications and engage in sales promotions with distribution partners,
with particular emphasis on trade shows and technology expositions at convention
centers.
 
    DISTRIBUTION
 
   
    The  Company's objective is to market and distribute its products worldwide,
in  part  by   disseminating  its   products  through   multiple  national   and
international  distribution channels. However,  the Company has  not yet entered
into any distribution agreements for its products and there can be no assurances
that the Company will be able  to meet this objective. Furthermore, the  Company
has  limited  resources  to achieve  the  distribution  of its  products  and no
assurances can be made that the
    
 
                                       33
<PAGE>
   
Company will not require  additional financing, which may  not be available,  to
achieve  such objective. The  Company has designed  its distribution strategy to
address the particular requirements of its diverse institutional and  individual
target  customers. The Company's  direct distribution efforts  will consist of a
direct sales force  and telesales as  well as marketing  directly VIA the  e-Net
home  page on  the Internet.  The Company's  products are  currently distributed
indirectly through OEMs, systems integrators, VARs and software retailers.
    
 
   
    DIRECT SALES.  The Company's direct sales force targets primarily medium  to
large-sized  enterprises,  including  telecommunications  companies  and  public
sector network  users.  The  Company  currently  has  only  three  employees  in
marketing  and sales, but intends  to add three more  employees in marketing and
sales following the closing  of this offering. The  Company believes that  these
organizations  are most likely  to become large  network users interconnected to
the Internet. In addition, these organizations have a substantial installed base
of private  IP networks  and are  expected to  employ Web  servers for  internal
enterprise applications.
    
 
   
    TELESALES.   The Company's telesales  organization, based in the Washington,
D.C. metropolitan area, receives customer  orders as well as contacts  potential
customers.  The organization comprises three telesales representatives, who also
are employed in  marketing and sales,  on behalf of  the Company. Following  the
closing  of this  offering, the  Company intends to  add three  employees to its
telesales force.
    
 
    INTERNET  SALES.    The  Company  will  offer  its  products  and   services
electronically VIA the Internet. Internet sales and distribution is particularly
well  suited to  address the  large base  of Internet  users who  may choose the
Company's products and services for many of their telephone needs.
 
    OEMS, VARS AND SYSTEMS INTEGRATORS.  OEMs, VARs and systems integrators  may
customize,  configure  and  install the  Company's  products  with complementary
hardware, software and services. In combining these products and services, these
resellers are  able  to deliver  more  complete solutions  to  address  specific
customer  needs,  deriving maximum  benefit  from the  Company's  products while
tailoring system solutions, which allows e-Net to avoid customization costs  and
invest in focused product improvement.
 
    The  Company has historically  sold its products  only through direct sales.
The  Company  intends  to  increasingly  utilize  the  Internet,  OEMs,  systems
integrators  and VARs. The  Company expects that any  material increase in sales
through  resellers  as  a  percentage  of  total  revenues,  especially  in  the
percentage  of sales through OEMs and  VARs, will adversely affect the Company's
average selling prices and gross margins due to the discounts that are typically
extended when  selling through  indirect  channels. Moreover,  there can  be  no
assurance  that the Company will be able  to attract resellers that will be able
to market the Company's  products effectively and will  be qualified to  provide
timely  and cost-effective customer support and service or that the Company will
be able to  manage conflicts among  its resellers. In  addition, the  agreements
with  resellers in Company's  industry typically do  not restrict resellers from
distributing competing products, and in many cases will be terminable by  either
party without cause. It is ordinary in the Company's industry to grant exclusive
distribution   rights  which   are  limited   by  territory   and  in  duration.
Consequently, the Company may be adversely affected should any reseller fail  to
adequately  penetrate its market  segment. The inability  to recruit, manage and
retain important resellers,  or their  inability to  penetrate their  respective
market  segments,  may  materially  adversely  affect  the  Company's  business,
operating results or financial condition.
 
    The Company  intends to  expand  its field  sales  force and  its  telesales
organization.  There can  be no assurance  that such internal  expansion will be
successfully completed, that  the cost  of such  expansion will  not exceed  the
revenues  generated, or that the Company's sales and marketing organization will
be able to  successfully compete  against the significantly  more extensive  and
well-funded  sales and marketing operations of  many of the Company's current or
potential  competitors.  The  Company's  inability  to  effectively  manage  its
internal expansion may have a material adverse effect on the Company's business,
operating results or financial condition.
 
                                       34
<PAGE>
    In  addition  to  expanding  its direct  sales  channels,  the  Company will
distribute its products  electronically through the  Internet. Distributing  the
Company's  products  through  the  Internet makes  the  Company's  software more
susceptible than other  software to  unauthorized copying and  use. The  Company
intends  to continue to allow potential customers to electronically download its
software for a  free evaluation  period. There can  be no  assurance that,  upon
expiration of the evaluation period, the Company will be able to collect payment
from  users  that retain  a  copy of  the  Company's software.  In  addition, by
distributing its products for free evaluation over the Internet, the Company may
have reduced the future  demand for its  products. If, as  a result of  changing
legal  interpretations  of  liability  for  unauthorized  use  of  the Company's
software or otherwise, users were to become less sensitive to avoiding copyright
infringement, the Company's business, operating results and financial  condition
may  be  materially  adversely  affected.  Any  such  export  restrictions,  new
legislation or regulation or  unlawful exportation may  have a material  adverse
impact on the Company's business, operating results or financial condition.
 
PRODUCT DEVELOPMENT
 
   
    The  Company's  current development  efforts  are focused  on  new products,
product enhancements  and implementing  existing  products into  new  enterprise
networks.  In particular, e-Net is in  the final testing stages of Telecom-2000.
This testing is currently on schedule and  it is estimated by the Company to  be
successfully concluded, resulting in product market readiness, by the end of the
Company's third quarter of fiscal 1997. There can be no assurance, however, that
any  Company  products  will  be  made  commercially  available  as  expected or
otherwise on a  timely and  cost-effective basis,  or that  if introduced,  that
these products will achieve market acceptance.
    
 
    The  Company's  ability to  attract  and retain  highly  qualified technical
employees will  be  the principal  determinant  of its  success  in  maintaining
technological   leadership.  e-Net  intends   to  develop  a   policy  of  using
equity-based compensation  programs,  which have  not  yet been  instituted,  to
reward and motivate significant contributors among its employees.
 
    To  date, all product development costs  have been expensed as incurred. The
Company believes that  significant investments in  research and development  are
required  to  remain  competitive.  As a  consequence,  the  Company  intends to
increase the amount of its research and development expenditures in the future.
 
    Substantially  all  of  the  Company's  revenues  have  been  derived,   and
substantially  all of the Company's future  revenues are expected to be derived,
from  the  license  of  its  software  and  sale  of  its  associated  services.
Accordingly,  broad  acceptance  of  the  Company's  products  and  services  by
customers is  critical to  the Company's  future success,  as is  the  Company's
ability  to  design,  develop,  test  and  support  new  software  products  and
enhancements on a timely basis that meet changing customer needs and respond  to
technological  developments  and emerging  industry standards.  There can  be no
assurance that the Company  will be successful in  developing and marketing  new
products  and enhancements that  meet changing customer  needs. Current products
are designed  around certain  standards, and  current and  future sales  of  the
Company's  products will be  dependent, in part, on  industry acceptance of such
standards. In addition,  there can  be no assurance  that the  Company will  not
experience  difficulties that may  delay or prevent  the successful development,
introduction and marketing  of new products  and enhancements, or  that its  new
products   and  enhancements  will  adequately  meet  the  requirements  of  the
marketplace and achieve market acceptance. Further, because the Company has only
recently commenced shipment  of its products,  there can be  no assurance  that,
despite  testing by the  Company and by current  and potential customers, errors
will not be  found in the  Company's products, or,  if discovered,  successfully
corrected  in a timely manner.  If the Company is unable  to develop on a timely
basis  new  software  products,  enhancements  to  existing  products  or  error
corrections,  or  if such  new products  or enhancements  do not  achieve market
acceptance, the Company's  business, operating results  and financial  condition
will be materially adversely affected.
 
                                       35
<PAGE>
PATENT, TRADEMARK, COPYRIGHT AND PROPRIETARY RIGHTS
 
   
    In  March 1996, the Company  acquired all rights, title  and interest in the
first U.S.  patent, U.S.  Patent No.  5,526,353,  for a  system and  method  for
communicating  high fidelity and  clear transmission of audio  or voice over the
Internet, enabling  free  worldwide  high fidelity  and  clear  transmission  of
ordinary  telephone communications over  the Internet. The  Company acquired all
rights, title and  interest in  the patent  from the  inventors, Messrs.  Arthur
Henley  and  Scott  Grau,  who  are original  stockholders  of  the  Company, in
consideration of a five percent overriding royalty interest against gross  sales
involving  the use of the patent. The  Company has agreed to allocate $1,000,000
of paid  in capital  to develop  and exploit  the market  opportunities for  the
patent  by December 31, 1996, or the patent will be subject to repurchase by the
inventors of  the patent.  The Company  believes that  its patent  is the  first
patent  awarded of its kind, specifically involving the transmission of audio or
voice over the Internet. The Company  also believes that its patent may  provide
certain strategic and technological advantages in the new and burgeoning area of
audio  or voice over the Internet. The  Company can make no assurances, however,
as to the extent of the advantages or protection, if any, that may be granted to
the Company as a result of its patent.
    
 
    The Company currently does not have any other patent, trademark or copyright
applications pending.  However,  the  Company may  file  patent,  trademark  and
copyright  applications relating to certain  of the Company's software products.
If patents, registered trademarks or copyrights were to be issued, there can  be
no  assurance as  to the extent  of the protection  that will be  granted to the
Company as a result of having such patents, trademarks or copyrights or that the
Company will be able to afford the expenses of any complex litigation which  may
be  necessary  to  enforce  its proprietary  rights.  Failure  of  the Company's
patents, trademark and copyright applications may have a material adverse impact
on the Company's business. Except  as may be required  by the filing of  patent,
trademark and copyright applications, the Company will attempt to keep all other
proprietary  information secret and to take such  actions as may be necessary to
insure the  results of  its development  activities are  not disclosed  and  are
protected under the common law concerning trade secrets. Such steps will include
the  execution of nondisclosure agreements by key Company personnel and may also
include the imposition of restrictive agreements on purchasers of the  Company's
products  and  services.  There  is  no assurance  that  the  execution  of such
agreements will be effective  to protect the Company,  that the Company will  be
able  to  enforce  the  provisions  of  such  nondisclosure  agreements  or that
technology and  other  information  acquired  by the  Company  pursuant  to  its
development  activities will be deemed to  constitute trade secrets by any court
of competent jurisdiction.
 
   
SECURITY RISKS
    
 
   
    The Company has included in certain  of its products an implementation of  a
security  protocol which operates in  conjunction with authentication technology
that it has developed. Despite the  existence of this technology, the  Company's
products  may be vulnerable to break-ins  and similar disruptive problems caused
by certain Internet users. Such  computer break-ins and other disruptions  would
jeopardize  the security  of information stored  in and  transmitted through the
computer systems of  end users of  the Company's products,  which may result  in
significant  liability to  the Company and  may also  deter potential customers.
Persistent  security  problems  continue  to  plague  public  and  private  data
networks.   Recent  break-ins  at  major   government  institutions,  banks  and
corporations have  involved hackers  bypassing firewalls  and  missappropriating
confidential  information.  Alleviating  problems caused  by  third  parties may
require significant expenditures of capital and resources by the Company and may
cause interruptions, delays or cessation of service to the Company's  customers;
such  expenditures or  interruptions may have  a material adverse  effect on the
Company's business,  operating results  and financial  condition. Moreover,  the
security  and privacy concerns  of existing and potential  customers, as well as
concerns related to  computer viruses, may  inhibit the growth  of the  Internet
marketplace,   generally,  and   the  Company's  customer   base  and  revenues,
specifically. The Company intends to limit its liability to customers, including
liability arising  from a  failure of  the security  features contained  in  the
Company's  products, through  provisions in  its future  contracts. However, the
Company can  make  no  assurances  that such  contractual  limitations  will  be
enforceable.
    
 
                                       36
<PAGE>
   
The Company currently does not have liability insurance to protect against these
risks and there can be no assurance that such insurance will be available to the
Company on commercially reasonable terms, or available on any terms.
    
 
GOVERNMENT REGULATION
 
    The  Company is not currently subject to direct regulation by any government
agency, other than regulations applicable to businesses generally, and there are
currently few laws or regulations directly  applicable to access to or  commerce
on  the  Internet. However,  due to  the  increasing popularity  and use  of the
Internet, it is possible that  a number of laws  and regulations may be  adopted
with  respect to the Internet, covering issues such as user privacy, pricing and
characteristics and quality of products and services. For example, the Exon Bill
(which was  recently approved  by  the Senate)  would prohibit  distribution  of
obscene,  lascivious or indecent communications on the Internet. The adoption of
any such laws or regulations may decrease the growth of the Internet, which  may
in  turn  decrease  the  demand  for the  Company's  products  and  increase the
Company's cost of  doing business  or otherwise have  an adverse  effect on  the
Company's  business,  operating results  or  financial condition.  Moreover, the
applicability to the Internet of existing laws governing issues such as property
ownership, libel and personal privacy is uncertain.
 
    The Company's success and ability to  compete is dependent in part upon  its
proprietary  technology. While  the Company  relies on  patent, trademark, trade
secret and copyright law  to protect its technology,  the Company believes  that
factors  such as  the technological  and creative  skills of  its personnel, new
product  developments,  frequent  product  enhancements,  name  recognition  and
reliable  product maintenance are more essential to establishing and maintaining
a technology position. The source code for the Company's proprietary software is
protected both  as  a  trade secret  and  as  a copyrighted  work.  The  Company
generally  enters into confidentiality or license agreements with its employees,
consultants and vendors, and generally controls access to an distribution of its
software,  documentation  and  other  proprietary  information.  Despite   these
precautions,  it may be possible  for a third party  to copy or otherwise obtain
and use  the  Company's products  or  technology without  authorization,  or  to
develop  similar technology independently. In  addition, effective copyright and
trade secret  protection  may  be  unavailable or  limited  in  certain  foreign
countries,  and the global nature of  the Internet makes it virtually impossible
to control  the ultimate  designation  of the  Company's products.  Despite  the
Company's  efforts to protect  its proprietary rights,  unauthorized parties may
attempt to copy  aspects of  the Company's  products to  "reverse engineer"  the
Company's  designs, or to obtain and use information that the Company regards as
proprietary. In addition, litigation may be  necessary in the future to  enforce
the  Company's  intellectual property  rights,  to protect  the  Company's trade
secrets, to  determine the  validity  and scope  of  the proprietary  rights  of
others,  or  to  defend  against  claims  of  infringement  or  invalidity. Such
litigation may result in  substantial costs and diversion  of resources and  may
have  a material adverse effect on  the Company's business, operating results or
financial condition.
 
    The Company also relies on certain  technology which it licenses from  third
parties,  including  software  which  is  integrated  with  internally developed
software and used in the Company's products to perform key functions. There  can
be  no assurance that these third party  technology licenses will continue to be
available to  the Company  on  commercially reasonable  terms.  The loss  of  or
inability  to maintain any of these technology  licenses may result in delays or
reductions in product shipments until  equivalent technology may be  identified,
licensed  and integrated. Any such delays or reductions in product shipments may
materially adversely  affect  the  Company's  business,  operating  results  and
financial condition.
 
COMPETITION
 
   
    The  market  for  Internet-based  software and  services  is  new, intensely
competitive, rapidly evolving  and subject  to rapid  technological change.  The
Company  expects competition to  persist, intensify and  increase in the future,
from start-up  companies  to  major  technology companies.  Almost  all  of  the
    
 
                                       37
<PAGE>
Company's  current and  potential competitors  have longer  operating histories,
greater name  recognition, larger  installed  customer bases  and  significantly
greater  financial,  technical and  marketing resources  than the  Company. Such
competition may materially  adversely affect the  Company's business,  operating
results  or financial condition. The Company's current and potential competitors
can be divided  into several  groups: Microsoft, browser  software vendors,  Web
server  software and  service vendors, PC  and Unix software  vendors and online
service providers.
 
   
    MICROSOFT  CORPORATION.    Microsoft  has  licensed  browser  software  from
Spyglass  and has announced its intention to improve and bundle the browser with
its Windows 95 operating system.  Microsoft's browser will access the  Microsoft
Network,  its announced  online service,  and will  also offer  Internet access.
While the anticipated  penetration of this  software into Microsoft's  installed
base  of PC users will increase the size  and usefulness of the Internet, it may
have a material adverse  impact on e-Net's ability  to sell client software.  In
addition,  because the  Company's client software  products will not  be able to
access Microsoft Network,  the Company's client  software products may  be at  a
competitive  disadvantage  VERSUS  Microsoft's browser.  Further,  Microsoft may
choose to  develop  Web  server, applications  software  and  software  products
specifically  designed to deliver high levels of performance that enables local,
material and international  telephone communications,  information exchange  and
commerce  over the Internet as  a complement to its  product line and to support
the Microsoft Network, which may materially adversely affect e-Net's ability  to
sell  its technologies,  products and services.  To the  extent that Microsoft's
browser gains market acceptance,  Microsoft will be  better positioned than  the
Company  to sell  Web server and  applications products. Microsoft  has a longer
operating history, a  much larger installed  base and number  of employees,  and
substantially  greater financial,  technical and marketing  resources, access to
distribution channels and name recognition than the Company.
    
 
    BROWSER  SOFTWARE  VENDORS.    Several  companies  are  currently   offering
client-based   Web   browser   products,   including   Netscape   Communications
Corporation,  Spry,  Inc.  (a  subsidiary  of  CompuServe),  Spyglass,  Booklink
Technologies,  Inc. ("Booklink," a  subsidiary of AOL),  NetManage Inc., Network
Computing Devices, Inc. and  Quarterdeck Office Systems,  Inc. In addition,  the
NCSA  at the  University of Illinois  distributes its product,  NCSA Mosaic, for
free for noncommercial use. Further, Spyglass has an exclusive license for  NCSA
Mosaic  and  is  actively sublicensing  it  to other  commercial  vendors. These
sublicensees are expected to  offer derivative products  that will compete  with
the Company's product line.
 
    SERVER SOFTWARE AND SERVICE VENDORS.  Some companies are offering Web server
software  that they install and operate on  behalf of their customers, and other
companies are offering services using Web serves. Companies offering Web  server
software  include Open Market, Inc. ("Open Market"),  which has a Web server for
various Unix platforms, Process Software Corp. and O'Reilly & Associates,  Inc.,
which  have Windows NT Web server products,  Spyglass, which has announced a Web
server for Windows  NT and various  Unix platforms, and  Terisa, which offers  a
toolkit for adding security functions to the existing NCSA and CERN Web servers.
Service companies include Open Market and Internet Media Services, which publish
content  from third parties  on their own  Web servers. In  the future, software
companies which have server products in  other product categories may choose  to
enhance the functionality of existing products or develop new products which are
competitive  with the Company's Web server and integrated applications products.
These companies include Lotus  (which IBM recently  acquired), which may  extend
Notes in this manner, and Novell, which may choose to provide add-ons to Netware
for Web publishing. In addition, Oracle, Sybase and Informix may incorporate Web
server functionality into their database products. Oracle has recently announced
a  technology licensing agreement  with Spyglass and  its intention to introduce
Web-based software that enables electronic commerce and communication.
 
    PC AND UNIX SOFTWARE VENDORS.  The Company believes that PC software vendors
may become particularly  formidable competitors. In  addition to Microsoft,  IBM
has  incorporated client software in its  OS/2 operating system, and the Company
believes that  other PC  operating system  vendors, including  Apple, will  also
eventually  incorporate  some  Web  client  functionality  into  their operating
 
                                       38
<PAGE>
systems as standard features.  This may also be  true of Unix operating  systems
vendors,  such  as  Sun, HP,  IBM,  Digital,  SCO and  SGI.  If  these companies
incorporate Web browser functionality into  their software products, they  could
subsequently  offer  this  functionality  at little  or  no  additional  cost to
customers.  Further,  in  the  event  that  client  products  incorporated  into
operating  systems by Microsoft or other PC or Unix software vendors gain market
acceptance, these organizations will  be better positioned  than the Company  to
sell Web server and applications software products.
 
    ONLINE  SERVICE  PROVIDERS.    Although  the  online  services  provided  by
companies such as Prodigy, CompuServe  and AOL are not Internet-based  services,
these   services  currently  present  an  alternative  medium  to  organizations
considering Internet-based publishing.  In addition,  due to the  appeal of  the
Internet to content publishers and end users, these companies are adapting their
service  offerings to provide  Internet access. At least  two of these companies
compete directly with the  Company in the  Internet-based software and  services
market:  AOL, which acquired Booklink, and  CompuServe, which acquired Spry. The
Company's client software products do not  offer access to any online  services,
including  Microsoft  Network,  and  are at  a  competitive  disadvantage VERSUS
browser products  which offer  both access  to  the Internet  and to  an  online
service.
 
    Additional  competition could come from client/server applications and tools
vendors, other  database companies,  multimedia companies,  document  management
companies,  networking  software  companies,  network  management  companies and
educational software  companies. Further,  the  Company's current  products  are
designed   around  certain  standards,  and  industry  acceptance  of  competing
standards could decrease  the demand  for the Company's  products. For  example,
Microsoft  and  IBM are  each proposing  an  alternative security  standard, and
widespread adoption of either standard may have a material adverse effect on the
Company's business, operating results or financial condition.
 
    Competitive factors  in  the  Internet-based software  and  services  market
include core technology, breadth of product features, product quality, marketing
and  distribution  resources, and  customer  service and  support.  However, the
market and competition are still new and  rapidly emerging, and there can be  no
assurance  that the Company will be able to compete successfully against current
or future competitors, or  that this competition will  not adversely affect  the
Company's business, operating results or financial condition.
 
