NAVIDEC INC, 424B1, 1997-02-13

NAVIDEC INC
424B1, 1997-02-13
COMPUTER INTEGRATED SYSTEMS DESIGN

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<PAGE>
PROSPECTUS

Filed Pursuant to Rule 424(b)(1)
Registration No. 333-14497

1,000,000 UNITS

[NAVIDEC LOGO]

EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK
AND ONE COMMON STOCK PURCHASE WARRANT

Each Unit ("Unit") of NAVIDEC, Inc., a Colorado corporation (the "Company")
consists of one share of Common Stock, no par value per share (the "Common
Stock"), and one Common Stock Purchase Warrant ("Warrant"). Of the 1,000,000
shares of Common Stock and 1,000,000 Warrants included in the Units offered
hereby, 755,000 shares of the Common Stock and 1,000,000 Warrants are being sold
by the Company and 245,000 shares of Common Stock are being sold by certain
stockholders of the Company (the "Bridge Financing Selling Stockholders"). See
"Bridge Financing Selling Stockholders." Until the completion of this offering,
the Common Stock and Warrants may only be purchased together as a Unit at the
public offering price of $6.00 ("Offering Price"), of which $.10 is the public
offering price allocated to the Warrants. The Units, Common Stock and Warrants
offered hereby are sometimes hereinafter collectively referred to as the
"Securities." Upon completion of the offering, the Common Stock and the Warrants
will immediately trade separately. The Company will not receive any of the
proceeds from sales of Common Stock included in the Units by the Bridge
Financing Selling Stockholders. Each Warrant entitles the holder to purchase one
share of Common Stock at a price of $7.20 (120% of the Offering Price) until
February 10, 2002 (five years from the date of this Prospectus). The Warrants
are redeemable at the option of the Company, at $.05 per Warrant, at any time on
or after February 10, 1998 (one year from the date of this Prospectus) or such
earlier date as may be determined by Joseph Charles & Associates, Inc., the
representative (the "Representative") of the Underwriters, upon at least thirty
days' notice if the closing price of the Common Stock equals or exceeds $8.40
(140% of the Offering Price) for twenty consecutive trading days ending within
thirty days prior to the date notice of redemption is given, and at such time
there is a current effective registration statement covering the shares of
Common Stock underlying the Warrants.

In addition to the shares of Common Stock included in the Units and being
sold hereby by the Bridge Financing Selling Stockholders, an aggregate of
104,126 shares of Common Stock and 349,126 Warrants are being registered
simultaneously with this offering for resale by such Bridge Financing Selling
Stockholders. The Bridge Financing Selling Stockholders have, however, agreed
not to resell any additional Common Stock or Warrants until ten months from the
consummation of this offering. See "Additional Registered Securities" and
"Underwriting."
--------------------------

(CONTINUED ON NEXT PAGE)

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE 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>
PROCEEDS TO
BRIDGE
PROCEEDS TO FINANCING
PRICE TO UNDERWRITING THE SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
<S> <C> <C> <C> <C>

Per Share............................... $5.90 $0.59 $5.31 $5.31

Per Warrant............................. $0.10 $0.01 $0.09 $--

Total (3)............................... $6,000,000 $600,000 $4,099,050 $1,300,950
</TABLE>

(FOOTNOTES CONTINUED ON INSIDE FRONT COVER)

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK
AND
IMMEDIATE SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED BY
INVESTORS WHO
CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK
FACTORS" BEGINNING ON PAGE 8 AND
"DILUTION."

The Securities are offered by the several Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters and subject
to approval of certain legal matters by counsel and to certain other conditions.
The Underwriters reserve the right to withdraw, cancel or modify the offering
and to reject any offer to purchase in whole or in part. It is expected that
delivery of the certificates representing the Securities will be made against
payment therefor at the offices of Joseph Charles & Associates, Inc., 9701
Wilshire Boulevard, Ninth Floor, Beverly Hills, California 90212, or through the
facilities of Depository Trust Company, on or about February 14, 1997.

JOSEPH CHARLES & ASSOCIATES, INC.

THE DATE OF THIS PROSPECTUS IS FEBRUARY 10, 1997
<PAGE>
(FOOTNOTES CONTINUED FROM COVER)

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

(1) Does not include additional compensation to be received by the
Representative in the form of (i) a 3% non-accountable expense allowance and
(ii) sale to the Representative for $100 of options ("Representative's
Options") to purchase 100,000 shares of Common Stock at a price of $7.38
(125% of the offering price of the Common Stock) exercisable over a period
of four years, commencing one year from the date of this Prospectus. The
Company has also agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."

(2) Before deducting other expenses of this offering payable by the Company,
estimated to be $515,000, including the Representative's non-accountable
expense allowance.

(3) The Company has granted the Underwriters an option ("Over-allotment
Option"), exercisable within 45 days from the date of this Prospectus, to
purchase up to 150,000 additional Units on the same terms as set forth
above, solely for the purpose of covering over-allotments, if any. If the
Underwriters' Over-allotment Option is exercised in full, the total Price to
the Public, Underwriting Discount, and Proceeds to the Company will be
$6,900,000, $690,000 and $4,909,050, respectively. See "Underwriting."

Prior to this offering, there has been no public market for the Securities
of the Company and there can be no assurance that any such market will develop
or be sustained after this offering. The initial public offering price of the
Securities has been determined by negotiation between the Company and the
Representative and does not necessarily reflect the Company's asset value,
performance or any other established criteria. For information regarding the
factors considered in determining the initial public offering price of the
Securities and the terms of the Warrants, see "Underwriting." The Units, the
Common Stock and the Warrants have been approved for inclusion on The NASDAQ
SmallCap-SM- Market under the symbols NVDCU, NVDC and NVDCW, respectively.

AS OF THE DATE OF THIS PROSPECTUS, THE COMPANY WILL BECOME SUBJECT TO THE
REPORTING REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 AND IN ACCORDANCE
THEREWITH WILL FILE REPORTS, PROXY STATEMENTS AND OTHER INFORMATION WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE COMPANY INTENDS TO FURNISH ITS
STOCKHOLDERS WITH ANNUAL REPORTS CONTAINING AUDITED FINANCIAL STATEMENTS AND
SUCH OTHER PERIODIC REPORTS AS THE COMPANY DEEMS APPROPRIATE OR AS MAY BE
REQUIRED BY LAW.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

3
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED IN THIS
PROSPECTUS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS. EACH PROSPECTIVE INVESTOR IS URGED TO CAREFULLY
READ THIS PROSPECTUS IN ITS ENTIRETY, INCLUDING BUT NOT LIMITED TO THE RISK
FACTORS.

THE COMPANY

The Company is a leading provider of comprehensive Internet and Intranet
solutions for regional, national and international business organizations. The
Company also serves as a distributor of various high technology and other
products through traditional and electronic channels. The Company provides its
services and distributes its products to over 500 customers as of the date of
this Prospectus. The Company's Internet/Intranet solutions focus on all aspects
of commercial Internet and Intranet presence, including design and development
of World Wide Web ("WWW" or "Web") sites, marketing, database integration,
electronic commerce and order fulfillment. ("Intranets" are internal corporate
networks based upon protocols and technology developed for the Internet.) See
"Business--Internet/Intranet Solutions." Product distribution includes the sale
and installation of high technology systems and components from third party
manufacturers principally through traditional distribution channels. See
"Business--Distribution and Related Services." The Company's core competencies
in Internet/Intranet technology and traditional product marketing and
distribution form its business model of providing complete Internet/Intranet
solutions. These solutions include computer and network infrastructure
equipment, software and services, content and aggregation, electronic commerce
and fulfillment of orders.

The Company provides Internet/Intranet solutions to regional, national and
international clients including Hewlett Packard, AT&T, KN Energy, Kimmon
Electric of Japan, the Colorado Avalanche National Hockey League team, Gannett's
KUSA-TV Denver, the Colorado Rockies Major League Baseball team, Live
Entertainment, the Denver Metro Convention Bureau and others. See "Business--
Significant Clients." The Company distributes high technology products
manufactured or produced by IBM, Apple, Hewlett Packard, Tektronix, Kimmon
Electric of Japan, Hayashi Denko, Silicon Graphics, Netscape, Netcom, Sybase and
others. See "Business--Distribution and Related Services."

To date, distribution of high technology products and related services has
accounted for the substantial majority of the Company's revenue. Although the
Company intends to continue expansion of its traditional high technology product
distribution, the Company believes that substantial revenue growth opportunities
exist in the Internet/Intranet solutions industry and the Company has positioned
itself to take advantage of these growth opportunities. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

The Company has developed a number of strategic relationships with Internet
industry participants, including subcontracting arrangements with AT&T and IBM
(see "Business--Marketing"), and designated reseller arrangements with AT&T,
IBM, Hewlett Packard, Silicon Graphics, Microsoft, Netscape and Sybase. Many of
these companies also employ the Company's Internet/Intranet Solutions and refer
clients to the Company. See "Business--Business Strategy." The Company believes
that the combination of these relationships with the Company's business model
allows the Company to offer uniquely complete, integrated commercial Internet
and Intranet solutions to its clients. The Company is able to design and
implement Internet or Intranet sites and networks serving the full range of
client needs, from simple informational sites to interactive product
distribution sites to advanced, user friendly corporate Intranets. The Company
has also developed a number of proprietary software tools to implement
Internet/Intranet interactivity and electronic commerce on the Internet. These
tools are licensed to clients in connection with Internet/Intranet sites and
networks designed and maintained by the Company. See "Business--
Internet/Intranet Solutions." In addition, many of the Company's
Internet/Intranet clients have become sources of recurring revenue as a result
of their continued utilization of the full range of Internet/Intranet

4
<PAGE>
solutions offered by the Company, including technical upgrades, site
maintenance, advertising and marketing. See "Business--Business Strategy."

The Company merged with Interactive Planet, Inc., a designer and developer
of Internet World Wide Web ("WWW" or "Web") sites, in July 1996. The
consideration for the merger was the issuance of an aggregate of 678,877 shares
of Common Stock to the shareholders of IPI and a $75,000 note payable to one
shareholder of IPI. The merger was consummated in order to establish the
Company's business model of combined expertise in traditional marketing and
distribution and Internet/Intranet technology. See "Business--Overview."

UNLESS OTHERWISE INDICATED, ALL SHARE AND PER SHARE DATA AND INFORMATION
CONTAINED IN THIS PROSPECTUS RELATING TO THE NUMBER OF SHARES OF COMMON STOCK
OUTSTANDING (I) ASSUMES THE EFFECT OF A 1-FOR-2 REVERSE SPLIT OF THE COMPANY'S
OUTSTANDING COMMON SHARES EFFECTED OCTOBER 18, 1996 AND THE EFFECT OF A
.85-FOR-1 REVERSE SPLIT OF THE COMPANY'S OUTSTANDING SHARES TO BE EFFECTIVE ON
THE DATE OF THIS PROSPECTUS, (II) ASSUMES THE ISSUANCE UPON CONSUMMATION OF THIS
OFFERING OF AN AGGREGATE OF 349,126 UNITS UPON CONVERSION OF $1,437,500
PRINCIPAL AMOUNT OF 10% UNSECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTES OF
THE COMPANY ("BRIDGE PROMISSORY NOTES") SOLD IN A PRIVATE PLACEMENT FINANCING IN
AUGUST THROUGH OCTOBER 18, 1996 ("BRIDGE FINANCING PRIVATE PLACEMENT"), (III)
ASSUMES NO EXERCISE OF THE WARRANTS, (IV) ASSUMES NO EXERCISE OF THE
OVER-ALLOTMENT OPTION, (V) DOES NOT INCLUDE 100,000 SHARES OF COMMON STOCK
RESERVED FOR ISSUANCE TO THE REPRESENTATIVE UPON EXERCISE OF OPTIONS TO BE
ISSUED TO THE REPRESENTATIVE UPON CONSUMMATION OF THIS OFFERING (THE
"REPRESENTATIVE'S OPTIONS"), AND (VI) DOES NOT INCLUDE A TOTAL OF 212,500 SHARES
RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS FOR 212,500 SHARES OF COMMON
STOCK GRANTED TO AN EMPLOYEE OF THE COMPANY (THE "EMPLOYEE'S OPTIONS").

THIS PROSPECTUS INCLUDES PRODUCT NAMES, TRADE NAMES AND MARKS OF COMPANIES
OTHER THAN THE COMPANY. ALL OTHER COMPANY OR PRODUCT NAMES ARE TRADEMARKS,
REGISTERED TRADEMARKS, TRADE NAMES OR MARKS OF THEIR RESPECTIVE OWNERS AND ARE
NOT THE PROPERTY OF THE COMPANY.

5
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common Stock Outstanding Prior to the Offering........................... 1,700,595 shares

Common Stock Offered by the Company...................................... 755,000 shares

Common Stock Offered by the Bridge Financing Selling Stockholders........ 245,000 shares

Common Stock to be Outstanding After the Offering........................ 2,804,721
shares(1)
</TABLE>

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

(1) Includes 104,126 shares of Common Stock to be issued to Bridge Financing
Selling Stockholders which are not included in this offering.

<TABLE>
<CAPTION>
Use of Proceeds................... For purchase of capital equipment, development of
Internet/ Intranet solutions, advertising and marketing,
repayment of loans and working capital and other general
corporate purposes. See "Use of Proceeds."

<S> <C>
NASDAQ SmallCap-SM- Symbols

Units......................... NVDCU

Common Stock.................. NVDC

Warrants...................... NVDCW

Risk Factors...................... The Securities offered hereby are highly speculative and
involve a high degree of risk and should be purchased
only by investors who can afford the loss of their
entire investment. See "Risk Factors." In addition,
there is immediate substantial dilution from the public
offering price. See "Dilution."
</TABLE>

6
<PAGE>
SUMMARY COMBINED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The following tables set forth summary combined financial information and
other equity information of the Company. The summary financial information in
the tables is derived from the financial statements of the Company and IPI and
pro forma financial information, and should be read in conjunction with and is
qualified in its entirety by the more detailed financial statements, pro forma
combined financial information and related notes thereto, and other financial
information included herein.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31, 1995 NINE MONTHS ENDED SEPTEMBER 30, 1996
---------------------------------------- ----------------------------------------
STATEMENTS OF OPERATIONS DATA NAVIDEC, INC. IPI(1) PRO FORMA(2) NAVIDEC, INC. IPI PRO FORMA(3)
- ---------------------------------- -------------- --------- ------------- -------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues...................... $ 4,121 $ 168 $ 4,288 $ 4,222 $ 185 $ 4,408
Operating Loss.................... (3) -- (174) (585) (100) (770)
Net Loss.......................... (23) -- (194) (714) (101) (900)
Loss Per Share.................... $ (.02) $ (.09) $ (.35) $ (.44)
Shares Outstanding(4)............. 1,352,075 2,030,952 2,030,952 2,030,952
</TABLE>

<TABLE>
<CAPTION>
PRO FORMA
------------------------
BEFORE AFTER
BALANCE SHEET DATA AT SEPTEMBER 30, 1996 NAVIDEC, INC. OFFERING(5) OFFERING(6)
- ------------------------------------------------------------------------ --------------- ----------- -----------
<S> <C> <C> <C>
Cash.................................................................... $ 277 $ 749 $ 4,264
Working Capital (Deficit)............................................... (463) 80 3,745
Total Assets............................................................ 2,307 2,857 6,086
Long-Term Liabilities................................................... 959 1,579 141
Stockholders' Equity (Deficit).......................................... (10) (10) 4,807
</TABLE>

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

(1) IPI was incorporated May 15, 1995.

(2) Reflecting the combination of the Company and IPI as if the acquisition
occurred January 1, 1995.

(3) Reflecting the combination of the Company and IPI as if the acquisition
occurred January 1, 1996.

(4) Options and shares from the conversion of the Bridge Promissory Notes were
considered in the calculation of weighted average shares under the treasury
stock method based on the proposed public offering price.

(5) Reflecting the Company as if the issuance of the Bridge Promissory Notes
were completed on September 30, 1996.

(6) Reflecting the Company as if the issuance and conversion of the Bridge
Promissory Notes and this offering were completed on September 30, 1996.

7
<PAGE>
RISK FACTORS

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. EACH
PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS INHERENT IN,
AND AFFECTING THE BUSINESS OF, THE COMPANY AND THIS OFFERING BEFORE MAKING AN
INVESTMENT DECISION.

RISK FACTORS RELATING TO THE COMPANY

1. HISTORY OF OPERATING LOSSES. Although the Company has been in business
for three years, its business has only recently expanded into Internet and
Intranet infrastructure equipment, software and services, content creation and
aggregation, commerce and distribution (together, "Internet/Intranet
Solutions"). As a result of this expansion, the Company is subject to all the
risks inherent in a new business enterprise. The Company has only a very limited
operating history in the Internet/Intranet Solutions business upon which to base
any evaluation of the Company's performance and prospects in such business. On a
pro forma combined basis for the year ended December 31, 1995 (which includes
approximately six months of Interactive Planet, Inc.'s ("IPI") operations since
its formation), the Company would have realized $4,288,317 in net sales and
recorded a net loss of $193,719. On a pro forma combined basis for the nine
months ended September 30, 1996, the Company would have recorded $4,407,862 in
net sales and a net loss of $900,326. Although there has been growth in annual
revenue, the Company likely will incur losses and experience negative cash flow
during at least the first three quarters following this offering. The Company
plans to focus in the near future on growing its Internet/Intranet Solutions
business and increasing its distribution activities. In order to do so, it must
increase significantly its expenses for personnel, marketing, equipment and
other product purchases. In addition, the Company may experience fluctuations in
future operating results due to a variety of factors (many of which are out of
the Company's control), including general economic conditions, specific economic
conditions in the Internet industry, capital and other costs relating to the
expansion of operations and the mix of services and distribution channels
offered by the Company. There can be no assurance that the Company's operations
will generate sufficient revenues to become profitable. The likelihood of the
Company's success must be considered relative to the problems, experiences,
difficulties, complications and delays frequently encountered in connection with
the operation and development of a new business and the competitive environment
in which the Company operates. See "Business."

2. IPI HISTORY OF OPERATING LOSSES. IPI operated from May 1995 until the
merger with the Company in July 1996. During that time IPI accumulated net
losses of approximately $100,000. The business of IPI is integral to the
Company's new focus on Internet/Intranet Solutions. Management believes that
substantial revenue growth opportunities exist in the Internet/Intranet
Solutions business; however, there can be no assurance that the Company's
Internet/Intranet Solutions business will achieve profitability. See
"Business--Internet/Intranet Solutions" and Financial Statements.

3. POSSIBLE INABILITY TO CONTINUE AS A GOING CONCERN. The Company's
independent auditor has included paragraphs in each of its reports accompanying
the audited financial statements of the Company as of September 30, 1996 and
December 31, 1995, and the audited financial statements of IPI as of December
31, 1995, which state that the respective losses from operations and negative
cash flows from operations of the Company and IPI raise substantial doubt about
each company's ability to continue as a going concern. IPI was merged into the
Company in July 1996 and no longer operates as a separate entity. Management has
taken a number of actions to improve the Company's cash position and operating
results, including (i) raising $1,232,670 in net proceeds from the Bridge
Financing Private Placement in August through October 18, 1996; (ii) completing
the merger with IPI which merger management believes will enhance the operating
results of the combined entity and (iii) undertaking the public offering
contemplated hereby. Management believes that the proceeds from this offering
after amounts used to repay debt will be sufficient to finance its cash
requirements for at least the next 12 months. There can, however, be no
assurance that the Company will be profitable in the future or that the net
proceeds of this offering, together with any funds provided by operations and
presently available capital, will be sufficient to fund the

8
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Company's ongoing operations and there can be no assurance that additional
financing can be obtained in the future if needed. See Financial Statements,
"Use of Proceeds", "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Bridge Financing Private Placement."

4. SIGNIFICANT CAPITAL REQUIREMENTS. The Company's capital requirements
have been and will continue to be significant. To date, the Company has been
dependent primarily on bank loans and loans from the Company's affiliates and
employees, as well as the net proceeds from the recent Bridge Financing Private
Placement, to fund its capital requirements. To date, there has been limited
equity investment in the Company. The Company is dependent on and intends to use
a significant portion of the proceeds of this offering to fund its ongoing
operations as well as to implement its proposed expansion plans. The Company
anticipates that the proceeds to the Company from this offering, together with
projected cash flow from operations, will be sufficient to fund the Company's
operations during the twelve months following the consummation of this offering.
In the event that the Company's plans change, there are any delays in
implementing the proposed expansion, the Company's projections prove to be
inaccurate or the proceeds of this offering prove to be insufficient, the
Company may be required to seek additional financing or curtail its operations
and/or expansion activities. In such case, the Company will generally be
required to seek additional debt or equity financing to fund the costs of daily
operation and of continuing to expand its operations. Any additional equity
financing may involve substantial dilution to the Company's then-existing
stockholders. The Company has no current commitments or arrangements with
respect to, or readily available sources of, additional financing and there can
be no assurance that the current stockholders of the Company will provide any
portion of the Company's future financing requirements. There can be no
assurance that additional financing will be available to the Company when needed
or, if available, that it can be obtained on commercially reasonable terms. Any
inability to obtain additional financing when needed would have a material
adverse effect on the Company including requiring the Company to curtail the
expansion of its operations and possibly causing the Company to cease its
operations. Even if the Company is successful in its expansion plans, no
assurances can be given that the Company will be successful or that investors
will derive a profit from their investment. See "Use of Proceeds," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business" and Financial Statements.

5. DEVELOPING MARKET; UNPROVEN MARKET FOR THE COMPANY'S PRODUCT. The
Internet, and particularly the Web, represent markets for the Company's products
and services which have only recently begun to develop, are rapidly evolving and
are characterized by low barriers to entry and an increasing number of market
entrants who have introduced or developed a wide variety of products and
services for communication, information and commerce. As is typical in the case
of a new and rapidly evolving industry, demand and market acceptance for new
products and services are subject to a high level of uncertainty. Moreover,
critical issues concerning the commercial use of the Internet (including
security, reliability, compatibility, cost, difficulty in obtaining user
demographic information, difficulty of use and access, and quality of service)
remain unresolved and may impact the growth of Internet and Web use. There can
be no assurance that marketing or commerce over the Internet will become
widespread, or that products and services which are being developed by the
Company for use on the Internet will become accepted. In particular, enterprises
that have already invested substantial resources in other means of conducting
commerce and exchanging information may be reluctant to adopt a new strategy
that could make their existing products and infrastructure obsolete. In
addition, there can be no assurance that individual personal computer users in
business or at home will adopt the Web for on-line commerce and communication.
Because the market for the Company's products and services is new and evolving,
it is also difficult to predict with any assurance the future growth rate, if
any, and the size of the market. There can be no assurance that the market for
the Company's products and services will continue to expand, that the Company's
products or services will be accepted, or that individual personal computer
users in business or at home will use the Internet or the Company's products and
services for commerce, information and communication. If a significant market
develops more slowly than expected or becomes saturated with

9
<PAGE>
competitors, or if the Company's products do not achieve market acceptance, the
Company's business, operating results and financial condition will be materially
adversely affected. See "Business."

6. RISKS RELATING TO COMPETITION; DYNAMIC MARKET. The market for
Internet/Intranet Solutions is new, intensely competitive, quickly evolving and
subject to rapid technological change. This market is also characterized by low
barriers to entry and frequent product introductions, and the Company therefore
expects competition will increase in the future. Some of the Company's current
and many of the Company's potential competitors have greater name recognition,
larger installed customer bases and significantly greater financial, technical
and marketing resources than the Company. Potential competitors include browser
and software vendors and servers, PC and UNIX software vendors, on-line service
providers, client/server applications and other database companies, multimedia
companies, document management companies, networking software companies, network
management companies, educational software companies, traditional advertising
agencies and interactive television. In a broader sense, the Company may compete
with the more traditional marketing and distribution mediums, such as
traditional distribution channels developed for products and services. This
intense level of competition could materially and adversely affect the Company's
future operating results and financial conditions.

