FIRSTLINK COMMUNICATIONS INC, 424B3, 1998-07-29

FIRSTLINK COMMUNICATIONS INC
424B3, 1998-07-29
TELEPHONE INTERCONNECT SYSTEMS

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<PAGE>
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-49291

PROSPECTUS

1,400,000 UNITS
FIRSTLINK COMMUNICATIONS, INC.

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

FirstLink Communications, Inc., an Oregon Corporation (the "Company"), is
hereby offering to the public 1,400,000 units (the "Units"), each unit
consisting of one share (the "Shares") of common stock, no par value per share
("Common Stock"), and one common stock purchase warrant (the "Warrants"). The
anticipated initial public offering price of the Units is $5.50 per Unit
("Offering Price"), of which $.10 is the public offering price allocated to the
Warrants. Upon completion of the Offering of the Units (the "Offering"), the
Common Stocks and the Warrants will immediately trade separately. Two Warrants
entitle the holder to purchase one share of Common Stock at a price of $8.10 per
share ("Warrant Exercise Price") during the three-year period commencing on the
date of this Prospectus. The Warrants may be redeemed by the Company at any time
after the date of this Prospectus at a price of $.05 per Warrant on 45 days
written notice if the last sale price of the Common Stock exceeds $12.15 for at
least 20 of the 30 trading days immediately preceding the notice of redemption.
Upon 30 days written notice to all holders of the affected class of Warrants,
the Company shall have the right to reduce the exercise price and/or extend the
term of the Warrants. The Units, Common Stock, and Warrants offered hereby are
sometimes herein collectively referred to as the "Securities." See "Description
of Securities."

Prior to the Offering, there has been no public market for the Common Stock
or the Warrants, and there can be no assurance that such a market will develop
after the effectiveness of the Offering. The offering price (the "Offering
Price") has been determined by negotiation between the Company and Kashner
Davidson Securities Corporation, Joseph Charles & Associates, Inc. and Joseph
Dillon & Company, Inc. (the "Representatives"), as representatives of the
several Underwriters ("Underwriters"). For a discussion of factors considered in
determining the Offering Price and the Warrant Exercise Price, see
"Underwriting."

The Representatives are currently negotiating with prospective underwriters
who may or may not become market makers in the Securities, but no additional
market makers for the Securities have been specifically identified at this time.
The Common Stock and Warrants have been approved for quotation on the Nasdaq
SmallCap Market under the symbols "FLCI," and "FLCIW" and they have been
approved for listing on the Boston Stock Exchange under the symbols "FSL," and
"FSLW."
------------------------

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND SUBSTANTIAL IMMEDIATE DILUTION. INVESTORS MAY RISK THE ENTIRE LOSS OF
THEIR INVESTMENT. SEE "RISK FACTORS" BEGINNING AT PAGE 8 AND "DILUTION."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PRICE TO PUBLIC UNDERWRITING PROCEEDS TO
(1) DISCOUNT (1) COMPANY (1)(2)
<S> <C> <C> <C>
Per Unit................................................. $5.50 $.55 $4.95
Total (3)................................................ $7,700,000 $770,000 $6,930,000
(see Notes, next Page)
</TABLE>

The Securities are being offered by the several Underwriters on a firm
commitment basis, subject to prior sale, when, as and if delivered to and
accepted by the Underwriters, and subject to withdrawal or cancellation of the
offer without notice and to their right to reject any order, in whole or in
part, and to certain other conditions. It is expected that delivery of the
certificates representing the Securities will be made on or about July 31, 1998.
------------------------

KASHNER DAVIDSON SECURITIES CORPORATION JOSEPH CHARLES & ASSOCIATES, INC.

JOSEPH DILLON & COMPANY, INC.

THE DATE OF THIS PROSPECTUS IS JULY 27, 1998
<PAGE>
(1) Excludes a non-accountable expense allowance equal to 3% of the gross
proceeds of the Offering payable to the Representatives, and the sale to the
Representatives for $140 of an option (the "Representatives' Option") to
purchase up to 140,000 Units at a price of $7.70 per Unit, exercisable over
a period of four years commencing one year from the date of this Prospectus.
The Company also has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."

(2) Before deducting offering expenses payable by the Company of approximately
$391,000, including the non-accountable expense allowance to the
Representatives. See "Underwriting."

(3) The Company has granted the Underwriters a 45-day option to purchase up to
an additional 210,000 Units on the same terms as set forth above to cover
over-allotments, if any (the "Over-allotment Options"). If the Underwriters
exercise such options in full, the total Price to Public, Underwriting
Discount, and Proceeds to Company will be $8,855,000, $885,500, and
$7,969,500 respectively. See "Underwriting."

Any modification to the Offering will be made by means of an amendment to
the Prospectus. The Company reserves the right to withdraw or cancel the
Offering without notice, and to reject any orders, in whole or in part, for the
purchase of any of the offered Securities.

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

Upon effectiveness of the Registration Statement of which this Prospectus is
a part the Company will be subject to the reporting and other requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Company intends to furnish its stockholders with annual reports containing
financial statements audited by independent certified public accountants, as
well as quarterly financial information for each of the first three quarters of
each fiscal year. The Company will also file reports, proxy statements and other
information with the Securities and Exchange Commission ("Commission").

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
WHICH STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK OR
WARRANTS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET,
INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE CONVERTING
TRANSACTIONS, OR IMPOSING PENALTY BIDS. SUCH TRANSACTIONS MAY BE EFFECTED ON
NASDAQ OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME. FURTHER, SUCH PERSONS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN
THE COMPANY'S SECURITIES ON NASDAQ IN ACCORDANCE WITH RULE 103 OF REGULATION M
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."

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<PAGE>
FORWARD-LOOKING STATEMENTS

When included in this Prospectus, the words "expects," "intends,"
"anticipates," "plans," "projects," and "estimates," and analogous or similar
expressions are intended to identify forward-looking statements. Such statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. The forward-looking statements made
in this Prospectus are based on current expectations that involve numerous risks
and uncertainties. The Company's plans and objectives are based, in part, on
assumptions involving the growth and expansion of business. Assumptions relating
to the foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes that its
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could prove inaccurate and, therefore, there can be no assurance
that the forward-looking statements made in this Prospectus will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements made in this Prospectus, particularly in view of the
Company's early stage of operations, the inclusion of such information should
not be regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.

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<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE RELATED NOTES THERETO,
APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL
INFORMATION WITH REGARD TO THE CAPITAL STOCK OF THE COMPANY IN THIS PROSPECTUS,
INCLUDING SHARE AND PER SHARE INFORMATION, (I) ASSUMES NO EXERCISE OF ANY
OUTSTANDING OPTIONS OR WARRANTS OF THE COMPANY PRIOR TO THE OFFERING DESCRIBED
HEREIN, (II) ASSUMES NO EXERCISE OF THE WARRANTS, THE UNDERWRITERS'
OVER-ALLOTMENT OPTION, OR THE REPRESENTATIVES' OPTION SOLD IN THE OFFERING, AND
(III) GIVES EFFECT TO A 1- FOR -1.5 REVERSE STOCK SPLIT TO BE EFFECTED BY THE
COMPANY ON THE EFFECTIVENESS OF THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS IS A PART. (SEE "DESCRIPTION OF SECURITIES" AND "UNDERWRITING.")

THE COMPANY

The Company is a telecommunications company based in Portland, Oregon, that
provides integrated telecommunications and entertainment services to
multi-family apartment and condominium complexes. The Company offers a variety
of services to tenants including the following:

- Cable television
- Local telephone
- Long distance telephone
- Enhanced calling features, such as:

<TABLE>
<S> <C>
- - Call waiting - Call forwarding
- - Conference calling - Distinctive ringing
- - Account coding - Speed dialing
- - Restricted access dialing - Wake-up service
- - Voice mail
</TABLE>

- High Speed Internet access
- Telephone calling cards

Industry sources estimate that the market for US telecommunications services
represents approximately $210 billion. This includes local and long distance
telephone service and cable television. Management estimates that approximately
$7 billion of this figure is represented by the approximately 6 million
apartments in buildings of 200 units or more in the United States.

The Company currently leases telephone transmission facilities from U S West
Communications, Inc. ("USWC"), LDDS Worldcom and Frontier Communications. Cable
television signal is acquired by the Company from TCI Cablevision of Oregon,
Inc., a subsidiary of Tele-Communications, Inc. ("TCI"); and KBL Cablesystems of
the Southwest, a Time Warner company. Switching hardware used by the Company is
manufactured by Cortelco, formerly ITT Solid State, and Digital
Telecommunications Inc. Its high speed Internet services provider is GTE
Intelligent Network Services, Inc. The Company's Internet line provides access
speed, over existing telephone lines using standard equipment, of 1.544 Mb per
second, or approximately 27 times faster than the 56 kilobytes per second
provided by dial-up modems for use over existing telephone lines.

These services are all offered under the Company's service mark to tenants
of apartment and condominium complexes (referred to collectively herein as
"apartments") which are under exclusive contracts with the Company. The services
that are provided to the tenant are "transparent" to him; he does not have to
acquire additional equipment or utilize special procedures to utilize the
services. When a new tenant at a property which has a contract with the Company
signs a service agreement with the Company, the Company assigns the tenant a
telephone number, and installs all requested services in the tenant's apartment
prior to the time the tenant moves in. All services are installed prior to
tenant move-in, thereby eliminating the need to arrange for multiple
installations by multiple vendors. One customer service number covers all
potential service and inquiry needs. One bill is rendered to the tenant at the
end of the month integrating all services provided. Payment is accepted by cash,
check, wire transfer or credit card. In

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<PAGE>
addition, all services are believed to be offered at or below retail market
prices. The tenant may retain his existing telephone number if allowed by the
incumbent local exchange carrier. There are no fees or interruptions of service
for tenants transferring to FirstLink from another supplier.

The Company provides additional incentives to the property manager or owner,
including the benefit of dealing with a single provider for all communication
services; the ability to offer tenants a complete, integrated package of
communication and entertainment services; and the ability to maintain or improve
occupancy rates by attracting and retaining tenants for whom communications and
entertainment services are important. The property manager or owner and leasing
agents also benefit from the receipt of commissions and further incentives for
successfully marketing the Company's service.

The Company currently has long-term contracts with 20 residential
developments in six cities in the United States, including properties owned by
Harsh Investment Corp, Paine Webber, and an affiliate of Prudential Insurance
Company of America. Eleven of those properties were on-line as of the date of
this Prospectus. The properties contain 4,661 apartment units.

The Company has been able to obtain contracts with building owners and
tenants in the Portland area. It intends to expand to other cities through
arrangements with companies that have established relationships with MDU's in
those cities. As an example, it recently entered into a letter of intent with
Web Service Company, Inc. ("WEB"), one of the largest providers of coin operated
laundry equipment and other services to apartment and condominium complexes in
the United States. Initially, WEB will market the Company's services to the 590
apartment complexes which WEB presently supplies ancillary services in Seattle,
Denver, Dallas, and the San Francisco Bay area, which represent approximately
150,000 units. See "Business--General" and "Business--WEB Agreement."

The Company believes that WEB, which has been in business for over 50 years,
has developed the credibility and recognition with property owners and managers
that will allow the Company to expand into its target markets more rapidly, with
greater penetration levels, and more cost effectively than it could do on its
own.

Approximately $40,000 of the proceeds of this Offering will be used by the
Company to fulfill its obligations under its current contracts in Portland. An
additional $3,652,000 will be used to purchase equipment for additional
expansion in Portland and expansion into five additional cities. Approximately
$2,097,000 of the proceeds will be used to pay additional overhead to service
apartments in those cities. See "Use of Proceeds."

The Company's executive offices are located at 190 SW Harrison, Portland,
Oregon 97201, where its telephone number is (503) 306-4444.

5
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Securities offered............ 1,400,000 Units (1)

Common Stock outstanding
before the Offering......... 2,190,917 (2)

Common Stock outstanding after
the Offering................ 3,590,917 (2)(3)

Use of proceeds............... Capital expenditures, system enhancements, and working
capital

Nasdaq Symbols:

Common Stock................ FLCI

Warrants.................... FLCIW

Boston Stock Exchange Symbols:

Common Stock................ FSL

Warrants.................... FSLW
</TABLE>

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

(1) Until completion of the Offering, the Units may only be purchased on the
basis of one Common Share and one Warrant per Unit. Upon completion of the
Offering, the Common Shares and the Warrants will be immediately detachable
and separately transferable. Two Warrants entitle the holder to purchase one
share of Common Stock at a price of $8.10 per share ("Warrant Exercise
Price") during the three-year period commencing on the date of this
Prospectus. The Warrants may be redeemed by the Company at any time after
the date of this Prospectus at a price of $.05 per Warrant on 45 days
written notice if the last sale price of the Common Stock exceeds $12.10 for
at least 20 of the 30 trading days immediately preceding the notice of
redemption. Upon 30 days written notice to all holders of the affected class
of Warrants, the Company shall have the right to reduce the exercise price
and/or extend the term of the Warrants.

(2) Does not include (i) 533,333 shares of Common Stock reserved for issuance
upon exercise of options which have been granted under the Company's stock
incentive plan (the "Plan"), none of which have been exercised as of June
30, 1998, and which have exercise prices ranging from of $1.13 to $2.25 per
share, and of which 343,333 were subject to future vesting; (ii) 357,000
shares of Common Stock reserved for issuance upon exercise of other
outstanding warrants having exercise prices ranging from $.75 to $3.00 per
share; or (iii) 94,444 shares of Common Stock reserved for issuance upon
exercise of the outstanding warrants that will be converted into Warrants.
See "Management--Stock Options and Option Plans"; and "Description of
Securities."

(3) Does not include 700,000 shares of Common Stock reserved for issuance upon
exercise of the Warrants (805,000 shares if the Over-allotment Option is
exercised in full). Assumes no exercise of (i) the Underwriters'
Over-allotment Options; and (ii) the Representative's Warrants.

6
<PAGE>
SUMMARY FINANCIAL DATA

Set forth below is selected summary financial information with respect to
the Company. Financial information as of and for each of the years in the
two-year period ended December 31, 1997, are derived from the financial
statements included elsewhere in this Prospectus and is qualified by reference
to such financial statements and the notes related thereto. Financial
information as of March 31, 1998 and for the three month periods ended March 31,
1998 and 1997 are derived from unaudited financial statements of the Company.
The unaudited financial statements have been prepared on the same basis as the
audited financial statements and, in the opinion of management, include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the information set forth therein. The historical results
are not necessarily indicative of the operating results to be expected in the
future.

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31 MARCH 31
------------------------- ------------------------
1997 1996 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues.................................................. $ 879,903 $ 602,423 $ 283,483 $ 165,441
Operating expenses........................................ 1,351,524 972,767 530,456 259,343
Operating loss............................................ (471,621) (370,344) (246,973) (93,902)
Other expense, net........................................ 106,655 27,473 137,255 50,736
Net loss.................................................. (578,276) (397,817) (384,228) (144,638)
Basic and diluted loss per common share................... $ (.50) $ (.75) $ (.20) $ (.18)
Basic and diluted weighted average common shares.......... 1,162,397 533,309 1,918,398 785,078
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1998
----------------------------
AS ADJUSTED
BALANCE SHEET DATA: DECEMBER 31, 1997 ACTUAL (1)
----------------- ------------ --------------
<S> <C> <C> <C>
Cash and cash equivalents...................................... $ 389,415 $ 409,132 $ 6,948,132
Working capital................................................ $ 59,464 $ 132,303 $ 6,671,303
Property and equipment, net.................................... $ 543,053 $ 542,182 $ 542,182
Total assets................................................... $ 1,060,821 $ 1,113,617 $ 7,652,617
Current liabilities............................................ $ 408,795 $ 376,728 $ 376,728
Long term debt, net of current portion......................... $ 388,017 $ 158,790 $ 158,790
Stockholders' equity........................................... $ 264,009 $ 578,099 $ 7,117,099
</TABLE>

<TABLE>
<CAPTION>
OTHER DATA: 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97 3/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Number of Units Under Contract...................... 1,641 2,081 2,081 3,985 4,290 4,661
Number of Units Installed........................... 1,069 1,271 1,643 1,643 1,922 2,609
</TABLE>

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

(1) Adjusted to reflect net proceeds of $6,539,000 from the sale by the Company
in this Offering of 1,400,000 Units at the assumed public offering price of
$5.50 per Unit.

7
<PAGE>
RISK FACTORS

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE POSSIBILITY OF THE
LOSS OF THEIR ENTIRE INVESTMENT IN THE COMPANY'S SECURITIES AND, ALONG WITH EACH
OF THE FOLLOWING FACTORS, CONSIDER THE INFORMATION SET FORTH ELSEWHERE IN THIS
PROSPECTUS.

RISK FACTORS RELATED TO THE BUSINESS OF THE COMPANY

INDEPENDENT AUDITORS RAISE SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO
CONTINUE AS GOING CONCERN. The Company has only a limited operating history
upon which investors may base an evaluation of the likely performance of the
Company. Although certain of the directors and officers of the Company have
experience in managing businesses in related industries, they have only limited
experience in developing and operating shared tenant services. Any failure to
successfully develop or operate future properties could have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company and its predecessors have generated operating revenues only since
September 1994. From inception through March 31, 1998, the Company has recorded
an accumulated deficit of $1,360,321. Management expects that the Company will
continue to incur losses for the foreseeable future. The continuation of the
Company for an extended period is dependent upon achieving adequate profit
margins to realize profitable operations. There can be no assurance that the
Company will realize earnings from operations or net profits. The Company has
funded its operations to date through the private sale of equity and debt
securities. The Company's independent auditors have included in their audit
report an explanatory paragraph which states that the Company's recurring losses
from operations raise substantial doubt about its ability to continue as a going
concern. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

DEPENDENCE ON PROCEEDS OF THIS OFFERING; NEED FOR ADDITIONAL CAPITAL. The
Company is dependent on and intends to use virtually all of the net proceeds of
the Offering to purchase switches and related equipment necessary to provide
local telephone service in the Company's new and existing markets, fund the
increased working capital requirements associated with the Company's planned
market expansion, and enhance the Company's billing and customer care systems to
support the growing customer base.

DEPENDENCE UPON TCI. Nearly all of the apartment and condominium complexes
the Company has under contract utilize TCI to provide cable service. The Company
has negotiated exclusive agreements with TCI to provide such service on a
complex-by-complex basis. There can be no assurance that the Company will be
able to continue to negotiate cable service rates with TCI that are economically
feasible for the Company; or that it will be able to enter any such agreements
with cable companies in areas not served by TCI. If it is unable to obtain such
agreements, the Company's ability to provide its services to new complexes may
be severely adversely affected.