EMPLOYEES
 
   
    As  of  the  date  of this  prospectus,  the  Company has  a  total  of nine
employees, all  of  whom  are  full  time employees.  Of  the  total  number  of
employees,  three were  engaged in software  development, three  were engaged in
marketing, sales and customer support  and three were engaged in  administration
and  finance. Certain  software development activities  and additional financial
and administrative support required to date have been purchased on an as  needed
basis  from independent consultants. Following the closing of this offering, the
Company intends to hire approximately  ten additional employees, including  five
in  software development, three in marketing and sales and two in administration
and finance. The Company's future success  depends in significant part upon  the
continued  service of its key technical  and senior management personnel and its
continuing  ability  to  attract  and  retain  highly  qualified  technical  and
managerial  personnel. Competition  for highly qualified  technical personnel is
intense and there can be  no assurance that the Company  will be able to  retain
its  key managerial and technical  employees or that it  will be able to attract
and retain additional highly qualified technical and managerial personnel in the
future. None  of the  Company's employees  is represented  by labor  union.  The
Company  has not experienced any work stoppages and considers its relations with
its employees to be good.
    
 
    The rapid execution necessary  for the Company to  fully exploit the  market
window  for  its  products  and  services  requires  an  effective  planning and
management process. The Company's growth has placed, and is expected to continue
to place,  a significant  strain on  the Company's  managerial, operational  and
financial  resources. In addition, most of the Company's management, development
and engineering staff was only recently hired. To manage its growth, the Company
must continue to implement and improve its operational and financial systems and
to expand, train and
 
                                       39
<PAGE>
manage its employee base. For example,  the Company is currently in the  process
of  building  its internal  maintenance and  support organization.  Although the
Company believes that it  has made adequate allowances  for the costs and  risks
associated  with this  expansion, there can  be no assurance  that the Company's
systems, procedures  or  controls will  be  adequate to  support  the  Company's
operations  or  that  Company  management  will be  able  to  achieve  the rapid
execution necessary  to  fully  exploit  the market  window  for  the  Company's
products  and services. If  the Company is unable  to manage growth effectively,
the Company's  business,  operating  results and  financial  condition  will  be
materially adversely affected.
 
FACILITIES
 
   
    The  Company  leases  approximately  1,500  square  feet  for  its principal
executive offices  located at  7-4  Metropolitan Court,  Gaithersburg,  Maryland
20878.  The  Company  intends to  expand  its  facilities to  3,000  square feet
following the closing of this offering. Base rental for the current premises  is
approximately $1,900 per month and will be approximately $3,800 per month in the
expanded  facilities. The  lease requires  the Company  to pay  certain property
taxes and certain operating expenses. The Company believes that its current  and
anticipated facilities are suitable and adequate for its operations.
    
 
                                       40
<PAGE>
                                   MANAGEMENT
 
    The officers and directors of the Company are as follows:
 
<TABLE>
<CAPTION>
           NAME                               TITLE
- ---------------------------  ----------------------------------------
<S>                          <C>
Alonzo E. Short, Jr.,        Chairman of the Board
 Lt. Gen., USA (ret.)
Robert A. Veschi             President, Chief Executive Officer,
                              Secretary, Director
George Porta                 Vice President, Operations
William L. Hooton            Director
</TABLE>
 
    Each  of the  directors of  the Company  hold office  for a  one-year period
expiring December 31, 1996.  At present, the Company's  By-laws provide for  not
less  than one director nor more than nine directors. Currently, there are three
directors in the Company. The By-laws permit the Board of Directors to fill  any
vacancy   and  such  director  may  serve  until  the  next  annual  meeting  of
shareholders or until his successor is elected and qualified. Officers serve  at
the  discretion of  the Board  of Directors.  There are  no family relationships
among any officers  or directors  of the  Company. Mr.  Veschi has  served as  a
promoter  of the  Company and the  consideration received for  such services has
been limited to the compensation disclosed under "Remuneration." The officers of
the Company  devote full  time to  the  business of  the Company.  See  "Certain
Transactions."
 
    The  principal  occupation  and  business experience  for  each  officer and
director of the Company for at least the last five years are as follows:
 
    ALONZO E. SHORT, JR.,  LT. GEN., USA  (RET.), 57, has  been chairman of  the
board  of the Company since  January 1996. General Short  has more than 30 years
experience in executive management, operations  and the engineering, design  and
development  of large scale telecommunications  and data systems. General DShort
retired from the  service in 1994  following a career  that included serving  as
deputy  commanding general (1988-1990) and commanding general (1990-1991) of the
U.S.  Army  Information   Systems  Command,  a   major  information   technology
organization, which was responsible for all telecommunications during the Desert
Shield/Desert  Storm operation, among other responsibilities. From 1991 to 1994,
General Short was director  of the Defense Information  Systems Agency, a  major
information  technology organization which is responsible for telecommunications
and related services  to the  President of  the United  States, Secret  Service,
Joint  Chiefs of  Staff, Secretary  of Defense,  among other  high level federal
entities. Since  1994, General  Short  has been  president and  chief  executive
officer  of  MICAH Systems,  Inc., a  Washington,  D.C. metropolitan  area based
information, technologies management  and consulting firm.  Since January  1996,
General  Short has been instrumental in  the organization and development of the
business of the Company.
 
   
    ROBERT A. VESCHI, 34, has been president, chief executive officer, secretary
and a director of the Company since  January 1995. Mr. Veschi is the founder  of
the Company, which began its operations in June 1995. Mr. Veschi has significant
experience  in executive management, operations  and the engineering, design and
development of telecommunications and computer  products and systems. From  1986
to  1990,  Mr.  Veschi  was manager  of  systems  engineering  for International
Telemanagement, Inc., a  Washington, D.C. metropolitan  area based  information,
data  and  network systems  firm.  From 1990  to 1994,  Mr.  Veschi was  a group
president  of  I-Net,   Inc.,  a  Washington,   D.C.  metropolitan  area   based
information,  data and network systems firm. From December 1994 to May 1995, for
approximately six months, Mr. Veschi  was president and chief executive  officer
of  Octacom, Inc., a Washington, D.C.  metropolitan area based information, data
and network systems  firm, and a  wholly-owned subsidiary of  Octagon, Inc.,  an
Orlando,  Florida metropolitan area based publicly held technical services firm.
From July 1994 to May 1995, for approximately nine months, Mr. Veschi was a vice
    
 
                                       41
<PAGE>
   
president of telecommunications for Octagon, Inc., and from January 1995 to  May
1995,  for approximately four  months, Mr. Veschi  was a member  of the board of
directors of such company. Since June 1995, Mr. Veschi has been instrumental  in
the  organization, development and promotion of the Company. Mr. Veschi attended
Texas A&M University where he majored in electrical engineering.
    
 
   
    GEORGE PORTA, 35, has been vice president of operations of the Company since
May 1996. Mr. Porta has significant experience in management, operations and the
engineering, design and development of telecommunications and computer  products
and  systems. From  1987 to  1994, Mr.  Porta was  a senior  network planner and
manager, sales engineering for Sprint Corp., a major telecommunications company.
From 1994 to 1996,  Mr. Porta was senior  director, network operations and  vice
president,  global networks of I-Net, Inc., a Washington, D.C. metropolitan area
based information, data and network systems firm. Since May 1996, Mr. Porta  has
been  vice president of operations  of the Company and  has been instrumental in
the organization and development of the Company. Mr. Porta holds B.S. degrees in
electrical engineering and computer science from Washington University.
    
 
    WILLIAM L. HOOTON,  45, has  been a director  of the  Company since  January
1996.   Mr.  Hooton  has  substantial  experience  in  the  management,  design,
operation, marketing and sales of  image conversion systems, electronic  imaging
system   integration,  data   automation  and  high   performance  data  storage
subsystems. From 1990 to 1993, Mr.  Hooton was vice president of operations  and
technical  and business development of  the Electronic Information Systems Group
of I-Net, Inc., a Washington, D.C. metropolitan area based information, data and
network systems  firm. Since  1993,  Mr. Hooton  has  been president  and  chief
executive  officer  of  Q  Corp.,  a  Washington,  D.C.  metropolitan  area high
technology consulting firm  specializing in  digital imaging  systems and  other
complex  imagery in media. Since January 1996, Mr. Hooton has been a director of
the Company and has been instrumental in the organization and development of the
Company. Mr. Hooton holds a B.B.A. degree from the University of Texas.
 
                                       42
<PAGE>
REMUNERATION
 
  EXECUTIVE COMPENSATION
 
    The following table sets forth remuneration  paid for the fiscal year  ended
March  31, 1996 and proposed to be paid for the fiscal year ended March 31, 1997
to the officers and directors of the Company:
 
   
<TABLE>
<CAPTION>
                                                                     SUMMARY COMPENSATION TABLE (1)(2)
                                                              ------------------------------------------------
                                                                                                     OTHER
   NAME OF INDIVIDUAL OR                                                                            ANNUAL
NUMBER OF PERSONS IN GROUP        POSITION WITH COMPANY         YEAR       SALARY       BONUS    COMPENSATION
- ---------------------------  -------------------------------  ---------  -----------  ---------  -------------
<S>                          <C>                              <C>        <C>          <C>        <C>
Alonzo E. Short, Jr.,        Chairman of the Board              1997     $        --  $      --   $    42,000
 Lt. Gen., USA (ret.)                                           1996     $        --  $  --       $        --
Robert A. Veschi             President, Chief Executive         1997     $   175,000  $  87,500   $        --
                              Officer, Secretary, Director      1996     $    25,000  $  --       $        --
George Porta                 Vice President, Operations         1997     $   100,000  $  50,000   $        --
                                                                1996     $        --  $      --   $        --
William L. Hooton            Director                           1997     $        --  $      --   $    24,000
                                                                1996     $        --  $      --   $        --
</TABLE>
    
 
- ------------------------
(1) The persons named in the table  immediately above reflect the management  of
    the  Company  as of  the date  hereof.  The Company  has agreed  to purchase
    key-man term  life insurance  on Mr.  Veschi  in the  amount of  $1  million
    following  the closing of this  offering. The Company will  be the owner and
    beneficiary of such life insurance policy.
 
(2) The officers of the Company may  receive remuneration as part of an  overall
    group  insurance  plan  providing  health,  life  and  disability  insurance
    benefits for  employees  of  the  Company.  The  amount  allocable  to  each
    individual  officer cannot be  specifically ascertained, but,  in any event,
    will not exceed $25,000 as to each individual.
 
   
(3) Each outside  director of  the  Company is  entitled to  receive  reasonable
    expenses  incurred in  attending meetings of  the Board of  Directors of the
    Company. The  members of  the Board  of Directors  intend to  meet at  least
    quarterly  during the  Company's fiscal year,  and at such  other times duly
    called. The Company presently has two outside directors.
    
 
  EMPLOYMENT AGREEMENT
 
    The Company  has entered  into an  employment agreement  ("Agreement")  with
Robert  A. Veschi,  the president  and chief  executive officer  of the Company,
dated as of  April 1, 1996.  The Agreement will  expire on March  31, 2001.  The
current  annual salary  under the  Agreement is  $175,000. The  salary under the
Agreement may be increased to reflect annual cost of living increases and may be
supplemented by discretionary merit and  performance increases as determined  by
the  Board of Directors of the Company, except that during the first three years
following  the  date  of  the  Prospectus  with  respect  to  the  offering,  no
executive's  salary may  exceed $200,000.  Mr. Veschi  is entitled  to an annual
bonus equal to 50 percent of the  salary provided under his Agreement, which  is
not subject to any performance criteria.
 
    The  Agreement  provides,  among  other  things,  for  participation  in  an
equitable manner  in any  profit-sharing  or retirement  plan for  employees  or
executives  and  for  participation  in other  employee  benefits  applicable to
employees and executives of the Company.  The Agreement provides for the use  of
an  automobile, payment of club dues and other fringe benefits commensurate with
his duties and responsibilities. The Agreement also provides for benefits in the
event of disability. The Agreement also contains non-compete provisions but  are
limited in geographical scope, I.E., the Washington, D.C. metropolitan area.
 
    Pursuant  to the Agreement, employment may be terminated by the Company with
cause or  by the  executive with  or  without good  reason. Termination  by  the
Company without cause, or by the
 
                                       43
<PAGE>
executive for good reason, would subject the Company to liability for liquidated
damages  in an amount equal  to the terminated executive's  current salary and a
PRO RATA portion of their bonus for the remaining term of the Agreement, payable
in a lump sum cash payment,  without any set-off for compensation received  from
any  new employment. In addition, the  terminated executive would be entitled to
continue to participate in and accrue benefits under all employee benefit  plans
and  to receive supplemental  retirement benefits to  replace benefits under any
qualified plan for the remaining term  of the Agreement to the extent  permitted
by law.
 
LIMITATION ON LIABILITY OF DIRECTORS
 
    As  permitted by  Delaware law,  the Company's  Certificate of Incorporation
includes a provision which provides that a director of the Company shall not  be
personally  liable to the Company or its stockholders for monetary damages for a
breach of  fiduciary duty  as  a director,  except (i)  for  any breach  of  the
director's  duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a  knowing
violation  of the law, (iii) under Section 174 of the General Corporation Law of
the State of Delaware, which prohibits the unlawful payment of dividends or  the
unlawful  repurchase or  redemption of stock,  or (iv) for  any transaction from
which the  director derives  an  improper personal  benefit. This  provision  is
intended  to afford directors  protection against, and  to limit their potential
liability for monetary damages  resulting from, suits alleging  a breach of  the
duty  of care by a director. As a consequence of this provision, stockholders of
the Company will  be unable to  recover monetary damages  against directors  for
action  taken  by them  that may  constitute negligence  or gross  negligence in
performance of  their  duties  unless  such conduct  falls  within  one  of  the
foregoing  exceptions.  The provision,  however, does  not alter  the applicable
standards governing a director's fiduciary duty and does not eliminate or  limit
the right of the Company or any stockholder to obtain an injunction or any other
type  of  nonmonetary  relief  in  the event  of  a  breach  of  fiduciary duty.
Management of the  Company believes this  provision will assist  the Company  in
securing  and retaining qualified persons to  serve as directors. The Company is
unaware of  any pending  or threatened  litigation against  the Company  or  its
directors  that would result in any liability for which such director would seek
indemnification or similar protection.
 
    Such indemnification  provisions are  intended  to increase  the  protection
provided  directors and,  thus, increase  the Company's  ability to  attract and
retain qualified  persons to  serve as  directors. Because  directors  liability
insurance  is only available at considerable cost  and with low dollar limits of
coverage and broad policy exclusions, the Company does not currently maintain  a
liability insurance policy for the benefit of its directors although the Company
may  attempt to acquire such insurance in  the future. The Company believes that
the substantial increase  in the number  of lawsuits being  threatened or  filed
against  corporations  and their  directors  and the  general  unavailability of
directors liability insurance to provide  protection against the increased  risk
of  personal liability resulting from such lawsuits have combined to result in a
growing reluctance on the part of capable persons to serve as members of  boards
of  directors of public companies. The  Company also believes that the increased
risk of  personal  liability  without  adequate  insurance  or  other  indemnity
protection  for its  directors could result  in overcautious  and less effective
direction and management of the Company. Although no directors have resigned  or
have  threatened  to resign  as a  result  of the  Company's failure  to provide
insurance or other indemnity protection from liability, it is uncertain  whether
the  Company's directors would continue to  serve in such capacities if improved
protection from liability were not provided.
 
    The provisions affecting  personal liability  do not  abrogate a  director's
fiduciary  duty  to the  Company and  its  shareholders, but  eliminate personal
liability for monetary damages for breach  of that duty. The provisions do  not,
however,  eliminate or limit the  liability of a director  for failing to act in
good faith, for engaging in intentional misconduct or knowingly violating a law,
for authorizing the illegal  payment of a dividend  or repurchase of stock,  for
obtaining  an  improper personal  benefit, for  breaching  a director's  duty of
loyalty (which  is  generally  described  as  the duty  not  to  engage  in  any
transaction  which involves a  conflict between the interest  of the Company and
those of the director) or
 
                                       44
<PAGE>
for violations of  the federal  securities laws.  The provisions  also limit  or
indemnify against liability resulting from grossly negligent decisions including
grossly  negligent business decisions relating to  attempts to change control of
the Company.
 
    The provisions  regarding  indemnification  provide, in  essence,  that  the
Company  will  indemnify its  directors  against expenses  (including attorneys'
fees), judgments, fines and amounts  paid in settlement actually and  reasonably
incurred  in connection with any  action, suit or proceeding  arising out of the
director's status as a director of the Company, including actions brought by  or
on behalf of the Company (shareholder derivative actions). The provisions do not
require  a showing of good faith.  Moreover, they do not provide indemnification
for liability  arising out  of  willful misconduct,  fraud, or  dishonesty,  for
"short-swing"  profits violations under the federal  securities laws, or for the
receipt  of  illegal   remuneration.  The   provisions  also   do  not   provide
indemnification  for any  liability to the  extent such liability  is covered by
insurance. One purpose of the provisions is to supplement the coverage  provided
by  such insurance. However, as mentioned  above, the Company does not currently
provide such insurance  to its  directors, and there  is no  guarantee that  the
Company will provide such insurance to its directors in the near future although
the Company may attempt to obtain such insurance.
 
    The provisions diminish the potential rights of action which might otherwise
be available to shareholders by limiting the liability of officers and directors
to   the  maximum  extent   allowable  under  Delaware   law  and  by  affording
indemnification against most damages and  settlement amounts paid by a  director
of  the Company in connection with  any shareholders derivative action. However,
the provisions do not have the effect of limiting the right of a shareholder  to
enjoin  a director from  taking actions in  breach of his  fiduciary duty, or to
cause the Company  to rescind  actions already  taken, although  as a  practical
matter courts may be unwilling to grant such equitable remedies in circumstances
in  which such actions have  already been taken. Also,  because the Company does
not presently  have  directors  liability  insurance and  because  there  is  no
assurance that the Company will procure such insurance or that if such insurance
is  procured  it  will  provide  coverage  to  the  extent  directors  would  be
indemnified under the provisions, the Company may be forced to bear a portion or
all of  the  cost  of  the director's  claims  for  indemnification  under  such
provisions.  If the Company is forced to bear the costs for indemnification, the
value of the  Company stock may  be adversely  affected. In the  opinion of  the
Securities  and  Exchange  Commission, indemnification  for  liabilities arising
under the Securities Act of 1933 is contrary to public policy and, therefore, is
unenforceable.
 
                                       45
<PAGE>
                             PRINCIPAL STOCKHOLDERS
 
    The following table sets forth  certain information regarding the  Company's
Common  Stock owned on the date of  this Prospectus and, as adjusted, to reflect
the sale of shares offered by this  Prospectus, by (i) each person who is  known
by  the Company  to own  beneficially more  than five  percent of  the Company's
Common Stock; (ii) each of the  Company's officers and directors; and (iii)  all
officers and directors as a group:
 
   
<TABLE>
<CAPTION>
                                                                              PERCENTAGE OF SHARES                    NUMBER OF
                                                                          ----------------------------   NUMBER OF     SHARES
                                                                NUMBER      BEFORE          AFTER         SHARES        AFTER
NAME AND ADDRESS (1)               POSITION WITH COMPANY       OF SHARES   OFFERING    OFFERING (2)(3)    OFFERED     OFFERING
- ----------------------------  -------------------------------  ---------  -----------  ---------------  -----------  -----------
<S>                           <C>                              <C>        <C>          <C>              <C>          <C>
Alonzo E. Short, Jr., Lt.     Chairman of the Board              180,000        2.12           1.71         --          180,000
 Gen., USA (ret.)
Robert A. Veschi              President, Chief Executive       2,600,000       30.59          24.76             --    2,600,000
                               Officer, Secretary, Director
George Porta                  Vice President, Operations         100,000        1.18            .95             --      100,000
William L. Hooton             Director                           100,000        1.18            .95         --          100,000
Edward Ratkovich, Maj. Gen.,  Stockholder                      1,000,000       11.76           9.52      1,000,000       --
 USAF (ret.) (4)
Arthur Henley (5)             Stockholder                        950,000       11.18           9.05         --          950,000
Thomas T. Prousalis, Jr.,     Stockholder                        900,000       10.59           8.57         --          900,000
 Esq. (6)
Robert Foise (7)              Stockholder                        500,000        5.88           4.76        500,000       --
ATG Group, Inc. (8)           Stockholder                        500,000        5.88           4.76         --          500,000
All Officers and Directors                                     2,980,000       35.06          28.38         --        2,980,000
 as a Group (4 persons)
</TABLE>
    
 
- ------------------------------
(1)  c/o e-Net, Inc., 7-4 Metropolitan Court, Gaithersburg, Maryland 20878.
(2)  Does  not include the exercise of up  to 2,000,000 Class A Warrants offered
     herein. The Company  is offering 1,000,000  Units at a  price of $7.00  per
     Unit.  Each Unit consists of two shares  of Common Stock and two redeemable
     Class A Warrants. The Class A Warrants shall be exercisable commencing  one
     year  after the  Effective Date  of this  Prospectus. Each  Class A Warrant
     entitles the holder  to purchase  one share of  Common Stock  at $4.00  per
     share  during the four  year period commencing one  year from the Effective
     Date. The Class A Warrants  are redeemable upon certain conditions.  Should
     the  Class A  Warrants be  exercised, of which  there is  no assurance, the
     Company  will  receive  the  proceeds  therefrom,  aggregating  up  to   an
     additional $8,000,000. See "Description of Securities."
(3)  This  offering also includes 2,000,000 shares of Common Stock and 2,000,000
     Class A  Warrants  owned  by  the Selling  Security-holders.  The  Class  A
     Warrants  are identical to the Class A Warrants included in the Units being
     offered by the Company. The securities held by the Selling Security-holders
     may be  sold  commencing  eighteen  (18)  months  from  the  date  of  this
     Prospectus,  subject  to  earlier release  at  the sole  discretion  of the
     Underwriter, and such securities include  a legend with such  restrictions.
     The   Underwriter  may   release  the   securities  held   by  the  Selling
     Security-holders  at  any  time  after   all  securities  subject  to   the
     Over-allotment Option have been sold or such option has expired. The resale
     of the securities of the Selling Security-holders are subject to Prospectus
     delivery  and other requirements of the Securities Act of 1933, as amended.
     Sales of such securities  or the potential  of such sales  at any time  may
     have  an  adverse effect  on the  market prices  of the  securities offered
     hereby. See "Certain Transactions,"  "Description of Securities,"  "Selling
     Security-holders" and "Underwriting."
(4)  1030  Delf  Drive,  McLean,  Virginia 22101.  General  Ratkovich  also owns
     1,000,000 Class A  Warrants and  1,000,000 Class B  Warrants. See  "Certain
     Transactions" and "Selling Security-holders."
(5)  10705 Bay Laurel Trail, Austin, Texas 78750.
(6)  1919  Pennsylvania  Avenue, N.W.,  Suite 800,  Washington, D.C.  20006. See
     "Legal Matters."
(7)  Executive Air Center,  Brainard Airport, Hartford,  Connecticut 06114.  Mr.
     Foise  also owns 500,000 Class A Warrants and 500,000 Class B Warrants. See
     "Certain Transactions" and "Selling Security-holders."
(8)  2 Farmstead Lane, Brookville, New York 11545.
 