A large number of companies act as manufacturer's representatives and
re-marketers of high technology equipment and related products, and the
Company's competition in this business is therefore also intense. The
distribution business is also characterized by low barriers to entry. In some
instances, the Company, in acting as a re-marketer, may compete with the
original manufacturer. Many of the Company's competitors in the distribution
business have longer operating histories, greater name recognition, larger
installed customer bases and significantly greater financial, technical and
marketing resources than the Company.

There can be no assurance that the Company will be able to compete
successfully against current or future competitors or that competitive pressures
faced by the Company will not materially adversely affect its business,
operating results and financial condition. See "Business--Competition."

7. RAPID OBSOLESCENCE AND TECHNOLOGICAL CHANGE. The market for
Internet/Intranet Solutions is characterized by rapidly changing technology,
frequent introductions of new products and evolving industry standards which
result in product obsolescence and short product life cycles. Accordingly, the
Company's success is dependent upon its ability to anticipate technological
changes in the industry and to continually identify, obtain and successfully
market new products and services that satisfy evolving technologies, customer
preferences and industry requirements. There can be no assurance that
competitors will not market products and services which have perceived
advantages over those of the Company or which render products and services to be
offered by the Company obsolete or less marketable. See "Business."

8. DEPENDENCE ON INTERNET INFRASTRUCTURE AND ACCESS. The Company's
revenues will depend in large part upon a robust industry and infrastructure for
providing Internet access and carrying Internet traffic. Notwithstanding current
interest and worldwide subscriber growth, the Internet may not prove to be a
viable commercial marketplace because of inadequate development of the necessary
infrastructure or complementary products, such as high speed modems. Because
global commerce and on-line exchange of information on the Internet and other
open area networks are new and evolving, it is difficult to predict with any
assurance whether the Internet will prove to be a viable commercial marketplace.
There can be no assurance that the infrastructure or complementary products
necessary to make the Internet a viable commercial marketplace will be developed
or, if developed, that the Internet will in fact become a viable commercial
marketplace. If the necessary infrastructure or complementary products are not
developed, or if the Internet does not become a viable commercial marketplace,
the Company's business, operating results and financial condition will be
materially adversely affected. See "Business."

9. NEED FOR MANAGEMENT OF GROWTH. The Company's rapid growth and plans for
further growth have placed, and are expected to continue to place, a significant
strain on its administrative, operational and

10
<PAGE>
financial resources. The Company's ability to sustain growth effectively will
depend, in part, on its ability to manage growth and to train, motivate and
manage its employees. Currently, the Company relies on a limited staff which is
responsible for all of the Company's activities, including sales and promotion,
client planning, product distribution and technical development of products for
clients. Many of the staff members are currently performing a combination of
these functions. The Company's continued growth will require it to recruit and
hire new technical, sales and marketing personnel so that the staff can be
better specialized to market the services of the Company and serve client needs.
At the present time, the Company plans to use a portion of the net proceeds of
this offering to increase its sales force and technical staff, although no
assurances can be given that qualified personnel can be hired. Market
competition for the services of the limited number of people who are capable of
performing the technical services of the Company is intense. The inability to
recruit, hire and retain necessary personnel or the emergence of unexpected
expansion difficulties could adversely affect the Company's business, operating
results and financial condition. See "Management" and "Business--Employees."

10. DEPENDENCE ON RELATIONSHIPS. The Company maintains many important
relationships with it clients and suppliers. These relationships often result in
opportunities for expanding the Company's client base, technical capability and
revenue base. The most significant of these relationships are with AT&T, IBM,
Hewlett Packard, Silicon Graphics, Microsoft, Netscape and Sybase. While the
Company has contracts with most of these companies, none of the contracts are
exclusive and for the most part these companies are free to terminate their
relationship with the Company at any time. The termination or deterioration of
one or more of these relationships could have a material adverse effect on the
Company's business, operating results and financial condition. See "Business."

11. DEPENDENCE ON MAJOR SUPPLIERS. During the first three quarters of
1996, resales of the products from four manufacturers or aggregators of
traditional products marketed by the Company accounted for over 5% of the
Company's net sales during such period. The four manufacturers and aggregators
are Hewlett Packard, Kimmon Electric of Japan, Tektronix and Micro Age. A
disruption in the supply from any of these companies could have an adverse
affect on the Company's short-term operating results, but management believes it
would be able promptly to find alternative sources for any such products.

12. DEPENDENCE ON RECURRING REVENUES. A substantial part of the Company's
income is derived from the recurring revenues associated with sales of supplies
to existing clients and periodic maintenance and upgrades to Internet and
Intranet sites. Clients of the Company are not required to purchase supplies
from the Company and may find another source for such supplies, or their need
for such supplies may diminish or disappear as a result of technological
advances or changes in customer utilization of hardware. In addition, most of
the Company's Internet/Intranet Solutions clients are not required to utilize
the Company for periodic maintenance and updates to their Internet and Intranet
sites. Although many of the sites designed for the Company's clients contain
proprietary tools licensed by the Company to such clients only so long as the
Company maintains such sites, such clients are nonetheless free to take the
information content of their sites to their own servers or servers maintained by
competitors of the Company. The loss of clients who provide recurring revenues
could have a material adverse effect on the Company. See "Business."

13. DEPENDENCE ON PROPRIETARY TECHNOLOGY; LACK OF PATENTS AND PROPRIETARY
PROTECTION; RISKS OF THIRD PARTY INFRINGEMENT CLAIMS. The Company presently has
no patents with respect to its proprietary technology. Instead, the Company
currently relies upon copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions, all of which afford only
limited protection, to protect its proprietary products. Accordingly, there can
be no assurance that the Company's measures to protect its current proprietary
rights will be adequate to prevent misappropriation of such rights or that the
Company's competitors will not independently develop or patent technologies that
are substantially equivalent or superior to the Company's technologies.
Additionally, although the Company believes that its products and technologies
do not infringe upon the proprietary rights of any third parties, there can be
no assurance that third parties will not assert infringement claims against the
Company. Similarly,

11
<PAGE>
infringement claims could be asserted against products and technologies which
the Company licenses, or has the rights to use, from third parties. Any such
claims, if proved, could materially and adversely affect the Company's business
and results of operations. In addition, although any such claims may ultimately
prove to be without merit, the necessary management attention to, and legal
costs associated with, litigation or other resolution of such claims could
materially and adversely affect the Company's business and results of
operations. See "Business--Proprietary Rights."

14. DEPENDENCE ON KEY PERSONNEL. The Company's success depends to a
significant extent on the continued service of certain key management personnel,
in particular Ralph Armijo, the Company's President and Chief Executive Officer.
The loss or interruption of Mr. Armijo's services, for whatever reason, would
have a material adverse effect on the Company. In the event of the loss of
services of Mr. Armijo, no assurance can be given that the Company will be able
to obtain the services of adequate replacement personnel. The loss or
interruption of the services of any of the Company's other senior management
personnel would also have an adverse effect on the Company. The Company has
entered into a two-year employment agreement with Mr. Armijo and the Company
currently maintains a $2 million life insurance policy on his life; however, no
assurance can be given that the Company will be able to keep such policy in
effect. The Company does not have employment agreements with or maintain life
insurance policies for any of its other executive officers. See "Management."

15. GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES. The Company is not
currently subject to direct regulation by any government agency, other than
regulations applicable to businesses generally. 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, unsolicited marketing, pricing and characteristics and quality of
products and services. The adoption of any such laws or regulations may decrease
the growth of the Internet, which could in turn decrease the demand for the
Company's products, 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 real and intellectual property ownership, libel and
personal privacy is uncertain.

16. ELIMINATION OF DIRECTOR LIABILITY. The Company's Articles of
Incorporation contain a provision eliminating a director's liability to the
Company or its shareholders for monetary damages for a breach of fiduciary duty,
except in circumstances involving certain wrongful acts, such as the breach of a
director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. The Company's Articles of
Incorporation also obligate the Company to indemnify its directors and officers
to the fullest extent permitted under Colorado law. While the Company believes
that these provisions will assist the Company in attracting and retaining
qualified individuals to serve as directors, they could also serve to insulate
directors of the Company against liability for actions which damage the Company
or its shareholders. See "Management."

17. HISTORY OF RELATED PARTY TRANSACTIONS. During the last two years, the
Company and IPI have borrowed approximately $360,000 from related parties, and
certain related parties have guaranteed receivables sold with recourse by the
Company in the maximum amount of $750,000 and a short term loan in the amount of
$70,000. The terms of these related party transactions were not subject to arm's
length negotiations and necessarily involved conflicts of interest between the
Company and the related parties. The Company's Articles of Incorporation require
that related party transactions either be approved by a majority of the
disinterested directors or the shareholders of the Company or that the
transactions be intrinsically fair to the Company. Nonetheless, there can be no
assurance that the Company will not engage in related party transactions which
are more favorable to the related parties than would be the case if the
transactions were subject to arm's length negotiations. See "Certain
Transactions."

12
<PAGE>
RISK FACTORS RELATING TO THIS OFFERING

1. IMMEDIATE AND SUBSTANTIAL DILUTION. An investor in this offering will
experience immediate and substantial dilution of $4.47, or 76%, per share
between the adjusted pro forma net tangible book value per share after the
offering and the initial public offering price of $5.90 per share. To the extent
that any Warrants, options or other securities convertible into shares of Common
Stock currently outstanding or subsequently granted to purchase the Common Stock
are exercisable at a price less than the net tangible book value per share
following this offering, there will be further dilution upon the exercise of
such securities. See "Dilution" and "Description of Securities."

2. CONTROL BY PRINCIPAL STOCKHOLDERS. Based upon the 2,804,721 shares of
Common Stock which will be outstanding upon completion of this offering,
assuming no exercise of the Warrants, the Over-allotment Option, the
Representative's Options or the Employee's Options, the Company's officers and
directors, as a group, will beneficially own and control 42% of the Company's
outstanding Common Stock (or approximately 24% assuming all of the foregoing
Warrants and options are granted and exercised to their fullest extent). In
addition, cumulative voting (which provides that a stockholder can cast votes in
the election of directors equal to the number of shares owned by such
stockholder multiplied by the number of directors to be elected to a single
candidate or among the candidates as the stockholder wishes) is not permitted
with respect to the Company's Common Stock. As a result, these persons acting
together, although not controlling a majority of the Common Stock, will be able
to exercise significant influence over all matters requiring stockholder
approval, including the election of directors and the approval of significant
corporate transactions. See "Principal Stockholders."

3. NO DIVIDENDS ON COMMON STOCK. The Company has not previously paid any
cash or other dividends on its Common Stock and does not anticipate payment of
any dividends for the foreseeable future, it being anticipated that any earnings
would be retained by the Company to finance its operations and future growth and
expansion. See "Dividend Policy."

4. ARBITRARY DETERMINATION OF OFFERING PRICE. The Combined Offering Price
for the Securities has been determined by negotiations between the Company and
the Representative and does not necessarily bear any relationship to the assets,
performance, book value or net worth of the Company or any other recognized
criteria of value. Among the factors considered in determining such price were
the business experience of the Company's management, the prospects for the
industry in which the Company operates, growth prospects of the Company and
prevailing market conditions generally. The Combined Offering Price should not
be considered to be an indication of the actual value of the Company. See
"Dilution" and "Underwriting--Determination of Offering Price."

5. MANAGEMENT'S BROAD DISCRETION IN APPLICATION OF PROCEEDS; UNSPECIFIED
POSSIBLE FUTURE ACQUISITIONS. Although the Company has tentatively allocated the
net proceeds from this offering for various uses, the projected expenditures are
estimates and approximations and do not represent firm commitments of the
Company. Accordingly, management of the Company has broad discretion to adjust
the application and allocation of 100% of the net proceeds of this offering
estimated to be $3,584,050, in order to address changed circumstances and
opportunities. In the event that the Company's plans change, or if the proceeds
of this offering together with the Company's cash flow prove to be insufficient
to fund operations, the Company may find it necessary to reallocate some or all
of the proceeds from the offering. A portion of the proceeds allocated to
Working Capital and other General Corporate Purposes ($1,434,050 or 40% of the
net proceeds of this offering) may be used to acquire the assets or operations
of companies which would supplement the growth of the Company. No such
opportunities are currently under consideration. If the Company does enter into
any such acquisition transactions, the shareholders of the Company may not have
the ability to review the financial statements of the acquisition candidate or
to vote on the acquisition. See "Use of Proceeds."

6. OFFICERS/DIRECTORS/AFFILIATES TO BENEFIT FROM PROCEEDS. Approximately
$150,000 of the proceeds of this offering have been allocated to the repayment
of indebtedness, representing approximately 4% of the

13
<PAGE>
net proceeds of the offering. Approximately $100,000 will be used to pay the
remaining balance on a promissory note of the Company in favor of Mr. Arthur
Armijo in the original principal amount of $119,199. Mr. Armijo is a former
director and the brother of the Company's President. Approximately $50,000 will
be used to pay the remaining balance on a promissory note of the Company in
favor of Mr. Patrick Mawhinney in the original principal amount of $45,110. Mr.
Mawhinney is the Chief Financial Officer and a director of the Company. The use
of the proceeds for this purpose will reduce the amount of proceeds available
for other corporate purposes. See "Use of Proceeds" and "Certain Transactions."

7. NO ASSURANCE OF PUBLIC TRADING MARKET; RISKS ASSOCIATED WITH "PENNY
STOCKS;" Prior to this offering, there has been no established trading market
for the Company's securities and there can be no assurance that an active
trading market for the Company's securities will develop after the completion of
this offering. If a trading market does in fact develop for the Securities
offered hereby, there can be no assurance that it will be sustained. The Common
Stock and Warrants have been approved for listing on the Nasdaq SmallCap-SM-
Market System ("NASDAQ"). If the Company should experience losses from
operations, it may be unable to maintain the standards for continued quotation
on NASDAQ. If, for any reason, the Company's securities are not eligible for
either listing or continued listing on NASDAQ or if a public trading market does
not develop, purchasers of the Securities may have difficulty selling their
Securities should they desire to do so. If the Company's securities are not
eligible for listing or continued listing on NASDAQ, they may become subject to
rules of the Securities and Exchange Commission concerning penny stocks, which
could materially, adversely affect the liquidity of the Company's securities.
The regulations define a penny stock as any equity security not listed on a
regional or national exchange or NASDAQ that has a market price of less than
$5.00 per share, subject to certain exceptions. The material, adverse effects of
such designation could include, among other things, impaired liquidity with
respect to the Company's securities and burdensome transactional requirements
associated with transactions in the Company's securities, including, but not
limited to, waiting periods, account and activity reviews, disclosure of
additional personal financial information and substantial written documentation.
These requirements could lead to a refusal of certain broker-dealers to trade or
make a market in the Company's securities.

8. POSSIBLE VOLATILITY OF STOCK PRICE. The trading prices of the Company's
securities could be subject to wide fluctuations in response to quarterly
variations in actual or anticipated results of operations of the Company,
changes in analysts' earnings estimates, announcements of technological
innovations or new products or services by the Company or its competitors,
general conditions in the Internet or other high technology industries or other
factors. In addition, the securities markets frequently experience extreme price
and volume fluctuation which affect market prices for securities of companies
generally, and technology companies in particular. Such fluctuations are often
unrelated to the operating performance of the affected companies. Broad market
fluctuations may adversely affect the market price of the Company's securities.

9. POSSIBLE ADVERSE EFFECTS DUE TO SHARES ELIGIBLE FOR FUTURE SALE. Upon
consummation of this offering, the Company will have 2,804,721 shares of Common
Stock outstanding, of which 755,000 shares of Common Stock offered hereby by the
Company and the 245,000 shares of Common Stock offered by the Bridge Financing
Selling Stockholders will be freely tradable without restriction or further
registration under the Securities Act of 1933, as amended (the "Securities
Act"). In addition, 104,126 additional shares of Common Stock issuable upon
conversion of the Bridge Promissory Notes are also being registered
simultaneously with this offering for resale by the holders thereof from time to
time after ten months from the consummation of this offering. When sold, such
shares will be freely tradable without restriction or further registration under
the Securities Act. The remaining 1,700,595 shares of Common Stock are
"restricted securities" as that term is defined under Rule 144 promulgated under
the Securities Act and may only be sold pursuant to a registration statement
under the Securities Act; in compliance with the exemption provisions of Rule
144; or pursuant to another exemption under the Securities Act. The holders of
all 1,700,595 restricted shares have agreed not to sell any shares of Common
Stock owned by them for a period of twelve months after the date of this
Prospectus without the Representative's prior written

14
<PAGE>
consent. No prediction can be made as to the effect, if any, that sales of
shares of Common Stock or even the availability of such shares for sale will
have on the market prices of the Company's securities prevailing from time to
time. The possibility that substantial amounts of the Company's securities may
be sold in the public market may adversely affect prevailing market prices for
the securities and could impair the Company's ability to raise capital through
the sale of its equity securities. See "Description of Securities," "Shares
Eligible for Future Sale" and "Underwriting."

10. FUTURE ISSUANCES OF STOCK BY THE COMPANY WITHOUT SHAREHOLDER
APPROVAL. Following the sale of the Securities offered hereby, a total of
2,804,721 shares of Common Stock will be issued and outstanding. The remaining
authorized but unissued shares of Common Stock not reserved for specific
purposes may be issued without any action or approval of the Company's
stockholders. Although there are no present plans, agreements or undertakings
involving the issuance of such shares, except as disclosed in this Prospectus,
any such issuances could be used as a method of discouraging, delaying or
preventing a change in control of the Company or could significantly dilute the
public ownership of the Company, which could adversely affect the market. There
can be no assurance that the Company will not undertake to issue such shares if
it deems it appropriate to do so. The holders of options, Warrants and other
securities convertible into shares of Common Stock have the opportunity to
profit from a rise in the market price of the Common Stock, if any, without
assuming the risk of ownership, with a resulting dilution in the interest of
other stockholders. The existence of the aforementioned options and Warrants and
any other options or warrants that may be granted in the future may prove to be
a hinderance to future equity financings by the Company. Further, the holders of
such warrants and options may exercise them at a time when the Company would
otherwise be able to obtain additional equity capital on terms more favorable to
the Company. See "Description of Securities."

11. CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO EXERCISE
WARRANTS. The Company will be able to issue shares of its Common Stock upon the
exercise of Warrants only if there is a current prospectus relating to the
Common Stock issuable upon the exercise of the Warrants under an effective
registration statement filed with the Securities and Exchange Commission and
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 has undertaken to maintain the
effectiveness of a current Prospectus covering the Common Stock underlying the
Warrants, there can be no assurance that the Company will be successful in
maintaining a current registration statement. The Warrants, therefore, may be
deprived of any value if for any reason a current prospectus covering the Common
Stock issuable upon exercise of the Warrants is not kept effective, or if such
Common Stock is not qualified or exempt from qualification in the states in
which the Warrant holders reside. The Company intends to qualify the sale of the
Common Stock and the Warrants in all states in which the Units are initially
sold, although certain exemptions under certain state securities ("blue sky")
laws may permit the Common Stock and Warrants to be transferred to purchasers in
states other than those in which the Common Stock and Warrants were initially
qualified. See "Description of Securities--Warrants."

12. WARRANTS SUBJECT TO REDEMPTION. Each Warrant will entitle the holder
to purchase one share of Common Stock at an exercise price equal to 120% of the
Offering Price commencing from the effective date of this Prospectus. The
Warrants are redeemable by the Company for $.05 per Warrant at any time one year
after the date of this Prospectus (which period may be reduced or waived by the
Representative in its sole discretion) upon at least thirty days' prior written
notice provided the closing price of the Common Stock for twenty consecutive
trading days within the thirty-day period preceding the date of the notice of
redemption equals or exceeds 140% of the Offering Price. In the event the
Company exercises the right to redeem the Warrants, a holder would be forced
either to exercise the Warrants within the period of the notice of redemption
(which could occur at a time when it may be disadvantageous to do so), to sell
the Warrants at the then current market price when the holder might otherwise
wish to hold them, or to accept the redemption. The Company presently expects to
call all of the Warrants for redemption as soon as

15
<PAGE>
permitted provided that a current prospectus relating to the Common Stock
underlying such Warrants is then in effect. See "Description of
Securities--Warrants."

13. CONTINUING INVOLVEMENT WITH REPRESENTATIVE. The Underwriting Agreement
with the Representative provides for the Company's continuing involvement with
the Representative after this offering, including (i) the Company's agreement to
retain the Representative as a consultant for two years from the date of this
Prospectus for a fee of $3,000 per month, (ii) the Company's agreement to allow
the Representative to nominate a director or to designate a consultant to the
Board of Directors for a period of four years from the date of this Prospectus,
(iii) the Company's agreement to appoint the Representative as Warrant
solicitation agent and to pay a fee for such services equal to three percent of
the exercise price of Warrant exercises solicited by the Representative, (iv)
the grant to the Representative of an option to purchase 100,000 shares of
Common Stock at an exercise price of 120% of the offering price for the Common
Stock, and (v) the right of the Representative to allow the Company to redeem
the Warrants at a date earlier than twelve months after the date of this
Prospectus provided the other conditions for redemption have been satisfied. The
fees to be paid to the Representative will reduce the amount of working capital
available for other purposes and the Representatives options involve the risks
specified above under "Future Issuances of Stock by the Company Without
Shareholder Approval." See "Underwriting Agreement," "Additional Registered
Securities" and "Description of Securities--Stock Purchase Warrants."

USE OF PROCEEDS

After deducting the underwriting discount of $455,450 and other expenses of
the offering estimated to be $515,000 (which includes the Representative's
non-accountable expense allowance), the Company will receive net proceeds from
the offering of approximately $3,584,050. The Company expects to use the
proceeds substantially as follows:

<TABLE>
<CAPTION>
APPROXIMATE
APPROXIMATE PERCENTAGE OF
APPLICATION OF PROCEEDS DOLLAR AMOUNT NET PROCEEDS
- ------------------------------------------------------------------------------------ -------------- ----------------
<S> <C> <C>
Purchase of Capital Equipment(1).................................................... $ 750,000 21%
Development of Internet/Intranet Solutions(2)....................................... 750,000 21%
Advertising and Marketing(3)........................................................ 500,000 14%
Repayment of Loans(4)............................................................... 150,000 4%
Working Capital and Other General Corporate Purposes(5)............................. 1,434,050 40%
-------------- ---
Total........................................................................... $ 3,584,050 100%
-------------- ---
-------------- ---
</TABLE>

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

(1) Such proceeds will be utilized for the purchase of additional computer
equipment, information systems and database services required in connection
with the Company's anticipated growth.

(2) Includes the development of new proprietary software tools, upgrades of
existing proprietary software tools, license fees for third-party software
tools and training of personnel for new Internet/Intranet technologies and
applications.

(3) Such proceeds will principally be used for purchasing advertising in trade
journals, newsprint and on the Internet to expand awareness of the Company's
products and services in domestic and international markets.

(4) Includes repayment of the loans to Arthur Armijo, the brother of the
Company's President, and Patrick Mawhinney, a director, executive officer
and principal shareholder of the Company. The loan from Mr. Armijo bears
interest at 5% per annum and has no fixed maturity date. The loan from Mr.
Mawhinney bears interest at 10% per annum and matures December 31, 1997.

16
<PAGE>
(5) This sum shall be available to fund anticipated increases in accounts
receivable and inventories and for the payment of operational expenses
including salaries, rent and other similar items to the extent revenues from
operations are insufficient for such purposes. Additionally, these proceeds
may be used to acquire the assets or operations of other companies which
would supplement the growth of the Company. No such opportunities are
currently under consideration.

The amounts set forth above are the Company's best estimates based upon its
present plans and certain assumptions regarding general economic and industry
conditions and the Company's anticipated future revenue and expenditures, and
merely indicate the proposed use of proceeds. Actual expenditures may vary
substantially from these estimates depending upon many factors, such as the
financial health of the Company, economic conditions, possible mergers with or
acquisitions of other companies (the determination of which shall be in the sole
discretion of management), the success, if any, of the Company's business and
operations and the availability of other financing arrangements, such as lines
of credit and loans. Accordingly, stockholders of the Company must rely upon the
judgment and discretion of management with regard to that portion of the net
proceeds of this offering allocated for working capital and general corporate
purposes. To the extent that the Over-allotment Option or the Warrants are
exercised, any proceeds received from such exercise will be used for Working
Capital and Other General Corporate Purposes. Pending use of the proceeds from
this offering as set forth above, the Company may invest all or a portion of
such proceeds in short-term bank certificates of deposit, U.S. Government
obligations, money market investments and short-term investment grade
securities.