POTENTIAL ADVERSE EFFECT OF INSUFFICIENT CABLE PENETRATION. Under its
exclusive agreements with TCI, the Company pays TCI a monthly rate based on the
number of units in a complex, regardless of the number of subscribers to cable
service in the complex. The Company makes assumptions about the number of
subscribers that will purchase cable in the complex to determine the rate it can
afford to pay TCI. However, it is required to pay TCI regardless of the actual
subscription base of a particular complex. Accordingly, there is a risk that the
Company over-estimated the number of cable subscribers it will obtain in a
complex, which would have an adverse impact on its results of operations. See
"Business--Key Suppliers."

UNCERTAIN ABILITY TO MANAGE GROWTH. The Company intends to pursue an
aggressive growth strategy involving the development of customers in new
markets. This growth strategy will require, among other changes, expanded
operational and financial systems and the implementation of new control
procedures. The Company's future operating results will depend on its ability to
develop its infrastructure commensurate with revenues and on its ability to
attract, hire and retain skilled employees. There can be no

8
<PAGE>
assurance that the Company will be able to provide adequate services in areas in
which it wishes to expand or otherwise execute its business strategy, and its
ability to grow may be adversely affected thereby.

There can be no assurance that the Company will be able to manage any growth
effectively. Failure to manage growth effectively could have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition, although the Company's management information systems ("MIS") are
adequate for its present level of business, as the Company expands it will need
to up-grade such systems. The Company will use a portion of the proceeds of this
Offering to acquire computer hardware, programming, and software to up-grade its
MIS. However, it is likely that the new systems will require a period of time
for the Company to adjust to the them and to integrate its existing future
business into such systems. The Company's billing and customer service may be
adversely affected by any delays in implementing such a system. See
"Business--Management Information Systems."

DEPENDENCE ON KEY PERSONNEL. The success of the Company is highly dependent
upon the continued services of A. Roger Pease, its President and Chief Executive
Officer, and Jeffrey S. Sperber, its Chief Financial Officer. The loss of the
services of such key personnel could adversely affect the Company's business,
financial condition and results of operations. The Company will require the
services of additional executive personnel in the future. The Company has no
employment agreements or non-compete agreements with any of its key personnel.
There can be no assurance that the Company will be successful in attracting and
retaining the personnel it requires to develop and operate its facilities or to
expand its operations. The Company does not carry key man life insurance on any
of its personnel. After the completion of this Offering, the Company will
attempt to obtain key man insurance on Roger Pease, Jeffrey Sperber, and David
Deluhery. See "Management."

COMPETITION. General and local market conditions, including, among others,
the presence of competing companies, may materially and adversely affect the
Company's business, financial condition and results of operations. The
competition in the telecommunications services industry is intense. Competitive
factors include location and quality of facilities, price and quality of
service. Competition may increase as a result of deregulation, allowing more
companies to enter the market for local telecommunications services, many of
which have held monopoly positions in the marketplace. Although the Company
believes it offers services that are superior to or more convenient than
competing services, many of the Company's existing and future competitors may
have financial, marketing and other resources that substantially exceed those
available to the Company. See "Business--Competition."

DEVELOPMENT AND CONSTRUCTION DELAYS. The Company's growth strategy is
dependent upon its ability to attract and retain additional customers. The
successful development of new customers will depend upon various factors,
including the availability of suitable sites, the ability of the Company to
successfully service contracts to meet construction schedules and budgets, and
the extent to which the Company otherwise performs in accordance with
expectations. Development and construction delays could have a material adverse
impact on the Company's business, financial condition and results of operations.

MANAGEMENT'S LACK OF VOTING INFLUENCE. Upon consummation of the Offering,
the Company's President, A. Roger Pease, will beneficially own 186,667 shares of
Common Stock, including vested options exercisable to acquire an additional
80,000 shares of Common Stock, together representing 5.1% of the total issued
and outstanding shares of Common Stock following completion of the Offering. All
of the Company's officers and directors as a group beneficially own only 442,647
shares of Common Stock, including vested options. Even giving effect to the
exercise of their outstanding and vested options, the Company's officers and
directors as a group would exercise voting control over only 11.8% of the
Company's outstanding shares of Common Stock following completion of the
Offering. As a result of this lack of voting influence as stockholders, there
can be no assurance that the Company's officers and directors will be able to
implement the plans and strategies described in this Prospectus. Further, it is
possible that stockholders with greater voting influence could initiate actions
which could be adverse to

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<PAGE>
those plans or hostile to current management. See "Security Ownership of
Management and Principal Stockholders."

INDEMNIFICATION AND EXCULPATION. To the extent permitted by Oregon law, the
directors of the Company will not be liable to the Company or its stockholders
for monetary damages for conduct as directors. The Company's Articles of
Incorporation permit, and its Bylaws require, the Company to indemnify its
directors and officers against all damages incurred in connection with the
business of the Company to the fullest extent provided or allowed by law. The
exculpation provisions may have the effect of preventing stockholders from
recovering damages against the directors of the Company caused by their
negligence, poor judgment or other circumstances. The indemnification provisions
may require the Company to use its assets to defend the directors and officers
of the Company against claims, including claims arising out of their negligence,
poor judgment, or other circumstances. The Company has also entered into
indemnity agreements with each of its directors and officers.

RELIANCE ON MANAGEMENT. All decisions with respect to the management of the
Company will be made exclusively by the management. The stockholders will not
have any right or power to take part in the management of the Company. No
prospective investor should purchase any of the Securities offered hereby unless
the investor is willing to entrust all aspects of the management of the Company
to the Management. See "Management."

COMPENSATION PAYABLE TO MANAGEMENT AND OTHERS REGARDLESS OF
PROFITABILITY. The officers of the Company will receive salaries, presently
totaling $305,000 per year, which will be payable to them whether or not the
Company is profitable. The Company does not have employment contracts with any
of its officers. Upon completion of the Offering the Compensation Committee of
the Board of Directors of the Company will negotiate employment contracts with
Messrs. Pease, Sperber, and Deluhery. All service performed by and compensation
paid to Messrs. Pease, Sperber, and Deluhery will be performed pursuant to and
paid under those employment agreements. See "Management--Executive
Compensation."

NO ASSURANCE OF PROFITS--RISK OF LOSS OF INVESTMENT. There is no assurance
that the Company will generate profits, or that its securities will appreciate
in value or that investors will be able to sell the securities acquired in the
Offering at a profit. The marketability and value of the Company's business will
depend upon many factors beyond the control of the Company, and there is no
assurance that there will be a ready market for the business operated by the
Company. Investors may risk the entire loss of their investment.

YEAR 2000 EFFECT. While the Company believes that its software applications
are year 2000 compliant, there can be no assurance until the year 2000 occurs
that all systems will then function adequately. Further, if the software
applications of local exchange carriers, long distance carriers, cable providers
or others on whose services the Company depends are not year 2000 compliant, it
could have a material adverse effect on the Company's financial condition and
results of operations and the value of the Securities.

GOVERNMENT REGULATION. The business of the Company is subject to extensive
and changing laws and regulations, including those of the Federal Communications
Commission ("FCC") and state and local regulatory bodies such as public utility
commissions ("PUC"). Many of the operations of the Company are subject to
licensing requirements of federal, state and local law. The United States
Congress, the FCC, and state and local regulatory bodies in the past have
adopted, and may in the future adopt, new laws, regulations and policies
regarding a wide variety of matters that could affect the operations of the
Company's business. No assurance can be given that changes in current or future
regulations adopted by the United States Congress, the FCC, or state or local
regulatory bodies or legislative initiatives could not have a material adverse
effect on the Company. See "Business--Government Regulation."

10
<PAGE>
RISK FACTORS RELATED TO THE OFFERING

POSSIBLE DEPRESSIVE EFFECT ON EARNINGS OF ISSUANCE OF WEB WARRANTS. The
Company has entered into a letter of intent with WEB to market the Company's
services to apartment complexes. Under the proposed contract, WEB will have the
right to earn warrants (the "WEB Warrants") to purchase shares of the Company's
Common Stock on the basis of warrants to purchase 25 shares of Common Stock for
each customer WEB obtains a service agreement with the Company. WEB can earn
warrants to purchase up to 2,000,000 shares of Common Stock over the five year
term of the Agreement. The exercise price of the WEB Warrants will be the public
offering price of the Units sold in this Offering. Issuance of the WEB Warrants
will significantly dilute the ownership of present shareholders and of those
persons who invest in this Offering. Additionally, when Warrants are issued to
WEB, the Company will report a charge to its earnings (if any) equivalent to the
difference between the fair market value of the Common Stock on the date the WEB
warrants are issued (if greater than the WEB Warrant exercise price) and the WEB
Warrant exercise price. Any resulting decrease in earnings (or increase in
losses) may have a depressive effect on the market price of the Company's Common
Stock. See "BUSINESS--The WEB Agreement."

BROAD DISCRETION IN APPLICATION OF PROCEEDS. The proceeds to the Company
from the Offering, net of the expenses of the Offering, will be approximately
$6,539,000, all of which will be used at the discretion of management in
furtherance of the Company's business plan. Although the Company has tentatively
allocated the net proceeds from this offering for certain broad uses, the
projected expenditures are estimates and approximations and do not represent
firm commitments of the Company. The proceeds will be used primarily to expand
into new buildings for which no contracts presently exist, and for marketing.
Accordingly, management of the Company has broad discretion to adjust the
application and allocation of the net proceeds of this offering, in order to
address changed circumstances and opportunities. In the event that the Company's
plans change, or if the proceeds of this offering, the Company's results of
operations or 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. See "Use of Proceeds."

DILUTION. As of March 31, 1998, the Company had sold the 2,164,063 shares
of Common Stock outstanding at an average cost per share of approximately $.93,
which is $4.57 per share less than the Offering Price. In February-March 1998,
the Company sold units which were essentially identical to the Units offered
hereby at $2.25 per unit. At March 31, 1998, the Company had a net tangible book
value (total assets less total liabilities and intangible assets) of $578,099 or
$.27 per share of Common Stock outstanding, based on 2,164,063 shares issued and
outstanding. Giving effect to the sale of 1,400,000 Units by the Company in the
Offering, after deduction of the expenses of the Offering, the Company will have
a net tangible book value of approximately $7,117,099 or $2.00 per share.
Investors in the Offering will sustain an immediate substantial dilution of
$3.50 (64%) of their price per share. See "Dilution."

NO MARKET FOR SECURITIES; ARBITRARY DETERMINATION OF PRICES. There has been
no market for the Common Stock or Warrants of the Company prior to the effective
date of the Registration Statement of which this Prospectus is a part, and there
is no assurance that an active public trading market for the Securities will
develop or be sustained in the foreseeable future. In the absence of a public
market for those securities, the public offering price of the Units and the
exercise price of the Warrants were determined by negotiations between the
Representative and the Company. Among the factors considered in determining the
Offering Price and the Warrant Exercise Price were the prospects for the
Company, an assessment of the industry in which the Company operates, an
assessment of management, the number of shares of Common Stock and Warrants
offered, the price the purchasers of such securities might be expected to pay
given the nature of the Company, and the general conditions of the securities
markets at the time of the Offering. Accordingly, the offering prices set forth
on the cover page of this Prospectus or the exercise price of the Warrants
should not be regarded as indications of the actual value of the Company or the
Securities or of any future market price of the Company's Common Stock.
Moreover, there can be no assurance that the market price of the Securities will
not decline following the Offering, or that

11
<PAGE>
investors will be able to sell any of the Securities purchased hereunder at a
price equal to or greater than the prices paid therefor.

UNDERWRITERS' INFLUENCE ON THE MARKET. A significant number of Units will
be sold to customers of the Underwriters. Such customers may subsequently engage
in transactions for the sale or purchase of the Securities through or with the
Underwriters. Although they have no legal obligation to do so, the Underwriters
from time to time in the future may make a market in and otherwise effect
transactions in the Securities. To the extent the Underwriters do so, they may
be a dominating influence in any market that might develop and the degree of
participation by the Underwriters may significantly affect the price and
liquidity of the Securities. Such market making activities, if commenced, may be
discontinued at any time or from time to time by the Underwriters without
obligation or prior notice. Depending on the nature and extent of the
Underwriters' market making activities and retail support of the Company's
securities at such time, the Underwriters' discontinuance could adversely affect
the price and liquidity of the Securities.

REGULATORY HISTORY OF UNDERWRITER. Kashner Davidson Securities Corporation
("Kashner"), one of the Representatives in this Offering, is currently involved
in a regulatory proceeding brought by the National Association of Securities
Dealers, Inc. ("NASD") in which the NASD has alleged certain violations of NASD
Regulations in connection with certain trading activity in municipal securities.
In addition to that pending matter, within the past five years Kashner has
settled and resolved three other regulatory proceedings brought by the NASD or
the Commission involving alleged violations of NASD Regulations or securities
laws. There can be no assurance of the effect, if any, of Kashner's pending or
prior regulatory history on its activities in the Company's securities following
completion of this Offering. See "Underwriting".

POSSIBLE VOLATILITY OF STOCK PRICES; PENNY STOCK RULES. The
over-the-counter markets for securities such as the Securities offered hereby
historically have experienced extreme price and volume fluctuations during
certain periods. These broad market fluctuations and other factors, such as new
product developments and trends in the Company's industry and investment markets
generally, as well as economic conditions and quarterly variations in the
Company's results of operations, may adversely affect the market price of the
Company's Common Stock. Although applications have been made to have the
Securities be approved for quotation on the Nasdaq Small Cap Market, even if the
applications are initially approved, there can be no assurance that they will
remain eligible to be included on Nasdaq. In the event that the Securities were
no longer eligible to be included on Nasdaq, they could be subject to rules
adopted by the Commission regulating broker-dealer practices in connection with
transactions in "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. See "--Penny Stock Regulation."

SHARES ELIGIBLE FOR FUTURE SALE. As of June 30, 1998, 2,190,917 shares of
the Company's Common Stock were issued and outstanding, all of which are
"restricted securities." Those shares may, under certain circumstances, in the
future, be sold in compliance with Rule 144 adopted under the Securities Act.
Holders of 935,556 shares of Common Stock, 188,888 Warrants, and 94,444 shares
of Common Stock underlying those Warrants have agreed not to sell those
securities for a period of one year after the date of this Prospectus. The
holders of an additional 159,467 shares and 961,317 shares have agreed not to
sell their shares for periods of six months and one year, respectively, after
the date of this Prospectus without the Representatives' prior written consent.
In general, under Rule 144, subject to the satisfaction of certain other
conditions, a person, including an affiliate of the Company, who has
beneficially owned restricted

12
<PAGE>
shares of Common Stock for at least one (1) year is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1% of
the total number of outstanding shares of the same class, or if the Common Stock
is quoted on Nasdaq or a stock exchange, the average weekly trading volume
during the four (4) calendar weeks immediately preceding the sale. A person who
presently is not and who has not been an affiliate of the Company for at least
three (3) months immediately preceding the sale and who has beneficially owned
the shares of Common Stock for at least two (2) years is entitled to sell such
shares under Rule 144 without regard to any of the volume limitations described
above.

The Company is authorized to grant options to purchase 533,333 shares of
Common Stock pursuant to a stock option plan for key employees, officers, and
directors (the "Plan"). As of May 15, 1998, stock options to purchase 533,333
shares of Common Stock have been granted under the Plan. See
"Management--Executive Compensation-Stock Options and Option Plans." Although
the Company has no present plans to register for sale under the Securities Act
shares issuable upon exercise of the options granted pursuant to the Plan, if it
should do so, when the options are exercised and the shares issued they would be
freely tradeable, except for certain limitations imposed upon directors,
officers and affiliates who exercise options granted under the Plan.

No prediction can be made as to the effect, if any, that sales of shares of
Common Stock or the availability of such shares for sale will have on the market
prices prevailing from time to time. Nevertheless, the possibility that
substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise capital in the future through the sale of equity
securities. Actual sales or the prospect of future sales of shares of Common
Stock under Rule 144 may have a depressive effect upon the price of the Common
Stock and the market therefor.

AUTHORIZATION OF PREFERRED STOCK. The Company's Articles of Incorporation,
as amended, authorize the issuance of up to 1,000,000 shares of preferred stock,
no par value. The Board of Directors has been granted the authority to fix and
determine the relative rights and preferences of preferred shares, as well as
the authority to issue such shares, without further stockholder approval. As a
result, the Board of Directors could authorize the issuance of a series of
preferred stock which would grant to holders preferred rights to the assets of
the Company upon liquidation, the right to receive dividend coupons before
dividends would be declared to common stockholders, and the right to the
redemption of such shares, together with a premium, prior to the redemption of
Common Stock. Common stockholders have no redemption rights. The issuance of any
series of preferred stock under certain circumstances could adversely affect the
voting power or other rights of the holders of Common Stock, and under certain
circumstances, be used as a means of discouraging, delaying or preventing a
change in control of the Company. The Company does not presently intend to issue
any Preferred Stock. See "Description of Securities."

AUTHORIZATION OF ADDITIONAL SHARES. The Company's Articles of
Incorporation, authorizes the issuance of up to 20,000,000 shares of Common
Stock, of which 2,190,917 shares were outstanding on June 30, 1998. The
Company's Board of Directors has the authority to issue additional shares of
Common Stock and to issue options and warrants to purchase shares of the
Company's Common Stock without stockholder approval. Future issuance of Common
Stock could be at values substantially below the Offering Price in the Offering
and therefore could represent further substantial dilution to investors in the
Offering. In addition, the Board could issue large blocks of voting stock to
fend off unwanted tender offers or hostile takeovers without further stockholder
approval.

MARKET OVERHANG FROM OUTSTANDING OPTIONS AND WARRANTS. Immediately after
the Offering the Company will have outstanding 533,333 options to purchase
shares of Common Stock which have been granted under the Plan. All of the
options granted under the Plan have exercise prices which were at or above the
fair market value of the Common Stock on the date of grant. Additionally the
Company will not grant non-qualified options with an exercise price of less than
85% of the fair market value of the Common Stock on the date of grant. The
Company will also have Common Stock purchase warrants ("Private Warrants")

13
<PAGE>
exercisable to purchase 357,000 shares of Common Stock at exercise prices
ranging from $.75 - $3.00 per share; 700,000 shares underlying the Warrants
issued in this Offering; and an additional 94,444 shares underlying warrants
that convert into warrants identical to the Warrants. The Company may also issue
warrants (the WEB Warrants) to purchase up to 2,000,000 shares of Common Stock
to WEB. (The options, Private Warrants and WEB Warrants will be referred to as
the "Derivative Securities.") To the extent that such Derivative Securities are
exercised or converted, dilution to the interests of the Company's stockholders
may occur. Exercise or conversion of the Derivative Securities, or even the
potential of their exercise or conversion may have an adverse effect on the
trading price and market for the Company's Common Stock. The holders of the
Derivative Securities are likely to exercise or convert them at times when the
market price of the shares of Common Stock exceeds their exercise price.
Accordingly, the issuance of shares of Common Stock upon exercise of the
Derivative Securities may result in dilution of the equity represented by the
then outstanding shares of Common Stock held by other stockholders. Holders of
the Derivative Securities can be expected to exercise them at a time when the
Company would, in all likelihood, be able to obtain any needed capital on terms
which are more favorable to the Company than the exercise terms provided by such
Derivative Securities. See "Description of Securities" and "BUSINESS--The WEB
Agreement."