                                       46
<PAGE>
                              CERTAIN TRANSACTIONS
 
    The Company was incorporated  in the State of  Delaware on January 9,  1995,
and  began its operations on June 8, 1995. The Company has authorized capital of
50,000,000 shares of  Common Stock, $.01  par value. The  Company currently  has
8,500,000  shares  of  Common  Stock  issued  and  outstanding.  See  "Principal
Stockholders" and "Description of Securities."
 
    In January 1995,  the Company issued  6,000,000 shares of  its Common  Stock
(which  includes a 600:1 stock  split in January 1996)  to 16 persons, including
the officers and directors of the Company, in a private placement transaction in
consideration of $100, or its par value at the time of issuance.
 
    In March 1996, the Company issued 500,000 shares of its Common Stock to  ATG
Group,  Inc.,  a  Brookville,  New  York based  investment  firm,  in  a private
placement transaction for aggregate consideration of $250,000, represented by  a
full recourse promissory note for the entire purchase price. The promissory note
is due in full in March 2001 and bears interest, payable upon maturity at 8% per
annum.
 
   
    Also,  in March and April 1996, the  Company borrowed $1,000,000 in a bridge
loan from  four persons  who  are nonaffiliated  with  the Underwriter  and  the
Company,  to  wit: Edward  Ratkovich  ($500,000), Robert  Foise  ($250,000), Sid
Ripman ($200,000) and Martin Sumichrast ($50,000), at the rate of eight  percent
simple annual interest, which is due and payable at the closing of this offering
from the net proceeds of this offering. General Ratkovich and Mr. Sumichrast are
officers,  directors  and  principal  stockholders  of  Nasdaq  listed companies
recently underwritten by the Underwriter. In further consideration of the bridge
loan, the Company  issued 2,000,000 shares  of Common Stock,  2,000,000 Class  A
Warrants  and 2,000,000  Class B Warrants  to the  Selling Security-holders. The
shares  of  Common   Stock  and  Class   A  Warrants  issued   to  the   Selling
Security-holders  are being  registered in this  offering. The  Class A Warrants
issued to the  Selling Security-holders are  identical to the  Class A  Warrants
included  in the Units being offered by the Company. The Class B Warrants, which
are not being registered in this offering, are identical to the Class A Warrants
included in the  Units being  offered by the  Company except  that the  exercise
price  if $4.20. The securities held by the Selling Security-holders may be sold
commencing eighteen (18)  months from the  date of this  Prospectus, subject  to
earlier  release at the sole discretion  of the Underwriter, and such securities
include a  legend  with  such  restrictions. The  Underwriter  may  release  the
securities held by the Selling Security-holders at any time after all securities
subject  to the Over-allotment Option have been sold or such option has expired.
The resale of  the securities  of the  Selling Security-holders  are subject  to
Prospectus  delivery and  other requirements of  the Securities Act  of 1933, as
amended. Sales of such securities or the potential of such sales at any time may
have an adverse effect  on the market prices  of the securities offered  hereby.
The Company will not receive any of the proceeds from the sale of the securities
being  offered  by  the  Selling  Security-holders.  The  Class  A  Warrants are
redeemable upon certain conditions. Should the  Class A Warrants offered by  the
Selling  Security-holders  be exercised,  of which  there  is no  assurance, the
Company will  receive the  proceeds therefrom  aggregating up  to an  additional
$8,000,000.  Prior  to  making  the  bridge loan  to  the  Company,  the Selling
Security-holders did not own  any other securities of  the Company. None of  the
Selling  Security-holders  of  the  Company are  otherwise  affiliated  with the
Company, at the time of making the bridge loan, at the time of this offering  or
at any other time. The Company believes that its financial transactions with the
Selling  Security-holders served a legitimate  business purpose, I.E., providing
needed working capital for the Company,  and were fair and reasonable under  the
circumstances  since  the transactions  were  highly speculative.  The Company's
financial transactions with  the Selling  Security-holders were  managed by  the
Underwriter  and no commissions or other remuneration  were paid or will be paid
to the Underwriter  in connection  with such transactions.  However, should  the
Underwriter  participate  in the  sale of  the securities  owned by  the Selling
Security-holders in  the  future,  the  Underwriter  will  be  paid  commissions
commensurate with industry standards in connection with such sales. See "Selling
Security-holders" and "Description of Securities."
    
 
                                       47
<PAGE>
    All unregistered securities issued by the Company prior to this offering are
deemed  "restricted securities"  within the meaning  of that term  as defined in
Rule 144 and have been issued pursuant to certain "private placement" exemptions
under Section 4(2) of the Securities Act of 1933, as amended, and the rules  and
regulations   as  promulgated   by  the  Securities   and  Exchange  Commission,
Washington, D.C. 20549, such that the sales of the securities were  transactions
by an issuer not involving any public offering. See "Description of Securities."
 
    In  March 1996, the Company  acquired all rights, title  and interest in the
first U.S. patent for  a system and method  for communicating high fidelity  and
clear  transmission of audio or voice over the Internet, enabling free worldwide
transmission of ordinary telephone communications over the Internet. The Company
acquired all  rights, title  and  interest in  the  patent from  the  inventors,
Messrs.  Arthur  Henley and  Scott Grau,  who are  original stockholders  of the
Company, in consideration of a five percent overriding royalty interest  against
gross  profits involving the  use of the  patent. The Company  believes that its
patent is  the first  patent awarded  of its  kind, specifically  involving  the
transmission of audio or voice over the Internet. The Company also believes that
its patent may provide certain strategic and technological advantages in the new
and burgeoning area of audio or voice over the Internet. The Company can make no
assurances,  however, as to the extent of  the advantages or protection, if any,
that may be granted to the Company as a result of its patent.
 
    The Company intends  to indemnify  its officers  and directors  to the  full
extent  permitted  by  Delaware  law.  Under  Delaware  law,  a  corporation may
indemnify its agents for expenses and  amounts paid in third party actions  and,
upon court approval in derivative actions, if the agents acted in good faith and
with reasonable care. A majority vote of the Board of Directors, approval of the
shareholders or court approval is required to effectuate indemnification.
 
    Insofar  as indemnification for liabilities arising under the Securities Act
of 1933,  as  amended,  may  be permitted  to  officers,  directors  or  persons
controlling  the Company, the Company  has been advised that,  in the opinion of
the  Securities   and  Exchange   Commission,  Washington,   D.C.  20549,   such
indemnification  is  against public  policy  as expressed  in  such Act  and is,
therefore, unenforceable. In the event that a claim for indemnification  against
such  liabilities (other than the payment by the Company of expenses incurred or
paid by  an  officer, director  or  controlling person  of  the Company  in  the
successful  defense  of any  action,  suit or  proceeding)  is asserted  by such
officer, director or controlling person in connection with the securities  being
registered,  the Company will, unless  in the opinion of  its counsel the matter
has been settled  by controlling  precedent, submit  to a  court of  appropriate
jurisdiction  the question whether such indemnification  by it is against public
policy as expressed in such Act and  will be governed by the final  adjudication
of such issue.
 
    Any  future transactions with affiliates will  be on terms no less favorable
than could be  obtained from  nonaffiliated parties and  will be  approved by  a
majority  of  the  independent and  disinterested  directors, as  required  by a
resolution of the  Board of  Directors. Any  future loans  to Company  officers,
directors,  affiliates and/or shareholders will be approved by a majority of the
independent and  disinterested directors,  as required  by a  resolution of  the
Board of Directors.
 
                                       48
<PAGE>
                           DESCRIPTION OF SECURITIES
 
UNITS
 
    Each of the 1,000,000 Units offered hereby at $7.00 per Unit consists of two
shares of the Company's Common Stock, $.01 par value, and two redeemable Class A
Warrants.  The Common Stock  and Class A  Warrants are detachable  and may trade
separately immediately upon issuance. Should the Class A Warrants be  exercised,
of which there is no assurance, the Company will receive the proceeds therefrom,
aggregating up to an additional $8,000,000.
 
COMMON STOCK
 
    The authorized capital stock of the Company consists of 50,000,000 shares of
Common  Stock,  $.01  par  value.  There  are  presently  8,500,000  issued  and
outstanding shares of  Common Stock.  Holders of the  Common Stock  do not  have
preemptive  rights  to  purchase  additional shares  of  Common  Stock  or other
subscription rights. The Common  Stock carries no conversion  rights and is  not
subject  to redemption or to  any sinking fund provisions.  All shares of Common
Stock are entitled to share equally in dividends from sources legally  available
therefor  when,  as  and  if  declared  by  the  Board  of  Directors  and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary,  to
share  equally  in  the assets  of  the  Company available  for  distribution to
stockholders. All outstanding shares of Common Stock are validly authorized  and
issued,  fully paid and nonassessable,  and all shares to  be sold and issued as
contemplated hereby,  will be  validly  authorized and  issued, fully  paid  and
nonassessable.  The Board of Directors is  authorized to issue additional shares
of  Common  Stock,  not  to  exceed  the  amount  authorized  by  the  Company's
Certificate of Incorporation, and to issue options and warrants for the purchase
of  such shares, on such terms and  conditions and for such consideration as the
Board may  deem  appropriate  without  further  stockholder  action.  The  above
description  concerning the Common Stock  of the Company does  not purport to be
complete. Reference is made  to the Company's  Certificate of Incorporation  and
By-laws  which are available for inspection  upon proper notice at the Company's
offices, as well as to  the applicable statutes of the  State of Delaware for  a
more complete description concerning the rights and liabilities of stockholders.
 
    Prior to this offering, there has been no market for the Common Stock of the
Company, and no predictions can be made of the effect, if any, that market sales
of  shares or the availability of shares for  sale will have on the market price
prevailing from time to time. Nevertheless, sales of significant amounts of  the
Common Stock of the Company in the public market may adversely affect prevailing
market  prices, and may  impair the Company's  ability to raise  capital at that
time through the sale of its equity securities.
 
    Each holder of Common Stock is entitled to one vote per share on all matters
on which such  stockholders are  entitled to vote.  Since the  shares of  Common
Stock  do not have cumulative voting rights, the holders of more than 50 percent
of the shares voting for the election  of directors can elect all the  directors
if  they choose to do so and, in such event, the holders of the remaining shares
will not be able to elect any person to the Board of Directors.
 
CLASS A AND CLASS B WARRANTS
 
    The Company is offering 1,000,000 Units at  a price of $7.00 per Unit.  Each
Unit  consists of two shares of Common Stock, $.01 par value, and two redeemable
Class A Warrants. The Common Stock and  Class A Warrants are detachable and  may
trade separately immediately upon issuance.
 
    The Class A Warrants shall be exercisable commencing one year after the date
of  this Prospectus ("Effective Date"). Each Class A Warrant entitles the holder
to purchase one share of  Common Stock at $4.00 per  share during the four  year
period  commencing one year  from the Effective  Date. The Class  A Warrants are
redeemable by the Company for $.05 per Warrant, at any time after              ,
1998,  upon thirty (30) days' prior written notice, if the average closing price
or bid price of the Common Stock, as reported by the principal exchange on which
the Common Stock is  traded, the Nasdaq National  Market System or the  National
Quotation  Bureau, Incorporated, as the case may be, equals or exceeds $8.00 per
share,   for   any   twenty   (20)    consecutive   trading   days   within    a
 
                                       49
<PAGE>
period  of  thirty  (30) days  ending  within ten  (10)  days of  the  notice of
redemption. Upon thirty (30) days' written notice to all holders of the Class  A
Warrants,  the Company shall have the right  to reduce the exercise price and/or
extend the term of the Class A Warrants.
 
   
    In March and April  1996, the Company borrowed  $1,000,000 in a bridge  loan
from four persons who are nonaffiliated with the Underwriter and the Company, to
wit:  Edward Ratkovich ($500,000), Robert Foise ($250,000), Armstrong Industries
($200,000) and Martin Sumichrast ($50,000), at the rate of eight percent  simple
annual  interest, which is due and payable  at the closing of this offering from
the net proceeds  of this  offering. General  Ratkovich and  Mr. Sumichrast  are
officers,  directors  and  principal  stockholders  of  Nasdaq  listed companies
recently underwritten by the Underwriter. In further consideration of the bridge
loan, the Company  issued 2,000,000 shares  of Common Stock,  2,000,000 Class  A
Warrants  and 2,000,000  Class B Warrants  to the  Selling Security-holders. The
shares  of  Common   Stock  and  Class   A  Warrants  issued   to  the   Selling
Security-holders  are being  registered in this  offering. The  Class A Warrants
issued to the  Selling Security-holders are  identical to the  Class A  Warrants
included  in the Units being offered by the Company. The Class B Warrants, which
are not being registered in this offering, are identical to the Class A Warrants
included in the  Units being  offered by the  Company except  that the  exercise
price  if $4.20. The securities held by the Selling Security-holders may be sold
commencing eighteen (18)  months from the  date of this  Prospectus, subject  to
earlier  release at the sole discretion  of the Underwriter, and such securities
include a  legend  with  such  restrictions. The  Underwriter  may  release  the
securities held by the Selling Security-holders at any time after all securities
subject  to the Over-allotment Option have been sold or such option has expired.
Should  the   Underwriter   release  the   securities   held  by   the   Selling
Security-holders  for resale,  it is  uncertain whether  the securities  will be
offered for sale. The resale of  the securities of the Selling  Security-holders
are  subject to Prospectus delivery and other requirements of the Securities Act
of 1933, as amended. Sales of such securities or the potential of such sales  at
any  time may  have an  adverse effect  on the  market prices  of the securities
offered hereby. The Company will not receive  any of the proceeds from the  sale
of  the securities  being offered by  the Selling Security-holders.  The Class A
Warrants are redeemable  upon certain  conditions. Should the  Class A  Warrants
offered  by  the Selling  Security-holders be  exercised, of  which there  is no
assurance, the Company will receive the proceeds therefrom aggregating up to  an
additional  $8,000,000.  Prior to  making the  bridge loan  to the  Company, the
Selling Security-holders did not own any  other securities of the Company.  None
of the Selling Security-holders of the Company are otherwise affiliated with the
Company,  at the time of making the bridge loan, at the time of this offering or
at any other time. The Company believes that its financial transactions with the
Selling Security-holders served a  legitimate business purpose, I.E.,  providing
needed  working capital for the Company, and  were fair and reasonable under the
circumstances since  the  transactions  are highly  speculative.  The  Company's
financial  transactions with  the Selling  Security-holders were  managed by the
Underwriter and no commissions or other  remuneration were paid or will be  paid
to  the Underwriter  in connection with  such transactions.  However, should the
Underwriter participate  in the  sale of  the securities  owned by  the  Selling
Security-holders  in  the  future,  the  Underwriter  will  be  paid commissions
commensurate with industry standards in connection with such sales. See "Selling
Security-holders."
    
 
    The Warrants  can  only be  exercised  when  there is  a  current  effective
registration  statement  covering  the  shares of  common  stock  underlying the
Warrants. If the Company does not or  is unable to maintain a current  effective
registration  statement  the  Warrant holders  will  be unable  to  exercise the
Warrants and  the Warrants  may become  valueless. Moreover,  if the  shares  of
common stock underlying the Warrants are not registered or qualified for sale in
the  state in which a Warrant holder resides, such holder might not be permitted
to exercise the Warrants.
 
    The Company will  deliver Warrant  certificates to the  purchasers of  Units
representing   two  Warrants  for  each   Unit  purchased.  Thereafter,  Warrant
certificates may be exchanged for  new certificates of different  denominations,
and  may be exercised  or transferred by  presenting them at  the offices of the
Transfer Agent. Holders of the Warrants may sell the Warrants if a market exists
rather than exercise them. However, there can be no assurance that a market will
develop or continue as to
 
                                       50
<PAGE>
such Warrants. If the Company is  unable to qualify its common stock  underlying
such  Warrants for sale in certain states,  holders of the Company's Warrants in
those states will have no choice but to either sell such Warrants or allow  them
to expire.
 
    Each  Warrant may be exercised by surrendering the Warrant certificate, with
the form of election to purchase on the reverse side of the Warrant  certificate
properly  completed and executed, together with payment of the exercise price to
the Warrant Agent. The Warrants may be  exercised in whole or from time to  time
in part. If less than all of the Warrants evidenced by a Warrant certificate are
exercised,  a new Warrant certificate will be issued for the remaining number of
Warrants. Upon the  exercise of the  Warrants, the shares  of Common Stock  when
issued will be fully paid and nonassessable.
 
    Holders  of  the  Warrants  are protected  against  dilution  of  the equity
interest  represented  by  the  underlying  shares  of  common  stock  upon  the
occurrence  of certain events, including, but  not limited to, issuance of stock
dividends. If the Company merges, reorganizes or is acquired in such a way as to
terminate the Warrants, the Warrants may be exercised immediately prior to  such
action.  In the event of liquidation, dissolution  or winding up of the Company,
holders of the Warrants are not entitled to participate in the Company's assets.
 
    For the life of the Warrants, the holders thereof are given the opportunity,
at nominal cost, to profit from a rise  in the market price of the common  stock
of  the Company. The exercise of the Warrants will result in the dilution of the
then book value of the Common Stock of the Company held by the public  investors
and would result in a dilution of their percentage ownership of the Company. The
terms  upon which  the Company  may obtain  additional capital  may be adversely
affected through the period that the Warrants remain exercisable. The holders of
these Warrants may  be expected  to exercise  them at  a time  when the  Company
would,  in  all likelihood,  be  able to  obtain  equity capital  on  terms more
favorable than those provided for by the Warrants.
 
    Because the  Warrants included  in the  Units being  offered hereby  may  be
transferred,  it  is  possible that  the  Warrants  may be  acquired  by persons
residing in states where the Company has  not registered, or is not exempt  from
registration  such that the  shares of common stock  underlying the Warrants may
not be  sold  or  transferred  upon exercise  of  the  Warrants.  Warrantholders
residing  in those  states would  have no  choice but  to attempt  to sell their
Warrants or  to let  them expire  unexercised.  Also, it  is possible  that  the
Company may be unable, for unforeseen reasons, to cause a registration statement
covering  the shares underlying the  Warrants to be in  effect when the Warrants
are exercisable. In that event, the  Warrants may expire unless extended by  the
Company  as permitted by the Warrant because a registration statement must be in
effect, including audited financial statements for companies acquired, in  order
for warrantholders to exercise their Warrants.
 
    The  Company will be able to issue  the securities offered hereby, shares of
its Common  Stock  upon the  exercise  of  the Warrants  and  the  Underwriter's
Purchase  Option  only if  (i) there  is  a current  prospectus relating  to the
securities offered hereby under an  effective registration statement filed  with
the  Securities  and Exchange  Commission, and  (ii) such  Common Stock  is then
qualified for sale or exempt therefrom under applicable state securities laws of
the jurisdictions in which the various holders of Warrants reside. Although  the
Company  intends to maintain  a current registration statement,  there can be no
assurance, however, that the Company will be successful in maintaining a current
registration statement. After a registration statement becomes effective, it may
require updating by the filing  of a post-effective amendment. A  post-effective
amendment  is required (i) anytime after nine months subsequent to the Effective
Date when any  information contained in  the prospectus is  over sixteen  months
old;  (ii)  when facts  or events  have occurred  which represent  a fundamental
change in the information contained in the registration statement; or (iii) when
any  material  change  occurs  in  the  information  relating  to  the  plan  or
distribution  of the securities  registered by such  registration statement. The
Company anticipates that this Registration  Statement will remain effective  for
not  more  than nine  months  following the  date  of this  Prospectus  or until
            , 1997,  assuming a  post-effective amendment  is not  filed by  the
Company,  which may be required. The Company  intends to qualify the sale of the
Units in a limited number of states, although
 
                                       51
<PAGE>
certain exemptions under certain state  securities ("Blue Sky") laws may  permit
the Warrants to be transferred to purchasers in states other than those in which
the  Warrants were initially qualified. The  Company will be prevented, however,
from issuing Common Stock  upon exercise of the  Warrants in those states  where
exemptions  are unavailable  and the  Company has  failed to  qualify the Common
Stock issuable upon  exercise of  the Warrants. The  Company may  decide not  to
seek,  or may not be able to obtain qualification of the issuance of such Common
Stock in all  of the states  in which  the ultimate purchasers  of the  Warrants
reside.  In such case, the Warrants of  those purchasers will expire and have no
value if such Warrants cannot be exercised or sold. Accordingly, the market  for
the  Warrants may be limited because of the Company's obligation to fulfill both
of the foregoing requirements.
 