DIVIDEND POLICY

The Company intends to retain earnings, if any, to finance the development
and expansion of its business. Accordingly, the Company does not intend to pay
cash dividends in the foreseeable future on its Common Stock. 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 payment of
dividends, therefore, is within the discretion of the Company's Board of
Directors. Cash dividends, if any, that may be paid in the future to holders of
Common Stock will be payable when, as and if declared by the Board of Directors
of the Company, based upon the Board's assessment of the financial condition of
the Company, its earnings, need for funds, capital requirements and other
factors, including any applicable laws. In addition, any financing which the
Company may obtain in the future may contain provisions restricting the
Company's ability to pay dividends. The Company is not currently a party to any
agreement restricting the payment of dividends.

17
<PAGE>
DILUTION

The difference between the initial public offering price per share of Common
Stock and the adjusted pro forma net tangible book value per share after giving
effect to this offering constitutes the dilution to investors in this offering.
Adjusted pro forma net tangible book value per share is determined by dividing
the adjusted pro forma net tangible book value of the Company (total tangible
assets less total liabilities) by the number of shares of Common Stock
outstanding. All numbers included herein assume conversion of all of the Bridge
Promissory Notes to Common Stock and Warrants prior to this offering and do not
give effect to the conversion or exercise of any convertible securities or
options outstanding or being sold hereby.

At September 30, 1996, the net tangible book value of the Company was
negative $(1,025,343), or $(0.60) per share of Common Stock (based on 1,700,595
shares outstanding). After giving effect to the Bridge Financing Private
Placement, the net tangible book value of the Company would have been $334,657,
or $.16 per share of Common Stock (based on 2,049,721 shares outstanding,
assuming the issuance of an aggregate of 349,126 shares upon conversion of the
Bridge Promissory Notes). After giving effect to the sale by the Company of the
755,000 shares of Common Stock offered by it hereby and the receipt of estimated
net proceeds to the Company of $3,584,050 (after deducting underwriting
discounts and commissions and estimated expenses of this offering), and after
giving effect to the merger with IPI and the Bridge Financing Private Placement,
the net tangible book value of the Company at September 30, 1996, would have
been $3,999,446 or $1.43 per share. This represents an immediate increase in the
net tangible book value of $1.27 per share to the existing stockholders and an
immediate dilution of net tangible book value of $4.47 (or 76%) per share to new
investors in this offering. The following table illustrates the foregoing
dilution to the investors on a per share basis:

<TABLE>
<CAPTION>
Initial public offering price per share............................... $ 5.90
<S> <C> <C>
Pro forma net tangible book value per share before offering........... $ .16
Increase per share attributable to new investors...................... $ 1.27
---------
Pro forma net tangible book value per share after offering............ $ 1.43
---------
Dilution per share to new investors................................... $ 4.47
---------
---------
</TABLE>

To the extent outstanding options and Warrants are exercised, further
dilution to new investors in this offering may result.

The following table sets forth, on an unaudited pro forma basis as of
September 30, 1996, the differences in the total consideration and the average
price per share paid by the Company's existing stockholders, the Bridge
Financing Selling Stockholders and investors in this offering with respect to
the Company's Common Stock:

<TABLE>
<CAPTION>
TOTAL CONSIDERATION
SHARES PURCHASED -------------------------
--------------------------------------------- AVERAGE
APPROX. APPROX. PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
-------------- ------------ --------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Existing Stockholders............................. 1,700,595 60.6% $ 822,104(3) 11% $ 0.48
Bridge Financing Selling Stockholders............. 104,126(1) 3.7% 428,999 6% $ 4.12
New Investors..................................... 1,000,000(2) 35.7% 5,900,000 83% $ 5.90
-------------- --- --------------- --- -----
Total......................................... 2,804,721 100% $ 7,151,103 100% $ 2.55
-------------- --- --------------- --- -----
-------------- --- --------------- --- -----
</TABLE>

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

(1) Does not include 245,000 shares of Common Stock sold in this offering by the
Bridge Financing Selling Stockholders.

(2) Includes 755,000 shares of Common Stock purchased from the Company and
245,000 shares of Common Stock purchased from the Bridge Financing Selling
Stockholders.

(3) Includes paid in capital of the Company at September 30, 1996 and the value
assigned to the shares of Common Stock issued to IPI shareholders in the
merger.

18
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company as of
September 30, 1996 (i) on an actual basis; (ii) on a pro forma basis to reflect
the issuance of an additional $620,000 of the Bridge Promissory Notes from
October 1, 1996 through October 18, 1996; and (iii) on a pro forma basis as
adjusted to give effect to the conversion of the Bridge Promissory Notes into
349,126 shares of Common Stock and Warrants upon consummation of this Offering,
and the sale of the 755,000 shares of Common Stock and 1,000,000 Warrants
offered by the Company hereby and the application of the net proceeds therefrom
as described under "Use of Proceeds." This table should be read in conjunction
with the Financial Statements and Notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
(IN THOUSANDS)
--------------------------------------
PRO FORMA AS
ACTUAL PRO FORMA ADJUSTED
--------- ------------ -------------
<S> <C> <C> <C>
Long-term debt................................................................. $ 959 $ 1,579(1) $ 141(2)

Shareholder's Equity
Common Stock, no par value, authorized 20,000,000 shares; issued and
outstanding 1,700,595 shares actual; 1,700,595 shares pro forma; 2,829,721
shares pro forma as adjusted............................................... 400 400 5,217

Accumulated Deficit............................................................ (410) (410) (410)
--------- ------ ------
Total Shareholder's Equity (Deficit)........................................... $ (10) $ (10) $ 4,807
--------- ------ ------
Total Capitalization....................................................... $ 949 $ 1,569 $ 4,948
--------- ------ ------
--------- ------ ------
</TABLE>

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

(1) Includes Bridge Promissory Notes in the principal amount of $1,437,500.

(2) Reflects the conversion of the Bridge Promissory Notes.

19
<PAGE>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

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

(1) IPI was incorporated May 15, 1995.

(2) Reflecting the combination of the Company and IPI as if the acquisition
occurred January 1, 1995.

(3) Reflecting the combination of the Company and IPI as if the acquisition
occurred January 1, 1996.

(5) Reflecting the Company as if the issuance of the Bridge Promissory Notes
were completed on Sepember 30, 1996.

(6) Reflecting the Company as if the issuance and conversion of the Bridge
Promissory Notes and this offering were completed on September 30, 1996.

20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company was organized as ACI Systems, Inc. in July 1993. The Company's
principal sources of revenue are resales of computer equipment, high technology
peripherals and electronic components manufactured by independent vendors
("Product Distribution") and services related to Internet/Intranet Solutions.
Effective July 1, 1996, the Company acquired all of the outstanding common
shares of IPI in exchange for 678,877 shares of the Company's Common Stock and a
promissory note for $75,000 payable to a shareholder of IPI and merged IPI into
the Company. Management believes the merger with IPI has accelerated
implementation of the Company's Internet/Intranet Solutions operating plan while
contributing to continued growth in systems integration and sales of networking
and computer peripherals and supplies. The historic operations of IPI prior to
the merger were minimal and comparable financial data is not available.
Accordingly, only limited discussion of IPI operating results is possible.

The Company's strategy is to increase revenue generated by its two core
competencies: (1) Internet/ Intranet Solutions, which are focused in five major
market areas, including computer and network infrastructure equipment, software
and services, content and aggregation, electronic commerce and order
fulfillment, and (2) Product Distribution. The Company has built and intends to
continue to build an infrastructure that assumes this strategy will succeed. The
failure of the Company to achieve this strategy could have a material adverse
effect on the Company's business, financial condition and results of operations.

The Company recognizes revenue upon delivery of its Internet/Intranet
Solutions and Product Distribution goods. Internet/Intranet Solutions generally
begin with consulting arrangements which are billed on an hourly basis and
progress to a bid for a proposed project. Deposits are then taken upon
acceptance of the bid. Most of the Company's customers elect to update and
expand their Web sites frequently, and clients are billed monthly on a time and
materials basis for these services. Additional sources of ongoing revenue
include revenue from advertising sold by the Company on clients' Web sites,
revenue from sales of merchandise and services over clients' Web sites and
revenue from maintenance of client Web sites. The Company receives a percentage
of the gross revenue from advertising and merchandise sales immediately upon
completion of these sales.

Presently, the Company factors its receivables on a recourse basis allowing
it to have readily available access to cash from receivables at acceptable
discount rates. See Note 7 to the Financial Statements of NAVIDEC, Inc.
Depending upon the Company's cash position, management will consider alternative
credit facilities in order to lower its cost of capital.

21
<PAGE>
RESULTS OF OPERATIONS

NAVIDEC, INC.

The following table sets forth for the periods indicated the percentage of
net sales represented by certain line items included in the Company's statement
of operations.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED
SEPTEMBER 30 DECEMBER 31
------------------------ ------------------------
1996 1995 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales............................................................... 100% 100% 100% 100%
Cost of Sales........................................................... 81 81 81 75
--- --- --- ---
Gross Margin............................................................ 19 19 19 25
Operating Expense....................................................... 33 17 19 23
Other Income (Expense).................................................. (3) (1) (1) 1
--- --- --- ---
Net Income (Loss)....................................................... (17)% 2% (1)% (1)%
--- --- --- ---
--- --- --- ---
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Net sales for the nine months ended September 30, 1996 were $4,222,433 which
represents an increase of 39% compared to the prior year period net sales of
$3,044,539. The increase in net sales was principally due to implementation of
the Company's Internet/Intranet Solutions operating plan, growth in systems
integration and growth in sales of networking and computer peripherals and
supplies.

Gross margin was 19% during the nine months ended September 30, 1996 and
1995. Subsequent to the merger with IPI, gross margin improved as compared to
the first six months of 1996 as a result of a larger proportion of sales from
Internet/Intranet Solutions, including advertising and merchandise sales.

Operating expenses for the nine months ended September 30, 1996 were
$1,390,779 compared with $508,235 for the prior year period. The increase in
operating expenses was primarily the result of an increase in staff and
marketing activity and legal and consulting fees. Operating expenses related to
executive salary will be higher in future periods as a result of employment
agreements with officers and others executed during the third quarter of 1996.

Net interest expense for the nine months ended September 30, 1996 was
$128,332 compared with $21,135 for the prior year period. The increased interest
expense for 1996 was a direct result of the Bridge Promissory Notes, increased
credit facilities with the Company's banks and expenses related to loans from
its principal shareholders. Interest expense should be reduced during fiscal
1997 as a result of the conversion of the Bridge Promissory Notes upon
consummation of this offering.

YEAR ENDED DECEMBER 31, 1995 AND 1994

Net sales for fiscal 1995 were $4,120,742 which represents an increase of
125% compared to net sales of $1,830,734 in fiscal 1994. The increase was
primarily attributable to the Company's introduction of new products and
services with an emphasis in two areas: (1) computer systems integration and
networking and (2) computer peripherals and supplies. Net sales generated by
systems integration and networking increased by $1,323,476, or 1620%, in fiscal
1995 to $1,405,183 compared to $81,707 for fiscal 1994. Net sales generated by
computer peripherals and supplies increased by $779,812, or 309%, in fiscal 1995
to $1,032,003 compared to $252,191 for fiscal 1994. The increase in revenues in
both cases was primarily attributable to expanded product lines, increased
marketing activities and greater market penetration.

Gross margin was 19% during fiscal 1995 as compared to 25% during fiscal
1994. The decline in gross margin was principally due to the increased cost of
products imported from Japan (as a result of the decreased value of the Dollar
against the Yen) and increased sales of higher volume, lower gross margin

22
<PAGE>
products. Gross margins have improved in the third quarter of 1996 as a result
of increasing sales of higher margin Internet/Intranet Solutions.

Operating expenses for fiscal 1995 were $784,150 compared with $497,284 for
fiscal 1994. The increase in operating expenses was primarily due to an increase
in personnel expenses.

Net interest expense for fiscal 1995 was $29,739 compared with $17,867 for
fiscal 1994, reflecting the Company's increased borrowing levels during fiscal
1995.

IPI

MAY 15, 1995 (INCEPTION DATE) TO DECEMBER 31, 1995

IPI was founded in May 1995 and therefore had no revenues during fiscal
1994. Revenues for 1995 were $167,574. Gross margin was 78% of revenues during
1995, which reflects the nature of IPI's business of providing high margin
services which are billed at a contract or hourly basis to its customers.
Operating expenses for the year ended December 31, 1995 totalled $131,739. The
principal operating expenses were salary, payroll taxes and marketing expenses.

SIX MONTHS ENDED JUNE 30, 1996

Revenues for the six months ended June 30, 1996 were $185,429 with gross
margin of 68%. Operating expenses for the six months ended June 30, 1996 were
$225,161. The decline in gross margin and increase in operating expenses for the
six months ended June 30, 1996 compared to the period ended December 31, 1995
resulted principally from the decision of IPI's management to invest in content
aggregation Web sites such as All About Colorado. See "Business."

LIQUIDITY AND CAPITAL RESOURCES

Through September 30, 1996, the Company funded its operations primarily
through revenues generated from operations, the Bridge Financing Private
Placement, loans from principal shareholders and employees, lines of credit and
factoring arrangements made available to it by banks. On September 30, 1996, the
Company had cash and cash equivalents of $276,804 and a net working capital
deficit of $462,531. This compares with cash and cash equivalents of $106 and a
working capital deficit of $92,423 at December 31, 1995.

The Company raised net proceeds of approximately $1,232,670 from sale of the
Bridge Promissory Notes from August through October 18, 1996. Management
believes that such proceeds combined with the proceeds of this offering will be
sufficient to fund the Company's operations for at least the next twelve months.

Cash used in operating activities for the Company totalled $605,359 and
$48,554 for the nine month periods ended September 30, 1996 and 1995,
respectively. Cash used in investing activities consisted of expenditures for
property and equipment. Such expenditures increased to $377,307 during the nine
months ended September 30, 1996 from $35,140 during the prior year period
primarily due to expanded operations. During the nine months ended September 30,
1996 and 1995, cash from financing activities included borrowings (including
advances under the Company's line of credit and factoring arrangement and
proceeds from the Bridge Financing Private Placement) of $3,206,866 and
$661,698, respectively, net of note and line of credit payments of $2,519,772
and $580,658, respectively.

Cash used in operating activities by the Company totalled $104,951 during
fiscal 1995 as compared to $153,931 during fiscal 1994. Cash used in investing
activities in each of fiscal 1995 and fiscal 1994 consisted of expenditures for
property and equipment of $34,210 and $33,600, respectively. Expenditures for
property and equipment were the direct result of increasing business operations.
Cash provided by financing activities consisted of borrowings (including
advances under the Company's revolving line of

23
<PAGE>
credit) of $790,215 and $488,885 during fiscal 1995 and fiscal 1994,
respectively, net of $659,004 and $330,203 in note and line of credit payments
during fiscal 1995 and fiscal 1994, respectively.

The Company has not recorded a deferred tax asset as it cannot conclude to
date that it is more likely than not that the deferred tax asset will be
realized.

The Company's independent auditor has included paragraphs in each of its
reports accompanying the audited financial statements of the Company as of
September 30, 1996 and December 31, 1995 and 1994, and the audited financial
statements of IPI as of December 31, 1995, which state that the respective
losses from operations and negative cash flows from operations of the Company
and IPI raise substantial doubt about each company's ability to continue as a
going concern (see pages F-7 and F-22 of the Financial Statements). IPI was
merged into the Company in July 1996 and accordingly no longer operates as a
separate entity. The Company incurred a net loss of approximately $900,000 for
the first nine months of 1996 on a pro forma combined basis and will incur
significant cost in further development of its Internet/ Intranet Solutions. The
Company has however experienced a 39% increase in net sales for the nine months
ended September 30, 1996 compared to the prior year period and management
believes that gross margin will improve in future periods as a result of
increasing sales of higher margin Internet/Intranet Solutions. The Company's net
loss for the nine months ended September 30, 1996 reflected increased operating
expenses, which are expected to decline as a percentage of net sales in periods
following this offering.

The Company raised net proceeds of approximately $1,232,670 from sales of
the Bridge Promissory Notes from August through October 18, 1996. At September
30, 1996, the Company's current liabilities exceeded its current assets by
approximately $463,000, its cash balance was $276,804, and it had fully utilized
its receivables factoring arrangement. Since such date, the Company has expended
substantially all of the net proceeds from the sale of the Bridge Promissory
Notes, and the Company's cash position has declined accordingly. The Company
nonetheless believes that the proceeds of this offering will be sufficient to
meet its cash requirements for at least the next 12 months. See "Use of
Proceeds." There can however be no assurance that the Company will be profitable
in the future or that the net proceeds of this offering, together with any funds
provided by operations and presently available capital, will be sufficient to
fund the Company's ongoing operations. If the Company has insufficient funds,
there can be no assurance that additional financing can be obtained on
acceptable terms, if at all. The absence of such financing would have a material
adverse effect on the Company's business, including a possible reduction or
cessation of operations.

Upon completion of this offering, the Company plans to use a substantial
portion of the proceeds to expand its Internet/Intranet Solutions business.
Planned expenditures include up to $750,000 for the purchase of additional
computer equipment, information systems and database services required in
connection with the Company's anticipated growth; up to $750,000 for the
development of new proprietary software tools, upgrades of existing proprietary
software tools, license fees for third-party software tools and training of
personnel for new Internet/Intranet technologies and applications; and up to
$500,000 for advertising and marketing including advertising in trade journals,
newsprint and on the Internet to expand awareness of the Company's products and
services. See "Use of Proceeds."

Except for historical information contained herein, statements in this
discussion, including information regarding the combined business of the Company
and IPI, are forward looking statements. Forward looking statements involve
known and unknown risks and uncertainties which may cause the Company's actual
results in future periods to differ materially from forecast results.

INFLATION

The Company does not believe that inflation will have a material impact on
the Company's future operations.

24
<PAGE>
BUSINESS

OVERVIEW

The Company is a leading provider of comprehensive Internet and Intranet
solutions for regional, national and international business organizations. The
Company also serves as a distributor of various high technology and other
products through traditional and electronic channels. The Company provides its
services and distributes its products to over 500 customers as of the date of
this Prospectus. The Company's Internet/Intranet Solutions focus on all aspects
of commercial Internet and Intranet presence, including design and development
of World Wide Web ("WWW" or "Web") sites, marketing, database integration,
electronic commerce and order fulfillment. Product distribution includes the
sale of high technology systems and components manufactured by third parties,
principally through traditional distribution channels, and related services. The
Company's core competencies in Internet/Intranet technology and traditional
product marketing and distribution form its business model of providing complete
Internet/Intranet Solutions. These solutions include computer and network
infrastructure equipment, software and services, content and aggregation,
electronic commerce and fulfillment of orders.

The Company was formed as a Colorado corporation in July 1993 and since that
time has engaged in the distribution of high technology products and related
services. The Company merged with IPI, a designer and developer of Internet
World Wide Web sites, in July 1996. The Company issued an aggregate of 678,877
shares of Common Stock to the shareholders of IPI and a promissory note in the
amount of $75,000 to one shareholder of IPI in exchange for all of the issued
and outstanding stock of IPI. Prior to the merger, there was no affiliation
between the Company or its officers and directors and IPI and its former
officers, directors and principal shareholders. The terms of the merger were
determined by arm's length negotiations between the Company and IPI. The merger
was consummated in order to establish the Company's business model of combined
expertise in traditional marketing and distribution and Internet/ Intranet
technology.

BUSINESS STRATEGY

The Company's goal is to enhance its position as a leading provider of
comprehensive networking and electronic marketing and distribution solutions to
regional, national and international clients. To achieve this objective, the
Company is pursuing the following strategies.

LEVERAGE EXPERTISE AND CORE COMPETENCIES. The Company leverages its
expertise in two core businesses, high technology product distribution and
Internet/Intranet Solutions, into complete electronic marketing and networking
solutions. The Company's solutions span all segments of the commercial Internet
industry, including networking equipment and routers, Internet software,
Internet/Intranet design and implementation, content creation and aggregation,
promotion and advertising, electronic commerce and order fulfillment. Management
believes that its ability to offer this full range of Internet/Intranet products
and services as well as traditional distribution and marketing services is
unique in its industry.

EXPLOIT RECURRING REVENUE STREAMS. The Company emphasizes ongoing services
to its Internet/ Intranet Solutions clients, which services are a source of
recurring revenues often well in excess of the fees associated with initial Web
site development. Most of the Company's clients elect to update and expand their
Web sites on at least a monthly basis to reflect updated information and the
latest Internet technology. The data underlying a number of client Web sites is
stored on a Company server which is connected to the Internet by a high-speed
T-1 connection. The Company receives a monthly maintenance fee for this
"hosting" service. The Company also develops and markets advertising space on a
number of client Web sites and receives a portion of the revenues generated from
such advertisements. Annual recurring revenues derived from some
Internet/Intranet Solutions clients have been several times the original site
development revenues from those clients.

25
<PAGE>
DEVELOP STRATEGIC RELATIONSHIPS. The Company has developed technology,
marketing and distribution relationships with a number of leading Internet
industry and computer companies. Important relationships include those with
AT&T, IBM, Silicon Graphics, Sybase, Netscape, Netcom, Verity, Ajilon Services
and Ryan & Associates. The Company's strategic relationships with IBM and AT&T
have led to subcontracting agreements with those companies for the provision by
the Company of Internet/Intranet Solutions to customers of IBM and AT&T. See
"--Marketing." As a result of the Company's technical expertise, it has been
designated as a Netscape Commercial Applications Products Provider Partner
(NCAPP), which is Netscape's top reseller designation and which allows the
Company to offer all of Netscape's high-end commercial Internet software
products to its clients. These and other strategic relationships have fueled
much of the recent growth of the Company, and management expects them to
continue to generate additional clients and revenue.

MAINTAIN EXPERTISE. The Company intends to use a substantial portion of the
proceeds from this offering for development of proprietary software tools,
licensing of new third-party software tools and training of personnel in order
to maintain the Company's technological expertise. See "Use of Proceeds."

EMPHASIZE CLIENT RETURN ON INVESTMENT. The Company furnishes clients with
solutions which are designed to provide a return on their investment through
generation of leads, increased sales, reduced personnel expenses and/or revenues
from advertising. The Company intends to further promote advertising on client
Internet and Intranet sites as a means of offsetting clients' site development,
update and maintenance costs. The Company also intends to emphasize hardware
solutions such as on- and off-site free standing kiosks which include a computer
terminal linked to the Web site of the client. These kiosks are designed to
expand the audience for the client's electronic marketing presence.

PROMOTE INTRANETS. The Company believes that many companies can benefit
from the ease of use and familiarity of a Web-style interface for their internal
networks. Intranets can provide an open, non-proprietary "enterprise" interface
to a closed, proprietary "legacy" database system, thereby avoiding the need to
replace the entire legacy system when an updated enterprise interface is
desired. The Company has an informal strategic relationship with Ajilon
Services, a major provider of legacy/enterprise conversion and data migration
services, which allows the Company to offer integrated database conversion and
migration solutions as part of its Intranet solutions. The Company has
implemented a major Intranet system for KN Energy and intends to promote its
expertise in this area to other large companies with a need for an easy to use
internal network interface.

EXPAND TRADITIONAL DISTRIBUTION CHANNELS. To date, distribution of high
technology products and related services has accounted for the substantial
majority of the Company's revenue. The Company intends to expand its high
technology product distribution business by increasing its sales staff and its
national network of local representatives for products distributed by the
Company. The Company also plans to implement and promote its own Internet Web
site for direct sales of high technology products.