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.

WARRANTS SUBJECT TO REDEMPTION. Two Warrants will entitle the holder to
purchase one share of Common Stock at an exercise price equal to $8.10 per Share
commencing from the effective date of this Prospectus. The Warrants are
redeemable by the Company for $.05 per Warrant at any time after the date of
this Prospectus upon at least forty-five (45) days prior written notice provided
(a) the closing high bid 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 $12.15; and (b) the Company has in effect a current
registration statement with the Commission registering the Common Stock issuable
upon exercise of the Warrants. 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.

PENNY STOCK REGULATION. In the event that the Company is unable to satisfy
the maintenance requirements for the Nasdaq Small Cap Market and its Common
Stock falls below the minimum bid price of $5.00 per share for the initial
quotation, trading would be conducted on the "pink sheets" or the NASD's
Electronic Bulletin Board. In the absence of the Common Stock being quoted on
Nasdaq, or listed on an exchange, trading in the Common Stock would be covered
by Rule 15g-9 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") if the Common Stock is a "penny stock." Under such rule,
broker-dealers who recommend such securities to persons other than established
customers and accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement to
a transaction prior to sale. Securities are exempt from this rule if the market
price is at least $5.00 per share.

14
<PAGE>
The Commission adopted regulations that generally define a penny stock to be
any equity security that has a market price of less than $5.00 per share,
subject to certain exceptions. Such exceptions include an equity security listed
on Nasdaq, and an equity security issued by an issuer that has (i) net tangible
assets of at least $2,000,000, if such issuer has been in continuous operation
for three years, (ii) net tangible assets of at least $5,000,000, if such issuer
has been in continuous operation for less than three years, or (iii) average
revenue of at least $6,000,000 for the preceding three years. Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated therewith.

If the Company's Common Stock were to become subject to the regulations
applicable to penny stocks, the market liquidity for the Common Stock and
Warrants would be severely affected, limiting the ability of broker-dealers to
sell the common Stock and Warrants and the ability of purchasers in this
Offering to sell their Common stock and Warrants in the secondary market. There
is no assurance that trading in the Common Stock and Warrants will not be
subject to these or other regulations that would adversely affect the market for
such securities.

NON-REGISTRATION IN CERTAIN JURISDICTIONS OF SHARES UNDERLYING THE
WARRANTS. Although the Common Stock and the Warrants will not knowingly be sold
to purchasers in jurisdictions in which they are not registered or otherwise
qualified for sale, purchasers may buy the Common Stock or Warrants in the
aftermarket or may move to jurisdictions in which the shares of Common Stock
issuable upon exercise of the Warrants are not so registered or qualified during
the period that the Warrants are exercisable. In such event, the Company could
be unable to issue shares to those persons desiring to exercise their Warrants
unless and until the shares could be registered or qualified for sale in the
jurisdiction in which such purchasers reside, or an exemption to such
qualification exists or is granted in such jurisdiction. If the Company was
unable to register or qualify the shares in a particular state and no exemption
to such registration or qualification was available in such jurisdiction, in
order to realize any economic benefit from the purchase of the Warrants, a
holder might have to sell the Warrants rather than exercising them. No assurance
can be given, however, as to the ability of the Company to effect any required
registration or qualification of the Common Stock or Warrants in any
jurisdiction in which registration or qualification has not already been
completed. See "Description of Securities-Warrants."

POSSIBLE LOSS OF INVESTMENT. Most of the net proceeds of the Offering will
be expended at or prior to receipt of significant revenues by the Company.
Consequently, stockholders will be dependent upon the performance of the
Company's business for any return of their investment and risk the entire loss
of their investment if revenues are insufficient to cover expenses. In the event
that the business does not generate sufficient revenues to pay expenses,
stockholders could lose part or all of their investment.

15
<PAGE>
DILUTION

The net tangible book value of the Company at March 31, 1998, before giving
effect to the Offering, was $578,099 or $.27 per share, based upon 2,164,063
shares outstanding. Net tangible book value per share is determined by dividing
the number of outstanding shares of Common Stock into the net tangible book
value of the Company (total assets less total liabilities and intangible
assets). After giving effect to the sale of 1,400,000 Units by the Company in
the Offering and receipt of the estimated net proceeds therefrom, the adjusted
net tangible book value at March 31, 1998, would have been $7,117,099 or $2.00
per share of Common Stock. This represents an immediate increase of $1.73 per
share to current stockholders and an immediate dilution of $3.50 per share to
the investors in the Offering (assuming the allocation of the entire Offering
Price to the shares of Common Stock). The following table illustrates the per
share dilution, assuming all 1,400,000 Units are sold in the Offering: (1)

<TABLE>
<S> <C> <C>
Assumed price Per Share of Common Stock....................... $ 5.50
Pro Forma Net Tangible Book Value Per Share of Common Stock
Before Offering (2)......................................... $ 0.27
Increase in Pro Forma Net Tangible Book Value Per Share of
Common Stock Attributable to Shares Offered Hereby.......... $ 1.73
Pro Forma Net Tangible Book Value Per Share of Common Stock
After Offering.............................................. $ 2.00
Dilution of Pro Forma Net Tangible Book Value Per Share of
Common Stock to Purchasers in this Offering................. $ 3.50
Dilution Per Share of Common Stock as a Percent of Offering
Price....................................................... 64%
</TABLE>

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

(1) Does not include (i) 533,333 shares of Common Stock which have been granted
under the Company's Incentive Plan, having exercise prices ranging from
$1.13 to $2.25 per share, and of which 343,333 are subject to future
vesting; (ii) 357,000 shares of Common Stock reserved for issuance upon
exercise of outstanding warrants having a weighted average exercise price of
$1.76 per share; and (iii) 94,444 shares of Common Stock reserved for
issuance upon exercise of outstanding warrants that will be automatically
converted into Warrants. See Management--Stock Options and Option Plans.

(2) Determined by dividing the number of shares of Common Stock outstanding into
the net tangible book value of the Company.

The following table sets forth, as of March 31, 1998, the number of shares
of Common Stock purchased, the percentage of total cash consideration paid, and
the average price per share paid by (i) the existing stockholders; and (ii)
investors purchasing Securities in the Offering, before deducting estimated
underwriting discounts and offering expenses payable by the Company.

<TABLE>
<CAPTION>
TOTAL CASH CONSIDERATION
SHARES PURCHASED AVERAGE
----------------------- ------------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Existing Stockholders.............................. 2,164,063 61% $ 2,022,621 21% $ .93
New Investors (1).................................. 1,400,000 39% $ 7,700,000 79%(1) $ 5.50
---------- --- ------------ --- -----
Total.............................................. 3,564,063 100% $ 9,722,621 100% $ 2.73
</TABLE>

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

(1) Assumes (a) 1,400,000 Shares are sold in the Offering at an Offering Price
of $5.50 per Share; and (b) no exercise of Warrants.

16
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company as of March
31, 1998, (i) on an actual basis; and (ii) as adjusted to give effect to the
estimated net proceeds from the sale of the Units offered hereby, based upon an
assumed Offering Price of $5.50 per Unit. This section should be read in
conjunction with the financial statements and notes to the financial statements
that are contained elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1998
--------------------------------
AS ADJUSTED
ACTUAL (1)(2)
------------- -----------------
<S> <C> <C>
Long Term Debt, net of current portion.......................................... $ 158,790 $ 158,790

Stockholders' Equity:
Preferred Stock, no par value, 1,000,000 Shares authorized; no shares
outstanding................................................................. -- --
Common Stock, no par value, 20,000,000 shares authorized; 2,164,063 shares
issued and outstanding; 3,564,063(2) shares issued and outstanding as
adjusted.................................................................... 1,938,420 $ 8,477,420
Accumulated Deficit:............................................................ (1,360,321) (1,360,321)
Total Stockholders' Equity:..................................................... 578,099 7,117,099
Total Capitalization:........................................................... $ 736,889 $ 7,275,889
</TABLE>

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

(1) Does not include (i) 533,333 shares of Common Stock which have been granted
under the Company's Stock Option Plan, having exercise prices ranging from
$1.13 to $2.25 per share, and of which 343,333 are subject to future
vesting; (ii) 357,000 shares of Common Stock reserved for issuance upon
exercise of outstanding warrants having a weighted average exercise price of
$1.76 per share; and (iii) 94,444 shares of Common Stock reserved for
issuance upon exercise of outstanding warrants that will be converted into
Warrants. See Management--Stock Options and Option Plans.

(2) Assumes no exercise of the Underwriters' Over-allotment Option or the
Representatives' Options.

17
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the Securities offered
hereby, assuming a Unit Offering Price of $5.50, are estimated to be
approximately $6,539,000, ($7,543,850 if the Over-allotment Option is exercised
in full) after deducting the underwriting discount and offering expenses.
Management anticipates that the proceeds will be applied with the following
priority during the next twelve (12) month period:

<TABLE>
<CAPTION>
DESCRIPTION OF USE AMOUNT PERCENT
- ------------------------------------------------------------------ ------------ ---------
<S> <C> <C>

Capital Expenditures (1).......................................... $ 3,692,000 56%
System Enhancements (2)........................................... 750,000 12%
Salaries and Personnel Costs (3).................................. 1,500,000 23%
Marketing and General Administrative Costs (3).................... 597,000 9%
------------ ---------

Total......................................................... 6,539,000 100%
------------ ---------
------------ ---------
</TABLE>

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

(1) Capital expenditures consist primarily of telephone switching equipment in
new cities and new buildings, including buildings under contract, based on
the Company's planned expansion.

(2) System enhancements consist primarily of enhancements to the current, or the
acquisition of a new, billing and customer service system. The Company is
currently evaluating the alternatives.

(3) The proceeds allocated to Salaries and Personnel Costs and to Marketing and
General Administrative Costs will be applied, to the extent necessary, to
the Company's current operations and to fund anticipated losses over the
next twelve months. See "Management's Discussion and Analysis."

The amounts set forth above represent the Company's present intentions for
the use of the proceeds from the Offering. However, actual expenditures could
vary considerably depending upon many factors, including, without limitation,
changes in economic conditions, the ability of the Company to obtain lease
financing, unanticipated complications, delays and expenses, or problems
relating to the development of additional properties. Any reallocation of the
net proceeds of the Offering will be made at the discretion of the Board of
Directors but will be in furtherance of the Company's strategy to achieve growth
and profitable operations through the development of additional properties. The
Company's working capital requirements are a function of its future sales growth
and expansion, neither of which can be predicted with any reasonable degree of
certainty. As a result, the Company is unable to precisely forecast the period
of time for which proceeds of the Offering will meet its working capital
requirements. The Company may need to seek funds through loans or other
financing arrangements in the future, and there can be no assurance that the
Company will be able to make such arrangements in the future should the need
arise. However, it intends to budget the proceeds so that such proceeds, either
alone or with proceeds of any other financing, and revenues from operations,
will be sufficient to meet the Company's cash requirements for at least the next
12 months.

Pending use of the net proceeds of the Offering, the funds will be invested
temporarily in certificates of deposit, short-term government securities or
similar investments. Any income from these short-term investments will be used
for working capital.

DIVIDENDS

No dividends have been paid by the Company. While no decision with regard to
the payment of dividends in the future has, to date, been made, the Company does
not, as of the date of this Prospectus, intend to declare or pay any dividends
on its outstanding shares of Common Stock in the foreseeable future. Future
dividend policy is subject to the discretion of the Board of Directors, and is
dependent upon a number of factors including future earnings, capital
requirements and the financial condition of the Company. Although no shares of
preferred stock have been issued, in the event such shares are issued, the
rights of Common Stock stockholders to dividends shall be subject to the rights
and preferences of preferred stockholders. The Company does not presently intend
to issue any preferred stock.

18
<PAGE>
SELECTED FINANCIAL DATA AND STATISTICAL DATA

<TABLE>
<CAPTION>
MARCH 31, 1998
----------------------------
DECEMBER 31, 1997 ACTUAL AS ADJUSTED(1)
----------------- ------------ --------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents...................................... $ 389,415 $ 409,132 $ 6,948,132
Working capital................................................ $ 59,464 $ 132,303 $ 6,671,303
Property and equipment, net.................................... $ 543,053 $ 542,182 $ 542,182
Total assets................................................... $ 1,060,821 $ 1,113,617 $ 7,652,617
Current liabilities............................................ $ 408,795 $ 376,728 $ 376,728
Long term debt, net of current portion......................... $ 388,017 $ 158,790 $ 158,790
Stockholders' equity........................................... $ 264,009 $ 578,099 $ 7,117,099
</TABLE>

<TABLE>
<CAPTION>
12/31/96 3/31/97 6/30/97 9/30/97 12/31/97 3/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Number of Units Under Contract...................... 1,641 2,081 2,081 3,985 4,290 4,661
Number of Units Installed........................... 1,069 1,271 1,643 1,643 1,922 2,609
</TABLE>

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

(1) Adjusted to reflect net proceeds of $6,539,000 from the sale by the Company
in this Offering of 1,400,000 Units at the assumed public offering price of
$5.50 per Unit.

19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
Financial Statements and Notes thereto appearing elsewhere in this Prospectus.

The Company provides integrated telecommunications services to multi-family
apartment and condominium complexes. The Company offers a complete package of
telecommunications services including local telephone, long distance telephone,
enhanced calling features, internet access and cable television. All services
are installed prior to the tenant's move-in and one bill is rendered to the
tenant at the end of the month incorporating all services provided.
Additionally, all services are believed to be offered at or below retail market
prices. The Company's first property, the 525-unit Portland Center apartments
complex, went on-line in September 1994. The properties under contract as of the
date of this Prospectus, consisting of 3,015 units in Portland, Oregon and 1,646
units in five other cities, represent 4,661 units. Contract terms range from
five years to fifteen years.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1997.

The Company reported a net loss of $384,228 for the three months ended March
31, 1998, compared to a net loss of $144,638 for the same period of the prior
year. The increase in net loss is primarily attributable to increased personnel
and other selling, general and administrative expenses, as well as a one-time
non-cash charge to other expense during 1998.

Revenue increased by $118,042 or 71% for the three months ended March 31,
1998, compared to the same period of the prior year. The increase in revenue is
attributable to the Company having eleven properties operating as of March 31,
1998, compared to four as of March 31, 1997. The increase in revenue is not
proportional to the increase in properties due to the timing of when properties
were brought on line.

Operating expenses increased by $103,899 or 88% for the three months ended
March 31, 1998, compared to the same period of the prior year. The increase in
operating expenses, which are those costs directly attributable to revenue, was
due to the increase in properties between periods. Operating expenses were 78%
of revenue for the three month period during 1998 compared to 71% for the same
period of the prior year. The increase in operating expense was disproportionate
to the increase in revenue due to the Company absorbing certain fixed costs
associated with the new properties brought on-line during 1998 without a
corresponding increase in revenue.

Selling, general and administrative expenses increased by $158,216 or 122%
for the three months ended March 31, 1998, compared to the same period of the
prior year. The increase between periods resulted from increases in payroll and
related costs, travel and entertainment expenses, advertising and promotion
expenses, and legal and regulatory costs. Selling, general and administrative
expenses were 102% of revenue for the three month period during 1998 compared to
79% for the same period of the prior year.

Depreciation and amortization expenses increased by $8,998 or 76% for the
three months ended March 31, 1998, compared to the same period of the prior
year. The increase between years is due to an increase in property and equipment
resulting from the increased number of properties on line between years.
Depreciation and amortization expense was 7% of revenue for the three month
periods in both 1998 and 1997.

Other expense increased by $86,519 or 171% for the three months ended March
31, 1998, compared to the same period of the prior year. The increase between
years resulted from a one-time non-cash charge to other expense related to the
induced conversion of certain convertible notes during 1998, partially offset by
a decrease in interest expense that was accreted on the Promissory Notes during
1997 that were not outstanding during 1998. Other expense was 48% of revenue for
the three month period during 1998 compared to 31% for the same period of the
prior year.

20
<PAGE>
YEAR ENDED DECEMBER 31, 1997 COMPARED TO DECEMBER 31, 1996.

The Company reported a net loss of $578,276 for the year ended December 31,
1997, compared to a net loss of $397,817 for the year ended December 31, 1996.
The increase in net loss is attributable to the increased personnel costs,
depreciation charges and interest expense associated with the Company's growth
that was experienced between years.

Revenue increased by $277,480 or 46% for the year ended December 31, 1997,
compared to the prior year. The increase in revenue is attributable to the
Company having eight properties operating by the end of 1997 compared to three
for 1996. The increase in revenue is not proportional to the increase in
properties due to the timing of when properties were brought on line during
1997.

Operating expenses increased by $210,782 or 57% for the year ended December
31, 1997, compared to the prior year. The increase in operating expenses, which
are those costs directly attributable to revenue, was due to the increase in
properties between years. Operating expenses were 66% of revenue for the year
ended December 31, 1997, compared to 61% for the prior year. The increase in
operating expense was disproportionate to the increase in revenue due to the
Company absorbing certain fixed costs associated with the new properties brought
on line during 1997 without a corresponding increase in revenue.

Selling, general and administrative expenses increased by $135,899 or 24%
for the year ended December 31, 1997, compared to the prior year. The increase
between years resulted from an increase in payroll and temporary staff expenses.
Selling, general and administrative expenses were 80% of revenue for the year
ended December 31, 1997, compared to 94% for the prior year.

Depreciation and amortization expenses increased by $32,076 or 85% for the
year ended December 31, 1997, compared to the prior year. The increase between
years is due to an increase in property and equipment resulting from the
increased number of properties on-line between years. Depreciation and
amortization expense was 8% of revenue for the year ended December 31, 1997,
compared to 6% for the prior year.

Other expense increased by $79,182 or 288% for the year ended December 31,
1997, compared to the prior year. The increase between years resulted from an
increase in interest expense, which was due to an increase in financing
activities and accreted interest thereon and capital leases between years. Other
expense was 12% of revenue for the year ended December 31, 1997, compared to 5%
for the prior year.

The Company has net operating loss carryforwards which are available to
offset future financial reporting and taxable income. Net operating loss
carryforwards for tax purposes totaled approximately $965,000 at December 31,
1997, and expire in 2011 through 2012.