   
    As a result  of the  Permanent Injunction,  the states  of Pennsylvania  and
Indiana  have commenced administrative proceedings  seeking, among other things,
to revoke Stratton Oakmont's license to do business in such states. In  Indiana,
the  Commissioner suspended Stratton Oakmont's license  for a three year period.
Stratton Oakmont has  appealed the  decision and  has requested  a stay  pending
appeal.  The requested  stay would maintain  the status quo  pending appeal. The
states of  Alabama,  North  Carolina,  South Carolina  and  Arkansas  also  have
suspended  Stratton Oakmont's license pending a resolution of the proceedings in
those states. The  states of  Minnesota, Vermont,  and Nevada  have served  upon
Stratton  Oakmont notices of intent to revoke Stratton Oakmont's license in such
states. The state of  Rhode Island has  served on Stratton  Oakmont a Notice  of
Intent  to  suspend its  license in  that  state. In  the state  of Mississippi,
Stratton Oakmont has agreed to a suspension of its license pending resolution of
certain claims  and  review  of  its  procedures  and  practices  by  the  state
authorities.  In  addition, Stratton  Oakmont withdrew  its registration  in the
state of New Hampshire  (with the right  of reapplication) and  in the state  of
Maryland.  There  may  be  further administrative  action  against  the  firm in
Maryland. The firm withdrew  its registration in Massachusetts  with a right  to
reapply  for registration after two years, withdrew its registration in Delaware
with a right to reapply  in three years and agreed  to a temporary cessation  of
business  in  Utah  pending  an on-site  inspection  and  further administrative
proceedings. Stratton Oakmont's license in the  state of New Jersey was  revoked
by  an administrative judge pursuant to  an administrative hearing and an appeal
has been filed (and such decision is not final). The state of Georgia has lifted
its suspension  and has  granted Stratton  Oakmont a  conditional license.  Such
conditional license was granted pursuant to an order, which Stratton Oakmont has
proposed to various states, which provides provisions for: (i) the suspension of
revocation,  (ii) compliance  with recommendations  of the  Consultant, (iii) an
expedited claims  mediation  arbitration  process,  (iv)  resolution  of  claims
seeking compensatory damages, (v) restrictions on use of operating revenue, (vi)
the  limitation on selling  group members in  offerings underwritten by Stratton
Oakmont and  the prohibition  of  participating as  a  selling group  member  in
offerings  underwritten by certain  other NASD member  firms, (vii) the periodic
review of Stratton Oakmont's agents, (viii) the retention of an accounting firm,
and (ix)  supervision  and  training,  restrictions  on  trading,  discretionary
accounts  and other matters. The  state of Oregon, as  a result of the Permanent
Injunction, has filed a  notice of intent to  revoke Stratton Oakmont's  license
subject to the holding of a hearing to determine definitively Stratton Oakmont's
license  status,  and Stratton  Oakmont,  in this  proceeding  as well  as other
proceedings, expects to be able to demonstrate that the Permanent Injunction  is
not  of a nature  as to be a  lawful basis to  revoke Stratton Oakmont's license
permanently. Finally, Stratton Oakmont has received an order limiting license in
the state of Nebraska. Such proceedings, if ultimately successful, may adversely
affect the market for  and liquidity of the  Company's securities if  additional
broker-dealers  do  not make  a market  in  the Company's  securities. Moreover,
should investors purchase any of the  securities in this offering from  Stratton
Oakmont prior to a revocation of Stratton Oakmont's license in their state, such
investors  will not  be able  to resell  such securities  in such  state through
Stratton Oakmont but  will be required  to retain a  new broker-dealer firm  for
such  purpose. The Company  cannot ensure that other  broker-dealers will make a
market in the Company's securities. In the event that other broker-dealers  fail
to  make a market in  the Company's securities, the  possibility exists that the
market for  and the  liquidity  of the  Company's  securities may  be  adversely
affected  to such an extent that public  security holders may not have anyone to
purchase their securities when offered for sale at any price. In such event, the
market for,
    
 
                                       52
<PAGE>
   
and liquidity and prices of the Company's securities may not exist. It should be
noted that although Stratton  Oakmont may not  be the sole  market maker in  the
Company's  securities, it will most  likely be the dominant  market maker in the
Company's securities. In addition, in  the event that the Underwriter's  license
to  do business is  revoked in the  states set forth  above, the Underwriter has
advised the Company  that it believes  the members of  the selling syndicate  in
this  offering will be able to make a market in the Company's securities in such
states and that such an event will not have a materially adverse effect on  this
offering, although no assurance can be given. See "Underwriting."
    
 
RESTRICTED SHARES ELIGIBLE FOR FUTURE SALE
 
    Upon completion of this offering, the Company will have 10,500,000 shares of
Common  Stock issued and outstanding. Of these shares of Common Stock, 2,000,000
shares are  being sold  in this  offering, in  addition to  the registration  of
2,000,000  shares of Common Stock on behalf  of the Selling Stockholders. Of the
remaining shares, 6,500,000 shares ("Restricted Shares") were issued and sold by
the Company in a private transaction in reliance upon certain private  placement
exemptions as promulgated by the Securities and Exchange Commission, Washington,
D.C. 20549. See "Selling Security-holders" and "Certain Transactions."
 
    In  general, under  Rule 144  as currently in  effect, a  person (or persons
whose shares are aggregated)  who has beneficially owned  his or her  Restricted
Shares  for at least two years, including persons who may be deemed "affiliates"
of the Company, as that term is defined under the Act, would be entitled to sell
in broker's transactions within any three  month period a number of shares  that
does not exceed the greater of one percent of the then outstanding shares of the
Company's   common  stock,  or   the  average  weekly   trading  volume  in  the
over-the-counter market in the Company's  common stock during the four  calendar
weeks  preceding such sale. Therefore, during each three month period, beginning
January 9, 1997,  a holder of  restricted securities  who has held  them for  at
least  the two year period may  sell under Rule 144 a  number of shares at least
equal to 105,000 shares. A person who is not deemed to have been an affiliate of
the Company  at any  time during  the  90 days  preceding a  sale, and  who  has
beneficially  owned his or her Restricted Shares for at least three years, would
be entitled to  sell such shares  under Rule  144 without regard  to the  volume
limitations described above, provided that certain public information concerning
the Company as required by the Rule is available.
 
    Prior to this offering, there has been no market for the Common Stock of the
Company,  and no  precise predictions can  be made  of the effect,  if any, that
market sales of shares or the availability  of shares for sale will have on  the
market  price prevailing from  time to time.  Nevertheless, sales of substantial
amounts of the Common Stock  of the Company in  the public market may  adversely
affect  prevailing market prices  and may impair the  Company's ability to raise
capital at the time through the sale of its equity securities.
 
    Pursuant  to  the  terms  of  the  Underwriting  Agreement,  the   Company's
restricted  stockholders  and the  Company have  agreed  not to  sell, transfer,
assign or issue any restricted shares of Common Stock for a period of 24  months
following  the  date  of  this  Prospectus  without  the  prior  consent  of the
Underwriter. The sale  of a  significant number of  these shares  in the  public
market  in  the future  may  adversely affect  prevailing  market prices  of the
Company's securities following this  offering. See "Principal Stockholders"  and
"Certain Transactions."
 
    No  predictions can be made  as to the effect, if  any, that sales of shares
under Rule 144 or otherwise or the availability of shares for sale will have  on
the  market, if any, prevailing from time  to time. Sales of significant amounts
of the Company's shares of  Common Stock pursuant to  Rule 144 or otherwise  may
adversely affect the market price of the securities offered hereby.
 
TRANSFER AGENT AND REGISTRAR
 
    The  transfer  agent and  registrar  for the  securities  of the  Company is
American Stock Transfer & Trust Company located at 40 Wall Street, New York, New
York 10005.
 
                                       53
<PAGE>
REPORTS TO SECURITY-HOLDERS
 
    The Company  will  furnish  to  holders of  its  securities  annual  reports
containing  audited financial statements. The  Company may issue other unaudited
interim reports to its security-holders as it deems appropriate.
 
    Contemporaneously, with this offering, the  Company intends to register  its
securities  with the Securities and Exchange Commission, Washington, D.C. 20549,
under the provisions of Section 12(g) of the Securities Exchange Act of 1934, as
amended ("Exchange  Act"), and,  in accordance  therewith, the  Company will  be
required  to  comply  with  certain  reporting,  proxy  solicitation  and  other
requirements of the Exchange Act.
 
                            SELLING SECURITY-HOLDERS
 
   
    The registration  statement, of  which this  Prospectus forms  a part,  also
covers  the registration of 2,000,000 shares of Common Stock and 2,000,000 Class
A Warrants offered by  four persons who are  nonaffiliated with the  Underwriter
and   the   Company,   hereinafter   collectively   referred   to   as  "Selling
Security-holders," to wit: Edward Ratkovich ($500,000), Robert Foise ($250,000),
Armstrong  Industries  ($200,000)  and  Martin  Sumichrast  ($50,000).   General
Ratkovich  and Mr. Sumichrast are officers, directors and principal stockholders
of Nasdaq listed companies recently underwritten by the Underwriter. The Class A
Warrants are  identical to  the Class  A Warrants  included in  the Units  being
offered  by the Company. The securities held by the Selling Security-holders may
be sold  commencing eighteen  (18)  months from  the  date of  this  Prospectus,
subject  to earlier release at the sole  discretion of the Underwriter, and such
securities include a legend with such restrictions. The Underwriter may  release
the  securities  held by  the  Selling Security-holders  at  any time  after all
securities subject to the  Over-allotment Option have been  sold or such  option
has  expired. Should the Underwriter release  the securities held by the Selling
Security-holders for  resale, it  is uncertain  whether the  securities will  be
offered  for sale. The resale of  the securities of the Selling Security-holders
are subject to Prospectus delivery and other requirements of the Securities  Act
of  1933, as amended. Sales of such securities or the potential of such sales at
any time may  have an  adverse effect  on the  market prices  of the  securities
offered hereby.
    
 
    In  March 1996, the  Company borrowed $1,000,000  in a bridge  loan from the
Selling Security-holders at the  rate of eight  percent simple annual  interest,
which  is due and payable at the closing  of this offering from the net proceeds
of this offering. 2,000,000 shares of  Common Stock, 2,000,000 Class A  Warrants
and  2,000,000 Class B  Warrants were issued to  the Selling Security-holders in
further consideration of  the bridge loan.  The Class A  Warrants issued to  the
Selling  Security-holders are identical to the  Class A Warrants included in the
Units being offered by the  Company. The Class B  Warrants, which are not  being
registered  in this offering, are identical to  the Class A Warrants included in
the Units being offered by the Company except that the exercise price is  $4.20.
The  shares of Common Stock and Class A Warrants are being registered as part of
this offering. The Company will not receive any of the proceeds from the sale of
the securities  by  the  Selling  Security-holders. The  Class  A  Warrants  are
redeemable upon certain conditions. Should the Class A Warrants be exercised, of
which  there is  no assurance, the  Company will receive  the proceeds therefrom
aggregating up to an additional $8,000,000.
 
    The 2,000,000 shares  of Common  Stock and  2,000,000 Class  A Warrants  are
being  offered by  the Selling  Security-holders under  an alternate Prospectus.
Prior to making the bridge loan to the Company, the Selling Security-holders did
not  own  any   other  securities   of  the   Company.  None   of  the   Selling
Security-holders  of the Company  are otherwise affiliated  with the Company, at
the time of making the bridge loan, at the time of this offering or at any other
time. The  Company believes  that its  financial transactions  with the  Selling
Security-holders served a legitimate business purpose, I.E.,
 
                                       54
<PAGE>
providing  needed working capital for the  Company, and were fair and reasonable
under the circumstances. The Company's  financial transactions with the  Selling
Security-holders  were managed  by the Underwriter  and no  commissions or other
remuneration were paid to the Underwriter in connection with such  transactions.
See "Certain Transactions" and "Description of Securities."
 
    The  securities offered hereby may be sold from time to time directly by the
Selling Security-holders. Alternatively, the  Selling Security-holders may  from
time to time offer such securities through underwriters, dealers and agents. The
distribution  of securities by  the Selling Security-holders  may be effected in
one or more  transactions that may  take place on  the over-the-counter  market,
including  ordinary broker's transactions,  privately-negotiated transactions or
through sales  to  one or  more  broker-dealers for  resale  of such  shares  as
principals,  at market prices prevailing at the  time of sale, at prices related
to such prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Security-holders in  connection  with  such sales  of  securities.  The  Selling
Security-holders and intermediaries through whom such securities are sold may be
deemed  "underwriters"  within  the  meaning  of the  Act  with  respect  to the
securities offered,  and any  profits realized  or commissions  received may  be
deemed underwriting compensation.
 
    At  the time a particular offer  of securities is made by  or on behalf of a
Selling  Security-holder,  to  the  extent   required,  a  Prospectus  will   be
distributed  which will  set forth  the number of  shares being  offered and the
terms of the offering, including the name or names of any underwriters,  dealers
or  agents,  if any,  the  purchase price  paid  by any  underwriter  for shares
purchased from the  Selling Security-holder  and any  discounts, commissions  or
concessions  allowed or reallowed  or paid to dealers,  and the proposed selling
price to the public.
 
    Under the Securities Exchange Act of 1934, as amended ("Exchange Act"),  and
the  regulations thereto, any person engaged in a distribution of the securities
of the  Company offered  by this  Prospectus may  not simultaneously  engage  in
market-making  activities with respect to such  securities of the Company during
the applicable "cooling  off" period (nine  days) prior to  the commencement  of
such  distribution. In addition, and without limiting the foregoing, the Selling
Security-holders will be subject  to applicable provisions  of the Exchange  Act
and  the rules  and regulations  thereunder, including  without limitation, Rule
10b-6 and  10b-7, in  connection  with transactions  in such  securities,  which
provisions may limit the timing of purchases and sales of such securities by the
Selling Security-holders.
 
    Sales of securities by the Selling Security-holders or even the potential of
such  sales  may likely  have  an adverse  effect on  the  market prices  of the
securities offered hereby. Following the closing of this offering, the  publicly
tradeable  securities of the Company  ("public float"), including this offering,
will be  4,000,000  shares of  Common  Stock  and 4,000,000  Class  A  Warrants,
provided,  however, that 2,000,000 shares of  Common Stock and 2,000,000 Class A
Warrants owned by the Selling Security-holders are not transferable for eighteen
(18) months commencing  on the  effective date of  this Prospectus,  or at  such
earlier date as may be permitted by the Underwriter, and such securities include
a  legend with  such restrictions. The  Underwriter may  release such securities
held by the Selling Security-holders at any time after all securities subject to
the Over-allotment Option have been sold or such option has expired. The  resale
of  the securities  of the  Selling Security-holders  are subject  to Prospectus
delivery and other requirements of the Securities Act of 1933, as amended. Sales
of such  securities or  the potential  of such  sales at  any time  may have  an
adverse  effect  on the  market  prices of  the  securities offered  hereby. See
"Description of Securities" and "Underwriting."
 
                                       55
<PAGE>
                                  UNDERWRITING
 
    Subject  to  the  terms  and   conditions  of  the  underwriting   agreement
("Underwriting  Agreement") by and between the  Company and the Underwriter, the
Company has  agreed  to sell  to  the Underwriter  1,000,000  Units on  a  "firm
commitment"  basis. The Underwriter has advised  the Company that it proposes to
offer the Units to the public at $7.00  per Unit as set forth on the cover  page
of this Prospectus and that it may allow to certain dealers who are NASD members
concessions  not to exceed $.  per  Unit. After the initial public offering, the
public offering  price,  concession  and  reallowance  may  be  changed  by  the
Underwriter. The Underwriter has informed the Company that it does not intend to
confirm sales to any accounts over which it exercises discretionary authority.
 
   
    In  addition to underwriting discounts and commissions of ten percent of the
entire offering, the  Underwriter will  receive additional  compensation in  the
form  of (i) a  nonaccountable expense allowance of  $210,000 if 1,000,000 Units
are sold  (or  $241,500 if  the  Underwriter's Over-allotment  Option  is  fully
exercised);  and  (ii)  an  option  (exercisable  for  a  period  of  four years
commencing one year after the date of this Prospectus) entitling the Underwriter
to purchase 100,000 Units at $11.55 per Unit ("Underwriter's Purchase Option").
    
 
    The public offering  price of  the Units and  the exercise  price and  other
terms  of the Warrants  were arbitrarily determined  by negotiations between the
Company and the Underwriter  and do not necessarily  relate to the assets,  book
value  or results of operations of the Company or any other established criteria
of value.
 
    The Company has granted an option to the Underwriter, exercisable during the
30-day period from the date of this  Prospectus, to purchase up to a maximum  of
150,000  additional Units at the offering price, less the underwriting discount,
to cover over-allotments, if any.
 
    The Underwriting Agreement provides  for reciprocal indemnification  between
the  Company and the Underwriter against  certain liabilities in connection with
the Registration Statement,  including liabilities under  the Securities Act  of
1933,  as  amended  ("1933  Act"). Insofar  as  indemnification  for liabilities
arising under the  1933 Act may  be provided to  officers, directors or  persons
controlling  the Company, the Company  has been informed that  in the opinion of
the Securities and Exchange Commission,  such indemnification is against  public
policy and is therefore unenforceable.
 
    The  Company will  also pay  a warrant  solicitation fee  to the Underwriter
equal to four percent of the exercise price of the Warrants (which includes  all
Class  A Warrants and  Class B Warrants owned  by the Selling Security-holders),
beginning one year from the date of this Prospectus, if the Underwriter solicits
the exercise of such Warrants  prior to the expiration  thereof as set forth  in
the  Warrant Agreement, subject  to the Underwriter's  compliance with the rules
and regulations of the NASD. In accordance with NASD Notice to Members 81-38, no
warrant solicitation fee shall be paid (i) upon exercise where the market  price
of  the underlying Common Stock  is lower than the  exercise price; (ii) for the
exercise of warrants held in any discretionary account; (iii) upon the  exercise
of  warrants where disclosure of compensation  arrangements has not been made in
documents provided to customers both as part of the original offering and at the
time of  exercise;  and  (iv)  upon the  exercise  of  warrants  in  unsolicited
transactions.  The broker-dealer to receive the warrant solicitation fee will be
designated, in writing, as the soliciting broker. See "Risk Factors --  Exercise
of  Class  A  Warrants May  Have  Dilutive  Effect on  Market  and Underwriter's
Influence on the Market May Have Adverse Consequences."
 
    The Company has agreed to sell to the Underwriter, or its designees, for  an
aggregate purchase price of $100, an option ("Underwriter's Purchase Option") to
purchase  up to an aggregate of 100,000 Units. The Underwriter's Purchase Option
shall be exercisable during the four-year  period commencing one year after  the
effective  date of this  offering. The Underwriter's Purchase  Option may not be
assigned, transferred, sold or hypothecated  by the Underwriter until 12  months
after  the effective date of this Prospectus,  except to officers or partners of
the Underwriter and selling group members in this offering. Any profits realized
by   the    Underwriter    upon    the    sale    of    the    Units    issuable
 
                                       56
<PAGE>
upon  exercise  of  the  Underwriter's  Purchase  Option  may  be  deemed  to be
additional underwriting compensation. The exercise  price of the Units  issuable
upon  exercise  of  the  Underwriter's  Purchase  Option  during  the  period of
exercisability shall be 120 percent of the initial public offering price of  the
Units.  The  exercise  price  of  the  warrants  underlying  the  Units  in  the
Underwriter's Purchase Option is $4.80. The exercise price of the  Underwriter's
Purchase  Option  and  the  number  of shares  covered  thereby  are  subject to
adjustment  in  certain  events  to  prevent  dilution.  For  the  life  of  the
Underwriter's Purchase Option, the holders thereof are given, at a nominal cost,
the  opportunity to  profit from  a rise  in the  market price  of the Company's
securities with a resulting dilution in the interest of other stockholders.  The
Company may find it more difficult to raise capital for its business if the need
should arise while the Underwriter's Purchase Option is outstanding. At any time
when  the  holders of  the Underwriter's  Purchase Option  might be  expected to
exercise it, the Company would probably be able to obtain additional capital  on
more favorable terms.
 
   
    If  the Company enters into a transaction (including a merger, joint venture
or the  acquisition  of  another  entity)  introduced  to  the  Company  by  the
Underwriter,  the Company has  agreed to pay the  Underwriter a maximum finder's
fee equal to five percent of  the first $3,000,000 of consideration involved  in
the  transaction, four percent of the next $3,000,000, three percent of the next
$2,000,000, two percent of the next $2,000,000 and one percent of the excess, if
any, over $10,000,000.
    
 
   
    The Underwriter has the right to designate a non-director observer to attend
meetings of the Company's Board  of Directors for three  years from the date  of
this  offering. The Underwriter does not have a right to designate or nominate a
director to the Company's  Board of Directors. The  observer will be  reimbursed
for reasonable expenses incurred by him in connection with his activities.
    
 
    Pursuant   to  the  terms  of  the  Underwriting  Agreement,  the  Company's
restricted stockholders  and the  Company  have agreed  not to  sell,  transfer,
assign  or issue any restricted shares of Common Stock for a period of 24 months
following the  date  of  this  Prospectus  without  the  prior  consent  of  the
Underwriter.  The sale  of a  significant number of  these shares  in the public
market may adversely affect prevailing market prices of the Company's securities
following   this   offering.   See   "Principal   Stockholders"   and   "Certain
Transactions."
 
    The  foregoing  is  a  summary of  certain  provisions  of  the Underwriting
Agreement and  the Underwriter's  Purchase Option  which has  been filed  as  an
exhibit to the Registration Statement of which this Prospectus is a part.
 
   
    The  Company has been advised  by the Underwriter that  the NASD (Direct 10)
filed a complaint (No. C10950081) on  October 5, 1995 ("Complaint") against  the
Underwriter,  Steven  Sanders, the  head trader  of  the Underwriter,  Daniel M.
Porush, the  president of  the  Underwriter, and  Paul  F. Byrne,  formerly  the
Underwriter's director of compliance (collectively, the "Respondents"), alleging
various  violations of the NASD Rules  of Fair Practice. The complaint consisted
of three  causes. The  first  cause alleged  that  the Underwriter  and  Sanders
effected  principal retail sales of securities  at prices that were fraudulently
excessive. The second  cause alleged  that the Underwriter  and Sanders  charged
excessive  markups. The  third cause  alleged that  the Underwriter,  Porush and
Byrne  failed  to  establish,   maintain  and  enforce  reasonable   supervisory
procedures designed to assure compliance with the NASD's rules and policies.
    
 
   
    On  April 15,  1996 the NASD  in its  decision found all  of the Respondents
except Paul Byrne  in violation of  all three causes  and imposed the  following
sanctions:
    
 
   
    - Sanders  was censured,  fined $25,000  and was  suspended from association
      with any member of the NASD in any capacity for a period of one year.
    
 
   
    - The Underwriter was censured, fined $500,000 and was required to  disgorge
      its excess profits to its customers, totaling $1,876,205, plus prejudgment
      interest.  In addition, the Underwriter was  suspended for a period of one
      year from effecting any principal retail transactions.
    