INTERNET/INTRANET SOLUTIONS

INTERNET/INTRANET INDUSTRY OVERVIEW

The Internet is a network of computer networks that are both commercially
and publicly owned. The networks all use a common set of nonproprietary
networking protocols. This commonality of protocols provides what appears to the
Internet user to be a seamless, integrated virtual network notwithstanding the
heterogeneity of the computer hardware and communications systems underlying the
Internet. Although the individual networks comprising the Internet are privately
owned, no one organization owns or controls the Internet. Any network may join
or remove itself from the Internet at any time and this open access has allowed
the Internet to grow exponentially as a resource in the United States and
world-wide.

Each new network (or individual connecting through a network) becomes not
only a consumer of information available on the Internet but also a potential
information or content provider to other users of the Internet. The following
table illustrates the growth in computers and routers ("hosts") which are
connected to the Internet.

26
<PAGE>
GRAPH SHOWING NUMBER OF INTERNET HOSTS FROM AUGUST 1981 THROUGH JUNE OF 1996 AS
REPORTED BY NETWORK WIZARDS WITH DATA AVAILABLE ON THE INTERNET AT
HTTP://WWW.NW.COM -- DATA POINTS ARE AS FOLLOWS:

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
INTERNET HOST GROWTH
<S> <C>
Aug-81 213
May-82 235
Aug-83 562
Oct-84 1,024
Oct-85 1,961
Feb-86 2,308
Nov-86 5,089
Dec-87 28,174
Jul-88 33,000
Oct-88 56,000
Jan-89 80,000
Jul-89 130,000
Oct-89 159,000
Oct-90 313,000
Jan-91 376,000
Jul-91 535,000
Oct-91 617,000
Jan-92 727,000
Apr-92 890,000
Jul-92 992,000
Oct-92 1,136,000
Jan-93 1,313,000
Apr-93 1,486,000
Jul-93 1,776,000
Oct-93 2,056,000
Jan-94 2,217,000
Jul-94 3,212,000
Oct-94 3,864,000
Jan-95 4,852,000
Jul-95 6,642,000
Jan-96 9,472,000
Jul-96 12,881,000
</TABLE>

Internet networks are connected in a variety of ways, including regular
analog phone lines, high-speed digital lines and fiber optic links. The Internet
permits users to communicate electronically, share or publish information,
download software and participate in commercial transactions. Internet data
packets are transferred through flexible routing protocols which allow signals
to reach their destinations even though portions of the network may be down or
overburdened. Nonetheless, because of the rapidly growing traffic on the
Internet, users sometimes report significant delays in data transfer and some
loss of data. There is a risk that as the Internet grows in popularity, its
infrastructure will become overwhelmed to the point where its functionality is
impaired, perhaps significantly.

Because connecting directly to the Internet requires expensive equipment and
considerable technical expertise, most Internet users connect to the Internet
through one of a rapidly growing number of local and national Internet Service
Providers ("ISPs"), including the major on-line services such as America Online
and Compuserve. The Company is not one of these ISPs.

THE WORLD WIDE WEB. Much of the recent growth in Internet use has been
attributable to a network of servers and information available via open
protocols known as the World Wide Web. The Web can be accessed through software
programs such as Netscape Navigator and Microsoft Explorer, which allow non-
technical users to exploit the capabilities of the Internet. The Web enables
users to find, retrieve and link to multimedia content on the Internet with easy
to use graphical interfaces. Electronic documents are published on Web servers
in a common format called hypertext markup language ("HTML"). Web software
browsers can retrieve these documents across the Internet by making requests
through a standard communications protocol called Uniform Resource Locators, or
"URLs."

27
<PAGE>
The technical capabilities of the Web together with the increasing
availability of user-friendly navigational and utility tools and search engines
such as Yahoo, Excite, Webcrawler, Magellan and Alta Vista are responsible for
the rapid growth in the popularity of the Web as a distribution channel. The Web
is growing exponentially with over 1,000 businesses joining as participants each
day. (Source: Network Wizards). In October 1996, International Data Corp.
estimated the number of Web users at 31.4 million and projected the number of
users to grow to 163 million by the year 2000.

The term "Web site" is commonly used to describe the computer screen layouts
and the file server computer that are accessible by users of the Web. Typically,
a Web site has a collection of "Web pages" which may contain text, graphics,
pictures, sound, animation, video or other multimedia content. One important
feature of the HTML format is that it allows a Web user to travel to other sites
simply by selecting with a mouse or other pointing device a text or graphic
marker on the current Web page. In this manner, users can quickly and
effortlessly connect to Web pages that are part of the same Web site or to Web
pages located on servers in another continent. Web sites vary significantly in
their complexity and interactivity. A simple Web site may have only text in
outline form. More complex sites may have full multimedia content. Web sites may
also vary in their level of interactivity with the user. Many Web sites are for
inquiry only (informational), while others allow the user to interact with,
enter and process information (interactive).

COMMERCIAL USES OF THE INTERNET. Commercial uses of the Internet include
business-to-business and business-to-consumer transactions, product marketing,
advertising, entertainment, electronic publishing, electronic services and
Internet support. The Company views the Internet and in particular the Web as
presenting significant opportunities for electronic marketing, sale and
distribution of products. In the Company's view, the Internet's benefits
include:

- Low cost in comparison to other marketing channels

- Direct marketing of products and services

- Audio/visual display and demonstration of products

- Ability to capture orders electronically at significantly lower personnel
costs than traditional order-taking

- Provision of client services such as order tracking and trouble-shooting

- Immediate fulfillment and satisfaction of certain orders, such as software
and information deliverable electronically

- Customer convenience (24-hour, 7 days a week access)

- Potential for narrowly-targeted marketing

A number of companies have developed systems to maintain the security of
transactions on the Internet and the Company has developed its own proprietary
merchandise engine which provides security for order-taking functions. There can
however be no assurance that breaches in transaction security will not have an
adverse effect on the growth and viability of on-line commerce.

ADVERTISING. The Internet is essentially a media outlet and as such serves
as an attractive platform for advertising. In July 1996, SIMBA Information Inc.
projected that advertising revenues from the Web and the four largest on-line
services (America Online, Compuserve, Prodigy and Microsoft Network) will total
$200 million in 1996 and grow to $1.17 billion in the year 2000. Typically,
advertising on the Web is in the form of a customized graphic box, or
"billboard," covering a portion of the screen being viewed. Viewers of the site
who are attracted to the advertisement can generally click on the billboard and
be connected directly to the Web site of the advertiser, which may be located on
the server of the host site or addressed to another Internet server. The Company
currently sells advertising on certain Web sites it maintains to companies
including AT&T, Silicon Graphics, Sybase, Penzoil, The Rocky Mountain News, The
Denver Post and BFI Waste Services. Advertising proceeds are generally shared by
the Company and the client that commissioned the site.

28
<PAGE>
INTRANETS. Because of the ease of use and widespread acceptance of Internet
protocols, HTML and other scripting languages and tools, a number of companies
have implemented internal networks, or Intranets, based on such protocols. The
use of these protocols allows employees using personal computers and Web browser
software to access and interact with a broad range of information sources within
their company, independent of physical location and underlying computer and
database design, on the familiar platform of Web browser software.

THE COMPANY'S INTERNET/INTRANET SOLUTIONS

The Company provides its Internet/Intranet Solutions through six business
units: Business Development Services, World Wide Web Services, Marketing
Services, Media Services, Client Services and Channel Services. These units
function as a team in providing solutions for clients. The Internet/Intranet
Solutions provided to clients often also involve one or more of the traditional
distribution services offered by the Company. See "--Distribution and Related
Services."

BUSINESS DEVELOPMENT SERVICES are delivered through consulting engagements,
generally billed on an hourly basis, in which Company professionals analyze
client business requirements and recommend comprehensive solutions for the
client's Internet or Intranet requirements. Proposed solutions offered by the
Company include one or more of the following components:

- Network solutions

- Web site specifications

- Private Intranets

- Web distribution strategies

- Traditional channel strategies

- Integrated marketing

- Image development

- Product introduction

- Project management

- Graphic design

- Product distribution

WORLD WIDE WEB SERVICES provide the design and implementation of a Web site
based upon specifications developed by the Company and the client. The Company's
World Wide Web Services also include the design and implementation of private
Intranets, including hardware and software implementation.

The Company designs many of its Web sites with database system integration,
which allows the Web site to act as an interface to selected portions of the
client's internal legacy or enterprise systems. Such integration allows the Web
site to reflect continuously the most current information concerning the client.

The Company has developed a set of proprietary software tools for
implementation on client Web sites. These tools are licensed to clients for use
on the particular site for so long as the site is maintained by the Company. A
brief description of each of the Company's proprietary tools follows.

- NAVIDEX. The Navidex tool is a dynamic, database driven table of contents
that allows the user to intuitively navigate the Web site.

- NAVIMAP. The Navimap tool is a graphical representation of site
information with links to other areas on the site.

- MERCHANDISE ENGINE. The Merchandise Engine creates an on-line catalog of
products available for sale through the Web site. The Merchandise Engine
also contains a secure algorithm for transmitting credit card information
and is capable of capturing contact and marketing information from
customers placing orders.

29
<PAGE>
- CALENDAR TOOL. The Calendar Tool provides a visual interface for
searching through a database of date oriented activities, announcements,
meetings or other events.

- E-MAIL TOOL. The E-Mail Tool is an e-mail engine which allows e-mail to
be sent from the Web site to e-mail addresses designated by the client for
purposes such as customer feedback, customer information capture and
customer service inquiries.

- ADMINISTRATION TOOLS. Administration Tools provide clients with the means
to maintain and update their sites themselves.

MARKETING SERVICES consist of market research, marketing, advertising and
public relations consulting and implementations designed to promote the client's
Internet presence. Such services are generally billed on an hourly basis.
Marketing Services also include the promotion and implementation of advertising
on client sites where appropriate. The Company generally charges for such
advertising placement through sharing of advertising revenues.

MEDIA SERVICES include digital image capture, post-processing services for
scanned images and graphic arts production. The Company offers these services to
assist clients in developing a uniform company image that spans both traditional
and electronic media. Actual output services provided by the Company include
photographic quality prints, color transparencies and printed output in all
sizes. The Company typically bills Media Services on a project basis.

CLIENT SERVICES include technical support, network implementation, Web site
maintenance and evolution, hosting of Web sites on a Company Internet server,
database management, product support and electronic messaging implementation.
The Company charges a variety of fees for these services, ranging from a
specific one time fee for change requests to a monthly fee for site maintenance.

CHANNEL SERVICES include all of the functions necessary to implement an
Internet marketing and distribution plan, including on-line sales of
merchandise, warehousing and order fulfillment. The Company generates revenues
from these services principally through sales commissions which vary depending
upon the level of Company involvement in the distribution plan.

SIGNIFICANT CLIENTS

The Company's major Internet/Intranet Solutions clients include the
following:

- HEWLETT PACKARD (HTTP://WWW.HP.COM). The Company designed the layout,
graphics and reusable templates for the Web pages of three Hewlett Packard
divisions (Electronic Measurements Division, Test & Measurement Operations
and the Colorado Division) contained within Hewlett Packard's primary Web
site.

- KN ENERGY ONLINE. The Company developed an Intranet for KN Energy that is
the primary resource for its employees to access company information. The
KN Energy Internet has a number of attractive features, including:

- a user interface featuring an animated "guide"

- a fully integrated search engine

- download capabilities

- internal authority and signature verification

- an extensive employee database

The Company maintains and enhances this network on the basis of a monthly
retainer and several major enhancements are planned for the network during
1997.

- LIVE ENTERTAINMENT (HTTP://WWW.LIVE-ENTERTAINMENT.COM). The Company, in
partnership with Ajilon Services, Inc., designed and implemented a Web
site for Live Entertainment, which is a major Los Angeles distributor of
entertainment video tapes. The Web site interfaces with Live
Entertainment's

30
<PAGE>
internal database to provide an on-line catalog of all videos offered by
Live Entertainment. The Company fulfills on-line orders of Live
Entertainment videos from the Company's warehouse facility. The Company
completed its initial work on the Live Entertainment Web site in November
of 1996 and it became fully operational in December 1996.

- COLORADO AVALANCHE (HTTP://WWW.COLORADOAVALANCHE.COM). The Company
developed this site during the 1995-1996 hockey season and the site has
been redesigned for the 1996-1997 season. The site received a four star
rating (the highest rating) from Magellan and it was chosen as the best
site in the NHL by ISWire. The site generates an average of 300,000
visitors a month, and hosted 2,000,000 visitors after the Avalanche won
the Stanley Cup in June of 1996. The redesigned site features advanced
graphics, video and audio clips, player statistics and regularly updated
features about the team. The Company has a contract in place to maintain
the Avalanche site until the end of the 1996-1997 hockey season.

- OKLAHOMA CITY BOMBING NEWS CONSORTIUM. The Company has a contract to
develop a secure Internet site to provide credentialed news organizations
with access to pleadings and court transcripts of the trials of the
suspects in the Oklahoma City bombing. The site will be accessible only by
such credentialed news organizations, and the Company believes that its
ability to provide the necessary security was an important factor in
obtaining this contract. The Company will receive revenues from commercial
sponsors, a number of which have already committed to underwrite the
development costs of the site. The site is expected to be completed in
March 1997.

- BURT AUTOMOTIVE GROUP (HTTP://WWW.BURT.COM). The Company created and
maintains a large Web site for this multi-dealer automobile retailer. The
Company has installed hardware at the various dealerships and has deployed
computer kiosks at some of the dealerships to allow walk-in customers to
access the Web site information. The Burt Group, with the Company's
assistance, intends to place similar kiosks in remote locations such as
credit unions to further promote the dealership group. The Company intends
to use the Burt site as the prototype for the development of a nationwide
network of car dealerships through the Company's association with Ryan &
Associates, a national provider of services to automotive dealerships.

- ALL ABOUT COLORADO (HTTP://WWW.AACO.COM). All About Colorado is a
community directory organized by the Company and KUSA-9News, a Denver,
Colorado, NBC-TV affiliate. The site contains general information,
activity and entertainment listings in over fifty categories. Each
category is located on a separate page and each page has billboard
advertising space available for sale. The site was redesigned in the
fourth quarter of 1996 to provide substantial interactive abilities, such
as search capabilities and visitor profiles, and to allow commerce to be
performed over the site. The Company believes that this site has the
potential to generate substantial advertising revenue, and pursuant to an
agreement with the major site sponsors, the Company is entitled to retain
a significant percentage of such revenue. The Company completed the first
phase of this site in November 1996.

Other sites developed by the Company include PrimeStar (currently under
development), Kimmon Electric Co., Ltd. (http://www.kimmon.com), the
Denver-Metro Regional Transportation District (http:// www.RTD-denver.com),
Denver Metro Convention & Visitors Bureau (http://www.denver.org), KUSA-9News
(http://www.9news.com), the Colorado Rockies (currently under development),
Colorado Recreation (http://www.coloradorecreation.com) and the American Animal
Hospital Association (http:// www.healthypet.com).

DISTRIBUTION AND RELATED SERVICES

The Company distributes high technology systems and components manufactured
by third parties and provides related services such as system integration and
installation. Product distribution clients range from small businesses to
Fortune 100 companies. Significant product distribution clients include Lockheed

31
<PAGE>
Martin, Johnson Controls, Hughes Aircraft and US West. The Company serves both
as a national manufacturer's representative for the products of certain
international manufacturers and as a reseller of selected computer products in
the Rocky Mountain region. The Company focuses its distribution efforts towards
selling specialized, higher margin products. The Company intends to expand its
product distribution activities into electronic channels, including sales over
the Internet on the Company's Web site.

Distribution activities usually involve the receipt by the Company of orders
for equipment from prospective purchasers and the delivery and/or installation
of the equipment by the Company. The Company purchases the equipment directly
from the manufacturer or vendor and resells it to the purchaser at a price which
includes the Company's cost and a profit margin. With the exception of graphics
supplies and certain imported components, the Company does not generally
maintain an inventory of products it distributes. The Company specializes in
components, lasers, graphics, supplies, systems integration and reprographic
services.

COMPONENTS. The Company represents and distributes component products from
several Japanese manufacturers, principally Hayashi Denko and Sunmoulon.
Products include temperature sensors, push-button switches and numerous other
specialized components. These products are sold primarily through phone sales as
well as through a national network of manufacturer's representatives. Most of
these components are sold to original equipment manufactures ("OEMs") which
incorporate these components into their product designs. Key industries for the
Company's component products include: industrial process control, heating,
ventilation and air conditioning (HVAC), energy management, food processing,
consumer appliances and medical monitoring.

LASERS. The Company is an agent in North America for Kimmon Electric Co.,
Ltd. Kimmon is the largest manufacturer in the world of Helium Cadmium (HeCd)
lasers and the Company provides sales, service and support for Kimmon's products
in North America. These lasers are sold through a combination of on-site direct
sales, trade shows and telephone orders. The Company sells Kimmon products to
both end-users and OEMs. The primary applications for HeCd lasers are mastering
of CDs & CD-ROMS, prototype production through three-dimensional
stereolithography, production of holograms, medical imaging and research.

GRAPHICS. The Company sells graphics products focused in the areas of data
capture (scanning, digital cameras and X-terminals) and color output (color
printers and LCD projection devices). The sale of many of these products is
through territorial authorizations granted to the Company by the manufacturers.
The Company has significant manufacturer alliances with Xerox, Tektronix, Sony,
InFocus and Hewlett Packard. Graphics products are sold primarily to end-user
customers by a direct sales team operating both in the field as well as through
an inside sales group which takes orders from existing customers.

SUPPLIES. The Company sells consumable supplies for color graphic output
devices. The Company stocks an inventory of popular consumables in order to
provide prompt response for customer orders. In addition, the supplies division
sells third-party extended warranty agreements for all hardware products.

SYSTEMS INTEGRATION. The Company offers network design and implementation
services to corporate customers in the Rocky Mountain region, which services
often include the acquisition and location of network equipment and servers.
These services are performed by a direct sales team. The primary manufacturers
of network equipment and servers distributed by the Company are Compaq, IBM and
Hewlett Packard.

MARKETING

Upon consummation of this offering, the Company intends to hire additional
personnel dedicated to marketing efforts. See "--Employees." In light of its
current client base, the Company's upcoming marketing efforts will be focused on
developing additional clients in the automotive, sports franchise, corporate
Intranet and regional directory businesses. The Company will also focus on
developing interest

32
<PAGE>
in electronic commerce and order fulfillment by the Company amongst the
Company's existing and new clients.

The Company expects to generate additional Internet/Intranet Solutions
clients from subcontracting arrangements entered into between the Company and
AT&T and IBM, each in August 1996. Under the terms of each of these agreements,
AT&T or IBM may refer customers to the Company and AT&T and IBM will receive in
exchange a percentage of the revenues received from such customers. Neither
agreement obligates the Company to accept any particular clients or projects or
obligates IBM or AT&T to refer any particular or minimum number of clients to
the Company, and both agreements are non-exclusive. Although there is no
guarantee that the Company will receive a substantial number of referrals or
derive substantial revenues from these agreements, management does expect that
these agreements will significantly expand the Company's client and revenue
base. Management plans to seek additional subcontracting opportunities with
other major computer and Internet industry companies.

PROPRIETARY RIGHTS

The Company has not yet determined whether any of its current products or
services are patentable. It has applied for federal trade name and trademark
registration of the "NAVIDEC" name and mark. The Company relies on a combination
of copyright, trade secret and trademark laws, and nondisclosure and other
contractual provisions to protect its various Web site tools and other
proprietary rights. These safeguards may not prevent competitors from imitating
the Company's products and services or from independently developing competing
products and services.

Because the Company's business is characterized by rapid technological
change, the Company believes that factors such as the technological and creative
skills of its personnel, name recognition and reliable client service and
support are more important to establishing and maintaining a competitive
position in its industry than the various legal protections of its proprietary
developments.

The Company believes that its proprietary rights do not infringe the
proprietary rights of third parties. There can be no assurance however that
third parties will not assert such infringement by the Company with respect to
current or future software, trade names or services. Any such claim, with or
without merit, could be time consuming, result in costly litigation and cause
product release delays and might require the Company to enter into royalty or
licensing agreements. Such royalty or licensing agreements, if required, may not
be available on terms acceptable to the Company.

EMPLOYEES

There are currently 33 full-time employees of the Company. These include six
in Business Development, eight in World Wide Web Services, three in Marketing
Services, three in Media (reprographic) Services, one in Client Services, six in
Channel Services (which includes high technology product sales personnel) and
six in management and accounting.

The Company expects to hire fifteen additional full-time employees in the
twelve months following this offering. The Company currently anticipates three
new hires dedicated to sales, four new hires dedicated to marketing and nine new
technical employees. The new employees will span all six of the Company's
business units, and some may be assigned to more than one unit.

PROPERTIES

The Company's headquarters are located at 14 Inverness Drive, Building F,
Suite 116, Englewood, Colorado, in a 5,900 square foot facility, which includes
approximately 1,500 square feet in warehouse space. The facility is occupied
under a lease with an unaffiliated party expiring in June 2001 and providing for
a current monthly lease rate of $4,166. The Company may lease additional
warehouse and office space if needed to support the growth in traditional and
on-line product distribution.

33
<PAGE>
COMPETITION

Existing competitors to the Internet/Internet Solutions business include
Online Systems Services, Inc., Eagle River Interactive, Inc. and Open Market,
Inc., all public companies traded on NASDAQ, as well as a large number of
regional firms providing similar services to those of the Company. Potential
competitors in this business include browser software vendors, PC and UNIX
software vendors and on-line service providers. Additional competition comes
from numerous client/server companies, database companies, multimedia companies,
advertising agencies, document management companies, networking software
companies, network management companies and educational software companies. In a
broader sense, the Company may compete with the more traditional advertising and
distribution mediums, such as radio, television and mail order outlets.
Potential competition also comes from the Company's clients, who could choose to
address their Internet/Intranet needs through in-house personnel. Some of the
Company's current and many of the Company's potential competitors have longer
operating histories, greater name recognition, larger installed customer bases
and significantly greater financial, technical and marketing resources than
those of the Company. Competitive factors in the Internet/Intranet Solutions
business include core technology, breadth of services offered, creative and
artistic ability, marketing and distribution resources, customer service and
support and price.

A large number of companies act as re-marketers of computer networks,
graphics equipment and components, and the Company's competition in the high
technology product distribution business is therefore also intense. In some
instances, the Company, in acting as a re-marketer, may compete with the
original manufacturer. In addition, a large number of companies offer the
reprographic services offered by the Company and competition in this area is
also intense. Many of the Company's competitors in the high technology product
distribution business have longer operating histories, greater name recognition,
larger installed customer bases, larger sales staffs and substantially greater
financial, technical and marketing resources than those of the Company.
Competitive factors in the distribution business include technical expertise,
breadth of products offered, product quality, performance and reliability,
price, name recognition, customer service and support and access to distribution
channels.

Both the Internet/Intranet Solutions business and the high technology
product distribution business are characterized by low financial barriers to
entry and frequent introductions of new products. The Company therefore expects
competition in each of its businesses to increase in the future. There can be no
assurance that the Company will be able to successfully compete in its
businesses. Although the Company believes that it has the requisite management,
technical and creative abilities to successfully compete, the intense level of
competition in each of the Company's businesses could materially, adversely
affect the Company's future operating results and financial condition.

LEGAL MATTERS

The Company is currently not involved in any material legal proceedings.

34
<PAGE>
MANAGEMENT

DIRECTORS AND OFFICERS

The following table sets forth the name, age and position with the Company
of each officer and director of the Company as of the date of this Prospectus.

<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------- --- --------------------------------------------------------------------
<S> <C> <C>
Ralph Armijo 44 President, Chief Executive Officer and Director

Andrew Davis 43 Vice President of Sales and Marketing

Patrick R. Mawhinney 32 Chief Financial Officer, Treasurer and Director

Kevin L. Blankenship 33 Vice President of Interactive Network Services and Secretary

Harold Anderson II 32 Vice President of Business Development

Lloyd G. Chavez, Jr. 46 Director Nominee
</TABLE>

The Company's Board of Directors currently consists of two members. All
directors hold office until the next annual meeting of the Company shareholders
and their successors are elected and qualified. The officers are elected by the
Board of Directors at the first meeting after each annual meeting of the Company
shareholders and hold office until their successors are duly elected and
qualified in accordance with the Bylaws of the Company.