A provision of the Internal Revenue Code requires the utilization of net
operating losses be limited when there is a change of more than 50% in ownership
of the Company. The Company appears to have incurred an ownership change under
IRC Section 382. This potential ownership change would limit the utilization of
any net operating losses incurred prior to the change in ownership date. The
Company intends to complete an analysis under IRC Section 382 to determine if
any ownership change has occurred.

The difference between expected tax benefit, computed by applying the
federal statutory rate of 34% to loss before taxes, and the actual tax benefit
of $-0- is primarily due to the increase in the valuation allowance for deferred
taxes.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1998, the Company had cash and cash equivalents of $409,132
compared to $389,415 at December 31, 1997. Net cash of $341,974 was used in
operating activities which resulted from the Company's net loss as well as from
working capital requirements.

21
<PAGE>
Net cash of $19,917 was used in investing activities which was comprised
entirely of capital expenditures. The Company is currently pursuing various
leasing alternatives to finance its anticipated future capital expenditures. As
of March 31, 1998, the Company had $550,000 of lease financing available for
future capital expenditures. While management believes that available lease
lines are sufficient to fund short-term capital requirements, additional lease
financing will be required to fund the Company's long-term plans. There is no
assurance that the Company will be able to obtain lease financing at rates that
are acceptable to the Company or in amounts that will be sufficient to fund its
long-term requirements. Any deficiencies between the Company's leasing
capabilities and the Company's capital expenditure requirements, will have to be
financed through the issuance of common stock or debt.

Net cash of $381,608 was generated from financing activities during the
three months ended March 31, 1998. This was the net result of the Company's
issuance of shares of Common Stock in a private placement which totaled
$390,391, offset by principal payments under capital leases.

The Company's independent auditors have included in their audit report an
explanatory paragraph which states that the Company's recurring losses from
operations raise substantial doubt about its ability to continue as a going
concern. The Company has generated operating cash losses from its inception.
Additionally, the Company requires and will continue to require, cash to fund
the net losses and capital requirements associated with the Company's planned
growth. The cash required to fund such activities will be substantial and beyond
what the Company currently holds in cash and cash equivalents. Management
believes that approximately $5,200,000 of cash will be required to fund planned
operations for the next twelve months. Management believes that the Company's
cash balance at March 31, 1998, is sufficient to fund the Company's activities
for the next three months. The Company is currently pursuing various financing
alternatives including both public and private equity financing. There can be no
assurance that management will be successful in obtaining such financing.

In December 1997, the Company signed a letter of intent with an underwriter
to offer shares of the Company's common stock for sale through an initial public
offering. It is the Company's plan to raise between $7,700,000 and $8,855,000 in
the public offering. If successful, management believes that the cash generated
from the public offering will be sufficient to meet its cash requirements for at
least the next twelve months.

The Company has agreements with certain cable television operators to
purchase bulk cable signals at the Company's properties. As of March 31, 1998,
the Company's commitment was $27,224 per month for such services. At March 31,
1998, there were no material commitments for capital expenditures.

NEW ACCOUNTING PRONOUNCEMENTS

SFAS 130, "Reporting Comprehensive Income," was issued in June 1997. It
establishes standards for reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. SFAS 131,
"Disclosure about Segments of an Enterprise and Related Information," was issued
in June 1997. It establishes standards for the way public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The adoption of these standards had no
effect on the Company's financial statements.

22
<PAGE>
BUSINESS

GENERAL

The Company is a Portland, Oregon, based telecommunications company that
provides integrated telecommunications and entertainment services to
multi-family apartment and condominium complexes. The Company offers a variety
of services to tenants including the following:

- Cable television

- Local telephone

- Long distance telephone

- Enhanced calling features, such as:

- High speed Internet access

- Telephone calling cards

Long distance traffic is routed over separate dedicated lines to an
interexchange carrier who provides discounted long distance telephone service to
the Company and its customers. Cable television service is provided to MDU's by
the Company through exclusive agreements with the local cable television
franchise holder. In Portland, for example, the Company has an agreement with
TCI Cablevision of Oregon, Inc., a subsidiary of Tele-Communications, Inc., the
largest cable company in the US ("TCI"); and with a division of Time Warner
Communications, Inc., to be the exclusive provider of cable service to the
building with which the Company has a contract. The Company purchases cable
service at a discount and applies a markup to cover additional costs and
contribution to profit and then resells the service to tenants at a discount
from retail rates.

Internet access is provided by routing traffic through the Company's
switches to an independent Internet service provider. On December 30, 1997, the
Company entered into an agreement with GTE Intelligent Network Services, Inc., a
subsidiary of GTE Corp., to provide internet access to its customers. In May
1998 the Company installed its first internet line on a test basis, providing
access speed of 1.544 Mb per second, or approximately 27 times faster than the
56 kilobytes per second provided by dial-up modems for use over existing
telephone lines. The GTE service uses existing telephone lines. The user incurs
no additional costs to utilize the faster service.

These services are all offered under the Company's service mark to tenants
of apartment and condominium complexes (referred to collectively herein as
"apartments") which are under exclusive contracts with the Company. When a new
tenant at a property under contract with the Company signs a service agreement
with the Company, the Company assigns the tenant a telephone number; and
installs all of the services in the tenant's apartment prior to the time the
tenant moves in. All services are installed prior to tenant move-in so the
tenant does not need to arrange for multiple installations by multiple vendors.
One customer service number covers all potential service and inquiry needs. One
bill is rendered to the tenant at the end of the month integrating all services
provided. Payment is accepted by cash, check, wire transfer or credit card. In
addition, all services are believed to be offered at or below retail market
prices. The tenant may retain his existing telephone number if allowed by the
incumbent local exchange carrier. There are no fees or interruptions of service
for tenants transferring to FirstLink after receiving service from another
supplier.

The Company provides additional incentives to a property manager or owner,
including the benefit of dealing with a single provider for all communication
services; the ability to offer tenants a complete,

23
<PAGE>
integrated package of communication and entertainment services; and the ability
to maintain or improve occupancy rates by attracting and retaining tenants for
whom communications and entertainment services are important. The property
manager or owner and leasing agents also benefit from the receipt of commissions
and further incentives for successfully marketing the Company's service.

The Company currently has written long-term contracts with 20 residential
developments in six cities in the United States, including properties owned by
Harsh Investment Corp, Paine Webber, and an affiliate of Prudential Insurance
Company of America. Eleven of those properties were on-line as of the date of
this Prospectus. The properties contain 4,661 apartment units. Contract terms
range from 5 to 15 years with the average term of 6.5 years. The Company does
not believe that it is dependent on any individual property.

<TABLE>
<CAPTION>
PROPERTY LOCATION UNITS UNDER CONTRACT UNITS ON LINE
- --------------------------------------------------------- --------------------- ---------------
<S> <C> <C>
Portland, OR............................................. 3,015 2,609
Seattle, WA.............................................. 351 --
Denver, CO............................................... 315 --
Oklahoma City, OK........................................ 273 --
Vancouver, WA............................................ 440 --
Phoenix, AZ.............................................. 267 --
----- -----
Total.................................................. 4,661 2,609
</TABLE>

The Company has been able to obtain contracts with building owners and
tenants in the Portland area. It intends to expand to other cities through
agreements with companies that already have an extensive presence in those
cities. As an example, it recently entered into a letter of intent with Web
Service Company, Inc., one of the largest providers of coin operated laundry
equipment and other services ("ancillary services") to apartment and condominium
complexes in the United States. Initially, WEB will market the Company's
services to the 590 apartment complexes which WEB presently supplies ancillary
services in Seattle, Denver, Dallas, and the San Francisco Bay area,
representing approximately 150,000 units. See "--WEB Agreement."

COMPANY SERVICES AND EXISTING CUSTOMERS

Five main services make up the Company's integrated communications package.
They include:

- Local phone service

- Enhanced calling features

- Long distance phone service

- Cable television service

- Internet access

The Company installs telephone switching equipment within each apartment
complex. This equipment generates an internal dial tone to the apartment
complex. The same hardware and software also provides enhanced calling features
like call waiting, call forwarding, and voicemail service. The switching
equipment located at the apartment complex is then interconnected with the local
telephone company so telephone calls can be received and transmitted across the
public switched telephone network, as well as

24
<PAGE>
the networks of other carriers. The Company's services are transparent to the
customer; that is, he is unaware that his service goes through the Company's
switch.

From the customer's perspective all of these services are provided through
the Company. The Company handles the sales, installation, customer care, and
billing of all services, thereby delivering a one-stop approach to customer
satisfaction.

The tenant is offered discounts as an enticement to take service from the
Company. Installation costs are waived when a customer transfers service to
FirstLink from another provider and the transfer is accomplished without
inconvenience to the tenant. If permitted by the local carrier, the tenant has
the option of keeping his existing phone number. The Company guarantees its
service: if the tenant is unhappy for any reason, the Company will reconnect the
tenant to the carrier of his choice. The apartment leasing agent or condominium
sales agent presents the Company's service agreement to the new tenant at the
same time final apartment leasing documents are executed.

The Company is positioned as a communications integrator and one-stop shop
for communications services, so that it can maximize its offerings to the
consumer. The Company will seek to provide other services to its customers, such
as video on demand, cellular telephone, paging, video conferencing, and others.
It is also working directly with local franchised cable companies to offer the
broadest possible range of cable television services. Many of its competitors
build stand-alone and limited capacity satellite television systems that provide
reduced offerings to the consumer. The Company views its business as a service
driven with customer satisfaction its number one priority.

In return for marketing assistance and access to their buildings and
tenants, the Company pays apartment owners a share of revenue based on services
used by each subscribing tenant. This revenue sharing can have a significant
impact not only on the revenue stream from an apartment complex but also through
enhanced capital appreciation for the property, which this additional revenue
represents. In addition, apartments are typically rented based on the amenity
package provided to prospective tenants. The Company's integrated communication
services give a potential competitive advantage to an apartment owner.

The Company provides the apartment tenant numerous benefits: cost savings
compared to the traditional providers of communications service; a convenient
means of subscribing to communications services; a single, integrated bill for
all communications services; instant connection to cable television, local phone
service, long distance telephone service and high speed internet access; and
simple and competitively priced choices for long distance telephone service.

While communications markets remain regulated, limiting competition on the
national level, many states are today licensing Shared Tenant Services ("STS"),
known in the industry as Residential Multi-Tenant Services ("RMTS"). The
providers of RMTS, like the Company, are allowed to purchase dial tone from the
local telephone company on a wholesale basis and resell the dial tone to the
tenant from common telecommunications facilities. Other services are added to
the package such as long distance and cable television. The potential customers
of this service include residents within existing apartment complexes, new
multi-unit developments under construction, condominiums, and other
multi-dwelling units with telecommunications needs such as hospitals, nursing
homes, college campuses, etc. Large apartment complexes served by on-site
telecommunications equipment offer efficient use of capital.

MARKETING STRATEGY

The Company currently targets apartment complexes with 150 or more tenants.
The selling cycle for the Company's service includes proposal presentation,
contract negotiations and service implementation, a cycle that can require more
than six months to complete. In addition to the 4,661 units currently under
contract, the Company has contracts under review by other properties
representing approximately 7,997 units and proposals outstanding to properties
totaling an additional 5,199 units. In addition it plans to

25
<PAGE>
market its services through WEB in at least four cities. However, no assurance
can be given that those contracts with additional properties will be entered.

The Company believes that there are few barriers to expanding the business
on a national basis. Unlike cable television networks or telephone networks, the
RMTS business does not require an investment in transport infrastructure like
fiber optic cable or telephone lines. Instead, it relies on purchasing that
capacity from third parties. The only significant capital expense is the
installation of telephone switching equipment in the various apartment
complexes, and this is done on a stand-alone basis. Because of this flexibility,
the Company has no ties to existing technology or infrastructure. Therefore,
with a successful engineering, marketing, and customer service formula,
expansion into other markets is simplified.

Securing new apartment contracts is the key to the Company's growth. Both
new apartment construction and existing apartment complexes will be targeted.
The Company will seek to secure new contracts through:

- One-on-one contacts

- Real Estate Investment Trusts (REITs)

- Associations

- Property management organizations

- Asset owners

The Company will also add appropriate new telecommunications services and
enhancements to customer offerings.

The Company believes that adequate back office support systems are in place
for its present level of business. However, it will need to implement additional
systems to manage its planned growth, including effective cost accounting,
technical support, credit and collections, and customer service, supported by a
subscriber management and billing system. Part of the proceeds from the Offering
will be used to establish such systems. See "Use of Proceeds."

THE WEB AGREEMENT

In May 1998 the Company entered into a letter of intent with Web Service
Company, Inc., one of the largest operators of coin-operated laundry equipment
and other services ("ancillary services") in apartment and condominium complexes
in the United States. Based on information provided by WEB, the Company believes
that WEB provides ancillary services to approximately 44,000 apartment complexes
located in 26 states.

Under the proposed contract, WEB will exclusively market the Company's
services to properties with which WEB has an existing relationship that have
more than 150,000 units. The exclusive arrangement will be subject to
performance requirements that will be defined in the definitive agreement. As
compensation for WEB's sales of the Company's services, the Company will grant
WEB warrants to purchase 2,000,000 shares of its Common Stock, subject to
vesting conditions requiring WEB to deliver one customer for each 25 shares. In
other words, in order to earn the 2,000,000 warrants, WEB must, within six
years, deliver 80,000 customers who subscribe to the Company's services. If WEB
is unable to deliver a certain number of subscribers each year (which number
increases over the life of the contract), a portion of the unvested warrants
expire. The maximum number of warrants that can vest in any year cannot exceed
20% of the Company's outstanding Common Stock at the vesting date. The warrants
will be exercisable at $5.40 per share for five years after they are issued.

The Company will also pay WEB a commission of 1.75% on collected revenues
for WEB customers (2.25% for customers in any property in which the Company has
achieved a penetration rate in excess of 60%). The commission is paid for the
life of the Company's contract with the property.

26
<PAGE>
The Company sold WEB 25,000 shares of the Company's Common Stock at $4.00
per share prior to the public offering; and it will sell WEB an additional
25,000 Units in the public offering, at the public offering price.

The Company anticipates that a definitive agreement will be entered into in
August 1998.

MARKET

The United States telecommunications industry is large and robust. The cable
television industry's annual revenues exceed $28 billion. Local and long
distance telephone traffic generates $182 billion per year. Since the break-up
of AT&T in 1984, many new businesses have developed, including cellular
telephone, alternative long distance, and competitive access providers. These
businesses and others have created dramatic growth in telecommunications.

MANAGEMENT INFORMATION SYSTEMS

Providing accurate and customized billing for customers is an integral
component of the Company's business. The Company's management information
systems ("MIS") processes calls for the services the Company provides and
combines this information with other recurring and nonrecurring customer charges
to produce monthly invoices. Customers are quoted a monthly charge for basic
telephone and cable service. In addition, customers are charged for special
services and usage, including third-party billing calls, local message units
(where applicable), directory assistance, and long-distance at a discount from
the standard rates charged by long-distance providers; and for premium cable
channels.

Enhancements to the MIS systems will allow the Company to have a scaleable
billing and customer service solution that will be able to support the Company's
planned growth. Once the Company's MIS systems are completed, they will be able
to be expanded with minimal incremental cost to accommodate substantially more
volume. Such systems may feature backup processors and short-time response
maintenance agreements and are designed to respond to customer needs as well as
support the Company's operations.

COMPETITION

The Company believes that competition in its markets will come from smaller
companies as well as large telephone companies. Corporate cultures of the
various competing entities such as phone and cable companies differ greatly from
one another. Cable companies tend to be more entrepreneurial and telephone
companies tend toward a monopoly mentality. As a result, it has been difficult
for these large organizations to work together to actually realize the economies
of scale which a converged industry represents. At the same time, the
telecommunications industry remains highly regulated and although there are
attempts being made to open telecommunications markets, incumbent monopolies
still control the local exchange marketplace and can afford protracted
litigation to delay new entrants to the marketplace. The Company will attempt to
establish relationships with large apartment owners who influence the
telecommunications options of the building they own. There can be no assurance
that other companies who may offer services like those offered by the Company
will not be able to effectively compete with the Company in its existing or
proposed markets.

Other companies currently provide cable and telephone services to
residential complexes, including ICS Communications, Inc. (ICS) and GE
Capital-Rescom, L.P. ("Rescom"). The Company's principal competitors in the
future will include companies that provide shared tenant services to office
holdings, who have a significant infrastructure in place in cities to which the
Company plans to expand. For example, Shared Technologies Fairchild
Communications Corp ("STF") has an agreement with ICS Rescom, L.P., to manage
certain aspects of its business.

27
<PAGE>
KEY SUPPLIERS

The Company currently leases transmission facilities from U S West
Communications, Inc. ("USWC"), LDDS Worldcom and Frontier Communications. Cable
television signal is acquired by the Company from TCI Cablevision of Oregon,
Inc. and KBL Cablesystems of the Southwest, a Time Warner company. Switching
hardware used by the Company is manufactured by Cortelco, formerly ITT Solid
State, and Digital Telecommunications Inc. Its Internet services provider is GTE
Intelligent Network Services, Inc. The Company believes that alternative sources
are available for all critical equipment and services that it utilizes from the
above suppliers, and that such equipment and services can be obtained at prices
comparable to those the Company is presently paying.

GOVERNMENT REGULATION

The Company is subject to regulation under both state and federal
telecommunications laws. On the state level, rules and policies are set by each
state's Public Utility Commission or Public Service Commission ("PUC" or "PSC").
On a federal level, the Federal Communications Commission ("FCC"), among other
agencies, dictates the rules and policies which govern interstate communications
providers. The FCC is also the main agency in charge of creating rules and
regulations to implement the recently enacted Telecommunications Act of 1996
("the Act"), although currently the Bell Operating Companies (BOCs) have asked
the judiciary to review and overrule the FCC and its regulations.

Nevertheless, the Act was enacted in the first quarter of 1996 with its
primary goal being to create a "competitive telecommunications marketplace." To
achieve that goal, the Act sets out a checklist of requirements that BOCs, other
local exchange carriers and long distance carriers must meet before they may
begin to compete in new telecommunications-based businesses. For example, the
Act opens a regulatory door for BOCs to enter the long-distance services market,
a door that has been closed for almost fourteen years since the Modified Final
Judgment or "Consent Decree" that broke up the old AT&T/Bell system. The Act
also allows long-distance carriers to enter the local exchange service business,
a monopoly held by the AT&T/Bell system since the turn of the Century. Equally
important, the Act opens new venues to alternative providers of video services,
thereby allowing more than the one-to-a-city cable franchisee to provide visual
entertainment and information products.