 
                                       57
<PAGE>
   
    - Porush was censured, fined $250,000  and barred from association with  any
      member of the NASD in any capacity.
    
 
   
    The  Underwriter,  Porush  and  Sanders have  appealed  the  NASD's decision
thereby staying imposition of the sanctions.
    
 
   
    If the sanctions imposed on the Underwriter are not reversed on appeal,  the
Underwriter's  ability to act as a market maker of the Company's securities will
be restricted. The Company cannot ensure  that other broker dealers will make  a
market  in the Company's securities. In the event that other broker dealers fail
to make a market  in the Company's securities,  the possibility exists that  the
market  for  and the  liquidity  of the  Company's  securities may  be adversely
affected to such an extent that public  security holders may not have anyone  to
purchase their securities when offered for sale at any price. In such event, the
market for and liquidity of the Company's securities may not exist. It should be
noted  that although  the Underwriter may  not be  the sole market  maker in the
Company's securities,  it  may  likely  be the  dominant  market  maker  in  the
Company's securities.
    
 
   
    In  addition, in  April 1996  the NASD  settled an  action whereby  it fined
Stratton Oakmont $325,000  for fraud  and other violations  (which were  neither
admitted  or denied)  in connection with  its underwriting of  an initial public
offering. Steven Sanders was fined $50,000 and was suspended for a period of  45
days  from  associating with  an NASD  member and  agreed not  to engage  in any
trading-related activities for  any NASD  member for a  period of  50 days.  The
settlement  also  requires that  Stratton Oakmont  file certain  new supervisory
procedures with the NASD.
    
 
   
    The Company has been advised by  Stratton Oakmont, Inc. that the  Commission
instituted  an action on December  14, 1994 in the  United States District Court
for the District  of Columbia  against Stratton Oakmont.  The complaint  alleged
that  Stratton Oakmont was not complying  with the March 17, 1994 Administrative
Order by failing to adopt the recommendations of an independent consultant.  The
Administrative  Order was previously  consented to by  Stratton Oakmont, without
admitting or denying the findings contained therein, as settlement of an  action
commenced  against Stratton Oakmont by the Commission in March 1992, which found
willful violations of the anti-fraud provisions of the securities laws such that
Stratton Oakmont:
    
 
    -engaged in fraudulent sales practices;
 
    -engaged in and/or permitted unauthorized trading in customer accounts;
 
   
    -knowingly and  recklessly  manipulated  the market  price  of  a  company's
     securities by dominating and controlling the market for those securities;
    
 
    -made  improper and unsupported price predictions with regard to recommended
     over-the-counter securities; and
 
    -made material misrepresentations and omissions regarding certain securities
     and its experience in the securities industry.
 
    Pursuant to the Administrative Order, Stratton Oakmont was censured and  the
Stratton  Consultant was  chosen by  the Commission  to advise  and consult with
Stratton Oakmont  and to  review and  recommend new  supervisory and  compliance
procedures. The complaint sought:
 
    -a to enjoin Stratton Oakmont from violating the Administrative Order;
 
    -an  order  commanding Stratton  Oakmont to  comply with  the Administrative
     Order; and
 
    -to have a Special  Compliance Monitor appointed  to ensure compliance  with
     the  Administrative  Order.  Stratton  Oakmont  claimed  that  the Stratton
     Consultant exceeded his  authority under the  Administrative Order and  had
     violated the terms of the Administrative Order.
 
                                       58
<PAGE>
   
    On  February 28,  1995, the  court granted  the Commission's  motion for the
Permanent  Injunction  and   ordered  Stratton  Oakmont   to  comply  with   the
Administrative   Order,  which  required  the   appointment  of  an  independent
consultant,  and  a   separate  independent  auditor   and  required  that   all
recommendations  be  complied  with,  including  the  taping  of  all  telephone
conversations between the  Stratton Oakmont's  brokers and  their customers.  In
granting   the  Commission's  motion  for  a  Permanent  Injunction,  the  Court
determined that Stratton Oakmont's conduct unequivocally demonstrated that there
is a substantial likelihood that it will continue to evade its  responsibilities
under  the Administrative Order. On April  20, 1995, Stratton Oakmont also filed
an appeal to the United  States Court of Appeals  for the District of  Columbia,
and  on April 24, 1995  filed a motion to  stay the permanent injunction pending
the outcome of the appeal. The motion to stay was denied. Subsequently, Stratton
Oakmont voluntarily dismissed  its appeal.  The failure by  Stratton Oakmont  to
comply  with  the Administrative  Order  or Permanent  Injunction  may adversely
effect Stratton Oakmont's activities in that the court may enter a further order
restricting the ability  of Stratton Oakmont  to act  as a market  maker of  the
Company's  securities. The effect of such action  may prevent the holders of the
Company's securities from selling such securities since Stratton Oakmont may  be
restricted  from acting as  a market maker  of the Company's  securities and, in
such event, will  not be able  to execute a  sale of such  securities. Also,  if
other  broker dealers  fail to  make a market  in the  Company's securities, the
public security holders may  not have anyone to  purchase their securities  when
offered  for sale at any  price and the security holders  may suffer the loss of
their entire investment.
    
 
   
    As a result  of the  Permanent Injunction,  the states  of Pennsylvania  and
Indiana  have commenced administrative proceedings  seeking, among other things,
to revoke Stratton Oakmont's license to do business in such states. In  Indiana,
the  Commissioner suspended Stratton Oakmont's license  for a three year period.
Stratton Oakmont has  appealed the  decision and  has requested  a stay  pending
appeal.  The requested  stay would maintain  the status quo  pending appeal. The
states of  Alabama,  North  Carolina,  South Carolina  and  Arkansas  also  have
suspended  Stratton Oakmont's license pending a resolution of the proceedings in
those states. The  states of  Minnesota, Vermont,  and Nevada  have served  upon
Stratton  Oakmont notices of intent to revoke Stratton Oakmont's license in such
states. The state of  Rhode Island has  served on Stratton  Oakmont a Notice  of
Intent  to  suspend its  license in  that  state. In  the state  of Mississippi,
Stratton Oakmont has agreed to a suspension of its license pending resolution of
certain claims  and  review  of  its  procedures  and  practices  by  the  state
authorities.  In  addition, Stratton  Oakmont withdrew  its registration  in the
state of New Hampshire  (with the right  of reapplication) and  in the state  of
Maryland.  There  may  be  further administrative  action  against  the  firm in
Maryland. The firm withdrew  its registration in Massachusetts  with a right  to
reapply  for registration after two years, withdrew its registration in Delaware
with a right to reapply  in three years and agreed  to a temporary cessation  of
business  in  Utah  pending  an on-site  inspection  and  further administrative
proceedings. Stratton Oakmont's license in the  state of New Jersey was  revoked
by  an administrative judge pursuant to  an administrative hearing and an appeal
has been filed (and such decision is not final). The state of Georgia has lifted
its suspension  and has  granted Stratton  Oakmont a  conditional license.  Such
conditional license was granted pursuant to an order, which Stratton Oakmont has
proposed to various states, which provides provisions for: (i) the suspension of
revocation,  (ii) compliance  with recommendations  of the  Consultant, (iii) an
expedited claims  mediation  arbitration  process,  (iv)  resolution  of  claims
seeking compensatory damages, (v) restrictions on use of operating revenue, (vi)
the  limitation on selling  group members in  offerings underwritten by Stratton
Oakmont and  the prohibition  of  participating as  a  selling group  member  in
offerings  underwritten by certain  other NASD member  firms, (vii) the periodic
review of Stratton Oakmont's agents, (viii) the retention of an accounting firm,
and (ix)  supervision  and  training,  restrictions  on  trading,  discretionary
accounts  and other matters. The  state of Oregon, as  a result of the Permanent
Injunction, has filed a  notice of intent to  revoke Stratton Oakmont's  license
subject to the holding of a hearing to determine definitively Stratton Oakmont's
license  status,  and Stratton  Oakmont,  in this  proceeding  as well  as other
proceedings, expects to be able to demonstrate that the Permanent Injunction  is
not  of a nature  as to be a  lawful basis to  revoke Stratton Oakmont's license
    
 
                                       59
<PAGE>
   
permanently. Finally, Stratton Oakmont has received an order limiting license in
the state of Nebraska. Such proceedings, if ultimately successful, may adversely
affect the market for  and liquidity of the  Company's securities if  additional
broker-dealers  do  not make  a market  in  the Company's  securities. Moreover,
should investors purchase any of the  securities in this offering from  Stratton
Oakmont prior to a revocation of Stratton Oakmont's license in their state, such
investors  will not  be able  to resell  such securities  in such  state through
Stratton Oakmont but  will be required  to retain a  new broker-dealer firm  for
such  purpose. The Company  cannot ensure that other  broker-dealers will make a
market in the Company's securities. In the event that other broker-dealers  fail
to  make a market in  the Company's securities, the  possibility exists that the
market for  and the  liquidity  of the  Company's  securities may  be  adversely
affected  to such an extent that public  security holders may not have anyone to
purchase their securities when offered for sale at any price. In such event, the
market for, and liquidity and prices of the Company's securities may not  exist.
It  should be noted  that although Stratton  Oakmont may not  be the sole market
maker in the Company's  securities, it will most  likely be the dominant  market
maker  in  the  Company's  securities.  In  addition,  in  the  event  that  the
Underwriter's license to do business is  revoked in the states set forth  above,
the  Underwriter has  advised the  Company that it  believes the  members of the
selling syndicate  in  this offering  will  be able  to  make a  market  in  the
Company's  securities in  such states  and that  such an  event will  not have a
materially adverse effect on this offering, although no assurance can be  given.
See "Underwriting."
    
 
   
    The  Company has  been advised  by Stratton  Oakmont that  Honorable John E.
Sprizzo, United States Judge for  the Southern District of  New York, on May  6,
1994  denied  the  class certification  motion  in PAUL  CARMICHAEL  V. STRATTON
OAKMONT, INC., ET AL.,  Civ. 0720 (JES), of  the plaintiff Paul Carmichael.  The
class  action complaint alleges  manipulation and fraudulent  sales practices in
connection with  a  number of  securities.  The allegations  were  substantially
similar  and involve  much of  the same  time period  as the  Commission's civil
complaint (discussed above). The Company has further been informed that  counsel
for  the  class  action  plaintiff  sought  to  re-argue  the  motion  for class
certification, which motion for re-argument was denied.
    
 
DETERMINATION OF PUBLIC OFFERING PRICE
 
    Prior to this offering, there has  been no public market for the  securities
of the Company. The initial public offering price for the Units and the exercise
price  of the Class A Warrants have  been determined by negotiations between the
Company and the Underwriter.  Among the factors  considered in the  negotiations
were  an analysis of the areas of activity  in which the Company is engaged, the
present state of the Company's business, the Company's financial condition,  the
Company's  prospects, an assessment of management,  the general condition of the
securities market  at the  time of  this  offering and  the demand  for  similar
securities  of comparable companies. The public  offering price of the Units and
the exercise  prices  of  the Class  A  Warrants  do not  necessarily  bear  any
relationship  to  assets,  earnings,  book  value  or  other  criteria  of value
applicable to the Company.
 
                               LEGAL PROCEEDINGS
 
    e-Net, Inc. is not a party to any legal proceedings and, to the best of  its
information, knowledge and belief, none is contemplated or has been threatened.
 
                                 LEGAL MATTERS
 
    The  validity of the securities being offered hereby will be passed upon for
the Company by Thomas T. Prousalis,  Jr., Esq., 1919 Pennsylvania Avenue,  N.W.,
Suite  800, Washington,  D.C. 20006.  Mr. Prousalis  is the  beneficial owner of
900,000 shares of  Common Stock  of the Company.  See "Principal  Stockholders."
Certain  legal matters will  be passed upon  for the Underwriter  by Bernstein &
Wasserman, LLP, 950 Third Avenue, New York, New York 10022.
 
                                       60
<PAGE>
                                    EXPERTS
 
    The financial statements of  e-Net, Inc. as of  March 31, 1996, included  in
the  Registration Statement  and this  Prospectus have  been included  herein in
reliance on the report dated April 12, 1996, of Grant Thornton LLP,  Independent
Certified  Public Accountants, and upon the authority of such firm as experts in
accounting and auditing.
 
                             ADDITIONAL INFORMATION
 
    The Company has  filed with  the Commission an  SB-2 Registration  Statement
under  the Securities Act  of 1933, as  amended, with respect  to the securities
offered by  this  Prospectus.  This  Prospectus does  not  contain  all  of  the
information  set forth  in the  Registration Statement  and exhibits,  to all of
which reference is hereby  made. Statements contained in  this Prospectus as  to
the  contents of any contract or other  document referred to are not necessarily
complete; with  respect  to  each  such contract  or  other  document  filed  or
incorporated by reference as an exhibit to the Registration Statement, reference
is  made to the exhibit for a  more complete description of the matter involved,
and each such statement shall be deemed to be qualified in its entirety by  such
reference.  All of these documents may be inspected without charge at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450  Fifth
Street, N.W., Room 1024, Washington, D.C. 20549.
 
                                       61
<PAGE>
                         INDEX TO FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
 
<S>                                                                         <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS........................  F-2
 
FINANCIAL STATEMENTS
 
  Balance Sheet...........................................................  F-3
 
  Statement of Operations.................................................  F-4
 
  Statement of Cash Flows.................................................  F-5
 
  Statement of Stockholders' Equity.......................................  F-6
 
  Notes to Financial Statements...........................................  F-7
</TABLE>
 
                                      F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
Board of Directors
e-Net, Inc.
 
    We  have audited the  accompanying balance sheet of  e-Net, Inc. (a Delaware
Corporation) as of  March 31, 1996,  and the related  statements of  operations,
stockholders'  equity and cash flows for the period from beginning of operations
(June  8,  1995)  to  March  31,  1996.  These  financial  statements  are   the
responsibility  of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
 
    We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence  supporting
the  amounts and disclosures in the financial statements. An audit also includes
assessing the  accounting  principles used  and  significant estimates  made  by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
   
    In our  opinion, the  consolidated financial  statements referred  to  above
present  fairly, in all material respects, the financial position of e-Net, Inc.
as of March 31, 1996, and the results  of its operations and its cash flows  for
the  period from beginning  of operations (June  8, 1995) to  March 31, 1996, in
conformity with generally accepted accounting principles.
    
 
   
                                          GRANT THORNTON LLP
    
 
   
Vienna, Virginia
April 12, 1996
    
 
                                      F-2
<PAGE>
                                  E-NET, INC.
                                 BALANCE SHEET
                                 MARCH 31, 1996
                                     ASSETS
 
<TABLE>
<S>                                                                               <C>
CURRENT ASSETS
  Cash and cash equivalents.....................................................  $ 557,960
  Accounts receivable...........................................................     53,677
                                                                                  ---------
TOTAL CURRENT ASSETS............................................................    611,637
PROPERTY, PLANT AND EQUIPMENT, NET..............................................    134,285
                                                                                  ---------
                                                                                  $ 745,922
                                                                                  ---------
                                                                                  ---------
 
                           LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES
  Stockholder/Officer notes payable.............................................  $  45,000
  Accounts payable -- trade.....................................................      5,326
  Accrued liabilities...........................................................     22,787
  Deferred revenue..............................................................     20,000
                                                                                  ---------
TOTAL CURRENT LIABILITIES.......................................................     93,113
LONG-TERM DEBT..................................................................    500,000
                                                                                  ---------
TOTAL LIABILITIES...............................................................    593,113
 
STOCKHOLDERS' EQUITY
  Common stock, $.01 par value, 50,000,000 shares authorized, 7,500,000 shares
   outstanding..................................................................     75,000
  Stock subscriptions and notes receivable......................................   (310,000)
  Additional paid-in capital....................................................    924,865
  Retained deficit..............................................................   (537,056)
                                                                                  ---------
TOTAL STOCKHOLDERS' EQUITY......................................................    152,809
                                                                                  ---------
                                                                                  $ 745,922
                                                                                  ---------
                                                                                  ---------
</TABLE>
 
         The accompanying notes are an integral part of this statement.
 
                                      F-3
<PAGE>
   
                                  E-NET, INC.
                            STATEMENT OF OPERATIONS
      PERIOD FROM BEGINNING OF OPERATIONS (JUNE 8, 1995) TO MARCH 31, 1996
    
 
   
<TABLE>
<S>                                                                              <C>
SALES..........................................................................  $  293,876
 
OPERATING EXPENSES
  Cost of product sales and service............................................      88,360
  Selling, general and administrative..........................................     115,171
                                                                                 ----------
INCOME FROM OPERATIONS.........................................................      90,345
 
INTEREST AND FINANCING CHARGES
  Interest expense -- private placement........................................    (614,865)
  Interest expense.............................................................      (6,884)
  Other expenses...............................................................      (6,143)
  Interest Income..............................................................         491
                                                                                 ----------
LOSS BEFORE INCOME TAXES.......................................................    (537,056)
 
INCOME TAX PROVISION...........................................................      --
                                                                                 ----------
NET LOSS.......................................................................  $ (537,056)
                                                                                 ----------
                                                                                 ----------
PRO FORMA ADJUSTMENT TO REFLECT ADDITIONAL COMPENSATION EXPENSE................    (237,500)
                                                                                 ----------
PRO FORMA NET LOSS.............................................................    (774,556)
                                                                                 ----------
                                                                                 ----------
PRO FORMA LOSS PER SHARE.......................................................  $     (.09)
                                                                                 ----------
                                                                                 ----------
 
WEIGHTED AVERAGE SHARES OUTSTANDING............................................   8,500,000
</TABLE>
    
 
         The accompanying notes are an integral part of this statement.
 
                                      F-4
<PAGE>
                                  E-NET, INC.
                            STATEMENTS OF CASH FLOWS
      PERIOD FROM BEGINNING OF OPERATIONS (JUNE 8, 1995) TO MARCH 31, 1996
 
<TABLE>
<S>                                                                               <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss......................................................................  $(537,056)
                                                                                  ---------
  Adjustments to reconcile net loss to net cash from operating activities
    Interest expense -- private placement.......................................    614,865
    Depreciation and amortization...............................................     30,715
    Changes in operating assets and liabilities
      (Increase) in accounts receivable.........................................    (53,677)
      Increase in accounts payable and accrued liabilities......................     28,113
      Increase in deferred revenue..............................................     20,000
                                                                                  ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES.......................................    102,960
                                                                                  ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from shareholder/officer loans.......................................     30,000
  Payment of shareholder/officer loans..........................................    (25,000)
  Payment of notes payable arising from asset acquisition.......................    (50,000)
  Proceeds from Issuance of bridge notes payable................................    500,000
                                                                                  ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES.......................................    455,000
                                                                                  ---------
NET INCREASE IN CASH............................................................    557,960
CASH AT BEGINNING OF PERIOD.....................................................     --
                                                                                  ---------
CASH AT END OF PERIOD...........................................................  $ 557,960
                                                                                  ---------
                                                                                  ---------
 
SUPPLEMENTAL DISCLOSURES:
  Income Taxes Paid.............................................................  $  --
                                                                                  ---------
                                                                                  ---------
  Interest Paid.................................................................  $     688
                                                                                  ---------
                                                                                  ---------
</TABLE>
 
NONCASH INVESTING AND FINANCING ACTIVITIES
 
The Company acquired fixed assets of  $165,000 in exchange for notes payable  of
$90,000 and a capital contribution of $75,000.
 
The  Company issued  6,500,000 shares  of common  stock for  notes receivable of
$310,000.
 
         The accompanying notes are an integral part of this statement.
 
                                      F-5
<PAGE>
                                  E-NET, INC.
                       STATEMENT OF STOCKHOLDERS' EQUITY
      PERIOD FROM BEGINNING OF OPERATIONS (JUNE 8, 1995) TO MARCH 31, 1996
 
<TABLE>
<CAPTION>
                                          COMMON STOCK             STOCK
                                     -----------------------   SUBSCRIPTIONS   ADDITIONAL                   TOTAL
                                       NO. OF                    AND NOTES       PAID IN      RETAINED    STOCKHOLDERS
                                       SHARES       AMOUNT      RECEIVABLE       CAPITAL      DEFICIT       EQUITY
                                     -----------   ---------   -------------   -----------   ----------   ----------
<S>                                  <C>           <C>         <C>             <C>           <C>          <C>
Balance, inception
Initial capitalization.............    6,000,000   $  60,000   $    (60,000)   $   --        $   --       $  --
Contribution of assets from
 stockholder/officer...............      --           --            --              75,000       --          75,000
Sale of common stock for note......      500,000       5,000       (250,000)       245,000       --          --
Issuance of common stock and
 additional capital associated with
 the financing cost from the
 issuance of bridge units..........    1,000,000      10,000        --             604,865       --         614,865
Net loss...........................      --           --            --             --          (537,056)   (537,056)
                                     -----------   ---------   -------------   -----------   ----------   ----------
Balance, March 31, 1996............    7,500,000   $  75,000   $   (310,000)   $   924,865   $ (537,056)  $ 152,809
                                     -----------   ---------   -------------   -----------   ----------   ----------
                                     -----------   ---------   -------------   -----------   ----------   ----------
</TABLE>
 
         The accompanying notes are an integral part of this statement.
 
                                      F-6
<PAGE>
                                  E-NET, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1996
 
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
    NATURE OF OPERATIONS
 
    e-Net,   Inc.  was  incorporated   on  January  9,   1995  with  an  initial
capitalization of 6,000,000  shares of  Common Stock  after giving  effect to  a
600:1  stock split in January 1996. The  Company commenced operations on June 8,
1995. The  Company  develops, markets,  and  supports open  client,  server  and
integrated  applications software that enables local, national and international
telephone communications, information  exchange and commerce  over the  Internet
and  private  networks.  The  Company  also sells  other  products  used  in the
management and billing of computer network, telephone and computer usage.
 