RALPH ARMIJO has served as the President, Chief Executive Officer and a
director of the Company since its inception in 1993. From 1981 to 1993, Mr.
Armijo was employed by Tektronix, Inc., a large communications company which
also produced testing and measuring equipment. Mr. Armijo's responsibilities at
Tektronix progressed from sales manager, to branch manager, to district manager
and, ultimately, to Western Regional Manager, a position he held for five years.
In that position, he was responsible for a $100 million budget in sales,
graphics, technical support and administration, and he was responsible for
developing new distribution channels, including reseller agreements. From 1976
to 1981, Mr. Armijo was employed by IBM Corporation, where he sold computerized
accounting and financial applications to small and medium-sized businesses. Mr.
Armijo received his B.A. from Colorado College and his M.B.A. from the
University of California, Los Angeles.

ANDREW DAVIS has served as Vice President of Sales and Marketing of the
Company since May 1996. From January 1994 to May 1996, Mr. Davis was manager of
wholesale distribution at InFocus Systems, a manufacturer of high resolution
projection systems. From September 1982 to January 1994, Mr. Davis held various
sales and marketing positions in Tektronix, Inc. including Director of Marketing
for the Interactive Technologies Division. Mr. Davis attended the University of
Denver from 1971 to 1974 where he studied Business Management and Marketing.

PATRICK R. MAWHINNEY served as the President of IPI from its inception until
its merger with the Company in July 1996 and since that time has served as Chief
Financial Officer, Treasurer and a director of the Company. From May 1995 until
May 1996, Mr. Mawhinney also served as a financial/accounting consultant for
MIS\Sunguard, a provider of accounting and investment software. Mr. Mawhinney
was employed as an Assistant Vice President of The Bank of Cherry Creek from
November 1993 to May 1995; as a Vice President of Vectra Banking Corporation
from June 1989 to November 1993; and as Operations Coordinator for Zions
Bancorporation from August 1986 to June 1989. He received his B.S. from Colorado
State University.

KEVIN L. BLANKENSHIP served as the Vice President of Technology for IPI from
May 1995 until its merger with the Company in July 1996 and since that time has
served as Vice President of Interactive Network Services and Secretary of the
Company. Mr. Blankenship also serves on the Internet Advisory Council of Sybase,
Inc., a major manufacturer of database systems. From January 1993 to May 1995,
Mr. Blankenship served as the Director of Client Integration and Development for
ADIA Information

35
<PAGE>
Technology and was employed by U.S. West Communications as Manager of Multimedia
Applied Engineering from September 1986 to January 1993. Prior to 1989, Mr.
Blankenship held various positions of responsibility for software systems
design. Mr. Blankenship has expertise in the field of document and information
management, as well as an extensive background in complex, heterogeneous,
corporate systems and computing architectures. Mr. Blankenship attended the
University of Colorado between 1982-1987 where he studied Electrical and
Computer Science and Computer Engineering.

HAROLD ANDERSON II served as Vice President of Business Development for IPI
from July 1995 until its merger with the Company in July 1996 and since that
time has served as Vice President of Business Development of the Company. From
September 1986 to July 1995, Mr. Anderson was employed by U.S. West Advance
Technologies and Communications, where he worked in Distributed Technology
Platform Security, served as the Technical Project Manager, and later acted as a
Product Marketing Specialist for the U.S. West Internet Services
Provider/On-line Service Project. Mr. Anderson received his B.S. degree in
Business Administration from the University of Arizona in 1986 and a Masters
degree in Computer Information Systems from the University of Denver in 1991.

No director or executive officer of the Company is related to any other
director or executive officer. None of the Company's officers or directors hold
any directorships in any public company. Presently the Company has no
nominating, compensation or audit committees; however the Company does plan to
establish compensation and audit committees subsequent to this offering.

DIRECTOR NOMINEE

The Company intends to increase the size of the Board of Directors to five
directors after consummation of this offering. Two of the three vacancies
created thereby will be filled by the Board of Directors pursuant to the
Company's Bylaws, and the Company has agreed to allow the Representative to
nominate the third director, subject to the Company's approval. See
"Underwriting--Designee to the Board of Directors." Lloyd G. Chavez, Jr. has
agreed to serve as director following consummation of this offering. The Company
is currently seeking a second qualified nominee. If the Representative does not
nominate a director, the Company will seek a third qualified director to be
added to the Board. The business background of Mr. Chavez is as follows:

LLOYD G. CHAVEZ, JR. has been the Director of Automotive Markets at the Burt
group of automobile dealerships in Denver, Colorado since 1988. From 1983 to
1994, Mr. Chavez was Vice President of Fort Dodge Laboratories, a subsidiary of
American Home Products, where he was responsible for business acquisitions, new
products and technologies, joint ventures, intellectual property acquisitions,
strategic planning, market research and sale projections. From 1982 to 1983, Mr.
Chavez was Vice President of General Genetics Corporation, where he was
responsible for management of biological and pharmaceutical research and
development. Mr. Chavez received his B.A. in Molecular, Cellular, Development
Biology from the University of Colorado, his M.A. in Old Testament Studies from
Denver Seminary, his Ph.D. in Microbiology and Immunology from the University of
Virginia, and was a post-doctoral Fellow in Chemistry at Cornell University.

DIRECTOR COMPENSATION

None of the Company's directors received any compensation during the most
recent fiscal year for serving in their position as a director. No plans have
been adopted to compensate directors in the future; however it is likely that
during fiscal 1997 the Board of Directors will adopt an employee stock option
plan which includes provision for stock options to be issued to directors.

36
<PAGE>
EXECUTIVE COMPENSATION

The following table sets out the annual compensation paid to Ralph Armijo
for the last three fiscal years. No other executive officer has received annual
compensation in excess of $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------- ALL OTHER
--------------------- RESTRICTED STOCK COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS OPTIONS ($)
- -------------------------------------- --------- ---------- --------- ------------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Ralph Armijo, Chief 1995 $ 111,444 $ 24,000 0 0 $ 9,000(1)
Executive Officer 1994 $ 69,541 $ 0 0 137,660(2) 0
1993 $ 0 $ 0 0 667,221(2) 0
</TABLE>

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

(1) Consists of an automobile allowance.

(2) During 1994 and 1993 the Company issued stock options to Ralph Armijo to
purchase a total of 804,881 shares of Common Stock for a total exercise
price of $1,745. Compensation expense of $10,000 and $29,000 was recorded
for 1994 and 1993, respectively.

AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1995(#) DECEMBER 31, 1995($)
SHARES ACQUIRED ON EXERCISEABLE/ EXERCISEABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISEABLE(1) UNEXERCISEABLE(2)
- -------------------------- ------------------- ------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Ralph Armijo, Chief
Executive Officer -- -- 804,881/0 $156,199/0
</TABLE>

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

(1) Represents options to purchase 804,881 shares of common stock for a total
exercise price of $1,745. These options were exercised during June 1996.

(2) Value of the options was determined by the Board of Directors at December
31, 1995 and assumes the exercise of the option and payment of the exercise
price. No market for the Company's securities existed at December 31, 1995.

No officer or director received any form of compensation other than cash
during 1995 and no long term incentive, bonus or option plans were or are in
place. Management expects to develop employee stock option plans during fiscal
1997.

The current annual salaries of the executive officers of the Company are as
follows: Ralph Armijo, President, $140,000; Andrew Davis, Vice President of
Sales and Marketing, $105,000; Patrick Mawhinney, Chief Financial Officer,
$75,000; Kevin L. Blankenship, Vice President of Interactive Network Services,
$70,000; and Harold Anderson II, Vice President of Business Development,
$68,000. Total annual compensation for all executive officers is $458,000.

The Board of Directors may, at its discretion, award discretionary bonuses
in the future. It is anticipated that a compensation committee will be
established during 1997. The compensation committee will establish salaries,
incentives and other forms of compensation for directors, officers and other
employees of the Company, and establish and administer the Company's benefit
plans and recommend policies relating to such plans.

37
<PAGE>
EMPLOYMENT AGREEMENTS

As a condition to the merger between the Company and IPI, the Company
entered into an employment agreement with Ralph Armijo. Such agreement will
continue through June 30, 1998, unless earlier terminated for cause and provides
for annual compensation of $140,000. Mr. Armijo also has agreed not to compete
with the Company during his employment term and for a period of one year
thereafter; however, courts sometime find noncompetition provisions in
employment contracts to be unenforceable or restrict the duration or geographic
scope of such agreements. Accordingly, there can be no assurance that Mr.
Armijo's agreement not to compete would be enforced by a court if challenged.

The Company entered into an employment agreement with John R. McKowen
employing Mr. McKowen as Director of Investor Relations for an initial term of
six months commencing in August 1996. The agreement will automatically be
extended upon consummation of this offering for 24 months following the date of
this Prospectus. Mr. McKowen's compensation under the agreement is $5,000 per
month and Mr. McKowen is entitled to an automobile allowance not to exceed $400
per month. In addition, he was granted options to purchase 212,500 shares of
Common Stock at an exercise price of $4.12 per share, exercisable no sooner than
thirty months following the date of grant and no later than sixty months from
such date.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Company's Articles of Incorporation eliminate the personal liability of
its directors to the Company and its shareholders for monetary damages for
breach of the directors' fiduciary duties in certain circumstances. The Articles
of Incorporation further provide that the Company will indemnify its officers
and directors to the fullest extent permitted by law. The Company believes that
such indemnification covers at least negligence and gross negligence on the part
of the indemnified parties. Insofar as indemnification for liabilities under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.

38
<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth, as of the date of this Prospectus, and as
adjusted to reflect the sale by the Company of the 755,000 shares of Common
Stock offered by the Company hereby, the Common Stock ownership of each person
known by the Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all directors individually, each executive officer and
all directors and executive officers of the Company as a group. Each person has
sole voting and investment power, as well as record and beneficial ownership,
with respect to the shares shown. None of the named persons hold any options,
warrants or other securities convertible into Common Stock within sixty days
after the date of this Prospectus.

As of the date of this Prospectus, there were 2,049,721 shares of Common
Stock issued and outstanding, including the 349,126 shares issued to the Bridge
Financing Selling Stockholders.

<TABLE>
<CAPTION>
COMMON STOCK PERCENT OF BENEFICIAL OWNERSHIP
BENEFICIALLY ---------------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED BEFORE OFFERING AFTER OFFERING
- --------------------------------------------------------------- ----------------- ------------------- ------------------
<S> <C> <C> <C>
Ralph Armijo................................................... 831,659 40% 30%

Patrick R. Mawhinney........................................... 146,057 7% 5%

Harold Anderson II............................................. 76,573 4% 3%

Andrew Davis................................................... 21,250 1% 1%

Kevin L. Blankenship........................................... 76,573 4% 3%

Cynthia J. Simmons............................................. 358,132 17% 13%
84 Willowleaf Drive
Littleton, CO 80125

All directors and executive officers as a Group (Five
Persons)...................................................... 1,152,112 56% 42%
</TABLE>

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

(1) Except as indicated herein, the address for each person is 14 Inverness
Drive, Bldg. F., Suite 116, Englewood, Colorado 80112.

BRIDGE FINANCING PRIVATE PLACEMENT

From August through October 18, 1996, the Company sold an aggregate of
$1,437,500 principal amount of 10% Unsecured Subordinated Convertible Promissory
Notes, due December 31, 1997 (the "Bridge Promissory Notes") in a private
placement to certain investors (the "Bridge Financing Private Placement"). Upon
consummation of the offering made by this Prospectus, each $50,000 in principal
amount of the Bridge Promissory Notes is automatically converted into 12,142.67
Units, rounded to the next whole Unit. Based upon the sale of Bridge Promissory
Notes in the aggregate amount of $1,437,500, upon the consummation of the
offering made by this Prospectus, the Bridge Promissory Notes will be
automatically converted into an aggregate of 349,126 Units, consisting of an
aggregate of 349,126 shares of Common Stock (the "Converted Shares") and 349,126
Warrants, and the Bridge Promissory Notes will no longer be outstanding. All of
the Converted Shares and the Warrants have been registered pursuant to the
Registration Statement, of which this Prospectus is a part, and 245,000
Converted Shares are being offered hereby. 104,126 of the Converted Shares and
all 349,126 Warrants may be sold from time to time in the open market by the
holders thereof (the "Bridge Financing Selling Stockholders"), provided that the
Bridge Financing Selling Stockholders have agreed that they will not make any
such sales of the Converted Shares or the Warrants for ten months after the date
of this Prospectus.

39
<PAGE>
BRIDGE FINANCING SELLING STOCKHOLDERS

The following table sets forth information with respect to the Bridge
Financing Selling Stockholders, who will own an aggregate of 349,126 Units
issuable upon conversion of the Bridge Promissory Notes, all of which are being
registered in the Registration Statement of which this Prospectus forms a part.
Of the Common Stock received upon conversion, an aggregate of 245,000 of such
shares are being offered hereby by the Bridge Financing Selling Stockholders.
See "Bridge Financing Private Placement." The Company will not receive any
proceeds from the sale of these shares. The Representative will receive from the
Company a non-accountable expense allowance equal to three percent of the total
proceeds of the 245,000 shares offered hereby. The cost of qualifying these
shares under federal and state securities laws, together with other costs in
connection with their offering, will be paid by the Company. The remainder of
the shares of Common Stock and all of the Warrants owned by the Bridge Financing
Selling Stockholders may be sold from time to time in the future, subject
however to the Bridge Financing Selling Stockholders' agreement not to sell any
of these shares or Warrants for ten months after the date of this Prospectus.

<TABLE>
<CAPTION>
COMMON
COMMON STOCK COMMON STOCK
RECEIVED ON CONVERSION STOCK OWNED WARRANTS RECEIVED ON
OF BRIDGE PROMISSORY OFFERED AFTER CONVERSION OF BRIDGE
NAME NOTES HEREBY OFFERING PROMISSORY NOTES
- ------------------------------------------ ---------------------- --------- --------- ----------------------
<S> <C> <C> <C> <C>
Ajan Family Trust......................... 3,036 2,130 906 3,036
Almeida, Donald E......................... 3,036 2,130 906 3,036
Barish, Marvin............................ 6,072 4,261 1,811 6,072
Bluett, David E........................... 3,643 2,557 1,086 3,643
Bluth, Mordecai........................... 6,072 4,261 1,811 6,072
Bussong, William.......................... 4,858 3,409 1,449 4,858
Campos, Felix and Joyce................... 6,072 4,261 1,811 6,072
Caribou Bridge Fund, L.L.C................ 18,215 12,782 5,433 18,215
Cooke, David.............................. 6,072 4,261 1,811 6,072
Davis, Jerry.............................. 3,643 2,557 1,086 3,643
Dill, H. Alan............................. 6,072 4,261 1,811 6,072
Downey, Mabe.............................. 6,072 4,261 1,811 6,072
Dukes, Leroy A............................ 6,072 4,261 1,811 6,072
Fishman, Eric............................. 6,072 4,261 1,811 6,072
Friedman, Richie.......................... 6,072 4,261 1,811 6,072
Funkhouser, Elliott M..................... 6,072 4,261 1,811 6,072
Generation Capital........................ 12,143 8,522 3,621 12,143
Gonte, William, M.D....................... 12,143 8,522 3,621 12,143
Grace, William............................ 3,036 2,130 906 3,036
Hall, Robert.............................. 12,143 8,522 3,621 12,143
Hall, James M............................. 12,143 8,522 3,621 12,143
HNC Associates............................ 3,036 2,130 906 3,036
Hoeppner, Fred C.......................... 3,643 2,557 1,086 3,643
Hupe, Gregory M........................... 3,036 2,130 906 3,036
Huston, Jeffrey D. and Frances B.......... 24,286 17,043 7,243 24,286
Inverness Investments..................... 6,072 4,261 1,811 6,072
Levenreich, David......................... 27,322 19,173 8,149 27,322
Liner, Richard M.......................... 6,072 4,261 1,811 6,072
Markowitz, Jeffrey........................ 6,072 4,261 1,811 6,072
Matsen, Nancy G........................... 9,107 6,391 2,716 9,107
McKay, Jerry S............................ 3,036 2,130 906 3,036
Nieder, Robert M.......................... 6,072 4,261 1,811 6,072
Patterson, Philip J....................... 3,036 2,130 906 3,036
</TABLE>

40
<PAGE>
<TABLE>
<CAPTION>
COMMON
COMMON STOCK COMMON STOCK
RECEIVED ON CONVERSION STOCK OWNED WARRANTS RECEIVED ON
OF BRIDGE PROMISSORY OFFERED AFTER CONVERSION OF BRIDGE
NAME NOTES HEREBY OFFERING PROMISSORY NOTES
- ------------------------------------------ ---------------------- --------- --------- ----------------------
Quartly-Watson, Tim....................... 6,072 4,261 1,811 6,072
<S> <C> <C> <C> <C>
Riggs, Ralph.............................. 6,072 4,261 1,811 6,072
Rockies Fund, The......................... 6,072 4,261 1,811 6,072
Rosen, Michael............................ 12,143 8,522 3,621 12,143
Schneider, Rick........................... 15,786 11,078 4,708 15,786
Schwartzberg, Debbie...................... 12,143 8,522 3,621 12,143
Shikora, Melvin........................... 3,036 2,130 906 3,036
Spanier, Myron D.......................... 3,036 2,130 906 3,036
Upsala Florida Corp....................... 6,072 4,261 1,811 6,072
Ventura, Joe.............................. 6,072 4,261 1,811 6,072
Warfield, Steven.......................... 4,858 3,409 1,449 4,858
Wise, John A.............................. 6,072 4,261 1,811 6,072
Zygelman, Aron............................ 12,143 8,522 3,621 12,143
------- --------- --------- -------
Total................................. 349,126 245,000 104,126 349,126
------- --------- --------- -------
------- --------- --------- -------
</TABLE>

41
<PAGE>
ADDITIONAL REGISTERED SECURITIES

The Bridge Financing Selling Stockholders will receive 349,126 Units from
conversion of the Bridge Promissory Notes upon consummation of this offering. Of
the 349,126 shares of Common Stock included in the Units, 245,000 are being
offered hereby by the Bridge Financing Selling Stockholders. The remaining
104,126 shares of Common Stock and the 349,126 Warrants included in the Units
which are not being offered hereby are being registered simultaneously with this
offering for resale by the Bridge Financing Selling Stockholders from time to
time, provided that such stockholders have agreed not to make any sales of the
Common Stock or the Warrants until ten months after the consummation of this
offering.

There are no material relationships between any of the Bridge Financing
Selling Stockholders and the Company, nor have any such material relationships
existed within the past three years. The Company has been informed by the
Representative that there are no material relationships between any of the
Underwriters and any Bridge Financing Selling Stockholders, nor have any such
relationships existed within the past three years, except that three of the
Bridge Financing Selling Stockholders were formerly minority shareholders of the
Representative's parent corporation. There are no agreements between such
parties regarding the distribution of the Common Stock or Warrants of the Bridge
Financing Selling Shareholders, other than the shares of Common Stock offered
hereby by the Bridge Financing Selling Stockholders. The Company has been
further advised by the Representative that none of the Bridge Financing Selling
Stockholders have any current plan or other arrangement or commitment with
respect to the sale of their Common Stock or Warrants.

The sale of Common Stock or Warrants by the Bridge Financing Selling
Stockholders may be effected from time to time in transactions (which may
include block transactions by or for the account of the Bridge Financing Selling
Stockholders) in the over-the-counter markets, in privately negotiated
transactions or otherwise. Sales may be made at fixed prices which may be
changed, at market prices prevailing at the time of sale, or at negotiated
prices. Bridge Financing Selling Stockholders may effect such transactions by
selling directly to purchasers, through broker/dealers acting as the seller's
agents or to broker/dealers who may purchase such securities as principals and
thereafter sell the securities from time to time in the over-the-counter market,
in negotiated transactions or otherwise. Such broker/dealers, if any, may
receive compensation in the form of discounts, concessions or commissions from
the sellers and/or the purchasers from whom such broker/dealers may act as
agents or to whom they may sell as principals or otherwise (which compensation
as to a particular broker/dealer may exceed customary commissions). Bridge
Financing Selling Stockholders will be required to deliver a current prospectus
in connection with their offer and sale of Common Stock or Warrants.

If any of the following events occur, the prospectus will be amended to
include additional disclosure before offers and sales of the Common Stock or
Warrants by the Bridge Financing Selling Stockholders are made: (i) to the
extent such securities are sold at a fixed price or by option at a price other
than the prevailing market price, such price would be set forth in the
prospectus; (ii) if the securities are sold in block transactions and the
purchaser wishes to resell, such arrangements would be described in the
prospectus; and (iii) if the compensation paid to broker/dealers is other than
usual and customary discounts, concessions or commissions, disclosure of the
terms of the transaction would be included in the prospectus. The prospectus
would also disclose if there are other changes to the stated plan of
distribution, including arrangements that either individually or as a group
would constitute an orchestrated distribution of the securities.

Under applicable rules and regulations under the Securities Exchange Act of
1934 (the "Exchange Act"), any person engaged in the distribution of the Common
Stock or the Warrants may not simultaneously engage in market making activities
with respect to any securities of the Company for a period of at least two (and
possibly nine) business days prior to the commencement of such distribution.
Accordingly, in the event that the Representative or any of the other
Underwriters makes a market in the Company's securities, the Bridge Financing
Selling Stockholders will likely be required to sell such securities through

42
<PAGE>
another broker/dealer. In addition, each Bridge Financing Selling Stockholder
desiring to sell securities will be subject to the applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation Rules 10b-6 and 10b-7, which provisions may limit the timing of the
purchases and sales by the Bridge Financing Selling Stockholders.

The Bridge Financing Selling Stockholders and broker/dealers, if any, acting
in connection with such sales might be deemed to be "underwriters" as defined in
the Securities Act and any commission received by them and any profit on the
resale of the securities may be deemed underwriting discounts and commissions
under the Securities Act.

CERTAIN TRANSACTIONS

In October 1993, Arthur Armijo, brother of the Company's President, Ralph
Armijo, made a $119,199 loan to the Company. The loan is evidenced by a
promissory note dated October 1, 1993 bearing interest at the rate of 5% per
year. As of the date of this Prospectus, the outstanding amount due under the
note is approximately $100,000, which amount is to be paid in full out of the
proceeds of this offering.

In November 1993, Arthur Armijo and Ralph Armijo each personally guaranteed
a line of credit in the amount of $200,000 extended by Vectra Bank, Denver,
Colorado, to the Company. Such line of credit and Messrs. Armijos' personal
guarantees were terminated in February 1996. No compensation was paid by the
Company for such personal guarantees. In February 1996, Arthur Armijo and Ralph
Armijo each personally guaranteed the factoring arrangement of the Company with
Colorado State Bank of Denver for a maximum of $750,000. See "Management's
Discussion and Analysis of Financial Condition and Results of Operation." To
date, Messrs. Armijo have received no compensation from the Company for such
personal guarantees.

In July 1996, Littleton Land Company made a $182,500 loan to the Company.
The loan was evidenced by a non-interest bearing promissory note with a maturity
date of August 31, 1996. Such note was prepaid in full on August 22, 1996. John
McKowen, an employee of the Company, is an affiliate of Littleton Land Company.
In August 1996, the Company granted options to Mr. McKowen to purchase 212,500
shares of Common Stock at an exercise price of $4.12 per share, exercisable from
February 1999 to August 2001. See "Management--Employment Agreements."

On March 31, 1996, Patrick Mawhinney, a shareholder, director and Chief
Financial Officer of the Company, made a $45,110 loan to IPI. The loan is
evidenced by a promissory note dated March 31, 1996, which provides for the
accrual of interest at a fixed rate of 10% per year and a maturity date of
December 31, 1997. The loan will be prepaid in full out of the proceeds of this
offering.