The FCC published a majority of the rules and regulations that add detail to
the Act, thereby giving to state PUCs/PSCs explicit directions and authority to
oversee, among others, such processes as 1) the way long-distance and
local-service providers "interconnect" their infrastructures and technologies;
2) the methods by which BOCs may determine their costs and revenue requirements
and pricing and rates for service; 3) how and how much non-facilities based
resellers will pay "wholesale" for retail service offerings; and 4) the degree
to which new entrants and incumbent carriers can agree as to terms, conditions,
and technical specifications for interconnection through negotiations and
arbitration.

Proceedings at state PUC's and PSC's continue, despite the BOCs court
appeals and the temporary stay of much of the FCC rules. In Oregon, for
instance, the Oregon Public Utilities Commission ("OPUC") regulates the
standards, rates and terms of services offered by Local Exchange Companies
("LECs") such as USWC, GTE, Inc. ("GTE") and other telecommunications carriers.
Companies such as the Company are regulated and certificated by the OPUC also.
As a STS provider, the Company must operate according to specific statutes and
OPUC rules. In addition, the Company has received authorization as an
Alternative Local Exchange Carrier ("ALEC") in Oregon. Applications for ALEC
authorization are pending in Colorado and Washington. As an ALEC, the Company
will be able to provide local dialtone services outside the apartment locations
for which it is currently authorized, and compete with the LECs such as USWC and
GTE. At that time, the Company will have to comply with the OPUC rules and
regulations governing ALEC operations, service standards and state surcharges
and subsidies, as well as state policies affecting technical interconnection
with the public switched telephone network, for its services provided as an
ALEC.

28
<PAGE>
In seeking the above-referenced state certifications, however, the Company
faces a limited risk of agency and court challenges by future competitors such
as USWC. Such challenges, though unlikely, could occur before state regulatory
agencies and courts in 1998.

While most of the services provided now and in the future by the Company are
considered "competitive" and "unregulated," no predictions or assurances can be
given as to the effect of federal and state laws and regulations on the
Company's business.

TRADEMARKS

The United States Patent and Trademark Office has granted the Company
service mark protection on the Company's service mark "FirstLink." This service
mark has been used in interstate commerce by the Company or its predecessors
continuously since 1994 and, in the Company's opinion, has developed recognition
in the Company's industry. The Company intends to develop and aggressively
protect its service mark and to develop other service marks used in connection
with its business.

PROPERTIES

The Company leases 2,100 square feet of office space at 190 SW Harrison in
Portland, Oregon, on a five-year lease expiring on October 31, 2001. In April
1998 the Company signed a lease agreement to lease 4,500 square feet of space at
117 SW Taylor in Portland, Oregon, with an option to lease an additional 4,500
square feet at the same location. The Company anticipates relocating to its new
facility in September 1998. This lease has an eight year term, but the Company
can terminate at any time after the 60th month. The Company believes it will be
able to sublease the space located at 190 SW Harrison. The Company believes that
its office space is sufficient for the next several years. The Company also
maintains leased equipment, including switching equipment, at various locations
to provide local dial tone for its customers.

EMPLOYEES

The Company employs 20 persons on a full-time basis in its Portland offices.
Of these employees, eight are administrative or management and twelve are in the
areas of customer service, billing and operations. The Company believes its
relationship with its employees to be good and none of the employees are union
members. All of the Company's employees are at will.

LEGAL MATTERS

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

29
<PAGE>
MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The directors and executive officers of the Company, and their ages as of
the date of this Prospectus, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------- --- ----------------------------------------------------
<S> <C> <C>
A. Roger Pease (2)(3).................. 52 Chairman of the Board, President, Chief Executive
Officer
David M. Deluhery...................... 41 Chief Operating Officer
A. Allan Fulsher....................... 45 Secretary
Thomas E. McChesney (1)(2)(3).......... 51 Director
Robert F. Olsen (1)(3)................. 49 Director
Jeffrey S. Sperber..................... 33 Chief Financial Officer
James F. Twaddell (1)(2)............... 58 Director
</TABLE>

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

(1) Independent directors. The Company will maintain at least two (2)
independent directors on its board of directors.

(2) Member of Audit Committee.

(3) Member of Compensation Committee.

A. ROGER PEASE was appointed President and Chief Executive Officer of the
Company in January 1996. From June 1994, Mr. Pease served as Chief Executive
Officer, President or Manager of the Company's predecessors. Previously, Mr.
Pease was President and Chief Executive Officer of Payline Systems, Inc. since
1987. From 1983 to 1987, he was employed by Lattice Semiconductor Corporation as
Vice President of Finance, Vice President of Strategic Planning and
Administration, and as a consultant. From 1979 to 1983, Mr. Pease was a Partner
with the Portland office of the accounting firm of Touche, Ross & Co., where he
served as Director of Management Consulting Operations. Mr. Pease, a certified
public accountant, holds a Masters of Business Administration degree from
Northwestern University (1970), and a Bachelor of Arts degree in Finance from
the University of Illinois (1968).

DAVID M. DELUHERY was appointed Chief Operating Officer in April 1998. From
August 1984 to April 1998 he was employed by Nike, Inc., a publicly held
international sports and fitness company. He served Nike in a variety of senior
information technology management roles, most recently as the Director of
Distributed Infrastructure Services where he was responsible for the planning
and implementation of contemporary technologies globally.

A. ALLAN FULSHER has been Secretary of the Company since its formation. He
has been in the private practice of law since 1983. Mr. Fulsher received his
Juris Doctor degree from the McGeorge School of Law, and Bachelor of Arts
degrees in Economics and Biology from the University of Oregon.

THOMAS E. MCCHESNEY was appointed a director in January 1996. He is a
registered representative of Blackwell Donaldson & Co., a securities
broker-dealer. From January 1996, to October 1996 Mr. McChesney was associated
with Bathgate McColley Capital Group, LLC. Previously, Mr. McChesney was an
officer and director of Paulson Investment Co. and Paulson Capital Corporation
from March 1977 to June 1995. Mr. McChesney also serves on the boards of Labor
Ready, Inc., a company listed on the Nasdaq Stock Market; T. Angell & Co., Inc.;
and Nation's Express, Inc.

ROBERT F. OLSEN was appointed as a director in January 1996. Mr. Olsen
previously served as Director of Payline Systems from May 1992 until May 1995.
Mr. Olsen is the Chairman and Chief Executive Officer of J. R. Roberts Corp.,
which he co-founded in 1980. J. R. Roberts Corp. is the largest construction
company in Sacramento, California, specializing in commercial, industrial and
multi-family housing

30
<PAGE>
projects. JR Roberts has offices in Sacramento, Seattle, Portland, and Orange
County. Mr. Olsen resides in California. From 1971 to 1980, he served as Manager
of Marketing and Director of East Coast Construction and Special Projects for
Continental Heller, a large national construction company based in California.
Mr. Olsen holds two degrees from Oregon State University: a Bachelor of Science
degree in Civil Engineering and a Bachelor of Arts degree in Business
Administration (1971).

JEFFREY S. SPERBER was appointed chief financial officer in October 1997.
From August 1995 to September 1997 Mr. Sperber was the Controller of TCI
Wireline, Inc., a business unit of Tele-Communications, Inc., engaged in
providing local telephone service. From August 1991 to August 1995 he was
employed by Concord Services, Inc., a privately held international conglomerate
based in Denver, Colorado, where he was responsible for the accounting and
finance of both public and privately held entities, most recently, as Chief
Financial Officer of its manufacturing and processing business unit. From
September 1986 to August 1991 he was employed by Arthur Andersen and Co. in
Denver, Colorado, as a senior auditor.

JAMES F. TWADDELL was elected a director of the Company in February 1998. He
is a member of the investment banking group of Schnieder Securities, Inc.,
located in Providence, Rhode Island. From 1974 through 1995, Mr. Twaddell served
as Chairman of Barclay Investments, Inc., a member firm of the National
Association of Securities Dealers, Inc. (the "NASD"). Mr. Twaddell also served
as Chairman of Regional Investment Brokers, Inc., a 125-member cooperative
association of regional investment bankers and broker/dealers conducting
business throughout the United States. For the 1993-1995 term, he was elected to
serve on both the NASD District 11 Committee and the District Business Conduct
Committee. He has served as Chairman of the Board of First Mutual Fund, a
30-year old publicly-traded mutual fund, since 1979. He has also served as a
Trust Manager of Grove Property Trust, a public real estate investment trust
that is engaged in the acquisition, repositioning, management and operation of
mid-priced multifamily communities in the Northeastern United States, since
1994. Mr. Twaddell received his B.A. from Brown University in 1961.

There are no family relationships among Directors or persons nominated or
chosen by the Company to become a Director, nor any arrangements or
understandings between any Director and any other person pursuant to which any
Director was elected as such. Each Director is elected to serve for a term of
one (1) year until the next annual meeting of stockholders or until a successor
is duly elected and qualified. The present term of office of each Director will
expire at the next annual meeting of stockholders.

The executive officers of the Company are elected annually at the first
meeting of the Company's Board of Directors held after each annual meeting of
stockholders. Each executive officer will hold office until his successor is
duly elected and qualified, until his resignation or until he shall be removed
in the manner provided by the Company's By-Laws.

During fiscal 1997 and 1996, the Company did not have standing Audit or
Compensation Committees of the Board of Directors. The Company formed an Audit
Committee, chaired by Mr. McChesney, and a Compensation Committee chaired by Mr.
Olsen, in February 1998. Those committees consist of three members each,
including two outside directors. No member of those committees will receive any
additional compensation for his service as a member of that Committee. The Audit
Committee will be responsible for providing assurance that financial disclosures
made by management of the Company reasonably portray the Company's financial
condition, results of operations, plan and long-term commitments. To accomplish
this, the Audit Committee will oversee the external audit coverage, including
the annual nomination of the independent public accountants, review accounting
policies and policy decisions, review the financial statements, including
interim financial statements and annual financial statements, together with
auditor's opinions, inquire about the existence and substance of any significant
accounting accruals, reserves or estimates made by Management, review with
Management the Management's Discussion and Analysis section of the Annual
Report, review the letter of Management representations given to the independent

31
<PAGE>
public accountants, meet privately with the independent public accountants to
discuss all pertinent matters, and report regularly to the Board of Directors
regarding its activities.

DIRECTOR NOMINEE

The Company intends to increase the size of the Board of Directors to five
directors after consummation of this offering. The vacancy created thereby will
be filled by the Board of Directors pursuant to the Company's Bylaws. The
Company has granted ProFutures Bridge Capital, LP, ("ProFutures") a substantial
shareholder, the right to nominate a director, subject to the Company's
approval. ProFutures has not exercised that right as of the date of this
Prospectus. If ProFutures does not nominate a director, the Company will seek a
qualified director to be added to the Board.

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. In 1997 the Board of
Directors adopted a stock option plan which includes provision for stock options
to be issued to directors. The Company has granted a total of 240,000 options to
directors under this plan. See "--Stock Incentive Plan."

Directors who are also executive officers of the Company receive no
additional compensation for their services as Directors. Directors who are not
executive officers of the Company are paid a $500 fee for each board meeting
they attend. In addition, outside Directors are entitled to be reimbursed for
their expenses associated with attendance at meetings or otherwise incurred in
connection with the discharge of their duties as Directors of the Company.

EXECUTIVE COMPENSATION

The following table and discussion set forth information with respect to all
compensation earned by or paid to the Company's Chief Executive Officer ("CEO"),
its most highly compensated executive officer, for all services rendered in all
capacities to the Company for each of the Company's last three fiscal years;
provided, however, that no disclosure has been made for any executive officer,
other than the CEO, whose total annual salary and bonus does not exceed
$100,000.

TABLE 1
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
ANNUAL COMPENSATION ---------------------------------
SECURITIES
---------------------------- OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY ($) BONUS ($) COMPENSATION(1)($) OPTIONS/SARS
- -------------------------------------------------- ------------- ------------- --------------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
A. Roger Pease President & CEO.................... 1997 -0- -0- $ 96,000 160,000
1996 -0- -0- $ 96,000 --
</TABLE>

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

(1) Mr. Pease was paid $8,000 per month pursuant to an oral management agreement
with the Company during 1996 and 1997. He was not paid a salary. Beginning
April 1998, he is being paid a salary of $10,000 per month, and the
management agreement has been terminated

The Company does not have an employment agreement with any of its officers.
It plans to enter into employment agreements with Mssrs. Pease, Sperber, and
Deluhery shortly after the completion of this Offering. Except for these
employment agreements and except for their eligibility to participate in the
Company's Stock Incentive Plan, there exist no other agreements, arrangements or
understandings

32
<PAGE>
pursuant to which Messrs. Pease, Sperber and Deluhery will receive any other
form of compensation or remuneration from the Company following completion of
this Offering.

STOCK INCENTIVE PLAN

During fiscal 1997, the Company adopted the Plan. Pursuant to the Plan,
stock options granted to eligible participants take the form of Incentive Stock
Options ("ISO's") under Section 422 of the Internal Revenue code of 1986, as
amended (the "Code") or options which do not qualify as ISO's (Non-Qualified
Stock Options or "NQSO's"). As required by Section 422 of the Code, the
aggregate fair market value of the Company's Common Stock with respect to its
ISO's granted to an employee exercisable for the first time in any calendar year
may not exceed $100,000. The foregoing limitation does not apply to NQSO's. The
exercise price of an ISO may not be less than 100% of the fair market value of
the shares of the Company's Common Stock on the date of grant. The exercise
price of an NQSO may be set by the administrator, but not less than 85% of the
Fair Market Value of the shares of Common Stock on the date of grant. An option
is not transferable, except by will or the laws of descent and distribution. If
the employment of an optionee terminates for any reason (other than for cause,
or by reason of death, disability, or retirement), the optionee may exercise his
options within a ninety day period following such termination to the extent he
was entitled to exercise such options at the date of termination. Either the
Board of Directors (provided that a majority of directors are "disinterested")
can administer the Plan, or the Board of Directors may designate a committee
comprised of directors meeting certain requirements to administer the Plan. The
administrator will decide when and to whom to make grants, the number of shares
to be covered by the grants, the vesting schedule, the type of award and the
terms and provisions relating to the exercise of the awards. An aggregate of
533,333 shares of the Company's Common stock is reserved for issuance under the
Plan. The Company received stockholder approval of the Plan in a meeting of
stockholders held on February 24, 1998, and accordingly, can issue ISO's from
such date forward.

At May 15, 1998, the Company had granted a total of 533,333 options under
the Plan consisting of 450,000 NQSO's and 83,333 ISO's at exercise prices
ranging from $1.13 to $2.25 per share. All options have been issued with
exercise prices at or above market value on the date of issuance. All of the
options vest over a three-year period. The Company will not grant options and
warrants in excess of 15% of the outstanding shares to officers, directors,
employees, 5% shareholders, or affiliates for a one year period from the date of
this Prospectus.

The following tables set forth certain information as of December 31, 1997,
and for the fiscal year then ended concerning non-qualified stock options
granted to and exercised by the named executive officer and the fiscal year-end
value of unexercised options on an aggregated basis:

OPTIONS/GRANTS IN FISCAL 1997

<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/GRANTS TO
UNDERLYING EMPLOYEES IN
NAME OPTIONS/GRANTS(#) FISCAL YEAR EXERCISE PRICE ($/SH) EXPIRATION DATE
- ---------------------- ----------------- ----------------- ------------------------- ----------------
<S> <C> <C> <C> <C>
A. Roger Pease........ 160,000 38.4% $ 1.13 February 2007
</TABLE>

33
<PAGE>
TABLE 3
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
NAME EXERCISE(#) REALIZED(1)($) FY-END(#) AT FY-END($)(2)
- ------------------------------------- ------------ --------------- ----------------------- -------------------------
<S> <C> <C> <C> <C>
A. Roger Pease....................... -- -- Exercisable-80,000 Exercisable-$90,000
Unexercisable-80,000 Unexercisable-$90,000
</TABLE>

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

(1) Value Realized is determined by calculating the difference between the
aggregate exercise price of the options and the aggregate fair market value
of the Common Stock on the date the options are exercised.

(2) The value of unexercised options is determined by calculating the difference
between the fair market value of the securities underlying the options at
fiscal year end and the exercise price of the options. The fair market value
of the securities underlying the options, based on the last price Common
Stock was sold by the Company privately, was $2.25 per share.

LIMITATION ON DIRECTORS' LIABILITY; INDEMNIFICATION

The Company has adopted provisions in its Articles of Incorporation and
Bylaws that limit the liability of its directors to the fullest extent permitted
by the Oregon Business Corporation Act (the "OBCA"). Under the Company's
Articles and Bylaws, as permitted by the OBCA, no director is liable to the
Company or its Stockholders for monetary damages for his conduct as a director
of the Company. Such limitation of liability does not affect a director's
liability for (a) a breach of the director's duty of loyalty to the Company or
its stockholders; (b) any acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of the law; or (c) any unlawful
distribution, or a transaction from which the director receives an improper
personal benefit. Such limitation of liability also does not affect the
availability of equitable remedies such as injunctive relief or rescission.

The Company's Articles of Incorporation permit and its Bylaws require the
Company to indemnify officers and directors to the fullest extent permitted by
the OBCA. These agreements, among other provisions, provide indemnification for
certain expenses (including attorney fees), judgments, fines and settlement
amounts incurred in any action or proceeding, including any action by or in the
right of the Company.

The effect of this provision in the Company's Articles of Incorporation is
to eliminate the rights of the Company and its stockholders (through
stockholder's derivative suits on behalf of the Company) to recover monetary
damages against a director for breach of his fiduciary duty of care as a
director (including breaches resulting from negligent or grossly negligent
behavior) except in the situations described in clauses (a) through (c) above.
This provision does not limit nor eliminate the rights of the Company or any
stockholder to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care. The ByLaws provide that if
Oregon law is amended, in the case of alleged occurrences of actions or
omissions preceding any such amendment, the amended indemnification provisions
shall apply only to the extent that the amendment permits the Company to provide
broader indemnification rights than the OBCA permitted the Company to provide
prior to such amendment.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy and is, therefore, unenforceable.

34
<PAGE>
SECURITIES OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of June 30, 1998, and as adjusted to
reflect the sale of the Securities offered hereby, by (i) each person who owns
beneficially more than 5% of the Company's Common Stock; (ii) each of the
Company's directors and executive officers; and (iii) all directors and
executive officers as a group. Each named beneficial owner has sole voting and
investment power with respect to the Shares held, unless otherwise stated.