    The Company's operations to date have concentrated on continuing development
of its  products,  establishing  acceptance  of its  software  products  in  the
telecommunications  industry, providing  services to its  existing customer base
and securing financing necessary to  fund development, operations and  expansion
of  its  business.  Management believes  cash  flow provided  by  operations and
proceeds of  $1,000,000  from bridge  financing  described  in Note  B  will  be
sufficient  to sustain  operations in fiscal  1997. Additional  financing may be
necessary to provide for continued product development and further expansion  of
operations.  While assurance cannot be given as  to its success, the Company has
entered into a letter  of intent in  March 1996 with an  underwriter for a  firm
commitment offering of securities as described in Note G.
 
    REVENUE RECOGNITION
 
    Revenue  is recognized on the sale of software products upon shipment unless
future obligations exist wherein a portion of the revenue is deferred until  the
obligation  is satisfied. Revenue from services rendered is recognized either as
the services are  rendered based  upon fixed  hourly rates  or at  contractually
determined fixed monthly fees. Approximately 20% of the total revenue recognized
was  derived from the sale  of software products. The  remaining revenue was the
result of providing services.
 
   
    For the period ending March 31, 1996, the Company derived 32%, 29%, 16%  and
13% of its sales from four customers, respectively.
    
 
    ACCOUNTS RECEIVABLE
 
    Accounts  receivable are  stated at the  unpaid balances,  less allowance on
uncollectible accounts, if any. Management periodically reviews its  outstanding
accounts   receivable  to  assess  collectibility  of  balances  based  on  past
experience and  evaluation  of  current  adverse  situations  which  may  affect
collectibility of receivables. At March 31, 1996, management deemed all balances
fully collectible and did not establish an allowance for uncollectible accounts.
 
    USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
 
    Preparation  of 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 financial statements and
the reported  amounts of  revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.
 
    PROPERTY AND EQUIPMENT
 
    Property  and  equipment  are  carried  at cost,  net  of  an  allowance for
accumulated depreciation and amortization. Depreciation is computed on equipment
and furniture, using a declining balance method over a five-year period.
 
                                      F-7
<PAGE>
                                  E-NET, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 1996
 
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    EARNINGS PER SHARE
 
   
    Earnings per share for each period presented are based upon weighted average
shares outstanding  during  the  period  from June  1995,  the  date  operations
commenced, through March 31, 1996, adjusted retroactively, where applicable, for
the  effect of  a 600:1  stock split  in January  1996. Weighted  average shares
outstanding includes the  effect of  the issuance  of 500,000  shares of  Common
Stock  in March 1996,  and the issuance  of Bridge Units  containing two million
shares of Common Stock and four million  warrants in March and April 1996 as  if
they were outstanding for the entire period presented. The warrants are excluded
from  the calculation as they are anti-dilutive when applying the treasury stock
method.
    
 
NOTE B -- SIGNIFICANT TRANSACTIONS
 
    PRIVATE PLACEMENT TRANSACTIONS
 
    In March  1996, the  Company issued  500,000  shares of  Common Stock  to  a
nonaffiliated  investment banking  firm in  a private  placement transaction for
aggregate consideration of $250,000, represented  by a full recourse  promissory
note  for the entire purchase price. The promissory note is due in full in March
2001 and bears interest, payable upon maturity at 8% per annum.
 
   
    In March 1996, in a transaction arranged by the underwriter of the Company's
initial public  offering, the  Company was  loaned $500,000  by a  nonaffiliated
person.  Principal and interest computed at the  rate of eight percent per annum
becomes due at the earlier  of June 1, 1997, or  the closing date of an  initial
public  offering of securities of the Company which is expected to occur in June
1996. As  additional consideration  for  making such  loan, the  Company  issued
500,000  Units ("Bridge Units") each containing  two shares of Common Stock, two
Class A Warrants and two  Class B Warrants to the  lender. The Bridge Units  are
intended  to be registered in  the proposed public offering  described in Note G
and will be  restricted from sale  or other  transfer by the  underwriter for  a
period  of 18 months following the offering. Inasmuch as these Bridge Units have
been issued in contemplation of the proposed offering, financing expense, valued
using the proposed offering  price per share, related  to the issuance of  these
securities  of $3,500,000 will be recorded between  the date of issuance and the
anticipated offering date, with a corresponding credit to paid-in capital. As of
March 31, 1996, the Company had accrued $614,865 of this financing expense.  The
Company has recorded the loan of $500,000 as a noncurrent liability at March 31,
1996. It is not practicable to estimate the fair value of this debt as there are
no quoted market prices for debt with similar terms.
    
 
   
    In April 1996, in a transaction arranged by the underwriter of the Company's
initial  public offering, the Company was loaned $500,000 by three nonaffiliated
persons. Principal and interest computed at the rate of eight percent per  annum
becomes  due at the earlier of  June 1, 1997, or the  closing date of an initial
public offering of securities of the Company which is expected to occur in  June
1996.  As  additional consideration  for making  such  loan, the  Company issued
500,000 Bridge Units identical to those issued in March 1996 as described above.
Inasmuch as these Bridge Units have been issued in contemplation of the proposed
offering, financing  expense related  to  the issuance  of these  securities  of
$3,500,000  will be  recorded between the  date of issuance  and the anticipated
offering date, with a corresponding credit to paid-in capital.
    
 
    ACQUISITIONS
 
    In June 1995, the Company acquired the rights and title to certain  tangible
assets  comprised  primarily  of  computer  equipment  and  peripherals, certain
products and intangible assets  related thereto, and  contract rights in  return
for  a promissory  note of  $50,000 and the  release of  the seller's obligation
valued at $75,000 for compensation formerly due to the president of the Company.
The
 
                                      F-8
<PAGE>
                                  E-NET, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 1996
 
NOTE B -- SIGNIFICANT TRANSACTIONS (CONTINUED)
Company allocated the entire purchase price  of $125,000 to the tangible  assets
acquired  based  upon  their  fair  value. The  portion  of  the  purchase price
attributable  to  the  release  of  the  compensation  obligation  due  to   the
stockholder/officer  was  credited to  additional  paid in  capital.  The entire
principal balance due under the promissory note and interest thereon was  repaid
by the Company in March 1996.
 
   
    In March 1996, the Company acquired the right, title and interest to certain
inventions  and related patents ("Technology") from two individuals who are also
stockholders of the  Company in  an assignment of  patent rights  in return  for
future  royalties to each individual computed quarterly equal to 2 1/2% of gross
profit from products sold related to the acquired Technology. Royalties will  be
expensed  in the  period in which  related sales are  recognized. The assignment
agreement provides for the right of the individuals to repurchase the Technology
if the  Company fails  to make  reasonable efforts  to develop  and exploit  the
market  opportunities made available  by the Technology.  The agreement provides
that the Company allocate $1,000,000 of  paid in capital to develop and  exploit
the  market  opportunities  of  the  Technology by  December  31,  1996,  or the
Technology will be subject to repurchase by the inventors of the Technology.
    
 
NOTE C -- PROPERTY AND EQUIPMENT
    Property and equipment consist of the following at March 31, 1996:
 
<TABLE>
<S>                                                                <C>
Furniture and office equipment...................................  $ 125,000
Airplane.........................................................     40,000
                                                                   ---------
                                                                     165,000
Less accumulated depreciation....................................    (30,715)
                                                                   ---------
Property and equipment -- net....................................  $ 134,285
                                                                   ---------
                                                                   ---------
</TABLE>
 
NOTE D -- STOCKHOLDER/OFFICER NOTES PAYABLE
    Stockholder notes payable consist of the following as of March 31, 1996:
 
<TABLE>
<S>                                                                 <C>
Loan from an officer of the Company, bearing interest at 8% per
 annum with principal and interest due June 3, 1996. The note is
 collateralized by an airplane....................................  $  40,000
Loan from an officer of the Company, bearing interest at 10% per
 annum with payment of principal and interest due June 15,
 1996.............................................................      5,000
                                                                    ---------
                                                                    $  45,000
                                                                    ---------
                                                                    ---------
</TABLE>
 
    Management's estimate of the fair value of these liabilities is the carrying
value.
 
NOTE E -- INCOME TAXES
    The income tax  provision consists  of the  following for  the period  ended
March 31, 1996:
 
<TABLE>
<S>                                                                 <C>
Deferred
  Federal.........................................................  $   2,267
  State...........................................................        426
  Valuation allowance.............................................     (2,693)
                                                                    ---------
Net provision.....................................................  $  --
                                                                    ---------
                                                                    ---------
</TABLE>
 
                                      F-9
<PAGE>
                                  E-NET, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 1996
 
NOTE E -- INCOME TAXES (CONTINUED)
    The  effective tax rate  for the period  ended March 31,  1996 was (7.4)%. A
reconciliations between  the  United  States  federal  statutory  rate  and  the
effective tax rate follows:
 
<TABLE>
<S>                                                               <C>
Tax (benefit) at U.S. federal statutory rates...................  $(182,599)
Increase (decrease) resulting from:
  State tax (benefit)...........................................    (21,267)
  Permanent difference -- interest expense private placement....    200,812
  Other permanent differences...................................        361
  Valuation allowance...........................................      2,693
                                                                  ---------
  Income tax provision..........................................  $  --
                                                                  ---------
                                                                  ---------
</TABLE>
 
    The  Company's reporting period for tax purposes is the calendar year. Taxes
on the  net loss  for  the period  January through  March  is reflected  in  the
calculation of the deferred tax asset. A valuation allowance has been recognized
in an amount equal to the deferred tax asset.
 
    The  tax  effect of  temporary differences  between the  financial statement
amounts and tax bases of  assets and liabilities which  give rise to a  deferred
tax asset is as follows at March 31, 1996:
 
<TABLE>
<S>                                                                 <C>
Net loss for January 1 through March 31, 1996.....................  $  31,997
Accounts Receivable...............................................    (28,704)
Accounts Payable and Accrued Expenses.............................        893
Depreciation expense..............................................     (1,493)
Valuation allowance...............................................     (2,693)
                                                                    ---------
Deferred taxes payable............................................  $  --
                                                                    ---------
                                                                    ---------
</TABLE>
 
NOTE F -- COMMITMENTS AND CONTINGENT LIABILITIES
 
    LEASE COMMITMENT
 
    The  Company leases  office space  under an  month to  month operating lease
which provides for monthly rent payments of $1,900.
 
   
    EMPLOYMENT AGREEMENT
    
 
    The Company entered  into an  employment agreement effective  April 1,  1996
with  an officer. Minimum future annual  salary commitments of the Company under
the agreements are as follows:
 
<TABLE>
<CAPTION>
              YEAR ENDING
               MARCH 31,                    SALARY        BONUS         TOTAL
- ----------------------------------------  -----------  -----------  -------------
<S>                                       <C>          <C>          <C>
   1997.................................  $   175,000  $    87,500  $     262,500
   1998.................................      175,000       87,500        262,500
   1999.................................      175,000       87,500        262,500
   2000.................................      175,000       87,500        262,500
   2001.................................      175,000       87,500        262,500
                                          -----------  -----------  -------------
                                          $   875,000  $   437,500  $   1,312,500
                                          -----------  -----------  -------------
                                          -----------  -----------  -------------
</TABLE>
 
    The agreement also provides for bonuses upon certain performance criteria of
the Company and  the determination of  the Board of  Directors. Pursuant to  the
agreement,  employment may  be terminated  by the Company  with cause  or by the
executive   with    or    without    good    reason.    Termination    by    the
 
                                      F-10
<PAGE>
                                  E-NET, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 1996
 
NOTE F -- COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
Company  without cause, or by  the executive for good  reason, would subject the
Company to liability  for in an  amount equal  to six months  of the  terminated
executive's salary at the date of termination plus comparable insurance benefits
being received prior to termination.
 
   
    The  accompanying financial statements reflect compensation paid and accrued
for services rendered,  if any, by  the officer  at the salary  level which  the
Company believes is reasonable under the circumstances. PRO FORMA data presented
in the accompanying statement of operations reflects the result of operations on
a  PRO FORMA basis had  the officer been employed by  the Company for the entire
period at a compensation level equal to that contained in the above agreement.
    
 
NOTE G -- PROPOSED INITIAL PUBLIC OFFERING
   
    In March  1996,  the  Company  entered  into a  letter  of  intent  with  an
underwriter  for a  firm commitment  offering of 1,000,000  Units at  a price of
$7.00 per  Unit. Each  Unit  consists of  two shares  of  Common Stock  and  two
redeemable  Class  A  Warrants.  The  Class  A  Warrants  shall  be  exercisable
commencing one year after the date of the prospectus and entitles the holder  to
purchase  one share  of Common  Stock at  $4.00 per  share during  the four year
period commencing one year from the effective date of the offering. The Class  A
Warrants are redeemable under certain conditions.
    
 
   
    The  Company  paid  $50,000 in  April  1996 to  an  attorney who  is  also a
stockholder of the Company  in return for services  rendered in connection  with
the offering.
    
 
   
NOTE H -- SUBSEQUENT EVENT
    
   
    In  January 1996, the Company signed a  letter of intent to purchase certain
assets from an entity of which two of the three owners are also stockholders  of
the  Company. These assets  are prototype boards,  proprietary software code and
existing  research  and  development  relating  to  specific  computer  software
products.  In May 1996, the Company completed  the purchase for cash of $50,000.
Management intends to allocate the entire purchase price of $50,000 to  research
and  development expense and therefore, record  a charge to operations in fiscal
year 1997 for that amount. The entity  from which the assets are intended to  be
acquired  is  dormant and  contains no  assets other  than the  above intangible
assets. As a result, condensed financial statements of this entity have not been
presented.
    
 
                                      F-11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
    NO  DEALER,  SALESMAN  OR  OTHER  PERSON HAS  BEEN  AUTHORIZED  TO  GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS  NOT CONTAINED IN THIS PROSPECTUS  IN
CONNECTION  WITH THE OFFER  MADE HEREBY. IF  GIVEN OR MADE,  SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT  CONSTITUTE AN OFFER OF  ANY SECURITIES OTHER THAN  THE
SECURITIES  TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION IN
WHICH SUCH AN OFFER WOULD BE UNLAWFUL. ANY MATERIAL MODIFICATION OF THE OFFERING
WILL BE ACCOMPLISHED BY MEANS OF AN AMENDMENT TO THE REGISTRATION STATEMENT.  IN
ADDITION,  THE RIGHT IS  RESERVED BY THE  COMPANY TO CANCEL  ANY CONFIRMATION OF
SALE PRIOR  TO  THE  RELEASE OF  FUNDS,  IF,  IN THE  OPINION  OF  THE  COMPANY,
COMPLETION OF SUCH SALE WOULD VIOLATE FEDERAL OR STATE SECURITIES LAWS OR A RULE
OR  POLICY OF THE NATIONAL ASSOCIATION  OF SECURITIES DEALERS, INC., WASHINGTON,
D.C. 20006.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Prospectus Summary........................................................    3
Risk Factors..............................................................    8
Use of Proceeds...........................................................   20
Dilution..................................................................   22
Capitalization............................................................   23
Dividend Policy...........................................................   23
Management's Discussion and Analysis or Plan of Operation.................   24
Business..................................................................   28
Management................................................................   41
Principal Stockholders....................................................   46
Certain Transactions......................................................   47
Description of Securities.................................................   49
Selling Security-holders..................................................   54
Underwriting..............................................................   56
Legal Proceedings.........................................................   60
Legal Matters.............................................................   60
Experts...................................................................   60
Additional Information....................................................   60
Index to Financial Statements.............................................  F-1
Report of Independent Certified Public Accountants........................  F-2
</TABLE>
    
 
                            ------------------------
 
    UNTIL                  , 1996  (25 DAYS  AFTER THE  EFFECTIVE DATE  OF  THIS
PROSPECTUS),   ALL  BROKER-DEALERS  EFFECTING  TRANSACTIONS  IN  THE  REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING  IN THIS DISTRIBUTION, MAY BE  REQUIRED
TO  DELIVER A PROSPECTUS.  THIS IS IN  ADDITION TO THE  OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                                1,000,000 UNITS
 
                                  E-NET, INC.
 
                             ---------------------
 
                                   PROSPECTUS
 
                             ---------------------
 
                             STRATTON OAKMONT, INC.
 
                                          , 1996
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
 
                                2,000,000 SHARES
                           2,000,000 CLASS A WARRANTS
 
                                  E-NET, INC.
 
    This  Prospectus relates to the offering of 2,000,000 shares of Common Stock
and 2,000,000 Class A Warrants offered by    persons who are nonaffiliated  with
the Company, hereinafter collectively referred to as "Selling Security-holders,"
in connection with a bridge loan to the Company of $1,000,000 in March and April
1996.  The Common Stock and Class A Warrants may not be transferred for eighteen
(18) months from the  date hereof unless permitted  sooner by Stratton  Oakmont,
Inc.,  and such  securities include  a legend  with such  restrictions. Stratton
Oakmont, Inc. may release the securities held by the Selling Security-holders at
any time after  all securities subject  to the Over-allotment  Option have  been
sold or such option has expired. One Class A Warrant entitles the holder thereof
to purchase one share of Common Stock at a price of $4.00 per share for a period
of  four  years commencing  one  year from  the  date hereof  ("Class  A Warrant
Exercise Date") at  which time the  Class A  Warrants will expire.  The Class  A
Warrants  are redeemable by the Company for  $.05 per Warrant, at any time after
       , 1998,  upon thirty  (30) days'  prior written  notice, if  the  average
closing  price or bid  price of the  Common Stock, as  reported by the principal
exchange on which the Common Stock is traded, Nasdaq SmallCap Market  ("Nasdaq")
or  the National Quotation Bureau,  Incorporated, as the case  may be, equals or
exceeds $9.00 per share,  for any twenty  (20) trading days  within a period  of
thirty  (30) days ending within ten (10)  days of the notice of redemption. Upon
thirty (30) days' written  notice to all  holders of the  Class A Warrants,  the
Company shall have the right to reduce the exercise price and/or extend the term
of the Class A Warrants in compliance with the requirements of Rule 13e-4 to the
extent    applicable.   See    "Description   of    Securities"   and   "Selling
Security-holders."
 
    The Common Stock and Class A Warrants offered by this Prospectus may be sold
from time to time by the  Selling Security-holders, or by their transferees.  No
underwriting  arrangements  have  been  entered into  by  the  Selling Security-
holders. The distribution of the securities by the Selling Security-holders  may
be   effected  in  one  or  more  transactions   that  may  take  place  on  the
over-the-counter market including ordinary broker's transactions,
privately-negotiated transactions or through  sales to one  or more dealers  for
resale  of such shares as principals at  market prices prevailing at the time of
sale, at  prices related  to  such prevailing  market  prices or  at  negotiated
prices.  Usual  and  customary  or  specifically  negotiated  brokerage  fees or
commissions may be paid by the Selling Security-holders in connection with sales
of such securities.
 
    The Selling Security-holders and intermediaries through whom such securities
may be sold may be deemed "underwriters" within the meaning of the Security  Act
of  1933, as amended  ("Securities Act") with respect  to the securities offered
and any  profits realized  or commissions  received may  be deemed  underwriting
compensation.  The Company has agreed  to indemnify the Selling Security-holders
against certain liabilities, including liabilities under the Securities Act.
 
    On the  date hereof,  the Company  commenced pursuant  to this  registration
statement  an initial public  offering of 1,000,000  Units, each Unit comprising
two shares of Common Stock and two Class A Warrants. See "Concurrent Sales."
 
    The Company  will not  receive any  of the  proceeds from  the sale  of  the
securities   by  the  Selling  Security-holders.   All  costs  incurred  in  the
registration of the securities of  the Selling Security-holders are being  borne
by the Company. See "Selling Security-holders."
 
    Stratton  Oakmont, Inc.  from time  to time will  become a  market maker and
otherwise effect  transactions  in the  securities  of this  offering.  Stratton
Oakmont,  Inc., if it  participates in the  market, may become  an influence and
thereafter a factor of increasing importance  in the market for the  securities.
However, there is no assurance that Stratton Oakmont, Inc. will or will continue
to  be a  dominating influence.  The prices  and liquidity  of the  Units may be
significantly affected  by  the degree,  if  any, of  Stratton  Oakmont,  Inc.'s
participation  in  such market  as a  market maker.  Stratton Oakmont,  Inc. may
discontinue such market making activities at any time or from time to time.
 
    The Company does not presently file  reports and other information with  the
Securities and Exchange Commission ("Commission"). However, following completion
of  the initial public offering, the Company intends to furnish its stockholders
with annual reports  containing audited  financial statements  and such  interim
reports,  in each case as it  may determine to furnish or  as may be required by
law.
 
AN INVESTMENT IN THE  SECURITIES OFFERED HEREBY INVOLVES  A HIGH DEGREE OF  RISK
AND  IMMEDIATE SUBSTANTIAL DILUTION OF THE BOOK  VALUE OF THE COMMON STOCK AND
  SHOULD BE CONSIDERED  ONLY BY  PERSONS WHO CAN  AFFORD THE  LOSS OF  THEIR
            ENTIRE INVESTMENT. SEE "RISK FACTORS" AND "DILUTION."
 
THESE  SECURITIES HAVE  NOT BEEN APPROVED  OR DISAPPROVED BY  THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
   OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR  ADEQUACY
     OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
                                    OFFENSE.
 
                            ------------------------
 
                 The date of this Prospectus is        , 1996.
<PAGE>
                                  THE OFFERING
 
<TABLE>
<S>                                       <C>
Securities Offered by Company(1)(4).....  1,000,000 Units
Securities Offered by Selling             2,000,000 Shares
Security-holders(2).....................  2,000,000 Class A Warrants
Shares of Common Stock Outstanding Prior  8,500,000 Shares
to Offering.............................
Shares of Common Stock Outstanding After  10,500,000 Shares
Offering(3).............................
Comparative Share Ownership Upon
Completion of Offering:
  Present Stockholders (8,500,000         80.95%
   Shares)(2)(5)........................
  Public Stockholders (2,000,000          19.05%
   Shares)(2)(5)........................
Use of Net Proceeds of Sale of            Administrative expenses, operating
Securities Offered by Company...........  costs and working capital, including
                                          software support and development,
                                          marketing and sales, mergers and
                                          acquisitions and the repayment of
                                          debt. See "Use of Proceeds."
Proposed Nasdaq SmallCap Market           EENTU
Symbols.................................  EENT
                                          EENTW
</TABLE>
 
- ------------------------
(1) The  Company is offering 1,000,000 Units at  a price of $7.00 per Unit. Each
    Unit consists  of two  shares of  Common Stock  and two  redeemable Class  A
    Warrants.  The Class  A Warrants  shall be  exercisable commencing  one year
    after the date of the Prospectus.  Each Class A Warrant entitles the  holder
    to  purchase one share  of Common Stock  at $4.00 per  share during the four
    year period commencing one year from the effective date hereof. The Class  A
    Warrants are redeemable upon certain conditions. Should the Class A Warrants
    be  exercised, of which there is no  assurance, the Company will receive the
    proceeds  therefrom  aggregating  up   to  an  additional  $8,000,000.   See
    "Description of Securities."
 