In June 1996, Schneider Mawhinney & Associates, P.C. advanced $32,500 to
IPI. This advance is repayable on demand without interest. Patrick Mawhinney's
spouse is a principal of Schneider Mawhinney & Associates. In July 1996, Mr.
Mawhinney made a loan to the Company in the amount of $30,000, evidenced by a
promissory note dated July 26, 1996 and bearing interest at the rate of 9.75
percent per year. This note is currently due. The Company has been advised that
neither Schnieder Mawhinney & Associates nor Mr. Mawhinney intends to demand
payment on the foregoing advance or note until such time as the Company has
sufficient funds to pay such amounts and in any case not until the second
quarter of 1997.

In July 1996, Cindy Simmons, a principal shareholder of the Company, was
issued a promissory note of the Company in the amount of $75,000 as part of the
purchase price for IPI. The promissory note provides for monthly payments of
$6,250 due on the first day of each month beginning August 1, 1996 and maturing
on July 1, 1997.

In August 1996, Ralph Armijo made a loan to the Company in the amount of
$70,000, evidenced by a promissory note dated August 6, 1996 and bearing
interest at the rate of 9.75 percent per year. Such note was prepaid in full in
October 1996.

43
<PAGE>
In January 1997, Ralph Armijo and Patrick Mawhinney guaranteed a short term
promissory note of the Company in the amount of $70,000. This note is expected
to be repaid from the resale of equipment which was purchased with the borrowed
funds. No compensation was paid by the Company for such guarantees.

Although the foregoing transactions were determined without arm's length
negotiations and necessarily involved conflicts of interest between the
interests of the related parties and the Company, the Company believes that all
of the foregoing transactions were entered into on terms no less favorable to
the Company than could have been obtained from independent third parties. All
future transactions by the Company with officers, directors and 5% stockholders
and their affiliates will be entered into only if a majority of the outside
directors determine that the terms of such transactions are no less favorable to
the Company than could be obtained from unaffiliated parties. There are
currently no new proposed related party transactions contemplated by the
Company.

DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is authorized to issue 20,000,000 shares of Common Stock, no par
value, of which 2,049,721 shares are currently outstanding including the shares
issued upon conversion of the Bridge Promissory Notes. After this offering,
there will be 2,804,721 shares of Common Stock outstanding, assuming no exercise
of the Warrants, the Over-allotment Option, the Representative's Options or the
Employee's Options.

Holders of Common Stock are entitled to dividends when, as and if declared
by the Board of Directors out of funds available therefor, subject to any
priority as to dividends for any preferred stock that may be outstanding. There
currently is no preferred stock authorized or outstanding. Holders of Common
Stock are entitled to cast one vote for each share held at all stockholder
meetings for all purposes including the election of directors. Cumulative voting
for the election of directors is not permitted. The holders of a majority of the
Common Stock issued and outstanding and entitled to vote, in person or by proxy,
constitute a quorum at meetings of stockholders and the vote of the holders of a
majority of Common Stock present at such a meeting will decide any question
brought before such meeting, except for certain actions such as amendments to
the Company's Articles of Incorporation, mergers or dissolutions, all of which
require the vote of the holders of a majority of the outstanding Common Stock.
Upon liquidation or dissolution, the holder of each outstanding share of Common
Stock will be entitled to share ratably in the net assets of the Company legally
available for distribution to such stockholder after the payment of all debts
and other liabilities and after distributions to preferred stockholders, if any,
legally entitled thereto. No holder of Common Stock has any preemptive or
preferential rights to purchase or subscribe for any part of any unissued or any
additional authorized stock or any securities of the Company convertible into
shares of its stock, nor does any holder of Common Stock have redemption or
conversion rights. The outstanding shares of Common Stock are, and the Common
Stock offered hereby will be fully paid and nonassessable once issued.

STOCK PURCHASE WARRANTS

Prior to the offering there were no warrants issued by the Company. Upon
consummation of this offering, 1,349,126 Warrants will be issued and outstanding
(consisting of 1,000,000 Warrants sold by the Company in this offering and the
349,126 Warrants issued to the Bridge Financing Selling Stockholders upon
consummation of this offering), assuming no exercise of the Over-allotment
Option. Each Warrant entitles the holder to purchase one share of Common Stock
at an exercise price equal to $7.20 (120% of the initial offering price of the
Unit), subject to adjustment, for a period of five years commencing from the
date of this Prospectus. No holder of Warrants, as such, will be entitled to
vote or receive dividends or be deemed the holder of shares of Common Stock for
any purpose whatsoever until such Warrants have been duly exercised and the
purchase price has been paid in full. Each Warrant will be redeemable by the
Company for $.05 per Warrant at any time commencing one year after the effective
date of this offering

44
<PAGE>
("Effective Date") (which period may be reduced or waived by the Representative
in its sole discretion), upon thirty days' prior written notice, at any time
when the closing price per share of Common Stock for twenty consecutive trading
days within the thirty-day period prior to the date notice of redemption is
given equals or exceeds 140% of the initial public offering price of the Unit
and at such time there is a current effective registration statement covering
the shares of Common Stock underlying the Warrants. The Company presently
expects to call all of the Warrants for redemption as soon as permitted provided
that a current Prospectus relating to the Common Stock underlying such Warrants
is effective at that time. In the event the Company gives notice of its
intention to redeem, a holder may exercise his Warrants within the period set
forth in the notice of redemption or they will be redeemed upon payment of the
redemption price. The Warrants will be entitled to the benefit of adjustments in
the exercise price and in the number of shares of Common Stock delivered upon
the exercise thereof upon the occurrence of certain events, such as stock
dividends, stock splits, recapitalizations, consolidations or mergers.

The Warrants will be exercisable only 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. Because the Warrants may be
transferred, it is possible that the Warrants may be acquired by persons
residing in states where the Company has not registered them, 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. Warrant holders
residing in those states would have no choice but to attempt to sell their
Warrants or let them expire unexercised.

Holders of the Warrants may be able to sell the Warrants if a market
develops rather than exercise them. However, there can be no assurance that a
market will develop, or if developed, will continue as to such Warrants.

Each Warrant will be exercisable by surrendering the Warrant certificate,
with the formal subscription form on the reverse side of the Warrant certificate
properly completed and executed, together with payment of the exercise price to
the Warrant Agent. Prior to their expiration or redemption by the Company, the
Warrants will be exercisable from time to time in whole or 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.

REPRESENTATIVE'S OPTIONS

Subject to the terms and conditions of the Underwriting Agreement between
the Company and the Representative, the Company has agreed to sell to the
Representative options to purchase 100,000 shares of Common Stock. See
"Underwriting--Representative's Options."

TRADING SYMBOL

The Company has applied for inclusion of its Units, Common Stock and
Warrants for quotation on NASDAQ under the symbols "NVDCU," "NVDC" and "NVDCW,"
respectively. This offering is the initial public offering of the Company's
Securities and, accordingly, there is currently no public trading market for any
such Securities. Even if the Company's Common Stock and Warrants are accepted
for quotation on NASDAQ, there can be no assurance that a public trading market
will ever develop or, if one develops, that it will be maintained. Although it
has no legal obligation to do so, the Representative from time to time may act
as a market maker and otherwise effect transactions for its own account, or for
the account of others, in the Company's securities. The Representative, if it so
participates, may be a dominating influence in any market that may develop for
any of the Company's Securities.

TRANSFER AGENT AND REGISTRAR

The transfer agent for the Company's Common Stock and the Warrant Agent for
the Company's Warrants is American Securities Transfer & Trust, Inc.

45
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of this offering, the Company will have 2,804,721
shares of Common Stock outstanding, including 349,126 shares issued upon
conversion of the Bridge Promissory Notes. Of the 2,804,721 shares of Common
Stock outstanding, the 1,000,000 shares of Common Stock offered hereby will be
freely tradeable without restriction or further registration under the
Securities Act, except for any shares purchased by an affiliate of the Company
(in general, a person who has a control relationship with the Company), which
shares will be subject to the resale limitations of Rule 144 under the
Securities Act. In addition to the 1,000,000 shares of Common Stock offered
hereby, 104,126 shares of Common Stock issued in the conversion of the Bridge
Promissory Notes are being registered simultaneously with this offering for
resale by the holders thereof from time to time commencing ten months after the
consummation of this offering (or sooner, if permitted by the Representative in
its sole discretion). When sold, such shares will be freely tradeable without
restriction or further registration under the Securities Act. See "Additional
Registered Securities." The remaining 1,700,595 shares of Common Stock
outstanding are deemed to be "restricted securities," as the term is defined
under Rule 144 promulgated under the Securities Act, in that such shares were
purchased by the stockholders of the Company prior to the offering in
transactions not involving a public offering and as such may only be sold
pursuant to a registration statement under the Securities Act, in compliance
with the exemption provisions of Rule 144, or pursuant to another exemption
under the Securities Act. Rule 144 provides, in essence, that a person
(including a group of persons whose shares are aggregated) and including any
person who may be deemed an "affiliate" of the Company, as that term is defined
under the Securities Act, who has satisfied a two-year holding period for such
restricted securities may sell within any three-month period, under certain
circumstances, an amount of restricted securities which does not exceed the
greater of one percent of that class of the Company's outstanding securities or
the average weekly trading volume of that class of securities during the four
calendar weeks prior to such sale. Sales under Rule 144 are also subject to
certain manner of sale provisions, notice requirements and the availability of
current public information about the Company. In addition, pursuant to Rule 144,
persons who are not affiliated with the Company and who have held their
restricted securities for at least three years are not subject to the quantity
limitations or the manner of sale restrictions of the rule. As of the date
hereof, 212,500 shares of Common Stock are available for resale pursuant to Rule
144; however, pursuant to an agreement with the Representative, the holders of
all of such shares are restricted from selling them for a period of twelve
months from the date of this Prospectus. See "Underwriting--Lock-Up Agreement."
A sale of shares by the Company's current stockholders, whether pursuant to Rule
144 or otherwise, may have an adverse effect upon the market price of the
Securities in any market for them that may develop. To the extent that these
shares enter the market, the value of the Common Stock in the over-the-counter
market may be reduced. See "Risk Factors."

46
<PAGE>
UNDERWRITING

Under the terms and subject to the conditions of the Underwriting Agreement,
the Underwriters named below, for whom Joseph Charles & Associates, Inc. is
acting as representative (the "Representative"), have severally agreed to
purchase from the Company and the Bridge Financing Selling Stockholders, and the
Company and the Bridge Financing Selling Stockholders have each agreed to sell
to the Underwriters named below the aggregate number of Securities set forth
below at the price to the public less underwriting discounts set forth on the
cover page of this Prospectus. The Units are being sold on a firm commitment
basis. The Underwriting Agreement provides, however, that the obligations of the
Underwriters to pay for and accept delivery of the Units are subject to certain
conditions precedent, and that the Underwriters are committed to purchase and
pay for all Units if any Units are purchased.

The Units will be purchased by the Underwriters as follows: Joseph Charles &
Associates, Inc. will purchase 450,000 Units; Kashner Davidson Securities Corp.
will purchase 300,000 Units; Barclay Investments, Inc. will purchase 50,000
Units; M.S. Farrell & Co., Inc. will purchase 50,000 Units; Neidiger/
Tucker/Bruner, Inc. will purchase 50,000 Units; Paulson Investment Company, Inc.
will purchase 50,000 Units; and Shepard Financial Group, Inc. will purchase
50,000 Units.

The Company has been advised by the Representative that the Underwriters
propose initially to offer the Units directly to the public at the offering
price set forth on the cover page of this Prospectus and to certain dealers (who
may include the Underwriters) at such price less a concession not in excess of
$ per Unit. The Underwriters may allow, and such dealers may reallow, a
concession to certain other dealers (who may include the Underwriters) not in
excess of $.29 per Unit. After the initial offering to the public, the offering
price and other selling terms may be changed by the Representative.

The Representative of the Underwriters has advised the Company that the
Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority as to such sale.

OVER-ALLOTMENT OPTION

The Company has granted to the Representative an option, exercisable for 45
days after the date of this Prospectus, to purchase up to a maximum of an
additional 150,000 Units at the Offering Price, less the underwriting discounts,
set forth on the cover page of this Prospectus. The Representative may exercise
such option only to cover over-allotments made in connection with the sale of
the Units offered hereby.

NON-ACCOUNTABLE EXPENSE ALLOWANCE

The Company has agreed to pay to the Representative a non-accountable
expense allowance equal to three percent of the total proceeds of the offering
including proceeds paid to the Bridge Financing Selling Stockholders, or
$180,000, of which $40,000 has previously been paid. The Representative's
expenses in excess of the non-accountable expense allowance will be borne by the
Representative. To the extent that the expenses of the Representative are less
than the non-accountable expense allowance, the excess will be deemed to be
underwriting compensation. In addition to the Underwriter's discount and the
non-accountable expense allowance, the Company is required to pay the costs of
qualifying the Securities under federal and state securities laws, together with
legal and accounting fees, printing and other costs in connection with this
offering.

The Bridge Financing Selling Stockholders will sell such shares to the
Underwriter less a discount equal to ten percent of the offering price for the
Common Stock. The costs of qualifying these shares under federal and state
securities laws, together with legal and accounting fees, printing and other
costs in connection with the offering, will be paid by the Company.

47
<PAGE>
REPRESENTATIVE'S FINANCIAL CONSULTANT AGREEMENT

The Company has agreed to retain the Representative as a financial
consultant for a period of two years from the date of this Prospectus for a fee
of $3,000 per month. The financial consulting services to be provided by the
Representative include assisting in the development of a long-term financial
strategy and working with financial analysts.

DESIGNEE TO THE BOARD OF DIRECTORS

The Company has agreed, for a period of four years from the date of this
Prospectus, at the option of the Representative, to nominate a designee of the
Representative, reasonably acceptable to the Company, for election to the
Company's Board of Directors or, at the option of the Representative, if the
Company is unable to obtain directors and officers insurance satisfactory to the
Representative, to designate a consultant to the Board of Directors who will
have the right to attend all Board and Board committee meetings and will be
compensated on the same basis as non-employee members of the Board. The
Representative has not yet exercised its right to designate such a person.

WARRANT SOLICITATION

The Company has agreed with the Representative not to solicit Warrant
exercises other than through the Representative. Upon exercise of any Warrants,
commencing one year from the date of this Prospectus, the Company will pay the
Representative a fee of three percent of the aggregate exercise price, if (i)
the market price of the Common Stock on the date the Warrant is exercised is
greater than the then exercise price of the Warrant; (ii) the exercise of the
Warrant was solicited by a member of the National Association of Securities
Dealers, Inc., who is designated in writing by the holder exercising the
Warrant; (iii) the Warrant is not held in a discretionary account except where
prior specific written approval for the exercise has been received; (iv)
disclosure of compensation arrangements was made both at the time of the
offering and at the time of exercise of the Warrant; (v) the solicitation of the
exercise of the Warrant was not in violation of Rule 10b-6 promulgated under the
Exchange Act; and (vi) the Representative provides bona fide services in
connection with the solicitation of the Warrant. No solicitation fee will be
paid to the Representative on Warrants exercised within one year of the date of
this Prospectus or on Warrants voluntarily exercised at any time without
solicitation. In addition, unless granted an exemption by the Commission from
Rule 10b-6 under the Exchange Act, the Representative will be prohibited from
engaging in any market making activities or solicited brokerage activities until
the later of the termination of such solicitations activity or the termination
by waiver or otherwise of any right the Representative may have to receive a fee
for the exercise of the Warrants following such solicitation. Such a
prohibition, while in effect, could impair the liquidity and market price of the
Securities.

REPRESENTATIVE'S OPTIONS

Subject to the terms and condition of the Underwriting Agreement between the
Company and the Representative, the Company has agreed to sell to the
Representative, for an aggregate purchase price of $100, as additional
compensation in connection with this offering, options (the "Representative's
Options") to purchase up to 100,000 shares of Common Stock. The Representative's
Options are exercisable for a four-year period commencing one year from the date
of this Prospectus and entitle the Representative to purchase up to 100,000
shares of Common Stock at a price per share equal to 125% of the initial
offering price of the Common Stock subject to adjustment in certain events. The
Representative's Options are restricted from sale, transfer, assignment or
hypothecation for a period of one year from the date of this Prospectus except
to officers or partners of the Representative, other Underwriters, and members
of the selling group and/or their officers or partners. The Representative's
Options contain anti-dilution provisions providing for adjustment of the
exercise prices as well as the number of shares issuable upon the occurrence of
certain events, including the issuance of shares of Common Stock or Warrants at
a price per share or per Warrant less than the exercise price or the market
price of the security, or in the

48
<PAGE>
event of any recapitalization, reclassification, stock dividend, stock split,
stock combination or similar transaction. The Representative's Options grant to
the holders thereof certain piggyback and demand registration rights as
described below.

If the holders of at least a majority of the Representative's Options or the
securities underlying them wish to register the Representative's Options or any
of the securities underlying them during the period commencing one year
following the date of this Prospectus and ending five years from the date of
this Prospectus, the Company has agreed to register or qualify such securities,
one time only, upon the request of the holders of at least a majority of such
Representative's Options or the securities underlying them ("Demand Registration
Right"). The Company will bear the full expense of such registration which may
be substantial. If the Demand Registration Right is exercised, the Company at
such time at its option may purchase the Representative's Options for the
difference between their exercise price and fair market value of the shares
issuable upon exercise. In addition, the Company has also agreed for a period of
five years commencing on the date of this Prospectus to give notice to the
holder or holders of the Representative's Options, or the Common Stock
underlying the Representative's Options, of its intention to file a registration
statement under the Securities Act, and in that event the holders of the
Representative's Options or the securities underlying such options shall have
the right to request the Company to include the Representative's Options and
such securities underlying them in such Registration Statement. The
Representative's Options and the securities underlying them are being registered
as part of the Registration Statement of which this Prospectus forms a part.

The holders of the Representative's Options have no voting, dividend or
other rights as shareholders of the Company with respect to the shares of Common
Stock underlying the Representative's Options until the Representative's Options
have been exercised. The Company is obligated at all times to set aside and have
available sufficient number of authorized but unissued shares of Common Stock to
be issued upon exercise of the Representative's Options.

LOCK-UP AGREEMENT

Except in connection with acquisitions or the exercise of options and
warrants that have been previously granted and the grant of options under an
incentive stock option plan reasonably acceptable to the Representative, the
Company has agreed, for a period of one year from the closing of this offering,
not to issue, sell or purchase any shares of Common Stock or other equity
securities of the Company without the prior written consent of the
Representative. The present stockholders have agreed that they will not offer,
sell or otherwise dispose of any shares of the Company owned by them to the
public for a period of at least twelve months from the closing of this offering
without the prior written consent of the Representative. The Representative may,
in its discretion, and without notice to the public, waive such restrictions and
permit holders otherwise agreeing to restrict their shares to sell any or all of
their shares.

INVESTOR RELATIONS

The Company has agreed with the Representative to engage the services of an
investor relations advisory firm, acceptable to the Representative, for at least
one year following the consummation of this offering.

DIRECTORS AND OFFICERS LIABILITY INSURANCE

The Company has agreed with the Representative to acquire a reasonable
amount of directors and officers liability insurance (provided that such
insurance can be obtained at a reasonable cost, as determined by the Company and
the Representative) from an insurer satisfactory to the Representative.

49
<PAGE>
RECIPROCAL INDEMNIFICATION

The Underwriting Agreement provides for reciprocal indemnification between
the Company, the Bridge Financing Selling Stockholders and the Underwriters
against certain liabilities in connection with the Registration Statement,
including liabilities under the Securities Act, and contribution to payments
that may be required to be made. Insofar as indemnification for liabilities
arising under the Securities Act may be provided to directors, officers and
controlling persons of the Company, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.

DETERMINATION OF OFFERING PRICE

Prior to this offering, there has been no public market for the Common Stock
or Warrants. The purchase price for the Units and the exercise price and other
terms of the Representative's Options were determined by negotiations between
the Company and the Representative, are not necessarily related to the assets,
book value, earnings or net worth of the Company or any other established
criteria of value, and should in no event be regarded as an indication of any
future market price of these securities. Among the factors considered in
determining the initial public offering price and the exercise price of the
Warrants were the prospects for the Company, an assessment of the industry in
which the Company operates, the business experience of management, the number of
Units offered, the price that purchasers of such securities might be expected to
pay given the nature of the Company and the general condition of the securities
markets at the time of the offering. Accordingly, the initial public offering
price of the Units set forth on the cover page of this Prospectus should not be
considered an indication of the actual value of the Units. The market price of
the Common Stock and the Warrants is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Common
Stock or Warrants can be resold at their combined initial public offering price.

The foregoing does not purport to be a complete statement of the terms and
conditions of the Underwriting Agreement, copies of which are on file at the
offices of the Representative, the Company and the Securities and Exchange
Commission, Washington, D.C. See "Additional Information."

In connection with the Bridge Financing Private Placement (see "Bridge
Financing Private Placement"), the Company paid the Representative a commission
in the amount of $143,750 and reimbursed the Representative for its
non-accountable expenses relating to the Bridge Financing Private Placement in
the amount of $35,938, including fees and expenses of its counsel.

A significant amount of Units offered hereby may be sold to customers of the
Representative or the other Underwriters and the concentration of customers of
the Representative or the other Underwriters may adversely affect the market for
and liquidity of the Company's securities. Such customers subsequently may
engage in transactions for the sale or purchase of the Common Stock or Warrants
through or with the Representative or the other Underwriters. Although they may
have no obligation to do so, the Representative or the other Underwriters may
make a market in the Company's securities and may otherwise effect transactions
in such securities. If they participate in the market, the Representative or the
other Underwriters may exert a dominating influence on the market, if one
develops, for the Common Stock and Warrants described in this Prospectus. Such
market activity may be discontinued at any time. The price and liquidity of the
Common Stock and Warrants may be significantly affected by the degree, if any,
of the Representative's or the other Underwriter's participation in such market.

50
<PAGE>
EXPERTS

The financial statements of the Company as of September 30, 1996 and
December 31, 1995 and of IPI as of December 31, 1995 have been included herein
in reliance on the report of Hein + Associates LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.

LEGAL MATTERS

Certain legal matters, including the legality of the issuance of the
Securities offered hereby, are being passed upon for the Company by Cohen Brame
& Smith Professional Corporation, 1700 Lincoln Street, Suite 1800, Denver,
Colorado 80203. Certain legal matters will be passed upon for the Underwriters
by Berliner Zisser Walter & Gallegos, P.C., Denver, Colorado.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission,
Washington, D.C. Office, a registration statement under the Securities Act on
Form SB-2 ("Registrations Statement") with respect to the Units offered hereby.
No distribution of the Units will be made until the Registration Statement, as
it may be amended, has been declared effective. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement and the exhibits thereto,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Statements contained in this Prospectus as to the contents of
any contract of other document referred to are not necessarily complete and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. For further information with
respect to the Company and the Units offered hereby, reference is hereby made to
the Registration Statement and the exhibits thereto. All of these documents may
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies may be
obtained at the prescribed rates from the Public Reference Section of the
Commission at its principal office in Washington, D.C. The Commission also
maintains a site on the Web that contains reports, proxy and information
statements, and other information regarding the Company. The address for such
site is http://www.sec.gov.