<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF SHARES
SHARES BENEFICIALLY OWNED(2)
BENEFICIALLY ----------------------------------
NAME AND ADDRESS OF OWNER OWNED(1) PRIOR TO OFFERING AFTER OFFERING
- -------------------------------------------------------------- ----------------- ----------------- ---------------
<S> <C> <C> <C>
A. Roger Pease (3)............................................ 186,667 8.2% 5.1%
190 SW Harrison
Portland, OR 97201

Robert F. Olsen (4)........................................... 118,679 5.4% 3.3%
7745 Greenback Lane
Citrus Heights, CA 95610

Jeffrey S. Sperber (5)........................................ 16,667 < 1% < 1%
190 SW Harrison
Portland, OR 97201

Steven M. Bathgate (6)(7)..................................... 359,220 15.8% 9.8%
5350 S. Roslyn Way, #380
Englewood, CO 80111

Thomas E. McChesney (8)....................................... 120,634 5.5% 3.4%
200 SW Market Street
Portland, OR 97201

Eugene C. McColley (6)(9)..................................... 329,220 14.6% 9.0%
5350 S. Roslyn Way, #380
Englewood, CO 80111

ProFutures Bridge Capital Fund, LP (10)....................... 212,800 9.5% 5.8%
5350 S. Roslyn Street, Suite 350
Englewood, CO 80111

James Edgar McDonald (11)..................................... 172,610 7.8% 4.8%
6044 E. Briarwood Drive
Englewood, CO 80112

Virginia S. McDonald (11)..................................... 172,610 7.9% 4.8%
6044 E. Briarwood Drive
Englewood, CO 80112

Caribou Bridge Fund, LLC (12)................................. 167,165 7.6% 4.6%
5350 S. Roslyn Street, Suite 380
Englewood, CO 80112

All Executive Officers and Directors as a Group
(5 persons)................................................. 442,647 18.9% 11.8%
</TABLE>

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

(1) Except as set forth in the footnotes to this table, the persons named in
this table have sole voting and investment power with respect to all shares.
Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire then as of the date of this Prospectus, or
within sixty (60) days of such date, all treated as outstanding when
determining the percent of the class owned by such person and when
determining the percent owned by a group.

35
<PAGE>
(2) Applicable percentage is based on 2,190,917 shares of Common Stock
outstanding on June 30, 1998 and 3,590,917 shares outstanding after the
completion of the Offering.

(3) 103,333 shares are owned by Mr. Pease in his individual retirement account.
Also includes 3,333 shares owned by Mr. Pease's wife, of which he disclaims
beneficial ownership; and presently exercisable stock options by Mr. Pease
to purchase 80,000 shares of Common Stock at $1.13 per share.

(4) Includes 96,653 shares beneficially owned by JR Roberts Corporation, of
which Mr. Olsen is the Chairman and Chief Executive Officer; and Options
exercisable to purchase 13,333 shares of Common Stock at $1.13 per share.

(5) Consists of presently exercisable options to purchase shares of Common
Stock.

(6) Includes 152,720 shares and warrants to purchase 14,445 shares owned by
Caribou Bridge Fund, LLC. Mssrs. Bathgate and McColley own the Administrator
of Caribou. They disclaim beneficial ownership of such shares. Also includes
29,161 shares of Common Stock and 4,445 shares of Common Stock underlying
presently exercisable warrants owned by Kiawah Capital Partners, an entity
that Mssrs. Bathgate and McColley own equally. Fifty percent of those shares
and warrants are attributed to each Mr. Bathgate and Mr. McColley.

(7) Includes 18,667 shares owned by Bathgate Family Partnership II, of which
Mr. Bathgate is a general partner.

(8) Includes 7,779 shares of Common Stock owned by Elizabeth McChesney, Mr.
McChesney's wife of which he disclaims beneficial ownership. Also includes
28,580 shares of Common Stock and 13,333 shares of Common Stock underlying
presently exercisable warrants and vested options, respectively.

(9) Includes 48,000 shares of Common Stock underlying presently exercisable
warrants.

(10) Includes 53,333 shares of Common Stock underlying presently exercisable
warrants. ProFutures is a limited partnership. Its general partners are
Bridge Capital Partners, Inc. James H. Perry is the President, Director and
sole shareholder of Bridge Capital Partners, Inc.

(11) Of the shares of Common Stock listed as being beneficially owned by James
Edgar McDonald and Virginia S. McDonald, 90,388 shares (including 7,778
shares underlying presently exercisable warrants) are owned by James Edgar
McDonald, Trustee for the James Edgar McDonald Revocable Trust; and 82,222
shares (including 6,667 shares underlying presently exercisable warrants)
are owned by Virginia S. McDonald, Trustee for the Virginia S. McDonald
Revocable Trust. Mr. and Mrs. McDonald are husband and wife. They each
disclaim beneficial ownership of shares owned by their spouse's trust.

(12) Includes 14,445 shares of Common Stock underlying presently exercisable
warrants. Caribou Bridge Fund, LLC, is a Colorado Limited Liability Company.
Its manager is E. Bowman McLean, who has voting power over securities owned
by CBF. Investment decisions are made by an investment committee comprised
of E. Bowman McLean, Douglas Kelsall, Steven M. Bathgate, Eugene C.
McColley, and Vicki D.E. Barone. See FN 6.

CERTAIN TRANSACTIONS

In April 1994, Payline Systems, Inc. ("Payline") a publicly traded
corporation, entered into a five-year contract with Pacific Union Property
Services, the management company for Portland Center Apartments, to provide
telecommunications services to the tenants of the Portland Center Apartments.
Shortly thereafter, Payline formed FirstLink Communications, L.L.C. ("FLC"), and
assigned that contract to FLC. In January 1995, FLC signed a seven-year contract
with RiverPlace II Joint Venture to provide services to the tenants of
RiverPlace. Subsequently, FLC borrowed a total of $250,000 from three investors,
including JR Roberts Corporation and Thair Q. Schneiter, a director and major
stockholders of the Company. The investors obtained as collateral for the loan a
security interest in all assets of FLC, including the two contracts and certain
equipment. In May 1995, the investors foreclosed on their notes, which were in
default, and obtained the assets of FLC. They assigned the assets to a newly
formed limited liability

36
<PAGE>
company, FirstLink Tenant Services, L.L.C. ("FTS"). On January 1, 1996, the
Company acquired substantially all of the assets of FTS, in exchange for 133,333
shares of Common Stock. The acquisition of these net assets was accounted for
using the purchase method of accounting. As the Company and FTS were entities
under common control, the assets and liabilities of FTS were recorded by the
Company using the carryover basis in such assets and liabilities of $82,790.
Because of the nature of this transaction, it cannot be considered to have
resulted from an arms-length negotiation between the Company and the investors.

In October 1996, the Company issued 6,667 shares of Common Stock to each of
Mr. McChesney, a director of the Company, and Mssrs. Bathgate and McColley, who
are substantial shareholders of the Company, in consideration of their
guaranteeing a $125,000 equipment lease. The Company also agreed to issue an
additional 200 shares per month to each of those individuals for each month that
the guarantee is outstanding. Through March 31, 1998, the Company had issued an
additional 3,400 shares to each such individual. The Company will attempt to
obtain a release of those guarantees following the closing of this Offering.

In 1997, the Company issued 8,692 shares to Mr. Olsen, and 1,060 shares to
Mr. McChesney, directors of the Company, as consideration for their guarantees
of a second lease.

Mssrs. Bathgate and McColley are principals of Bathgate McColley Capital
Group, LLC, who acted as the Company's Placement Agent in three private
offerings of the Company in 1997 and 1998. In connection with such offerings,
they were paid commissions aggregating $135,852 in 1997 and $38,000 in 1998; and
issued persons affiliated with BMCG warrants to purchase a total of 157,000
shares of Common Stock.

Each of the above transactions, except the transaction in which the Company
acquired the assets of FTS, were approved or ratified by a majority of
disinterested directors. The Board of Directors has determined that any future
transactions with officers, directors, or principal shareholders will be
approved by the disinterested directors and will be on terms no less favorable
than could be obtained from an unaffiliated third party. The Board of Directors
will obtain independent counsel or other independent advice to assist in that
determination.

37
<PAGE>
DESCRIPTION OF SECURITIES

The Company's Articles of Incorporation authorize the issuance of up to
20,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock
("Preferred Stock").

COMMON STOCK

Holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors out of any funds lawfully available therefor
and, in the event of liquidation or distribution of assets, are entitled to
participate ratably in the distribution of such assets remaining after payments
of liabilities, in each case subject to any preferential rights granted to any
series of Preferred Stock that may then be outstanding. The Common Stock does
not have any preemptive rights or redemption, conversion or sinking fund
provisions. All of the issued and outstanding shares of Common Stock are, and
all shares of Common Stock to be outstanding upon completion of the Offering
will be, validly issued, fully paid and nonassessable. Holders of Common Stock
are entitled to one vote per share on all matters to be voted upon by the
stockholders. Holders of Common Stock do not have cumulative voting rights in
the election of directors, which means that the holders of more than 50% of the
shares voting can elect all directors.

PREFERRED STOCK

The Articles of Incorporation authorize 1,000,000 shares of Preferred Stock
and permit the Board of Directors, without further stockholder authorization, to
issue Preferred Stock in one or more series and to fix the terms and provisions
of each series, including dividend rights and preferences, conversion rights,
voting rights, redemption rights and rights on liquidation, including
preferences over Common Stock. The issuance of any series of Preferred Stock
under certain circumstances could adversely affect the voting power or other
rights of the holders of Common Stock, and, under certain circumstances, be used
as a means of discouraging, delaying, or preventing a change in control of the
Company. No Preferred Stock is outstanding, and the Company has no present plans
to issue any shares of Preferred Stock. The Company will not offer preferred
stock to officers, directors, or substantial shareholders of the Company except
on the same terms as are offered to all shareholders as a group, or to new
investors.

WARRANTS

Two Warrants will entitle the holder to purchase one share of Common Stock
at a price of $8.10 during the three-year period commencing on the date of this
Prospectus. The Warrants will be redeemable upon forty-five (45) days prior
written notice at a redemption price of $.05 per Warrant if (a) the closing high
bid price of the Common Stock has exceeded $12.15 for at least 20 of the 30
trading days immediately preceding the date of mailing of the notice of
redemption, and (b) the Company has in effect a current registration statement
with the Commission registering the Common Stock issuable upon exercise of the
Warrants. The Warrants will contain anti-dilution provisions for stock splits,
recombinations, and reorganizations.

STATE LEGISLATION

When and if the Company has 100 or more stockholders, the Company will
become subject to the Oregon Control Share Act (the "Control Share Act"). As of
December 31, 1997, the Company had 73 stockholders. The Control Share Act
generally provides that a person (the "Acquirer") who acquires voting stock of
an Oregon corporation in a transaction which results in the Acquirer holding
more than each of 20%, 33 1/3% or 50% of the total voting power of the
corporation (a "Control Share Acquisition") cannot vote the shares it acquires
in the Control Share Acquisition ("Control Shares") unless voting rights are
accorded to the Control Shares by (i) a majority of each voting group entitled
to vote and (ii) the holders of a majority of the outstanding voting shares,
excluding the Control Shares held by the Acquirer and

38
<PAGE>
shares held by the corporation's officers and inside directors. The term
"Acquirer" is broadly defined to include persons acting as a group.

The Acquirer may, but is not required to, submit to the corporation an
"Acquiring Person Statement" setting forth certain information about the
Acquirer and its plans with respect to the corporation. The Acquiring Person
Statement may also request that the corporation call a special meeting of
stockholders to determine whether the voting rights will be restored to the
Control Shares. If the Acquirer does not request a special meeting of
stockholders, the issue of voting rights of Control Shares will be considered at
the next annual or special meeting of stockholders. If the Acquirer's Control
Shares are accorded voting rights and represent a majority or more of all voting
power, Stockholders who do not vote in favor of the restoration of such voting
rights will have the right to receive the appraised "fair value" of their
shares, which may not be less than the highest price paid per share by the
Acquirer for the Control Shares.

TRANSFER AND WARRANT AGENT

American Securities Transfer & Trust, Incorporated, 1825 Lawrence Street,
Denver, Colorado 80202 will be the transfer agent for the Common Stock and the
warrant agent for the Warrants.

REGISTRATION RIGHTS

The Company is a party to a Registration Rights Agreement pursuant to which
it granted to certain former holders of Convertible Promissory Notes (the
"Notes") (all of whom have converted the Notes to Common Stock), Common Stock,
and Warrants certain rights with respect to registration under the Securities
Act of 935,556 shares of Common Stock and 188,889 warrants held by such holders,
the "Registrable Securities"). Under the Registration Rights Agreement, if the
Company files a registration statement under the Securities Act, the holders of
Registrable Securities may require the Company, subject to certain limitations,
to include all or any portion of their Registrable Securities in such
registration at the Company's expense. The shares so registered will be subject
to an agreement not to sell those shares for a period of one year after the date
of this Prospectus without the representative's written consent. The Company
plans to file a separate registration statement for the Registrable Securities
prior to the expiration of the lock-up period.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no public market for the Common Stock
or the Warrants. Future sales of substantial amounts of Common Stock in the
public market could adversely affect prevailing market prices.

Upon completion of the Offering, the Company will have 3,590,917 shares of
Common Stock outstanding. Of these shares, 1,400,000 shares registered in the
Registration Statement for this Offering will be freely tradeable without
restriction under the Securities Act, except for any shares purchased by
affiliates of the Company, which will be subject to certain resale limitations
of Rule 144 promulgated under the Securities Act. The remaining 2,190,917 shares
and all of the shares of Common Stock issuable upon exercise of outstanding
options and warrants are "restricted securities" as defined in Rule 144. The
owners 1,915,540 of those shares have agreed with the Representative of the
Underwriters not to sell, transfer, assign, or make any other disposition of any
shares owned by them for a period of twelve months after the date of this
Prospectus without the prior written consent of the Representative. In addition,
the owner of 152,720 shares has agreed not to sell, transfer, or assign those
shares for a period of six months after the date of this Prospectus without the
prior written consent of the Representative. The Warrants being issued in this
Offering as part of the Units, and the 700,000 shares of Common Stock issuable
upon exercise of the Warrants will be freely transferable and not subject to any
restrictions on resale.

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least one year is entitled to sell, within any three-

39
<PAGE>
month period, a number of shares that does not exceed the greater of 1% of the
then outstanding shares of the issuer's common stock or the average weekly
trading volume during the four calendar weeks preceding such sale, provided that
certain public information about the issuer as required by Rule 144 is then
available and the seller complies with certain other requirements. In general,
shares issued in compliance with Rule 701 promulgated under the 1933 Act may be
sold by non-affiliates subject to the manner of sale requirements of Rule 144,
but without compliance with the other requirements of Rule 144. Affiliates may
sell such shares in compliance with Rule 144, other than the holding period
requirement. A person who is not an affiliate, has not been an affiliate within
three months prior to sale, and has beneficially owned the restricted securities
for at least two years is entitled to sell such shares under Rule 144 without
regard to any of the limitations described above.

Further, upon completion of the Offering, there will be outstanding Warrants
exercisable to purchase an additional 794,444 shares of Common Stock, assuming
no exercise of the Over-allotment Option. 700,000 shares of Common Stock
issuable upon exercise of the Warrants will be free trading and immediately
eligible for sale upon issuance. The remaining 94,444 shares issuable upon
exercise of Warrants are subject to a one-year lock-up agreement.

40
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, a copy of
which has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, the Underwriters named below (the "Underwriters") have
severally agreed, through Kashner Davidson Securities Corporation, as the
Managing Underwriter and as the Representative of the Underwriters, to purchase
from the Company on a firm commitment basis, the aggregate number of Units set
forth opposite their names below:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF UNITS
- --------------------------------------------------------------------------------------- ---------------
<S> <C>
Kashner Davidson Securities Corporation................................................ 512,500
Joseph Charles & Associates, Inc....................................................... 512,500
Joseph Dillon & Company, Inc........................................................... 200,000
Tejas Securities Group, Inc............................................................ 175,000
---------------
Total................................................................................ 1,400,000
</TABLE>

The Securities are being offered by the several Underwriters, subject to
prior sale, when, as, and if delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part and subject to
approval of certain legal matters by counsel and to various conditions. The
nature of the Underwriters' obligation is such that they must purchase all of
the Securities offered hereby if any are purchased.

The Company has granted the Underwriters an option for 45 days from the date
of this Prospectus to purchase up to an additional 210,000 Units at the initial
public offering prices less the underwriting discount of $.55 per Unit. The
Underwriters may exercise such option only for the purpose of covering any
over-allotments in the sale of the Securities being offered.

The Underwriters have advised the Company that they propose to offer the
1,400,000 Units directly to the public at the public offering prices set forth
on the cover page of this Prospectus and to selected dealers at that price, less
a concession of not more than $.275 per Unit. After the initial offering of the
Securities is completed, the price of the Securities may change as a result of
market conditions. However, no such change will effect the amount of proceeds to
be received by the Company as set forth on the cover page of this Prospectus.
The Underwriters have advised the Company that they will not make sales of the
Securities offered in this Prospectus to accounts over which they exercise
discretionary authority.

The Company will pay the Representative a non-accountable expense allowance
from offering proceeds, including proceeds from the over-allotment options to
the extent exercised. The expense allowance will be 3% of the gross proceeds
sold in the Offering. 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 shall be deemed to be compensation to the
Representative. The Company has advanced the Representative $25,000 of such
expense allowance.

In addition to the Underwriters' 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, road show and other costs in connection with the Offering. The
Underwriters have agreed to pay all fees and expenses of any legal counsel whom
it may employ to represent it separately in connection with or on account of the
proposed offering by the Company, mailing, telephone, travel and clerical costs
and all other office costs incurred or to be incurred by the Underwriters or by
their representatives in connection with the Offering.

The Company has agreed with the Representatives not to solicit Warrant
exercises other than through the Representatives. Upon exercise of any Warrants,
the Company will pay the Representatives a fee of 3% of the aggregate exercise
price, if (i) the market price of the Company's 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

41
<PAGE>
was solicited by a member of the National Association of Securities Dealers,
Inc. who is so 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 Regulation M promulgated under the Exchange Act;
and (vi) the Representative provides bona fide services in connection with the
solicitation of the exercise of the Warrant. No solicitation fee will be paid to
the Representatives 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
Regulation M under the Exchange Act, the Representatives 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 representatives 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.

The present shareholders of the Company have agreed not to issue, offer,
sell, transfer, assign, hypothecate or otherwise dispose of any securities of
the Company for twelve months from the date of this Prospectus without the prior
written consent of the Representative.

Until the distribution of the Securities is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the securities. As an exception to these rules,
the Underwriters are permitted to engage in certain transactions that stabilize
the price of the securities. Such transactions consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the securities. If
the Underwriters create a short position in the Securities in connection with
the Offering, i.e., if they sell more Securities than are set forth on the cover
page of this Prospectus, the Underwriters may reduce that short position by
purchasing Securities in the open market. The Underwriters may also elect to
reduce any short position by exercising all or part of the Over-allotment Option
described above.