(2) This  offering also includes 2,000,000 shares  of Common Stock and 2,000,000
    Class A  Warrants  offered by  the  Selling Security-holders.  The  Class  A
    Warrants  are identical to the Class A  Warrants included in the Units being
    offered by the Company. The shares of Common Stock and Class A Warrants held
    by the Selling Security-holders may be sold commencing eighteen (18)  months
    from  the date of  this Prospectus, subject  to earlier release  at the sole
    discretion of Stratton Oakmont, Inc.,  and such securities include a  legend
    with  such restrictions. Stratton  Oakmont, Inc. may  release the securities
    held by  the  Selling Security-holders  at  any time  after  all  securities
    subject  to  the Over-allotment  Option have  been sold  or such  option has
    expired. The resale of  the securities of  the Selling Security-holders  are
    subject  to Prospectus delivery and other requirements of the Securities Act
    of 1933, as amended. Sales of such securities or the potential of such sales
    at any  time  may  have an  adverse  effect  on the  market  prices  of  the
    securities offered hereby. See "Selling Security-holders."
 
(3) Assumes  no exercise of  (i) the Class  A Warrants offered  hereby; (ii) the
    Underwriter's Over-allotment Option  to purchase  up to  150,000 Units;  and
    (iii) the Underwriter's Purchase Option to purchase up to 100,000 Units. See
    "Description of Securities" and "Underwriting."
 
(4) The  public offering  price of  the Units and  the exercise  price and other
    terms of the Class  A Warrants were  arbitrarily determined by  negotiations
    between the Company and the Underwriter and do not necessarily relate to the
    assets,  book value  or results  of operations of  the Company  or any other
    established criteria of value. See "Underwriting."
 
(5) See "Dilution."
 
                                       2
<PAGE>
                                CONCURRENT SALES
 
    On  the  date  of  this  Prospectus,  a  registration  statement  under  the
Securities  Act with respect to an  underwritten public offering ("Offering") of
1,000,000  Units  ("Units")  by  the  Company  was  declared  effective  by  the
Securities  and Exchange Commission ("Commission"),  Washington, D.C. 20549, and
the Company commenced the sale of Units offered thereby. The Units are comprised
of 2,000,000 shares of Common Stock  and 2,000,000 Class A Warrants to  purchase
an  additional 2,000,000  shares of Common  Stock (without giving  effect to the
Over-allotment Option  granted to  the Underwriter  of the  offering). Sales  of
securities  under this  Prospectus by the  Selling Security-holders  or even the
potential of such sales may  have an adverse effect on  the market price of  the
Company's securities.
 
                            SELLING SECURITY-HOLDERS
 
   
    The  registration statement,  of which  this Prospectus  forms a  part, also
covers the registration of 2,000,000 shares of Common Stock and 2,000,000  Class
A  Warrants  offered by  four persons  who are  nonaffiliated with  the Company,
hereinafter collectively  referred to  as  "Selling Security-holders,"  to  wit:
Edward  Ratkovich  ($500,000),  Robert  Foise  ($250,000),  Armstrong Industries
($200,000) and Martin Sumichrast ($50,000). General Ratkovich and Mr. Sumichrast
are officers, directors  and principal stockholders  of Nasdaq listed  companies
recently  underwritten by the Underwriter. The Class A Warrants are identical to
the Class A Warrants  included in the  Units being offered  by the Company.  The
securities  held by the Selling Security-holders may be sold commencing eighteen
(18) months from the date of this Prospectus, subject to earlier release at  the
sole  discretion of the  Underwriter, and such securities  include a legend with
such restrictions.  The  Underwriter may  release  the securities  held  by  the
Selling  Security-holders  at  any  time after  all  securities  subject  to the
Over-allotment Option have  been sold  or such  option has  expired. Should  the
Underwriter  release  the securities  held by  the Selling  Security-holders for
resale, it is  uncertain whether the  securities will be  offered for sale.  The
resale  of  the  securities  of  the  Selling  Security-holders  are  subject to
Prospectus delivery and  other requirements of  the Securities Act  of 1933,  as
amended. Sales of such securities or the potential of such sales at any time may
have an adverse effect on the market prices of the securities offered hereby.
    
 
    In  March and April 1996,  the Company borrowed $1,000,000  in a bridge loan
from the Selling  Security-holders at the  rate of eight  percent simple  annual
interest,  which is due and payable at the closing of this offering from the net
proceeds of this offering. 2,000,000 shares  of Common Stock, 2,000,000 Class  A
Warrants  and 2,000,000  Class B Warrants  were issued to  the Selling Security-
holders in further consideration of the bridge loan. The Class A Warrants issued
to the Selling Security-holders are identical  to the Class A Warrants  included
in  the Units being offered by the Company.  The Class B Warrants, which are not
being registered  in  this offering,  are  identical  to the  Class  A  Warrants
included  in the  Units being  offered by the  Company except  that the exercise
price is  $4.20. The  shares of  Common Stock  and Class  A Warrants  are  being
registered  as part of  this offering. The  Company will not  receive any of the
proceeds  from  the  sale  of  the  securities  being  offered  by  the  Selling
Security-holders.  The Class A Warrants  are redeemable upon certain conditions.
Should the Class A Warrants  be exercised, of which  there is no assurance,  the
Company  will receive  the proceeds  therefrom aggregating  up to  an additional
$8,000,000.
 
   
    The 2,000,000 shares  of Common  Stock and  2,000,000 Class  A Warrants  are
being  offered by  the Selling  Security-holders under  an alternate Prospectus.
Prior to making the bridge loan to the Company, the Selling Security-holders did
not  own  any   other  securities   of  the   Company.  None   of  the   Selling
Security-holders  of the Company  are otherwise affiliated  with the Company, at
the time of making the bridge loan, at the time of this offering or at any other
time. The  Company believes  that its  financial transactions  with the  Selling
Security-holders  served a  legitimate business purpose,  I.E., providing needed
working capital  for  the  Company,  and were  fair  and  reasonable  under  the
circumstances  since  the transactions  were  highly speculative.  The Company's
financial transactions with the
    
 
                                       3
<PAGE>
Selling  Security-holders  were  managed  by  Stratton  Oakmont,  Inc.  and   no
commissions  or  other  remuneration  were paid  to  Stratton  Oakmont,  Inc. in
connection with such transactions.  See "Certain Transactions" and  "Description
of Securities."
 
    The  securities offered hereby may be sold from time to time directly by the
Selling Security-holders. Alternatively, the  Selling Security-holders may  from
time  to time offer such securities through underwriters, dealers or agents. The
distribution of securities by  the Selling Security-holders  may be effected  in
one  or more  transactions that may  take place on  the over-the-counter market,
including ordinary broker's  transactions, privately-negotiated transactions  or
through  sales  to one  or  more broker-dealers  for  resale of  such  shares as
principals, at market prices prevailing at  the time of sale, at prices  related
to such prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Security-holders  in  connection  with  such sales  of  securities.  The Selling
Security-holders and intermediaries through whom such securities are sold may be
deemed "underwriters"  within  the  meaning  of the  Act  with  respect  to  the
securities  offered, and  any profits  realized or  commissions received  may be
deemed underwriting compensation.
 
    At the time a particular  offer of securities is made  by or on behalf of  a
Selling   Security-holder,  to  the  extent   required,  a  Prospectus  will  be
distributed which will  set forth  the number of  shares being  offered and  the
terms  of the offering, including the name or names of any underwriters, dealers
or agents,  if  any, the  purchase  price paid  by  any underwriter  for  shares
purchased  from the  Selling Security-holder  and any  discounts, commissions or
concessions allowed or reallowed  or paid to dealers,  and the proposed  selling
price to the public.
 
    Under  the Securities Exchange Act of 1934, as amended ("Exchange Act"), and
the regulations thereto, any person engaged in a distribution of the  securities
of  the  Company offered  by this  Prospectus may  not simultaneously  engage in
market-making activities with respect to  such securities of the Company  during
the  applicable "cooling  off" period (nine  days) prior to  the commencement of
such distribution. In addition, and without limiting the foregoing, the  Selling
Security-holders  will be subject  to applicable provisions  of the Exchange Act
and the rules  and regulations  thereunder, including  without limitation,  Rule
10b-6  and  10b-7, in  connection with  transactions  in such  securities, which
provisions may limit the timing of purchases and sales of such securities by the
Selling Security-holders.
 
    Sales of securities by the Selling Security-holders or even the potential of
such sales  may likely  have  an adverse  effect on  the  market prices  of  the
securities  offered hereby. Following the closing of this offering, the publicly
tradeable securities of the Company  ("public float"), including this  offering,
will  be  4,000,000  shares of  Common  Stock  and 4,000,000  Class  A Warrants,
provided, however, that 2,000,000 shares of  Common Stock and 2,000,000 Class  A
Warrants owned by the Selling Security-holders are not transferable for eighteen
(18)  months commencing  on the  effective date  of this  Prospectus or  at such
earlier date as may be permitted by Stratton Oakmont, Inc., and such  securities
include a legend with such restrictions. Stratton Oakmont, Inc. may release such
securities held by the Selling Security-holders at any time after all securities
subject  to the Over-allotment Option have been sold or such option has expired.
The resale of  the securities  of the  Selling Security-holders  are subject  to
Prospectus  delivery and  other requirements of  the Securities Act  of 1933, as
amended. Sales of such securities or the potential of such sales at any time may
have an adverse effect on the market prices of the securities offered hereby.
 
                                       4
<PAGE>
                              PLAN OF DISTRIBUTION
 
    The securities offered hereby may be sold from time to time directly by  the
Selling  Security-holders. Alternatively, the  Selling Security-holders may from
time to time offer such securities through underwriters, dealers or agents.  The
distribution  of securities by  the Selling Security-holders  may be effected in
one or more  transactions that may  take place on  the over-the-counter  market,
including  ordinary broker's transactions,  privately-negotiated transactions or
through sales  to  one or  more  broker-dealers for  resale  of such  shares  as
principals, including Stratton Oakmont, Inc., at market prices prevailing at the
time  of  sale,  at  prices  related to  such  prevailing  market  prices  or at
negotiated prices. Usual and customary or specifically negotiated brokerage fees
or commissions may
be paid  by  the Selling  Security-holders  in  connection with  such  sales  of
securities.  The Selling  Security-holders and intermediaries  through whom such
securities are  sold may  be deemed  "underwriters" within  the meaning  of  the
Securities  Act with respect to the securities offered, and any profits realized
or commissions received may be deemed underwriting compensation.
 
    At the time a particular  offer of securities is made  by or on behalf of  a
Selling   Security-holder,  to  the  extent   required,  a  Prospectus  will  be
distributed which will set forth the number of shares and warrants being offered
and the terms of the offering, including the name or names of any  underwriters,
dealers or agents, if any, the purchase price paid by any underwriter for shares
and  warrants  purchased from  the  Selling Security-holder  and  any discounts,
commissions or concessions  allowed or  reallowed or  paid to  dealers, and  the
proposed selling price to the public.
 
    Under  the Securities Exchange Act of 1934, as amended ("Exchange Act"), and
the regulations thereto, any person engaged in a distribution of the  securities
of  the  Company offered  by this  Prospectus may  not simultaneously  engage in
market-making activities with respect to  such securities of the Company  during
the  applicable "cooling  off" period (nine  days) prior to  the commencement of
such distribution. In addition, and without limiting the foregoing, the  Selling
Security-holders  will be subject  to applicable provisions  of the Exchange Act
and the rules  and regulations  thereunder, including  without limitation,  Rule
10b-6  and  10b-7, in  connection with  transactions  in such  securities, which
provisions may limit the timing of purchases and sales of such securities by the
Selling Security-holders.
 
                                       5
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
    NO  DEALER,  SALESMAN  OR  OTHER  PERSON HAS  BEEN  AUTHORIZED  TO  GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS  NOT CONTAINED IN THIS PROSPECTUS  IN
CONNECTION  WITH THE OFFER  MADE HEREBY. IF  GIVEN OR MADE,  SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT  CONSTITUTE AN OFFER OF  ANY SECURITIES OTHER THAN  THE
SECURITIES  TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION IN
WHICH SUCH AN OFFER WOULD BE UNLAWFUL. ANY MATERIAL MODIFICATION OF THE OFFERING
WILL BE ACCOMPLISHED BY MEANS OF AN AMENDMENT TO THE REGISTRATION STATEMENT.  IN
ADDITION,  THE RIGHT IS  RESERVED BY THE  COMPANY TO CANCEL  ANY CONFIRMATION OF
SALE PRIOR  TO  THE  RELEASE OF  FUNDS,  IF,  IN THE  OPINION  OF  THE  COMPANY,
COMPLETION OF SUCH SALE WOULD VIOLATE FEDERAL OR STATE SECURITIES LAWS OR A RULE
OR  POLICY OF THE NATIONAL ASSOCIATION  OF SECURITIES DEALERS, INC., WASHINGTON,
D.C. 20006.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Prospectus Summary........................................................    3
Risk Factors..............................................................    8
Use of Proceeds...........................................................   20
Dilution..................................................................   22
Capitalization............................................................   23
Dividend Policy...........................................................   23
Management's Discussion and Analysis or Plan of Operation.................   24
Business..................................................................   28
Management................................................................   41
Principal Stockholders....................................................   46
Certain Transactions......................................................   47
Description of Securities.................................................   49
Selling Security-holders..................................................   54
Plan of Distribution......................................................
Legal Proceedings.........................................................   60
Legal Matters.............................................................   60
Experts...................................................................   60
Additional Information....................................................   60
Index to Financial Statements.............................................  F-1
Report of Independent Certified Public Accountants........................  F-2
</TABLE>
    
 
                            ------------------------
 
    UNTIL         , 1996 (25 DAYS AFTER THE EFFECTIVE DATE OF THIS  PROSPECTUS),
ALL  BROKER-DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER
OR NOT  PARTICIPATING  IN  THIS  DISTRIBUTION, MAY  BE  REQUIRED  TO  DELIVER  A
PROSPECTUS.  THIS  IS IN  ADDITION TO  THE  OBLIGATION OF  DEALERS TO  DELIVER A
PROSPECTUS WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                                2,000,000 SHARES
                           2,000,000 CLASS A WARRANTS
 
                                  E-NET, INC.
 
                             ---------------------
 
                                   PROSPECTUS
 
                             ---------------------
 
                                        , 1996
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                                    PART TWO
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 24.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
    As  permitted by  Delaware law,  the Company's  Certificate of Incorporation
includes a provision which provides that a director of the Company shall not  be
personally  liable to the Company or its stockholders for monetary damages for a
breach of  fiduciary duty  as  a director,  except (i)  for  any breach  of  the
director's  duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a  knowing
violation  of the law, (iii) under Section 174 of the General Corporation Law of
the State of Delaware, which prohibits the unlawful payment of dividends or  the
unlawful  repurchase or  redemption of stock,  or (iv) for  any transaction from
which the  director derives  an  improper personal  benefit. This  provision  is
intended  to afford directors  protection against, and  to limit their potential
liability for monetary damages  resulting from, suits alleging  a breach of  the
duty  of care by a director. As a consequence of this provision, stockholders of
the Company will  be unable to  recover monetary damages  against directors  for
action  taken  by them  that may  constitute negligence  or gross  negligence in
performance of  their  duties  unless  such conduct  falls  within  one  of  the
foregoing  exceptions.  The provision,  however, does  not alter  the applicable
standards governing a director's fiduciary duty and does not eliminate or  limit
the right of the Company or any stockholder to obtain an injunction or any other
type  of  nonmonetary  relief  in  the event  of  a  breach  of  fiduciary duty.
Management of the  Company believes this  provision will assist  the Company  in
securing  and retaining qualified persons to  serve as directors. The Company is
unaware of  any pending  or threatened  litigation against  the Company  or  its
directors  that would result in any liability for which such director would seek
indemnification or similar protection.
 
    Such indemnification  provisions are  intended  to increase  the  protection
provided  directors and,  thus, increase  the Company's  ability to  attract and
retain qualified  persons to  serve as  directors. Because  directors  liability
insurance  is only available at considerable cost  and with low dollar limits of
coverage and broad policy exclusions, the Company does not currently maintain  a
liability insurance policy for the benefit of its directors although the Company
may  attempt to acquire such insurance in  the future. The Company believes that
the substantial increase  in the number  of lawsuits being  threatened or  filed
against  corporations  and their  directors  and the  general  unavailability of
directors liability insurance to provide  protection against the increased  risk
of  personal liability resulting from such lawsuits have combined to result in a
growing reluctance on the part of capable persons to serve as members of  boards
of  directors of public companies. The  Company also believes that the increased
risk of  personal  liability  without  adequate  insurance  or  other  indemnity
protection  for its  directors could result  in overcautious  and less effective
direction and management of the Company. Although no directors have resigned  or
have  threatened  to resign  as a  result  of the  Company's failure  to provide
insurance or other indemnity protection from liability, it is uncertain  whether
the  Company's directors would continue to  serve in such capacities if improved
protection from liability were not provided.
 
    The provisions affecting  personal liability  do not  abrogate a  director's
fiduciary  duty  to the  Company and  its  shareholders, but  eliminate personal
liability for monetary damages for breach  of that duty. The provisions do  not,
however,  eliminate or limit the  liability of a director  for failing to act in
good faith, for engaging in intentional misconduct or knowingly violating a law,
for authorizing the illegal  payment of a dividend  or repurchase of stock,  for
obtaining  an  improper personal  benefit, for  breaching  a director's  duty of
loyalty (which  is  generally  described  as  the duty  not  to  engage  in  any
transaction  which involves a  conflict between the interest  of the Company and
those of the  director) or for  violations of the  federal securities laws.  The
provisions  also  limit or  indemnify against  liability resulting  from grossly
negligent decisions including grossly  negligent business decisions relating  to
attempts to change control of the Company.
 
    The  provisions  regarding  indemnification provide,  in  essence,  that the
Company will  indemnify its  directors  against expenses  (including  attorneys'
fees),  judgments, fines and amounts paid  in settlement actually and reasonably
incurred  in   connection  with   any  action,   suit  or   proceeding   arising
 
                                      II-1
<PAGE>
out  of the director's  status as a  director of the  Company, including actions
brought by or  on behalf of  the Company (shareholder  derivative actions).  The
provisions do not require a showing of good faith. Moreover, they do not provide
indemnification  for  liability arising  out  of willful  misconduct,  fraud, or
dishonesty, for "short-swing"  profits violations under  the federal  securities
laws,  or for the  receipt of illegal  remuneration. The provisions  also do not
provide indemnification  for  any liability  to  the extent  such  liability  is
covered  by  insurance.  One purpose  of  the  provisions is  to  supplement the
coverage provided by such  insurance. However, as  mentioned above, the  Company
does  not currently  provide such  insurance to its  directors, and  there is no
guarantee that the Company will provide  such insurance to its directors in  the
near future although the Company may attempt to obtain such insurance.
 
    The provisions diminish the potential rights of action which might otherwise
be available to shareholders by limiting the liability of officers and directors
to   the  maximum  extent   allowable  under  Delaware   law  and  by  affording
indemnification against most damages and  settlement amounts paid by a  director
of  the Company in connection with  any shareholders derivative action. However,
the provisions do not have the effect of limiting the right of a shareholder  to
enjoin  a director from  taking actions in  breach of his  fiduciary duty, or to
cause the Company  to rescind  actions already  taken, although  as a  practical
matter courts may be unwilling to grant such equitable remedies in circumstances
in  which such actions have  already been taken. Also,  because the Company does
not presently  have  directors  liability  insurance and  because  there  is  no
assurance that the Company will procure such insurance or that if such insurance
is  procured  it  will  provide  coverage  to  the  extent  directors  would  be
indemnified under the provisions, the Company may be forced to bear a portion or
all of  the  cost  of  the director's  claims  for  indemnification  under  such
provisions.  If the Company is forced to bear the costs for indemnification, the
value of the  Company stock may  be adversely  affected. In the  opinion of  the
Securities  and  Exchange  Commission, indemnification  for  liabilities arising
under the Securities Act of 1933 is contrary to public policy and, therefore, is
unenforceable.
 
ITEM 25.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
    The following is an itemization of expenses, payable by the Company from the
net proceeds of this  offering, incurred by the  Company in connection with  the
issuance and distribution of the securities of the Company being offered hereby.
The Company has agreed to pay all of the expenses related to the registration of
the  securities by the Selling Security-holders,  which are included herein. All
expenses are estimated except the SEC and NASD Registration and Filing Fees. See
"Use of Proceeds."
 
<TABLE>
<S>                                                              <C>
SEC Registration and Filing Fee(1).............................  $   14,638
NASD Registration and Filing Fee(1)............................       4,745
Nasdaq Registration and Filing Fee.............................      10,000
Financial Printing.............................................     150,000
Transfer Agent Fees............................................      10,000
Accounting Fees and Expenses...................................     100,000
Legal Fees and Expenses........................................     375,000
Blue Sky Fees and Expenses.....................................      85,000
Underwriter's Nonaccountable Expense Allowance.................     241,500
Miscellaneous..................................................       9,117
                                                                 ----------
    TOTAL......................................................  $1,000,000
                                                                 ----------
                                                                 ----------
</TABLE>
 
- ------------------------
(1) Paid  upon  initial  filing  of  this  Registration  Statement  and  related
    Prospectus.
 
ITEM 26.  RECENT SALES OF UNREGISTERED SECURITIES.
 
    The  following information sets forth all  securities of the Company sold by
it within the past three years,  which securities were not registered under  the
Securities Act of 1933, as amended.
 