51
<PAGE>
NAVIDEC, INC. (FORMERLY ACI SYSTEMS, INC.)
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PRO FORMA COMBINING, CONDENSED FINANCIAL INFORMATION (UNAUDITED):

INTRODUCTION............................................................................................... F-2

CONDENSED BALANCE SHEET--September 30, 1996................................................................ F-3

COMBINING, CONDENSED STATEMENT OF OPERATIONS--For the Nine Months Ended September 30, 1996................. F-4

COMBINING, CONDENSED STATEMENT OF OPERATIONS--For the Year Ended December 31, 1995......................... F-5

NOTES TO COMBINING, CONDENSED FINANCIAL INFORMATION........................................................ F-6

NAVIDEC, INC. (FORMERLY ACI SYSTEMS, INC.):

INDEPENDENT AUDITOR'S REPORT............................................................................... F-7

BALANCE SHEETS--September 30, 1996 and December 31, 1995................................................... F-8

STATEMENTS OF OPERATIONS--For the Nine Months Ended September 30, 1996, for the Nine Months Ended September
30, 1995 (Unaudited), and for the Years Ended December 31, 1995 and 1994................................. F-9

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)--For the Years Ended December 31, 1994 and 1995 and
for the Nine Months Ended September 30, 1996............................................................. F-10

STATEMENTS OF CASH FLOWS--For the Nine Months Ended September 30, 1996, for the Nine Months Ended September
30, 1995 (Unaudited), and for the Years Ended December 31, 1995 and 1994................................. F-11

NOTES TO FINANCIAL STATEMENTS.............................................................................. F-12

INTERACTIVE PLANET, INC.:

INDEPENDENT AUDITOR'S REPORT............................................................................... F-21

STATEMENTS OF OPERATIONS--For the Six Months Ended June 30, 1996 (Unaudited) and for the Period from May
15, 1995 (Inception Date) to December 31, 1995........................................................... F-22

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)--For the Period from May 15, 1995 (Inception Date)
through June 30, 1996 (Unaudited)........................................................................ F-23

STATEMENTS OF CASH FLOWS--For the Six Months Ended June 30, 1996 (Unaudited) and for the Period from May
15, 1995 (Inception Date) to December 31, 1995........................................................... F-24

NOTES TO FINANCIAL STATEMENTS.............................................................................. F-25
</TABLE>

F-1
<PAGE>
NAVIDEC, INC. (FORMERLY ACI SYSTEMS, INC.)
INTERACTIVE PLANET, INC.
INTRODUCTION

The accompanying unaudited pro forma condensed balance sheet includes the
balance sheet of NAVIDEC, Inc. (formerly ACI Systems, Inc.) as of September 30,
1996, then assumes the receipt of the net proceeds of $542,500 from the sale of
unsecured subordinated convertible promissory notes from bridge financing during
October 1996, and the receipt of estimated net proceeds of $3,584,050 from the
sale of 755,000 shares of common stock of 755,000 warrants at $5.90 and $.10,
respectively (estimated) and 245,000 additional warrants at $.10 per warrant, as
contemplated in the proposed public offering as if such financing, and public
offering occurred at September 30, 1996. The promissory notes are convertible
into 12,142.67 shares of common stock and 12,142.67 warrants for every $50,000
in principal and must convert on a public offering.

The accompanying unaudited pro forma combining, condensed statements of
operations combine the operations of NAVIDEC and Interactive Planet, Inc. (IPI)
for the year ended December 31, 1995 and the nine months ended September 30,
1996 as if the acquisition was completed as of the beginning of the period
presented under the purchase method of accounting and based upon the assumptions
as included in the notes to the pro forma statements. As a result of the NAVIDEC
and IPI effective merger date of July 1, 1996, the financial statements of
NAVIDEC for the nine months ended September 30, 1996, includes three months of
IPI operations and the financial statements of IPI represents six months of
IPI's operations prior to the merger with NAVIDEC.

These statements are not necessarily indicative of future operations or the
actual results that would have occurred had the merger been consummated at the
beginning of the periods indicated.

The unaudited pro forma combined, condensed financial statements should be
read in conjunction with the historical financial statements and notes thereto,
included elsewhere in this document.

F-2
<PAGE>
NAVIDEC, INC. (FORMERLY ACI SYSTEMS, INC.)
CONDENSED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA
NAVIDEC, BRIDGE PRO FORMA PRO FORMA
INC. FINANCING BEFORE OFFERING PRO FORMA
(A) ADJUSTMENTS OFFERING ADJUSTMENTS COMBINED
----------- ----------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash................................................. $ 276,804 $472,500(B) $ 749,304 $3,514,789(C) $4,264,093
Trade account receivables............................ 285,955 -- 285,955 -- 285,955
Inventories.......................................... 281,678 -- 281,678 -- 281,678
Prepaid expenses and other current assets............ 50,913 -- 50,913 -- 50,913
----------- ----------- ----------- ---------------- -----------
Total current assets............................... 895,350 472,500 1,367,850 3,514,789 4,882,639
PROPERTY AND EQUIPMENT, net............................ 395,834 -- 395,834 -- 395,834
INTANGIBLE ASSETS...................................... 1,015,576 77,500(B) 1,093,076 (285,576)(B)(C) 807,500
----------- ----------- ----------- ---------------- -----------
TOTAL ASSETS........................................... $2,306,760 $550,000 $2,856,760 $3,229,213 $6,085,973
----------- ----------- ----------- ---------------- -----------
----------- ----------- ----------- ---------------- -----------
CURRENT LIABILITIES:
Current portion of capital lease obligations......... $ 30,593 $ -- $ 30,593 $ -- $ 30,593
Notes payable--related party......................... 340,465 (70,000)(B) 270,465 (150,000)(C) 120,465
Accounts payable..................................... 729,278 -- 729,278 -- 729,278
Other accrued liabilities............................ 257,545 -- 257,545 -- 257,545
----------- ----------- ----------- ---------------- -----------
Total current liabilities.......................... 1,357,881 (70,000) 1,287,881 (150,000) 1,137,881
LONG-TERM DEBT:
Capital lease obligations............................ 141,146 -- 141,146 -- 141,146
Other................................................ 817,500 620,000(B) 1,437,500 (1,437,500)(B) --
3,584,050(C)
STOCKHOLDERS' EQUITY (DEFICIT)......................... (9,767 ) -- (9,767 ) 1,232,663(B) 4,806,946
----------- ----------- ----------- ---------------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)... $2,306,760 $550,000 $2,856,760 $3,229,213 $6,085,973
----------- ----------- ----------- ---------------- -----------
----------- ----------- ----------- ---------------- -----------
</TABLE>

See accompanying notes to combining, condensed financial information.

F-3
<PAGE>
NAVIDEC, INC. (FORMERLY ACI SYSTEMS, INC.) AND
INTERACTIVE PLANET, INC.

COMBINING, CONDENSED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
INTERACTIVE PRO FORMA
NAVIDEC, PLANET, PRO FORMA BEFORE
INC.(G) INC.(F) ADJUSTMENTS OFFERING
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
NET REVENUES...................................... $ 4,222,433 $ 185,429 $ -- $ 4,407,862
COST OF REVENUES.................................. 3,416,948 60,017 -- 3,476,965
-------------- ------------- -------------- -------------
GROSS MARGIN...................................... 805,485 125,412 -- 930,897
OPERATING EXPENSES................................ 1,390,779 225,161 85,000(D) (1,700,940)
-------------- ------------- -------------- -------------
OPERATING LOSS.................................... (585,294) (99,749) (85,000) (770,043)
Other income (expense), net..................... (129,154) (1,129) -- (130,283)
-------------- ------------- -------------- -------------
NET LOSS.......................................... $ (714,448) $ (100,878) $ (85,000) $ (900,320)
-------------- ------------- -------------- -------------
-------------- ------------- -------------- -------------
LOSS PER SHARE.................................... $ (.35) $ (.44)
-------------- -------------
-------------- -------------
WEIGHTED AVERAGE SHARES (E)....................... 2,030,952 2,030,952
-------------- -------------
-------------- -------------
</TABLE>

See accompanying notes to combining, condensed financial information.

F-4
<PAGE>
NAVIDEC, INC. (FORMERLY ACI SYSTEMS, INC.) AND
INTERACTIVE PLANET, INC.
COMBINING, CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)

<TABLE>
<CAPTION>
INTERACTIVE PRO FORMA
PLANET, PRO FORMA BEFORE
NAVIDEC, INC. INC. ADJUSTMENTS OFFERING
-------------- ----------- ---------------- ------------
<S> <C> <C> <C> <C>
NET REVENUES......................................... $ 4,120,743 $ 167,574 $ -- $ 4,288,317
COST OF REVENUES..................................... 3,339,891 36,252 -- 3,376,143
-------------- ----------- ---------------- ------------
GROSS MARGIN......................................... 780,852 131,322 -- 912,174
OPERATING EXPENSES................................... 784,150 131,739 170,000(D) 1,085,889
-------------- ----------- ---------------- ------------
OPERATING LOSS....................................... $ (3,298) $ (417) $ (170,000) $ (173,715)
Other income (expense), net........................ (20,004) -- -- (20,004)
-------------- ----------- ---------------- ------------
NET LOSS............................................. $ (23,302) $ (417) $ (170,000) $ (193,719)
-------------- ----------- ---------------- ------------
-------------- ----------- ---------------- ------------
LOSS PER SHARE....................................... $ (.02) $ (.09)
-------------- ------------
-------------- ------------
WEIGHTED AVERAGE SHARES (E).......................... 1,352,075 678,877(A) 2,030,952
-------------- ---------------- ------------
-------------- ---------------- ------------
</TABLE>

See Accompanying Notes to Combining, Condensed Financial Information.

F-5
<PAGE>
NAVIDEC, INC. (FORMERLY ACI SYSTEMS, INC.) AND
INTERACTIVE PLANET, INC.
NOTES TO COMBINING, CONDENSED FINANCIAL INFORMATION

(A) Reflects the acquisition of IPI in a purchase transaction where NAVIDEC
acquired 100% of the stock of IPI for 678,877 shares of common stock of
NAVIDEC and a note payable of $75,000. The acquisition was valued at
$750,000, resulting in goodwill of approximately $850,000, which will be
amortized over 5 years.

(B) To reflect the bridge financing debt of $620,000 raised subsequent to
September 30, 1996, the payment of $70,000 related party note paid from the
bridge financing proceeds and then to reflect the conversion of the
$1,437,500 notes into 349,126 units (consisting of one share of common stock
and one purchase warrant) as contemplated in the proposed public offering.

(C) To reflect the sale of 755,000 shares of common stock and 1,000,000 warrants
at $5.90 and $.10, respectively, net of offering costs of $970,450, as
contemplated in the proposed public offering and the use of proceeds to
repay $150,000 in notes payable to related parties. Related past interest
expense on the $150,000 has not been a significant amount in the net loss
per share amount (if outstanding shares were adjusted to reflect such net
proceeds used to repay the debt).

(D) To reflect amortization of goodwill resulting from the value assigned in
purchase price allocation.

(E) Options and shares from the conversion of the bridge financing debt were
considered in the calculation of weighted average shares under the treasury
stock method based on the proposed public offering price.

(F) Includes the operation of IPI for the six months ended June 30, 1996, prior
to IPI's merger with NAVIDEC on July 1, 1996.

(G) Includes three months of IPI operations from July 1, 1996 (the effective
merger date of NAVIDEC and IPI) to September 30, 1996.

F-6
<PAGE>
INDEPENDENT AUDITOR'S REPORT

Board of Directors
NAVIDEC, Inc.
Englewood, Colorado

We have audited the accompanying balance sheets of NAVIDEC, Inc. (the
Company) as of September 30, 1996 and December 31, 1995, and the related
statements of operations, changes in stockholders' equity (deficit), and cash
flows for the nine months ended September 30, 1996, and for the years ended
December 31, 1995 and 1994. These financial statements are the responsibility of
the Company's manage-ment. 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 financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of September
30, 1996 and December 31, 1995, and the results of its operations and its cash
flows for the nine months ended September 30, 1996 and for the years ended
December 31, 1995 and 1994, in conformity with generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred losses from operations and had
negative cash flows from operations. These factors raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.

HEIN + ASSOCIATES LLP

Denver, Colorado
November 6, 1996, except for a .85 for 1 reverse stock split described in the
third paragraph of footnote 8, for which the date is November 27, 1996

F-7
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------

<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents......................................................... $ 276,804 $ 106
Trade accounts receivable, net of $40,000 and $18,250 allowance for doubtful
accounts........................................................................ 285,955 668,312
Inventories....................................................................... 281,678 203,753
Prepaid expenses and other current assets......................................... 50,913 10,252
------------- ------------
Total current assets.......................................................... 895,350 882,423

PROPERTY AND EQUIPMENT, net......................................................... 395,834 37,715

EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED, net.............................. 807,500 --

DEFERRED FINANCING AND OFFERING COSTS............................................... 208,076 --
------------- ------------

TOTAL ASSETS........................................................................ $ 2,306,760 $ 920,138
------------- ------------
------------- ------------

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Current portion of capital lease obligations...................................... $ 30,593 $ --
Notes payable:
Related parties................................................................. 340,465 103,199
Other........................................................................... -- 386,801
Accounts payable.................................................................. 729,278 423,366
Other accrued liabilities......................................................... 257,545 61,480
------------- ------------
Total current liabilities..................................................... 1,357,881 974,846
------------- ------------

CAPITAL LEASE OBLIGATIONS, net of current portion................................... 141,146 --

UNSECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTES................................. 817,500 --

COMMITMENTS AND CONTINGENCIES (NOTES 7 AND 8)

STOCKHOLDERS' DEFICIT:
Common stock, no par value; 20,000,000 shares authorized; 1,700,595 and 216,837
shares issued and outstanding as of September 30, 1996 and December 31, 1995,
respectively.................................................................... 400,130 62,714
Accumulated deficit............................................................... (409,897) (117,422)
------------- ------------
Total stockholders' deficit................................................... (9,767) (54,708)
------------- ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT......................................... $ 2,306,760 $ 920,138
------------- ------------
------------- ------------
</TABLE>

See accompanying notes to these financial statements.

F-8
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE NINE MONTHS FOR THE YEARS ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------- --------------------------
1996 1995 1994
------------ 1995 ------------ ------------
------------
(UNAUDITED)

<S> <C> <C> <C> <C>
NET SALES................................................ $ 4,222,433 $ 3,044,539 $ 4,120,743 $ 1,830,734

Cost of sales.......................................... 3,416,948 2,465,279 3,339,891 1,370,874
------------ ------------ ------------ ------------

GROSS MARGIN............................................. 805,485 579,260 780,852 459,860

Operating expense...................................... 1,390,779 508,235 784,150 497,284
------------ ------------ ------------ ------------

OPERATING INCOME (LOSS).................................. (585,294) 71,025 (3,298) (37,424)

OTHER INCOME (EXPENSE):
Interest expense, net.................................. (128,332) (21,135) (29,739) (17,867)
Other.................................................. (822) 2,010 9,735 32,416
------------ ------------ ------------ ------------
Other, Net............................................. (129,154) (19,125) (20,004) 14,549
------------ ------------ ------------ ------------

NET INCOME (LOSS)........................................ $ (714,448) $ 51,900 $ (23,302) $ (22,875)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

PRO FORMA NET INCOME (LOSS) PER SHARE.................... $ (.35) $ (.02)
------------ ------------
------------ ------------

PRO FORMA COMMON SHARES AND EQUIVALENTS OUTSTANDING...... 2,030,952 1,352,075
------------ ------------
------------ ------------
</TABLE>

See accompanying notes to these financial statements.

F-9
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1995 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

<TABLE>
<CAPTION>
COMMON STOCK
----------------------- ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
---------- ----------- ------------ -----------

<S> <C> <C> <C> <C>
BALANCES, January 1, 1994.................................... 216,837 $ 52,714 $ (71,246) $ (18,532)

Options issued to officer for compensation................. -- 10,000 -- 10,000
Net loss................................................... -- -- (22,875) (22,875)
---------- ----------- ------------ -----------

BALANCES, December 31, 1994.................................. 216,837 62,714 (94,121) (31,407)

Net loss................................................... -- -- (23,302) (23,302)
---------- ----------- ------------ -----------

BALANCES, December 31, 1995.................................. 216,837 62,714 (117,423) (54,709)

Exercise of stock options.................................. 804,881 1,745 -- 1,745
Compensation recognized related to transfers of common
stock to employees....................................... -- 82,940 -- 82,940
Shares issued in acquisition of IPI........................ 678,877 674,705 -- 674,705
Reclassification of accumulated deficit in connection with
termination of tax status as a Subchapter
S-Corporation............................................ -- (421,974) 421,974 --
Net loss................................................... -- -- (714,448) (714,448)
---------- ----------- ------------ -----------

BALANCES, September 30, 1996................................. 1,700,595 $ 400,130 $ (409,897) $ (9,767)
---------- ----------- ------------ -----------
---------- ----------- ------------ -----------
</TABLE>

See accompanying notes to these financial statements.

F-10
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE NINE MONTHS FOR THE YEARS ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------- ------------------------
1996 1995 1994
------------- 1995 ----------- -----------
-----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................ $ (714,448) $ 51,900 $ (23,302) $ (22,875)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization.......................... 88,653 12,483 33,595 6,087
Stock based compensation............................... 82,940 -- -- 10,000
Provision for bad debt................................. 22,647 500 22,445 1,776
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable................................ (394,819) (304,083) (374,835) (142,549)
Inventories........................................ (77,925) (36,516) (52,889) (62,969)
Other assets....................................... (25,661) (36,121) 13,216 (8,790)
Increase (decrease) in:
Accounts payable and accrued liabilities........... 303,842 265,086 244,771 37,964
Other liabilities.................................. 109,412 (1,803) 32,048 27,425
------------- ----------- ----------- -----------
Net cash used in operating activities.................... (605,359) (48,554) (104,951) (153,931)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and equipment.......... (377,307) (35,140) (34,210) (33,006)
Cash acquired in merger with IPI......................... 4,987 -- -- --
------------- ----------- ----------- -----------
Net cash used in investing activities.................. (372,320) (35,140) (34,210) (33,006)
CASH FLOWS FROM FINANCING ACTIVITY:
Proceeds from sale of accounts receivable................ 773,614 -- -- --
Proceeds from issuance of common stock................... 1,745 -- -- --
Proceeds from issuance of notes payable and capital
leases................................................. 3,206,866 661,698 790,215 488,885
Payment on notes payable................................. (2,519,772) (580,658) (659,004) (330,203)
Payment for deferred financing and offering costs........ (208,076) -- -- --
------------- ----------- ----------- -----------
Net cash provided by financing activities.............. 1,254,377 81,040 131,211 158,682
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........... 276,698 (2,654) (7,950) (28,255)
CASH AND CASH EQUIVALENTS, beginning of period............. 106 8,056 8,056 36,311
------------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period................... $ 276,804 $ 5,402 $ 106 $ 8,056
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash payments for interest............................... $ 129,551 $ 21,135 $ 29,739 $ 17,867
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
Net assets, net of cash assumed, acquired in merger of
Navidec with IPI....................................... $ 286,013 $ -- $ -- $ --
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
</TABLE>

See accompanying notes to these financial statements.

F-11
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

ORGANIZATION AND NATURE OF OPERATIONS--The Company was incorporated in the
State of Colorado in 1993 and distributes various high technology and other
products through traditional and electronic channels. Effective on July 1, 1996,
the Company merged with IPI and as a result, the Company also provides
comprehensive Internet and Intranet solutions, including design and development
of Worldwide Web sites, marketing, database integration, electronic commerce and
order fulfillments. The Company has a December 31 year-end.

INVENTORIES--Inventories are stated at the lower of cost or market,
determined by the first-in, first-out method and consist primarily of products
held for resale.

PROPERTY AND EQUIPMENT--Property and equipment is stated at cost.
Depreciation is computed over the estimated useful lives of the assets using the
200% declining balance method generally over a three to seven year period.
Leasehold improvements are amortized on the straight-line method over the lesser
of the lease term or the useful life. Expenditures for ordinary maintenance and
repairs are charged to expense as incurred. Upon retirement or disposal of
assets, the cost and accumulated depreciation are eliminated from the account
and any gain or loss is reflected in the statements of operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS--The estimated fair values for financial
instruments are determined at discrete points in time based on relevant market
information. These estimates involve uncertainties and cannot be determined with
precision. The carrying amounts of cash, trade accounts receivable, notes
payable--other, accounts payable, and accrued liabilities approximate fair
value. The carrying amount of notes payable--stockholders which have interest
rates of 5% and -0-% are considered to be at below market rates, however, based
on the short-term nature of these notes, the fair value is not materially
different from the stated value.

CASH EQUIVALENTS--For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments with original maturities of three
months or less to be cash equivalents.

REVENUE RECOGNITION--The Company recognizes revenue upon delivery of its
Internet/Intranet Solutions and Product Distribution goods. Internet/Intranet
Solutions generally begin with consulting arrangements, which are billed on an
hourly basis and/or on a percentage of completion method on fixed bid projects.
Most of the Company's customers elect to update and expand their Web site
frequently, and clients are billed monthly on a time and materials basis for
these services. Additional sources of ongoing revenue include revenue from
advertising sold by the Company on clients' Web sites, revenue from sales of
merchandise and services over clients' Web sites and revenue from maintenance of
client Web sites. The Company receives and records a percentage of the gross
revenue from advertising and merchandise sales immediately upon completion of
these sales.

PRO FORMA INCOME (LOSS) PER SHARE--Loss per share is generally computed
based on the weighted average number of shares outstanding. However, for the
periods presented, common and common equivalent shares, including the options
and convertible notes discussed in Notes 6 and 7, issued prior to the filing of
the Company's registration statement, at prices below the $5.90 per share
(estimated) minimum price (which is anticipated for the Company's proposed
public offering) have been included in the weighted average calculation, as if
they were outstanding for the year ended December 31, 1995 and

F-12
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
the nine months ended September 30, 1996 (using the treasury stock method and
the anticipated public offering price).

INCOME TAXES--Subsequent to June 30, 1996, the Company converted to a "C
Corporation" and adopted Statement of Financial Accounting Standards No. 109,
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax assets and
liabilities are determined, based on the difference between the financial
statements and tax bases of asset and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse. No
provision has been made for income taxes since the Company has elected to be
taxed as an "S Corporation" as defined by the Internal Revenue Code. The
Company's stockholders will report the Company's taxable income or loss on their
individual income tax returns. Pro forma income tax expense prior to the
adoption of the "C Corporation" status is not presented due to anticipated
losses for the year and a valuation allowance for the loss carryovers which
would have been recorded under FASB 109 after the Company's proposed public
offering and the termination of the "S" corporate election. At September 30,
1995, the Company had a net operating loss of approximately $325,000, which, if
not previously utilized, will expire in 2011. At September 30, 1996, the tax
effects of temporary differences that give rise to significant portions of
deferred tax assets are $12,000 for allowance for doubtful accounts and $123,000
for the net operating loss carryforward, net of a valuation of allowance
totaling $135,000.

USE OF ESTIMATES--The preparation of the Company's financial statements in
conformity with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the amounts reported in
these financial statements and accompanying notes. Actual results could differ
from those estimates. The Company makes a significant estimates, including the
allowance for doubtful account and the life of the excess of purchase price over
net assets acquired (goodwill) in the IPI merger. Due to the uncertainties
inherent in the estimation process, it is at least reasonably possible that the
life of goodwill could be revised over the next year and such revisions could be
material.

IMPAIRMENT OF LONG-LIVED ASSETS--Effective January 1, 1996, the Company
adopted Financial Accounting Standards Board Statement 121 (FAS 121). In the
event that facts and circumstances indicate that the cost of assets or other
assets may be impaired, an evaluation of recoverability would be performed. If
an evaluation is required, the estimated future undiscounted cash flows
associated with the asset would be compared to the asset's carrying amount to
determine if a write-down to market value or discounted cash flow value is
required. Adoption of FAS 121 had no effect on the September 30, 1996 financial
statements.

STOCK-BASED COMPENSATION--In October 1995, the Financial Accounting
Standards Board issued a new statement titled "Accounting for Stock-Based
Compensation" (FAS 123). The new statement was effective for the Company January
1, 1996. FAS 123 encourages, but does not require, companies to recognize
compensation expense for grants of stock, stock options, and other equity
instruments to employees based on fair value. Companies that do not adopt the
fair value accounting rules must disclose the impact of adopting the new method
in the notes to the financial statements. Transactions in equity instruments
with non-employees for goods or services must be accounted for on the fair value
method. The Company has elected not to adopt the fair value accounting
prescribed by FAS 123 for employees, and will be subject only to the disclosure
requirements prescribed by FAS 123.