The Underwriters may also impose a penalty bid on selling group members.
This means that if the Underwriters purchase Securities in the open market to
reduce the Underwriters' short position or to stabilize the price of the
Securities, it may reclaim the amount of the selling concession from the selling
group members who sold those securities as part of the Offering.

In general, purchase of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it was
to discourage resales of the security. Neither the Company nor the Underwriters
make any representation or predictions as to the direction or magnitude of any
effect that the transactions described above may have on the price of the
Securities. In addition, neither the Company nor the Underwriters make any
representation that the Underwriters will engage in such transactions, once
commenced, will not be discontinued without notice.

Prior to the Offering, there has been no public market for the Common Stock
or Warrants. Accordingly, the public offering prices of the Shares and Warrants
and the exercise price of the Warrants were determined by negotiations between
the Representatives and the Company. Among the factors considered in determining
the public offering prices and the Warrant exercise price were the prospects for
the Company, an assessment of the industry in which the Company operates, the
assessment of management, the number of Securities 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 offering prices set forth on the cover page of this
Prospectus should not be considered an indication of the actual value of the
Company or the Common Stock or Warrants.

42
<PAGE>
The Company and the Underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the 1933 Act, and, if such
indemnifications are unavailable or insufficient, the Company and the
Underwriters have agreed to damage contribution agreements between them based
upon relative benefits received from the Offering and relative fault resulting
in such damages. 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. The Company also has agreed with the
Underwriters that the Company will file and cause to become effective a
registration statement pursuant to Section 12(g) of the Securities Exchange Act
of 1934 no later than the date of this Prospectus.

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 Commission. See "Additional
Information."

REPRESENTATIVES' OPTIONS

Upon completion of the Offering, the Company will sell to the Representative
for $140, the Representatives' Options to purchase 140,000 Units at a price that
is equal to 140% of the Offering Price. The Warrants underlying the
Representatives' Option will have an exercise price and other terms identical to
the Warrants being offered to the public pursuant to this Prospectus, (the
"Representatives' Option"). The Representatives' Options will be exercisable
commencing one year after the date of this Prospectus for a period of four
years. The exercise price for the units underlying the Representatives' Options
is payable in cash or through the surrender of Options having a value equal to
the difference between the exercise price and the average of the current market
price of the Common Stock and Warrants for the 20 consecutive trading days
commencing 21 trading days before the date the Representatives' Options are
tendered for exchange.

The Representative's Options will be non-transferable except among the
Underwriters and by their respective officers or partners for a period of twelve
months from the date of this Prospectus. The Representative's Options and the
securities underlying the Representative's Options (the "Representative's
Securities") will also contain anti-dilution provisions for stock splits,
combinations and reorganizations, piggyback registration rights, one demand
registration right at the expense of the Company, and one demand registration
right paid for by the holders of the Representative's Securities (all of which
expire five years from the date of the Prospectus).

The Representative's Securities are being registered in the Registration
Statement of which this Prospectus is a part. The Company has agreed to maintain
an effective Registration Statement with respect to such shares to permit their
resale at all times during the period in which the Representative's Options are
exercisable. The sale of the Representative's Securities could dilute the
interest of other holders of Common Stock and Warrants and the existence of the
Representative's Options may make the raising of additional capital by the
Company more difficult. At any time at which exercise of Representative's
Options might be expected, it is likely that the Company could raise additional
capital on terms more favorable than the terms of the Representative's Options.
Any profit realized by the Representatives (or any holder of the Representatives
Options) on the sale of the shares of Common Stock or the Warrants included in
the Units or the sale of the shares of Common Stock underlying the Warrants may
be deemed underwriting compensation.

KASHNER REGULATORY HISTORY

Kashner Davidson Securities Corporation, a representative in this Offering,
is currently involved in a proceeding brought by the NASD alleging certain
violations of NASD rules and regulations in connection with trades in municipal
securities. While Kashner and its principals are attempting to resolve this

43
<PAGE>
proceeding, there can be no assurance of its outcome. In addition, in 1996
Kashner and Victor Kashner, a principal, resolved another NASD proceeding
arising from transactions in an OTC electronic bulletin board security, without
admitting or denying any wrongdoing, by the payment of fine and restitution. In
1994 Mr. Kashner and Kashner resolved, without admitting or denying any
wrongdoing, another NASD proceeding by agreeing to a censure and fine. In 1993
Kashner and Victor Kashner voluntarily resolved a matter brought by the
Commission alleging violations of certain securities laws. In that settlement,
without admitting any wrongdoing or violation of any securities laws, Kashner
agreed to the imposition of an administrative cease and desist order, a three
month suspension for Victor Kashner from association with any broker/dealer and
a two year supervisory bar for Mr. Kashner. The three month suspension imposed
upon Mr. Kashner has been completed. Also as a result of the Commission action,
the NASD also suspended Mr. Kashner's registration as an options principal and a
general securities principal for two years. A complaint filed by the
Massachusetts Securities Division based upon the same facts remains pending,
although it has been dormant for several years.

There can be no assurance of the outcome of any pending regulatory matters
affecting Kashner or Mr. Kashner or the effect of this regulatory history, if
any, on Kashner's activities in the Company's securities following completion of
this Offering.

CONSULTANT TO THE BOARD OF DIRECTORS

The Company has agreed, for a period of three years from the date of this
Prospectus, to designate a person selected by the representatives to act as a
consultant to the Board of Directors who will have the right to attend all Board
and Board committee meetings and will be reimbursed his out-of-pocket expenses
to attend Board meetings. The Representative has not yet exercised its right to
designate such a person.

LEGAL MATTERS

The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Neuman Drennen & Stone, LLC, Englewood, Colorado.
David H. Drennen, whose company is a member of the firm of Neuman Drennen &
Stone, LLC is the owner of warrants to purchase 14,000 shares of the Company's
Common Stock, which he received from the placement agent of a private placement
of the Company's securities as partial compensation for his services to that
placement agent. Certain legal matters will be passed upon for the
Representative by Sichenzia, Ross & Friedman, LLP, 135 West 50th Street, 20th
Floor, New York, New York 10020.

EXPERTS

The financial statements of the Company as of December 31, 1997, and for the
years ended December 31, 1997 and 1996, have been included herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

The report of KPMG Peat Marwick LLP covering the December 31, 1997,
financial statements contains an explanatory paragraph that states that the
Company's recurring losses from operations raise substantial doubt about its
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of that uncertainty.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement on Form SB-2 with the
Commission in Washington, D.C., in accordance with the provisions of the
Securities Act, with respect to the securities offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information pertaining to the
securities offered hereby and the Company, reference is made to the

44
<PAGE>
Registration Statement, including the exhibits and financial statement schedules
filed as a part thereof. Statements contained in this Prospectus concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an Exhibit to the
Registration Statement. Each such statement is qualified in its entirety by such
reference. The Registration Statement may be obtained from the Commission upon
payment of the fees prescribed therefor and may be examined at the principal
office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a World Wide web site that contains reports, proxy and
information statements and other information that are filed through the
Commission's Electronic Data Gathering, Analysis and Retrieval System. This web
site can be accessed at http://www.sec.gov.

Upon completion of the Offering the Company will be subject to the
information requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), and in accordance with the Exchange Act files periodic reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information concerning
the Company can be inspected and copied (at prescribed rates) at the
Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, as well as at the following Regional
Offices: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, 13th Floor, new
York, New York 10048. Copies of such material also may be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549.

The Company intends to furnish to its stockholders annual reports containing
financial statements audited by an independent public accounting firm after the
end of each fiscal year. In addition, the Company will furnish to its
stockholders quarterly reports for the first three quarters of each fiscal year
containing unaudited financial and other information after the end of each
fiscal quarter.

45
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1997
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE(S)
-----------
<S> <C>
Independent Auditors' Report............................................................................. F-3
Financial Statements:
Balance Sheet as of December 31, 1997 and March 31, 1998 (unaudited)................................... F-4
Statements of Operations for the years ended December 31, 1997 and 1996 and the three months ended
March 31, 1998 and 1997 (unaudited).................................................................. F-5
Statements of Stockholders' Equity (Deficit) for the years ended December 31, 1997 and 1996 and the
three months ended March 31, 1998 (unaudited)........................................................ F-6
Statements of Cash Flows for the years ended December 31, 1997 and 1996 and the three months ended
March 31, 1998 and 1997 (unaudited).................................................................. F-7
Notes to Financial Statements.......................................................................... F-8
</TABLE>

F-2
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Board of Directors
FirstLink Communications, Inc.:

We have audited the accompanying balance sheet of FirstLink Communications,
Inc. as of December 31, 1997, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the years ended December 31,
1997 and 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FirstLink Communications,
Inc. as of December 31, 1997, and the results of its operations and its cash
flows for the years ended December 31, 1997 and 1996 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 1 to the
financial statements, the Company has suffered recurring losses from operations
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ KPMG Peat Marwick LLP

Portland, Oregon
January 21, 1998, except as to note 9
which is as of April 8, 1998 and note 2(e)
which is as of July 27, 1998

F-3
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

BALANCE SHEET

DECEMBER 31, 1997 AND MARCH 31, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------ MARCH 31,
1998
------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................................................... $ 389,415 $ 409,132
Accounts receivable, net of allowance for doubtful accounts of $8,716 at December
31, 1997 and $17,817 at March 31, 1998........................................... 19,617 30,322
Prepaid and other current assets................................................... 59,227 69,577
------------ ------------
Total current assets........................................................... 468,259 509,031
Property and equipment, net.......................................................... 543,053 542,182
Other assets......................................................................... 49,509 62,404
------------ ------------
Total assets................................................................... $1,060,821 $ 1,113,617
------------ ------------
------------ ------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable................................................................... $ 142,130 $ 104,752
Accrued liabilities................................................................ 99,580 106,114
Current portion of capital lease obligations....................................... 40,897 39,674
Other current liabilities.......................................................... 126,188 126,188
------------ ------------
Total current liabilities...................................................... 408,795 376,728
------------ ------------
Long-term debt:
Capital lease obligations.......................................................... 166,350 158,790
Convertible notes payable.......................................................... 221,667 --
------------ ------------
Total long-term debt........................................................... 388,017 158,790
------------ ------------
Commitments and contingencies (note 8)

Stockholders' equity:
Preferred stock, no par value; 1,000,000 shares authorized; no shares issued or
outstanding...................................................................... -- --
Common stock, no par value; 20,000,000 shares authorized; 1,786,708 and 2,164,063
shares issued and outstanding at December 31, 1997 and March 31, 1998,
respectively..................................................................... 1,240,102 1,938,420
Retained deficit................................................................... (976,093) (1,360,321)
------------ ------------
Total stockholders' equity..................................................... 264,009 578,099
------------ ------------
Total liabilities and stockholders' equity..................................... $1,060,821 $ 1,113,617
------------ ------------
------------ ------------
</TABLE>

See accompanying notes to financial statements.

F-4
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997 AND 1996 AND THE
THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
------------------------- ------------------------
1997 1996 1998 1997
------------ ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue..................................................... $ 879,903 $ 602,423 $ 283,483 $ 165,441
------------ ----------- ----------- -----------
Expenses:
Operating................................................. 580,197 369,415 221,472 117,573
Selling, general and administrative....................... 701,372 565,473 288,196 129,980
Depreciation and amortization............................. 69,955 37,879 20,788 11,790
------------ ----------- ----------- -----------
Total expenses........................................ 1,351,524 972,767 530,456 259,343
------------ ----------- ----------- -----------
Operating loss........................................ (471,621) (370,344) (246,973) (93,902)
------------ ----------- ----------- -----------
Other (income) expense:
Interest, net............................................. 107,305 25,123 30,756 49,906
Other..................................................... (650) 2,350 106,499 830
------------ ----------- ----------- -----------
106,655 27,473 137,255 50,736
------------ ----------- ----------- -----------
Net loss.............................................. $ (578,276) $ (397,817) $ (384,228) $ (144,638)
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Per share amounts:
Basic and diluted loss per common share................... $ (.50) $ (.75) $ (.20) $ (.18)
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Basic and diluted weighted average common shares.......... 1,162,397 533,309 1,918,398 785,078
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
</TABLE>

See accompanying notes to financial statements.

F-5
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

YEARS ENDED DECEMBER 31, 1997 AND 1996 AND THE
THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK STOCKHOLDERS'
-------------------------- RETAINED EQUITY
SHARES AMOUNT DEFICIT (DEFICIT)
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Balance at January 1, 1996.............................. $ -- $ -- $ -- $ --
Acquisition of net assets from FirstLink Tenant
Services.............................................. 133,333 82,790 -- 82,790
Sale of common stock.................................... 554,667 126,040 -- 126,040
Common stock issued pursuant to guarantor agreements.... 21,200 6,996 -- 6,996
Common stock issued pursuant to Promissory Notes........ 57,200 18,876 -- 18,876
Net loss................................................ -- -- (397,817) (397,817)
------------ ------------ ------------- ------------
Balance at December 31, 1996............................ 766,400 234,702 (397,817) (163,115)
Common stock issued pursuant to Promissory Notes........ 52,800 17,424 -- 17,424
Common stock issued in payment of Promissory Note
interest.............................................. 3,879 4,364 -- 4,364
Conversion of Promissory Notes into common stock........ 217,780 245,000 -- 245,000
Sale of common stock, net of stock offering costs....... 728,888 721,449 -- 721,449
Common stock issued pursuant to guarantor agreements.... 16,961 17,163 -- 17,163
Net loss................................................ -- -- (578,276) (578,276)
------------ ------------ ------------- ------------
Balance at December 31, 1997............................ 1,786,708 1,240,102 (976,093) 264,009
Conversion of Promissory Notes into common stock, net... 186,667 304,552 -- 304,552
Sale of common stock, net of stock offering costs....... 188,888 390,391 -- 390,391
Common stock issued pursuant to guarantor agreements.... 1,800 3,375 -- 3,375
Net loss................................................ -- -- (384,228) (384,228)
------------ ------------ ------------- ------------
Balance at March 31, 1998............................... $ 2,164,063 $ 1,938,420 $ (1,360,321) $ 578,099
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1997 AND 1996 AND THE
THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
------------------------ ------------------------
1997 1996 1998 1997
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss................................................... $ (578,276) $ (397,817) $ (384,228) $ (144,638)
Adjustments to reconcile net loss to net cash used in
operating activities:
Non-cash charge for debt conversion to equity............ -- -- 105,000 --
Depreciation and amortization............................ 130,262 38,112 35,829 51,326
Provision for losses on accounts receivable.............. 43,250 73,796 9,101 8,185
Changes in assets and liabilities:
Accounts receivable.................................... (39,196) (34,422) (19,806) 10,453
Prepaid and other current assets....................... (59,563) 7,441 (57,026) (1,328)
Accounts payable and accrued liabilities............... 17,408 (52,037) (30,844) 96,180
Other current liabilities.............................. (50,233) 176,421 -- (50,234)
----------- ----------- ----------- -----------
Net cash used in operating activities................ (536,348) (188,506) (341,974) (30,056)
----------- ----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures....................................... (70,090) (48,664) (19,917) (30,022)

Cash acquired from FirstLink Tenant Services L.L.C......... -- 4,467 -- --
----------- ----------- ----------- -----------
Net cash used in investing activities................ (70,090) (44,197) (19,917) (30,022)

Cash flows from financing activities:
Net proceeds from issuance of common stock................. 738,873 144,916 390,391 --
Proceeds from Promissory Notes............................. 102,576 111,124 -- 65,000
Repayments of Promissory Notes............................. (5,000) -- -- --
Proceeds from Convertible Notes............................ 172,077 -- -- --
Principal payments under capital leases.................... (27,792) (8,218) (8,783) (4,283)
----------- ----------- ----------- -----------
Net cash provided by financing activities............ 980,734 247,822 381,608 60,717
----------- ----------- ----------- -----------
Net increase in cash and cash equivalents............ 374,296 15,119 19,717 639
Cash and cash equivalents, beginning of year................. 15,119 -- 389,415 15,119
----------- ----------- ----------- -----------
Cash and cash equivalents, end of year....................... $ 389,415 15,119 409,132 15,758
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Supplemental disclosure of cash flow information:
Cash paid for interest..................................... $ 51,791 $ 23,446 $ 19,660 $ 9,948
Cash paid for income taxes................................. -- -- -- --
</TABLE>

See accompanying notes to financial statements.

F-7
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(1) BUSINESS AND ORGANIZATION

FirstLink Communications, Inc. (FirstLink or the Company), an Oregon
corporation, is an integrated telecommunications service company providing local
telephone, long distance telephone, enhanced calling features and cable
television services to residents of multi-family apartment and condominium
complexes. The services are provided to the tenants in accordance with long-term
operating agreements between the Company and the property owners under which the
property owners share in the telecommunication revenues generated from their
properties. The agreements provide the tenants with the option to use either
FirstLink or the local telephone company and long distance carriers for
telephone services. Tenants desiring to subscribe to cable television must
utilize FirstLink.

From time to time, the Company will evaluate the market demand, as well as
the economic and technical feasibility, of offering new products and services to
the residents of the Company's properties. Such products and services may
include, but are not limited to, internet access, wireless telephone and paging.
The Company expects to introduce internet access to certain properties during
the first quarter of 1998.

Historically, the Company has operated in and around the Portland, Oregon
metropolitan area. As of December 31, 1997, the Company had contracts for
additional properties in Vancouver, Washington; Seattle, Washington; Denver,
Colorado; Phoenix, Arizona; and Oklahoma, City, Oklahoma.

The Company was incorporated on December 26, 1995 and on January 1, 1996
acquired substantially all of the assets and liabilities of FirstLink Tenant
Services L.L.C. (FTS) with a net book basis of $82,790 in exchange for 133,333
shares of the Company's common stock. The acquisition of these net assets was
accounted for using the purchase method of accounting. As the Company and FTS
were entities under common control, the assets and liabilities of FTS were
recorded by the Company using the carryover basis in such assets and
liabilities.

The Company has generated operating cash losses from its inception.
Additionally, the Company requires, and will continue to require, cash to fund
the net losses and capital requirements associated with the Company's rapid
growth. It is management's expectation that the Company will enter at least five
new markets during 1998 and additional others beyond the coming year. The cash
required to fund such activities will be substantial and beyond what the Company
holds in cash and cash equivalents at December 31, 1997. The Company is
currently pursuing various financing alternatives including, but not limited to,
both public and private equity and debt financings. There can be no assurance
that management will be successful in obtaining such financing.

In December 1997, the Company signed a letter of intent with an underwriter
to offer shares of the Company's common stock for sale through an initial public
offering.