                                      II-2
<PAGE>
    In  January 1995,  the Company issued  6,000,000 shares of  its common stock
(which includes a 600:1  stock split in January  1996) to 15 persons,  including
the officers and directors of the Company, in a private placement transaction in
consideration of $100, or its par value at the time of issuance.
 
    In  March 1996, the Company issued 500,000 shares of its Common Stock to ATG
Group, Inc.,  a  Brookville,  New  York based  investment  firm,  in  a  private
placement transaction in consideration of $250,000.
 
   
    Also,  in March and April 1996, the  Company borrowed $1,000,000 in a bridge
loan from  four persons  who  are nonaffiliated  with  the Underwriter  and  the
Company,  each  of whom  is  an accredited  investor,  to wit:  Edward Ratkovich
($500,000), Robert Foise ($250,000), Armstrong Industries ($200,000) and  Martin
Sumichrast ($50,000), at the rate of eight percent simple annual interest, which
is due and payable at the closing of this offering from the net proceeds of this
offering.  General  Ratkovich and  Mr.  Sumichrast are  officers,  directors and
principal stockholders of Nasdaq listed  companies recently underwritten by  the
Underwriter.  In further  consideration of the  bridge loan,  the Company issued
2,000,000 shares of Common Stock, 2,000,000 Class A Warrants and 2,000,000 Class
B Warrants to the Selling Security-holders. The shares of Common Stock and Class
A Warrants issued to the Selling  Security-holders are being registered in  this
offering.  The  Class  A Warrants  issued  to the  Selling  Security-holders are
identical to the Class  A Warrants included  in the Units  being offered by  the
Company.  The Class B Warrants, which are not being registered in this offering,
are identical to the Class A Warrants included in the Units being offered by the
Company except that  the exercise  price is $4.20.  The securities  held by  the
Selling  Security-holders may be  sold commencing eighteen  (18) months from the
date of this Prospectus,  subject to earlier release  at the sole discretion  of
the  Underwriter, and such  securities include a  legend with such restrictions.
The Underwriter may release the securities held by the Selling  Security-holders
at  any time after all securities subject to the Over-allotment Option have been
sold or such option has expired.  Should the Underwriter release the  securities
held  by the  Selling Security-holders for  resale, it is  uncertain whether the
securities will be offered for sale. The resale of the securities of the Selling
Security-holders are subject  to Prospectus delivery  and other requirements  of
the  Securities  Act  of 1933,  as  amended.  Sales of  such  securities  or the
potential of such sales  at any time  may have an adverse  effect on the  market
prices of the securities offered hereby. The Company will not receive any of the
proceeds  from  the  sale  of  the  securities  being  offered  by  the  Selling
Security-holders. The Class A Warrants  are redeemable upon certain  conditions.
Should  the  Class  A  Warrants  offered  by  the  Selling  Security-holders  be
exercised, of which there is no assurance, the Company will receive the proceeds
therefrom aggregating up to an additional $8,000,000. Prior to making the bridge
loan to  the  Company,  the  Selling Security-holders  did  not  own  any  other
securities  of the Company. None of  the Selling Security-holders of the Company
are otherwise affiliated  with the  Company, at the  time of  making the  bridge
loan,  at the time of  this offering or at any  other time. The Company believes
that its  financial  transactions with  the  Selling Security-holders  served  a
legitimate  business  purpose, I.E.,  providing needed  working capital  for the
Company, and  were  fair  and  reasonable  under  the  circumstances  since  the
transactions  were highly speculative. The Company's financial transactions with
the Selling Security-holders were managed by the Underwriter and no  commissions
or  other  remuneration were  paid to  the Underwriter  in connection  with such
transactions. See "Description of Securities."
    
 
    All unregistered securities issued by the Company prior to this offering are
deemed "restricted securities"  within the meaning  of that term  as defined  in
Rule 144 and have been issued pursuant to certain "private placement" exemptions
under  Section 4(2) of the Securities Act of 1933, as amended, and the rules and
regulations  as  promulgated   by  the  Securities   and  Exchange   Commission,
Washington,  D.C. 20549, such that the sales of the securities were transactions
by an issuer not involving any public offering. See "Description of Securities."
 
    Reference is  also  made  hereby to  "Dilution,"  "Principal  Stockholders,"
"Certain  Transactions" and  "Description of  Securities" in  the Prospectus for
more information with respect to the previous issuance and sale of the Company's
securities.
 
                                      II-3
<PAGE>
    All of  the  aforesaid securities  have  been appropriately  marked  with  a
restricted legend and are "restricted securities," as defined in Rule 144 of the
rules  and regulations  of the  Securities and  Exchange Commission, Washington,
D.C. 20549. All of the aforesaid securities were issued for investment  purposes
only  and not  with a  view to redistribution,  absent registration.  All of the
aforesaid  persons  have  been  fully   informed  and  advised  concerning   the
Registrant,  its  business, financial  and  other matters.  Transactions  by the
Registrant involving the sales of these  securities set forth above were  issued
pursuant to the "private placement" exemptions under the Securities Act of 1933,
as  amended, as transactions by an issuer not involving any public offering. The
Registrant has been informed that each person is able to bear the economic  risk
of his investment and is aware that the securities were not registered under the
Securities  Act of 1933, as  amended, and cannot be  re-offered or re-sold until
they have  been  so  registered  or  until  the  availability  of  an  exemption
therefrom. The transfer agent and registrar of the Registrant will be instructed
to  mark "stop transfer" on its ledgers to assure that these securities will not
be transferred absent  registration or  until the availability  of an  exemption
therefrom is determined.
 
ITEM 27.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 
   
    This  following  is a  list  of Exhibits  marked  by an  asterisk  (*) filed
herewith by e-Net,  Inc. as part  of Amendment  No. 1 to  the SB-2  Registration
Statement and related Prospectus:
    
 
   
<TABLE>
<C>      <S>
      1.0 Form of Underwriting Agreement.
      1.1 Selected Dealers Agreement.
      3.0 Certificate of Incorporation, filed January 9, 1995.
      3.1 By-laws, as amended.
      4.0 Specimen Copy of Common Stock Certificate.*
      4.1 Form of Class A Warrant Certificate.*
      4.2 Form of Class B Warrant Certificate.*
      4.3 Form of Underwriter's Purchase Option.
      4.4 Form of Warrant Agreement.
      5.0 Opinion of Thomas T. Prousalis, Jr., Esq. for Registrant.
     10.0 Employment Agreement, Robert A. Veschi, dated April 1, 1996.
     10.1 United States Patent, Notice of Allowance, dated January 23, 1996.
     10.2 Assignment of Patent Rights, dated March 22, 1996.
     10.3 Sprint Agreement, dated March 1, 1996.
     23.0 Consent of Thomas T. Prousalis, Jr., Esq. is contained on page II-7 of
          the Registration Statement.
     24.0 Consent of Grant Thornton LLP is contained on page II-8 of the
          Registration Statement.
     25.0 Power of Attorney appointing Robert A. Veschi is contained on page II-6
          of the Registration Statement.
</TABLE>
    
 
   
ITEM 28.  UNDERTAKINGS
    
 
    The  undersigned Registrant  hereby undertakes  to provide  to participating
broker-dealers,  at  the  closing,   certificates  in  such  denominations   and
registered  in such  names as required  by the  participating broker-dealers, to
permit prompt delivery to each purchaser.
 
    The undersigned Registrant also undertakes:
 
       (1) To file, during any period in which offers or sales are being made, a
           post-effective amendment to this registration statement:
 
           (i) To include any  prospectus required  by section  10(a)(3) of  the
               Securities Act of 1933;
 
           (ii)To  reflect in the  prospectus any facts  or events arising after
               the effective date  of the  registration statement  (or the  most
               recent  post-effective amendment thereof)  which, individually or
               in  the  aggregate,  represent   a  fundamental  change  in   the
               information set forth in the registration statement:
 
                                      II-4
<PAGE>
           (iii)
               To  include any material information with  respect to the plan of
               distribution  not  previously   disclosed  in  the   registration
               statement  or  any material  change  to such  information  in the
               registration statement;
 
           Provided, however, that  paragraphs (a)(1)(i) and  (a)(1)(ii) do  not
           apply  if the registration statement is on  Form S-3 or Form S-8, and
           the information required to be included in a post-effective amendment
           by those paragraphs  is contained  in periodic reports  filed by  the
           registrant  pursuant to section 13 or section 15(d) of the Securities
           Exchange Act  of  1934 that  are  incorporated by  reference  in  the
           registration statement.
 
       (2) That,  for  the  purpose  of  determining  any  liability  under  the
           Securities Act of 1933, each  such post-effective amendment shall  be
           deemed  to be a new registration statement relating to the securities
           offered therein, and  the offering  of such securities  at that  time
           shall be deemed to be the initial bona fide offering thereof.
 
       (3) To  remove from registration  by means of  a post-effective amendment
           any of the  securities being  registered which remain  unsold at  the
           termination of the offering.
 
    Insofar  as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to  directors, officers and controlling persons of  the
registrant  pursuant to the  foregoing provisions, or  otherwise, the registrant
has been advised that in the  opinion of the Securities and Exchange  Commission
such  indemnification is against public  policy as expressed in  the Act and is,
therefore, unenforceable. In the event that a claim for indemnification  against
such  liabilities (other than the payment by the registrant of expenses incurred
or paid by a director,  officer or controlling person  of the registrant in  the
successful  defense  of any  action,  suit or  proceeding)  is asserted  by such
director, officer or controlling person in connection with the securities  being
registered, the Registrant will, unless in the opinion of its counsel the matter
has  been settled  by controlling  precedent, submit  to a  court of appropriate
jurisdiction the question whether such  indemnification by it is against  public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
 
    This Registration Statement consists of the following:
 
<TABLE>
<C>        <S>
       1.  Facing page.
       2.  Cross-Reference Sheet.
       3.  Prospectus.
       4.  Complete text of Items 24-28 in Part Two of Registration Statement.
       5.  Exhibits.
       6.  Signature page.
       7.  Consents of:
           Thomas T. Prousalis, Jr., Esq.
           Grant Thornton LLP
</TABLE>
 
                                      II-5
<PAGE>
                                   SIGNATURES
 
   
    In  accordance  with the  requirements of  the Securities  Act of  1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements  for filing on  Form SB-2 and  authorized this  registration
statement  to  be  signed  on  its behalf  by  the  undersigned,  thereunto duly
authorized, in the City of Washington, District of Columbia, on May 30, 1996.
    
 
   
                                e-NET, INC.
 
                                By:               ROBERT A. VESCHI
                                     -------------------------------------------
                                                  Robert A. Veschi
                                                      President
 
    
 
   
    In accordance with  the requirements  of the  Securities Act  of 1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated:
    
 
   
<TABLE>
<CAPTION>
                      SIGNATURE                                      TITLE                     DATE
- ------------------------------------------------------  -------------------------------  ----------------
 
<C>                                                     <S>                              <C>
     ALONZO E. SHORT, JR., LT. GEN., USA (RET.)*
     -------------------------------------------        Chairman of the Board              May 30, 1996
      Alonzo E. Short, Jr., Lt. Gen., USA (ret.)
 
                   ROBERT A. VESCHI                     President, Chief Executive
     -------------------------------------------         Officer, Chief Financial          May 30, 1996
                   Robert A. Veschi                      Officer, Secretary, Director
 
                    GEORGE PORTA*
     -------------------------------------------        Vice President, Operations         May 30, 1996
                     George Porta
 
                  WILLIAM L. HOOTON*
     -------------------------------------------        Director                           May 30, 1996
                  William L. Hooton
 
                       By:           ROBERT A. VESCHI*
            ------------------------------------------
                                      Robert A. Veschi
                                      ATTORNEY-IN-FACT
</TABLE>
    
 
                                      II-6
<PAGE>
                               CONSENT OF COUNSEL
 
    The  consent of  Thomas T. Prousalis,  Jr., Esq.,  1919 Pennsylvania Avenue,
N.W., Suite 800, Washington,  D.C. 20006, to  the use of his  name in this  Form
SB-2  Registration Statement, and related Prospectus, as amended, of e-Net, Inc.
is contained in his opinion filed as Exhibit 5.0 hereto.
 
                                      II-7
<PAGE>
              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
    We have issued our  report dated April 12,  1996 accompanying the  Financial
Statements   of  e-Net,  Inc.  contained   in  the  Registration  Statement  and
Prospectus.  We  consent  to  the  use  of  the  aforementioned  report  in  the
Registration  Statement and Prospectus, and to the use of our name as it appears
under the caption "Experts."
 
                                          GRANT THORNTON LLP
 
   
Washington, D.C.
May 22, 1996
    
 
                                      II-8
<PAGE>
                                  E-NET, INC.
                               INDEX TO EXHIBITS
 
   
    The following is a list of Exhibits marked by an asterisk (*) filed herewith
by e-Net, Inc. as part of Amendment No. 1 to the SB-2 Registration Statement and
related Prospectus:
    
 
   
<TABLE>
<C>        <S>                                                                       <C>
      1.0  Form of Underwriting Agreement.
      1.1  Selected Dealers Agreement.
      3.0  Certificate of Incorporation, filed January 9, 1995.
      3.1  By-laws, as amended.
      4.0  Specimen Copy of Common Stock Certificate.*
      4.1  Form of Class A Warrant Certificate.*
      4.2  Form of Class B Warrant Certificate.*
      4.3  Form of Underwriter's Purchase Option.
      4.4  Form of Warrant Agreement.
      5.0  Opinion of Thomas T. Prousalis, Jr., Esq. for Registrant.
     10.0  Employment Agreement, Robert A. Veschi, dated April 1, 1996.
     10.1  United States Patent, Notice of Allowance, dated January 23, 1996.
     10.2  Assignment of Patent Rights, dated March 22, 1996.
     10.3  Sprint Agreement, dated March 1, 1996.
     23.0  Consent of Thomas T. Prousalis, Jr., Esq. is contained on page II-7 of
            the Registration Statement.
     24.0  Consent of Grant Thornton LLP is contained on page II-8 of the
            Registration Statement.
     25.0  Power of Attorney appointing Robert A. Veschi is contained on page II-6
            of the Registration Statement.
</TABLE>
    

<PAGE>

                                   e-NET, INC.


     NUMBER                                                          SHARES

     E


              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

     COMMON STOCK                            SEE REVERSE FOR CERTAIN DEFINITIONS
                                                  CUSIP


THIS

CERTIFIES

that






is the owner of

   FULLY PAID AND NON-ASSESSABLE SHARES OF THE $.01 PAR VALUE COMMON STOCK OF

                                   e-NET, INC.

transferable only on the books of the corporation by the holder hereof in person
or by a duly authorized attorney upon surrender of this certificate properly
endorsed.  This certificate is not valid until countersigned by the Transfer
Agent.  This certificate and the shares represented hereby are issued and shall
be held subject to all of the provisions of the Certificate of Incorporation and
By-Laws of the Corporation and all amendments thereto, copies of which are on
file with the Transfer Agent, to all of which the holder of this certificate, by
acceptance hereof, assents.
     IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by the facsimile signatures of its duly authorized officers and to be
sealed with the facsimile seal of the Corporation.

Dated,

BY                                      BY

                                [CORPORATE SEAL]


     CHAIRMAN OF THE BOARD                                        SECRETARY

COUNTERSIGNED:
     AMERICAN STOCK TRANSFER & TRUST COMPANY
                (NEW YORK, N.Y.)         TRANSFER AGENT



                                     AUTHORIZED OFFICER

<PAGE>

     NUMBER                                                   CLASS A WARRANT(S)
EW                                 e-NET, INC.


              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
                REDEEMABLE CLASS A COMMON STOCK PURCHASE WARRANT

                                                                           CUSIP

THIS CERTIFIES THAT, for value received,







is the Registered Holder of a Redeemable Class A Common Stock Purchase 
Warrant ("Class A Warrants") that entitles its Registered Holder to purchase 
one share of Common Stock, $.01 par value, of e-NET, INC. ("Company") for 
each Class A Warrant set forth above at a price of $4.00 per share (subject 
to adjustment) from          , 1997 (or earlier if determined by the Company 
in accordance with certain procedures) until            , 2001, unless 
extended by the Company, all as more particularly described in, and subject 
to the terms and conditions contained in the Warrant Agreement, dated         
   , 1996 between the Company and American Stock Transfer & Trust Company as 
Warrant Agent.  A copy of the Warrant Agreement may be obtained by any 
registered holder, without cost, upon written request to the Warrant Agent or 
the Company.  This Class A Warrant shall be governed by the laws of the State 
of New York.
     This Class A Warrant may be exercised to purchase Common Stock only in
accordance with its terms, which include the completion and execution of the
"Exercise Agreement" appearing on the reverse side hereof for a written exercise
instrument of comparable substance and delivery thereof, with payment as
provided, to the principal office of the Warrant Agent.
     The Class A Warrants are redeemable by the Company for $.05 per Warrant, at
any time after            , 1998, upon thirty (30) days' prior written notice,
if the average closing price or bid price of the Common Stock, as reported by
the principal exchange on which the Common Stock is traded.  The Nasdaq Stock
Market, Inc. or the National Quotation Bureau, Incorporated, as the case may be,
equals or exceeds $9.00 per share, for any twenty (20) trading days within a
period of thirty (30) days ending within ten (10) days of the notice of
redemption.  Upon thirty (30) days' written notice to all holders of the Class A
Warrants, the Company shall have the right to reduce the exercise price and/or
extend the term of the Class A Warrants.
     This Class A Warrant is registered on the books of the Company as
maintained on its behalf by the Warrant Agent, and is transferable only by
surrender thereof at the principal office of the Warrant Agent, duly endorsed 
for assignment as reflected on the reverse side hereof or otherwise 
accompanied by a duly executed written instrument of assignment or transfer.  
This certificate is not valid unless countersigned by the Warrant Agent.
     WITNESS, the facsimile seal of the Company and the facsimile signatures of
its duly authorized officers.

Dated                                                       e-NET, INC.

                                             BY


               [CORPORATE SEAL]
                                                           CHAIRMAN OF THE BOARD

                                             BY


                                                                  SECRETARY

COUNTERSIGNED
      AMERICAN STOCK TRANSFER & TRUST COMPANY
                 (NEW YORK, N.Y.)           AS WARRANT AGENT
BY



                                        AUTHORIZED SIGNATORY

<PAGE>

     NUMBER                                                   CLASS B WARRANT(S)
EW
                                   e-NET, INC.


              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
                REDEEMABLE CLASS B COMMON STOCK PURCHASE WARRANT

                                                            CUSIP
THIS CERTIFIES THAT, for value received,






is the Registered Holder of a Redeemable Class B Common Stock Purchase Warrant
("Class B Warrants") that entitles its Registered Holder to purchase one share
of Common Stock, $.01 par value, of e-NET, INC. ("Company") for each Class B
Warrant set forth above at a price of $4.20 per share (subject to adjustment)
from                   , 1997 (or earlier if determined by the Company in
accordance with certain procedures) until                , 2001, unless extended
by the Company, all as more particularly described in, and subject to the terms
and conditions contained in the Warrant Agreement, dated                   ,
1996 between the Company and American Stock Transfer & Trust Company as Warrant
Agent.  A copy of the Warrant Agreement may be obtained by any registered
holder, without cost, upon written request to the Warrant Agent or the Company.
This Class B Warrant shall be governed by the laws of the State of New York.
     This Class B Warrant may be exercised to purchase Common Stock only in
accordance with its terms, which include the completion and execution of the
"Exercise Agreement" appearing on the reverse side hereof for a written exercise
instrument of comparable substance and delivery thereof, with payment as
provided, to the principal office of the Warrant Agent.
     The Class B Warrants are redeemable by the Company for $.05 per Warrant, at
any time after                  , 1998, upon thirty (30) days' prior written
notice, if the average closing price or bid price of the Common Stock, as
reported by the principal exchange on which the Common Stock is traded.  The
Nasdaq Stock Market, Inc. or the National Quotation Bureau, Incorporated, as the
case may be, equals or exceeds $9.00 per share, for any twenty (20) trading days
within a period of thirty (30) days ending within ten (10) days of the notice of
redemption.  Upon thirty (30) days' written notice to all holders of the Class B
Warrants, the Company shall have the right to reduce the exercise price and/or
extend the term of the Class B Warrants.
     This Class B Warrant is registered on the books of the Company as
maintained on its behalf by the Warrant Agent, and is transferable only by
surrender thereof at the principal office of the Warrant Agent, duly endorsed
for assignment as reflected on the reverse side hereof or otherwise accompanied
by a duly executed written instrument of assignment or transfer.  This
certificate is not valid unless countersigned by the Warrant Agent.
     WITNESS, the facsimile seal of the Company and the facsimile signatures of
its duly authorized officers.

Dated                                                       e-NET, INC.

                                             BY


               [CORPORATE SEAL]
                                                           CHAIRMAN OF THE BOARD

                                             BY


                                                                 SECRETARY
COUNTERSIGNED
      AMERICAN STOCK TRANSFER & TRUST COMPANY
                 (NEW YORK, N.Y.)           AS WARRANT AGENT
BY


                                        AUTHORIZED SIGNATORY

<PAGE>
   
                                                                      EXHIBIT 11
    
 
   
                                  E-NET, INC.
                         COMPUTATION OF PER SHARE LOSS
    
 
   
<TABLE>
<S>                                                                              <C>
Pro Forma Net Loss.............................................................  $ (774,556)
 
Weighted Average Shares:
 
Weighted average number of common shares outstanding from inception (1)........   6,000,000
 
Common shares issued in March and April 1996 in contemplation of public
 offering, assumed outstanding for the entire period (2).......................   2,500,000
                                                                                 ----------
                                                                                  8,500,000
                                                                                 ----------
                                                                                 ----------
 
Pro Forma net loss per share...................................................  $     (.09)
                                                                                 ----------
                                                                                 ----------
</TABLE>
    
 
- ------------------------
   
(1) Reflects retroactive affect of stock split in January 1996.
    
 
   
(2) Warrants  issued pursuant to bridge  units in March and  April 1996 have not
    been included  in weighted  average shares  outstanding as  their effect  is
    anti-dilutive when measured using the treasury stock method.
    


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