F-13
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
During the nine months ended September 30, 1996, the Company granted options
for the purchase of 212,500 shares of common stock to an employee at the fair
market value as estimated by management of the Company. Management of the
Company believes the adoption of FAS 123 is not expected to have a material
impact on the Company's financial statements in the future based on transactions
through September 30, 1996.

UNAUDITED INFORMATION--The statement of operations for the nine-month period
ended September 30, 1995 was taken from the Company's books and records without
audit. However, in the opinion of management, such information includes all
adjustments (consisting only of normal accruals), which are necessary to
properly reflect the results of operations for the nine months ended September
30, 1995. The results of operations for the interim periods presented are not
necessarily indicative of those expected for the year.

2. CONTINUED OPERATIONS:

The accompanying financial statements have been prepared assuming that the
Company will continue operating as a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred net losses for the past two years and has had
negative cash flows from operations. As described in Notes 3, 6, and 8,
management has taken the following actions to improve the Company's cash flow
and operating results.

- In October 1996, the Company completed a private offering for the sale of
$1,437,500 of unsecured subordinated convertible promissory notes and
intends to complete a public offering to provide gross proceeds of
approximately $4,554,500.

- Effective July 1, 1996, the Company acquired IPI. Even though IPI has had
insignificant revenues, management believes that the merger will enhance
the operating results of the combined entity.

The Company is also aggressively working to increase revenues and improve
operating results to ultimately achieve profitability, although no assurances
can be given the Company will be successful. The Company's ability to continue
as a going concern is dependent upon the factors described above. The
accompanying financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

3. ACQUISITION OF IPI:

Effective July 1, 1996, the Company acquired IPI in a purchase transaction,
where the Company acquired 100% of the stock of IPI for 678,877 shares of common
stock of the Company and a $75,000 note payable. The acquisition was valued at
approximately $750,000 and resulted in goodwill of approximately $850,000 being
recorded. The goodwill is being amortized over five years. IPI develops,
markets, and supports World Wide Web (Web) sites, on the Internet or Intranets.
IPI designs and implements Web sites ranging from basic inquiry-only sites to
complex, interactive sites capable of providing on-line commerce, database
integration and manipulation, sophisticated graphics, animation, and other
multi-media content. IPI also serves as a value-added reseller of software
capable of allowing the Internet or Intranet user to use self-service
applications such as the on-line purchase of products or services, product
warranty and

F-14
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. ACQUISITION OF IPI: (CONTINUED)
support, employee benefit enrollments and other applications. Immediately after
the effective date of the merger, IPI was dissolved.

The unaudited following pro forma information presents the effect of the
merger as if it occurred on January 1, 1995.

<TABLE>
<CAPTION>
FOR THE
NINE MONTHS FOR THE
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Revenue......................................................... $ 4,407,862 $4,288,317
------------- ------------
------------- ------------
Net loss........................................................ $ (900,326) $ (193,719)
------------- ------------
------------- ------------
Loss per share.................................................. $ (.44) $ (.09)
------------- ------------
------------- ------------
Common share and equivalents outstanding........................ 2,030,952 2,030,952
------------- ------------
------------- ------------
</TABLE>

The above pro forma information is not necessarily indicative of the
financial results which would have occurred if such acquisition had taken place
at the earlier date, nor of future operating results.

4. CONCENTRATION OF CREDIT RISK:

Credit risk represents the accounting loss that would be recognized at the
reporting date if counterparties failed completely to perform as contracted.
Concentrations of credit risk (whether on or off balance sheet) that arise from
financial instruments exist for groups of customers or counterparties when they
have similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly effected by changes in economic or other
conditions described below. In accordance with FASB Statement No. 105,
DISCLOSURE OF INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET
RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK, the credit
risk amounts shown do not take into account the value of any collateral or
security.

A geographic concentration exists because the Company has historically sold
approximately 40% of its products and services in the State of Colorado with
remaining revenue derived from sales throughout the United States. Financial
instruments that subject the Company to credit risk consist principally of
accounts receivable.

At September 30, 1996, accounts receivable totaled $325,955, and the Company
has provided an allowance for doubtful accounts of $40,000. For the nine months
ended September 30, 1996 and 1995, and for the years ended December 31, 1995 and
1994, bad debts totaled $22,647, $500, $22,445, and $1,176, respectively. The
Company performs periodic credit evaluations on its customers' financial
condition and believes that the allowance for doubtful accounts is adequate.

At September 30, 1996, the Company maintained cash balances with a
commercial bank, which were approximately $171,000 in excess of FDIC insurance
limits.

The Company is dependent on four key suppliers. The Company has contracts
with these suppliers, however, they are not exclusive and can be terminated at
any time. Management believes that while the Company may suffer a short-term
adverse impact, it would be able to replace anyone of these suppliers.

F-15
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Furniture, fixtures and equipment............................... $ 474,541 $ 82,924
Leasehold improvements.......................................... 14,318 1,620
------------- ------------
488,859 84,544
Less accumulated depreciation................................... (93,025) (46,829)
------------- ------------
$ 395,834 $ 37,715
------------- ------------
------------- ------------
</TABLE>

F-16
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. NOTES PAYABLE:

Notes payable consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
RELATED PARTIES:
Note payable to an entity affiliated with an officer/
director/shareholder due on demand, non-interest bearing. $ 32,500 $ --
Note payable to an officer/director/shareholder, principal
along with interest at 10% per annum due in December 31,
1997.The Company intends to pay this note from the proceeds
of its initial public offering (see Note 8). 45,110 --
Note payable to a shareholder, non-interest bearing,
subordinated to all other indebtedness of the Company, due
in monthly installments of $6,250 through July 1, 1997. 62,364 --
Notes payable to two officers/directors/shareholders,
subordinated to all other indebtedness of the Company,
principal and interest at 9.75% per annum due July 1,
1997.Subsequent to September 30, 1996, the Company paid off
a $70,000 note. 100,000 --
Note payable to a shareholder, principal and interest at 5%
per annum are due as determined by the Company's
shareholders.The Company intends to pay this note from the
proceeds of its initial public offering (see Note 8). 100,491 103,199
------------- ------------
$ 340,465 $ 103,199
------------- ------------
------------- ------------
OTHER:
Note payable to a bank, interest at prime plus 1.5% (10.5% at
December 31, 1995) and principal payments of $3,333 payable
monthly, with remaining principal paid upon maturity in
June1996, collateralized by accounts receivable, inventory,
furniture, fixtures, equipment and a shareholder's home,
guaranteed by two shareholders of the Company. $ -- $ 200,000
</TABLE>

F-17
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. NOTES PAYABLE: (CONTINUED)

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
Revolving line-of-credit with bank maximum borrowings of
$200,000; interest of prime plus 1.5% (10.5% at December 31,
1995); collateralized by accounts receivable, inventory,
furniture, fixtures, equipment and a shareholder's home,
guaranteed by two shareholders of the Company.The revolving
line-of-credit agreement required compliance with certain
covenants and expired in June 1996.......................... -- 186,801
<S> <C> <C>
------------- ------------
$ -- $ 386,801
------------- ------------
------------- ------------
</TABLE>

PRIVATE OFFERING OF UNSECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTES--In
October 1996, the Company completed the sale of $1,437,500 of unsecured
subordinated convertible promissory notes. As of September 30, 1996, the Company
had closed $817,500 in sales of these notes. Each $50,000 in principal is
convertible into 12,142.67 Units (consisting of one share of common stock and
one warrant) upon consummation of the initial public offering. The warrants will
be identical to the warrants offered in the initial public offering. Interest at
10% per annum is due on the earlier of December 30, 1997 or the consummation of
the public offering. In the event that the Company has not consummated the
initial public offering prior to December 30, 1997 and the Company defaults in
the repayment of the notes, the Company will issue 10,625 Units for every
$50,000 in principal. The warrants in such case will be exercisable within five
years from the closing date of the offering of these notes at $4.12 per share.
In addition, principal and interest at the lesser of prime rate plus 8% or the
maximum rate permitted by law will become immediately payable. The notes are
subordinated to all other indebtedness of the Company. (See Note 8).

7. COMMITMENTS:

CAPITAL LEASE OBLIGATIONS--The Company leases certain equipment under
agreements classified as capital leases. Equipment under the leases has a cost
of approximately $177,000 and accumulated amortization of approximately $6,000.
The following is a schedule of future minimum lease payments under capital
leases at September 30, 1996.

<TABLE>
<S> <C> <C>
Future minimum lease payments.................................. $ 248,082
Less amount representing interest.............................. 76,343
-
---------
Present value of net minimum lease payments.................... 171,739

Less current portion........................................... (30,593)
-
---------
$ 141,146
-
-
---------
---------
</TABLE>

OFFICE LEASES--The Company leases two offices under operating leases for
terms expiring in 1996 and 2001. During 1996, the Company terminated one of its
leases effective December 1996. A termination fee of $10,000 is due on December
31, 1996. The Company moved its offices and entered into a new lease. The

F-18
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. COMMITMENTS: (CONTINUED)
lease calls for monthly payments of $4,584. These lease payments are included in
the schedule below. The aggregate minimum annual lease payments are as follows:

<TABLE>
<CAPTION>
OPERATING
LEASES
----------
<S> <C>
Year ending December 31:
1996............................................................................ $ 51,496
1997............................................................................ 55,012
1998............................................................................ 55,012
1999............................................................................ 55,626
2000............................................................................ 55,626
Thereafter...................................................................... 35,287
----------
Total minimum lease payments.................................................. $ 308,059
----------
----------
</TABLE>

RECEIVABLES SOLD WITH RECOURSE--In 1996, the Company entered into an
agreement with a bank to sell, with full recourse, existing and future accounts
receivable to a maximum of $750,000 at a 2.55% discount. The Company must
maintain a cash reserve account with the bank of up to 20% of the face amount of
receivables sold to the bank. The Company's recourse obligation is secured by
all of the Company's assets and is guaranteed by two of the Company's
shareholders. As of September 30, 1996, the face amount of receivables sold was
$743,975.

EMPLOYMENT AGREEMENTS--In July 1996, the Company entered into employment
agreements with two shareholders. The agreements provide for payments totaling
$165,000 per year through June 30, 1998 and include covenants not to compete
during the term of employment and for one year thereafter.

The Company entered into an employment agreement with an employee which
commenced on August 1, 1996 and ends January 31, 1997 which is to be extended
for an additional 24 months from the date of completion of an initial public
offering by the Company. The agreement provides for payments of $5,400 per month
plus options to purchase 212,500 shares of the Company's common stock at $4.12
per share. The options are exercisable after 30 months and must be exercised
within 60 months from the date of the agreement. The agreement also contains a
covenant not to compete during the term of the employee's employment and for one
year thereafter. In July 1996, the company borrowed $182,500 from this employee.
The Company repaid this in full in August 1996.

8. STOCKHOLDERS' EQUITY:

TERMINATION OF S-CORPORATION STATUS--Effective July 1, 1996, the Company
terminated its S-Corporation status and became a C-Corporation. As a result, the
Company reclassified its accumulated deficit attributable to the S-Corporation
as a reduction in common stock upon termination of S-Corporation status.

LETTER OF INTENT FOR A PUBLIC OFFERING--On July 1, 1996, the Company signed
a letter of intent with an underwriter which has subsequently been amended, to
provide for a public offering consisting of 1,000,000 Units to provide gross
proceeds to the Company of approximately $4,554,500. Included in the 1,000,000
shares are 245,000 shares of common stock offered by the holders of the
unsecured subordinated

F-19
<PAGE>
NAVIDEC, INC.
(FORMERLY ACI SYSTEMS, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY: (CONTINUED)
convertible promissory notes. The Company anticipates that the offering price
will be $6.00 per unit, of which $0.10 is the warrant price. Each warrant will
allow the holder to purchase one share of common stock at an exercise price of
120% of the unit offering price for a period of five years after the date of the
offering. The warrants are redeemable by the Company at $.05 per warrant upon 30
days notice if the market price of the common stock for 20 consecutive trading
days within the 30-day period preceding the date the notice is given equals or
exceeds 140% of the unit offering price. The underwriter has a 60-day option
(over-allotment option) to purchase up to 150,000 Units at the unit offering
price. The Company will also sell to the underwriter at the close of the public
offering underwriters warrants, at a price of $0.001 per warrant, to purchase
100,000 shares of common stock exclusive of the over-allotment. The underwriters
warrants will be exercisable for 4 years beginning one year after the effective
date of the registration statement at 125% of the offering price of the common
stock. The letter of intent is subject to change and cancellation by either
party.

STOCK SPLIT--During 1996, the Company declared a 1 for 2 reverse stock split
and 510.2041 to 1 stock split. The Company also declared a .85 for 1 reverse
stock split to be effective immediately prior to the initial public offering.
Accordingly, all common stock reflected in the financial statements and
accompanying notes reflect the effect of the split and reverse splits.

COMMON STOCK TRANSFERS AND OPTIONS--In June 1996, an officer and a
shareholder transferred 83,725 shares of common stock to employees at no cost.
The Company recognized $82,940 in compensation expense related to this transfer.

During 1994 and 1993, the Company issued stock options to an officer and
shareholder to purchase 804,881 shares of common stock at an exercise price of
$1,745, which resulted in compensation expense being recognized of $10,000 and
$29,000, respectively, related to the issuance of such options. During June
1996, these options were exercised.

F-20
<PAGE>
INDEPENDENT AUDITOR'S REPORT

Board of Directors
Interactive Planet, Inc.
Denver, Colorado

We have audited the balance sheet (not separately included herein) of
Interactive Planet, Inc. (IPI) as of December 31, 1995, and the accompanying
related statements of operations, changes in stockholders' equity (deficit), and
cash flows for the period from May 15, 1995 (inception date) to December 31,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of IPI as of December 31, 1995,
and the results of its operations and its cash flows for the period from May 15,
1995 (inception date) to December 31, 1995, in conformity with generally
accepted accounting principles.

The accompany financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred losses from operations and has
had negative cash flows from operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
these uncertainties.

HEIN + ASSOCIATES LLP

Denver, Colorado
October 4, 1996

F-21
<PAGE>
INTERACTIVE PLANET, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
MAY 15, 1995
FOR THE SIX (INCEPTION
MONTHS ENDED DATE) TO
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
(UNAUDITED)
REVENUES......................................................... $ 185,429 $ 167,574

Cost of services............................................. 60,017 36,252
------------ ------------

GROSS MARGIN..................................................... 125,412 131,322

Operating expense............................................ 225,161 131,739
------------ ------------

OPERATING LOSS................................................... (99,749) (417)

Interest expense............................................. 1,129 --
------------ ------------

NET LOSS......................................................... $ (100,878) $ (417)
------------ ------------
------------ ------------
</TABLE>

See Accompanying Notes to These Financial Statements.

F-22
<PAGE>
INTERACTIVE PLANET, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE PERIOD FROM MAY 15, 1995 (INCEPTION DATE) THROUGH JUNE 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
COMMON STOCK
--------------------- ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
---------- --------- ------------ ------------

<S> <C> <C> <C> <C>
BALANCES, MAY 15, 1995..................... -- $ -- $ -- $ --

Common stock to founders for cash...... 1,597,357 1,000 -- 1,000

Net loss............................... -- -- (417) (417)
---------- --------- ------------ ------------

BALANCES, December 31, 1995................ 1,597,357 1,000 (417) 583

Net loss (unaudited)................... -- -- (100,878) (100,878)
---------- --------- ------------ ------------

BALANCES, June 30, 1996 (Unaudited)........ 1,597,357 $ 1,000 $ (101,295) $ (100,295)
---------- --------- ------------ ------------
---------- --------- ------------ ------------
</TABLE>

See Accompanying Notes to These Financial Statements.

F-23
<PAGE>
INTERACTIVE PLANET, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
MAY 15, 1995
(INCEPTION
DATE) TO
DECEMBER 31,
1995
FOR THE SIX ------------
MONTHS ENDED
JUNE 30,
1996
------------
(UNAUDITED)

<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................................... $ (100,878) $ (417)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization................................ 8,305 5,545
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable...................................... (7,342) (11,743)
Other assets............................................. 24,536 (39,536)
Increase (decrease) in:
Accounts payable and accrued liabilities................. 2,070 --
Other liabilities........................................ 30,734 55,919
------------ ------------
Net cash provided by (used in) operating activities.......... (42,575) 9,768

CASH FLOWS FROM INVESTING ACTIVITIES--
Capital expenditures for property and equipment................ 1,116 39,700
------------ ------------
Net cash used in investing activities........................ (1,116) (39,700)

CASH FLOWS FROM FINANCING ACTIVITY:
Proceeds from issuance of common stock......................... -- 1,000
Proceeds from issuance of notes payable........................ 44,249 33,361
------------ ------------
Net cash provided by financing activities.................... 44,249 34,361

INCREASE IN CASH AND CASH EQUIVALENTS 558 4,429
CASH AND CASH EQUIVALENTS, beginning of period................... 4,429 --
------------ ------------
CASH AND CASH EQUIVALENTS, end of period......................... $ 4,987 $ 4,429
------------ ------------
------------ ------------
</TABLE>

See Accompanying Notes to these Financial Statements.

F-24
<PAGE>
INTERACTIVE PLANET, INC.

NOTES TO FINANCIAL STATEMENTS

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1995 IS UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

ORGANIZATION--IPI was incorporated in the State of Colorado in 1995. The
Company develops, markets, and supports World Wide Web (Web) sites, on the
Internet or Intranets. The Company designs and implements Web sites ranging from
basic inquiry-only sites to complex, interactive sites capable of providing
on-line commerce, database integration and manipulation, sophisticated graphics,
animation, and other multi-media content. The Company plans to utilize leading
edge software in its Web site development.

CASH EQUIVALENTS--For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments with original maturities of three
months or less to be cash equivalents.

REVENUE RECOGNITION--The Company recognizes revenue upon delivery of its
Internet/Intranet Solutions. Internet/Intranet Solutions generally begin with
consulting arrangements, which are billed on an hourly basis and/or on a
percentage of completion method on fixed bid projects. Most of the Company's
customers elect to update and expand their Web site frequently, and clients are
billed monthly on a time and materials basis for these services. Additional
sources of ongoing revenue include revenue from advertising sold by the Company
on clients' Web sites, revenue from sales of merchandise and services over
clients' Web sites and revenue from maintenance of client Web sites. The Company
receives and records a percentage of the gross revenue from advertising and
merchandise sales immediately upon completion of these sales.

INCOME TAXES--The Company accounts for income taxes under SFAS No. 109 which
requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax assets and
liabilities are determined, based on the difference between the financial
statements and tax bases of asset and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.

STOCK BASED COMPENSATION--In October 1995, the Financial Accounting
Standards Board issued a new statement titled "Accounting for Stock-Based
Compensation" (FAS 123). The new statement is effective for fiscal years
beginning after December 15, 1995. FAS 123 encourages, but does not require,
companies to recognize compensation expense for grants of stock, stock options,
and other equity instruments to employees based on fair value. Companies that do
not adopt the fair value accounting rules must disclose the impact of adopting
the new method in the notes to the financial statements. Transactions in equity
instruments with non-employees for goods or services must be accounted for on
the fair value method. The Company has elected not to adopt the fair value
accounting prescribed by FAS 123 for employees, and will be subject only to the
disclosure requirements prescribed by FAS 123.

UNAUDITED INFORMATION--The statement of operations for the six-month period
ended June 30, 1996 were taken from the Company's books and records without
audit. However, in the opinion of management, such information includes all
adjustments (consisting only of normal accruals), which are necessary to
properly reflect the results of operations of the Company for the six months
ended June 30, 1996. The results of operations for the interim period presented
is not necessarily indicative of those expected for the year.

F-25
<PAGE>
INTERACTIVE PLANET, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1995 IS UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
The Company had no operations from May 15, 1995 (inception date) to June 30,
1995, and as such, no comparative interim financial statements have been
presented for this period.

2. CONTINUED OPERATIONS:

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets, including liquidation of liabilities in the normal course of business.
The Company has incurred substantial debt and recurring losses. As of December
31, 1995, the Company has a working capital deficiency of $211,000 and total
stockholders' equity of $583. As discussed in Note 6, subsequent to June 30,
1996, the Company merged with NAVIDEC, Inc. (NAVIDEC), which has also incurred
losses and has had negative cash flows from operations. NAVIDEC, however, has
completed a private placement of debt and is in the process of a public
offering, which management believes should provide adequate funding to enable
the combined entity to continue operations. In addition, management is
aggressively pursuing an increase in revenues, which ultimately, the Company
believes, will result in profitable operations. The Company's and Navidec's
ability to continue as a going concern are dependent upon the factors described
above. The accompanying financial statements do not include any adjustments that
might result from the outcome of these uncertainties.

3. STOCKHOLDERS' EQUITY (DEFICIT):

During 1996, the Company declared a 15.97357 for 1 stock split. Accordingly,
all common stock reflected in the financial statements and accompanying notes
reflect the effect of the split.

4. INCOME TAXES:

The components of the net deferred tax asset recognized as of December 31,
1995 is as follows:

<TABLE>
<S> <C>
Long-term deferred tax assets (liabilities):
Net operating loss carryforwards......................... $ 5,000
Valuation allowance...................................... (5,000)
---------
Net long-term deferred tax asset......................... $ --
---------
---------
</TABLE>

At December 31, 1995, the Company had net operating loss carryforwards for
Federal tax purposes of approximately $13,726. The loss carryforwards, unless
utilized, will expire in 2010.

The Company's ability to use its net operating loss (NOL) carryforwards to
offset future income is subject to restrictions attributable to equity
transactions that result in change in ownership as defined by the Internal
Revenue Code. As a result of a merger subsequent to June 30, 1996 (see Note 8),
these restrictions will limit, on an annual basis, the Company's future use of
its NOL loss carryforwards.

5. MAJOR CUSTOMERS:

For the period from May 15, 1995 (inception date) to December 31, 1995, the
Company had sales to three customers representing 23%, 20%, and 12% of total
sales, respectively. As of December 31, 1995, the Company's accounts receivable
was from four customers. These receivables were collected in full subsequent to
the period then ended.

F-26
<PAGE>
INTERACTIVE PLANET, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1995 IS UNAUDITED)

6. SUBSEQUENT EVENTS:

Effective on July 1, 1996, the Company entered into an agreement and plan of
merger with NAVIDEC. Each of the issued and outstanding shares of the Company's
stock was exchanged for a share of NAVIDEC's common stock and NAVIDEC gave a
$75,000 note to one of the shareholders of the Company. Subsequent to June 30,
1996, NAVIDEC completed an offering for $1,437,500 of unsecured subordinated
convertible promissory notes. Additionally, NAVIDEC signed a letter of intent
with an underwriter for a proposed public offering.

F-27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. ANY INFORMATION OR REPRESENTATION
NOT HEREIN CONTAINED, IF GIVEN OR MADE, MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES
OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES BY ANY PERSON IN ANY JURISDICTION
WHERE SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING SUCH OFFER IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS
SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 4
Risk Factors.............................................................. 8
Use of Proceeds........................................................... 16
Dividend Policy........................................................... 17
Dilution.................................................................. 18
Capitalization............................................................ 19
Selected Financial Data................................................... 20
Management's Discussion & Analysis of Financial Condition and Results of
Operations.............................................................. 21
Business.................................................................. 25
Management................................................................ 35
Principal Stockholders.................................................... 39
Bridge Financing Private Placement........................................ 39
Bridge Financing Selling Stockholders..................................... 40
Additional Registered Securities.......................................... 42
Certain Transactions...................................................... 43
Description of Securities................................................. 44
Shares Eligible for Future Sale........................................... 46
Underwriting.............................................................. 47
Experts................................................................... 51
Legal Matters............................................................. 51
Additional Information.................................................... 51
Index to Financial Statements............................................. F-1
</TABLE>

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

UNTIL MARCH 7, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS) ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

1,000,000 UNITS

[NAVIDEC LOGO]

EACH UNIT CONSISTING OF ONE SHARE
OF COMMON STOCK AND ONE
COMMON STOCK PURCHASE WARRANT

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

PROSPECTUS

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

JOSEPH CHARLES & ASSOCIATES, INC.

FEBRUARY 10, 1997

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