The financial statements and related notes as of March 31, 1998 and for the
three months ended March 31, 1998 and 1997 are unaudited but, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, which are necessary for a fair presentation of the financial
condition, results of operations and cash flows of the Company. The operating
results for the three months ended March 31, 1998 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1998.

F-8
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) CASH AND CASH EQUIVALENTS

The Company considers all highly liquid instruments readily convertible to
known amounts of cash to be cash equivalents.

(b) PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, including installation cost. The
Company provides for depreciation using the straight-line method over estimated
useful lives of three to ten years. Property and equipment held under capital
leases are amortized straight-line over the shorter of the lease term or
estimated useful life of the asset. Repairs and maintenance are expensed as
incurred.

Revenue is recognized when services are provided.

(d) USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

(e) COMMON STOCK AND LOSS PER SHARE

The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 128, EARNINGS PER SHARE. SFAS 128 replaced the presentation of primary and
fully diluted earnings (loss) per share (EPS) with a presentation of basic and
diluted EPS. Under SFAS 128, basic EPS excludes dilution for common stock
equivalents and is computed by dividing income or loss available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock resulted in the issuance of common stock.

The loss per common share in the accompanying financial statements has been
computed using the weighted average number of shares of common stock outstanding
during each period giving consideration to the effects of the Securities and
Exchange Commission Staff Accounting Bulletin No. 98 (SAB 98). Pursuant to SAB
98, issuances of common stock, options, warrants or other potentially dilutive
securities for nominal consideration (Nominal Issuances) are to be included in
the calculation of EPS for all periods presented in the manner of a stock split
for which retroactive restatement is required. Management believes that there
have been no Nominal Issuances since the inception of FirstLink.

In accordance with SFAS No. 128, the calculation of basic and diluted EPS
does not assume the conversion, exercise or contingent issuance of securities
that would have an anti-dilutive effect on earnings per share. As a result,
basic and diluted loss per share are the same for the years ended December 31,
1997 and 1996 and for the three months ended March 31, 1998 and 1997.
Additionally, common share amounts have been adjusted to reflect the stock split
of 1 for 1.5 which will occur immediately prior to the effectiveness of the
Registration Statement.

F-9
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) STOCK-BASED COMPENSATION

The Company accounts for its stock-based employee compensation plan using
the intrinsic value based method prescribed by Accounting Principles Board
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related
Interpretation (APB No. 25). The Company has provided pro forma disclosures as
if the fair value based method of accounting for these plans, as prescribed by
SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, had been applied.

(g) IMPAIRMENT OF LONG-LIVED ASSETS

Effective January 1, 1996, the Company adopted SFAS No. 121, ACCOUNTING FOR
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF
(SFAS No. 121), which requires that the long-lived assets and certain
identifiable intangibles, held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying value of
an asset may not be recoverable. An impairment loss is recognized when estimated
undiscounted future cash flows expected to be generated by the asset is less
than its carrying value. Measurement of the impairment loss is based on the fair
value of the asset, which is generally determined using valuation techniques
such as the discounted present value of expected future cash flows. The adoption
of SFAS No. 121 had no effect on the financial statements of the Company.

(h) INCOME TAXES

The Company accounts for income taxes under the provisions of SFAS No. 109,
ACCOUNTING FOR INCOME TAXES (SFAS No. 109). Under the asset and liability method
of SFAS No. 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under SFAS
No. 109, the effect on deferred tax assets and liabilities of a change in tax
rate is recognized in income in the period that includes the enactment date.

(i) NEW ACCOUNTING PRONOUNCEMENTS

SFAS 130, REPORTING COMPREHENSIVE INCOME, was issued in June 1997. It
establishes standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. SFAS 131,
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION, was issued
in June 1997. It establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The adoption of these standards had no
effect on the financial statements of the Company.

F-10
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Supplemental Cash Flow Information of Non-cash Investing and Financing
Activities

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
----------------------- ----------------------
1997 1996 1998 1997
---------- ----------- --------- -----
<S> <C> <C> <C> <C>
Assets acquired under capital leases............... $ 73,694 $ 169,563 -- --
Net working capital deficit acquired from FirstLink
Tenant Services L.L.C............................ -- (210,553) -- --
Property and equipment acquired from FirstLink
Tenant Services L.L.C............................ -- 288,876 -- --
Conversion of Promissory Notes to equity........... 245,000 -- 199,552 --
Other.............................................. 15,024 6,996 3,875 594
</TABLE>

(3) PROPERTY AND EQUIPMENT

Property and equipment, including assets owned under capital leases of
$243,257 at both December 31, 1997 and March 31, 1998 is comprised of the
following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
<S> <C> <C>
Switches, installation and wiring................................. $ 601,446 $ 621,363
Computers and office equipment.................................... 41,117 41,117
Leasehold improvements............................................ 8,324 8,324
------------ -----------
650,887 670,804
Less accumulated depreciation, including $30,973 and $36,562 at
December 31, 1997 and March 31, 1998, respectively, applicable
to assets under capital leases.................................. (107,834) (128,622)
------------ -----------
Net property and equipment................................ $ 543,053 $ 542,182
------------ -----------
------------ -----------
</TABLE>

(4) INCOME TAXES

F-11
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(4) INCOME TAXES (CONTINUED)
The Company's deferred tax assets are comprised of the following components
as of December 31, 1997 and March 31, 1998:

<TABLE>
<CAPTION>
MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1997 1998
------------ ----------
<S> <C> <C>
Net operating loss carryforwards.................................... $ 373,480 485,250
Less valuation allowance............................................ (373,480) (485,250)
------------ ----------
Net deferred tax assets..................................... $ -- --
------------ ----------
------------ ----------
</TABLE>

The valuation allowance for deferred tax assets as of January 1, 1998, 1997
and 1996 was $373,480, $152,242 and $-0-, respectively. The net change in the
total valuation allowance for the three months ended March 31, 1998 and the
years ended December 31, 1997 and 1996 was an increase of $111,770, $221,238 and
$152,242, respectively. The Company has established a valuation allowance due to
the uncertainty that the full amount of the operating loss carryforwards will be
utilized. Although management expects future results of operations to be
profitable, it emphasized past performance rather than growth projections when
determining the valuation allowance. Any subsequent adjustments to the valuation
allowance, if deemed appropriate due to changed circumstances, will be
recognized as a separate component of the provision for income taxes.

The Company has net operating loss carryforwards which are available to
offset future financial reporting and taxable income. Net operating loss
carryforwards for tax purposes totaled approximately $965,000 and $1,244,000 at
December 31, 1997 and March 31, 1998, respectively, and expire in 2011 through
2012.

F-12
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(5) DEBT

PROMISSORY NOTES

During 1997 and 1996, the Company issued unsecured promissory notes (the
Promissory Notes) aggregating $250,000. The Promissory Notes bore interest at 8%
per annum with both principal and interest payable on or before March 31, 1997.
As an additional inducement, the holders of the Promissory Notes received 440
shares of the Company's common stock for each $1,000 of principal. The value
assigned to such shares was $17,424 and $18,876 in 1997 and 1996, respectively.
The Promissory Notes were originally recorded at $213,700, which represents the
$250,000 in proceeds less a discount of $36,300 assigned to the common stock.
The fair value of the common stock was based on other recent equity transactions
with third parties. The discount was accreted to the debt over the life of the
Promissory Notes as a financing cost. The accretion of the value assigned to the
common stock is included in interest expense in the accompanying financial
statements. In 1997, $245,000 of the Promissory Notes, plus accrued interest,
were converted into 221,659 shares of the Company's common stock. The remaining
$5,000 and accrued interest was paid in full during 1997.

CONVERTIBLE NOTES

During 1997, the Company issued unsecured convertible notes (the Notes) with
a face value of $420,000 and 560,000 shares of common stock pursuant to a
private placement memorandum (the Private Placement). Total proceeds from the
Private Placement was $840,000. The Notes bear interest at 6% per annum, payable
semiannually commencing June 30, 1998, mature three years from the date of
issuance and are convertible into shares of the Company's common stock at $3.00
per share. The Notes were originally recorded at $210,000, which represents the
face value of $420,000 less a discount of $210,000 which was assigned to the
common stock and offering costs of $37,923 which are included in other assets in
the accompanying financial statements. The 560,000 shares of common stock were
recorded at the estimated fair market value of such shares which was $630,000
less stock offering costs of $37,301, resulting in net proceeds of $592,699. The
fair market value of the common stock was based on other recent equity
transactions with third parties. The discount is being accreted to the debt
using the interest method over three years. The accretion value assigned to the
common stock is included in interest expense in the accompanying financial
statements.

CONVERTIBLE NOTE CONVERSION

During the three months ended March 31, 1998, the Company asked the holders
of the Notes to convert the Notes into shares of common stock. As an inducement
to convert, the Company reduced the conversion price to $2.25 per share from the
$3.00 conversion price stated on the Notes for those holders converting on or
before March 9, 1998. The induced conversion resulted in a $105,000 charge to
operations, classified as other expense, during the quarter ended March 31,
1998. As of March 9, 1998, all of the Notes had been converted into 186,667
shares of common stock.

F-13
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(6) STOCKHOLDERS' EQUITY

PRIVATE PLACEMENT

During 1997, the Company issued 290,000 units, with each unit consisting of
two shares of common stock and one common stock purchase warrant pursuant to a
private placement memorandum. The Company sold 126,667 units (the Units)
resulting in 168,888 shares for $190,000 with the remaining 163,333 units being
issued to the holders of the Promissory Notes in exchange for converting
$245,000 of the Promissory Notes plus accrued interest into 221,659 shares of
common stock (see note 5 above). Stock offering cost associated with the sale of
the Units was $61,250.

During February and March 1998, the Company sold 283,333 units with each
unit consisting of one share of common stock and one common stock purchase
warrant pursuant to a private placement memorandum. The net proceeds from the
offering were $390,391.

STOCK OPTION PLANS

In July 1996, the Company established the FirstLink Communications, Inc.
Incentive Stock Option Plan (the Incentive Plan) and the FirstLink
Communications, Inc. Non-Qualified Stock Option Plan (the Non-Qualified Plan).
No shares were issued under the Incentive and Non-Qualified Plans. In February
1997, the Company's Board of Directors adopted the 1997 Restated Combined
Incentive Stock and Non-Qualified Stock Option Plan (the 1997 Plan) to supersede
and replace the Incentive and Non-Qualified Plans. Options issued under the 1997
Plan shall not be priced at less than fair market value and expire no later than
ten years from the date of grant. The vesting periods are at the discretion of
the Company's Board of Directors. The 1997 Plan is subject to ratification by
the majority vote of the holders of the Company's common stock within one year
from the effective date of adoption for any incentive options granted under the
1997 Plan. Until ratified, all shares issued under the 1997 Plan will be
non-qualified as the Board of Directors has the authority to issue nonqualified
options. The Company has made available 533,333 shares for grant under the 1997
Plan. During 1997, the Company issued options to purchase 416,667 shares of
common stock with vesting terms of 25% immediately and 25% on each anniversary
date over a three-year period.

The following table provides additional information concerning options
granted under the 1997 Plan:

<TABLE>
<CAPTION>
NUMBER OF WEIGHTED AVERAGE WEIGHTED AVERAGE
SHARES EXERCISE PRICE REMAINING TERM
----------- ----------------- ----------------
<S> <C> <C> <C>
Outstanding, January 1, 1997.................. -- $ --
Granted....................................... 416,667 1.13 9.2 years
Exercised..................................... -- --
Forfeited..................................... -- --
----------- -----
Outstanding, December 31, 1997................ 416,667 1.13
Granted....................................... 6,666 1.13 9.84 years
Exercised..................................... -- --
Forfeited..................................... --
----------- -----
Outstanding, March 31, 1998................... 423,333 $ 1.13
----------- -----
----------- -----
</TABLE>

F-14
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(6) STOCKHOLDERS' EQUITY (CONTINUED)
A total of 104,167 and 188,333 options were exercisable at December 31, 1997
and March 31, 1998 at a weighted average exercise price of $1.13.

The Company has elected to account for its stock-based compensation plans
under APB 25; however, the Company has computed, for pro forma disclosure
purposes, the value of all options granted during 1997 using the Black-Scholes
option pricing model as prescribed by SFAS 123 using the following assumptions
used for grants in 1997:

<TABLE>
<CAPTION>
<S> <C>
Risk-free interest.......................................................... 6.25%
Expected dividend yield..................................................... None
Expected lives.............................................................. 5 years
Expected volatility......................................................... Not applicable
</TABLE>

The total value of options granted during 1997 was computed as approximately
$124,000 which would be amortized on a pro forma basis over the three-year
vesting period of the options. The fair market value of the option grants during
1997 was $1.13 per share.

Had the Company determined compensation cost based on the fair value at the
grant date for its stock options under SFAS No. 123, the Company's net loss and
loss per share would have been:

<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------
AS REPORTED PRO FORMA
----------- ----------
<S> <C> <C>
Net loss............................................................. $ (578,276) (609,276)
----------- ----------
----------- ----------
Basic and diluted loss per common share.............................. $ (.50) (.52)
----------- ----------
----------- ----------
</TABLE>

WARRANTS

The Company has issued various stock purchase warrants in connection with
its financing activities to investors and placement agents. The following table
provides additional information related to stock purchase warrants:

<TABLE>
<CAPTION>
RANGE OF RANGE OF
EXERCISE EXPIRATION
NUMBER OF SHARES PRICES OF DATES OF
UNDERLYING WARRANTS WARRANTS
WARRANTS ISSUED ISSUED ISSUED
DURING YEAR DURING YEAR DURING YEAR
---------------- -------------- --------------
<S> <C> <C> <C>
Outstanding at December 31, 1997.......... 357,000 $ .75-$3.00 12/00-11/02
Outstanding at March 31, 1998............. 451,444 $ .75-$5.25 12/00-11/02
</TABLE>

(7) RELATED PARTY TRANSACTIONS

During 1997 and 1996 and a portion of 1998, the Company had a management
agreement with an officer and director of the Company whereby from time to time
a management fee was paid for his services. Amounts paid under this arrangement
totaled $96,000 in both 1997 and 1996 and $30,000 during

F-15
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(7) RELATED PARTY TRANSACTIONS (CONTINUED)
the three months ended March 31, 1998. This officer and director became an
employee of the Company on April 1, 1998.

(8) COMMITMENTS AND CONTINGENCIES

OPERATING LEASE COMMITMENT

The Company leases office space under a non-cancelable operating lease
expiring on October 31, 2001. Operating lease payments for the years ended
December 31, 1997 and 1996 and the three months ended March 31, 1998 totaled
$29,160, $10,728 and $7,290, respectively. At December 31, 1997, future minimum
lease payments under non-cancelable operating leases are as follows:

The Company leases certain switching equipment under capital leases. The
following table is a schedule, by year, of future minimum payments under capital
leases, together with the present value of the net minimum payments as of
December 31, 1997:

<TABLE>
<CAPTION>
<S> <C>
1998.............................................................................. $ 74,693
1999.............................................................................. 74,693
2000.............................................................................. 73,017
2001.............................................................................. 57,892
2002.............................................................................. 8,499
----------
Total minimum lease payments................................................ 288,794
Less amount representing interest................................................. (81,547)
----------
Total obligations under capital leases...................................... $ 207,247
----------
----------
</TABLE>

In connection with entering into certain of the capital lease agreements,
certain stockholders, including directors of the Company (the Guarantors),
entered into personal guaranty arrangements with the lessor on behalf of the
Company. The Company, in turn, agreed to issue common stock to each of the
Guarantors upon execution of and throughout the duration of the leases. 16,961,
21,200 and 1,800 shares of common stock were issued to the Guarantors during
1997 and 1996 and the three months ended March 31, 1998, respectively.

The common stock was assigned values of $17,163, $6,996 and $3,375 for the
shares issued during 1997 and 1996 and the three months ended March 31, 1998,
respectively, based on recent equity transactions with third parties. The value
assigned to the common stock is being amortized using the

F-16
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998

(INFORMATION AS OF MARCH 31, 1998 AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 IS UNAUDITED)

(8) COMMITMENTS AND CONTINGENCIES (CONTINUED)
interest method over the lives of the leases. The accretion value is included in
interest expense in the accompanying financial statements.

COMMITMENT WITH CABLE PROVIDERS

The Company has agreements with TCI Cablevision of Oregon, Inc. (TCI) and
Paragon Cable (Paragon) to purchase bulk cable signals at the Company's
properties. The agreements provide for the Company to pay fixed monthly amounts
regardless of the number of customers the Company has at the properties. As of
December 31, 1997 and March 31, 1998, the Company's monthly commitment was
$27,224 per month. The TCI agreements provide for annual rate increases not to
exceed 5%. The agreements all have terms of five years and expire during May
2001 through April 2002.

(9) LITIGATION

In April 1997, LDDS World Comm (LDDS) filed a lawsuit against the Company
seeking payment of $190,000 plus attorney fees for goods and services provided
to the Company. The Company contends it was overcharged by LDDS pursuant to the
terms of its agreement and the actual amount owed is approximately $126,000
which is recorded on the accompanying balance sheet. The Company has provided
LDDS with supporting documentation for the actual amount owed and has offered a
settlement proposal. On April 8, 1998, the LDDS claim was settled for $102,000
payable in two installments of $50,000 and $52,000 on April 10, 1998 and June
15, 1998, respectively.

From time to time, the Company is involved in various litigation in the
normal course of business. Management believes that the outcomes will not have a
material impact to the Company's financial statements.

F-17
<PAGE>
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF
THE COMMON STOCK AND WARRANTS OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE SHARES OF COMMON
STOCK OR WARRANTS BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 4
Risk Factors.............................................................. 8
Dilution.................................................................. 16
Capitalization............................................................ 17
Use of Proceeds........................................................... 18
Dividend Policy........................................................... 18
Selected Financial Data................................................... 19
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 20
Business.................................................................. 23
Management................................................................ 30
Securities Ownership of Management and Principal Shareholders............. 35
Certain Transactions...................................................... 36
Description of Securities................................................. 38
Underwriting.............................................................. 41
Legal Matters............................................................. 44
Experts................................................................... 44
Additional Information.................................................... 44
Index to Financial Statements............................................. F-2
</TABLE>

UNTIL AUGUST 25, 1998 (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 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.

1,400,000 SHARES OF COMMON STOCK
1,400,000 COMMON STOCK
PURCHASE WARRANTS

FIRSTLINK
COMMUNICATIONS, INC.

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

PROSPECTUS

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

KASHNER DAVIDSON SECURITIES
CORPORATION

JOSEPH CHARLES &
ASSOCIATES, INC.

JOSEPH DILLON &
COMPANY, INC.

JULY 27, 1998

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